Daschuk v Mrdjenovich, 2015 ABQB 822

Court of Queen’s Bench of Alberta Citation: Daschuk v Mrdjenovich, 2015 ABQB 822 Date: 20151222 Docket: FL03 12267 Registry: Edmonton Between: Crystal Daschuk Plaintiff - and - Milan (Mike) Mrdjenovich Defendant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Background [ 1 ] The parties are the parents of three children, who are 5, 9 and 11 years old. Ms.Daschuk is also the mother of an 18 year old, whose father is not Mr. Mrdjenovich.

[ 2 ] The parties had been acquainted with one another for some time. They began an intimate relationship sometime in 2002 or 2003, when Ms. Daschuk was approximately 26 years old, and Mr. Mrdjenovich was approximately 53 years old. At the time, Mr. Mrdjenovich was a successful businessman and Ms. Daschuk was a student. They did not immediately cohabit. Ms. Daschuk takes the position that they began cohabitating in 2005. Mr. Mrdjenovich says they moved in together in July 2007. They separated for approximately three months in 2008.

They reconciled briefly, and ceased cohabitating around September 2009. [ 3 ] In September 2009, Ms. Daschuk filed a claim for child support in respect of the parties’ two eldest children (as their youngest child was not yet born at that date), as well as her eldest child (on the basis that Mr. Mrdjenovich was in loco parentis to him).

She also filed a claim for adult interdependent partner support. [ 4 ] On November 4, 2009, Thomas J granted an Interim Interim Consent Order (the “Thomas Order”), which stipulated that the issues of child and spousal support were to be heard de novo at a full hearing scheduled for December 1, 2009. Among other things, the Thomas Order required Mr. Mrdjenovich to arrange to have a $200,000 advance paid to Ms. Daschuk, and directed him to pay an estimated amount of $11,150 per month for the months of October, November and December 2009, in relation to the property in which Ms.

Daschuk was then residing with the children (the “residence”). In addition, Mr. Mrdjenovich was ordered to pay interim interim “without prejudice” support of $15,000 per month, non-taxable in the hands of Ms. Daschuk. The Thomas Order further stipulated that Mr. Mrdjenovich would arrange for payment of Ms. Daschuk’s 2008 personal tax liability in the estimated amount of $86,814; and that Ms. Daschuk would have exclusive possession of the residence, the household furnishings, and a 2007 Cadillac Escalade. The Thomas Order was to expire on December 1, 2009, unless extended by the parties.

The hearing did not take place on December 1, 2009. The Thomas Order was not extended by agreement or further order at that time. Nonetheless, Mr. Mrdjenovich continued making the payments. [ 5 ] On November 5, 2013, Sulyma J granted a further Interim Interim “Without Prejudice” Order, requiring Mr. Mrdjenovich to continue paying $15,000 per month as well as the expenses related to the residence. In addition, Mr. Mrdjenovich was ordered to pay $75,000 as a “without prejudice” payment, to be taken into account in relation to any property and support claims. [ 6 ] On February 26, 2014, Sulyma J ordered Ms.

Daschuk to appear for Questioning and to answer any undertakings given at the Questioning within 30 days. [ 7 ] On February 19, 2015, Sulyma J ordered that the issues of Guideline income for the parties, child support, and partner support be set down for a two day trial. [ 8 ] On March 4, 2015, Sulyma J dispensed with the need for Ms. Daschuk’s signature on Form 37; and ordered that the issues of Guideline income, child support, and partner support be set for a two day trial commencing September 21, 2015. [ 9 ] Mr.

Mrdjenovich has made the payments called for under the Interim Interim “Without Prejudice” Orders, as well as additional payments made to or on behalf of Ms. Daschuk. The $15,000 per month payments and payments made in respect of the residence totalled $1,626,484.36 from October 2009 to September 2015. In addition, payments in respect of tax liabilities, car payments and purchases, additional cash payments, tuition, and interim payments towards Ms. Daschuk’s interest in 1161720 Alberta Ltd (“1161720”), paid to or on Ms. Daschuk’s behalf, totalled $557,580.62. The total amount paid to Ms.

Daschuk, or on her behalf, between October 2009 and September 2015 was $2,184,065. Issues [ 10 ] It is the three issues stipulated in Sulyma J’s Order of February 19, 2015, that are before me in this proceeding. They are namely: 1. What are the parties’ respective Guideline incomes? 2. Is Ms. Daschuk’s entitled to partner support and, if so, what should be the amount of such support?; and 3. Is child support payable in relation to Ms. Daschuk’s eldest son? In this regard, Mr. Mrdjenovich acknowledges that he is responsible for the payment of child support in relation to his three biological children with Ms.

Daschuk. Analysis Issue I. Guideline Incomes [ 11 ] Mr. Mrdjenovich provided numerous documents in relation to the determination of his Guideline income, including his personal tax returns for the years 2009 to 2014, and financial statements for the numerous companies in which Mr. Mrdjenovich is a shareholder. In addition, Mr. Mrdjenovich called Mr. Lorne Siebert as an expert witness retained for the purposes of calculating Mr. Mrdjenovich’s Guideline income. Mr.

Siebert explained the expert reports that had been prepared by him, including the methodology employed by him, and the documents reviewed by him in connection with their preparation. [ 12 ] Ms. Daschuk provided no income information. She maintained that she has always worked. However, her evidence seemed to

suggest that she has not been working for several years because: 1. she has had to remain home to take care of her children; and/or 2. she requires retraining, expressing a desire to obtain a commercial pilot’s license. [ 13 ] In relation to the determination of his Guideline income, Mr. Mrdjenovich argues that the only evidence before this Court is his evidence, largely provided through and explained by Mr. Siebert. He submits that Mr. Siebert is a highly respected expert whose qualifications and evidence have been accepted by this Court on previous occasions. He points out that Mr.

Siebert confirmed that there had been no restrictions placed on him in relation to any inquiries that he had wanted to make in formulating his opinion. Therefore, he contends, I ought to accept Mr. Siebert’s opinion in relation to his Guideline income. [ 14 ] In relation to Ms. Daschuk’s Guideline income, Mr. Mrdjenovich argues that Ms. Daschuk has been underemployed and has failed to become self-sufficient, notwithstanding his attempts to assist her in doing so. [ 15 ] Ms. Daschuk suggests that Mr.

Mrdjenovich has not included income from non-arm’s length entities whose income ought to be taken into account in determining his Guideline income. She also submits that Mr. Mrdjenovich has been deliberately under- employed. Ms. Daschuk argues that she is unable to provide evidence to the Court because she lacks the resources required to obtain such evidence. [ 16 ] Although Ms. Daschuk contends that Mr. Mrdjenovich has under-represented his Guideline income, I am satisfied that the voluminous materials before me, together with the explanations given by Mr. Mrdjenovich and Mr.

Siebert, more than address these concerns. Mr. Siebert quite properly did not include, for the purposes of calculating Mr. Mrdjenovich’s Guideline income, revenues received from corporate entities that are part of the trust property of the two trusts established by Mr. Mrdjenovich to provide for his four children with his former wife, and his three children with Ms. Daschuk. [ 17 ] Regarding these trusts, I note that the first trust was established in December of 1994, long before Mr. Mrdjenovich began a relationship with Ms. Daschuk.

He saw it as a vehicle to provide an ongoing source of income to his then minor children. It provided that the trust property settled upon the trust would eventually be distributed to the children. Those children are now all adults and that is in fact what has occurred. The corporations that held the trust property have now been turned over to the children, and these children currently operate those businesses. [ 18 ] In April of 2005, Mr. Mrdjenovich set up a second family trust, this one in favour of his children with Ms. Daschuk.

The trust was established while the parties were still together, before the birth of their third child. Assets of significant value have been settled on this trust. This includes the residence occupied by Ms. Daschuk and the children, which was valued at $1,450,000 in 2011. [ 19 ] I reject the suggestion that these two trusts were established for any improper purpose or that they are being used as a vehicle to hide Mr. Mrdjenovich’s income. To the contrary, they are an example, among several others in the evidence, of Mr. Mrdjenovich’s concern that he provide for his children. [ 20 ] I conclude that Mr.

Siebert’s decision not to include any of the revenues generated in the trust entities, and his rationale therefore, were justifiable and correct. Furthermore, Ms. Daschuk did not provide any evidence to support a conclusion that Mr. Mrdjenovich is diverting his income to entities other than the ones Mr. Siebert considered, or that he is receiving income from other sources which he is not disclosing. [ 21 ] Ms. Daschuk also seemed to suggest, or at least raised a suspicion, concerning Mr. Mrdjenovich’s divorce settlement. The matrimonial settlement agreement had been provided to one of Ms.

Daschuk’s former lawyers at the direction of Sulyma J. No evidence was adduced at trial which would support a conclusion that the divorce settlement was a mechanism to hide assets or income from Ms. Daschuk. [ 22 ] Mr. Mrdjenovich is now approximately 66 years old and has been withdrawing from participation in many of his previous business activities. This is understandable given his age, his very long and successful presence in the work force, and his desire to realize his lifelong dream of farming the land which he acquired many years ago for that purpose. [ 23 ] I find that Mr.

Mrdjenovich is not underemployed. Indeed, the income that he suggests be utilized for Guideline purposes is still significant and generously includes items that he might argue ought to be excluded. In that regard, Mr. Mrdjenovich has provided, with the assistance of Mr. Siebert, various scenarios which might be used for the purposes of establishing his Guideline income. These calculations, with significant supporting materials, were provided in a binder entered as “Exhibit 4.” Depending on which scenario is used, Mr.

Mrdjenovich’s Guideline income would range between $299,573 and $386,156 in 2012, $360,819 and $456,388 in 2013, and $352,183 and $458,078 in 2014. [ 24 ] Any other concerns or questions raised by Ms. Daschuk in relation to financial issues, and the use of funds, were adequately explained at trial. I reject Ms. Daschuk’s argument that she was unable to provide any evidence in support of her suspicions and allegations concerning Mr. Mrdjenovich’s financial circumstances due to a lack of financial resources. Ms.

Daschuk clearly had access to a considerable amount of money during this time period and during the course of the litigation had several lawyers act for her. She did obtain an Expert Report but chose not to enter it into evidence at trial or to call the expert who prepared it. Mr. Siebert did address the issues raised in such report by way of his Rebuttal Report and his testimony at trial. [ 25 ] It is clear that Mr. Mrdjenovich has always ensured that his children are well supported financially. The calculations of his Guideline income, prepared on his behalf by Mr.

Siebert, included amounts which are notional only, and do not reflect funds actually received by him. Similarly, Mr. Mrdjenovich does not argue that he should be entitled to deduct items which he might reasonably argue should be deducted for Guideline calculation purposes. [ 26 ] In these circumstances, I have concluded that the highest Guideline income figures provided by him are appropriate.

Therefore, I find that Mr. Mrdjenovich’s 2012 income was $386,156, his 2013 income was $456, 388, and his 2014 income was $458,078. Until his 2015 income has been determined, the 2014 income should be used for determining his child support obligation for 2015. [ 27 ] Notwithstanding that the parties ceased cohabitating in the fall of 2009, and that Mr. Mrdjenovich has provided funds to assist Ms. Daschuk in pursuing training requested by her, Ms. Daschuk has apparently not earned any employment income during this time. In addition to the $2,184,065 received, directly or indirectly, from Mr.

Mrdjenovich during this time, her only other source of income appears to be her receipt of the Universal Child Care Benefit. There is no evidence that she has completed any of the retraining she initiated with Mr. Mrdjenovich’s financial assistance, or that she has attempted to become self-sufficient in any way. All of the evidence suggests otherwise. This pattern of behaviour by Ms. Daschuk goes back to the early days of their relationship, when Mr. Mrdjenovich purchased a hotel that he anticipated would provide a net income to Ms. Daschuk, in the range of about $10,000 - $13,000 per month. [ 28 ] In 2011, Ms.

Daschuk, who Mr. Mrdjenovich had already provided with a 2011 Cadillac Escalade worth almost $120,000, asked Mr. Mrdjenovich to provide her with a second vehicle. She indicated that she intended to go to university, and required a smaller vehicle for that purpose. Mr. Mrdjenovich bought her a 2006 Mercedes for $37,000 for such purpose. There is no evidence that Ms. Daschuk obtained any degree or certificate as a result of this intended attendance. Mr. Mrdjenovich does not know if she even attended. [ 29 ] Ms. Daschuk is still a relatively young woman and she has no health issues.

Notwithstanding that she has taken no apparent steps to become self-sufficient in the last six years, or to obtain regular employment, Mr. Mrdjenovich does not seek to impute income to Ms. Daschuk during that period. The evidence supports his contention that she has been underemployed and has failed to take reasonable steps to find employment or pursue retraining with a view to becoming self-sufficient. [ 30 ] It is clear that Ms. Daschuk has done little, if anything, to become self-sufficient in the last six years. However, since Mr.

Mrdjenovich does not seek to impute income to her for that period, I will set her income to reflect only her receipt of the Universal Child Care Benefit of $21,060 for the years 2012, 2013, 2014, and 2015. [ 31 ] With her education and background, I would expect that Ms. Daschuk should be able to obtain more than a minimum wage job. However, to give her the benefit of the doubt and to provide some additional time for her to seek employment, I will impute a minimum wage income of $22,000 per annum commencing April 1, 2016, reviewable any time after January 1, 2017. Issue II. Partner Support [ 32 ] If I accept Mr.

Mrdjenovich’s evidence, he cohabited with Ms. Daschuk for approximately two years. Alternatively, if I accept Ms. Daschuk’s evidence, they cohabited for approximately four years. By either, this was a relatively short relationship. Although Ms. Daschuk urges me to find that she gave up educational opportunities to pursue her relationship with Mr. Mrdjenovich, the evidence does not support this conclusion. To the contrary, it is clear that Mr. Mrdjenovich was prepared to support Ms. Daschuk when she pursued, but did not complete, Law School at the beginning of their relationship.

He provided her with the opportunity of managing a property that he purchased for the purpose of providing her with an income. After deciding she did not wish to manage that property, Ms. Daschuk purchased a spa business in Edson. She closed it three months later. Since separation, Mr. Mrdjenovich has provided Ms. Daschuk with funds to enable her to pursue educational and training opportunities, which she indicated she wished to pursue. Although Mr. Mrdjenovich did so, Ms. Daschuk did not see these opportunities through to completion. [ 33 ] Although Mr.

Mrdjenovich might argue that any obligation he had to provide partner support to Ms. Daschuk ended in 2009, he seeks an adjustment only to 2013. [ 34 ] Ms. Daschuk argues that she is entitled to partner support because of the difference in standards of living between her household and Mr. Mrdjenovich’s. Ms. Daschuk offered no evidence concerning alleged differences in their standards of living. The only evidence she offered was a comment made by Mr. Mrdjenovich that when the children are with him he buys them the toys that they want.

However, his other evidence suggests that they live a relatively modest lifestyle when in his care (which is approximately 40% of the time). There is no evidence to suggest that they experience a dramatically different standard of living between their parents’ respective homes or that they will do so if Ms. Daschuk does not receive partner support. [ 35 ] I conclude that Ms.

Daschuk’s entitlement to spousal support ought to have been for a short duration following separation, and that she has received well in excess of what she was entitled to on any basis, whether compensatory or based on need. [ 36 ] It is only because Mr. Mrdjenovich did not request an adjustment back beyond 2013 that Ms. Daschuk will be entitled to retain the funds that were paid to her by Mr. Mrdjenovich during that time period, subject to any prior Court direction concerning the application of such funds. Any amount not attributable to child support, as herein ordered, will be characterized as Partner Support.

Ms. Daschuk’s entitlement to Partner Support shall be terminated effective January 1, 2014. Any amounts paid to her after that date, other than amounts payable in respect of child support as ordered herein, shall be credited against Mr. Mrdjenovich’s future obligations in respect of any property settlement or child support obligations. Issue III. Child Support [ 37 ] The evidence established that Ms. Daschuk’s eldest child always called Mr. Mrdjenovich by his first name. I accept Mr. Mrdjenovich’s evidence that he had no input in how Ms.

Daschuk’s eldest child was being raised, that this child knew who his father was, and that Ms. Daschuk received child support from her eldest son’s biological father. None of these assertions were denied by Ms. Daschuk when she testified. Furthermore, Mr. Mrdjenovich has not seen Ms. Daschuk’s eldest child since their separation. I conclude

that, in the approximately 2-4 years that they co-habitated, Mr. Mrdjenovich was not a co-parent to Ms. Daschuk’s eldest child and should not be required to pay child support for him. [ 38 ] Based on the Guideline income established above, Mr. Mrdjenovich’s child support obligation was $6,798 per month in 2012, $8,006 in 2013, $8,035 in 2014 and estimated (until his 2015 Guideline income is determined) $8,035 per month for 2015. Conclusion and Direction of the Court [ 39 ] It is clear that the almost $2.2 million paid by Mr. Mrdjenovich to or on behalf of Ms.

Daschuk, over a period of approximately six years following separation, was more generous than that to which Ms. Daschuk was legally entitled to receive. Notwithstanding Ms. Daschuk’s assertions that the amount was insufficient to cover her needs, she provided no evidence of how any of this money was spent or why it would have been insufficient. The only evidence received in relation to these funds was that provided by Mr.

Mrdjenovich. [ 40 ] Given the evidence received at trial, I have no difficulty concluding that the reason this matter did not proceed to the scheduled full de novo hearing on December 1, 2009, and the reason there have been several delays attributable to Ms. Daschuk since then, is that Ms. Daschuk wished to receive the benefit of Mr. Mrdjenovich’s interim “without prejudice” payments for as long as possible. [ 41 ] As a result of my conclusions above concerning the adjustment of child and partner support, there will be a significant amount owing by Ms. Daschuk to Mr. Mrdjenovich. I direct that Counsel for Mr.

Mrdjenovich, preferably with the assistance of Mr. Siebert, provide a detailed calculation of the adjustments required and the amount of overpayment by Mr.

Mrdjenovich to the date of trial, with a monthly calculation from that date to the date of the Judgment which will result from this Memorandum of Decision. [ 42 ] It is my understanding that property issues remain outstanding, but I do not have any sense of the amounts in dispute in relation to that aspect of the matter. [ 43 ] Following the calculation of the adjustments and resulting overpayment, the parties will have a period of three months in which to discuss and attempt to reach agreement on a mechanism for repayment of the amount of the overpayment. [ 44 ] If the parties are unable to agree, they are to provide their respective written proposals in relation to the satisfaction of this overpayment, and arrange for a time at which they can appear before me to address the matter further. [ 45 ] Following the conclusion of any agreement or appearance pursuant to para 44, if the parties are unable to agree on costs they may arrange for a time at which they can appear before me to address the issue of costs.

Heard on the 21 st , 22 nd and 23 rd days of September, 2015. Dated at the City of Edmonton, Alberta this 22 nd day of December, 2015. D.L. Shelley J.C.Q.B.A. Appearances: Crystal Daschuk

Appeared on her own behalf Louis Ares Ares Law Appeared for the Defendant