Lorenson v Lorenson, 2021 ABQB 273

Court of Queen’s Bench of Alberta Citation: Lorenson v Lorenson, 2021 ABQB 273 Date: 20210409 Docket: 4803 190708 Registry: Edmonton Between: Danielle Monique Lorenson Plaintiff - and - Dean Robert Lorenson Defendant _______________________________________________________ Reasons for Decision of the Honourable Madam Justice S. Leonard _______________________________________________________ Introduction [ 1 ] This is an application by the plaintiff for an interim order directing the defendant to pay retroactive and ongoing child support inclusive of

section 7 expenses. The defendant acknowledges the requirement that he pay retroactive and ongoing child support but asks the Court to impute income to the plaintiff. The defendant has not paid any child support since the date of separation and claims

undue hardship if he is required to pay the full child support amounts calculated under the Federal Child Support Guidelines, SOR/97- 175 (the Guidelines ). [ 2 ] The parties were married on August 26, 2006. They separated on February 28, 2019. A Statement of Claim for Divorce and Division of Matrimonial Property was filed on May 4, 2020 by the plaintiff. The parties have shared parenting on a week on/week off basis of their three children, aged 13, 11, and 9. [ 3 ] In 2019, the plaintiff’s income was $39,442.97. In 2020, her income was $70,000. [ 4 ] In 2019, the defendant’s income was $97,197.55. [ 5 ] The agreed upon

section 7 expenses are hockey and ringette. In 2019/2020, the cost of hockey for one child was $1,125.00. The cost of ringette for the two younger children is $1,750.00 per year. Issues [ 6 ] The issues to be resolved are as follows: (

a) Should the Court impute income to the plaintiff; and (

b) Has the defendant established undue hardship such that his child support payments should be reduced or eliminated? Position of the parties [ 7 ] According to the plaintiff, the defendant has not paid any child support or

section 7 expenses since the parties separated on February 28, 2019. She says that her income amounts of $39,442.97 in 2019 and $70,000 in 2020 are the actual amounts of money that she earned in these periods. She explained that she began taking Leave with Income Averaging (LIA) in 2017 so that she could have the summers off to provide child care for the children. She continued to take LIA every year, rather than incur the costs of child care in the summer months.

The plaintiff states that she is not taking LIA to reduce her income for the purpose of reducing her child support obligations. [ 8 ] As to the defendant’s claim of undue hardship, the plaintiff argues that the defendant has failed to meet the test for undue hardship. He has not established that he is paying an unequal proportion of the marital debt, nor has he established that his payments toward joint debt create an undue hardship. [ 9 ] The defendant’s position is that the plaintiff is intentionally underemployed for the purpose of avoiding her child support obligations.

His position is that the plaintiff should be working throughout the year and that there is no merit to the argument that she is taking LIA for the purpose of facilitating child care in the summer. He argues that her income should be imputed at the full amount that she could earn if she was working full time. The defendant also argues the plaintiff has other sources of income that she has not reported and that this should be considered in determining her income.

Finally, the defendant takes the position that he is unable to pay the full amount of child support because he is servicing an unequal share of the marital debt. Background Periods of LIA [ 10 ] The parties began an in-home separation in November 2018. The parties began living in separate residences on February 28, 2019. [ 11 ] The parties are both employees of the Federal Government. The plaintiff works for Public Services and Procurement Canada and the defendant works for Corrections Canada. As employees of the Federal Government, they have the ability to take LIA.

LIA allows an employee to take a period of unpaid leave. The overall pay of the employee is reduced accordingly, but paid on a pro rata basis throughout the year. [ 12 ] The plaintiff took regular periods of LIA during the marriage and after separation. In the absence of any evidence to the contrary, I accept that during the marriage, the parties mutually agreed that the plaintiff would take LIA during the summer months to facilitate child care. [ 13 ] The plaintiff’s first period of LIA occurred in the summer of 2017.

Although the defendant was dealing with a workplace injury, he worked overtime during this period in order to make ends meet. [ 14 ] In the summer of 2018, the plaintiff was on LIA from June 27, 2018 to September 3, 2018. The defendant again worked overtime to meet the family’s expenses. Working overtime caused the defendant to experience a recurrence of work-related injuries. As a result, he was unable to continue to work overtime. [ 15 ] In the summer of 2019, the plaintiff was on LIA from July 11, 2019 to October 23, 2019. By this time, the parties were separated and living apart.

The plaintiff was off for the entire period even though the parties shared the parenting of the children on a week on/week off basis. The result was that the plaintiff had every other week off, without child care responsibilities and she did not have to rely on her annual vacation allotment to look after the children. The plaintiff did not return to work when the children returned to

school. She remained off work until October 23, 2019. [16] In order to meet his parenting responsibilities during the summer of 2019, the defendant took his vacation time to look afterthe children. [17] The plaintiff is now able to work remotely. The defendant’s position is that obviates the necessity of taking LIA. Thedefendant is not able to work remotely. The plaintiff’s alleged other sources of income [18] The defendant asserts that the plaintiff is conducting a nail business from her home and has unclaimed income.

The plaintiffdenies that she has sources of income other than from her employment with the Federal Government. [19] The defendant also alleges that the plaintiff received a large retroactive payment in the approximate amount of $30,000following the ratification of a new contract by her union. The defendant’s employment and claim of undue hardship [20] In September 2019, the defendant was put on WCB. He is not able to work in his previous position with Corrections Canadaand steps are being taken to find him an alternate position with the Government of Canada.

While on WCB he is guaranteed 90% of hisprevious base salary. [21] The defendant alleges that there was an unequal division of matrimonial property and debts following the separation. Heclaims that he became responsible for a larger proportion of the home equity line of credit and the mortgage payments.

He alleges thatthe plaintiff continued to remove money from joint lines of credit and this only stopped when the defendant locked the accounts.Coupled with the plaintiff’s spending habits and the household expenses, the defendant claims that making ends meet has become verydifficult. [22] The defendant says that he is unable to pay child support in accordance with the parties’ incomes as he is servicing joint debtbetween $900 and $1,000 monthly in excess of the contributions of the plaintiff toward their joint liabilities.

Analysis Should the Court impute income to the plaintiff? [23] The test for imputing income in Alberta differs significantly from the test that is applied in the rest of Canada. Althoughsection 19(1)(

a) of the Guidelines allows a court to impute income where the spouse “is intentionally under-employed or unemployed,”in Alberta, this provision is interpreted more strictly to require something akin to bad faith. [24] The Court of Appeal of Alberta in Hunt v Smolis-Hunt, 2001 ABCA 229 at para 42 [Hunt] interprets

section 19 of theGuidelines as permitting imputation of income where: ... the obligor has pursued a deliberate course of conduct for the purpose of evading child support obligations. We read the

section asrequiring either proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to inferthat the intention of the obligor is to undermine or avoid his or her support obligations. [25] This approach has been upheld in subsequent decisions of the Alberta Court of Appeal.

In Blanchard v Blanchard, 2019ABCA 53 at para 39, the Court reiterated that “[t]he question is whether the respondent engaged in non-remunerative activities with theintention of avoiding child support obligations.” [26] As noted by the Court in Smith v Gulka, 2020 ABQB 32 at para 124, “... the effect of this stringent test is that a parent whoreduces his/her income for what might be described as lifestyle choices ... is unlikely to ever have income imputed ... even in those caseswhere it is reasonable to do so.” [27] The test for imputing income is less stringent in the rest of Canada.

What matters is not whether there is intent to evade childsupport but rather, “whether the parent is earning what the parent is capable of earning”: Barker v Barker, 2005 BCCA 177 at para 19.In the rest of Canada, a “parent is intentionally unemployed when he or she chooses not to work when capable of earning an income”:Drygala v Pauli (2002), 61 OR (3d) 711, (Ont CA) at para 28.

See also: Linn v Frank, 2014 SKCA 87; Horbas vHorbas, 2020 MBCA 34; Droit de la famille – 101332, 2010 QCCA 1087; JDF v JLF-F, 2020 NBCA 70; Smith v Helppi, 2011 NSCA65; ALM v CGM, 2019 PESC 24; and Bowes v Bowes, 2021 NLCA 10. [28] Courts outside of Alberta have considered whether to impute income to a party that takes LIA.

In those cases, the party’sincome has been imputed at the level of the person’s full annual salary without deductions for periods of LIA: See Terracol v Terracol,2010 ONSC 6442 and PDH v DJH, 2000 MBQB 86. [29] The Alberta Court of Appeal recently acknowledged its different approach in MacDonald v Brodoff, 2020 ABCA 246[MacDonald]. At para 68, the Court of Appeal acknowledged: Alberta is the only jurisdiction in Canada that has interpreted s 19(

a) of the Guidelines, which allows for the imputation of income to aparent who is “intentionally under-employed or unemployed”, as requiring something akin to bad faith. All other jurisdictions apply a

reasonableness standard consistent with the minority decision of Picard JA in Hunt ... [ 30 ] At para 69, the Court further acknowledged that this difference “... may signal a need for this Court to reconsider its decision in Hunt which is 19 years old.” [ 31 ] Until that happens, this Court is bound by the decision in Hunt and subsequent jurisprudence of the Court of Appeal of Alberta. In order to impute income to the plaintiff, I must be satisfied that she is intentionally taking LIA in order to avoid her child support obligations.

This requires intentional under-employment or unemployment “akin to bad faith”: MacDonald at para 68 . [ 32 ] On the record before this Court, there is no evidence that the plaintiff is taking LIA in order to reduce her child support obligations. In response to questions by the Court, the plaintiff cited a number of reasons for taking LIA.

These included, an absence of part time child care to cover the plaintiff’s parenting weeks, an inability to take annual vacation during the summer months, and a need to take extra time off in the fall of 2019 due to stress. [ 33 ] However, it matters not whether it is the absence of part time child care, stress, or a lifestyle choice. The evidence before the Court does not establish that there is any bad faith on the part of the plaintiff in this case. [ 34 ] Further, the plaintiff denies that she has employment income from sources other than her Federal Government job.

Despite the defendant’s assertions otherwise, there is no evidence before this Court that the plaintiff has income from other sources. [ 35 ] I decline to make findings as to whether or not this time off is for legitimate child care concerns or as a lifestyle choice. That being said, I acknowledge that if the plaintiff’s time off is as a lifestyle choice, it does create an injustice whereby the defendant is subsidizing the plaintiff’s choices through his child support payments. [ 36 ] I find that there is no basis upon which to impute income in this case to the plaintiff.

Has the defendant established undue hardship? [ 37 ] The defendant argues that he is unable to pay child support in accordance with the Guidelines because he is serving a greater proportion of the marital debt. He claims undue hardship on this basis. In response, the plaintiff contends that the defendant has failed to meet the test of undue hardship. [ 38 ] The defendant did not file a cross-application in this matter containing a claim for undue hardship.

Such a claim must be included in the pleadings and must be accompanied by comparative household incomes: Henderson v Micetich , 2021 ABCA 103 at para 78 [ Henderson ]. Therefore, the claim of undue hardship is not properly before this Court. [ 39 ] Further, although the defendant claims that he is carrying a greater proportion of the marital debt, the evidence provided does not establish that this is the case. I note that he is the higher income earner. The expenses that he is referring to seem to be the same as the expenses that existed prior to separation.

There is no evidence that the amount he is paying is actually in greater proportion to what is being paid by the plaintiff, based on their respective incomes. Finally, hardship that warrants a reduction in child support must be “severe and unreasonable”: Henderson at para 78 . Even if this matter was properly before the Court, I am not satisfied that the defendant has established undue hardship. Applicability of the Contino analysis [ 40 ] Both the Supreme Court of Canada and the Alberta Court of Appeal direct trial courts to consider sections 9 (

b) and 9 (

c) of the Guidelines when determining child support amounts: Contino v Leonelli-Contino , 2005 SCC 63 [ Contino ] and MacDonald . In this case, both parties were invited to make submissions regarding the applicability of these sections of the Guidelines . Both declined and encouraged the court to determine the amount of child support owing based on a straight set-off approach pursuant to

section 9 (a). [ 41 ] Although a properly founded Contino analysis might well have addressed some of the concerns raised by the defendant in this case, without evidence and a desire on the part of the parties to provide that evidence, the analysis cannot be performed. The Court is aware that a Contino analysis “is prohibitively expensive for most family law litigants”: MacDonald at para 59 . In the absence of a willingness on the part of the litigants to engage in this process, I have declined to do so.

Conclusions [ 42 ] The parties’ incomes are set as follows: Year Plaintiff Defendant 2019 $39,442.97 $97,197.55 2020 $70,000.00 $98,198.00 [ 43 ] The defendant shall pay to the plaintiff retroactive child support to March 1, 2019, inclusive of

section 7 expenses. From March to December 2019, the defendant should have paid child support at a rate of $1,086 per month for a total of $10,860. In addition, the defendant should have paid 71.1% of the

section 7 expenses. [ 44 ] From January 2020 to March 1, 2021, the defendant should have paid child support in the amount of $532.00 per month for a total of $7,980. In addition, the defendant should have paid 58.4% of the

section 7 expenses. [ 45 ] The defendant shall pay ongoing child support inclusive of

section 7 expenses in proportion to his income.

[ 46 ]

Section 7 expenses include expenses for hockey and ringette. The plaintiff shall provide the defendant with receipts showing the amounts paid for these activities. [ 47 ] To the extent that the plaintiff has received or will receive retroactive payments as a result of a new collective agreement, these amounts will be reflected in her tax information. The parties will exchange tax income information annually by June 30th. Heard on the 5 th day of March, 2021. Dated at Edmonton, Alberta this 9 th day of April, 2021. S. Leonard J.C.Q.B.A. Appearances: Ms. Michelle Mackay for the Applicant Mr. Michael Lazaruk for the Respondent