Schmaus v Schmaus, 2016 ABQB 408

Court of Queen ’ s Bench of Alberta Citation: Schmaus v Schmaus, 2016 ABQB 408 Date: 20160726 Docket: 4803 164146 Registry: Edmonton Between: Dean Kelly Schmaus Plaintiff - and - Nicolette Amber Schmaus Defendant _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice Sterling M. Sanderman _______________________________________________________ [ 1 ] The development of the married life of the Schmauses is a familiar story in Alberta. A young couple meet, form a relationship, cohabit and eventually marry. They start a life together and have children.

The husband is a tradesman who has marketable skills. He has developed those skills through training and experience. He is a good worker. He is able through his training and experience to earn a good living. He is industrious and wants to work for more than a wage. He starts his own company. It is successful. [ 2 ] The Schmauses life together followed this pattern. From performing carpenter work, Mr. Schmaus branched out and acquired homes that he fixed up and sold for a profit. The Schmauses began to acquire property. Their net worth increased.

They began to acquire playthings associated with young couples who are successful in business and live in rural Alberta. All-terrain vehicles, ski- doos, a fifth-wheel trailer and other property became theirs. Ms. Schmaus was a shareholder in the company but was basically a full-time mother to the three children of the marriage. Both parties benefitted from this arrangement. As long as the marriage lasted, they enjoyed

a high standard of living and shared the benefits of their arrangement. Mr. Schmaus’ abilities and industry made all of this possible. The Schmauses are representative of a class of Albertans whose industry and commitment to their craft drive the economy in many centers throughout this province. The Schmauses are not unique. Their story can be seen throughout Alberta. [ 3 ] Unfortunately for them, by their mid to late thirty’s, the marriage started to disintegrate. They drifted apart. Ms.

Schmaus has relocated to Edmonton, Alberta with her children after the dream home built by them in Whitecourt, Alberta was sold. Shortly after this relocation, it became obvious to the parties that the marriage was over. Mr. Schmaus no longer lives with his wife and children. She has formed a new relationship. Two homes have to be maintained. Of course, when this happens, the standard of living enjoyed before the separation drops considerably. In this case, there are a number of factors that contribute to this.

There is the overriding factor that is present in all marriage breakdowns; the cost of maintaining two households on one income dictates that there is less cash available to continue the standard of living enjoyed when one home was being funded by that same income. Ms. Schmaus has never been a contributor to the income flow. She has contributed to the marriage in other ways by being a fulltime caregiver to the children.

Yet, it is necessary for her to maintain a residence of her own for the children. [ 4 ] It is not uncommon in situations such as this, to see the desire of the working partner to continue to work as hard as he has in the past diminished. This is especially true when he observes the fruits of his labor being transferred to a household of which he is not a member. When that person is not a wage earner but runs his own business and can accept or refuse work, it is easy for him to control his income if he desires to do so. [ 5 ] Recently, in Alberta, there has been another contributing factor.

There has been a marked downturn in the economy of resource-based towns. Mr. Schmaus did most of his work in Whitecourt, Alberta. This town’s economy is based on the development of natural resources. One has to accept that his ability to generate an income has been affected to a considerable extent by matters outside his control. In fact, it is apparent that he has gone back to working for wages as there is not enough work to make the continuing operation of his company viable. [ 6 ] It is obvious that when parents separate, those who suffer most are the children of the marriage. They suffer in two ways.

The first is the potential psychological damage done to children when they see one parent leave the home. Behavioural difficulties often arise in this situation. They have to be addressed by the parents in some meaningful fashion. Both parents have to take whatever steps are necessary in order to ensure that this type of harm is minimal. [ 7 ] Children also suffer economically. The destruction of the family unit that was financially supported by a family-run company and the necessity to fund two homes can create financial hardship for all.

It is incumbent upon the parents of the children to follow a course of action that minimizes these two types of harm. [ 8 ] There is no doubt that these parents love their children dearly. Both want to play an important

part in the lives of their children. They have to realize that although their marriage is over, they have a common obligation that will last well past the 18 th birthday of their youngest child. Their obligation is to create an environment after separation, in which their children can flourish. They have to approach their task together. They need to work co-operatively to ensure that their three children continue their lives with the mutual support and effort of their parents.

The parents must establish a positive environment that will allow their children to develop their talents and abilities to the greatest possible extent. These parents must learn to act selflessly whenever they are required to make a decision that affects their children. They cannot keep score in their fight with one another. They cannot act in a selfish fashion. They have to learn to put their personal desires aside whenever decisions have to be made that have any affect upon their children. Decisions that they make must put the interests of their children first.

As the youngest of their three children is only seven years of age, the parties will have to have significant dealings with one another for a considerable period of time. [ 9 ] The first step in establishing a proper environment for the children calls for an honest relationship to be established between the parents. They need to be honest with one another in relation to the needs of the children and the expectations of each parent. They must be realistic with one another. They cannot take unreasonable positions with one another for strategic reasons.

At this stage in their relationship, this need for honest communication is not present. An example of this is the $15,000 monthly budget submitted by Ms. Schmaus in one of her affidavits. Her request for these after-tax dollars is ludicrous. It is obvious that Mr. Schmaus’ company never generated this type of income that could be used for the purposes that she now claims after separation. [ 10 ] What compounds the matter for Ms. Schmaus is that since separation, she has made no appreciable effort to become self- sufficient.

She does point to the fact that he has failed to provide income for her to go back to school, but putting all of the blame upon Mr. Schmaus is not fair. She has not made any effort to take realistic employment while her children are in school. Her wish list in relation to what she feels are appropriate activities for her children is somewhat suspect. One can only imagine the feelings engendered in Mr. Schmaus when he looks at some of her requests. He has to be candid in relation to his true earning capacity. He cannot turn down work. He has to report his income honestly.

He has been very casual in the past in his approach to claims that could be established through third-party records but have not been. [ 11 ] When the parties take rigid positions as they have, it prolongs the fight. These parties realize that the marriage is over. They should not be interested in attempting to keep score to come out ahead of the other person. They should be doing everything in their power to co-operatively resolve their difficulties so that they can get on with the task of establishing a stable environment for their children.

Not only should they be dealing with any psychological issues that may arise with their children in relation to the marriage breakdown, but they should be attempting to solve their economic difficulties as quickly as possible to bring stability to their lives and the lives of the children. [ 12 ] It is mandatory that Ms. Schmaus, a healthy young woman, be retrained in order to become self-sufficient. She needs to upgrade her education which has been neglected for a number of years. She has to have some certification that will allow her to be employed.

She certainly is entitled to compensatory spousal support for this relationship that exceeded 15 years. A child support order that truly reflects Mr. Schmaus’ earning capacity must be put in place in order to ensure the wellbeing of the children. Once a fair regime in relation to child support is in place, then the parties can take whatever steps they need to in order to resolve the outstanding property issues.

[ 13 ] The history of the judicial orders granted in relation to this matter is sparse. The orders granted show the difficulty the court has had in properly assessing the earning capacity of Mr. Schmaus. On July 11, 2013, Justice Graesser set the pre-disclosure income of Mr. Schmaus at $125,000 a year. He ordered spousal support in the sum of $3,380 based upon this earning capacity. Child support was also set based upon this sum. Slightly over a year later, Justice Manderscheid stayed the payment of one-half of the spousal support and reduced the monthly payment to $1,690.

Arrears continued to accumulate based upon the order of Justice Graesser. Every month, $1,690 arrears accumulated. [ 14 ] In November of 2015, a consent order was agreed to by Ms. Schmaus that set the global support payment at $3,500 per month. No breakdown of spousal or child support was indicated. It is apparent that Ms. Schmaus conceded that the economy in Alberta had changed since their separation as the monthly payment in November of 2015 that covered both child and spousal support was similar to the spousal support order of Justice Graesser. [ 15 ] Mr.

Schmaus takes the position that the $125,000 annual income set by Justice Graesser in July of 2013 is not and has not been representative of his true income. He asks for relief in this regard. He seeks a proper adjustment of the arrears that have accumulated as he argues that he has overpaid child and spousal support based upon his true income since the order of Justice Graesser. He seeks an adjustment in relation to his ongoing obligation to pay spousal and child support. [ 16 ] There is no doubt that Ms. Schmaus is entitled to compensatory spousal support for a period of time.

The parties were married in May of 2002. They separated in April of 2013. They lived as married couple for 11 years. They have yet to be divorced. Prior to their marriage, they lived in a common-law relationship. Their co-habitation began when Ms. Schmaus was 19 and Mr. Schmaus 22. In the early years of their relationship, she obtained a diploma from Grant McEwan Community College in office administration and worked outside the home until the birth of their first child. That was in January of 2004. Since then, two other children joined the family.

All the children are under the age of 13 and attend school in Edmonton, Alberta. [ 17 ] Ms. Schmaus asks for an accurate assessment of Mr. Schmaus’ income. She seeks the appropriate child and spousal support based upon that income. She seeks an order declaring that certain

Section 7 expenses are legitimate. She is concerned about Mr. Schmaus’ history of nonpayment of support despite court orders being in place. She seeks some future protection in regard to this problem. [ 18 ] When this matter was argued, it was suggested, on behalf of Ms. Schmaus, that there is a “dearth of information” before the court from Mr. Schmaus indicating what his true earning capacity is. I find that statement to be accurate.

Just as the history of the Schmaus’ relationship is similar to other couples who start a life together, so is the problem of properly identifying the true income of small business men who control their operation and make decisions that adjust their earning capacity to suit different needs. If it is to their advantage to reduce their income, they can. To compound the matter in this situation, Mr. Schmaus’ business records are incomplete. He leaves the court in the position of having to guess about certain things. This is clearly a situation that is unsatisfactory. [ 19 ] I really wish I knew what Mr.

Schmaus’ earning capacity is so that an annual income that truly reflects it could be attributed to him. No court likes to guess at uncertain facts. Guesswork can lead to an inherent unfairness. In order to do justice to the parties, a court needs a firm evidentiary basis to guide the decision-making process. Here it is impossible with any certainty to say what Mr. Schmaus’ income is. I do know that it is not $125,000 a year. At one time, it was in excess of that. Because of the diminished economic opportunity in the province of Alberta, it has not reached that level for some time. I find that the setting of Mr.

Schmaus’ predisclosure income at $125,000 in July of 2013 was artificially high. [ 20 ] There is no doubt that part of the uncertainty in relation to his earning capacity has been created by his lack of co-operation in providing detailed information that would allow a proper assessment. A more accurate reflection of his earning capacity would be an annual income of $95,000. That is the annual income I set for him since the order of Justice Graesser. This is the annual income set for this year but it will have to be revisited next June when the parties will exchange their filed income tax returns. His

Section 3 obligation to his three children is set at $1,777 per month starting when the Graesser order was made. His proportion for the

Section 7 expenses should be adjusted accordingly. [ 21 ] As Mr. Schmaus’ income was set artificially high, the spousal support that he was ordered to pay was also inappropriate. He should have paid a mid-range amount according to the Spousal Support Advisory Guidelines. From the time of the Graesser order, that would be a sum of $1,050 per month. [ 22 ] Mr. Schmaus has been overpaying both child and spousal support. Counsel will have to engage in the mathematical calculations that determine this amount. It can be set off against any arrears that have accumulated since the Graesser order. [ 23 ] Ms.

Schmaus has not had the benefit of any further education since she completed her office administration course. That was some time ago. She needs to be retrained in order to obtain meaningful employment. It is in her best interest to obtain training that will make her employable and move her towards self-sufficiency. That is a goal that Mr. Schmaus should be supporting. Consequently, she will receive $20,000 from funds that are being held in trust as a result of the sale of the matrimonial home. She is to use these funds for one purpose only.

They are to be used so that she can enrol in the Dental Assistant’s Program that she desires to take. During the course of the marriage, Mr. Schmaus was able to continue to develop his skills and abilities as a carpenter. Ms. Schmaus now deserves that same opportunity so that she can find suitable employment in the future. [ 24 ] As this retraining is being funded by matrimonial property, Mr. Schmaus’ spousal support obligation for the months that she is pursuing this education endeavor is reduced to $750 . [ 25 ] The following

Section 7 expenses will be approved for the children. Any costs that are required in order to supply medication, dental services, orthodontic services or counselling will be paid. Before engaging in orthodontic services or counselling to the children, Mr. Schmaus should be consulted by Ms. Schmaus. Lacrosse, baseball, swimming and music lessons are also approved expenses. The school fees and field trip fees that are incurred by the children are also appropriate

Section 7 expenses. At this time, no other extracurricular activities are deemed to be appropriate

Section 7 expenses because of the reduced income of Mr. Schmaus. Rock climbing camp, yoga lessons for the children and tutoring during the summer months for these elementary school children are not

warranted. [ 26 ] The parties understand the marriage is over. They are aware of their joint obligation to providing continued nurturing and care for their children. Both need to play important roles in the development of these three young people. The sooner the parties resolve their outstanding issues, the better it will be for the children. Until they do, it is necessary to attempt to regularize the relationship between the parties and set out their respective obligations to one another and the children.

All this decision can do is to attempt to do that until the parties craft a final resolution that is in the best interests of their children and fair to one another. [ 27 ] In order to ensure that the parties are in a position to make the appropriate adjustments in relation to child support when required, they will exchange their yearly tax information by the end of the month of June of each year. They will also complete any undertakings that have been given to one another during the course of the litigation so that the opposite party is fully informed. [ 28 ] Ms.

Schmaus seeks security for future support payments by having some of the sale proceeds of the matrimonial home set aside for this purpose. This type of application is premature. Mr. Schmaus should be given the opportunity to show that he will be compliant with the adjusted court order. If he is not, then it would be appropriate to contemplate this action. Heard on the 7 th day of July, 2016. Dated at the City of Edmonton, Alberta this 26 th day of July, 2016. Sterling M. Sanderman J.C.Q.B.A. Appearances: Diane Ridley, Barrister & Solicitor for the Plaintiff Carolyn L. Seitz, Duncan Craig LLP for the Defendant