Wehrhahn v Murphy, 2013 ABQB 717

Court of Queen ’ s Bench of Alberta Citation: Wehrhahn v Murphy, 2013 ABQB 717 Date: 20131204 Docket: 4801 122280 Registry: Calgary Between: Lisa Dawn Wehrhahn Plaintiff - and - Kevin Douglas Murphy Defendant _ ________________________________________ ______________ Memorandum of Decision of the Honourable Madam Justice C.L. Kenny _________________________________________ ______________ [ 1 ] This matter came before me as a special application pursuant to the Order of Justice McCarthy granted June 4, 2013. The issues to be determined, as set out in that order, are:

a) Mr. Murphy’s application to vary child support;

b) Ms. Wehrhahn’s application for reimbursement from Mr. Murphy for August’s university expenses;

c) Mr. Murphy’s application for enforcement of the costs order against Ms. Wehrhahn. [ 2 ] Each party wishes to bring an application as against the other party to argue that they are intentionally unemployed or

underemployed and seek to have the court impute an income to them pursuant to

section 19 of the Federal Child Support Guidelines. That matter was not before me. The parties are to meet with the case management Justice to set up an appropriate time for that matter to be heard which will allow sufficient time for a proper hearing of the matter and the setting of deadlines for the filing of all necessary material. [ 3 ] The decisions I make below with respect to income for 2012 and ongoing are based on the income information received by me from the parties. I make no decision on the imputing of income. In the event that income is imputed for either or both of the parties for 2012 and on, then clearly the

section 3 child support and

section 7 expenses will need to be readjusted retroactively based on the imputed incomes. Child Support [ 4 ] The parties have historically varied child support a year in arrears based on the previous year’s income tax return. At the end of 2011, Mr. Murphy’s employment with an oil and gas company ended. He has had sporadic contract work and other employment income since that time. As a result, he is earning much less income than previously. He seeks to reduce his child support payments. [ 5 ] Child support for 2013 is based on the parties’ income in 2012. I must set that income.

a) Ms. Wehrhahn Justice Jeffrey, in his trial decision, imputed income to Ms. Wehrhahn of $35,000 until January of 2012 and thereafter, at the greater of $35,000 or her actual income until the automatic annual adjustment mechanism kicked in. The parties are not eligible for the automatic recalculation program because of the imputed income to Ms. Wehrhahn and the corporate income earned by Mr. Murphy therefore the recalculation must be done by the court barring agreement between the parties. Pursuant to the order of Justice Jeffrey, the income for Ms. Wehrhahn for 2011 is set at $35,000.

This will be used to calculate support payments for 2012. Her income for 2012 will be her actual line 150 income which is $26,654. This will be used to calculate support payments for 2013.

b) Mr. Murphy Mr. Murphy now earns his income through consulting and part-time work. It is directed through a corporate entity. He does not prepare proper financial statements but rather prepares himself, for submission to the Canada Revenue Agency, a statement of operations, a closing balance sheet and an income statement. The tax year end for the company is March 31 st .

I have reviewed his personal tax return for 2012, his corporate tax returns for the corporate years ending March 2012 and March 2013, as well as the statement of operations he prepared for September 30, 2011 to March 31, 2012 and April 1, 2012 to March 31, 2013. He has claimed a line 150 income for 2012 of $33,526.00 which was paid to him from his consulting company. I have taken three months of salary from the operations statement ending March 31, 2012 and nine months of salary from the operations statement ending March 31, 2013 to try and determine his income for 2012. This totals $42,143.00.

A review of the statement of operations however, indicates a number of deductions which, although appropriate for tax purposes, are not appropriate for the purposes of calculating child support. These include deductions for things such as office expenses, computer, telephone, vehicle, marketing, internet and health insurance. For 2012, I would add back in from those deductions the sum of $8,000.00 for a total income in 2012 of $50,143.00. [ 6 ] Based on these these incomes, the proportionate sharing for

section 7 expenses in 2013 is 34% to Ms. Wehrhahn and 66% to Mr. Murphy. August’s University Expenses [ 7 ] August attends university in Calgary. She is in a special music program which is very demanding in terms of hours of practice and course work. As a result, she chose, with the agreement of her parents for her first year, to live in residence. Mr. Murphy says that starting in September of 2012, August’s second year, he could no longer afford to pay for board and suggested she live with either him or her mother.

August set out why that was impractical given her course work, long hours of practice, lack of transportation to university, and the lack of a suitable place to practice at either her mother or father’s residence. I accept her rational for living in residence for the 2012-2013 school year. [ 8 ] In the trial decision, Justice Jeffrey directed Mr. Murphy pay

section 3 support for August as well as the sharing of her university costs which included board. This appears to be on the basis that the mother would still have costs for August over and above all of her university costs such as keeping a room for her during the school year, feeding her on occasion, and providing her with transportation when required. [ 9 ] In my view, it would be inappropriate to require Mr. Murphy to pay both

section 3 support which is to cover his share of the overhead costs for August as if she were residing with her mother while at the same time requiring him to contribute to her costs to live in residence at university which is for the same purpose. [ 10 ] I also note that August is contributing to her own costs as well by working two jobs and obtaining bursaries and now loans. [ 11 ] For September to December of 2012, August’s university expenses, net of her own contribution, were $7,669.88. Mr. Murphy’s pro rata share of those expenses is $5,062.00. He paid the sum of $3,414.00 and he therefore owes to Ms.

Wehrhahn the further sum of $1,648,00. [ 12 ] For January to April of 2013, the total university costs, net of August’s contribution, were $5,228.00. Mr. Murphy’s pro rata

share is $3,450.00. He has paid $1,400.00 and therefore he owes a further $2,050.00 to cover his pro rata share of the expenses. [ 13 ] August has now returned to live with her mother for her third year of university and so

section 3 support for her would start May 1 st 2013 and continue on thereafter.

Summary of

Section 3 Child Support [ 14 ] For January to April 30, 2013, Mr. Murphy will pay a set off for the parties’ son as he shares time with each parent. The younger daughter is designated as being with the father although she lives with her mother and Justice Jeffrey has refused to allow the parties revisit the support for a two year period which ends at the end of June 2013. Therefore, Ms. Wehrhahn shall pay support for the younger daughter during this period. Ms. Wehrhahn shall pay for two children with a set-off from Mr.

Murphy of one child such that the net amount owing is negligible based on their incomes. [ 15 ] For May and June of 2013, Mr. Murphy shall pay support for August and Ms. Wehrhahn shall pay support for her younger daughter and a set off amount for the parties son. The set off is $305.00 per month and therefore Mr. Murphy owes Ms. Wehrhahn the sum of $610.00. [ 16 ] From July 1, 2013 and going forward, Mr. Murphy shall pay

section 3 support for both August and his younger daughter, and the parties shall have a set off with respect to their son. I set that monthly sum at $725.00 per month. Costs [ 17 ] There were trial costs due and owing by Ms. Wehrhahn to Mr. Murphy. At the hearing of this matter, we applied certain credits to the outstanding costs leaving a balance due and owing of $2,366.91. There were further sums of $1,691.24 and $161.00 that still had to be divided once we knew the pro rata shares. Mr. Murphy then owes to Ms. Wehrhahn, the sum of $1,222.00 being his pro rata share of $1,852.24.

Summary [ 18 ] Mr. Murphy owes to Ms. Wehrhahn the following sums: $1,648.00 + $2,050.00 + $610.00 + $1,222.00 for a total of $5,530.00. [ 19 ] Ms. Wehrhahn owes to Mr. Murphy the sum of $2,366.91 for costs. [ 20 ] The net amount owing therefore by Mr. Murphy to Ms. Wehrhahn is the sum of $3,163.00 plus payments for support of $725.00 per month from July 1, 2013 which total $4,350.00. Mr. Murphy therefore owes a total of $7,513.00 for all payments of

section 3 and

section 7 support to and including December 1, 2013. He shall receive credit for this sum as against any payments he has made to MEP in 2013. [ 21 ] Commencing January 1, 2014, Mr. Murphy shall continue to pay $725.00 per month in

section 3 child support plus his proportionate share (66%) of any

section 7 expenses. The parties will readjust support payments commencing January 1, 2015 based on their 2013 incomes. Heard on the 27 th day of November, 2013. Dated at the City of Calgary, Alberta this 4th day of December, 2013. C.L. Kenny J.C.Q.B.A. Appearances: Lisa Dawn Wehrhah Self-Represented Plaintiff Kevin Douglas Murphy

Self-Represented Defendant