Hankins v Konopka, 2020 ABQB 782

Court of Queen’s Bench of Alberta Citation: Hankins v Konopka , 2020 ABQB 782 Date: 20201215 Docket: 4803 187767 Registry: Edmonton Between: Roxanne Lee Hankins Applicant - and - Cory Dale Konopka Respondent _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice G.R. Fraser _______________________________________________________ [ 1 ] The parties in this matter come before the Court by way of a Special Chambers application.

They are seeking an Order to clarify the parenting arrangements, and to determine the incomes attributable to each party for the purposes of retroactive and ongoing child support. [ 2 ] The parties were married in 2012 and separated in October 2017. There is one child of the marriage, a son born in March 2011. Initially, Ms. Hankins stayed home with the child for approximately three years. She then started work outside the home, primarily in the area of arranging financing for the purchase of vehicles or equipment. She is now the joint owner of a company that arranges commercial equipment financing. Mr.

Konopka is a pipefitter and has chosen to work in the oilfield. He operates his own business providing services to oilfield companies. His work often requires him to be in the field for extended periods of time. It also allows him the flexibility to take approximately three months off in the summer.

[ 3 ] The parties were able to enter an agreement without the assistance of the court regarding parenting, support, and property division in June 2018. That Order set Mr. Konopka’s income at $160,000 and Ms. Hankins’ income at $40,000. [ 4 ] The Order gave Ms. Hankins primary care of their son with Mr. Konopka having reasonable and generous access not to exceed seven consecutive days, except during the summer when he would have four consecutive weeks of access. [ 5 ] The parties have been doing reasonably well at co-parenting since entering the agreement. It is apparent that both parties love their son.

However, they still seem to harbour animosity towards each other. There has been a problem, primarily on the part of Mr. Konopka, of speaking negatively about the other party, sometimes in the presence of their son. The parties recognize that this is wrong, and they now communicate primarily through Our Family Wizard. [ 6 ] It is important that the parties focus their attention on what is in the best interests of their son. He did not choose to have them as parents; they chose to have him as their child. As parents, they must focus on providing him with a loving and nurturing environment.

They must put aside any animosity they feel towards each other and focus on raising their son. Parenting [ 7 ] Both parties have put forward a proposal regarding a parenting schedule. The schedules are somewhat unique due to Mr. Konopka’s unusual work schedule. He is self-employed, working in the oilfield. His employment often takes him away to remote locations for long periods of time. When he returns, he will often have a week or more of consecutive days off.

Also, he only works nine months of the year, generally having June, July, and August off work. [ 8 ] Perhaps the simplest issue to solve regarding parenting is the day on which exchanges will occur. The practice has been for exchanges to take place on Wednesdays. Mr. Konopka is seeking to have that altered so that exchanges take place on Fridays. His reason for wanting the change is that Friday is the natural end to the usual work and school week. However, his work

schedule does not operate on a regular work week. I do not find that there is a reason to change the current exchange date of Wednesdays after school. [ 9 ] A second relatively simple issue to resolve involves phone contact between Mr. Konopka and his son. The parties cannot agree on an end time for the calls, Ms. Hankins wants them to stop by 8:00 PM, Mr. Konopka wants the time extended to 8:30 PM. In addition, Mr. Konopka wants a provision that requires Ms. Hankins to assist in facilitating the calls.

I find that it is in the child’s best interest to have telephone contact, or contact through other electronic means, with his father. This contact shall occur between 7:30 AM and 8:15 PM. If Mr. Konopka has been unable to reach his son by 7:00 PM, he may contact Ms. Hankins for assistance. He may only contact her once per day for this purpose, and no more than three times per week. [ 10 ] Another issue that has arisen between the parents involves the exchange of items when the child goes from one parent to the other. Ms. Hankins has the primary day-to-day care of the child. She receives child support from Mr.

Konopka. Part of that child support should cover the daily needs of the child, such as clothing. There is no evidence that Mr. Konopka has no items for his son at his residence. However, he is seeking that Ms. Hankins send clothing with the child at each exchange. She does not want to do this, as she says his clothing either is not returned, or returns dirty. [ 11 ] It is in the best interests of the child that he feels comfortable in the home of both parents. He should not have to keep a mental list of what items belong at mom’s house, and what items belong at dad’s house. The items are his, and are for his use.

He should be free, within reason, to transfer whatever items he wants back and forth between the houses. Both parents should facilitate this. [ 12 ] I note that the child is currently nine years old. He should be able to assist in packing items to take to dad’s house, and to assist in packing items to take back to mom’s house. When he goes to his father’s house, he should arrive with adequate clothing for his time there. When he returns to his mother’s house, he should be returning with a similar amount of clean clothing. [ 13 ] The parties also seek clarification of some parenting issues.

Regarding school holidays, for Christmas, the parties shall equally share the school holiday. In even years, the first week will be with the mother. In odd years, the first week will be the father. Regarding Spring break, in even years the father will have custody; in odd years, the mother. Regarding fall break, in even years the mother will have custody; in odd years, the father. Regarding summer holidays, each party shall be entitled to four weeks with the child. In even years, the father shall have first choice of the four weeks. In odd years, the mother will have first choice.

The choosing parent must notify the other parent no later than April 30 of which weeks are being selected. [ 14 ] The child shall not change schools without the consent of both parents. Both parents shall ensure that the child attends all regularly scheduled classes. If the child misses class for any reason, the other parent must be notified. On school days, exchanges will occur at the school. Exchanges on non-school days shall take place at the custodial parent’s home, such that the parents shall share the driving. Neither parent should

schedule events during the other parent’s time without the other parent’s consent. Both parents shall make their best efforts to have the children attend all regularly scheduled activities. I am not prepared to order a first refusal clause, given the nature of the father’s work and the distance between the parties’ homes. [ 15 ] It should go without saying, and should not need to be included into any Court Order, that the parties should not talk negatively about each other, or about the court process when their son can hear.

However, the parties do not seem to be able to follow this simple rule, so it will be included as part of a Court Order. Support [ 16 ] The current agreement between the parties sets Ms. Hankins’s income at $40,000 per year and Mr. Konopka’s income at $160,000 per year. As stated earlier, Mr. Konopka is self-employed, operating an independent business. He pays himself by way of a dividend. There is disagreement as to whether the actual amount of dividends or a grossed-up, taxable amount should be used to calculate his income.

There is also an issue regarding what company expenses may be attributable as personal expenses. [ 17 ] Mr. Konopka pays himself a dividend of $132,000 per year. The grossed-up, taxable amount of dividends would be $151,800

per year. He says the actual amount should be used because he is the sole owner of the company, and it is the company that pays the taxes reflected by the grossed-up amount. Consequently, he is not receiving any tax breaks by paying himself through dividends. [ 18 ] This is an interesting argument. It is true that the company has already paid taxes on the dividends. Since there is only one shareholder of the company, Mr. Konopka, he ultimately is paying the same amount of taxes as he would if the money were taken out as regular employment income.

However, this view fails to draw the distinction between the company and the individual. Just as not all of the profits of the company are attributable to Mr. Konopka, not all of the expenses are attributable to him. His tax obligations are separate from the company’s obligations. I find that it is appropriate to use the grossed-up, taxable amount of dividends for the purposes of calculating support. [ 19 ] Ms. Hankins seeks to have many items contained in the financial documents of Mr. Konopka’s corporation attributable as personal benefits to him.

The three largest areas of contention concern a trailer described as a “toy hauler”, an F-350 truck, and a tax-free living out allowance. Regarding the trailer, Ms. Hankins seeks to have 90% of the expenses attributable as a personal benefit. She seeks to have 35% of the expenses related to the truck attributable as a personal benefit and 67% of the living out allowance added as a personal benefit. Mr. Konopka has proposed that 10% of the trailer and truck expenses be added as personal benefits.

He submits that none of the living out allowance should be added as the amount accurately reflects the extra costs incurred by him while living in the field. [ 20 ] The main disagreement between the parties regarding the trailer and truck involve the method of calculation of personal benefit. Ms. Hankins took the number of days the items were used for work purposes out of the year and then calculated the percentage. Mr. Konopka submits that both items were purchased for work purposes. Although he gets some personal benefit from them, they are primarily used for work.

He cannot pay for the items only while they are being used for work. Ms. Hankins does not seem to dispute that both items are used at least partially for work purposes. [ 21 ] While I am sure many corporations would like to pay for items only when they are being used for work purposes, that is not the reality. When a company borrows money to purchase equipment, the bank expects to be paid every month regardless of whether the equipment is being used.

It would also not be practical to lease or purchase an item when needed, then either return or sell it when done with it, only to have to re-purchase or re-lease the item a few months later. [ 22 ] I note that Mr. Konopka’s work

schedule allows him to have approximately three months off each year. He acknowledges that the truck is his primary form of transportation throughout the year. I also note that most of the mileage and the wear and tear on the truck likely occurs when it is being used in the field for work purposes. Regarding the trailer, it was used for business purposes very little in the last year. However, it was used a great deal in previous years. Again, it would not be practical to buy and sell this item on an as needed basis. Consequently, I am prepared to accept the 10% figure submitted by Mr.

Konopka for both the truck and trailer, including all the associated expenses. [ 23 ] Regarding the living out allowance, Mr. Konopka submits that there should be no personal benefit found. I do not agree. Certainly, some of the expenses associated with living in the field are higher than those experienced in living in one’s regular residence. However, no matter where one lives certain costs will be incurred.

There are always costs for food and shelter, whether the food comes from a grocery store or a restaurant, or the shelter is a regular residence with mortgage, utilities, and taxes as an expense or a hotel with daily room charges. A portion of the living out allowance must be a personal benefit to Mr. Konopka. I find that the appropriate portion attributable is a personal expense to be 50%. [ 24 ] Another area of contention between the parties regarding business expenses is the approximately $6,500 per year related to CRA debt. Ms.

Hankins submits that a portion of this payment should be included as a personal benefit to Mr. Konopka, thereby increasing his income for the purposes of calculating support. This is because the CRA debt was considered as a factor in the property division. There is nothing in the evidence to indicate that the company is paying the personal CRA debt of Mr. Konopka. It is paying its own debt to the CRA. In the same way the taxes paid by the company cannot be credited to Mr. Konopka, company debts paid by the company cannot be attributed to him.

They are separate entities, and I find that he is not receiving a personal benefit from the company when it pays its CRA debt. [ 25 ] There are other minor items of disagreement between the parties regarding personal benefit and business expenses. There is approximately $1,800 in hotel and restaurant bills paid for by the company. Mr. Konopka acknowledges that part of the amount is a personal benefit. I am not prepared to go through each charge in detail to determine what may have been a personal benefit and what was not. I find that all of the hotel and restaurant bills should be included in Mr.

Konopka’s income. [ 26 ] There is also the issue of the security system and telephone expenses. Ms. Hankins submits the entire $1,500 cost of the security system should be attributable as a personal expense. Mr. Konopka submits that the entire cost is a proper business expense. The company assets are kept at his residence. Many of those assets are easily movable. He is often away from his residence for long periods of time. The security system is necessary to protect his business assets. Ms. Hankins submits that 50% of the telephone expenses should be attributable as a personal benefit. Mr.

Konopka does not dispute that percentage. I find that none of the security system costs should be attributable to Mr. Konopka’s income and 50% of the telephone expenses should be included. [ 27 ] Having made the above findings, I calculate Mr. Konopka’s income as follows: Dividend Income $132,000.00 Dividend Gross Up $19,800.00 Trailer $2,222.00 Trailer Insurance $116.00 Truck Interest $1,138.00 Truck Insurance $198.00 Vehicle Expenses $621.00 Vehicle Repairs $2,306.00 Amortization $2,110.00

Living Out Allowance $8,450.00 Hotel Expenses $1,843.00 Telephone Expenses $1,658.00 Total: $172,462.00 Ms. Hankins seeks to have her income set at $40,000. Her income for the past three years has been $44,078, $60,456, and $26,661. Her 2020 information is not yet finalized, but is likely similar to her 2019 income. Her suggested income approximates the three-year average, and I am prepared to set that amount as her income. [ 28 ] The parties cannot agree on

Section 7 expenses. Mr. Konopka seeks to only have childcare and hockey related expenses considered to be

Section 7 expenses on a go forward basis. As stated earlier, the parties currently have an agreement regarding support and parenting. That agreement was based on Mr. Konopka having an income of $160,000 per year; Ms. Hankins $40,000 per year. [ 29 ] In the agreement, school fees, non-covered medical expenses, childcare expenses, agreed upon extracurricular activities, along with golf registration, golfing lessons, swimming lessons, hockey equipment, hockey registration, hockey camps, and hockey tournament fees are all specifically listed as

Section 7 expenses. Normally, regular school fees would not be considered a

Section 7 expense, as they are not extraordinary. However, Mr. Konopka agreed to them being included as such an expense. He also agreed to the other specifically listed items. When he entered the agreement, he had the advice of counsel. His income has increased since the agreement was signed. I see no reason to vary the agreement. The listed items will remain as

Section 7 expenses. Any other

section 7 expenses must be agreed upon by the parties. Having made determination of each party’s income, and the

Section 7 expenses, counsel can now perform the necessary calculations to determine retroactive and ongoing child support. The parties will need to continue to exchange financial disclosure annually so that a property termination of each party’s income can be determined. [ 30 ] Both parties are seeking costs in this action. I find that both parties have been partially successful, and am not prepared to award costs. Heard on the 20 th day of November, 2020. Dated at the City of Edmonton , Alberta this 15 th day of December, 2020. G.R. Fraser J.C.Q.B.A. Appearances: Maureen E. Murdoch, Maureen E. Murdoch Barrister & Solicitor for the Applicant Christopher King CK Family Law for the Respondent