Petrunia v. Petrunia, 2012 ABQB 568

Court of Queen ’ s Bench of Alberta Citation: Petrunia v. Petrunia, 2012 ABQB 568 Date: 20120914 Docket: 4803 120496 Registry: Edmonton Between: Barbara Letitia Katerina Petrunia Respondent / Plaintiff - and - Dean Alexander Petrunia Applicant / Defendant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice M. David Gates _______________________________________________________ 1.

Introduction [ 1 ] This is an application filed by Dean Alexander Petrunia (the Applicant) on August 23, 2011, seeking a review of the order of Manderscheid J. dated November 9, 2010 in relation to the issue of ongoing spousal support for his former wife, Barbara Letitia Katerina Petrunia (the Respondent), and child support for one child of the marriage. [ 2 ] This matter was heard as a one day vive voce hearing on March 12, 2012, and continued for a further day on March 20, 2012. Oral argument was heard on May 2, 2012.

On June 19, 2012, I advised the parties of my decision and indicated that written reasons would follow. 2. History of the Proceedings

[ 3 ] The parties were married on September 26, 1981 in Calgary, Alberta. They were divorced on July 22, 2001. At the time of the divorce, there were three children of the marriage. Only Sara, currently aged 16, remains a child of the marriage. [ 4 ] At the time of the divorce, Macklin J. granted the Respondent sole custody of the children of the marriage, and ordered that the matrimonial home be transferred to her. He further directed monthly support payments in the amount of $762, consisting of $612/month in child support and $150/month in spousal support.

Spousal support was set for a period of 3 years in recognition of the fact that the Applicant had transferred his share of the equity in the matrimonial home to the Respondent (approximately $8,500) and the fact that the Applicant committed to paying $150/month in spousal support for three years in full satisfaction of the Respondent’s claim to retroactive and on-going spousal support. Finally, the order specified that the parties could apply for a variation in the event of a material change in circumstances. [ 5 ] The Respondent sought to vary the order of Macklin J. in an application filed July 20, 2005.

At the time, the Applicant conceded that there had been a material change in circumstances relative to the issue of ongoing spousal support, but contested the amount sought by the Respondent. On July 26, 2005, Acton J. varied the terms of the July 2001 order of Macklin J.

Specifically, she fixed ongoing child support at $468 per month, together with $60 per month in s. 7 expenses (a total of $528.00 per month), and increased the level of spousal support to $700 per month commencing September 1, 2005 and continuing for six years until August 1, 2011. [ 6 ] The Applicant’s employment at TransX was terminated on or about January 9, 2009. He continued to make his monthly child and spousal support payments up to and including January, 2010. On August 18, 2010, he filed an application to vary the order of Acton J. dated August 9, 2005.

That application was heard by Stevens J. on August 19, 2010. Relying on his loss of employment as a material change in circumstances, the Applicant sought a reduction in child support and termination of spousal support. Stevens J. adjourned the application to special chambers and issued an interim order reducing the child support to $183 per month and the spousal support to $317 per month effective August 1, 2010 until further order.

He further directed a stay of execution for three months, under s. 32 of the Maintenance Enforcement Act , RSA 2000, c M-1. [ 7 ] The special chambers application was heard by Manderscheid J. on November 9, 2010. In the

preamble to his order, Manderscheid J. found that there had been a temporary change in circumstances that required an interim variation of Acton J. ’ s July 26, 2005 order. He found that both the Defendant and the Plaintiff had the same guideline income of approximately $20,000 per annum at the time of the application. The Court dismissed the application to terminate spousal support and confirmed Stevens J. ’ s interim order reducing child support to $183 per month and spousal support to $317 per month.

The order stipulated that this reduction in both child support and spousal support would continue until September 1, 2011. The order also directed the Applicant to return to Court on or before September 1, 2011 to provide evidence concerning his income and to show cause why this Court should not impute to him income commensurate with his previous Guideline Income of $54,000 per annum.

In the event that the Applicant failed to initiate a review of child support and spousal support by September 1, 2011, the Applicant ’ s child support would automatically revert back to $528 per month, and his spousal support would revert back to $700 per month, commencing September 1, 2011, until further Court order. [ 8 ] In accordance with the order of Manderscheid J., the Applicant filed an application on August 23, 2011, seeking to terminate spousal support payable to the Respondent, citing the following grounds: his financial circumstances; no further need or entitlement on the part of the Respondent to ongoing spousal support; no effort by the Respondent toward economic self-sufficiency; no willingness on the part of the Respondent to forego spousal support despite the potential irreparable financial harm it caused the Applicant; and hardship on the Applicant should spousal support continue to be payable. [ 9 ] In effect, the Defendant seeks to vary Manderscheid J.’s November 9, 2010 order which, as previously stated, dismissed his application to terminate spousal support and set a deadline of September 1, 2011 by which the Defendant was to provide evidence of his financial situation showing why he should not be imputed an income of $54,000 for support purposes.

I would note that income of $54,000 coincides with that found by Acton J. in July 2005 which in her view justified $528 per month in child support and $700 per month in spousal support. [ 10 ] During the March 12, 2012 hearing, I found that the Applicant had complied with paragraphs 3 and 4 of Manderscheid J.’s order by filing his application on August 23, 2011. I also found that the Applicant’s August 23, 2011 application constituted notice to the Respondent of his intention to seek termination of spousal support.

[ 11 ] The Respondent’s position is that Manderscheid J.’s order limits this review to the Applicant providing proof of why he should not be imputed an income of $54,000 and that the issue of termination of spousal support is not reviewable. Her position is that the Applicant is intentionally underemployed and should, therefore, be imputed a higher income. 3. The Parties [ 12 ] The Applicant obtained a Bachelor of Management degree from the University of Lethbridge with a concentration in accounting in1980 or 1981.

Upon graduation, given the downturn in the Alberta oil and gas economy, he accepted a position with Big Horn Transport as a dispatcher. He had worked for Big Horn on a part time basis when he was 16 years of age and then part-time during the summers and on weekends while attending university. Following graduation from university, he spent approximately six months looking for work in his field, but was unable to find anything. He had accumulated approximately $12,000 in student loans and they were coming due from the bank.

Hence, he needed a job. [ 13 ] The Applicant spent three years with Big Horn Transport in Lethbridge and then accepted a position as Operations Manager with the same company in Edmonton. He remained there for 13 years before moving to Edge Transportation. According to his evidence, the Applicant left Big Horn to try and better his financial position; a decision supported by his family. He remained with Edge Transportation for five years. In 2001, the company let him go.

The Applicant describes this parting of the ways as the result of the company having unrealistic expectations of his ability to expand the business. [ 14 ] The parties separated in 2000 and were divorced in 2002. [ 15 ] After leaving Edge Transportation, the Applicant applied for employment insurance, but then obtained a position with Byers Transportation in Edmonton. He worked with Byers very briefly before returning to Big Horn Transport in Calgary as dispatcher/operations manager.

In late 2008, the Applicant, along with all of the other employees of Big Horn, was informed that this family operated business was closing down. [ 16 ] TransX of Winnipeg bought Big Horn and the Applicant’s employment continued until TransX decided to shut down the Calgary operation in January 2009 as a result of a downturn in the economy. The Applicant was not offered any opportunity to continue with TransX. He received three weeks severance pay and a total of $8,400 for his years of service with Big Horn. [ 17 ] The Applicant spent the next month to six weeks looking for new employment.

He talked to many other companies and confirmed that the recession had left the industry in a challenging situation such that other similar companies were downsizing and letting employees go. [ 18 ] In early February 2009, the Applicant decided to start his own business. He testified that he had been thinking about doing this for 15 years and, indeed, had discussed this with the Respondent during the marriage.

However, he had decided against it at that point given his need for a regular pay cheque. [ 19 ] In early 2009, the Applicant decided that employment insurance was not an option given his severance package, and the fact that he was not the kind of person to take advantage of that option if he was able to do something. Faced with a situation where no one was hiring, a recession that “hit hard”, and with “no hopes of obtaining a job”, the Applicant decided to start his own business and use the knowledge he had acquired over the years working in the trucking business.

He incorporated 1450636 Alberta Ltd. in February 2009, operating as First Freight. [ 20 ] The Applicant stated that while he could possibly obtain employment as a junior dispatcher earning $25,000 to $30,000 per year, his former position earning approximately $55,000 per year simply no longer exists. He also indicated that the trucking business has been going through difficult times over the past five years and that many companies have gone bankrupt. [ 21 ] The Applicant submitted that his current business is viable and simply needs to be given a reasonable amount of time to grow.

He has considered other employment options, including returning to university to upgrade his educational qualifications, or obtaining his Class 1 license. However, he stated that he simply does not have the money to pursue such options; he lacks computer skills and his age

(50) works against future employment prospects. He stated: “What else can I do? I have to try and do this.” (Transcript, p. 81, l. 34) [ 22 ] The Applicant confirmed that he secured part time evening and weekend employment in November, 2011 as a front desk clerk at a hotel earning $10 per hour. At present, he earns $650 to $800 per month from this employment. He testified that while he tries to take extra shifts when they become available, he cannot work 24 hours per day. [ 23 ] In terms of assets, the Applicant has equity in his company. He does not own a home.

He has a 12 year old vehicle with 250,000 miles on it. He does not have any RRSPs, other investments, or insurance. In his own words, he has nothing. In terms of personal assets, he has a television and a futon. He has an outstanding balance of approximately $3,200 on a credit card that carries an annual interest rate of 28% or 29%. He attempts to make payments of $100 per month. He also owes Legal Aid $5,500. [ 24 ] The Applicant borrowed $10,000 from his father to make an RRSP contribution and then used the resulting tax refund of $4,500 to finance the start-up costs of his business.

He repaid the $10,000 loan to his father during the next year, together with $600 in interest. He currently owes his father and step-father approximately $4,000, representing other money they have lent to him. He initially set up an office in a room in a friend’s home in Okotoks, but later moved to Calgary when the house in Okotoks was sold. He lives day to day in this same room. The company pays a monthly rent of $300, but the Applicant personally lives rent-free, helping out with some of the household chores.

He has an understanding with his landlord that he will pay some money for his personal use of the space at some point in the future when he is able to do so. He contributes $50 to $75 per month to the cost of food. He testified that he spends $40 to $50 per year on clothing and approximately $80 per year on haircuts. He has no health insurance other than Alberta Health Care. He has not taken a vacation in six to nine years. His parents also assist him from time to time by providing him with food.

Prior to setting up his business, the Applicant lived with his father and was required to pay some rent. [ 25 ] In terms of income, the Applicant testified that he does not earn a salary as he did when he was employed with Big Horn or TransX, but rather he is having “to fight and build it [the business] on his own”. He made a gross revenue of $10,000 in the corporate year ending on October 31, 2009.

He testified that he gets paid either by taking out shareholder loans or via dividends and that during that first year he paid himself $2,000. [ 26 ] The Applicant initially used his severance from Big Horn to meet his monthly child and spousal support obligations. As this money ran out, he began using business proceeds to fulfill these obligations. [ 27 ] In his second year of operation, the company made $20,000. Last year it made just over $10,000, down from the previous year’s earnings as a result of the loss of an important customer.

He described the business as growing and stated that in five years he hoped to be grossing $100,000 a year. He explained that he was taking a minimal amount out of the company in order to survive, so that he could leave money in the company to enable it to continue to grow. The Applicant stated that he is in the negative every month to the extent of $2,000 and that, generally, he is “going into debt more and more” (Transcript: p. 91, l. 20). [ 28 ] The Applicant’s current financial situation is aptly summarized in the following extract from the Applicant’s testimony: I’m trying to do the best I can.

The company is still viable on paper. It’s still making money. Yes, at this time, I can’t withdraw $54,000 a year to myself. The company is not grossing 50,000 - - $54,000 a year. In two or three years from now, you know, I am hoping - - I’m - - I’m doing it, and I’m anticipating that it is going to continue to grow. As I can make it grow, I can - - I can hopefully use other tools. There’s the Internet, for example, there’s programs that I could subscribe to that would greatly help my business, but they come at a fee per month.

There’s programs like LoadLink, where I can tap into and see loads and - - and go after them. There’s also, on the other hand, links that truckers or transportation companies would - - would let you know where they’re located and looking for loads, but those come at a fee, 3 to $400 a month. I - - I just - - until I build more money in the company, I have to make sure I can pay my bills. But if I had opportunity, I can - - that will just make my company grow.” (Transcript, p. 80, l. 4-16) [ 29 ] The Respondent also gave evidence during the proceedings.

She testified that she currently operates a childcare centre our of her home in Edmonton, which she has owned for approximately 12 years. She testified that she has actually operated a dayhome for over 20 years. She currently pays $717.87 per month for her mortgage and property taxes. There is an outstanding balance on the mortgage of $60,857.21 as of September 28, 2011 (Exhibit #4).

[ 30 ] I had some difficulty with the Respondent’s oral evidence, supported by some documents, as to the status of her education. In 2005, she advised Acton J. that she planned to get her Bachelor of Education degree and complete a program as a Special Needs Educational Assistant. Acton J. awarded her six years of spousal support in order to enable her to complete this education plan and to allow her to close her day home and increase her income. At some point after the Applicant stopped paying $700 per month in spousal support (after January 2010), the Respondent had to quit school and re-open her dayhome.

It is not clear to me whether she completely quit school or simply scaled back her course load. On the evidence, it would appear that she never attended school full time and that she worked part time for Southgate Medallion Day Homes as a supervisor when she initially closed the day home after the Acton J. order in 2005. From her evidence, it was also clear that she altered her plan at some point after January 2010 and decided to enroll in an occupational therapist diploma program. Her evidence was that this is a two year program, as opposed to a four year program to obtain an education degree.

However, although there are academic records in evidence showing the various courses she has completed, the evidence leaves me uncertain as to the nature and status of her education plan from the date of the Acton order. [ 31 ] Mrs. Petrunia provided extensive evidence, including a number of exhibits, which detail her monthly expenses to operate the family home for herself and for Sarah, as well as to operate the childcare centre. She has other debts in addition to her mortgage, including an outstanding balance of $18,100 on a Toronto-Dominion Line of Credit.

She pays $200 per month towards a credit card, and currently owes $4,500 to the Canada Revenue Agency, and $4,000 to Legal Aid. [ 32 ] Mrs. Petrunia’s financial circumstances are very tight and she has had to rely on financial assistance from her church over the course of the past several years. During the years 2007 to 2010, the church has covered such expenses as the bills for water and electricity, urgent home repairs, medical expenses and food.

As set out in Exhibit #2 in these proceedings, the church’s support totalled $3,707.20 in 2007; $4,257.67 in 2008; $5,023.98 in 2009; $4,510.60 in 2010; $4,547.26 in 2011 and $992.99 in 2012. She also provided evidence on dental expenses for Sarah and for the parties’ eldest daughter, Lisa. While Mr. Petrunia was employed, the evidence suggests that at least a portion of the dental expenses for his dependent children was covered by his workplace dental plan. However, the evidence is less clear regarding the extent to which actual dental expenses were submitted to the plan for reimbursement. [ 33 ] Mrs.

Petrunia also provided detailed evidence on the costs incurred to support Sarah’s attendance at school, including transportation and extra-curricular activities. [ 34 ] Finally, Mrs. Petrunia’s evidence was that in September 2009, once she became aware of the Applicant’s loss of employment, she made a proposal to him by which she would accept a reduced amount of child and spousal support until such time as the Applicant was able to get back on his feet financially. As such, she proposed a reduction to $500 per month.

The Applicant rejected the proposal and subsequently initiated the August 18, 2010 application to reduce child support and terminate spousal support. 4. Child Support [ 35 ] According to Manderscheid J.’s order, the Applicant was to be imputed income of $54,000 as at September 1, 2011 unless he provided evidence of his financial situation showing why this amount should not be imputed. [ 36 ] Essentially, Manderscheid J. found that although the Applicant’s employment had changed, his earning capacity had not changed.

Manderscheid J. nevertheless concluded that the Applicant’s business aspirations should not be rejected out of hand. Consequently, he granted interim relief until September 1, 2011 when the Applicant would be required to explain, if the circumstances warranted, why he had not been able to increase his income from his business to his prior income level.

Manderscheid J. was aware of the nature and struggles of the Applicant’s fledgling business. [ 37 ] Having had the benefit of vive voce evidence from both of the parties, the subsequent history of the Applicant’s business and earnings establish, in my view, that the situation is not as temporary as Manderscheid J. contemplated at the time of the hearing before him on November 9, 2010.

In my view, this is a material change in circumstance which permits me to examine afresh the issues of child and spousal support. [ 38 ] Section 19(1) of the Federal Child Support Guidelines (CSG ) gives the Court discretion to impute income for the purposes of child support. It provides in part:

(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; ... (

g) the spouse unreasonably deducts expenses from income...

(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act . [ 39 ] In Hunt v Smolis-Hunt , 2001 ABCA 229 at para. 64 , the majority of the Court of Appeal held that there is no obligation on a payor to support his dependents to the maximum of his earning capacity, as that would fail to recognize and value the fundamental importance of work to a person’s life and the freedom to choose meaningful work.

Further, categorizing employment decisions as “reasonable” or “unreasonable” is not helpful as it does not provide sufficient scope to the payor to choose his or her employment.

At the same time, proof of deliberate intention is difficult to establish, and therefore inferences can be drawn based on the evidence. [ 40 ] In Mercer v Mercer , 2004 ABQB 551 at para 28 , Watson J. (as he then was) held that an intention to avoid support could be inferred where unreasonable explanations and attempts to find alternative employment are combined with actual concrete awareness of the consequences, being that the dependents are receiving less support. See also VLW v JEW , 2007 ABQB 358 at para 32 .

These cases are difficult to reconcile with Hunt , in that they appear to place great weight on the reasonableness of a payor’s employment decision when the Court of Appeal expressly held that was not the test. A payor usually has actual awareness that his employment decisions affect the level of support received by his dependents. Nevertheless, the voluntariness of the payor’s unemployment or underemployment, as it relates to available employment opportunities and attempts to secure such opportunities, is an important factor.

The Applicant’s choice in this case to pursue his business venture must be assessed on the basis of all the evidence. [ 41 ] The Respondent submits that the test for imputing income has been met.

She relies on various decisions, including: Mercer v Mercer , 2004 ABQB 551 ; VLW v JEW , 2007 ABQB 358 ; Bercier v Isaac , 2008 ABQB 377 ; Higgins v Higgins , 1996 CarswellAlta 848 , Gibson v Gibson (Gauthier ), 2011 ABQB 564 and Lavergne v Lavergne , 2007 ABCA 169 . [ 42 ] In determining the appropriate amount of child support in this case, I recognize that the Applicant’s company is not providing him much in the way of personal income. Further, I find that he is making his best efforts with respect to the part-time job and the trucking business.

In my view, he is not “intentionally under-employed or unemployed” within the meaning of s. 19(1) of the Divorce Act . Accordingly, I do not impute income to him in the sense that he can be faulted for not finding further alternate employment or for unreasonably deducting business expenses from his income. [ 43 ] However, this case calls for a practical solution given the very limited financial means of both parties and the protracted history of litigation leading to this application.

Although I do not find that the Applicant has made an unreasonable decision in attempting to establish a trucking business, I find that at this point in time he has used, and can continue to use, his part-time desk clerk income, combined with his modest earning from the trucking business, to pay child support. [ 44 ] I conclude that $500 per month is not an unreasonable amount in all of the circumstances. In setting this amount, I take into consideration that he had been paying child support at approximately this level from 2005.

I also take into consideration the fact that he has, in fact, been paying this same total amount since August 2010. As well, Mrs. Petrunia’s evidence before me was that $500 per month is the minimum amount of support that she requires to make ends meet. Accordingly, I fix child support at $500/month effective July 1, 2012. As well, the Applicant is responsible for his proportionate share of the s. 7 expenses as are agreed upon by the parties. 5. Spousal Support

Priority of Child Support over Spousal Support [45]

Section 15.3 (1) of the Divorce Act mandates that where a court is considering an application for a child support order and anapplication for a spousal support order, the court shall give priority to child support in determining the applications. Entitlement [46] In making an initial order for spousal support, the Court first considers the threshold issue of entitlement to spousal support,which can be proven on three bases: (1) contractual, (2) compensatory, and (3) non-compensatory or needs-based (Bracklow v Bracklow, (SCC), [1999] 1 SCR 420 at para 15).

If entitlement is proven, then the Court goes on to consider the form, quantumand duration of the spousal support. In weighing an applicant's entitlement to support and the respondent's ability to pay support, thepayee’s entitlement to support is presumed before embarking on an analysis of the payor’s ability to pay (MacNeill v MacNeill, 2008ABQB 535 at para 30). There is no need to consider the second issue if entitlement is not proven. [47] Manderscheid J. found that the Respondent was still entitled to spousal support as of November 9, 2010.

He did reduce thequantum from that ordered by Acton J. in July 2005 due to the Applicant’s unemployment. However, Manderscheid J. included in theorder a review mechanism on the issue of the quantum aspects of the support order. [48] The Applicant in this case seeks not merely a reduction in the quantum of spousal support, but a termination of spousalsupport altogether, at least in part on the grounds that the Plaintiff is no longer entitled to spousal support. Manderscheid J. did notindicate in his order that the question of entitlement was open to review.

Such a review would first require the Applicant to establish amaterial change of circumstances under s. 17 of the Divorce Act, RSC 1985, c 3 (2nd Supp): Leskun v Leskun, 2006 SCC 25, [2006] 1SCR 920 at para 35. [49] The test for “material change” was defined in Willick v Willick, (SCC), [1994] 3 SCR 670 at 688 in thecontext of a variation of child support as: a change, such that, if known at the time, would likely have resulted in different terms. TheSupreme Court of Canada in G(

L) v B(G), (SCC), [1995] 3 SCR 370 adopted this approach for variation of a spousalsupport order. [50] As stated above, the evidence was not clear regarding the Respondent’s educational pursuits. It was not clear how far she hadprogressed in the education degree when she switched gears. It is also not clear that she would earn more with an occupational therapistdiploma than she does at her dayhome. What is clear is that the Respondent has not completed an educational program as contemplatedby Acton J.

This cannot be laid entirely at her feet, as Acton J.’s six year award was premised on the Applicant continuing to pay $700per month in spousal support for the duration, which did not occur. In the circumstances, I conclude that the Respondent’s failure tocomplete an educational program is not a material change in circumstance which can be raised by the Applicant. [51] I find on the basis of all of the evidence that the Respondent continues to be entitled to support, but the Applicant’s continuingstruggle to build his business does allow the Court to reconsider quantum.

Imputing Income [52] Some courts have held that the law respecting imputation of income under s. 19(1) applies equally in the context of imputingincome for those spouses who have spousal support obligations (see MacNeill v MacNeill, 2008 ABQB 535 at para 25, and Jean v Jean,2006 ABQB 938 at paras 105-07). This is particularly appropriate in cases, such as this, where both the spousal support and child supportobligations of the payor are at issue.

Greckol J. noted at para. 107 of Jean that this approach “makes sense where there might be aninconsistent and awkward outcome where two different incomes are ascribed to a payor spouse in the course of the same application ortrial”. She did caution, however, that the underlying rationale and objectives of spousal support and child support differ, in particularbecause entitlement to child support is automatic for children of the marriage.

She held at para. 110 that the Court has the jurisdiction toimpute income for the purpose of spousal support without requiring consideration of the common law test for imputing income under s.19(1), citing Corbeil v Corbeil, 286 AR 330, 2001 ABCA 220 at para. 47 for the proposition that spousal support is a matter of judicialdiscretion, taking into consideration those matters set out in the Divorce Act.

[ 53 ] All of the cases cited by the Respondent in relation to imputing income dealt with child support, not spousal support. Further, all are driven by their particular set of facts. [ 54 ] As stated above, I do not find that the Applicant has been unreasonable in his desire and attempts to establish a trucking business. I accept his evidence that the industry has changed over the years such that the type of work he has previously done no longer exists.

Before embarking upon his current business venture, he made reasonable inquiries of his contacts within the industry regarding employment opportunities relative to his former role, as well as a lower-paying position as a dispatcher. The Applicant’s evidence was that he had recently taken on a part-time position as a front desk clerk at a hotel.

I have taken all of these circumstances into account in ordering $500 per month in child support. [ 55 ] I conclude on all of the evidence that at this time it would be inappropriate and counterproductive to require the Applicant to pay spousal support, given his current income and the child support which I have ordered herein. [ 56 ] Although the Respondent has a continued entitlement to spousal support, the Applicant has no ability to pay anything other than nominal spousal support given his current income and his continuing child support obligations.

Accordingly, I reduce the Applicant ’ s spousal support payment to $1 per month effective July 1, 2012. [ 57 ] Finally, I direct the parties to make arrangements to have this matter brought back before me for review by the end of September 2013. While I have found that the Respondent is not underemployed at the present time, the expectation is that his business income will increase over time. If that does not occur, at some point he will be expected to take alternative steps to obtain gainful employment. 6.

Costs [ 58 ] The parties provided written submissions on the issue of costs, as requested at the time of the delivery of the oral decision. [ 59 ] The Applicant seeks costs on a solicitor-client basis. Mr. Petrunia says that he was denied coverage by Legal Aid relative to this application, while the Respondent has received Legal Aid coverage throughout. He says that the Respondent has used this differing treatment by Legal Aid as “leverage” in these proceedings so as to warrant “sanction” by the Court in the awarding of costs.

He further states that his counsel has had to write off considerable time as a result of his (the Applicant’

s) financial limitations. Finally, the Applicant says that proceeding by way of a “very costly” vive voce hearing was the only available option under the circumstances. [ 60 ] The Respondent, on the other hand, seeks costs in Column 1. She says that the Applicant was not successful in this application in that spousal support was not terminated and the result on the issue of child support was also not what the Applicant was seeking.

Moreover, she says that the Applicant’s conduct unnecessarily lengthened and delayed these proceeding as a result of his failure to meeting court filing deadlines leading to a striking of his initial date for a Special Chambers Application in November, 2010. Further, she says that the Applicant failed to comply with the Rules of Court and applicable Practice Notes relative to the filing of materials (confirming letter, notice of all materials to be relied upon, and case authorities) required for the March 12, 2012 vive voce hearing.

Finally, the Respondent says that the Applicant did not comply with the order of Read J. of October 18, 2011 regarding the provision of financial disclosure. [ 61 ] I do not accept the Applicant’s contention that he is entitled to solicitor-client costs for any of the reasons provided. Likewise, I am not satisfied that there is an factual basis to his contention that the Respondent has somehow improperly lengthened these proceedings or otherwise intentionally added to the complexity of same.

The differing treatment by Legal Aid is unfortunate given that both parties clearly lack financial resources, but that hardly warrants the awarding of solicitor-client costs. [ 62 ] I agree with the Respondent that the Applicant was not entirely successful in his pursuit of this application. I would, however, characterize the success as mixed or divided. As a general proposition, I also agree with the Respondent that some of the alleged actions of the Applicant have, indeed, lengthened the proceedings.

This must, however, be balanced against the fact that the Applicant was unrepresented for at least part of the early stages of this application.

[ 63 ] Further, it is true that informal offers that do not comply with the Rules are a relevant consideration with respect to costs ( Mahe v Boulianne , 2010 ABCA 74 , 81 RFL (6th) 4).

However, in this case, the Respondent’s September 2009 offer was made shortly after the loss of the Applicant’s job and the launch of his new business, and the Applicant would not necessarily have understood the potential cost consequences of rejecting an informal offer. [ 64 ] Under all of the circumstances, and having considered the factors in Rule 10.33, I am of the view that the most appropriate order that can be made is to find that both parties should bear his or her own costs. Heard on the 12 th and 20 th days of March and the 2 nd day of May, 2012.

Dated at the City of Edmonton, Alberta this 12th day of September, 2012. M. David Gates J.C.Q.B.A. Appearances: Lydia J. Bubel Family Law Office for the Respondent / Plaintiff Gary D. Ellis Soby Boyden Lenz for the Applicant / Defendant