Engler v. Engler, 2012 ABQB 442

Court of Queen ’ s Bench of Alberta Citation: Engler v. Engler, 2012 ABQB 442 Date: 20120713 Docket: 4803 153875 Registry: Edmonton Between: Warren Scott Engler Plaintiff/Respondent - and - Kimberly Anne Engler Defendant/Applicant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] In a special chambers application, Ms. Engler asks the court to determine the father ’ s income for support purposes, and for interim monthly spousal support of $3,000.00, together with child support based on the Child Support Guidelines. In addition, she asks the court to strike certain paragraphs of the husband ’ s affidavits on the grounds that they contain allegations which are not supported by independent evidence and that the responses are too long and too full of opinion rather than fact. [ 2 ] Mr.

Engler asks the court to confirm a shared parenting regime with the addition that any of the children who want to do so may go with him to church on Sunday including during the mother ’ s parenting time, to set his gross annual income at $75,000.00, to impute income to the mother and to stop her spousal support. In relation to his last request, Mr. Engler invokes a comprehensive settlement agreement negotiated between the parties with the assistance of lawyers as a result of a previous separation in 2006. In that

agreement, Ms. Engler waived all claims to future spousal support in exchange for receiving, among other matters, the title to some realproperty owned by the parties. Mr. Engler complied with all of the terms in the separation agreement, including the payment of spousalsupport and the transfer of real property. When the parties reconciled in 2008, Ms. Engler did not repay the spousal support she hadreceived and did not return the real property she had received. The agreement itself stated that it was null and void if the partiesreconciled. [3] On this application, Mr.

Engler’s guideline income for support purposes is set at his 2011 tax-reported annual income of$175,585.00, resulting in a total monthly child support payment for the four children of the marriage of $3,774.00. Mr.

Engler’s claimsthat his income has been drastically reduced as a result of a drastic downturn in the financial circumstances of his employer will have tobe explored at trial. [4] The existing shared parenting regime is confirmed; in order to avoid disputes pending the trial; because the paternalgrandparents offer safe, known, care for the two younger children of the marriage, the modalities of the shared parenting regime as itapplies to the two younger children is extended to their day-time care on the father’s week on parenting schedule.

The shared parentingregime is not varied in respect of church attendance on Sundays with the father. [5] The mother’s waiver of future spousal support in exchange, inter alia, for real property which remains as her property willhave to be determined at trial on the basis of the intention of the parties when they resumed cohabitation after the first separation.

In allthe circumstances, the execution of the waiver does not prevent the wife from making an interlocutory spousal support claim. [6] On this application, there being no evidence that the mother has been financially or economically deprived as a result of themarriage or of having children, and there being evidence that the mother is able to be employed outside the home, and there beingevidence that the paternal grandparents are willing and able to provide care for the two younger children of the marriage, the mother isentitled to short term spousal support of $3,000.00 per month to provide a buffer period during which she can seek employment. [7] Beginning November 1, 2012, the wife will be deemed to have gross annual income of $30,000.00. [8] Under the authority of R. 3.68(4)(a), the court strikes paragraph 35 of Mr.

Engler’s second affidavit. Cases and authorities cited [9] By Mr. Engler: Botticelli v. Botticelli, 2009 ABQB 556; BLH v. SBH, 2004 ABQB 336; Eberle v. Pascoe, 2009 ABQB137; D.B.S. v. S.R.G., 2005 ABCA 2; Hunt v. Smolis-Hunt, 2001 ABCA 229; Bracklow v. Bracklow (SCC); Fritze v.Day, 2001 ABQB 172.; Smart v. Wiewior (BC CA); Sydor v. Sydor (ON CA); Smith v. Smith (NS SC); Bebenek v. Bebenek, [1979] O.J. No. 4195; Fekete v. Fekete (NL SCTD); Evashenkov. Evashenko 2010 SKQB 45 , 2010 SK QB 45; Evashenko v. Evashenko 2011 SKCA 22 , 2011 SK CA 22. [10] By Ms. Engler: Elfar v. Elfar, 2011 ABQB 444, [2011] A.J.

No. 845; Emery v. Emery, (ON SC),[2008] O.J. No. 844, ON SCJ; Radziwilko v. Seef Estate, [2003] O.J. No. 3390, ON SCJ; Hierath v. Hierath, [2000] S.J. No. 749, SKQB; Hulleman v. Hulleman, [1999] A.J. No. 1472, AB CA; Jefferson v. Jefferson, [1996] B.C.J. No. 1856 BC SC. [11] By the court: Chevron Canada Resources v Canada (Executive Director of Indian Oil and Gas Canada) 1998 ABQB 910;Elkow v Sana 2006 ABQB 851 1. Background [12] The parties were married in September 2000.

They separated in June 2006; in June 2007, with the assistance of their thenlawyers, they executed a comprehensive separation agreement which addressed parenting, support and property. In that agreement, the

parties agreed to shared parenting. The husband agreed to pay the wife $734.00 per month in spousal support for the period April 2006 to April 2007 and the wife waived spousal support after that date. The husband made all of the spousal support payments required by the agreement.

The spousal support waiver was stated to be based, in part, on the division of property and assets effected by the settlement and the parties agreed that the agreement itself “ adequately compensates the Wife for any future loss of earnings, pension benefits or other benefits she could reasonably have expected to receive had she followed her career to the date hereof instead of adopting the roles, responsibilities and functions she adopted as a result of her marriage to the Husband ” .

The agreement stated that it would be “ automatically terminated and rendered void if the parties cohabit together as Husband and Wife for a period of 90 continuous days ” . Despite this provision, the property provisions of the agreement were implemented and have not been reversed; in the result, for example, the wife is the sole owner of what was formally a rental residential property and she in fact now resides in that property. During the separation, the mother was diagnosed with non Hodgkins Lymphoma and received 6 months ’ chemotherapy and two months ’ radiation. She is now cancer free.

During the separation, the mother worked part-time in the husband ’ s business and the children were cared for by the father ’ s mother. [ 13 ] The parties resumed cohabitation in March 2008. Two of the parties ’ four children were born prior to the first separation and twins were born after the parties resumed cohabitation. The children were born in December 2001, August 2004, and November 2008. [ 14 ] The parties separated again in September 2010.

On an interim without prejudice basis, the father paid the mother $20,000.00 as an advance on matrimonial property, in addition to the amounts which had been transferred pursuant to the June 2006 agreement.

The parties also agreed on a form of shared parenting with week on and week off arrangements for the two older children and that the two younger children would stay overnight at the father ’ s home when the older children were there but that during the day they would be with the mother. [ 15 ] Between the date of the second separation and October 2011, the father paid child and spousal support in an amount which is not clear from the affidavits. [ 16 ] Since October 2011, the father has been paying “ combined ” spousal and child support of $4,966.00 per month plus monthly payments of $492.00 on a vehicle. [ 17 ] Prior to the parties ’ marriage, the mother worked at a Shell gas station and then at Westgate Insulation, where her future husband was also employed.

She has never made an application to become an apprentice insulator. Since the 2010 separation, the mother has not been employed. [ 18 ] Throughout the marriage the father has been employed as a commercial pipe and duct insulator in a family business, Alliance Insulation. The voting shares in that business are held by his parents while the father and his brother, who is also an insulator, equally own the non-voting shares of the business.

The paternal parents are not insulators but they were apparently involved in the construction field and Warren Engler states that he discusses bidding jobs with his father; if the parents contributed start-up money for the business they have now been paid out. The parents have declined to provide information about how much they receive from the company by way of occasional dividends. The father ’ s brother and their father all have signing authority for the company, and all three of them make hiring and timing decisions for the company.

At present, the father receives $75,000.00 per annum as income from employment, and an additional $500.00 per month as office rental. During the period May 2011 to April 2012, the father also received dividends of $6,250.00 per month. This level of employment, dividend and rental income is the same for both brothers. The father states that, in May 2012, his parents decided that the business was losing money and they therefore decided to stop the payment of dividends.

A “ to whom it may concern ” letter dated April 24, 2012 from the registered public accountant for Alliance Insulation states that Warren Engler ’ s salary has been set at $75,000.00 “ after review and discussion of the company ’ s financial results and future expectations.

If you have any further questions, please contact me at the numbers listed below. ” According to the unaudited balance sheet of Alliance Insulation as at May 31, 2011, which is the last balance sheet provided and which appears to reflect the company ’ s year end, as of May 31, 2011, Alliance Insulation Ltd. had retained earnings of $424,436.00 as compared with retained earnings of $427,344.00 for 2010. The total current and long term liabilities for each year were less than $150,000.00 and share capital was nominal.

The last monthly balance sheet provided by Warren Engler at the hearing itself states that, from retained earnings of $669,686.26 a total of $407,750.00 in dividends had been paid, leaving total equity of $249,474.59, after taking into account nominal shareholders ’ equity. Subsequent to the hearing, Warren Engler provided additional monthly financial information from Alliance Insulation, but Ms. Engler did not have the opportunity of vetting that information, and so it will not be considered in this decision. [ 19 ] Mr.

Engler ’ s line 150 income for 2010 was $185,981.00 and for 2011 was $175,585.00. [ 20 ] No explanation has been provided about the delay in getting to trial even though the parties have been separated for

approximately two years. 2. Mr. Engler ’ s income for support purposes [ 21 ] On this interlocutory application, Mr. Engler ’ s last line 150 income of $175,585.00 will be used as his guideline income. [ 22 ] In coming to that conclusion, I note that Mr. Engler provides some evidence that his income pattern for the last many years has abruptly and dramatically decreased. At trial, he may indeed be able to prove that contention. [ 23 ] However, at this interlocutory stage of the proceedings, the court is one person who has “ further questions ” about this abrupt decrease for the accountant of Alliance Insulation.

The questions of the parties themselves and of the court will presumably all be answered at trial. [ 24 ] On this application, I note that the corporate balance sheet as of the year end for 2011 was very similar to the year end for 2010. Not surprisingly, given the date on which this application was heard, year end financials for the period ending May 31, 2012 were not available at the hearing. However, monthly statements were only available to the end of February, 2012.

Those statements, on their own, do not provide the court with sufficient information about billing patterns and dividend payment patterns to allow it to come to conclusions about whether the first corporate statement relating to the reduction in Warren Engler ’ s compensation from Alliance, coming as it did one month prior to Alliance ’ s year end, is justified. 3. Does Ms. Engler ’ s waiver of future spousal support in the 2007 separation agreement disentitle her to interlocutory spousal support? [ 25 ] Ms.

Engler ’ s waiver of future spousal support in the 2007 separation agreement does not disentitle her to interlocutory spousal support at this time. [ 26 ] In coming to that conclusion, I observe that the effect of the 2007 separation agreement is an issue that will have to be resolved at trial; on this application, it is not possible to determine what the parties ’ intent was when they resumed cohabitation in 2008. [ 27 ] The waiver of support which Ms. Engler executed as of June 18, 2007 is comprehensive: 2.

MAINTENANCE AND SUPPORT 2.1 The husband will pay to the wife the sum of Seven Hundred and Thirty-Four ($734.00) dollars per month commencing August 1, 2006, and continuing up to and including April 1, 2007. 2.2 The parties specifically acknowledge and agree that the duration for which support is payable by the Husband to the Wife, and the quantum of such support, as referred to herein, shall not be varied by either party regardless of a change in circumstances of either party, foreseeable or unforeseeable, related to the marriage or otherwise, and regardless of either of the party's health or prospects.

The Wife specifically acknowledges that support shall terminate as provided for herein and she waives all rights which she

otherwise may have had, may now have or may in the future have for any additional support of any type, whether periodic or lump sum, compensatory or otherwise.

Notwithstanding the provisions of 2.1 herein, spousal support specified in this Agreement shall terminate upon the death of the Wife but shall be binding upon the Estate of the Husband. 2.3 The Wife agrees to consent to a final Order for Corollary Relief consistent with the terms of paragraphs 2.1 and 2.2 herein. 2.4 It is understood by each party that this Agreement represents a final disposition of all spousal support issues between them and, without limiting the generality of the foregoing, the parties specifically agree that none of the following events will give rise to any claim for further interim or permanent support, for a variation of any terms of this Agreement regarding spousal support or for the commencement of any action arising out of the agreement herein (other than to enforce the Agreement), namely: 2.4.1 Temporary or permanent illness or disability, mental or physical, of either party; 2.4.2 Temporary or permanent loss of employment of either party; 2.4.3 An increase or decrease in financial obligations of any nature and kind; 2.4.4 Inflation; 2.4.5 Economic depression; 2.4.6 An increase or decrease in the income of either party; 2.4.7 Bankruptcy or insolvency of either party; 2.4.8 A windfall or inheritance of either party; 2.4.9 Marriage to, cohabitation with, or separation from any third party; 2.4.10 Subsequent separation or divorce. 2.5 In agreeing to the waiver of spousal support as contemplated herein, the parties agree and acknowledge that they have carefully, and on the advice of their respective counsel and financial advisors, considered the factors set out in Sections 15.2(4) and 15.2(6) of the Divorce Act , 1985 as amended, and in that regard have had specific note of the following factors considered by them to be relevant to the particular circumstances, namely: 2.5.1 The length of cohabitation of the parties during the marriage; 2.5.2 The fact that the division of property and assets affected hereby adequately, fully and properly relieves any economic hardship either of the parties would otherwise allege occurred to that party be reason of the marriage or its breakdown; 2.5.3 The fact that the division of property and assets effected hereby also adequately compensates the Wife for any future loss of

earnings, pension benefits or other benefits she could reasonably have expected to receive had she followed her career to the date hereof instead of adopting the roles, responsibilities and functions she adopted as a result of her marriage to the Husband. 2.5.4 The parties acknowledge that it Is foreseeable that either may suffer personal or economic calamity, through improvidence, ill health, bad luck, social economic change, or victimization by third parties, and that the parties further acknowledge and agree that these circumstances are contemplated, that their complete economic independence is a valued and important aspect of the Agreement herein, and that the foreseeability of any of the calamities set out herein would not induce the parties to enter into any other form of Agreement that promoted or suggested a relationship of dependency.

It is acknowledged that the parties have considered not only all of the factors set out in Sections 15.2(4) and 15.2(6) of the Divorce Act ; 1985, as amended May 1, 2997(sic) , as well as the provisions of the Spousal Support Advisory Guidelines, released in January 2005, and make this Agreement with the intention that the waiver herein shall be complete, inclusive and binding upon both parties. 2.6 The parties further agree that they are aware of the jurisprudence surrounding spousal support agreements and waivers, such as Miglin v.

Miglin, and have accounted for all factors that would lead a court to review the agreement. The parties agree that such a review is not appropriate in the circumstances. (Emphasis added) [ 28 ] Moreover, when the parties reconciled in 2008, Ms.

Engler did not treat the terms of the separation agreement as if they were void; on the contrary, she retained both the spousal support which she had been paid and also the title to the property which had been transferred to her. [ 29 ] Nonetheless, the agreement itself does state that agreement is “ automatically terminated and rendered void ” if the parties resumed cohabitation for 90 days. [ 30 ] The difference between the wording of the agreement and the actions of the wife is a matter that will have to be assessed at trial, according to the principles set out by the Supreme Court in Miglin . [ 31 ] In the complete absence of evidence with respect to the intention of the parties in relation to the waiver of spousal support when they resumed cohabitation, I am unable to make any determination of the likelihood of success by Ms.

Engler in claiming that the waiver no longer operates. However, I also note that the existence of a contract is only one factor which a court must consider in determining whether spousal support should be paid; therefore, even if Ms. Engler is not successful in setting aside her waiver, she will not necessarily lose her entitlement to spousal support. [ 32 ] However, the most important factor in my conclusion that I am not prevented from addressing spousal support on this interlocutory application is that the husband himself has acknowledged that the payment to Ms.

Engler of $20,000.00 is only a partial satisfaction of her matrimonial property claim. If there were an overpayment to Ms. Engler of spousal support, Mr. Engler could set that off against Ms. Engler ’ s matrimonial property claim in addition to getting a judgment which could be charged against her real property. 4. Shared parenting [ 33 ] The court confirms a week on, week off parenting regime in respect of all of the children of the marriage. [ 34 ] Since the final separation, and indeed in the 2007 separation agreement, the parties have, in essence, agreed to shared parenting.

The court now confirms that regime with respect to all 4 children.

[ 35 ] The result of the court ’ s order is that the twins will be in the father ’ s day to day care during his week on with the older two children. During his week-on period, he will make arrangements for the physical care of the children when he is not physically able to do so. As I understand the expectation of the parties, it is that all the children will be cared for on Mr. Engler ’ s weeks on by his parents when Mr. Engler is working.

During the parties ’ separation in 2006/2008, the children were cared for by Warren Engler ’ s parents, so this is a comfortable, safe arrangement for the children of the marriage. Mr. Engler does not expect to incur any s. 7 expenses in relation to that care. [ 36 ] In coming to the conclusion that the shared parenting agreement should effectively apply to all 4 children, I note that, until the present application, this had been the clear intention of the parents. I agree with Mr. Engler that, unexpectedly, Ms. Engler now has reservations about shared parenting.

It is not in the children ’ s best interests, at least on this interlocutory application, to depart from a regime to which they are accustomed and where there is no shred of evidence to suggest that they are not thriving. [ 37 ] I do not, however, accede to Mr. Engler ’ s request for a term of the shared parenting order relating to church attendance with him by any children who choose to do so even during the times they are on a week on with their mother.

As I indicated above, until the trial of this matter - which presumably will be organized for the very near future - it is best to minimize occasions that may lead to conflict between the parents as that is likely to have a negative effect on the children. [ 38 ] Nor will I accede to the parties apparent agreement that there should be a “ right of first refusal ” incorporated into the court order regarding shared parenting.

Until the trial of this matter, the relationship between the parties may be somewhat tense; they should be encouraged not to return to court until the trial, especially not over relatively minor issues like the right of first refusal. 5. Interlocutory child support [ 39 ] Commencing on August 1, 2012 and until the trial of the action, Mr. Engler will pay monthly child support of $3,774.00. [ 40 ] Mr. Engler will pay child support based on the Child Support Guidelines. No

section 7 expenses are identified on this application. 6. Spousal support [ 41 ] Starting on August 1, 2012, and for each of September 1, 2012 and October 1, 2012, Mr. Engler will pay to Ms. Engler monthly spousal support of $3,000.00. [ 42 ] In coming to the conclusion that Ms. Engler is entitled only to time limited spousal support, I take into account the evidence that, prior to her marriage, Ms. Engler was employed, and was even employed in an insulation business and that, even while she was being treated for cancer, Ms.

Engler was employed part-time by Alliance Insulation on an apparently commercial basis. [ 43 ] During the period May 6, 2006 to October 3, 2008, Ms. Engler worked a total of 1,775 hours, or 53 weeks, for Alliance Insulation; during the last part of that employment, Ms. Engler earned $18.50 an hour. [ 44 ] Ms. Engler states that she should not have to go to work at $18.50 an hour, or at some equivalent amount, when her about to be former husband earns approximately $175,000.00 a year. She may be right.

At trial, she will have the opportunity of proving her entitlement to long term spousal support on either a compensatory or non-compensatory basis since she is clearly not claiming support on a contractual basis. On this application, however, it does not appear that Ms. Engler lost career prospects as a result of the marriage or that she was even impeded in career prospects as a result of the birth of her children at least in part because of the unique support that has been available from the paternal grandparents. As to the potential non-compensatory basis, no current health issues prevent Ms.

Engler from being employed outside the home and the availability of free, competent, child care from the paternal grandparents resolves any potential problem of the cost of day care off-setting income from employment. Ms. Engler states that she and her husband had agreed that she would not go back to work until the children were in school; the husband disputes this. This is yet another dispute that will presumably be solved at trial. At this point, I can only note that the twins will be 4 in the Fall and that some type of early education program may be available to children of that age.

7. Deeming income to the wife [ 45 ] Essentially for the reasons set out above, i.e. that the wife has a relatively recent work history, from November 1, 2012, the wife will be deemed to have a gross annual income of $30,000.00. Income earned, or deemed to have been earned, by the mother will, of course, affect the amount of child support payable by the father and will also affect any s. 7 expenses which may eventually apply to the children. 8. Application to strike certain parts of the husband ’ s affidavits [ 46 ] Pursuant to the authority in Rule 3.68(4)(a), the court to strikes paragraph 35 of Mr.

Engler ’ s second affidavit. [ 47 ] Mr. Engler ’ s affidavits are, indeed, prolix, repetitive, argumentative and sometimes irrelevant. However, that does not make them vexatious, only tedious. Ms. Engel ’ s affidavits are, themselves, occasionally argumentative, as, for example, where she expresses an opinion on the validity of the 2007 separation agreement or on Mr. Engel ’ s budget.

In litigation of this type, and with repetitive and opinion-laden evidence of this type, while the court could go through each parties ’ affidavits and remove all material which is frivolous, irrelevant or improper, the wiser course of action is just to ignore the offending material: Chevron , para. 11 unless the offending material is so interwoven with the acceptable evidence that the only solution may be to strike the complete affidavit: Elkow . [ 48 ] Ms. Engel complains about Mr.

Engel ’ s statements to the effect that she is trying to mislead the court by stating that she has not been employed during the course of the marriage. Indeed, there are comments of that type in Ms. Engel ’ s affidavits, or at least comments which might be misconstrued by a court as meaning that, during the course of the marriage, Ms. Engel was a stay at home mom. Mr. Engel has provided evidence that Ms. Engel has been employed during the course of the marriage. The comments in his affidavit concerning Ms. Engel ’ s employment record are clearly not irrelevant. [ 49 ] However, the comment made in para. 35 of Mr.

Engel ’ s second affidavit is both irrelevant and gratuitously offensive: that paragraph will be struck from his affidavit.. 8. Costs [ 50 ] If the parties are not agreed on costs, I may be spoken to within 30 days of the delivery of these reasons. Heard on the 28 th day of June and the 5 th day of July, 2012. Dated at the City of Edmonton, Alberta this 13 th day of July, 2012. J.B. Veit J.C.Q.B.A.

Appearances: Ellen S. Ticoll, Ticoll Andreiuk for Ms. Engler Humaira Ahmad, Barr Picard for Mr. Engler