Fessenden v Schuetz, 2014 ABQB 692

Court of Queen ’ s Bench of Alberta Citation: Fessenden v Schuetz, 2014 ABQB 692 Date: 20141223 Docket: 4803 137146 Registry: Edmonton Between: Kimberly Michelle Fessenden Plaintiff/Applicant - and - Henry Joseph Schuetz Defendant/Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _______________________________________________________ Background [ 1 ] Ms. Fessenden, formerly known as Ms. Schuetz has brought an application for a variation of child support granted in the Divorce Judgment dated September 13, 2006. She seeks child support and

Section 7 expenses retroactive to January 1, 2010; and an imputation of her former husband’s income for the period between 2010 and 2013. [ 2 ] These parties were married in August 1993 and separated in August 2004. There were four children of the marriage currently

ranging in age between 14 and 20. As of August 2012 the oldest child turned 18 and is no longer a child of the marriage as he was working fulltime. [ 3 ] In August 2004 when the parties separated they agreed to joint custody with shared parenting of the children. The September 2006 Divorce Judgment provided for this as well. Issue [ 4 ] The wife brings this application to input income to the husband for 2010 to 2013, and seeks retroactive child and

Section 7 expenses to January 1, 2010. Analysis [ 5 ] During the marriage the husband was self-employed as a flooring installer, and the wife was employed as a health aide. Their respective incomes from the time of separation in 2004 through to 2006 were roughly the same. The husband (who earned approximately $20,000.00) paid off set child support to the wife (who earned approximately $19,000.00) of $35.00 each month. From the date of separation in 2004 to 2008 the parties continued to have joint custody and share parenting of the children.

In January 2009 a series of changes began to occur with respect to the primary residence of three of the four children.

The parties essentially only shared parenting with respect to the youngest child from 2009 onwards, and had primary residence of some of the other children at various times between 2009 and the present. [ 6 ] The wife continues to work as a healthcare aide and her income pursuant to her Income Tax Returns is as follows: 2010 $38,636.00 2011 $34,958.00 2012 $47,231.00 2013 $37,570.00 [ 7 ] The husband continues to be self-employed as a floor installer and his income pursuant to his Income Tax Returns is as follows: 2010 $3,386.00 2011 $7,914.00 2012 $22,518.00 2013 Income tax return not provided [ 8 ] The wife submits that the husband’s income as a self-employed sole proprietor floor installer does not accurately reflect his income for child support purposes.

The husband does not provide Financial Statements; instead his bookkeeper advises that his Income Tax Return schedules are his Financial Statements for his business.

With respect his Statement of Business Activities T2 form pursuant to his Income Tax Returns, the wife submits that the husband’s actual income for the year 2010 through 2012 should be as follows after adding back depreciation and other noncash deductions: 2010 $71,539.00 2011 $44,330.00 2012 $95,249.00 2013 $74,830.00 [ 9 ] Accordingly the wife submits based on the actual reasonable income attributable to the husband as described above, the husband owes the wife $17,590.00 in past child support calculated as follows: 2010 The Respondent owes the Applicant $ 7,512.00 2011 The Respondent owes the Applicant $ 1,122.00 2012 The Respondent owes the Applicant $ 10,216.00 Total $18,850.00 Adjustment for $35.00 per month paid for 36 months $ 1,260.00 Potential arrears for

section 3 child support $17,590.00 [ 10 ] The husband argues that the wife’s attributable income calculations are a form of double dipping that results in his actual

“reasonable” income being greatly exaggerated by the wife. He submits his annual income should be set at $35,000.00. [ 11 ] It is also not in dispute that the husband has been diagnosed with Stage IV renal cancer and has been given a life expectancy of approximately two years. He was advised not to work as he is on blood thinners for blood clots in his lungs. As he is self-employed, he is not eligible for Employment Insurance benefits and he does not have a health care plan.

While not questioning the terminal nature of his illness, the wife points out that as of February 2014 the husband was healthy enough to be able to bowl and go on vacation to Arizona, as well as return to work. [ 12 ] During his period of recuperation from the removal of his kidney, and before he returned to light work duties in early 2014, it appears that the husband’s family provided him with expenses to go on a vacation to Arizona for four days, and he returned to bowling. I credit the husband for returning to work notwithstanding his terminal illness.

The husband further responds that his common-law spouse also has income that he did not include in his Affidavit evidence, and that he has received other family support of a generally unspecified nature. [ 13 ] In assessing proper annual income for the husband, I note that the average earnings of a floor installer pursuant the Alberta Wages and Salary Review is approximately $29.00/hour or $65,000.00/year, assuming fulltime employment. [ 14 ] With respect to the wife’s detailed accounts additions and entries to the husband’s income, given that I have no expert accounting opinion evidence or reports before me, I conclude that it is not appropriate to make any specific determination or finding as to what the husband’s income would be on commonly accepted accounting principles. [ 15 ] For purposes of determining the husband’s annual income, I note that the husband has always been a self-employed floor installer throughout all material periods of time that we are dealing with, and was not engaged in any significant under employment or any deliberate scheme through his business to understate his income.

I also note that the parties’ incomes were roughly the same from the time they separated until 2012 [although the 2013 income for the wife is known, and the husband never supplied his 2013 Income Tax Return]. [ 16 ] The situation with respect to determining arrears of child support is further complicated by the fact that only the youngest child remained under the shared parenting regime continuously since the time of separation. Three of the four children changed their primary residence, sometimes on several occasions.

Then there is the issue of the husband’s now terminal cancer which arose in late 2013. [ 17 ] I conclude that

Section 3 child support should not be paid on the basis of the husband’s minimal income as declared on his Income Tax Returns because the husband’s Income Tax Return incomes understates the amount of his earnings since they include deductions that are not actually incurred by the husband. Additionally it is not reasonable that the husband could support his common- law spouse, her children and his own children on his Income Tax Return income of $3,386.00, $7,914.00, and $22,518.00 for 2010 through 2012.

There are a total of eight children that the husband was supporting in one form or another, while making debt payments of approximately $40,000.00 per year. [ 18 ] I conclude that the most appropriate way to determine the husband’s annual income is to use the Alberta average annual earning for floor installer in Alberta of $65,000.00, which assumes fulltime employment at $29.00 an hour. Taking into account all of the factors I have mentioned herein it would be appropriate to set the husband’s annual income for 2010 and 2012 at this amount of $65,000.00.

Given the husband’s current terminal illness, I set his 2013 and current annual guideline income at $45,000.00. His 2012 income is set at the amount claimed by the wife $44,330.00.

Arrears owing by the husband for 2010 through 2012 can be calculated using the following annual incomes for the husband: 2010 $65,000.00 2011 $44,330.00 2012 $65,000.00 [ 19 ] Since I have determined that the husband’s present income of $45,000.00 a year is approximately the same annual income as that of the wife for 2013 and 2014, I conclude that there are no arrears in child support for 2013 and 2014 as essentially each parties’ child support obligations off set the other parties’ child support obligations, given that the parties more or less shared parenting responsibilities with respect to the children.

At the present time there are only two children that are under the age of 18, and they are presently approximately 15 and 14 years of age. The oldest child is clearly no longer a child of the marriage and has not been for approximately two years, and the second oldest child has just turned 18 years of age. The husband has agreed through his counsel to provide for these two youngest children on the basis of his existing life insurance, for as long as they continue to be children of the marriage. Accordingly no child support arrears exist for 2013 and

Section 7 Expenses [ 20 ] Having imputed 2013 and 2014 income of $45,000.00 to the husband at roughly the same amount as the wife’s income for 2013 and 2014 of $47,000,

Section 7 expenses on an ongoing basis will be paid equally by the parties. [ 21 ] With respect to

Section 7 arrears, the husband asserts he had an agreement with the wife that he would pay the children’s extracurricular activities, and the wife would pay for their health care expenses. The wife denies such an agreement, and further submits that the husband is not providing proper receipts for his claim to

Section 7 expenses. She further disputes some of the

Section 7 expenses as being valid

Section 7 expenses. [ 22 ] Whether or not there was an agreement between the parties with respect to

Section 7 expenses, the reality is that the husband

apparently no longer has much in the way of records regarding the

Section 7 payments he made in 2009 through to 2013, which I gather have not been disputed until this application. Furthermore it is almost impossible without viva voca evidence, and even then it may even be difficult given the nature of the multiple changes in primary residency of the children over the past four years, to make an accurate determination for past

Section 7 expenses. Accordingly I am unable to make a finding or determination with respect to any

Section 7 arrears based on the present evidence before me. Conclusion [ 23 ] I have determined that the husband’s annual guideline income for a 2010 through 2012 at $65,000.00, $44,330.00 and $65,000.00 respectively for purposes of ongoing

Section 3 child support. The husband’s arrears can be calculated accordingly for 2010 to 2012. [ 24 ] From January 1, 2013 to the present there are no

Section 7 arrears or child support arrears. Ongoing child support will be set on the basis of the husband imputed income of $45,000.00 a year, which is roughly equal to the wife’s current income of $47,000.00. The parties share custody of their remaining children of the marriage. [ 25 ] Each party will be responsible for their own costs in this matter. Heard on the 11 th day of September, 2014. Dated at the City of Edmonton, Alberta this 23 rd day of December, 2014. Donald Lee J.C.Q.B.A. Appearances: Elaine Hancheruk Nickerson Roberts Holinski & Mercer for the Plaintiff Kathleen Stevenson Fotty Stevenson Wilson for the Defendant