SJG v TAG, 2016 ABQB 684

Court of Queen’s Bench of Alberta Citation: SJG v TAG, 2016 ABQB 684 Date: 20161206 Docket: 4801 160601 Registry: Calgary Between: SJG Applicant - and - TAG Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Robert A. Graesser _______________________________________________________ Introduction [ 1 ] The parties separated in 2013 but continued to reside in the matrimonial home until early 2015. Following a chambers application on March 26, 2015, Jones J ordered that the matrimonial home be sold, and that Mr.

G pay spousal support of $1,100 per month, commencing April 15 and continuing monthly thereafter. [ 2 ] Jones J also ordered that Mr. G pay

section 3 child support of $1,871 per month, commencing April 1. At the time, all three children resided with Ms. G. It was expected that the two younger children would reside half time with each parent once Mr. G established a new residence. [ 3 ] No order was made regarding

section 7 expenses. [ 4 ] Ms. G’s guideline income for 2014 was set. Mr. G’s was not known at that time. It has now been quantified as $126,532.00 [ 5 ] Both parties had counsel at the time. [ 6 ] On April 19, 2016 Ms. G brought an application for “an interim parenting order”. She had retained new counsel, Mr. Freeston. Mr. G was unrepresented. The application was returnable on April 26, 2016. Mr. G was apparently served by email and not by personal service.

[ 7 ] According to Mr. G, he did not open the email from Mr. Freeston until shortly before 10 am on April 26. He was unable to reach Mr. Freeston and was unable to get to court. Poelman J ordered that the three children would live with Ms. G, and that Mr. G would have access to the children as set out in the order. Mr. G was ordered to pay $500 in costs. [ 8 ] Mr.

G then filed an application on April 29, 2016 to vary the child and spousal support he had been ordered to pay based on: • His position that he should only be ordered to pay child support on his base income and not his total income, which includes significant overtime; and • Undue hardship. [ 9 ] Mr. G also noted in his application that

section 7 expenses were “still to be agreed”. He submitted that income should be attributed to Ms. G. [ 10 ] That application was adjourned so the parties could participate in a hearing with a Dispute Resolution Officer. The DRO process was unsuccessful, so Ms. G filed an application on October 12, 2016 seeking child support arrears. [ 11 ] The applications came before me on November 21, 2016 in morning chambers. [ 12 ] The essence of Mr. G’s position is that his child support obligations should be calculated on his base pay, without reference to the overtime he has chosen to work.

Indeed, he argues that he must work overtime to make the payments he was ordered to make in the March 26, 2015 order. [ 13 ] He also objects to paying spousal support, arguing that Ms. G is capable of self-sufficiency and that she could be earning up to $60,000 per year cleaning houses, and has turned down a job opportunity that would have paid her some $35,000 per year. [ 14 ] Mr. G seeks to impute income to Ms. G for spousal support purposes, as well as to increase her proportionate share of

section 7 expenses. [ 15 ] Mr. G notes that Ms. G is living in a new residence, while he is living in modest rental accommodation. He complains that he is barely able to make ends meet with a modest standard of living while paying generous spousal and child support. [ 16 ] The proceeds of the sale of the matrimonial home are presently in trust, pending resolution of matrimonial property issues. In the meantime, Ms. G seeks to have child support arrears paid out of Mr. G’s share. She seeks to recover significant

section 7 expenses relating largely to dance activities for their daughters, and to get Court directions on future

section 7 expenses. Analysis [ 17 ] I expressed during the application that Mr. G was mistaken in thinking that child support is calculated on base income and not total income including overtime. While Mr.

G’s views on the subject are not illogical -- why should he have to work overtime to be able to make child support payments – but the reality is that the Child Support Guidelines and the decided cases use the payor’s line 150 income taken from his or her income tax return as the starting point for child support. [ 18 ] The rationale for that is that the children should benefit from the income available to their parents, regardless of whether the parents are together or separated. [ 19 ] If the payor chooses to work overtime for whatever reason, his or her child support obligations will be based on the amount actually earned.

If the payor chooses not to work overtime, he or she will not generally be made to pay child support on the amount of overtime he or she used to earn, or could have earned by working available overtime. While that is not an absolute, it is the typical situation. [ 20 ] Mr. G says his base salary in 2015 was $97,406. His 2015 tax return shows a line 150 income of $135,816. That suggests that he earned $38,410 for overtime. The difference in child support payments based on Mr. G’s $38,410 of overtime is approximately $530 per month, which is about 17 percent of the gross amount of overtime earned.

That indicates that Mr. G is able to retain some $1,200 per month after estimated tax for his own use from the overtime he worked. Thus, it does not appear that the amount of additional child support is excessive or in any way punitive. The children would be benefitting from the overtime if they were living with Mr. G, and they would be benefitting if Mr. G and Ms. G were still together. [ 21 ] Mr. G’s current base salary is $105,414.40. Mr. G has provided some information as to the level of overtime he has worked in 2016. His affidavit filed April 7, 2016 shows gross earnings to March 20, 2016 of $31,023.72.

His November 14, 2016 affidavit shows gross earnings to date of $121,487.26. Extrapolating this to the end of the year suggests that Mr. G may make over $138,000 in 2016, which is slightly more than he made in 2015. [ 22 ] I recognize that he is working many extra hours, and this may not be sustainable. Indeed, Mr. G may choose not to work so hard in the future, and a reduction in overtime, even though voluntary, may well result in a reduction in his future child support payments. But that would also significantly reduce the disposable income he has for himself.

These are choices he has to make himself. [ 23 ] But for the time being, he is required to pay child support based on what he actually earns. [ 24 ] It is obvious from the above that Mr. G has actually underpaid child support since he was ordered to do so by Jones J in March, 2015. He has been paying on his 2013 income of $114,000. He made $126,532 in 2015 and $136,895 in 2015. He is on track to make more than that in 2016.

[ 25 ] Ms. G is entitled to retroactive child support based on Mr. G’s actual 2014 income of $126,532 and his actual 2015 income of $136,895. He should have been paying in 2016 based on his 2015 income of $136,895. [ 26 ] Child support is the right of the child and needs to be paid in the appropriate amounts. There are very few exceptions to this, and Mr.

G does not fall within any of the recognized exceptions. [ 27 ] All calculations of child support are to be based on the parenting arrangements as set out in the two orders: Jones J’s order of March 26, 2015 directing shared parenting of two of the children and primary residency of one of the children with Ms. G; and Poelman J’s order of April 26, 2016 directing that the three children should reside with Ms. G. That should result in a change of payments starting May 1, 2016. [ 28 ] I understand that one of the children ceased to be a child of the marriage effective July 1, 2016, such that Mr.

G’s child support obligation starting July 1, 2016 is for two children. Hardship [ 29 ] Mr. G argues that his child support obligation should be reduced on account of hardship. He points to the fact that Ms. G is living in a new residence (apparently provided by her parents). He contrasts that with his own circumstances, living in a one-bedroom apartment that is inadequate to properly accommodate the children when they are with him. He points out that he has incurred significant debt relating to legal bills incurred in the divorce and property action to date. He blames Ms.

G for the breakdown of the marriage. [ 30 ] Hardship so as to reduce a payor’s child support obligations is dealt with in

section 10 of the Federal Child Support Guidelines which states: 10

(1) On either spouse’s application, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship.

(2) Circumstances that may cause a spouse or child to suffer undue hardship include the following: (

a) the spouse has responsibility for an unusually high level of debts reasonably incurred to support the spouses and their children prior to the separation or to earn a living; (

b) the spouse has unusually high expenses in relation to exercising access to a child; (

c) the spouse has a legal duty under a judgment, order or written separation agreement to support any person; (

d) the spouse has a legal duty to support a child, other than a child of the marriage, who is (

i) under the age of majority, or (ii) the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life; and (

e) the spouse has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability.

(3) Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other spouse. [ 31 ] Mr. G’s evidence falls far short of establishing any undue hardship as contemplated in the Child Support Guidelines .

None of the factors are made out by his evidence. [ 32 ] I would observe at the outset that it would be remarkable for someone earning more than $130,000 per year to establish sufficient hardship to reduce his child support obligations. [ 33 ] Secondly, the Courts do not recognize for the purposes of child support, spousal support or matrimonial property division the legal costs incurred by a party fighting the other party. The legal expenses are the individual’s burden, unless the Court determines that one of the parties should bear some or all of the other party’s costs.

That issue is generally determined at trial. [ 34 ] Hardship is not made out by the fact that a spouse’s parents are voluntarily providing assistance to their child and the payor has no such benefits. Child support is the parents’ responsibility, not the grandparents. [ 35 ] A payor’s

section 3 child support is not affected by the income earned by the other parent. Ms. G’s earnings or lack of earnings are not relevant to Mr. G’s obligations to pay

section 3 child support. Her earnings are relevant to the division of

section 7 expenses. [ 36 ] Finally, fault is no longer a basis to deny or increase support. [ 37 ] There is no basis in law or in fact for any undue hardship claim by Mr. G on the evidence provided to date. Spousal Support

[ 38 ] Mr. G is concerned about paying any spousal support as he believes that Ms. G should no longer be dependent on him. He maintains that she is under-employed and should have income of at least $35,000 per year attributed to her. Ms. G earned $16,169 in 2014 and $15,165 in 2015. [ 39 ] Mr. G is currently paying interim spousal support of $1,100 per month.

The real cost to him in after-tax dollars is likely between $600 and $660 per month, depending on his tax rate. [ 40 ] I advised him at the hearing that I would look at the Spousal Support Advisory Guidelines and determine whether on an interim basis he might be paying an amount out of line with the SSAGs.

I advised him that the SSAGs were not used in the same manner as the Child Support Guidelines , but that Courts in Alberta refer to them as some information relevant to the calculation of spousal support when a spouse demonstrates entitlement. [ 41 ] Here, the calculations under the SSAGs are based on the length of the parties’ marriage, the actual incomes of the parties and the fact that Ms.

G has day-to-day care of the two remaining dependent children and is receiving significant child support for the two children. [ 42 ] On the parties’ actual 2015 incomes, the SSAGs show a range of between $1,396 and $2,273 per month. Duration (subject to entitlement) is from 9.5 to 19 years. [ 43 ] If Ms. G were attributed $35,000 of income, the SSAGs show a range of between $850 and $1,836 per month, with the same duration. [ 44 ] It can be seen that the current level of spousal support is well below the low end of the SSAGs, based on what Ms. G has been earning.

There are, however, a number of factors that bear on the quantum and duration of spousal support. [ 45 ] What this demonstrates to me is that a detailed analysis should be done as to Ms. G’s circumstances, including what efforts she has made to find gainful employment or to upgrade her skills and her reasonable budget. It is unclear the extent to which Mr. G is servicing matrimonial debt, which may be a relevant factor in what he should be paying. [ 46 ] The Divorce Act has as one of its objectives regarding spousal support that the parties achieve as best and as quickly as possible self-sufficiency.

Section 15.2(4) provides:

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 47 ] There may be factors that interfere with a spouse’s ability to become gainfully employed, and to earn an income that will allow him or her to duplicate the lifestyle enjoyed while married and together. These are issues that are generally explored at trial and not in a morning chambers application. [ 48 ] As I stated above, the SSAGs are only advisory and do not have the force of law in Alberta.

However, they are commonly used to compare the estimated “net” incomes of both parties and see what level of spousal support may be needed to provide financial equality between the parties, if financial equality is determined to be the objective of a spousal support order. [ 49 ] I agree with Mr. Freeston that Mr. G’s application should be set for a family law special application. Until a more fulsome hearing has been held, with more evidence as to Ms.

G’s earning capacity, means and needs, I do not see any proper grounds on an interim basis to vary the level of support being paid at present and as ordered by Jones J. in March, 2015. Conclusion on

Section 3 and spousal support [ 50 ] Mr. G should be paying child support on the basis of two children at his line 150 income as shown in his 2015 tax return, being $135,816. [ 51 ] He should pay retroactive child support based on his actual 2014 and 2015 incomes. [ 52 ] He should continue to pay interim spousal support of $1,100 per month until further order.

Section 7 Expenses [ 53 ] The March 26, 2015 order does not deal with

section 7 expenses. Ms. G seeks retroactive and ongoing

section 7 expenses, based on Mr. G’s 2015 income and Ms. G’s 2015 income of $15,165. [ 54 ] I have no information as to why Ms. G is not earning at least minimum wage. She appears to have a much greater earning capacity, but more information is needed to fairly assess what that may be.

[ 55 ] For some reason,

section 7 expenses were not dealt with in March, 2015. Normally, a

section 7 order is made at the same time child support is ordered, as

section 3 support only covers basic living expenses and not “extraordinary” amounts. [ 56 ] Mr. G expresses a willingness to pay

section 7 expenses on a 50-50 basis and for one extracurricular activity per child, or otherwise based on his base salary and an imputed income of $62,400 for Ms. G. [ 57 ]

Section 7 expenses are generally divided proportionately between the parties based on their respective incomes. I have no information as to Ms. G’s 2016 income to date. Normally, the

section 7 split is based on the parties’ earnings for the previous year, and then adjusted when the current year’s income is actually known. That process generally results in some arrears or a credit, and reconciling the difference may cause some cash flow difficulties for the parties. The parties may agree to adjust prospectively (frequently on July 1 of each year) based on the previous year’s incomes, with no retroactive adjustment. This means that in some years, the payor may overpay, and in other years the payor will underpay, but over time it all averages out. [ 58 ] At this stage, the parties have not agreed on any method for the adjustment of

section 7 expenses. Conclusion on

Section 7 expenses [ 59 ] Commencing December 1, 2016, Mr. G is required to pay his proportionate share of

section 7 expenses based on the parties’ actual 2015 incomes. This will be adjusted effective July 1, 2017 and will be based on the parties’ actual 2016 incomes. The parties are required to exchange income information as per paragraph 8 of the Jones J order of March 26, 2015, by June 30 of each year. [ 60 ] This direction is interim only, and is subject to review at a special chambers application or at trial as to whether Ms. G should have additional income attributed to her. [ 61 ]

Section 7 expenses will be those as specifically listed in that section, namely: (

a) child care expenses incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment; (

b) that portion of the medical and dental insurance premiums attributable to the child; (

c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses; (

d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs; (

e) expenses for post-secondary education; and (

f) extraordinary expenses for extracurricular activities. [ 62 ] Some of these may not be applicable at this stage, such as child care expenses and post-secondary education, but are typically in an order, in case the children’s circumstances change before the parties are able to return to court. [ 63 ] As for extracurricular activities, Mr. G appears to agree in his November 14, 2016 affidavit that the children should continue in dance. Mr. G says in his affidavit that 2014 dance class fees were waived by the dance school. He recognizes that some 2013 expenses were paid by Ms. G. [ 64 ] Mr.

G objects to paying for archery and horse riding. He appears willing to pay for music lessons and instrument rentals, as long as his expenses are taken into account. [ 65 ]

Section 7 expenses work both ways, so that the parent paying

section 3 support is entitled to be reimbursed the other parent’s share of

section 7 expenses incurred by the payor. [ 66 ] Of the 2015

section 7 expenses claimed by Ms. G in her affidavit sworn October 4, 2016, Ms. G attaches statements from the dance studio showing payments of $5,578.68 from September 1, 2014 to December 31, 2015. Mr. G should reimburse Ms. G for his proportionate share of those expenses, based on the parties’ actual incomes for 2014 and 2015. [ 67 ] I also accept the volleyball fees of $85.00 and online art course of $53.00, for a total of $5,716.68.

It is not unreasonable for a child to participate in a sport, and the online art course is the only extracurricular expense claimed for the third child. [ 68 ] Using the proportion stated in Ms. G’s affidavit (11 percent Ms. G and 89 percent Mr. G), Mr. G’s share is $5,087.85. [ 69 ] Absent agreement from Mr. G, I do not find camera equipment, school bus fees, or items less than $50 such as musical equipment rental to be extraordinary expenses, having regard to the level of child support being paid by Mr. G. [ 70 ] As for 2015 school fees, I agree that Mr.

G should have been responsible for 50 percent of those fees, having regard to the shared parenting regime. That amounts to $754.75. [ 71 ] That would amount to arrears of $5,842.59 for 2014-2015. [ 72 ] For 2016, I note that one of the children is no longer involved in dance. She has apparently taken up horse riding. The $80

cost is not unreasonable. It is not unreasonable for the daughter who is still pursuing dancing to participate in volleyball as well. Mr. G should pay his proportionate share for dance expenses, volleyball and the online art course. Those total $948.79. [ 73 ] Mr. G is responsible for his proportionate share of these expenses, being 84 percent. He thus owes $827.22 for 2016. [ 74 ] These amounts of

section 7 expenses, as well as any amount of

section 3 arrears resulting from a recalculation based on the parties’ actual line 150 incomes for 2014 and 2015 should be paid out of the trust account resulting from the sale of the matrimonial home, and charged against Mr. G’s ultimate share of the matrimonial property. Mr. G is apparently having cash flow problems, so payment out of the trust account will not create current difficulties for him, and will get Ms. G the funds owed expeditiously. [ 75 ] This is an interim direction only, as Mr. G may be successful in establishing that additional income should be attributed to Ms.

G when a full hearing on the issue of Ms. G’s efforts to achieve self-sufficiency has occurred. In the meantime, Ms. G is entitled to reimbursement of Mr. G’s share of the

section 7 expenses as directed above. [ 76 ] Mr. G is entitled to submit any receipts for

section 7 expenses incurred by him in accordance with the above formulas. Matrimonial Property [ 77 ] Mr. G seeks a distribution of matrimonial property. Morning chambers is not the place to deal with matrimonial property, other than by way of consent matters, procedural orders and possibly interim distributions. Matrimonial property division is final, and requires a final process, such as a consent judgment,

summary trial or full trial. Some issues may be decided at special chambers applications if the parties agree. [ 78 ] The matrimonial property issues here do not appear complicated, at least on the materials before me. I encourage the parties to attempt to resolve their matrimonial property division through some form of settlement process, or by way of a

summary trial. [ 79 ] I decline to weigh in on any of the matrimonial property issues raised by Mr. G. This is not the proper forum to do so. Interim Relief [ 80 ] The parties have obviously spent an enormous amount of money in legal costs, fighting each other. They are not yet divorced. All of the orders granted so far, including the one resulting from this decision, are interim, and subject to variation at trial or on changed circumstances. I encourage the parties to focus on resolving the remaining differences in a final process, rather than continuing to seek interim relief.

The main issue would appear to be the level of Ms. G’s earnings, which bears on the amount and duration of any final spousal support order and on

section 7 expenses. That issue can only be resolved in any final way by a trial or agreement. [ 81 ] Because of the shortage of resources currently available in the Court of Queen’s Bench in Alberta, it may be more efficient to set the matter for trial, rather than to pursue further interim remedies by way of a special chambers application. Order [ 82 ] Mr. Freeston should do the necessary calculations relating to the adjustments in child support and arrears resulting from this decision. The draft order submitted at the application on November 21 will need revision in paragraphs 2 and 3 to describe the correct amount of arrears in both

section 3 and

section 7 child support. [ 83 ] Mr. Freeston should provide Mr. G with a revised form of order as well as the calculations of child support arrears. If Mr. G has no objection to the calculations within seven days of receipt, the clerk may sign the order. Service [ 84 ] Mr. Freeston may serve Mr. G with the draft order and subsequent proceedings at the email address provided by Mr. G at the application. Costs [ 85 ] Ms. G has been entirely successful on this application and is entitled to $500 in costs. Heard on the 21 st day of November, 2016. Dated at the City of Edmonton, Alberta, this 6 th day of December, 2016.

Robert A. Graesser J.C.Q.B.A. Appearances: SJG, Applicant on his own behalf Darren Freeston Freeston Law Office for the Respondent