Bujak v Bujak, 2012 ABQB 458

Court of Queen ’ s Bench of Alberta Citation: Bujak v Bujak, 2012 ABQB 458 Date: 20120713 Docket: 4801 125802 Registry: Calgary Between: Joanna Stanislawa Bujak Plaintiff - and - Wojciech Bujak Defendant _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice B.E. Romaine _______________________________________________________ Introduction [ 1 ] In this case involving issues of spousal support, child support and matrimonial property division, an order was granted on September 8, 2011 striking the Defendant Wojciech Bujak’s pleadings.

At the commence of the trial, I directed that Mr. Bujak had no standing to adduce evidence, although his counsel was allowed to cross-examine Ms. Bujak and her witnesses and to make submissions on his behalf on the evidence adduced by her: Zivkovic v. Zivkovic , 2009 ABQB 542 ; Rule 3.37(1)(b). Spousal Support

[ 2 ] This was a traditional long-term marriage (over 30 years from the date of the marriage until the divorce) and Mr. Bujak concedes that Ms. Bujak is entitled to spousal support, both on a compensatory and non-compensatory basis. [ 3 ] The parties spent some considerable time living apart, with Mr. Bujak in Canada and Ms. Bujak in Poland, but that is not an issue with respect to support. Mr. Bujak submits, however, that the following issues should be addressed: (

a) Pleadings Mr. Bujak submits that, since Ms. Bujak in her Statement of Claim for Divorce and Division of Matrimonial Property filed on October 26, 2005 only sought support of $3,000 per month retroactive to July, 2005, or alternatively or in addition lump sum support in the amount of $50,000 or such other amount as the Court deems appropriate, she is limited to that relief. Ms. Bujak has calculated spousal support payable in accordance with the Spousal Support Guidelines with a high and low range for each year from 2005 to 2011 inclusive. While the 2005 range (with a deduction from Mr.

Bujak’s gross corporate income of $10,000) is below $3,000 per month for both the high and low range, the Guideline ranges in subsequent years are in excess of $3,000 per month. I find that, despite the pleadings, Ms. Bujak is not restricted to $3,000 for years subsequent to 2005, as the circumstances that existed in 2005 did not necessarily continue to be static in terms of Mr. Bujak’s income and the other circumstances of the family. (

b) Previous Orders Mr. Bujak submits that interim support orders should be taken into account in determining both spousal and child support. In this case, those interim orders were made in circumstances where little or no evidence of Mr. Bujak’s actual income or financial position was known, and the justices involved merely did their best to speculate on those matters. Thus, these orders are of limited assistance to a more extensive analysis of the issues of income and expense at trial. (

c) Previous Notices to Retroactively Vary Child Support Mr. Bujak submits that Notices of Motion filed subsequent to the Statement of Claim somehow preclude Ms. Bujak from seeking to retroactively vary support amounts prior to 2007. Given the large number of interim applications in this case, and Mr. Bujak’s continuing intransigence and failure to disclose his financial situation, I find that Ms. Bujak is not precluded from claiming a full amount of retroactive support once a better picture of Mr. Bujak’s financial situation began to emerge from third party sources.

I also find that there has been sufficient blameworthy conduct by Mr. Bujak in his attempts to hide and distort his financial situation to take this case outside the three-year limit on retroactivity set out in Heimstra v. Hiemstra , 2006 SCC 37 , as followed by Tilleman, J. in N.M.O. v. R.D.O. , 2011 ABQB 349 . Although Mr. Bujak was making some spousal and child support payments as directed by interim court orders, the amounts of such payments were far lower than what he should have been paying had proper disclosure been made. (

d) Income Imputed to Mr. Bujak Mr Bujak also concedes that this is an appropriate case to impute income to Mr. Bujak for both spousal and child support purposes. He concedes that Ms. Bujak has correctly calculated the net yearly payments made to his corporation, W. Bujak & Associates Ltd., for the years 2005 through 2008 inclusive and for 2010. However, he submits that the calculation for 2009 is faulty in that it incorrectly adds negative amounts listed on the computer printouts prepared by Worley Parson. However, Ms.

Bujak points out that these negative amounts were amounts paid out pursuant to a garnishee of Mr. Bujak’s wages. As the money was nevertheless earned by Mr. Bujak, it was not an error to include the amounts in income for support purposes.

Mr. Bujak also disagrees with the 10% reduction in corporate income for business expenses suggested by Ms. Bujak, and argues instead that such a deduction for corporate taxes and expenses be increased to 25%. As noted by Ms. Bujak, Mr. Bujak operated his consulting business out of his own home. Whatever deductions he may have been able to claim for vehicle and house expenses for income tax reasons are not appropriate when assessing income levels for the purposes of calculating spousal and child support. There is no evidence before the Court as to what Mr.

Bujak’s actual expenses may have been, and this absence of evidence is entirely Mr. Bujak’s responsibility. I accept the 10% deduction in the circumstances of inadequate disclosure and the fact that Mr. Bujak is essentially a salaried employee running his business through a corporation for tax purposes. (

e) Income Imputed to Ms. Bujak Mr. Bujak submits that because of Ms. Bujak’s certification as an esthetician in Poland in 1981 and her work out of her home in that capacity prior to the separation, income of $35,000 per annum should be imputed to her as she has failed to take reasonable steps to mitigate any economic disadvantage she suffered as a result of the break-down of the marriage. Ms. Bujak explained the health difficulties suffered by her daughter since the separation and the reasons why it was necessary that she be at home to support her daughter.

She also explained the reasons why she was unable to earn more than the little income set out in her tax returns. I accept her evidence as credible and reasonable. I find no reason to impute income to Ms. Bujak beyond that set out in her tax returns. (

f) Post-Separation Increase in Income Mr. Bujak submits that, where there has been a significant increase to a spouses’s income post-separation as a result of a change of employers (as there has been here), and where there is no clear temporal link between the marriage and the increase in income, the increase in income should not serve to increase the quantum of spousal support payable: Sawchuk v. Sawchuk, 2010 ABQB 5 . I find that in this case, it was Ms. Bujak’s dedication to the care of her children and her management of the household that allowed Mr.

Bujak to progress in his chosen professional career and to earn greater amounts due to his experience and seniority. There is no reason on the facts of this case to deny Ms. Bujak the benefit of that increase. (

g) Other Issues Mr. Bujak submits that I should depart from the Spousal Support Guidelines on the basis of what he characterizes as Ms. Bujak’s lack of initiative. On the basis of what I have said before on that issue, I decline to do so. I also find that it is inappropriate to take into account the $800 per month that the Bujak son paid his mother to help with her support. It was not the son’s responsibility to support his mother and sister in the face of Mr. Bujak’s failure to provide adequate and appropriate support. [ 4 ] In conclusion, I find that Ms.

Bujak is entitled to spousal support at the mid-point of the ranges as calculated pursuant to the Spousal Support Guidelines for the years 2005 - 2011 and part of 2012 as follows: 2005 - $2,814 x 6 months = $16,884 2006 - $4,101 x 12 months = $49,212 2007 - $4,155.50 x 12 months = $49,866 2008 - $4,791 x 12 months = $57,492 2009 - $5,113.50 x 12 months = $61,362 2010 - $5,326.50 x 12 months = $63,918 2011 - $5,326.50 x 12 months = $63,918

2012 - $5,326.50 x 6 months = $31,959 Total: $394,611 [ 5 ] Ms. Bujak concedes that Mr. Bujak paid spousal support in the amount of $36,000 between December, 2005 and November, 2011. If there have been any further payments, this amount should be adjusted. Without adjustment, Mr. Bujak owes retroactive spousal support in the amount of $358,611. Child Support [ 6 ] Other than the issues set out under the analysis of spousal support, there is little dispute with respect to the amount of child support that should have been paid by Mr.

Bujak for the years 2005 to 2011 and part of 2012, which is as follows: 2005 - $1,051 x 6 months = $6,306 2006 - $1,414 x 12 months = $16,968 2007 - $1,498 x 12 months = $17,976 2008 - $1,693 x 12 months = $20,316 2009 - $1,815 x 12 months = $21,780 2010 - $1,925 x 12 months = $23,100 2011 - $1,925 x 12 months = $23,100 2012 - $1,925 x 6 months = $11,550 Total: $141,096 [ 7 ] Ms. Bujak accepts that Mr. Bujak paid $73,140 in child support between the months of December 2005 and November 2011. Without taking into account any further payments that may have been made, Mr.

Bujak owes retroactive child support in the amount of $67,956. Credit for Home Payments [ 8 ] The parties separated in June 2005 and Ms. Bujak moved to the basement of the matrimonial home. On December 21, 2005 a Consent Order provided that Mr. Bujak would have possession of the basement and garage and that Ms. Bujak would have possession of the main floor. Mr. Bujak was to make the mortgage, insurance and tax payments and, pursuant to the consent order, a portion of these were to be considered to be an advance towards his obligation to pay support. Mr.

Bujak lived in the basement until the end of September, 2009. Ms. Bujak was eventually granted exclusive possession of the entire home with Mr. Bujak vacating it as of October 1, 2009 after being required to do so by another order. [ 9 ] Mr. Bujak paid $9,032 for house taxes from separation to September, 2009. From then to October, 2011, he paid $5,534. He paid $3,104.62 for house insurance from separation to September, 2009 and $2,058.75 from October 2009 to October 2011. [ 10 ] As pointed out by Ms.

Bujak, the mortgage on the home is more properly described as a line of credit which had two components, a fixed amount and a revolving amount. At the outset, the total credit limit was $199,125.00, with the fixed component making up $100,000.00 of that amount. As at December 16, 2003 the fixed monthly payment was stated to be $581.36 for 60 months, which would have left a balance of $88,466.69 on the fixed portion of the credit line. The monthly payment was subsequently varied to become a bi-weekly payment beginning January 5, 2004.

[ 11 ] Mr. Bujak made payments on the fixed portion of the line of credit from the date of separation to December 2008 in the amount of $26,946.75. There was a gap in early 2009 but payments resumed in March, 2009 totalling $3,196.34 by the end of September, 2009. From October 2009 to October 2011, payments totalled $15,598.97. [ 12 ] At the time of the parties’ separation at the end of June 2005, the outstanding balance on the revolving portion of the line of credit was $50,292.41.

It had earlier been paid down by $46,083.78 on March 31, 2005 by way of receipt of the net proceeds from the sale of the parties’ home in Orangeville, Ontario. [ 13 ] In August, 2005, after the parties separated, Mr. Bujak transferred $47,000 from the revolving line of credit to his own account. [ 14 ] The bi-weekly payments on the fixed portion of the line of credit had the effect of reducing the fixed amount from approximately $96,421.78 on May 31, 2005 to $85,253.53 as at January 2009. [ 15 ] Mr. Bujak was the only one who accessed the joint line of credit after separation.

As the amount owing on the fixed line decreased, Mr. Bujak allowed the amount borrowed on the revolving line to increase, using this additional borrowing for his own purposes. The revolving line had increased to $113,800.81 by January 2009. After the fixed line and revolving line were consolidated on January 5, 2009, Mr. Bujak borrowed from the total line to the maximum of $199,125 and from that point on, paid interest only. [ 16 ] Interest was billed to the revolving portion of the line monthly and paid by transfer from Mr. Bujak’s account.

Beginning with the interest payment of $196.68 on July 29, 2005, the monthly interest charged through until September 2009 totalled $23,913.40. From October 2009 through October 2011, the interest charged was $14,481.23. [ 17 ] Mr. Bujak paid $23,913.40 in interest on the revolving line of credit from separation to September, 2009, and $15,135.89 from October 2009 to October 2011 inclusive. [ 18 ] Ms. Bujak submits that, as Mr.

Bujak had the use of half the home, he should receive credit for one-half the payments made up until September 2009 and full credit for the payments made from October 2009 to the present after he moved out, subject to adjustments made to take into account that the revolving portion of the line of credit at the time of separation was $50,292.41, but increased by Mr. Bujak for his own benefit to $113,800.81 by January 2009. The adjustment suggested is to give Mr.

Bujak credit for the interest on the debt as it existed at separation, but no credit for the interest on the revolving portion of the line of credit that he incurred for his own account. That proportionate share would be as follows: $50,292.41 ÷ $113,800.81 x 100 = 44.19%. [ 19 ] This is a reasonable approach to take to the issue, and I accept it. [ 20 ] Although not specifically ordered to do so, Mr. Bujak also paid for the utilities. He is entitled to credit for such payments on the same basis as for the other payments. [ 21 ] Mr.

Bujak submits, without evidence to support this submission, that there must have been debt obligations owing by Mr. Bujak prior to the parties’ separation. Thus, he submits, although there is no evidence that would allow Mr. Bujak to claim credit for any matrimonial debt owing at the time of separation, use of funds from the revolving line of credit to pay ongoing liabilities should not be viewed as “being to the sole benefit of Mr. Bujak”, but rather as payments towards pre-existing marital debt.

[ 22 ] The fact that there was no evidence on this issue is a consequence of Mr. Bujak’s continuing misconduct in this litigation. I am not prepared in the circumstances to allow Mr. Bujak any positive inferences that are not supported by any evidence or disclosure. I am satisfied by the evidence before me that the increase in the revolving line of credit from the time of separation up to trial was solely beneficial to Mr. Bujak. [ 23 ] In

summary, Mr. Bujak is entitled to credit in the amount of $52,126.64, calculated as set out in

Schedule A, for support paid by way of house expenses between the date of separation and trial. Arrears of spousal and child support are therefore set at $306,484.36 for spousal support ($358,611 - $52,126.64) and $67,956 for child support. Matrimonial Property Division Real Property [ 24 ] The parties are joint owners of a home in Calgary and a home in Poland. The Calgary home is valued at $428,000, and the Polish property has a value of 531,100 Zlotys or $172,289 in Ms.

Bujak’s opinion, based on appraisals in 2009 and 2011. [ 25 ] While the Court has no jurisdiction to make an in rem determination with respect to disposition of the Polish property, it may take the value of that property into account when determining the appropriate division of matrimonial property. [ 26 ] The Bujak son did extensive work on the home, both inside and outside, while he was living with his mother. I find from the evidence that this work materially increased the value of the property by at least $40,000. I agree that Mr.

Bujak should not share in this increase in value, and it should be deducted from the value of the home before any calculations with respect to division are made. [ 27 ] Mr. Bujak argues against this, suggesting that it makes a difference that the Bujak son is not a party to the litigation and that Ms. Bujak did not perform the work herself. It does not. This contribution to the improvement of the property is a factor that can be properly considered under

Section 8 of the Matrimonial Property Act RSA 2000, c M-8. Mr. Bujak also submits that expert evidence should have been called to establish the fair market value to be ascribed to the work. I find the value of the work as submitted by Ms. Bujak and her son to be appropriate, given the son’s evidence and the pictures of the improvements to the property, and find that expert evidence was not required in the circumstances. [ 28 ] Ms. Bujak concedes that Mr. Bujak is to be credited with $8,000 he paid as an advance on Ms. Bujak’s share of the matrimonial property pursuant to the consent order.

Personal Property [ 29 ] It is clear from the evidence that Mr. Bujak sold the family vehicle and retained the $16,000 of proceeds. Ms. Bujak is entitled to half that amount. [ 30 ] Mr. Bujak’s Canadian cash account in the amount of $59,34.77 and his self-directed RRSP in the amount of $66,128.59 are marital assets, required to be divided equally. [ 31 ] For the reasons described earlier relating to Mr. Bujak’s use of the line of credit, I ascribe only $135,546.04 from that line of credit as matrimonial debt. [ 32 ] I find from the evidence that Mr.

Bujak appropriated $6,761.06 from an account that belonged to his daughter and transferred these amounts to his own personal account. Mr. Bujak submits that, as his daughter’s guardian, he had the authority to manage her money as he saw fit. While that is not persuasive, and does not excuse this misappropriation of his child’s money, Mr. Bujak transferred

the money into his personal account, a matrimonial asset that is subject to the direction of this Court. [ 33 ] I find that half of this amount of money, $3,380.53, is to be paid by Mr. Bujak directly to the Bujak daughter’s account within 30 days of this judgment. Ms. Bujak may at her discretion do the same with the other half credited to her in the division of this matrimonial asset. [ 34 ] I accept Ms. Bujak’s evidence that Mr. Bujak took her jewellery. I accept that these items were exempt from division, and I accept their value in the amount of $5,000. I direct that Mr.

Bujak shall either return the jewellery to Ms. Bujak within 15 days of this decision or that Ms,. Bujak will have judgment in the amount of $5,000 for such jewellery. [ 35 ] The resulting calculation of division of matrimonial property is thus set out in

Schedule B. [ 36 ] As noted by Ms. Bujak, the actual equity in the matrimonial home since Mr. Bujak has incurred further debt on the line of credit is $278,875. It is appropriate in the circumstances that the matrimonial home be transferred to Ms.

Bujak, and that she be given judgment for the shortfall in her share of real property and unregistered assets less the $8,000 credit in the amount of $33,168.78 (plus $5,000 if the jewellery is not returned). [ 37 ] The division of the RRSP asset is to be accomplished by transfer as permitted by the Income Tax Act . [ 38 ] If the parties are not able to agree on costs within 30 days, they may provide written submissions on that issue within 15 days. Dated at the City of Calgary, Alberta this 13th day of July, 2012. B.E. Romaine J.C.Q.B.A. Appearances: John E. Davison, Q.C. for the Plaintiff

Marc F. Crarer for the Defendant

Schedule A Credits for Support Paid by Mr. Bujak July 2005 to September 2009 Property taxes $ 9,032.00 House insurance $ 3,104.62 Utilities $10,509.21 Fixed Line of Credit July, 2005 - December 2008 $29,946.75 January 2009 - September 2009 $ 3,196.34 Revolving Line of Credit @ 44.19% July 2005 - September 2009 $23,913.46 x .4419 $10,567.33 TOTAL: $66,356.25 Allowed at ½ $33,178.13 October 2009 to October 2011 Property taxes $ 5,534.00 House insurance $ 2,058.75 Utilities $ 2,538.53 Fixed Line of Credit $ 2,128.68 Revolving Line of Credit @ 44.19% $15,135.89 x .4419 $ 6,688.55 TOTAL $18,948.51 Allowed in total $18,948.51

Total Credits $33,178.13 + $18,948.51 $52,126.64

Schedule B Property Division Calculations Real Property Matrimonial home $428,000.00 Polish home $172,288.84 TOTAL $600,288.84 Revolving Line of Credit at Separation $ 50,292.41 Fixed Line of Credit at January 2009 $ 85,253.63 TOTAL DEBT $135,546.04 Net divisible equity $600,288.84 Less Debt $135,546.04 TOTAL DIVISIBLE EQUITY $464,642.84 Ms. Bujak’s share @ one-half` $232,371.42 Personal Property Unregistered assets Vehicle $ 16,000.00 Mr. Bujak’s investment account $ 59,344.77 TOTAL $ 75,344.77 Ms. Bujak’s share @ one-half $ 37,672.38 Registered assets Mr. Bujak’s RRSP $ 66,128.59 Ms. Bujak’s share @ one-half $ 33,064.30 Other Return of $3,380.53 to the account in the name

of the Bujak daughter Credit to Mr. Bujak of $8,000.00