Bauer v Kiselyk, 2017 ABQB 461

Court of Queen’s Bench of Alberta Citation: Bauer v Kiselyk, 2017 ABQB 461 Date: 20170724 Docket: 4803 161113 Registry: Edmonton Between: Devin Allan Bauer Plaintiff/Respondent - and - Colleen Anne (Bauer) Kiselyk Defendant/Applicant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [ 1 ] In this special chambers application, Ms. Kiselyk asks the court to transfer Mr. Bauer’s $100,000.00 interest in the matrimonial home to her in satisfaction of: his MEP child and spousal support arrears, a retroactive increase in child support to correspond with Mr. Bauer’s income since the last court order in April, 2013, her assessment of matrimonial property including Mr. Bauer’s $60,000.00 pension acquired since separation. [ 2 ] Mr. Bauer cross-applies for an order: terminating spousal support as of August 1, 2015, when Ms. Kiselyk remarried; imputing income to Ms.

Kiselyk who is a teacher; granting him occupation rent for the period 2012-2017 during which Ms. Kiselyk has been occupying the matrimonial home; directing a Practice Note 7 intervention to allow him to re-integrate a relationship with his three younger children; and, establishing a litigation plan for an anticipated trial. [ 3 ] Ms. Kiselyk’s application is denied.

[ 4 ] There are two general impediments to Ms. Kiselyk’s application: first, the court may not have the legislative jurisdiction to enforce support arrears in light of the statutory powers given to the Director of Maintenance Enforcement, and, second, on an interlocutory motion, the court will not make a final disposition of matrimonial property without consent. Here, there are material property issues which require a trial. In addition, even if the court did have jurisdiction to enforce arrears, the MEP accounts do not appear to have tracked the 2013 court order. Moreover, Ms.

Kiselyk’s application to vary support retroactively was made in October, 2016; no satisfactory explanation is advanced by Ms. Kiselyk on which the court should make an award retroactive to the effective notice received by Mr. Bauer. [ 5 ] The parties’ matrimonial property dispute must go to trial. [ 6 ] Mr. Bauer’s application is allowed, in part. [ 7 ] Mr. Bauer’s application to take steps to determine if it is in the best interests of the three youngest children of the marriage to re-establish a relationship with their father with whom they have had no contact since 2012 is allowed, in part.

A preliminary assessment by an expert of the situation relative to the children is ordered. [ 8 ] Mr. Bauer’s application for a retroactive variation of the spousal support order faces the same retroactivity problem faced by Ms. Kiselyk. This court does not accept Mr. Bauer’s unsworn assertion that he did not know of his former wife’s remarriage until November, 2016. He states that, after separation, he remained on good terms with the two older children of the marriage; the court concludes that it is improbable that he did not know of his former wife’s re-partnering. [ 9 ] Mr.

Bauer’s application for a litigation plan is premature. The parties must re-assess their position as a result of this decision. If they are then unable to agree on a litigation plan, they can, of course, return to the court for advice and direction. Cases and authority cited [ 10 ] By Ms. Kiselyk : D.C.B. v R.L.B . 2007 ABQB 93 . [ 11 ] By Mr. Bauer : SJG v TAG 2016 ABQB 684 . [ 12 ] By the court : Hryniak v Mauldin 2014 SCC 7 ; Lawlor v Lawlor 2012 ABQB 723 ; Burke v Burke 2017 ONSC 4046 . 1. Background [ 13 ] The parties married in December, 1991, separated in June 2012 and divorced in July 2015. Ms.

Kiselyk remarried in August 2015. [ 14 ] Ms. Kiselyk was a teacher at the time of the marriage and Mr. Bauer was an electrician. [ 15 ] The parties are the parents of 5 children. In December, 2012, when both parties were represented, the court issued a restraining order against Mr. Bauer which prevented him from having any contact with the younger children. In July, 2013, when both parties were represented, the restraining order was continued. Mr. Bauer has not seen or had any contact with his younger children since 2012. [ 16 ] Since separation, the mother has resided in the matrimonial home.

Until they became independent, the children resided with her, but for one of the children who lived with her father for a disputed period but approximately from 2014 to 2015. Ms. Kiselyk’s husband moved into the matrimonial home in August, 2015. According to the current municipal assessment, the market value of the matrimonial home is $200,000.00; it is clear title. [ 17 ] After separation, Mr. Bauer obtained employment from an arm’s length employer. His income from that employment resulted in line 150 income for the years 2014, 2015 and 2016 of $158,837.69, $120,276.00, and $141,365.25, respectively.

As a result of that employment, he has a pension valued at the end of 2016 at approximately $65,000.00. [ 18 ] After separation, Ms. Kiselyk continued to work part-time as a teacher. Her line 150 income for the years 2014, 2015 and 2016 is $13,435.00, $24,367.00, and $42,912.00, respectively. She claims s. 7 expenses of approximately $5,000.00. [ 19 ] Ms. Kiselyk claims that, at the date of separation, she retained matrimonial debt of $19,000.00. [ 20 ] Mr. Bauer claims that, at the date of separation, Ms.

Kiselyk retained a bank account of $5,500.00 and tools and related business assets worth an unattributed amount. [ 21 ] According to MEP, Mr. Bauer’s child and spousal arrears, up to June 14, 2017 total $52,721.22. [ 22 ] In April, 2013, when both parties were represented, at the conclusion of a family law special chambers application, this court: - found, on a pre-disclosure basis that Mr. Bauer had a guideline income of $161,833.46 for 2012 and a guideline income of $117,000.00 for 2013 and that Ms. Kiselyk had a guideline income of $15,197.00; - ordered Mr.

Bauer to pay a total of $3,956.00 per month for September 1, 2012 to December 1, 2012 in s. 3 child support for the parties’ 5 children; - ordered Mr. Bauer to pay a total of $2,934.00 per month for all 5 children beginning January 1, 2013; - ordered Mr. Bauer to pay spousal support of $900.00 per month to Ms. Kiselyk beginning September 1, 2012.

[ 23 ] The April 23, 2013 court order went on to say: 8. Any arrears arising as a result of this Order shall be paid by the Plaintiff in the monthly amount of $500.00 with $200.00 of that amount to be applied to the arrears of spousal support and the balance to be applied to child support. Once the spousal support arrears are paid, the total amount of $500.00 per month shall be applied to the arrears of child support.

The Defendant shall be credited with the sum of $3,500.00 as against the total arrears for payments made to date. [ 24 ] Finally, the April 23, 2013 court order went on to order that each party should provide to the other, by June 30 of each year, with income tax returns or T4s. [ 25 ] We know - from the fact that the order of April, 2013 was the first support order and the fact that that order went back more or less to the date of separation - that the chambers judge who issued the April, 2013 court order was not creating arrears, but rather was creating a retroactive award and establishing a payment plan for that retroactive award.

The distinction between a retroactive award and arrears is, of course, crucial when it comes to such matters as licence suspension and effective notice of an application to vary an existing order. The April 23, 2013 order did not create arrears; Mr. Bauer could become in arrears if he didn’t pay, monthly $4,334.00 beginning on the date the order was entered. [ 26 ] The MEP accounting provided by Ms. Kiselyk begins on April 3, 2013 with “total declared arrears” of $2,898.00, an entry for “maintenance” on May 4 of $2,898.00, and an entry on May 1, for “maintenance” in the amount of $1,449.00.

None of this matches up with the court order of April 23, 2013. [ 27 ] On June 1, 2013, there is a “maintenance” entry for $1448.00 and on June 14, 2013, an entry for interest. Again, none of this matches up with the April 23, 2013 court order. [ 28 ] Indeed, because the judge made a retroactive award, not a statement of arrears, it is not clear why any interest would be charged. Nevertheless, in 2013, apparently MEP charged Mr. Bauer a total of $144.31 in interest, presumably interest on arrears. [ 29 ] On August 1, 2013, MEP charged Mr.

Bauer with a “maintenance” payment of $2,934.00 and a “support” amount of $900.00; we can deduce, from those amounts, that “maintenance” means child support and “support” means spousal support. On August 10, 2013, MEP charged Mr. Bauer “maintenance” of $10,395.00, “support” of $6,300.00, and, $1,000.00 in costs. The result was that, as of August 10, 2013, Mr. Bauer is shown as being in arrears in the amount of $26,989.00. [ 30 ] On October 13, 2016, Ms. Kiselyk filed the application which the court is hearing on July 20, 2017. In that application, she indicated that Mr.

Bauer owed arrears of $54,050.40 as at July 20, 2016. She indicated that child and spousal support had never been recalculated; she stated that based on Mr. Bauer’s 2014 tax return the amount payable should have been $2,888.00. In his November 2016 affidavit in response to Ms. Kiselyk’s claim, Mr. Bauer stated that spousal support should terminate as of the date of Ms. Kiselyk’s re-marriage. [ 31 ] On June 23, 2017, Mr. Bauer made the cross-application which the court is hearing on July 20, 2017. 2. Child reintegration [ 32 ] Ms.

Kiselyk states that she has no objection to an intervention to assist in determining what contact if any between their father and the three youngest children is in the children’s best interests. The allegations against Mr. Bauer in relation to the children are extremely serious. In the circumstances here, the only order which this court is prepared to make is a relatively narrow one, appointing a parenting expert to review the affidavit in which Ms. Kiselyk outlines the allegations against Mr. Bauer, to review any sworn response to that affidavit which Mr.

Bauer chooses to file, and to make a recommendation to the court about whether any process to reintegrate the parent/child relationship could and should be undertaken, and if so, what process or processes would be available and useful. 3. Ms. Kiselyk’s claim for arrears based on the April 23, 2013 court order [ 33 ] For the reasons outlined in the factual background, I am not satisfied that the arrears as calculated by MEP are correct. Ms. Kiselyk states that it is not particularly important whether the finding in the April 23, 2013 order is characterized as arrears or as a statement of debt owing.

With respect, I disagree. In this context, “arrears” relate to an unpaid order, i.e. the flouting of a court order or just the failure to comply with a court order; an unpaid support creditor is sometimes entitled to charge, or even sell, property to satisfy support arrears, although that is generally ordered only in circumstances where it can be shown that the support debtor is unlikely to satisfy the arrears. Unless there are arrears, the same analysis cannot be made. If, after re-calculation, one concluded that Mr.

Bauer is up-to-date in paying what the court has ordered, i.e. ongoing child and spousal support plus $500.00 a month towards the retroactive spousal support award, then Mr. Bauer is not in arrears and the arrears argument in favour of selling property disappears. 4. Ms. Kiselyk’s claim for arrears based on post-2013 changes in Mr. Bauer’s income [ 34 ] Ms. Kiselyk asks for a retroactive increase from 2014 to 2017 in Mr. Bauer’s child support obligation based on increases in Mr.

Bauer’s line 150 income from January 1, 2014. [ 35 ] Case law establishes that the Canadian child and spousal support regime is a demand system. From April 23, 2013 on, as a result of the April 23, 2013 order, Ms. Kiselyk had a right every year by June 30 at the latest to Mr. Bauer’s income information from the previous year; she, of course, was equally required to provide her income information to him. Either she received that information and didn’t do anything about it, or she didn’t receive the information and didn’t do anything about it.

Either way, she only made a demand on October 13, 2016, which is the date of effective notice to Mr. Bauer that she wanted a recalculation of his support. A court can go further back than the date of effective notice if the applicant explains why they were unable to make a timely application. No such satisfactory explanation was provided here; Ms. Kiselyk said that she wanted to take a break from litigation. [ 36 ] In the result, similarly to the April 2013 order, any order made now on Ms. Kiselyk’s application for a variation of support

from October 13, 2016, to the present would create a retroactive award with respect to which there were no arrears, together with a payment

schedule which, if not met, would then create arrears. [ 37 ] This specific application for a variation in support based on a change of income is the type of application which could be heard in regular chambers. 5. Ms. Kiselyk’s application for transfer to herself of Mr. Bauer’s interest in the matrimonial home [ 38 ] As indicated above, Ms. Kiselyk’s claim to Mr. Bauer’s $100,000.00 interest in the matrimonial home is based on support arrears, on what Ms. Kiselyk describes as her payment of matrimonial debts, and on her calculation of an equalization payment. [ 39 ] There are two general problems with Ms.

Kiselyk’s application. First, Mr.

Bauer correctly states that, whether on the basis of existing case law which states that matrimonial property claims cannot be dealt with on an interlocutory basis in a piecemeal fashion - see SJG at para. 77 - or on the basis of the circumstances of this case, it is inappropriate to make a final order for distribution of matrimonial property in a regular chambers application where there are any material issues in dispute. [ 40 ] Second, where, as here, the proposed transfer of matrimonial property from one spouse to another is based on support arrears, there is a technical issue about whether the court has jurisdiction to enforce arrears in light of the wide discretion granted to the Director of Maintenance Enforcement in the statute which deals with the enforcement of appears. [ 41 ] In addition to the two problems of general application, there are several specific concerns which arise in the circumstances here. [ 42 ] The problem with the calculation of “arrears” has been set out above. [ 43 ] The problem with assumption of matrimonial debts is that Mr.

Bauer contests his obligation to pay anything towards matrimonial debts, asserting that Ms. Kiselyk acquired both the bank account of the electrical business which has been operated by Mr. Bauer and the other assets – tools - which had been owned by that business, which she has sold without accounting for their sale to Mr. Bauer. This dispute on the facts will have to be resolved at a trial. As I indicated during the hearing, I would not have required a trial to settle disputed factual claims if the only facts Mr. Bauer raised as being in dispute were the bank accounts and tools of the business which had failed.

Mr. Bauer provided no evidence about those alleged assets, so it would have been impossible for the court to have made any assessment of his position. Hryniak requires, as part of a shift in the culture relating to civil process, that the parties each put their best foot forward on interlocutory applications. Mr. Bauer stated that he would acquire information about the bank account and tools at trial. With respect, that is not sufficient.

Courts are required to make an assessment of whether a trial is proportional to the parties’ claims; in the absence of contests dealing with material aspects of matrimonial property, such as – in the circumstances here - the pensions of each of the parties, the court would have felt entitled to make a determination with respect to the value of the assets connected to the failed business from the evidence filed on the application. [ 44 ] In addition, Ms. Kiselyk’s calculation of Mr. Bauer’s obligation to her includes Mr. Bauer’s pension all of which was acquired by him after separation.

A court will have to undertake the analysis usefully reviewed in Lawlor to determine whether this after- separation property should be divided equally. [ 45 ] As to her RRSP, I understood Ms. Kiselyk to indicate that, in 2003, she withdrew from teaching and had to liquidate her pension at that time and that she invested her pension in the RRSP which she has reported. The difficulty with that position is, of course, that Ms. Kiselyk then returned to teaching at some time but has not apparently filed a current FL17-Schedule A indicating what her current pension is. [ 46 ] Finally, Ms.

Kiselyk’s request for a transfer to herself of Mr. Bauer’s $100,000.00 interest in the matrimonial home is based on what she describes as his unpaid portion of s. 7 expenses. There are two difficulties in relation to that claim; the first is its timeliness as discussed above in relation to a variation in support. The second is that the 2013 order did not set s. 7 expenses; the language in s. 5 of the order is that Mr. Bauer will pay additional expenses “pursuant to s. 7 of the Federal Child Support Guidelines”.

We know that s. 7 requires either that the parties agree on s. 7 expenses or that the court determines which expenses qualify as such expenses as a result of being necessary for the child and reasonable in the circumstances. [ 47 ] In the result, for the reasons set out above, Ms. Kiselyk’s application for a transfer to herself of Mr. Bauer’s interest in the matrimonial home is denied: a trial is required to assess Ms. Kiselyk’s claims. 6. Change of ownership of the matrimonial home [ 48 ] On this application, Mr. Bauer indicates that he does not object to transferring his interest in the matrimonial home to Ms.

Kiselyk on the understanding that he would get credit towards his support obligations for his approximately $100,000.00 interest in the matrimonial home. As can be seen from the comments relating to Ms. Kiselyk’s application, Ms. Kiselyk is, in fact, proposing that the $100,000.00 transfer would finalize matrimonial property claims as well as support claims. Clearly, Mr. Bauer does not agree to abandon his claim to his equity in the matrimonial home. [ 49 ] In the result, while it has now been made clear that Mr.

Bauer is not asking for the sale of the matrimonial home, there are important issues which must be settled before a transfer of interest can take place. 7. Mr. Bauer’s request to terminate spousal support as of the date of Ms. Kiselyk’s remarriage [ 50 ] Mr. Bauer wrongly suggests that spousal support ceases on re-partnering. Rather, case law establishes that spousal support may continue after re-marriage of the creditor spouse or even after the death of the payor spouse. Where spousal support is compensatory rather than needs-based, the court assessing Mr. Bauer’s claim would have to make an assessment of Ms.

Kiselyk’s claim to compensatory spousal support.

[ 51 ] The first problem with Mr. Bauer’s claim is that, just like Ms. Kiselyk’s claim, at best, Mr. Bauer’s claim would operate from the date of effective notice of his claim which may be on November 10, 2016, when he responded to Ms. Kiselyk’s application or on June 23, 2017 when he made his cross-application for a variance. Mr. Bauer states that he didn’t bring an application for a variance of spousal support earlier because he was unaware that Ms. Kiselyk remarried essentially as soon as the divorce judgment issued. He has not filed an affidavit to that effect.

Without an affidavit, I am not prepared to accept his statement about the date when he learned of his ex-wife’s re-marriage. Mr. Bauer states that he has a good relationship with the older children of the marriage; it is unlikely that, during the course of that relationship, he did not learn of the children’s mother’s remarriage. [ 52 ] The second problem is that Mr. Bauer has failed, on this application, to establish that Ms. Kiselyk’s spousal support is non- compensatory. Mr. Bauer could be correct about the nature of Ms. Kiselyk’s claim: Ms.

Kiselyk is a teacher and it may be that, in that profession, perhaps uniquely, Ms. Kiselyk has not suffered any financial disadvantage as a result of the marriage. However, in light of the number of children of the marriage, it is possible that Ms. Kiselyk has a compensatory basis for spousal support which survived her re-partnering. [ 53 ] Ms. Kiselyk has acknowledged, on this application, that her spousal support should cease on August 1, 2017. [ 54 ] In the result, a trial is required to determine if Ms. Kiselyk’s spousal support should cease as of November 20, 2016. 9. Mr.

Bauer’s claims, including his claim for occupation rent [ 55 ] Some of Mr. Bauer’s claims have been dealt with above including his claim for a PN 7 voice of the child intervention and his request to vacate the restraining order as it relates to the youngest children of the marriage, his request to terminate spousal support as of August 1, 2015, and, his request for the sale of the matrimonial home. The main issue remaining in Mr. Bauer’s counter-application is his claim for occupation rent. [ 56 ] Mr.

Bauer has not claimed occupation rent in his pleadings; that alone may terminate his pursuit of that remedy. [ 57 ] In any event, however, the case law establishes that, when asked to award occupation rent, a court must assess the equities of each situation on its own merits: see a useful outline of the case law in Burke . [ 58 ] In the result, for the reasons set out above, Mr. Bauer’s application for occupation rent is adjourned to a trial. [ 59 ] Mr. Bauer’s request to set a litigation plan leading to a trial is denied as being premature.

The parties will presumably have to reconsider their positions in light of this decision; once they have made adjustments to their positions, if they cannot agree on a litigation plan to bring this matter to trial as expeditiously, fairly and cheaply as possible, they can return to court for advice and directions. 10. Costs [ 60 ] If the parties are not agreed on costs, I may be spoken to within 30 days of releasing this decision. Heard on the 20 th day of July, 2017. Dated at the City of Edmonton, Alberta this 24 th day of July, 2017. J.B. Veit J.C.Q.B.A. Appearances: Linnea C.

Goodhand, Strathcona Law Group for the Applicant, Ms. Bauer Dave J. Rechlo, McAllister LLP for the Respondent, Mr. Bauer