Auer v Auer, 2021 ABQB 584

Court of Queen’s Bench of Alberta Citation: Auer v Auer, 2021 ABQB 584 Date: 20210723 Docket: 4803 156019 Registry: Edmonton Between: Roland Nikolaus Auer Plaintiff - and - Aysel Igorevna Auer Defendant _______________________________________________________ Reasons for Decision of the Honourable Madam Justice D.A. Sulyma _______________________________________________________ [ 1 ] These parties, who were in a short-term marriage, conceived a child, NIA, born on October 2, 2005. Since their separation, approximately one month after NIA was born, there has been fierce litigation.

As noted by the Alberta Court of Appeal in Auer v Auer , 2018 ABCA 409 , this high conflict matrimonial litigation has been in Case Management since 2006. [ 2 ] There have been constant applications made throughout this litigation. One is the Applicant’s challenge to the validity of the Federal Child Support Guidelines , which has been brought on more than one occasion and was recently decided by Rothwell, J ( 2021 ABQB 370 ), who dismissed the challenge. The other is the constant lack of disclosure of income particulars from the Father to allow the setting of child support and challenging the amount payable.

This included his challenge to the s 7 expenses which included payment to a nanny and driver relating to the child. Indeed, Jeffrey J heard viva voce evidence on that issue on December 13, 2010 and Jeffrey J asked the Mother to give a detailed explanation why she required a nanny for her employment. The Court was satisfied with her explanation

and made the direction for payment. [ 3 ] There were two Orders of Jeffrey J, the second was a “Clarifying Order” issued May 18, 2011. By the Fall of 2020, Yungwirth J had directed the challenge to the Guidelines be a separate issue, hived off from the litigation between the parties and directed this Special Chambers Application before me in September 2020. I reserved and Justice Rothwell then heard the challenge to the Guidelines and has since rendered his decision. I am now called on to deal with the merits of the Application before me.

That is: 1) should the orders granted by Jeffrey J on December 13, 2010 be rectified; 2) is the Mother entitled to retroactive s 3 and s 7 child support from the father from 2010 to the current date in accordance with his Guideline income as set out by the Mother’s expert; 3) should the Father’s child support obligations be adjusted retroactively from 2010 onwards, because of undue hardship; and 4) should the Father pay his pro rata share of retroactive s 7 expenses that he has been previously ordered to pay. [ 4 ] I should note that the expert is an Accountant and business valuator in Edmonton who provides expert reports in this area and he prepared a report dated January 16, 2020. [ 5 ] During the oral hearing before me, there was discussion between counsel regarding whether a retroactive claim was to be made for the period beyond July, 2014. [ 6 ] There was also an issue of the timeliness of the father’s Application for rectification.

The Mother’s position is that the Father became aware of the alleged overpayment in 2012 and he did not apply to rectify the Jeffrey Orders until July 11, 2014. [ 7 ] The Mother relies on the Transcripts of the Hearings held by Jeffrey J while the Father submits that the intention of Jeffrey J in granting both Orders was that there would be a set off of overpayment of spousal support as against the s 3 and s 7 child support obligations. [ 8 ] I note and I find it to be a significant fact that despite the litigation and the results as stated in the Orders of Jeffrey J and that of Gates J, the Father still has not paid any child care or any other extra-ordinary and extra-curricular costs for NIA.

He did not examine the Mother on those expenses prior to August 31, 2012 as he had been granted the right to do. I also find that the Father’s various attempts to avoid disclosure certainly overshadowed the litigation during all these years. I note this as fact despite the Applicant’s arguments that during the relevant period of time the Father paid the proper amount of child support and those payments were unchallenged by the Mother until now.

The arguments of both parties include reliance on DBS ( DBS v SRG, 2006 SCC 37 ) factors in which the Supreme Court stated that retroactive support is a discretionary remedy that is not always appropriate. [ 9 ] I reject the father’s arguments on this issue. This was a living file with many challenges raised by the father at all times. [ 10 ] I exercise my discretion to order retroactive support, which I do, based on the facts here. This makes the father’s argument that he paid the proper amount of child support untenable. Rectification [ 11 ] On the issue of rectification, I prefer the Respondent’s position.

First, Bissky v MacDonald , 2020 ABCA 242 states that an application under r 9.12 for rectification operates when - by a mere technical, clerical or drafting error, the order or judgment does not express the court’s obvious intention. The rule itself states that an application must be decided by the judge who granted the original judgment or order unless the Court otherwise orders. At all times, this Application for Rectification has been brought after 2014 before other judges, including me. [ 12 ] This matter arose before Gates J when he dealt with the Rectification Application.

Gates J adjourned the application and ordered the Rectification applications to be heard in Edmonton, as the file was being transferred to Edmonton and eventually I heard that Application. [ 13 ] I am also persuaded by a full review of the first Order and the Clarifying Order of May 18, 2011.

Jeffrey J’s Clarifying Order stated: All remaining and any new issues arising between the parties to this action must proceed in the Judicial District of Edmonton, unless otherwise ordered by a member of this Court, in the Judicial District of Edmonton, as all matters requiring clarification arising from the Order granted by the Honourable Mr. Justice P.R. Jeffrey on December 13, 2010 have now been resolved. [ 14 ] This is a clear statement from Jeffrey J regarding matters of rectification and the Father was represented at the time of the December 13, 2010 application, the Mother was unrepresented.

The Clarifying Order clearly states that all matters requiring clarification were resolved. [ 15 ] Considering r 9.12 and relevant case law, I find the application here does not focus on a mere technical, clerical or drafting error, so this Rectification Application must be directed at the ground that the order does not reflect the Court’s obvious intention.

I cannot find on the evidence and submissions before me, including Jeffrey J’s own Clarifying Order that he erred in not citing and not directing the set off of the alleged overpayments. [ 16 ] In addition, as pointed out by the Respondent, significant time has passed and the Father obtained a significant financial advantage as a result of incorrect items claimed on tax returns and by incorrect or incomplete disclosure which delayed the proceedings.

The Mother could not and did not claim spousal support as income in either 2010 or 2011 as the Father had not paid it but used the deduction in reports to Canada Revenue and also there was at least one instance where he filed a return and split his income with his present wife so that the income he claimed in 2013 was $191,653.71 per year, but before that, he split his income and his wife claimed $135,000 as income.

A further sum was provided to her and his other sons in dividends from his trust. [ 17 ] Having made that finding, it is clear that the parties agree that there was a $22,500 overpayment because MEP did not take

into account the reduction to support made by Gates J. I decline to apply any further reduction to the Father’s obligations given the evidence and submissions before me. However, as a matter of negotiation, I am of the view that the parties could easily agree on the appropriate set off and this could be clarified by a new Order made by me now. Father’s Retroactive

Section 7 Obligation [ 18 ] The Applicant has, as stated above, never paid his pro rata share of retroactive s 7 expenses despite an Order to Pay. This is a no brainer. It appears that he became too involved with other portions of this litigation to honour the Order or, at worst, he was deliberately contemptuous. I will issue an Order confirming his on-going obligation to honour the former Order and I am prepared to put a time limit on him fulfilling his obligation unless the parties between them come up with a

schedule for payment. Undue Hardship [ 19 ] The Father claims undue hardship for the period from 2010 to July 11, 2014. His first application was made at the direction of Jeffrey J and Jeffrey J did adjust payments on the basis of that claim. I decline to do so further. [ 20 ] The Father has not provided any evidence as required by law to establish this claim. The onus is on him to establish such as the claimant.

He has not established hardship as undue in the meaning of exceptional, excessive or disproportionate in all of the circumstances as is required by the defining cases of Hanmore v Hanmore , 2000 ABCA 57 ; Michel v Graydon , 2020 SCC 24 ; and Henderson v Micetich , 2021 ABCA 103 . [ 21 ] The only point he does make in support of the claim is a theoretical expectation of hardship in the future, much of which is framed on the basis of his present age.

He gave absolutely no figures that would allow me to assess all of his obligations (not known at this time) as against Guidelines amounts and his continuing reluctance to provide timely and full disclosure has leaked very much into the area of this issue. His claim that there was undue hardship due to excessive legal fees is ludicrous as at most stages of the very long litigation, it was he who brought motions to fight child and spousal obligations.

Clearly as a matter of common sense, these legal fees would not have accumulated had he properly assessed the wisdom of his various applications. [ 22 ] Similarly, he cannot throw the issue of access into this claim. Gates J indicated that it was the Father who would not follow Court Orders regarding access and the minimal number of times he did exercise access cannot form the basis of an undue hardship claim.

Not only has he not provided hard figures for me to assess his actual hardship now or in the future, he has not in the course of these years provided a budget which reconciles his household needs with his alleged inability to meet support obligations. He has not disclosed the amount of payments to other members of his extended family. He clearly has not met the onus of establishing undue hardship under s 10(2) of the Guidelines . [ 23 ] Indeed, although he provided partial 2019 disclosure on August 24, 2020 pursuant to an undertaking given in Questioning, the Father has refused to provide “Cunningham disclosure”.

Retroactive Child Support Application/DBS Factors [ 24 ] In 2010, Jeffry J had some of the Father’s disclosure. [ 25 ] The Mother’s evidence is that she put the Father on notice in April 2012 that she was seeking his disclosure and the appropriate level of child support. The Mother’s application seeking disclosure and child support was a live issue throughout these proceedings and was often overcome by other applications such as the rectification application and Guidelines challenge.

I find that the Mother never lost sight of her application and it has always been pursued as a live and ongoing issue. [ 26 ] There is a disagreement about whether they had an agreement to limit the period of retroactivity, however, neither counsel was able to confirm that to me in the submissions or orally and therefore, I cannot find that such an agreement existed. [ 27 ] The Alberta Court of Appeal in Henderson notes that the Supreme Court of Canada outlining law that has developed since DBS was released in 2006. It mandates that I view the DBS factors in light of the passage of time and the

interpretation and application of the DBS considerations including the most resent statement in Michel . Yungwirth J in Smith v Gauka , 2020 ABQB 32 reiterated principles from DBS as follows: 1. Is there any agreement between the parties regarding the payment of child support, and if so, how does that agreement impact the DBS analysis? 2. How do payments made and expenses paid by Mr. Gulka during the retroactive period under consideration, factor into the DBS analysis? 3. Is this an appropriate case to depart from the Guidelines pursuant to s. 10 for 2019 going forward? 4. Is this an appropriate case to impute income to Ms. Smith pursuant to s. 19(1)(

a) of the Alberta Child Support Guidelines ? [ 28 ] In DBS , Bastarache J described blameworthy conduct expansively as “anything that privileges the payor parent’s own interest over his/her children’s right to an appropriate amount of support”. The Supreme Court noted in Goulding v Keck , 2014 ABCA 138 , “Once the payor parent engages in such conduct, there can be no suggestion that he or she thought that his or her obligations were being met over the relevant period”. The Court in Henderson noted that such conduct includes a failure to provide full and accurate financial

disclosure, or to disclose an increase in income. It stated that payor parents have an affirmative duty of full disclosure. This was confirmed in Michel . [ 29 ] I do not find it necessary in this case to go over the four factors the Yungwirth J cited as I do not find them to apply to the case before me. Conduct of the Payor Parent [ 30 ] In this case, the Father has paid very sporadically pursuant to Gates J’s 2012 Order, but paid nothing to cover his s 7 obligation and currently payments are being garnished.

He has throughout drawn out this litigation by initiating duplicitous applications in the course of this litigation and has outright refused to provide his appropriate and legally mandated disclosure.

In his 2014 undue hardship affidavit he neglected to mention his income splitting with various members of his family. [ 31 ] Although he provided some disclosure in January 2016, he did not provide the basic 2010 to 2015 disclosure until August 12, 2016 and never disclosed pursuant to the 2012 Order. [ 32 ] As stated in Goulding , “the real question is whether the payor’s conduct had the effect of privileging his or her interests over the child’s right to support”. [ 33 ] In my view that “real question” has to be answered in the affirmative.

Here there are many objective indicators helpful in determining whether the Applicant is blameworthy and on an expansive view of the conduct and facts outlined in the submissions, I find he did engage in blameworthy conduct that certainly had the effect of extending this litigation and of privileging his own interests over the child’s right to support. [ 34 ] In my view, this payor parent’s failure to disclose actual income over years, a fact within his knowledge, is a failure of a significant obligation and often is the root cause of a delayed application. That is so in this case.

Circumstances of Child [ 35 ] The Mother’s evidence is that life was extremely difficult for her son and her until she completed her residency in the summer of 2013. Goulding states that the circumstances of a child and the issue of need deserve careful attention under DBS as the child is entitled to a standard of living that he would have enjoyed while his parents were together. [ 36 ] The only response of the father has been to note that his son has led a privileged life having been fortunate in extracurricular activities, he has a laptop and has travelled recently in 2019.

The Father outlines what he estimates the cost of trips would have been. [ 37 ] This is a nonsensical argument that ignores the principles set out in Goulding and DBS . For a payor parent to say in essence “he’s done well and has received items from the recipient parent” is a ludicrous view of need given the principles of law that apply here. He may have done well in the past despite the Father’s refusal to pay owed child care expenses or consistent support, but that does not obviate his need for such.

If a payor parent could merely point at a thriving child to escape his legal obligations, Courts could not impose any legal obligations. This is not the law and clearly here, NIA did not receive the same benefits he would have had, had his Father been supporting him in accordance with the Guidelines , including the s 7 expenses approved and his actual incomes earned. Indeed, the attitude he displays in arguing this factor is exactly the analysis that Goulding found inappropriate. Hardship Occasioned by a Retroactive Award [ 38 ] The Father now has one remaining child at home.

His income is definitely in the upper income class. He has had notice of this application for well over a year. Indeed, he knew what she sought for years. He has taken no steps to ensure he is paying the correct amount of support, instead he has wasted valuable money in legal fees fighting the payment of child support that should have gone to NIA. Child support is the right of NIA, not his Father’s right to use that money to pursue the Father’s “rights”. [ 39 ] I reject his arguments as stated above. [ 40 ] The Father’s Applications for Undue Hardship and Rectification are dismissed.

The Mother’s Application for retroactive s 3 child support and s 7 expenses is granted in the sums submitted by the solicitor for the Mother. Heard on the 15 th day of September, 2020. Dated at the City of Edmonton, Alberta this 23 rd day of July, 2021. D.A. Sulyma J.C.Q.B.A.

Appearances: Micah Chartrand of Soby Boyden Lenz LLP for the Plaintiff/Applicant Jordan Crerar of Crerar Badejo Hagen Family Law Group for the Defendant/Respondent