LEW v RWW, 2017 ABQB 806

Court of Queen’s Bench of Alberta Citation: LEW v RWW, 2017 ABQB 806 Date: 20171222 Docket: 4806 020134 Registry: Lethbridge Between: LEW Plaintiff/Applicant - and - RWW Defendant/Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice M. David Gates _______________________________________________________ Background [ 1 ] This is an application brought by the mother seeking a determination of various issues relating to on-going and retroactive child and spousal support.

This matter was heard as a Special Application on August 15, 2017, in Lethbridge, Alberta. On January 31, 2017, Hall J. directed that the hearing was to make a final determination of:

a) The Guideline Income of both parties;

b) Spousal support;

c) Occupation rent;

d) The effect on the quantum of spousal support of the parties’ personal bankruptcies and foreclosure against the matrimonial home. [ 2 ] In additional to fixing the date for the Special Application, Hall J. made an order dealing with the following matters:

a) The mother’s Guideline Income was set at $20,000 and the father’s at $67,100;

b) Section 3 child support was set at $558.00 per month, payable by the father retroactive to April 1, 2016;

c) Child support arrears owing by the father was to be determined upon proof of payments made after April 1, 2016;

d) On a without prejudice basis, the father was directed to pay $462.00 per month in spousal support commencing March 1, 2017. [ 3 ] Notwithstanding Hall J.’s Order, the parties’ written materials filed for this Special Application indicate that the following, more comprehensive, list of issues were to be addressed:

a) The determination of the appropriate Guideline Income for both parties from the date of separation to the present;

b) On-going and retroactive child support;

c) On-going and retroactive spousal support;

d) Whether the father is entitled to occupation rent relative to the mother's occupation of the matrimonial home;

e) The effect on the quantum of spousal support payable of the personal bankruptcies of both parties and the foreclosure against the matrimonial home;

f) Costs of this application. [ 4 ] At the outset of oral argument, counsel for the father advised that the only issues remaining in dispute related to on-going and retroactive spousal support and the determination of whether or not income was to be imputed to the mother. [ 5 ] At the conclusion of oral argument, I reserved my decision. These are my reasons. Background [ 6 ] The parties married in May 2008. They cohabited for approximately twenty one months prior to marriage. They separated in March 2015 and divorced in October 2016. In total, this was a relationship of approximately 8.5 years duration.

There is one child of the marriage, a son, born in early 2006. Parenting issues were resolved by way of a consent order dated October 18, 2016. [ 7 ] In 2009, the mother obtained a diploma as a Licensed Practical Nurse (“LPN”). Thereafter she worked part-time at the Taber Medical Clinic from 2010 until 2013, when the son was 4 to 7 years old. She did not work again until December 2016, when she secured casual employment with Taber Special Needs. As of March 2017, she has secured regular weekly employment at Taber Special Needs for a total of 19 hours per week, earning $15.77 per hour.

The father supported the mother while she obtained her LPN diploma. [ 8 ] According to counsel for the mother, the mother did not, and has not, sought full-time employment as a result of the breakdown of the relationship and the need to care for their son’s special medical needs. The boy was 9 years of age at the time of separation and attending school on a full-time basis. He was 11.5 years of age at the hearing date. [ 9 ] The mother declared bankruptcy on May 17, 2016, and was discharged on February 18, 2017. [ 10 ] At the time of separation, the father worked full-time at WellTech Energy Services.

He lost his job in January 2016 and was able to secure his current position at SennCrete Construction in March 2016. He declared bankruptcy on September 27, 2016 and is expected to be discharged as of June 28, 2018. [ 11 ] The father earned $85,213 in 2015. As such, his

section 3 child support as of April 1, 2015, the first month post-separation, should have been $725, with total base child support payable in 2015 (based on 9 months) amounting to $6,525. [ 12 ] The evidence reveals that his 2016 income was $65,835.00, which corresponds to a monthly child support payment of $555.18. This is the amount that he should have paid for the months of January, February and March 2016, for a total of $1,665.54. Based on his 2015 and 2016 Guideline Income, his total base child support obligations from the date of separation to April 1, 2016, amount to $8,190.54. The mother’s 2016 income was $500, plus various child tax benefits. [ 13 ] The father’s

section 3 child support obligations from April 1, 2016 onward are governed by Hall J.’s Order, which set the amount at $558 per month. Both parties agree that this is the appropriate level of child support on a go-forward basis, subject of course to standard annual adjustment.

Accordingly, I confirm Hall J.’s Order in this regard. [ 14 ] There is no dispute that the father continued, following separation, to make payments towards the mortgage on the matrimonial home, home insurance, utilities, the parties' line of credit, and truck payments and vehicle insurance for a truck initially in the mother’s exclusive possession. (The father retrieved the vehicle in February 2016.) [ 15 ] There is also some evidence that the father paid the mother’s cellular telephone bill for a period of time following separation, but no dollar amount is before me in evidence.

The total amount of these payments in 2015 was $25,643.73, consisting of: Mortgage - $11,407.97 Home Insurance - $883.14 Utilities - $4,716.77 Line of Credit (50%, representing the mother’s half share) - $1,496.02

Truck Payments - $ 6,161.40 Vehicle Insurance - $978.43 [16] The father continued to make these payments in 2016 as well, consisting of $2,920.58 (mortgage); $765.26 (home insurance);$1,169.48 (50%, representing the mother’s half share of the line of credit); $616.14 (truck payments); $133.81 (vehicle insurance), for atotal of $5,605.27. [17] In advancing a claim for both child and spousal support effective April 1, 2016, not back to the date of separation in March2015, the mother says that she is acknowledging these various payments.

I would note, however, that the total of these payments is$31,249.00, whereas the father’s responsibility for child support from the date of separation up to April 1, 2016, based on a GuidelineIncome of $85,213 in 2015 and $65,835 in 2016 was a total of $8,190.54. Deducting this amount from the total amount of the father’suncharacterized payments of $31,249 leaves an amount of $23,058.56 to the father’s credit.

This is the equivalent of $28,823.08 inspousal support, using a gross-up factor of 25% to account for the fact that the father received no tax deduction for this amount and themother was not required to include this amount in the determination of her taxable income. [18] I also take into account that the mother continued to reside in the matrimonial home after the father stopped paying themonthly mortgage on the property. She remained in the property until April 2017, paying only the taxes and utilities, but not themortgage, until she was forced to leave the property as a result of the foreclosure proceedings.

In effect, she lived "rent-free" for a periodof 14 months. [19] While I accept the mother’s argument that the father made no direct financial contribution to her receipt of this benefit, I amsatisfied that she had, nonetheless, the sole benefit of a joint asset of the marriage during this time-frame.

As such, I am of the view thatit is a factor properly taken into account in assessing the quantum of spousal support payable in this instance. [20] In my view, this benefit to the mother should be calculated as 50% of the monthly mortgage payment that would otherwisehave been payable, specifically, $610.29 (one half of $1,220.58) for a total benefit of $8,544.06. For ease of calculation, I would set thisamount at $8,500. Child Support and Child Support Arrears [21] During the hearing of this matter, the parties agreed that the total amount of child support arrears owing is $2,194.00.

Giventhis agreement, I set child support arrears at $2,194.00. Spousal Support Position of the Parties [22] The mother says that this was a lengthy relationship of 8.5 years and that she should receive spousal support on a 1:2 basis,i.e. one year of spousal support for every two years of the relationship. Specifically, she seeks spousal support for a period of 4.5 yearsfrom April 2016 until October 2020.

She resists any suggestion that income should be imputed to her on the grounds that she had solechild-rearing responsibilities following the breakdown of the marriage and the limited employment opportunities that exist in the area. [23] The father concedes that the mother is entitled to spousal support. He also does not seriously challenge her calculation as toduration and agrees that the 4.5 year period should start at the date of separation.

He says, however, that the mother’s work history, bothduring and after the breakdown of the marriage, warrants the court making a finding that she was intentionally underemployed and thatincome should be imputed to her in this instance. The mother responds to say that any imputation of income should not exceed $20,000per year. Analysis [24] In Bracklow v Bracklow, (SCC), [1999] 1 SCR 420, the Supreme Court of Canada recognized three basesfor entitlement to spousal support: 1) compensatory; 2) non-compensatory, and 3) contractual.

Compensatory support recognizes that amarriage is a joint endeavour and seeks to alleviate the economic consequences of the marriage and its breakdown by taking into accountall the circumstances of the parties, including the advantages conferred on either spouse during the marriage. It seeks to achieve anequitable sharing of the benefits gained by the respective spouses from the marriage. Contractual entitlement gives effect to any expressor implied agreement made between the spouses.

Non-compensatory support, often described as “needs based support,” may be ordered“where it is fit and just to do so.” [25] Entitlement considers the four objectives of spousal support set out in

section 15.2(6) of Divorce Act, RSC 1985, c 3 (2nd Supp) including recognizing the economic advantages and disadvantages of the marriage and its breakdown and relieving any economichardship, apportioning the financial consequences arising from the care of children and promoting self-sufficiency within a reasonabletime. [26] Once entitlement is established, the court must consider the condition, means, needs and other circumstances of each spousein determining the quantum and duration of support.

In Thomas v Thomas, 2004 ABQB 27 at paras 34-35, affirmed 2005 ABCA 24,Sullivan J summarized the key principles: The "condition" of a spouse includes their age, health, needs, obligations, dependants, and thestation in life. "Means" incorporates all pecuniary resources. "Other circumstances" include the length of time of cohabitation and thefunctions performed by each spouse during cohabitation.

[ 27 ] In this instance, there is no dispute as to entitlement to spousal support. Likewise, the father does not seriously contest the mother’s contention that she is entitled to one year of support for every two years of the relationship. In the result, I would fix the duration of spousal support at 4.5 years from the date of separation in light of the fact that the relationship was of approximately nine years duration in total. The father does seriously contest, however, the quantum of spousal support payable and asks the Court to impute income to the mother as part of the overall consideration on this issue.

Quantum of Spousal Support [ 28 ] In deciding upon a spousal support award, the courts often refer to the Spousal Support Advisory Guidelines (the “ SSAG ”). Although not legally binding, the SSAG assist in the determination of the appropriate quantum and duration of spousal support. Both counsel have provided me with detailed calculations employing the SSAG . [ 29 ] I approach the father’s request to impute income to the mother with some caution, particularly in light of the Court of Appeal’s decision in Hunt v Smolis-Hunt , 2001 ABCA 229 , as recently confirmed and applied in DBF v BF , 2017 ABCA 272 .

At paragraph 77 in DBF , the Court stated: ...In Hunt v Smolis-Hunt (citations omitted), this Court ruled that a person seeking to impute income to another under section 19(1)(

a) of the CS Guidelines must adduce evidence that the obligor engaged in a “deliberate course of conduct for the purpose of evading child support obligations”: Hunt at para 42 . Proving a deliberate course of conduct requires “proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to infer that the intention of the obligor is to undermine or avoid his or her support obligations”: Hunt at paragraph 42 . [ 30 ] In my view, the mother’s education and work history warrant careful consideration.

I am satisfied that she returned to school in 2007 to obtain upgrading, following which she successfully completed her LPN program in 2009. I accept the father’s contention that he supported her during her return to school and, indeed, covered the costs associated with the LPN program. [ 31 ] Following her graduation, the mother worked 3.5 days per week in Taber, but was terminated for cause in May 2013. She went back to work on a part-time basis in the fall of 2016, a full 18 months following separation.

She was initially employed on a casual basis, but her employment was converted to part-time status in March of this year. [ 32 ] According to the father, the mother only returned to work after having been discharged from bankruptcy. Given her unemployed status at the time, the father maintains that the mother was able to obtain her discharge from bankruptcy after 9 months.

On the other hand, the father says that he is not eligible for discharge from bankruptcy for a period of 22 months given his full-time employment. [ 33 ] On the evidence before me, it would appear that the mother accepted a casual position on November 11, 2016, and actually commenced work sometime in December 2016, a number of months before she was discharged from bankruptcy on February 18, 2017. [ 34 ] According to the mother, she remained out of the work force following separation as a result of the breakdown of the relationship and to attend to the special medical needs of the parties’ then nine-year-old son.

Her evidence fails to disclose any particulars relating to the child’s special medical needs. The father maintains that the special needs involve a peanut allergy only. There is no suggestion that the child’s peanut allergy prevented him from attending school on a full-time basis. In the absence of any medical evidence suggesting otherwise, there was, in my view, no legitimate reason for the mother’s decision not to seek employment on the basis of the child’s medical condition.

Before and after school care, to the extent that it is required, is provided by the mother’s parents. [ 35 ] Yet I am unable to accept the father’s argument that the mother should have immediately sought employment following separation. In my view, it was not unreasonable for her to have taken the first six months following separation to try and stabilize her new situation, financially and otherwise, in light of her ongoing responsibility to provide primary care to their son. However, she ought to have returned to work at the beginning of 2016.

Under all of the circumstances, I am satisfied that her failure to return to work at the beginning of 2016 was the result of an intention to avoid her support obligations. I would, accordingly, impute income to her commencing in January 2016. [ 36 ] For the nine months between April 1 and December 31, 2015, I would set spousal support at $1,962 per month. This represents the mid-range amount specified by the SSAG based on the father’s 2015 income of $85,213 and the fact that his base child support payments during the same period were $725 per month.

This calculation also takes into consideration that the mother had no employment income. The total amount of spousal support owing for 2015 is $17,658. [ 37 ] For 2016, I would impute income to the mother in the amount of $20,000 per year. This amount is consistent with Hall J.’s Order. As such, I accept the representations from counsel that this is an appropriate amount in all of the circumstances. I am not prepared to impute income at the levels suggested by the father, namely $43,142, representing the amount she would earn at Taber Special Needs if employed on a full-time basis.

There is no evidence to suggest that full-time employment is available at this facility. Similarly, I am not prepared to impute an income of $31,200, the amount the father says the mother could earn working on a full-time basis at Tim Horton’s. In my view, Tim Horton’s employment is not an appropriate comparator, particularly in the absence of evidence that full-time employment is available at this enterprise. [ 38 ] The father’s guideline income in 2016 was $65,835. His corresponding monthly child support payment should have been $555.18.

Again using the mid-range amount set forth in the SSAG , I would set the father’s spousal support at $471 per month, for a total of $5,652 for the year. [ 39 ] I selected the mid-range of support for a number of reasons. First, the mother’s claim is largely compensatory, however, it is not as strong a compensatory claim as in some cases since she improved her employment prospects during the relationship with the father’s support and obtained her LPN diploma. Furthermore, the son is in full-time school and requires less hand-on care than a younger

child would need. [ 40 ] Further, it appears the mother needs some incentive to seek employment. Often the lower end of the range is used for this purpose, but I have imputed income to her beginning in January 2016, making the low end of the range an inappropriate choice.

Both parties declared personal bankruptcy and essentially are starting fresh, so a mid-range amount that balances their needs with the promotion of self-sufficiency and work incentives is appropriate in this case. [ 41 ] As previously indicated, I am satisfied that the father should receive credit against spousal support owing for the payments he made on the mortgage, etc. for a total of $37,423.08 ($28,923.08 + $8,500). At the above amounts, his spousal support obligations for 2015 and 2016 total $23,310.

Deducting this amount from the credit outstanding, I find that the father has a remaining credit of $14,113.08. [ 42 ] Spousal support remains payable up to and including September 2019, representing 4.5 years following the date of separation. For the year 2017, based on the 2017 Guideline Incomes determined by Hall J. and the level of on-going

section 3 child support, I find that the mid-range spousal support payable in accordance with the SSAG to be $423 per month, or $5,076 for the year. [ 43 ] Once the parties have exchanged their respective tax returns for 2017, this amount should be adjusted to reflect the father’s actual 2017 income and the corresponding amount of his actual

section 3 child support payments, included the new child support figure that came into effect on November 22, 2017. The mother’s actual income, should it exceed the $20,000 amount determined for 2017 by Hall J., should be used in determining the mid-range SSAG spousal support payment. [ 44 ] This same approach should be used in calculating the quantum of the father’s spousal support obligations for 2018 and the first nine months of 2019. Any amount owing for 2017 and beyond first should be set off against the father’s remaining credit.

Costs [ 45 ] There was mixed success in terms of the outcome of the application and cross-application. Under the circumstances, I am satisfied that both parties should be responsible for their own costs. Heard on the 15 th day of August, 2017. Dated at the City of Calgary, Alberta this 22nd day of December , 2017. M. David. Gates J.C.Q.B.A. Appearances: Lori G. Andreachuk, QC for the Plaintiff/Applicant Robert G. Bissett for the Defendant/Respondent