Hodges v Hodges, 2016 ABQB 210

Court of Queen ’ s Bench of Alberta Citation: Hodges v Hodges, 2016 ABQB 210 Date: 20160411 Docket: 4801 155785 Registry: Calgary Between: Anthony Hugh Hodges Plaintiff - and - Tania Hodges Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice E.C. Wilson _______________________________________________________ Introduction [ 1 ] On August 12, 2015 D.B. Nixon, J. directed a three day viva voce hearing commencing March 30, 2016 in order to determine the issues of spousal support and matrimonial property division.

[ 2 ] Counsel then decided among themselves to add the topic of child support to the agenda. That attempt was denied by the Court because it was a violation of the terms of the Order of D.B.

Nixon, J. pronounced over seven months earlier and because there had been no attempt to seek a variation of that Order in the interim and because the Court was concerned that there was insufficient time booked to add this additional area of conflict. [ 3 ] As it developed, counsel’s final submissions on the matters of spousal support and matrimonial property division only concluded around 4:00pm on the third day of the scheduled hearing, albeit approximately one hour of sitting time was lost as counsel attempted to negotiate a settlement which, unfortunately, did not come to pass.

Decision on the merits was reserved. The following is the Court’s decision on the merits. Like counsel, I will simply refer to the parties by their given names – Tony and Tania. Spousal Support [ 4 ] Tony and Tania started to cohabitate in November, 2001. They were married on April 5, 2003. They have two sons – Davin who is 11 years old, and Jaxton who is 5½ years old. The children have lived with Tania since the couple’s separation.

As I understand, Dad has zero contact with Davin (at his request) and supervised access with Jaxton. [ 5 ] Tony and Tania separated March 12, 2013 and the matrimonial home was sold shortly thereafter. [ 6 ] Both parties agree that Tania is entitled to spousal support on both a compensatory and non-compensatory basis. Both parties also agree that spousal support should terminate in three years’ time, i.e. a total of six years post separation for this couple who lived together for 12 years and were married for 10 years. [ 7 ] I agree with the parties.

Nevertheless, and to give some general context to the basis for the parties’ agreement, I will make brief reference to one useful decision. [ 8 ] In Gardner v. Gardner , 2008 ABQB 527 , Manderscheid J. described the difference between compensatory and non- compensatory support: 26 Compensatory support was explained by Conrad J.A., speaking for our Court of Appeal in Corbeil v Corbeil , 2001 ABCA 220 , 286 A.R. 330 (Alta. C.A.) at para. 45 : Essentially, compensatory support intends that both spouses profit from the joint venture of marriage.

The question is not what the disadvantaged spouse would have achieved had he or she not entered the marriage. Rather, the question is what was that spouse’s contribution to the marriage and was the other spouse advantaged by that contribution. ... 28 Non-compensatory support was considered by McLachlin J. in Bracklow . She held that the impacts of the marriage breakup, as distinct from the marriage itself, could be such that non-compensatory support is mandated.

She held, at para. 43, that non-compensatory support is based on the needs and means principle, the idea being that “spouses may have an obligation to meet or contribute to the needs of their former partners where they have the capacity to pay, even in the absence of a contractual or compensatory foundation for the obligation. Need alone may be enough.” [ 9 ] Regarding compensatory support, I accept Tania’s evidence over Tony’s and find that Tania’s efforts at maintaining the household and looking after the children on a day-to-day basis involved much more time than that which was provided by Tony.

Tony had suggested in his testimony that it was approximately a 50-50 proposition, notwithstanding that his lawyer’s brief suggested that Tania bore “slightly more responsibility”. I find that even the latter is an understatement. [ 10 ] I note, for instance, that after the birth of each of the children Tania took one year maternity leave. In addition, she was off work some nine months recovering from a motor vehicle accident in 2009.

I am satisfied that during the majority of these three separate events Tania dedicated all of her time to household maintenance and the raising of the children, even while she was at home convalescing from the motor vehicle accident. [ 11 ] I am satisfied that it was due to the combination of these three events which explains why, during the pre-separation years, Tania’s employment in sales and the service industry has only left her at the managerial level. [ 12 ] Her commitment to her family, especially with regard to Davin, is extremely noteworthy.

This unfortunate child suffers from significant difficulties which have even required having to spend several months in a mental health treatment facility.

The record reveals how Tania has had to respond to Davin’s difficulties in so many ways, both pre-separation and post-separation. [ 13 ] During the post-separation years when Tania has had custody of the boys and Tony has honoured Davin’s request not to be with his dad, Tania has been forced to perform essentially all of the child rearing activity which has prevented her from working extra hours at her employment and having to get time off during her work day in order to attend at various meetings with various experts at various locations around the city.

She detailed the nature and extent of the stress that this has put upon her both professionally and personally. It culminated in her having to take stress leave. It should also be noted that her “holiday” time was not spent on vacations with either her children or by herself but actually became time that was further used by her to provide more time and effort for Davin. [ 14 ] On the other hand, it may be noted that Tony’s employment income has steadily increased over the years, both pre- and post- separation.

Tony testified that none of these consistent pay increases over the years were as a result of promotions. He described all as being “lateral movements”. I think it less important to examine job titles for Tony as it is to simply note that there has been nothing that interfered with his ability to be completely flexible in his work

schedule as he has not had as much as child rearing responsibility pre- separation as did Tania and, virtually none post-separation.

[ 15 ] Turning to non-compensatory support, Tania pays particular regard to the significant drop in her standard of living post- separation. [ 16 ] She notes that she and the two boys now live together in a two bedroom apartment whereas before the family lived in a house with each boy having his own bedroom. [ 17 ] Tania points out that post-separation Davin was not able to continue in sports because of the cost and also because Tania did not have the time available to take him. Tania also noted that post-separation she can no longer take the children for summer camping trips.

She notes that, contrary to the situation pre-separation, she cannot even afford a gym card for the facility which provided free day care while she worked out. She also advised that her children cannot go to birthday parties any more because Tania cannot afford to pay for the gifts that the children would have to bring. [ 18 ] Tony certainly conceded that Tania has suffered a reduction in the standard of living post-separation.

When asked by Tania’s lawyer to detail what lifestyle sacrifices he has had to endure, he noted that he no longer had a house in his name, he cannot take any long-term vacations (notwithstanding that he never took any pre-separation), he owes $50,000 in lawyer’s fees and that he no longer had a TFSA. Lastly, he pointed out that he now has less personal clothing and he dines out less often. [ 19 ] It is interesting to contrast their evidence. Tania spoke of a reduction in the standard of living as it affected her and the two boys; particularly for the two boys.

On the other hand, Tony could only speak about himself. His comments regarding the reduction in personal clothing and the reduction in dining out says much about how he defines “sacrifice”. [ 20 ] In short, Tania’s evidence truly touched on “needs and means”. Tony’s evidence offered very little in this regard. Quantum of Spousal Support [ 21 ] Tania provided a budget entered as Exhibit 2A. It shows a monthly child support receipt from Tony via MEP of $1,866 per month.

When that child support payment was added to the total of Tania’s income it left a monthly shortfall of $375.58. [ 22 ] That shortfall coupled with Tania’s testimony that this was a “bare bones budget” undoubtedly explains why her counsel sought spousal support in the amount of $500 per month. It may be noted that on April 23, 2015 Brooker, J. ordered monthly interim spousal support in the amount of $500. However, Tony only made one such payment prior to Nation, J. staying his Order on December 16, 2015. [ 23 ] The monthly MEP income of $1,866 occurred from January to June of 2015.

Tania’s evidence was that thereafter the child support increased. It was $2,300 per month for July, August and September. It was $2,400 per month in October and December. It rose to $2,500 in November of 2015 and January and February of 2016. [ 24 ] Thus, it is clear that Tania’s budget must be adjusted to take note of her actual receipt of higher child support payments commencing in July 2015. [ 25 ] Presuming that the total monthly child support payment was $2,400 would mean that Tania’s income exceeded her total expenses by $158.42.

At a monthly child support payment of $2,500, her total income would exceed her total expenses in the amount of $258.42. [ 26 ] While I have not been favoured with any precise numbers, it is clear that in past years Tony was not providing support of $1,866 per month inasmuch as he has accumulated $12,000 in child support arrears. [ 27 ] That has meant that in addition to the absence of any spousal support Tania has had to bear the ongoing cost of Tony’s ongoing deficiency in making his required child support payments. [ 28 ] Indeed, the evidence is clear that over 2014-2016 Tania has cashed in some of her RRSPs (and taken the resultant income tax hit) to essentially subsidize Tony’s deficiencies.

It may be noted that the vast majority of these RRSP withdrawals went toward legal fees but there still was a percentage that went to handling the cost associated with running her household, including subsidizing the child support deficiencies. [ 29 ] Tony’s counsel, relying upon the Spousal Support Advisory Guidelines, seeks a monthly spousal support award of $0-$234 per month. These numbers were based on the incomes of the parties in 2013.

However, I do not find them useful for looking at the years March 2013-March 2016 given all that has transpired, e.g. child support arrears and including the fact that Tania’s 2015 income is approximately $10,000 less than what she earned in 2013. [ 30 ] In all of these circumstances I am satisfied that an appropriate monthly spousal support amount is $500 starting April 2013 up to and including March 2016, i.e. 35 months.

After deducting the one $500 payment, I find that the total past spousal support amount to total $17,000. [ 31 ] In regard to ongoing spousal support, from April 2016 to March 2019 (i.e. three more years) I am satisfied it should be in the amount of $200 per month. [ 32 ] This significant reduction reflects the reality of Tony’s present employment condition. [ 33 ] Tony lost his job in November of 2015 due to the economic turndown in Alberta. [ 34 ] While he has not been able to pick up work carrying an income commensurate to what he earned with his previous job at Coretex, it is just over four months since he lost his job.

He has picked up some contract work earning much less and the future in

uncertain. However, it is expected that he will continue to seek employment opportunities as I am satisfied he has done to date. [ 35 ] Should he be able to obtain employment at a salary commensurate to what he had earned at Coretex, I would not wish Tania not to have the benefit that that may bring to her by way of an increase in spousal support.

On the other hand, if Tony has not seen an increase in his income, I do not wish to deprive Tania of her right to be able to return to Court and seek an imputation of income to Tony should it be that Tony has apparently chosen to deliberately seek lower paying employment. [ 36 ] Accordingly, by August 4, 2016 Tony or his counsel is to provide to Tania’s counsel the following: 1. written copies of all contract and offers of employment Tony has received between January 1, 2016 and July 31, 2016; 2. detailed information fully documenting all of Tony’s efforts to secure employment offering an income commensurate with the income he was earning at Coretex. [ 37 ] Absent agreement between the parties regarding any variation upon the $200 per month of ongoing spousal support, either party is given leave to book a one half day special hearing for the purpose of determining what, if any, variation will be made to the ongoing spousal support as ordered in this decision today. [ 38 ] At that hearing Tania is given leave, presuming there is a factual basis to do so, to argue that there is an insufficiency in the documentation referred to above and/or to argue that Tony’s efforts at securing employment are deficient such as to support a claim that an income should be imputed to him. [ 39 ] The quantum of ongoing spousal support for the period April 2016 through to and including March 2019 is $200 per month presuming no interim variation.

The total of that award for the 36 month duration amounts to $7,200. [ 40 ] The total spousal support award therefore is in the amount of $24,200. Matrimonial Property [ 41 ] The proceeds from the sale of the matrimonial home, which are held in trust, and after all expenses were deducted including outstanding property taxes, amounts to $173,277.53 (See Exhibit 5). [ 42 ] From those proceeds, various costs have been paid. There is the fee for Dr. During’s services vis-à-vis Davin ($3,000); the early distribution of her share of matrimonial property proceeds to Tania ($40,000) and because of the fee for Dr.

Clark’s services regarding a bilateral assessment ($20,000). I have also deducted the cost of the future fees for Dr. Clark’s bilateral assessment as I understand that they have been set by Nation, J. ($8,000). These costs total $71,000. [ 43 ] Accordingly, that leaves a balance held in trust from the sale of the matrimonial home in the amount of $102,277.53. [ 44 ] At the conclusion of the hearing counsel advised that the parties had agreed that a number of items that had been at issue in the matrimonial property division dispute were taken off the table.

The parties have agreed that all household goods have been properly divided between them and the parties also agree that all bank accounts (but not investment accounts) in each other’s name cancelled the other out. Tania also withdraws her allegations that Tony had dissipated assets. [ 45 ] After paragraph 53, under the heading of Matrimonial Property Division I have outlined the progressive steps that were taken to arrive at the final number. In the course of doing so there were specific points of contention between the parties as they related to particular items.

I chose to deal with and then resolve those disputes at the appropriate point. [ 46 ] However, there were a number of other issues raised, principally by Tania’s counsel, for which I have not given effect and which I will now explain. [ 47 ] Tania notes that during the marriage she provided to Tony $15,000 from her motor vehicle accident proceeds which she put into his TFSA. Tania wishes I credit or re-imburse her with fifty percent of that deposit, i.e. $7,500.

I will not do so because I am satisfied that what she provided appears to be in the nature of a gift without any expectation that it would ever find its way back to her. [ 48 ] Tania also wishes to be re-imbursed for one-third of the income tax “hit” that she took as a result of her numerous RRSP withdrawals over the last few years. That one-third re-imbursement can be roughly rounded to $9,300.

Counsel argued that Tony should pay this because the majority of the RRSP withdrawals went to pay legal fees which were created as a result of Tania having to bring numerous applications in court due to insufficient and timely presentation of required financial information and for non-payment of support, etc. [ 49 ] Counsel did not provide any case law to support this rather novel suggestion. Regardless, Court cannot accede to this request for a number of reasons.

Most importantly, while I did get a general idea of Tania’s legal fees in the post-separation period and a precise amount regarding the quantum of the RRSP withdrawals and the quantum of the tax “hit”, I have no way of knowing how much of either amounts could be attributed to required court action due to Tony’s failure to make timely and full disclosure, etc. Counsel did not even provide a good basis for discussion, e.g. a chart listing every application filed by either party and what was being sought in each application and what was directed by a Court.

Secondly, I do not know how relevant and material any of the various applications really were. Counsel for Tania advises that all were relevant and material.

Counsel for Tony suggests that that was not always the case and that some applications were unnecessary or redundant and/or that communication difficulties between the lawyers (both present and in the past on this file) was also somewhat problematic. [ 50 ] I note in the latter regard that Responses to Undertakings given at Tony’s questioning on December 15, 2014 (and filed as Exhibit 10 before the Court), includes numerous undertakings with the responses directed solely at specific correspondence or

communications passing between the lawyers. There are also undertakings given to explain what appear to be fairly minor cost issues, like a vehicle impound expense of $188.58. [ 51 ] All of these detailed enquiries might resonate with the Court had the value of the matrimonial property been anything remotely approaching significance. However, that would not be a fair description of the property at question in this case.

Sadly, it would appear that there has been a significant cost to both clients for the payment of legal fees which at this point, i.e. six years after separation, had not achieved any resolution in relation to child support, spousal support or matrimonial property division. But it is the right of the parties to litigate as they see fit and to instruct their counsel accordingly and to then pay whatever legal fees their lawyers have earned. [ 52 ] Lastly, I would not give effect to this application because it also smacks of amounting to a retroactive cost award.

I would presume that counsel at each application would have been able to satisfy a Court to grant enhanced cost awards had Tony’s efforts been as deficient as Tania’s counsel alleges. This Court is not willing to either second guess or to, in essence, return to a reconsideration of an appropriate cost award for interlocutory applications through the vehicle of an arbitrary percentage of the tax consequences suffered by Tania in withdrawing her RRSP funds. [ 53 ] Finally, Tony wanted re-imbursement for his costs in preparing the house and property for sale.

I have refused because this was the first time he made such a claim and he could not produce any receipts. Matrimonial Property Division 1. Proceeds held in trust from sale of matrimonial home as per para 43 $102,277.53 1.

A) To re-imburse Tania for her $12,250.00 exemption having put $24,500.00 from her M.V.A. settlement into the mortgage, the proceeds held in trust will be reduced by $12,250.00 to go to Tania -12,250.00 1.

B) To re-imburse Tony in order to balance against Tania’s $40,000.00 advance, the proceeds held in trust will be reduced by a further $40,000.00 to go to Tony -40,000.00 1.

C) Funds now in trust available for further distribution $50,027.53 1.

D) Tony and Tania’s individual amount $25,013.76 2. Tania’s assets at separation

A) TFSA 17,000.00

B) RRSP 26,201.82 43,201.82 3. Tony’s assets at separation

A) investment accounts 21,158.23

B) Cortex shares 18,432.85

C) stock options 1,356.00 40,947.08 4. Total of Tania and Tony’s assets at separation 84,148.90 Plus funds now in trust 50,027.53 134,176.43 5. On their agreed upon 50-50 split, each would receive 67,088.21 6.

A) Re: Tania’s share 67,088.21 Plus exemption re-imbursement 12,250.21 79,338.42 Plus ½ trust proceeds 25,013.76 104,352.18 6.

B) Re: Tony’s share 67,088.21 Plus re-imbursement equal to Tania’s advance 40,000.00 Plus ½ trust proceeds 25,013.76 132,101.76 7. Adjustments/Re-imbursements

A) Tania owes Tony for:

i) her ½ share of ADT security 508.10 7.

A) Total 508.10

B) Tony owes Tania for:

i) his ½ share of house insurance 438.87 ii) the entirety of his auto insurance that Tania paid 1,252.50 iii) by agreement, child support arrears as of April 1, 2016 12,000.00 iv) by agreement,a cost award from an interlocutory proceeding 500.00

v) by agreement, a cost award determined at taxation 1,313.45 vi) by agreement that any spousal support arrears owed by Tony to Tania are to be

deducted from the proceeds held in trust that Tony would otherwise be receiving 17,000.00 vii) by agreement that any ongoing spousal support owed by Tony to Tania is to be deducted from the proceeds held in trust that Tony would otherwise be receiving 7,200.00 7.

B) Total 39,704.82 7.

B) total $39,704.82 7.

A) total - 508.10 7.C) $39,196.72 Payable by Tony to Tania which will be paid by a reduction from the 1.B) $40,000.00 re-imbursement otherwise going to Tony from the trust proceeds 8. The Court concludes that the proper distribution of the matrimonial property to be as follows:

A) Proceeds in trust $102,277.52

B) Tania receives: 1.A) 12,250.00 1.D) +25,013.76 7.C) + 39,196.72 Receipt total $76,460.48

C) Tony receives: 1.B) – 7.C) 803.28 1.D) +25,013.77 Receipt total $25,817.05 Total 8.B) $76,460.48 8.C) + 25,817.05 D) $102,277.52 8.A) – 8.D) $0.00 Heard on the 30 th day of March, 2016 to the 1 st day of April, 2016. Dated at the City of Calgary, Alberta this 11 th day of April, 2016.

E.C. Wilson J.C.Q.B.A. Appearances: Hugh G. Slocombe for the Plaintiff Linda V. Goold for the Defendant