Mortson v Kminkova, 2021 ABQB 476

Court of Queen’s Bench of Alberta Citation: Mortson v Kminkova, 2021 ABQB 476 Date: 20210622 Docket: FL01 32658 Registry: Calgary Between: Ryan Erik Mortson Applicant - and - Katerina Kminkova Respondent Corrected judgment: A corrigendum was issued on June 22, 2021; the corrections have been made to the text and the corrigendum is appended to this judgment. _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice O.P. Malik _______________________________________________________ I.

Introduction [ 1 ] The parties, who have one child born in March, 2017, separated in December, 2018. Since their separation, no support has been paid pursuant to the Alberta Child Support Guidelines , Alta Reg 147/2005 (the “ Guidelines ”). [ 2 ] The Applicant seeks a determination regarding ongoing child support. In his view, there should be a straight set-off of the parties’ respective table amounts without any further adjustment considering the means, needs and other circumstances of the child as required by

section 9 of the Guidelines . He acknowledges that he might be entitled to additional support were a full assessment conducted pursuant to

section 9 but argues that ordering the parties to pay support calculated on a pure set-off basis would significantly decrease conflict between them. [ 3 ] The Respondent earns significantly more than the Applicant. While she is not strictly opposed to support being calculated on a straight set-off basis, she argues that the Applicant is underemployed and receives income from his family and rental revenue from his girlfriend and that consequently, I should impute income to him pursuant to

section 19 of the Guidelines . [ 4 ] The Respondent brings a cross-application for retroactive

section 3 and 7 support commencing in January, 2019. The Applicant urges me not to award retroactive support but says that if I decide to do so, it should commence when the Applicant was given notice, May, 2020. [ 5 ] The parties disagree over how their

section 7 expenses should be apportioned and paid, particularly in respect of their respective child care expenses. II. Issues [ 6 ] I will deal with the parties’ issues in the following order:

i. Should I impute an income to the Applicant pursuant to section 19(1) of the Guidelines ? ii. Is the Respondent entitled to retroactive

section 3 support? iii. What should the amount of ongoing

section 3 child support be? iv. A determination of retroactive and ongoing

section 7 support. III. Analysis i. Should I Impute an Income to the Applicant Pursuant to Section 19(1) of the Guidelines ? [ 7 ] The Applicant is an airline pilot. He says that his incomes for the years 2019, 2020 and 2021 are $83,659.00, $71,691.00, and $50,637.00, respectively.

His yearly income has declined for the years 2020-2021 due to the the pandemic which saw him accept a demotion to a lower paid position with reduced hours. [ 8 ] The Respondent argues that I should impute the Applicant’s income pursuant to section 19(1) of the Guidelines on three grounds: first, that the Applicant is under-employed and has failed to make efforts to find additional employment that would supplement his reduced income; second, that he receives undeclared financial assistance from his family; and third, that he receives undeclared rental income from his girlfriend. [ 9 ] First, I dismiss the Respondent’s argument that I should impute an income to the Applicant pursuant to section 19(1) (

a) of the Guidelines on the basis that he intentionally remains under-employed. The test for imputing income under section 19(1) (

a) of the Guidelines was established by the Alberta Court of Appeal in Hunt v Smolis Hunt , 2001 ABCA 229 at para 42 (see also Smith v Gulka , 2020 ABQB 32 at paras 122-143 ) and requires evidence that the obligor has “pursued a deliberate course of conduct for the purpose of evading child support”. [ 10 ] It is not disputed that the Applicant was forced, through no fault of his own, to accept a reduction in his income, both in terms of a demotion in position and reduced hours worked, due to the pandemic.

There is no direct evidence that in accepting these changed employment circumstances, that the Applicant intended or can be said through his conduct to have intended to avoid his child support obligations. [ 11 ] Further, I know of no binding authority and none has been presented to me that would allow me to conclude that in circumstances such as these, the Applicant has a positive obligation to pursue additional employment to maximize his earnings. I therefore decline to impute income to the Applicant pursuant to section 19(1) (

a) of the Guidelines . [ 12 ] Second, I agree with the Respondent that while gifts are not typically included in a payor’s Guideline income amount, they may be considered when determining what a payor’s support obligations should be where the gifts are “ regular and of long duration and that which materially improve the lifestyle of the receiving party” ( Hartley v. Del Pero , 2017 ABQB 1 at para 128 ; CRC v DAJC , 2020 ABCA 143 at para 20 ). [ 13 ] The Respondent asserts that the Applicant is receiving financial support from his family to meet his everyday living expenses.

She points out that for each of the payment periods of December 23 -January 22, 2021 and January 23-February 22, 2021, the Plaintiffs made payments towards his credit card in the sums of $2,450.00 and $3,150.00 respectively, when his 2021 monthly household budget was $4,165.78. In 2020, the Applicant estimates his monthly budget to be between $4,573.00 - $4,926.90 but made a payment to his credit card in the sum of $3,500.00 for the billing period November 24, 2020-December 22, 2020. [ 14 ] The Applicant does not deny that his family provides him with financial assistance.

I do not know the full extent of the financial assistance that he receives.

Without more extensive financial disclosure, I do not have sufficient information to determine the consistency, longevity, or impact of that assistance, and what I should therefore impute his income to be. [ 15 ] While I am not prepared at this time to impute an income to the Applicant based on his family’s financial assistance, the Respondent is not precluded from addressing this issue in the future as she receives additional financial disclosure from the Applicant and gains a better understanding as to the scope and impact of that assistance. [ 16 ] Finally, the Respondent argues that the Applicant receives rental revenue from his girlfriend.

It appears the Applicant and his girlfriend entered into a lease agreement effective April 1, 2019, whereby she agreed to pay rent in the sum of $1,250.00 per month. The Applicant’s bank statements indicate that he received $1,000.00 from his girlfriend for December, 2019, and for the months of January and February, 2020. [ 17 ] The Applicant deposes that he and his girlfriend entered into the lease agreement so that his girlfriend could claim living expenses while working out of town.

The Applicant further deposes that he and his girlfriend never lived together and that the lease agreement came to an end within the same month in which it was entered into.

The Applicant says that he has never received any rental payments from his girlfriend and that any amounts that he received from her were reimbursements for his payment of various shared household expenses. [ 18 ] I am satisfied, in light of the Applicant’s very specific explanation and denial of the Respondent’s allegation, that the Respondent has failed to prove that the Applicant received rental income from his girlfriend and that any monies he has received from her should serve as the basis for imputing income to the Applicant.

[ 19 ] Consequently, I am not prepared to impute an income to the Applicant over and above what he currently receives as employment income. [ 20 ] An issue that arose during the hearing was how to treat the Applicant’s per diem expenses that he receives as a pilot. These amounts are not taxed and were not included in the Applicant’s income. [ 21 ] These per diems include meal and incidental allowances to cover items such as cell phone, dry cleaning, and gratuity expenses that necessarily arise out of the Applicant’s employment duties.

In an Affidavit sworn on June 15, 2021, the Applicant provides further details as to how he spends his per diems , how his employment requires him to incur additional costs not covered by per diems , and what he estimates his actual expenses that arise from his employment to be. [ 22 ] I agree with the Applicant’s proposal that no adjustment should be made regarding those per diems which he actually spends that necessarily arise out of, or in fulfillment of, his employment duties.

However, there should be a gross-up adjustment for any unused per diems not incurred in the course of his employment as these constitute a conferment upon the Applicant of additional discretionary income. [ 23 ] On that basis, I find that the Applicant’s Guideline incomes for the years 2019, 2020, and 2021, are $73,501.01, $67,806.66, and $42,759.67 respectively. ii. Is the Respondent Entitled to Retroactive

Section 3 Support? [ 24 ] The Respondent argues that she is owed child support from the date of the parties’ separation, January, 2019.

I agree. [ 25 ] The test for ordering retroactive child support was originally established by the Supreme Court of Canada in DBS v SRG , 2006 SCC 37 , which it revisited and updated in Michel v Graydon , 2020 SCC 24 , and which was recently discussed by the Alberta Court of Appeal in Henderson v Micetich , 2021 ABCA 103 . [ 26 ] In Henderson the Alberta Court of Appeal noted at paras 29-31 that concepts such as delay, blameworthy conduct and hardship were formulated in DBS at a time when courts were concerned with the impact of the transition from the pre- to post- Guidelines regimen on payor parents.

Over time however, considerations of fairness for the affected payor parent have largely been replaced with a more child-centric view, as illustrated by the Alberta Court of Appeal in Brear v Brear , 2019 ABCA 419 at para 18 : Parents have an obligation to support their children in a fashion that is in direct proportion to their income, and this obligation exists independent of any statute or court order. The support award should, as much as possible, provide children with the same standard of living they enjoyed when their parents were together.

When a payor parent does not increase the amount of their support when their income increases, the child loses. A Consideration of the DBS Factors [ 27 ] DBS outlined four factors to be addressed in determining whether a retroactive order for a variation in child support ought to be granted: 1. Whether there was a reasonable excuse for why support was not sought earlier; 2. The conduct of the payor, and whether the payor engaged in “blameworthy conduct”; 3. The circumstances of the child; and 4. Any hardship occasioned by a retroactive award. [ 28 ] It is to each of these factors that I now turn.

It is important to state at this point that none of these factors, taken individually, are determinative of the analysis. Rather, they should be viewed holistically in light of all the circumstances. [ 29 ] With respect to the first factor, the Respondent says that she did not seek support earlier because the parties’ first priorities were dealing with a division of matrimonial property (she moved out of the matrimonial home upon the parties’ separation), including disposition of the matrimonial home, followed by parenting issues.

The parties have obtained two court orders - an Interim Order granted by Justice Devlin on February 10, 2020, setting out various parenting terms and a Consent Order granted by Justice K. Nixon on March 25, 2020, regarding the parties’ engagement of a Parenting Coordinator. [ 30 ] The question of delay is addressed in Henderson at paras 40-48 . Delay will rarely be operative in the analysis given that it has been more than twenty years since the federal Guidelines came into force and by now parents are taken to know that support is based upon the payor parent’s income.

As the Court put it in Henderson at para 42 : “...delay will rarely substantially prejudice a payor parent. The payor knows about the existence of a child support obligation and that the quantum of the obligation is based on the payor’s line 150 income, calculated annually...At any given point in time, therefore, the payor parent has the information required to determine the appropriate amount of child support owing...” [ 31 ] In this case, I find that it is reasonable for the Respondent to have deferred the question of support following a resolution of matrimonial property and parenting.

I do not find that the effective date of notice regarding retroactive support which was given to the Applicant in May, 2020, constitutes unreasonable delay. The Applicant cannot be said to be prejudiced given that he knew, or ought to have known that, while not having been demanded, support was demandable on behalf of the child and that until paid, support remained an outstanding obligation for which the Applicant was responsible .

[ 32 ] With respect to the second factor, the Applicant states that it would not be fair to order a retroactive award given that the Respondent has not paid any child support either. The Applicant asserts that if he is blameworthy in not having paid support, then so too is the Respondent. With respect, I reject this argument entirely. If support is a right that belongs to the child, then both parents should be paying support.

The question here, is whether I should order retractive support from the date of the parties’ separation. [ 33 ] I find that while the Applicant did not actively seek to avoid his support obligations, he knew or ought to have known that he was obliged to pay the Respondent child support, particularly during the time during which the parties’ child primarily resided with the Respondent. Having failed to do so constitutes blameworthy conduct.

In so finding, I am supported by the Court’s comments regarding blameworthy conduct in Henderson at paras 49-57 . [ 34 ] The Respondent’s undisputed evidence is that when the parties separated, the Respondent moved out of the matrimonial home, leaving the child’s toys and other belongings there.

This required her to incur additional expenses to get set up in her own accommodations and her financial situation was such that all she could afford was a single bedroom apartment that she shared with her mother. [ 35 ] I find that the Applicant enjoyed a significant advantage over the Respondent in that he did not have to incur the expense of having to purchase the normal items that would be needed to support a child. [ 36 ] I acknowledge that the Applicant has paid for the child’s pre-school fees, day home costs, sporting activities and various other memberships and that he maintains health care coverage through his employer’s benefits.

He should be commended for doing so (although these are costs that he is partially responsible for in any event). But it is important to note that the concept of blameworthiness has, over the years, taken on a much more expansive definition of what a payor parent’s obligation to support their child entails, and that obligation clearly extends beyond a parent’s contribution towards some of a child’s special expenses. [ 37 ] In not having to pay

section 3 support, the Applicant effectively privileged his interests over that of the parties’ child ( Henderson at para 55 ). Given how long the Guidelines have been in place, it is untenable in my view for parents to claim ignorance of their support obligations that they know is otherwise payable without formal notice or court order. Simply put, a payor parent who avoids his support obligations should not be allowed to profit from such conduct ( DBS at para 107 ). [ 38 ] Child support is the right of the child.

Its purpose, as the Court in Henderson reminds us at para 57 , is “restorative” rather than punitive. Excusing the Applicant from having to pay child support would put the parties’ child in a significantly worse situation as compared to what his living standard would have been had the parties remained together ( DBS at para 111 ). [ 39 ] I cannot endorse the Applicant’s knowingly wilful blindness of his support obligations. In my view, a payors parent’s passivity in addressing their support obligations that they knew or ought to have known was payable in support of their child constitutes blameworthy conduct .

While there is no evidence that the Applicant actively concealed his financial information (which would largely have been known to the Respondent in any event) or otherwise deliberately refused to acknowledged his support obligations, the Applicant’s failure to pay child support is blameworthy in itself, irrespective of the Respondent’s lack of subjective intent. [ 40 ] As for the third factor, the circumstances of the parties’ child, the inquiry is not needs-based. In other words, a payor parent cannot argue that retroactive support is not required because the child’s needs were sufficiently met.

Rather, the analysis presumes that a child is entitled to the same standard of life and benefits had the parents stayed together. ( DBS at para 111 and Goulding v Keck , 2014 ABCA 138 at paras 50-52 , Henderson at paras 58-64). [ 41 ] As I have already stated, I find that the Applicant’s failure to provide support commencing in January, 2019, deprived the parties’ child of income that he was rightfully entitled to. I also conclude that this would have led to there being a significant difference, at least initially, in the child’s living conditions in each of the parties’ households.

In my view, a consideration of this factor supports an award for retroactive support. [ 42 ] Finally, with respect to the question of hardship that would result were I to award retroactive support, I acknowledge that the Respondent might find it difficult to satisfy a lump sum retroactive award given his diminished economic situation. I would point out, however, that the Respondent would not have had to pay retroactive child support had he not engaged in the blameworthy conduct and had he simply paid child support on his actual income as it fell due.

Further, a consideration of hardship should not merely be assessed from the payor parent’s perspective but must also assess the hardship that that has accrued to both the child and the recipient parent during the period that no support was paid ( Henderson at para 68 ). [ 43 ] In any event, this Court can mitigate the impact of requiring the payor parent to make payment of a retroactive lump sum award by imposing an affordable payment plan or adjustment to the quantum of the retroactive award where appropriate. [ 44 ] Having considered the DBS factors, I find that it is reasonable in the circumstances having regard to the child’s needs and the Respondent’s circumstances following her moving out of the matrimonial home in late December, 2018, that the Applicant pay retroactive support commencing as of January 1, 2019. iii.

What Should the Amount of Retroactive and Ongoing

Section 3 Support Be? a. What Should the Applicant Pay in

Section 3 Support? [ 45 ] The Applicant shall pay the Respondent

section 3 support commencing January 1 2019 and shall pay support based upon his Guideline income of $73,501.01 for 2019; $67,806.66 for 2020; and $42,759.67 for 2021. b. What Should the Respondent Pay in

Section 3 Support?

[ 46 ] In 2019, the parties gradually began moving towards a shared parenting arrangement. There is a dispute as to when this finally occurred. The Applicant asserts that the parties agreed to follow a 60-40% parenting

schedule in July and thereafter agreed to transition to a 2-2-5-5 parenting

schedule starting in September, 2019. [ 47 ] It appears from the parenting

schedule the Applicant has provided that the parties effectively shared parenting for the months of July-October, 2019, but not in November or December, 2019, when the Applicant says the Respondent refused him access. [ 48 ] In answer to my question about when the parties entered into a shared parenting arrangement, the Applicant’s counsel suggested that I treat the month of October, 2019, as the commencement of the parties’ shared parenting arrangement. [ 49 ] In my view, the parties consistent adhered to a shared parenting regime starting in January, 2020.

This was helped by Justice Devlin’s February 10, 2020, Interim Order which confirmed the terms of the parties’ parenting schedule. I have no evidence before me that the parties have departed from this parenting

schedule to the extent that I can only conclude that they continue to engage in a shared parenting regimen. [ 50 ] On that basis, the Respondent owes the Applicant child support commencing January 1, 2020, for the years 2020 and 2021, based upon her Guideline Income for those years of $120,705.00 and $104,500.00, respectively. c. Application of

Section 9 of the Guidelines [ 51 ] The question that has arisen is whether I should, as the Applicant has urged me to do, allow a set-off of the parties’ support obligations or whether I should, as the Respondent argues, conduct a fulsome analysis into the conditions, means, needs and other circumstances of each of the parties and of their child, pursuant to

section 9 of the Guidelines . [ 52 ] I agree with the Respondent’s submissions at para 17 of her Concise Letter that should I apply

section 9 of the Guidelines , my analysis must be: ...contextual and must include the actual funds available to the parties and their respective expenses.

One of the critical inquiries in this analysis is whether the child would experience a difference in the standard of living as they move between the households, which would certainly be the case if a straight set off approach was used in these circumstances. [ 53 ] However, the Respondent states at para 18 of her Concise Letter that “[t]here is no evidence to show that the [c]hild is currently experiencing any difference in standard of living between the [Applicant’s] and the [Respondent’s] households. [ 54 ] During a further hearing, I asked the parties whether currently, either party is disproportionately bearing expenses related to the care of their child that do not qualify as shared

section 7 expenses. Neither party was able to identify any such expense other than that the child has more expensive toys at the Respondent’s home. [ 55 ] I do not have sufficient evidence that the child’s living conditions in each of the parties’ homes would justify an adjustment of child support beyond the presumptive set off that ordinarily applies. However, my decision in this respect is interim in nature only, and I give the parties leave to apply directly to

schedule a half-day Special Family Chambers application should either party wish to pursue this issue. iv. Determining the Amount of Retroactive and Ongoing

Section 7 Support [ 56 ] The parties disagree about how to apportion the payment of

section 7 expenses, particularly with respect to the provision of child care that was provided to each of the parties by their respective mothers. There have also been other

section 7 expenses incurred by the parties for pre-school and day home fees, sports activities and dental and medical expenses. I understand that a sharing of these expenses has yet to be determined. [ 57 ] I am precluded from dealing with these issues as both parties agreed to the terms of Justice Nixon’s Consent Order of March 25, 2020, including clause 5(

g) that stipulates that the parties’ Parenting Coordinator is responsible for addressing conflicts regarding

section 7 expenses. [ 58 ] I therefore leave a determination of the parties’ retroactive and ongoing

section 7 expenses to be dealt with by the Parenting Coordinator as per the parties’ agreement. I direct that both parties cooperate with the Parenting Coordinator as per the terms of the Consent Order, including the payment of fees, so that the issue of special expenses and any other issues the Parenting Coordinator is responsible for dealing with can be addressed. IV. Disposition [ 59 ] The Respondent’s cross-application that I should impute income to the Applicant is dismissed. [ 60 ] The Respondent’s application regarding retroactive

section 3 support and the Applicant’s application regarding ongoing support are allowed as follows: i. The Applicant shall pay the Respondent retroactive support commencing January 1, 2019, and ongoing

section 3 support; ii. The Respondent shall pay the Applicant retroactive support commencing January 1, 2020, and ongoing

section 3 support; iii. The Applicant’s Guideline incomes for the years 2019, 2020, and 2021 are $73,501.01, $67,806.66, and $42,759.67, respectively;

iv. The Respondent’s Guideline incomes for the years 2020 and 2021 are $120,705.00 and $104,500.00, respectively. v. In respect of the Applicants’

section 3 arrears, the Respondent shall deduct $300.00 from her monthly support owing to the Applicant until such time as those arrears have been paid in full. [ 61 ] The question of retroactive and ongoing

section 7 support will be determined by the parties’ Parenting Coordinator. [ 62 ] The Applicant will prepare the Order for my endorsement and Rule 9(4)(2)(

c) is invoked. [ 63 ] In my view, the parties met with mixed success and presumptively, neither is entitled to costs. If the parties disagree, they can provide me with submissions regarding costs within 7 days from the date of this decision, not exceeding 3 pages plus authorities. Heard on May 20 th and June 10 th , 2021 with further written submissions received on June 16 th , 2021. Dated at the City of Calgary, Alberta on June 18 th , 2021. O.P. Malik J.C.Q.B.A. Appearances: Dane T.

Tousignant, for the Applicant, Ryan Erik Mortson The Respondent, Katerina Kminkova, Self-represented _______________________________________________________ Corrigendum of the Memorandum of Decision of The Honourable Mr. Justice O.P. Malik _______________________________________________________ Page 6, paragraph 42 should read “Applicant” and not “Respondent”.