Tarrabain v. Tarrabain, 2016 ABQB 128

Court of Queen ’ s Bench of Alberta Citation: Tarrabain v. Tarrabain, 2016 ABQB 128 Date: 20160304 Docket: 4803 162628 Registry: Edmonton Between: Theresa Florence Tarrabain Plaintiff - and - Danny Clayton Tarrabain Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice B.R. Burrows _______________________________________________________ [ 1 ] The issues to be resolved in this divorce and matrimonial property action are: a. What is Mr. Tarrabain’s income for child support purposes and what ongoing child support should he pay? b.

What retroactive child support should Mr. Tarrabain pay? c. What ongoing and retroactive s.7 child support should Mr. Tarrabain pay? d. Is Mr. Tarrabain entitled to spousal support from Ms. Tarrabain and if so in what amount? e. How should the matrimonial property be distributed?

[ 2 ] The parties were married on June 29, 2001. They had two periods of cohabitation totaling about 3 years prior to their marriage. Ms. Tarrabain was 35 years old at the time of marriage. Mr. Tarrabain was 32. They separated in August, 2012. They were divorced on the day the trial ended, February 3, 2016. [ 3 ] Mr. and Ms. Tarrabain have a son. He was born in September 2002 and is now 13 years old. What is Mr. Tarrabain’s income for child support purposes and what ongoing child support should he pay? [ 4 ] Mr. Tarrabain operates a pawn shop. The pawn shop business is incorporated and Mr.

Tarrabain is the sole shareholder. Another corporation owns the building in which the pawn shop is located. Mr. and Ms. Tarrabain each own an equal number of the shares of that corporation. There are no other shareholders. [ 5 ] Ms. Tarrabain is a sales manager for a flooring company. For several years her income has been substantial.

Income tax documents indicate her line 150 total income as follows: 2005 $ 110,299 2006 139,137 2007 170,534 2008 267,000 2009 356,408 2010 409,469 2011 393,001 2012 435,194 2013 446,692 2014 452,059 Her T4 for 2015 indicates employment income of $362,124.84. [ 6 ] Income tax documents indicate Mr.

Tarrabain’s line 150 total income as follows: 2005 $ 14,000 2006 23,000 2007 1,200 2008 - 13,622 2009 - 7,409 2010 - 6,978 2011 1 2012 no assessment 2013 no assessment [ 7 ] Tax records and financial statements relating to the corporation which operates the pawn shop business for 2009, 2010 and 2011 indicate that it operated at a loss in each of those years. [ 8 ] It appears that Mr. Tarrabain operates the pawn shop on a cash basis and that no accounts are kept. At least no conventional business accounts have been disclosed or offered in evidence. Some records relating to the pawn transactions were produced.

These appear to have been kept in order to comply with the police reporting requirements which are imposed on pawn shops. What, if anything, they say about the income earned by the pawn shop was not clear from their face or from Mr. Tarrabain’s testimony. [ 9 ] Mr. Tarrabain did not provide the financial disclosure required from a party to a divorce action. It is unlikely that the income tax documents described above reflect his true income.

Indeed, they are inconsistent with his testimony which was to the effect that until the parties separated he was contributing regularly and significantly to the financial support of the family. Since separation in 2012, he testified, the pawn shop has not done well and he has been relying on his elderly parents for financial support. [ 10 ] Neither Mr. Tarrabain’s financial disclosure nor his testimony permit me to reach any conclusion about his true income. [ 11 ] Ms. Tarrabain retained Brenda Pisko, a chartered accountant and business valuator to provide an opinion as to the income Mr.

Tarrabain could reasonably earn as the proprietor of a pawn shop. Ms. Pisko’s report was received in evidence by agreement of counsel. Mr. Hogel admitted that Ms. Pisko’s qualifications are such that the court should receive her opinion evidence.

[ 12 ] Ms. Pisko’s report provides her opinion as to both Mr. Tarrabain’s earning ability and as to the rental income that might be earned by the building in which he operates his business. In my view, as both parties have an equal interest in the building and it is one of the assets to be dealt with in the matrimonial property distribution, it’s potential to bring in rental income should not be taken into account in determining Mr. Tarrabain’s income. [ 13 ] As to Mr. Tarrabain’s potential income from employment, Ms.

Pisko compared his work experience as the operator of a pawn shop to other similar occupations and consulted the 2011 Alberta Wage and Salary Survey with respect to those similar occupations. The average of the three income levels for comparable occupations presented by Ms. Pisko is $49,608. [ 14 ] Mr. Hogel submitted that Mr. Tarrabain’s annual income should be imputed at that amount. [ 15 ] In my view, that is the best available evidence of Mr. Tarrabain’s income.

To the extent that using that income level for child support purposes constitutes imputation of income, in my view, it is appropriate to impute income given Mr. Tarrabain’s failure to meet his disclosure obligations. (Federal Child Support Guidelines, s. 19(1)(f)). [ 16 ] I find that Mr. Tarrabain’s income for child support purposes is $49,608. His ongoing child support obligation will be determined on the basis of that income. It will commence March 1, 2016. What retroactive child support should Mr. Tarrabain pay? [ 17 ] There was no interim child support order. The parties separated on August 30, 2012. Ms.

Tarrabain commenced this action, in which one of her claims is for child support, on December 4, 2012. She claims child support retroactive to separation – that is from September 1, 2012. Mr. Hogel offered no submission to support a contrary disposition. [ 18 ] In my view, Ms. Tarrabain is entitled to retroactive child support from September 1, 2012 to February 29, 2016 calculated on an income throughout that period of $49,608 per year. [ 19 ] As Mr.

Tarrabain’s retroactive child support obligation will be in a significant amount (I roughly calculate that it will be about $29,500), I order that there will be a conditional stay of enforcement in respect of his retroactive child support debt. The condition will that Mr. Tarrabain not be in default of his monthly ongoing child support obligation, and pay at least $500 on the first of each month, starting April 1, 2016, against his retroactive child support debt. What retroactive and ongoing s.7 child support should Mr. Tarrabain pay? [ 20 ]

Section 7 of the Federal Child Support Guidelines says: In a child support order the court may, on either spouse’s request, provide for an amount to cover all of any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation . . . [ 21 ] In her evidence, Ms.

Tarrabain provided a list of expenses she has incurred in respect of various activities in which the parties’ son has participated since the parties separated. Documentation confirming that the listed amounts were paid is also in evidence.

The expenses total $10,392.15. [ 22 ] The evidence relating to these expenses did not address the points which s. 7 directs the court to consider: the necessity of the expense in relation to the child’s best interest, the reasonableness of the expense in relation to the means of the spouses, and the family’s spending pattern prior to separation. [ 23 ] Some of the expenses appear to be health related. There is a $400 expenses for counselling and an expense for 15 months of a “Benefit Package” at $212.41 a month.

The evidence contains nothing about the counselling or the benefit package except the entries on the list and the receipts. I have no basis upon which to assess whether these are properly characterized as s. 7 expenses which Mr. Tarrabain should be required to share in. [ 24 ] The other expenses are not obviously “extraordinary” within the meaning of s. 7. They might well be, but the evidence does not provide me with a basis upon which to reach a conclusion on that point. [ 25 ] Ms. Tarrabain did testify that the expenses were incurred and that Mr. Tarrabain had no involvement in the decision to incur them.

She testified that Mr. Tarrabain made it clear he would not contribute to them. She also testified that the parties’ son participated in some of the activities for which Ms. Tarrabain has incurred expense and makes a s. 7 claim, prior to separation. [ 26 ] Given the very great disparity between the respective incomes of the parties, I expect that what might be a reasonable expense from Ms. Tarrabain’s point of view would probably not be a reasonable expense from Mr. Tarrabain’s point of view.

Given the general tenor of the evidence regarding how the parties’ finances were structured while they were together, I expect it is likely that all expenses of the type Ms. Tarrabain has listed as s. 7 expenses were paid exclusively by her even while the parties were together. [ 27 ] In these circumstances, I am not satisfied that Ms. Tarrabain has established a basis for the child support order requiring Mr. Tarrabain to contribute to the expenses Ms. Tarrabain has listed as s. 7 expenses. I note that had she established a claim in that regard, Mr.

Tarrabain’s required contribution would have been in the area of $1000 given the parties’ respective incomes. [ 28 ] As to ongoing s. 7 expenses, there was no evidence as to any anticipated extraordinary expenses. Whether or not any future expense incurred for the parties’ child would be an “extraordinary expense” within the meaning of s. 7 cannot therefore be determined. I make no order in that regard.

Is Mr. Tarrabain entitled to spousal support from Ms. Tarrabain and if so in what amount? [ 29 ] Mr. Tarrabain seeks an order requiring Ms. Tarrabain to pay him spousal support. The claim was put exclusively on the basis that in the circumstances “compensatory” spousal support is appropriate – that is that Ms. Tarrabain should pay Mr. Tarrabain spousal support to relieve economic hardship he experienced as a result of the marriage breakdown. Mr.

Hogel submitted that the appropriate amount of spousal support given the age of the parties, the duration of their marriage (11 years) and their respective incomes should be in the region of $5800 per month for between 5.5 and 11 years from separation. He submitted however that a lump sum award would be preferable because, “. . . these parties need a clean break.” [ 30 ] Mr. Hogel submitted that up to the time the parties separated, Mr. Tarrabain’s pawn shop operation was producing an income but that shortly after separation the pawn shop failed and Mr. Tarrabain’s income stream went dry. Mr.

Hogel submitted that the separation was the cause of the business failure. He submitted that after separation Ms. Tarrabain no longer provided the capital (which Mr. Tarrabain called, “the float”) needed to run the pawn shop. [ 31 ] The evidence, however, did not support that submission. There was no evidence from either party that Ms. Tarrabain ever provided the capital Mr. Tarrabain required to operate his pawn shop business – either before or after separation.

There was evidence that after separation she made the mortgage and, for a time, the property tax payments for the pawn shop building in order to protect her interest in the building. There was evidence that Mr. Tarrabain brought home cash from the business which was used to pay for some of the parties’ expenses. Mr. Tarrabain testified that when, after separation, his business began to fail, Ms. Tarrabain refused his requests for financial assistance. There was no evidence that Ms. Tarrabain ever provided operating capital for the business. [ 32 ] Neither did Mr.

Tarrabain testify as to any other connection between the marriage breakdown and the failure of his business. [ 33 ] However, there was evidence of a reason for the failure of the pawn shop business entirely unrelated to the marriage breakup. Prior to the separation, Mr. Tarrabain developed a substance abuse problem. In November 2011, several months before separation, Mr. Tarrabain undertook treatment for his substance abuse in a residential treatment facility in British Columbia. Ms. Tarrabain testified that almost immediately after he returned from treatment he recommenced his substance abuse.

She testified that this led to her asking him either to get help or to leave their residence later in 2012. Apparently he chose the latter option. This evidence was not disputed by Mr. Tarrabain. [ 34 ] In my view, the failure of the pawn shop business about the time of the parties’ separation is more likely the result of Mr. Tarrabain’s substance abuse than the marriage breakdown. Therefore the evidence does not support Mr. Tarrabain’s claim for compensatory spousal support. [ 35 ] Though Mr.

Tarrabain did not argue an entitlement to spousal support on a non-compensatory basis, I have considered whether the circumstances might justify spousal support on that basis. I have concluded that they do not. [ 36 ] The evidence included nothing about what has happened in relation to Mr. Tarrabain’s substance abuse problem since separation. There is no evidence as to whether or not he received further treatment, whether if he did it was successful, or whether the problem still exists and still impairs his ability to operate the pawn shop and to earn an income doing so.

By his own evidence until about the time of separation, he was contributing regularly to the family finances. [ 37 ] Mr. Tarrabain’s evidence as to the amount of cash he brought home was that it varied. It was at least $3000 but sometimes was $5000, $6000 or $8000. His evidence is that his present monthly expenses amount to $4375.00. The evidence supports the conclusion that the income he could earn if his pawn shop was running properly would meet his expenses – that he is capable, at least in theory, of being financially self-sufficient.

The evidence also justifies the conclusion that if he is not in fact financially self-sufficient, the cause, his substance abuse, creates no legitimate call on the obligations of mutual support the parties undertook in their marriage. [ 38 ] I dismiss Mr. Tarrabain’s claim for a spousal support order. How should the matrimonial property be distributed? [ 39 ] Much of the testimony of the parties and the submissions of counsel had to do with the distribution of matrimonial property.

The evidence indicates that the assets to be dealt with have a value in excess of $2 million and that there is more than $500,000 of liability. [ 40 ] I have carefully reviewed the evidence and submissions made and I am not satisfied that the information I have been given is sufficient for me to reach just conclusions. There are features of the circumstances that I am not certain the parties have considered or if they have dealt with properly.

I have written to counsel with particulars of my concerns and have requested that they advise whether they wish to seek to reconsider or supplement the information I have been given. In my view, the just determination of the matrimonial property issues required that I do so. [ 41 ] Formally, I will reserve my decision on the question of how the matrimonial property should be distributed until I have heard further from counsel. Heard on the 23 rd day of February, 2016. Dated at the City of Edmonton, Alberta this 4 th day of March, 2016.

B.R. Burrows J.C.Q.B.A. Appearances: Collista A. Coles for the Plaintiff G. Randy Hogle for the Defendant