Hatt v Heather, 2021 ABQB 878

Court of Queen’s Bench of Alberta Citation: Hatt v Heather, 2021 ABQB 878 Date: 20211104 Docket: FL03 49534 Registry: Edmonton Between: Jason Paul Hatt Applicant (Respondent) - and - Zara Mackie Heather Respondent (Applicant) _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice M. J. Lema _______________________________________________________ A. Introduction [ 1 ] A support payor applies to retroactively reduce support to square with claimed reduced income, to determine his exposure to the recipient’s retroactive s. 7 claim, to re-set ongoing

section 3 and

section 7 child support, and to cancel accumulated arrears. [ 2 ] The recipient opposes all round.

[ 3 ] I find no material change to the payor’s income and thus no cause to change ongoing s. 3 support, no recipient entitlement to retroactive s. 7 expenses, and no reason to cancel any arrears. [ 4 ] As for ongoing s. 7 support, more information is required on the recipient’s own payments versus payments made by others in her family. B.

Retroactive adjustment of child support Payor’s income [ 5 ] The payor wants to adjust his sec 3 and sec 7 support obligations “since 2016 to reflect [his] actual income.” [ 6 ] Per his February 12, 2021 affidavit (para 11): My income has fluctuated over the last few years, and I recently declared bankruptcy.

Currently [my income] is less than it has been due to changes in the economy and, most recently, the pandemic. … Attached … as Exhibit “D” are my last three years’ tax documents, including my [pre- and] post-bankruptcy filing[s], as well as my last three pay stubs. [ 7 ] His baseline income -- $92,343 – comes from a Nova Scotia Supreme Court (Family Division) order granted by MacDonald J. on July 9, 2014.

She found the payor’s and recipient’s incomes to be the above figure and $29,705, respectively, and gave full parenting to the recipient. [ 8 ] For April 2015 onwards, that order directed the payment of “$1,600 per month, covering child maintenance [i.e.

section 3 support] and

section 7 amounts”, with no particular breakdown. [ 9 ] The payor provided CRA notices of assessment reflecting his line 150 income of $87,806 and $93,125 for 2017 and 2018, respectively. [ 10 ] The recipient referred to partly overlapping assessment data (for 2015-2017) for the payor’s income, with 2015 and 2016 figures of $88,265 and $86,132, respectively. (Her information for 2017 squared with the payor’s assessed income for that year.) [ 11 ] For 2019 (during which year the payor assigned into bankruptcy), he provided pre-bankruptcy and post-bankruptcy tax returns reflecting line 150 incomes of $51,239.72 and $36,196.38, respectively i.e. total income of $87,436.10. [ 12 ] For 2020, the payor initially provided copies of pay slips for the biweekly periods ending October 15, November 30, and December 15, 2020 (i.e. pay periods 20, 23, and 24 out of 24 for the year) reflecting gross earnings of $7,097, $6,853, and $6,363, respectively. [ 13 ] The last pay slip reflects year-to-date gross earnings of $43,029. [ 14 ] In his update affidavit (sworn April 1, 2021), he provided his 2020 T4s, noting that he had not yet filed his 2020 tax return. [ 15 ] The T4s reflect income from three employers ($884, $52,092.09, and $31,266.45, respectively) i.e. total “line 10100” income of $84,242.54 for 2020.

Whether material changes to payor’s income [ 16 ] The payor’s income in each 2016-2019 (inclusive) swung within a fairly tight band: • $6,211 lower in 2016 (6.7 per cent drop from $92,343); • $4,537 lower in 2017 (4.9 per cent drop from the same baseline); • $783 higher in 2018 (1 per cent increase from same baseline); and • $4,907 lower in 2019 (5.3 per cent increase from same baseline). [ 17 ] Coming back to his 2020 “per T4” income ($84,242.54), it was $8,100 less (8.7 per cent drop – same baseline). [ 18 ] Are those annual figures “material changes” from the $92,343 baseline? [ 19 ] In Schmidt v Christie , 2021 ABQB 123 , I found that up-and-down swings inside a ten-per-cent band did not constitute material changes in circumstance: I find that, in all the circumstances here, including the upswing in 2018 income, the historical up-and-down pattern of the payor’s income, the relatively short sample period (three years, with one year of increase and two years of decrease), the relative scale of the decreases (less than 10 per cent in both of the “decrease” years, measured from $85,000), the absence of evidence showing that 2021 income will necessarily depart from the $85,000 level in any material way (if at all), the payor’s proven ability to rebound from spells of unemployment (i.e. if any such spells lie in his future), and the absence of evidence that the payor’s age has actually been a limiting factor in finding project work, that the payor has not proven a material change of circumstances based on income changes. [para 86] [emphasis in original]

[20] In RLS v DCM, 2003 BCSC 692, Satanove J. took the same approach: In cross examination she admitted that during the mediation, her potential earnings were estimated by Mr. R.L.S. and herself as$36,000.00 per annum. Her most recent income tax return shows she has an income from employment of $32,291.43. This equates to lessthan a 10 percent difference from what she anticipated she would have earned. I do not see how 10 percent more or less income thaninitially anticipated can amount to a material change.

As the Supreme Court said in Miglin at para. 89, a certain degree of changeis foreseeable most of the time. … [para 24] [emphasis added] [21] See also Hariram v Hariram, (2001) (ON SCDC), 53 OR (3d) 131 (ONSC – Div Ct) at para 11 (15 percent decrease in payor’s income qualified as “material change” – support reduced by corresponding amount); Greslik v Greslik, (1996) (ON SC), 30 RFL (4th) 411 (Forestell J.) at paras 25 and 34 (22 per cent decrease in payor’s income a materialchange warranting support decrease); Lebsack v Lebsack, (1992) (AB KB), 132 AR 78 (McDonald J.) at para 3 (19per cent increase a material change warranting increased support); Krauskopf v Pfefferle, (PESCTD) (MacDonaldCJ) (potential 22 per cent increase in income (from $30,000 to $36,500) not a material change in circumstances); Giroux v Buss, 2010BCSC 965 (Gray J.) (per separation agreement, income change of less than 10 per cent not be treated as a material change re spousalsupport); Whittick v Whittick, 2001 BCSC 133 (Master Horn) (same as Giroux albeit with a 15 per cent threshold); Lamparski v Lamparski, (1997) (BC SC), 35 RFL (4th) 52 (30 per cent decrease in payor’s income a material change re spousalsupport); [22] In light of these authorities, I do not see the income swings here, ranging between roughly 1 per cent and 9 per cent as materialchanges of circumstances.

No earlier-than-formal-notice disclosure of changed income [23] In any case, from the record it appears the payor did not provide “as you go” disclosure of his income through the years,instead providing disclosure of his income through to January 11, 2020 via his disclosure at that time. [24] Even if the payor’s income had tailed off materially before then, his after-the-fact disclosure, in the circumstances here,would bar retroactive adjustment to child support based on any such decrease(s).

See DM v SP, 2021 ABQB 738 (paras 15-65),particularly: ... per Colucci [v Colucci, 2021 SCC 24] what matters here is the father’s income disclosure to the mother. On that front, he did notperform his provide-annual-tax-information duty or otherwise keep the mother abreast of his income each year or at all, untiladvising her, after the fact (in September 2020), via his application. In these circumstances, and as explained in Colucci, the mother’s “certainty” interest outweighs the father’s “flexibility” interest.

Itwas obviously in his power to provide year-by-year disclosure of his income and, by doing so, to adjust her support expectationsi.e. so that she would know (assuming that she accepted his reported income) that support would be decreasing. This is the central insight of Colucci for support payors: if you wish to have your support payments adjusted to reflect yourdecreased income, you must provide timely (i.e. as-you-go) disclosure of your changed income i.e. not wait until years later toreveal the decreases.

With no ongoing disclosure, the recipient is entitled to assume that the payor’s income has not changed (atleast in any material way) and that the ordered support will be paid in line with the (reasonably perceived) ongoing income. This is especially so (as here) where ongoing payments are being made or at least caught up from time to time. Given (eveneventual) full payment of support, it is even more reasonable for the recipient to assume that “all is well” on the payor’s incomefront. Further, I do not see anything in the evidence justifying the payor’s delay in making his 2017-2020 income disclosure.

It wasobviously within his power to update the recipient, each year, of his income changes and that he intended to seek supportadjustments to square with his overall-reduced income. [paras 54-58] [emphasis added]

Section 7 expenses [25] On the

section 7 front, the payor’s core position is that, until June 2019, he was unaware, of the child’s serious disabilities (orat least their particulars) and thus of any need for extraordinary child-care expenses (e.g. ranging as high as approximately $34,000 in2019). [26] In any case, aside from the state of his awareness of the child’s condition, his evidence is that the mother did not providereceipts or any other particulars, or even notice that she was incurring any child-care-related expenses at all, until relatively recently(summer or fall 2019). [27] Nothing in the mother’s evidence contradicts the father’s evidence on these aspects.

As she explained it, after retaining newcounsel (at some point in 2019) she came to understand that she had a greater right to claim section-7-based contributions from the payorthan she had earlier understood, sparking the disclosure of various categories of expenses tallying approximately $171,000, includingapproximately $144,200 in child-care expenses, all stemming from the years 2014 to 2019, inclusive. [28] As far as I can tell, the mother provided receipts for s. 7 expenses incurred between January 2018 and May 2019 sometimebetween June and September 2019, and receipts for earlier periods some time in fall 2019 (based on her answers in questioning onSeptember 26, 2019, pages 13 and 27-29). [29] Is the mother able to require contribution from the father for these expenses after the fact?

Retroactive pursuit of s. 7 expenses (case law) [ 30 ] This question engages retroactive-support principles outlined by the Supreme Court of Canada in DBS v SRG , 2006 SCC 37 , which apply to both s. 3 (base) child support and s. 7 (special or extraordinary expenses) support: Calver v Calver , 2014 ABCA 63 (paras 28 and 29 ); Titova v Titov , 2012 ONCA 864 (paras 18 , 35-40, and 43-44); and Selig v Smith , 2008 NSCA 54 (paras 25 and 26 ). [ 31 ] In Semancik v Saunders , 2011 BCCA 264 (cited in Calver v Calver ), the BC Court of Appeal examined the notice aspect: The father’s primary objection to the retroactive award is that the mother did not provide receipts for expenses as they were incurred by her, and that the first notice of the specific nature, amounts and timing of the expenses was in affidavits filed on this application.

He says that without that information, there was no way for him to know what the expenses were, and how much he was required to contribute . The father says that the mother’s application is like that considered by BC Supreme Court judges in Petersen v. Petersen , 2007 BCSC 497 and Leachman v. Leachman , 2007 BCSC 1166 . In both of those cases, the applicant for an order for contribution to retroactive s. 7 expenses first informed the other parent of the nature, amount and timing of the expenses in her affidavit filed on the application.

The application was dismissed on the ground that the applicant did not have a reasonable excuse for delay in requesting the contributions . The chambers judge in Leachman , quoting Petersen , said (at para. 29 ): In my view, the plaintiff does not have a reasonable excuse for her delay in requesting the defendant’s contributions. The plaintiff did not have to know the defendant’s exact income to know that he should be contributing to special and extraordinary expenses.

Although the defendant can ascertain how much child support he owes based on his income, he is unable to determine his contribution towards special and extraordinary expenses unless the plaintiff informs him of the amount expended. As Metzger J. states in Petersen , supra , at para. 30 : The defendant was and is entitled to know why a special and extraordinary expense is being incurred. In the interests of fairness and certainty, it is essential that the recipient parent inform the payor parent in a timely manner of the details of the expenses as they occur.

It is unfair and unreasonable to expect a payor parent to pay a lump sum for past special and extraordinary expenses when the other parent does not inform him of the nature and extent of those expenses. From reading the reasons for judgment in those cases, it appears that the mother had not discussed any of the expenses with the father, in even a general way, before bringing the application for a retroactive award .

The evidence in this case, however, supports the chambers judge’s finding that the father knew the nature and at least the approximate amount of the dental and education expenses that were being incurred by the mother for the daughter in 2008 and 2009, and that she wished him to contribute . Having said that, and accepting that the principles applicable to retroactive awards of child support and s. 7 expenses are the same , in my opinion the factual difference between these two types of parental contribution to child support is worth mentioning.

In the case of child support, the payor parent’s income is determinative. That parent knows what his or her income is and can determine the amount of the child support obligation from the Guidelines . In the case of s. 7 expenses, it is the recipient parent who knows the details of the expenses. If that parent does not communicate that information to the payor parent, the payor parent cannot fulfill his or her legal obligation to contribute. That is the point, with which I agree, of the decisions in Petersen and Leachman .

In this case, both parties have difficulty communicating with each other regarding these matters. It seems to me that much of the financial and emotional expense involved in this application and appeal might have been avoided had the mother taken the additional step of providing the receipts for the expenses to the father as they were incurred , as Josephson J. required in the order he made in 1998. The mother could mail the receipts to the father, which would obviate any direct communication. The father would then be in a position to determine his obligation to contribute .

In the result, I am satisfied that the chambers judge’s order requiring the father to pay retroactive s. 7 expenses for 2008 and 2009 is appropriate in this case . [paras 55-59] [emphasis added] [ 32 ] Our Court has barred retroactive recovery of s. 7 expenses for lack of notice to the support payor. In Nyereyogona v Schofield , 2021 ABQB 662 , Manderscheid J. held: As an alternative argument, the Applicant is requesting that the Respondent be required to pay 33% of the children’s s. 7 expenses – minus LH’s s. 7 contribution – from September 1, 2011 to present.

In Bland v Bland , 1999 ABQB 236 , one of the factors set out in para 24 to be considered in assessing the reasonableness of a s. 7 expense claim is whether the parent from whom the contribution is sought was consulted about the expense before it was incurred. See also: NJP v DWH , 2006 ABQB 352 at para 9 . There is no evidence that the Applicant consulted with, sought prior approval for or notified the Respondent with respect to any s. 7 expenses being incurred, whether before or after each of DNH and TNH turned 18 years of age.

Nor did she provide any evidence that she demanded or requested that the Respondent contribute to these expenses prior to this Application. See: MLR v SLR , 2020 ABQB 444 at paras 43 and 46 [ MLR ]. I also adopt the following comments of Lema J in MLR at paras 43 and 45 : [43] ... given the long period of virtually no contact between the father and the children, it is not apparent that he had any particular window into their extracurricular activities or life events possibly generating section-7-recognized expenses . [45] As well, s. 7 expenses must be pursued in a timely way, not years after the fact .

The opportunity to seek reimbursement for DNH’s and TNH’s s. 7 expenses for the period when they were still children of the marriage has long passed. This is not a situation where there was a pre-existing court order obliging the Respondent to contribute his proportionate share to the children’s s. 7 expenses, and he did not comply with that order. There have been no previous child support orders between

these two parties . Even if there had been, I would have declined to make a retroactive s. 7 expense order in light of the Applicant’s long delay in bringing this Application and the lack of relationship between the children and the Respondent.

The Applicant’s request for retroactive contribution from the Respondent towards DNH’s and TNH’s s. 7 expenses is denied . [paras 177-181 and 183] [emphasis added] [ 33 ] In MLR v SLR (cited above), I added (at para 46): With no evidence that the mother notified the father of s. 7 expenses as they being incurred or sought any contribution from him at that time or at any point in the last three years, and with no basis for inferring that he was necessarily aware of any such expenses , I find that it would be unfair to tag the father retroactively now with co-liability for such expenses. [emphasis added] [ 34 ] See also Johannson v Haaranen , 2018 ABQB 554 (Labrenz J.) (affirmed with no discussion of this point ( 2019 ABCA 73 )): I limit the award of retroactive s. 7 expenses because, in my view, DBS must be interpreted such that retroactive awards should not be utilized to impair the delicate balance between flexibility and certainty .

As the Supreme Court of Canada stated, “ when obligations appear to be settled, fairness also demands that they not be gratuitously disrupted .” [para 104] [emphasis added] [ 35 ] And McMorran v McMorran , 2016 ABQB 532 (Yungwirth J.): … There appear to have been retroactive child support claims being made by both parties when the matter was before Moen, J. There has been no reasonable explanation provided for why it took 10 years for Ms. Benincasa to make the application for child support for 2004 and 2005.

The ongoing litigation until January of 2009 and the fact that the matter was under case management until 2010 indicates that Ms. Benincasa had opportunity to deal with these old child support claims but she did not do so . In addition, and even if a court were persuaded after applying the analysis from DBS , that a retroactive award is appropriate, there is an issue related to the commencement date for that retroactive award. For the

section 7 claims listed in paragraph 52 of Ms. Benincasa’s February 10, 2015 Affidavit – which cover a time span of 2009 to 2015, the date of effective notice to Mr. McMorran of these retroactive child support claims is February of 2015 . There is no evidence of blameworthy conduct by Mr. McMorran since 2009 when these expenses are alleged to have been incurred. For … these [and other] reasons, Ms. Benincasa’s claims for retroactive child support are also dismissed. [paras 82-84 and 87] [emphasis added] [ 36 ] And Sweezey v Sweezey , 2016 ABQB 131 (Yungwirth J.): Mr.

Sweezey shall also pay his proportionate share of child care expenses commencing January 1, 2013. … Mr. Sweezey cannot reasonably claim to be surprised by Ms.

Sweezey’s claim for a retroactive contribution to the costs of child care . [para 108] [emphasis added] [ 37 ] And Brandson v Brandson , 2015 ABQB 796 (Veit J.): The mother brought her claim for s. 7 dance expenses essentially upon separation; therefore, the father has had adequate notice of what have become retroactive claims. [para 26]. [ 38 ] See as well Small v Small , 2020 BCSC 707 (Horsman J.): The respondent seeks reimbursement from the claimant of retroactive s. 7 expenses from the date of separation to the present.

He says he incurred s. 7 expenses over that period in the total amount of $150,122, to which the claimant has made no contribution. The expenses are comprised of the children’s private school tuition and related fees, hockey expenses, dental care, contributions to the children’s RESPs, and cell phone expenses. The respondent says that the claimant collected receipts for the parties until April 2017, and was well aware of the expenses that the respondent was incurring from the time the parties’ separated .

He says that the effective date of notice of his claim for retroactive expenses is, at the very latest, March 26, 2018, which is the date the respondent filed his counterclaim claiming, inter alia , special and extraordinary expenses for the children. The claimant agrees to pay 25% of reasonable and necessary s. 7 expenses incurred by the respondent after April 30, 2018. Before that date, the claimant says that the family expenses were paid out of the CIBC joint account that both parties had contributed to since separation.

She says that the respondent’s calculations do not account for contributions she has already made to the claimed s. 7 expenses. The claimant also disputes that she received effective notice of the respondent’s claim for retroactive s. 7 expenses. For the following reasons, I conclude that the respondent is not entitled to reimbursement of s. 7 expenses incurred prior to May 1, 2018 . First, I do not agree that the claimant received effective notice of the respondent’s claim for reimbursement of retroactive s. 7 expenses simply because she saw the receipts that now form the basis for the claim.

There is no evidence that the respondent put the claimant on any form of notice prior to filing his counterclaim on March 26, 2018 that he would be seeking reimbursement of retroactive s. 7 expenses . ... [paras 252-256] [emphasis added] [ 39 ] In Toronchuk v Wainwright , 2021 ABQB 862 , Ross J. allowed retroactive recovery of s. 7 expenses: It is not clear that there were reasons personal to the Applicant for not enforcing payment of s. 7 expenses. There would have been no or only a minimal cost to provide receipts to MEP . She may have had inadequate legal advice. Counsel for the Applicant

notes that, after 2011, the parties did not return to court until 2020. However, the Applicant was enforcing other aspects of the 2011 Order through MEP. The Applicant has attested that, in addition to being the sole caregiver for the child, she was taking on extra work to make up for the Respondent’s lack of support. It would be understandable that she would not want to commence a new Court application in these circumstances, especially given the delays and difficulties encountered with getting disclosure during the previous application.

But again, this does not explain why she did not take the simple steps required to collect s. 7 expenses already provided for in the 2011 Order. There is no evidence that the Applicant feared the Respondent generally or his potential reaction to enforcement steps , although she has attested to an unpleasant encounter with his partner in August 2021. The Applicant lacked knowledge about the Respondent’s increased income. While this does not directly relate to enforcement of the 2011 Order, there may have been an indirect impact.

The Respondent did not always pay the $1100 amount that he was directed to pay, and the arrears amount remained substantial. The Applicant could easily have concluded that adding to the arrears amount was fruitless. Had she known that, by 2014, the Respondent’s actual income had more than doubled from the earlier estimate, this might well have led her to take a different approach. Did the delay cause prejudice to the Respondent?

The Applicant’s unilateral decision to incur significant expenses relating to tutoring and freestyle skiing, would prejudice the Respondent if he were required to pay for these items after the fact, without having the ability to object or challenge the reasonableness of these costs . However, the Applicant’s revised calculations reducing the s. 7 claim from $23,267 to $15,814 removes this prejudice. The Respondent suggests that the Applicant could have obtained dental insurance.

The Respondent could have made this submission in 2011, and could have contributed his proportionate share to the cost of the child’s insurance. He did neither. The expenses included in the $15,814 claim were either directly specified in the 2011 Order, or come within a reasonable

interpretation of its terms (eg, modest summer camp costs, which provided both extracurricular recreation and childcare; and orthodontic care costs). There is no doubt that the Respondent was obligated to pay his proportionate share of these expenses. Adding these costs to his unpaid arrears later, rather than earlier, does not prejudice him . The expenses included in the $15,814 claim were reasonable, even necessary, expenses incurred by the Applicant to care for the child . The Applicant’s funds went to pay for these and other expenses, while the Respondent remained far in arrears in fulfilling his obligations.

The Applicant took on extra work because of the unequal sharing of financial responsibilities. She sacrificed time with the child, notwithstanding that she was his sole caregiver. This was not in the child’s best interests. The Respondent’s interest in certainty is not a compelling factor in relation to s. 7 arrears, any more than s 3 arrears, given his blameworthy conduct. The Respondent has been or should have been aware for years that he was not fulfilling his child support obligations.

In all of the circumstances, it is my view that the Applicant’s delay in enforcing s. 7 expenses does not preclude her retroactive claim for s [7] expenses in the amount of $15,814 . [paras 42-51] [emphasis added] Has the father overpaid s. 7 support to date? [ 40 ] Before returning to the mother’s retroactive s. 7 claim, I first explore the father’s clam to have overpaid s. 7 expenses to date. [ 41 ] While the 2014 order did not break down the $1,600 monthly support (payable from April 2015 onwards) i.e. as between s. 3 and s. 7 support, both parties have proceeded on the basis of a MEP breakdown, namely, $777 for s. 3 and $823 for s. 7 support. [ 42 ] The father asserts that he has overpaid s. 7 support; the mother, that he has (vastly) unpaid it, especially factoring in her presented-after-the-fact s.7 claim discussed above. [ 43 ] As far as I can tell (with the parties having presented different MEP documents and arrears calculations), the father’s arrears (as of February 2021), approximately $16,000, stem from under-payment of the $1,600 monthly support in 2018 and 2019 i.e. not from the addition (and non-collection) of any of the mother’s retroactively sought s. 7 expenses. [ 44 ] The $823 monthly s. 7 figure translates into $9,876 per year. [ 45 ] The mother’s total s. 7 expense claim for 2014 to 2019 ($171,763) breaks down as follows: 2014: $11,707 (including child-care expenses of $11,400) 2015: $14,704 (including child-care expenses of $12,700) 2016: $28,015 ($25,850) 2017: $31,004 ($25,850) 2018: $35,287 ($34,200)

2019: $51,046 ($34,200) [ 46 ] Completely factoring out child care expenses (the core focus of the father’s “no retroactive claim should be allowed” objection), the mother (per her reporting) incurred other s. 7 expenses of $27,563 i.e. an average of $4,594 per year. [ 47 ] The difference between the apparently (per MEP) required s. 7 support of $9,876 per year ($823 x 12) and the mother’s non- child-care s. 7 expenses ($4,594) is $5,282, which translates to $440 per month. [ 48 ] That is a modest amount for the payor to contribute to this working mother’s child-care expenses. [ 49 ] I am not prepared to find that the father effectively overpaid (or would end up overpaying, after clearing his arrears) s. 7 support for these years, particularly when he was apparently content to pay a set amount for such support ($823 monthly) i.e. without requiring any particular reporting by the mother about s. 7 expenses.

Application of the retroactive-section-7 principles [ 50 ] The focus returns to whether the mother can claim incremental s. 7 support i.e. beyond that $823 monthly figure. [ 51 ] Tallying the total claimed amounts above (2014-2019) reveals total claim expenses of $171,763. [ 52 ] Deducting the amount the payor was required to pay in those years ($823 per month x 12 months x 6 years i.e. $59,256) leaves an apparent shortfall of $112,507, for which the mother seeks proportionate-to-income payment by the father. [ 53 ] Here is where the DBS principles are engaged: • as noted, the father’s evidence is that, until approximately June 2019, he was not aware of the child’s autism diagnosis, let alone its particulars (severe impairment); • the father was largely out of the orbit of the child’s life between 2014 and 2019.

As far as I can tell, he had no particular window into the child’s health or well-being (let alone the child’s disability) in that period and, by extension, any awareness of resulting heightened s. 7 expenses, including the very extensive child-care costs; • it was not until approximately June 2019 that the father was advised of the child’s disability and of the mother having incurred the now-claimed (and reflected above) s. 7 expenses for 2014 to (mid) 2019; and • the evidence does not reflect any particular reason, or at least any reasonable explanation, for the mother not informing the father of the son’s condition or of her increased s. 7 expenses i.e. until in or around June 2019. [ 54 ] In these circumstances, and applying the DBS principles in line with the above cases, I find that the mother cannot now tag the father with exposure for any of her incremental (i.e. above the $823 monthly) s. 7 expenses. [ 55 ] In a nutshell: if she wanted the father to contribute to those incremental expenses, of which the father had no knowledge, during those six years, she should have informed him of them on an “as you go” basis i.e. as they were incurred (at the latest), as well as showing why (in her view, because of the son’s disability) they were necessary. [ 56 ] Applying the approach of Ross J. in Toronchuk (cited above), the mother’s incremental expenses (as defined above) went far beyond the scale of s. 7 expenses contemplated by the parties (at least using MEP’s division of support as between s. 3 and s. 7 amounts) i.e. were not simply the kinds and scale of expenses required by an earlier order or at least squaring with the parties’ earlier understanding (per the MEP division). [ 57 ] Per Ross J.’s analysis, the payor here did not have “the ability to object or challenge the reasonableness of these [incremental] costs.” [ 58 ] With the section-7-expense payor having not provided “as you go” or at least far more timely notice of these expenses, and with no reason offered for not providing such earlier notice other than a lack of awareness of her (potential) entitlement to recover, and with no apparent “blameworthy conduct” by the father on the s. 7 front, it is too late for the recipient to claim such expenses now, as explained in the above cases. [ 59 ] The section-7 focus shifts to July 2019 (and onwards), when the father was informed of the child’s serious disabilities and of the associated heightened child-care expenses.

Section 7 claims for July 2019 onwards [ 60 ] The mother reported total s. 7 expenses of $51,045 for 2019.

Assuming they were incurred evenly throughout the year, $25,523 (fifty per cent) in such expenses were incurred from July to December. [ 61 ] That includes $17,100 of child-care expenses (i.e. one-half of the claimed $34,200), which translates to $2,850 monthly. [ 62 ] Also included are “physio (braces)” and “orthodontics” expenses of $1,750 and $3,666, respectively (i.e. one-half of the annual totals for those claims). [ 63 ] At the $823-per-month pace, the father was expected to pay $4,938 in s. 7 expenses for July to December 2019 i.e. leaving a shortfall (per the mother) of $20,585 ($25,523 - $4,938).

[ 64 ] The mother did not provide evidence of s. 7 expenses incurred in 2020 or 2021. Father’s other arguments on

section 7 [ 65 ] Beyond his too-late-disclosure argument (reviewed above), the father argues that: • the child-care expenses are unreasonable and, in any case, insufficiently proved; • the mother neglected to register the child under her benefit plan or, in any case, seek reimbursement (whole or partial) of any covered expenses (possibly physio or orthodontics, or both); • she did not incur all of the s. 7 expenses personally (with some paid for by others in her family); • she deducted the child-care expenses from her income but neglected to factor in any resulting tax savings; and • she also neglected to apply any Child Tax Benefit or related benefits first to the discharge of s. 7 expenses.

Findings on those arguments [ 66 ] I find that: • per the express wording of s. 7, reasonableness of proposed-to-be-shared expenses is a factor (“tak[e] into account … the reasonableness of the expense in relation to the means of the spouses and those of the child …”, per ss. 7(1)); • similarly, s. 7 requires that benefits (per benefit plans) be factored in (“in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense”, per ss. 7(4)): see KA v TD , 2008 ABQB 222 (S Martin J as she then was) (paras 30 and 31 ); JT v TT , 2015 ABQB 648 (Graesser J.) (para 68 ); Spiess v Spiess , 2021 ABQB 730 (para 5 ); GJ v CM , 2021 YKSC 20 (CJ Duncan) (para 68 ); VB v MB , 2017 BCSC 1761 (MacNaughton J.) (para 150 ); Szabo v Pulham , 2015 BCSC 1393 (Master MacNaughton) (para 45 ); Splett v Pearo , 2014 ONSC 393 (para 90 ); L v L , 2015 ONSC 3650 (Eberhard J.) (para 71 ); SK v TZ , 2007 SKQB 210 (Smith J.) (para 41 ); and El-Jaroudi v El-Mikati , 2020 BCSC 868 (Shergill J.) (para 284 ); • as discussed further below, s. 7 sharing applies only to expenses paid for by a parent personally (whether out of on-hand or borrowed monies) i.e. does not apply to expenses paid for by others e.g. grandparents and other relatives; • as reflected in ss. 7(4) (see above), the impact of income tax deductions or credits (e.g. for certain child-care expenses) must be factored in: see FDM v EGM , 2021 ABQB 420 (Ashcroft J.) (para 246 ); SER v JS , 2020 ABQB 267 (C Jones J.) (paras 6 and 94 ); and GM v JB , 2019 ABQB 772 (Devlin J.) (paras 104 and 105 ); and • no requirement exists that Child Tax Benefits or similar benefits are first devoted to s. 7 expenses. (Subsection 7(4) expressly factors out “any universal child care benefit or any eligibility to claim that benefit.”) [ 67 ] The second, fourth, and fifth aspects are straightforward: s. 7 sharing applies to expenses net of any benefit coverage available to either parent, the impact of tax deductions has to be factored in, and the Child Tax Benefit is a non-factor.

Section 7 expense sharing requires payments by parent(

s) personally [ 68 ] As for reasonableness, I propose to examine that factor only once the mother’s remaining s. 7 claims are put through a “paid for personally” filter i.e. once expenses paid for by others are factored out. [ 69 ] The rationale for this rule is clear: the burdens to be shared per s. 7 are necessarily those carried by the parents themselves, not by others who may choose to contribute to the expenses.

Reimbursing a parent (even partially) for expenses covered by others would produce a windfall for that parent. [ 70 ] As ss. 7(2) states: The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child. [ 71 ] That requirement of expense sharing implies expense incurring by one or the other parent personally, as confirmed in the following cases. Ludmer v Ludmer , 2014 ONCA 827 Mr. Ludmer had no income in 2005.

He funded the s. 7 expenses through loans made to him by his father. For reasons that are not germane to the appeal, the trial judge concluded that the loans received would not form part of Mr. Ludmer’s income for support purposes. He took a different view of them for s. 7 purposes, however, rejecting the argument that the principle “gifts are not income” was dispositive of the s. 7 issue as well. In the trial judge’s view, s. 7 expenses of almost $85,000 in a year when Mr. Ludmer had zero income (and Ms.

Ludmer only $66,809) were simply not reasonable when “this couple could not possibly have afforded [them] on the basis of their own incomes”. The fact that the expenses were funded entirely through family assistance opened up the issue of apportionment and enabled the trial judge to

look beyond the parties’ respective incomes. Requiring Ms. Ludmer to reimburse Mr. Ludmer for those payments, in the circumstances, was not appropriate. In my view, it was open to the trial judge to come to this conclusion. In any event, the amount in issue would not be Ms. Ludmer’s share of $84,751.97. Because the expenses were funded through a loan, the amount in question would only be her share of the interest on the amount of the loan for that year .

In the overall balancing of the financial issues between the parties, this would be a relatively insignificant amount. [paras 38-40] [emphasis added] [Comment: that appears to assume no principal payments on the loan, present or future] Bonilla v. Bonilla , 2009 BCSC 890 (Grist J.): In my view, the expenses covered by the grandparents are in the most part special or extraordinary expenses that might fall under s. 7 of the Federal Child Support Guidelines , S.O.R./97-175 (the “ Guidelines ”).

Their contributions to these expenses do not at law alter the plaintiff’s obligation to provide the basic level of support indicated by the Tables . The plaintiff’s present Guideline income is the sum of $58,000, and accordingly, the maintenance payable is $541 per month, which will first be payable June 1, 2009. [para 12] [implicit finding was no obligation of section-3-support-paying parent to contribute to s. 7 expenses covered by grandparents] MB v. SBB , 2018 ONSC 4893 (McGee J.): … S.B.B. acknowledged at trial that her father has paid for the vast majority of the children's

section 7 expenses for which she is now seeking reimbursement. T.B. gave evidence that he does not expect to be repaid. S.B.B. has not provided evidence as to whether she or her father paid for any specific expense in any particular year. It is possible that he paid for all the pre-2014 expenses, and some of the post-2014 expenses that were supposed to have been covered by the $398 per month ordered by Justice Nelson. Even if S.B.B. did pay the additional expenses , I cannot find that it was necessary, or within the means of the parents to have done so. I decline to give effect to any additional claims by S.B.B. for retrospective contributions to

section 7 expenses … [paras 184, 185 and 188] [emphasis added] Vogler v. Vogler , 2015 ONSC 424 (Linhares de Sousa J.): With respect to the children’s s. 7 expenses, the evidence revealed that Mr. Vogler’s parents cover the post-secondary education costs of the children by way of RESPs established by them for the children . Every other s. 7 expenses relating to the children, was to be shared between the parties in accordance with the parties’ mid-trial agreement.

The mid-trial agreement provided that the parties would each be responsible for a one-third portion of the children’s s. 7 expenses, “not covered by the payments of their grandparents”. The children would be responsible for the remaining third. Mr. Vogler took the position that the children’s uncovered s. 7 expenses ought to be shared by the parties and the children in accordance with the parties’ mid-trial agreement.

In the face of this problematic evidence, what was clear from the parties’ testimonies was that, while the parties did reach an agreement to share, in a one-third/one-third proportion, the children’s s. 7 expenses, the parties do not communicate in any functional way to inform each other of what expenses each is paying for the children.

Furthermore, neither parent receives information from the children as to what expenses have been covered by the other parent or what money the other parent gives to the children or what s. 7 expenses are covered by the grandparents or what money the grandparents give to the children. With respect to child support, I am not persuaded that a case has been made out for ongoing child support or retroactive child support. Both parties appear to share equally the care of their children while they are with them.

Despite the difference in salary between the two parents, for the reasons mentioned above, I am satisfied that these two parents are equally financially capable of caring for their children. Their legal responsibility in this regard is supplemented by the generosity of grandparents who are prepared to pay a substantial portion of these two children’s s. 7 expenses as well as give other gratuitous payments to the children . The parties have reached an agreement on the sharing of the children’s uncovered s. 7 expenses which continues to be a source of dispute between them.

Both parties have presented evidence relating to what expenses they have personally incurred in meeting the s. 7 expenses of their two children. See Exhibits #3 and 15.

From examining that evidence, while there may be a slight differential in what one parent claims they may have paid compared to the other parent, I am not persuaded to make any order relating to the s. 7 expenses of the children other than to indicate that this Court’s order, with respect to the past and ongoing s. 7 expenses of the children, is that those expenses are to be shared by the parties in accordance with their agreement filed with this Court as Exhibit #42. [paras 20-22, 26, 118 and 119] [emphasis added] [parties’ agreement factored out grandparents’ contributions from s. 7 sharing] Application of the “must be paid for personally” principle here [ 72 ] The mother’s evidence on this aspect came in part from affidavit questioning in late September 2019: Q: So if you don’t have health coverage, how are you paying for these expenses [e.g. $6,000 mouth retainer] on your salary?

A: My salary[,] and my family supports me. Yeah, it’s not gifted. It’s – Q: Extended family, or -? A: My mother’s side, my sister – my sister – more my sister and my uncles if it’s anything too big. … [ 73 ] Per her February 5, 2020 affidavit (under the heading “Child Support”): I have provided my sister and mother’s banking statements as well as mine.

Yes, many of the major services [for the child] are covered by my sister … and kind-hearted uncles in Montreal. [para 27]. [ 74 ] Per her March 8, 2021 affidavit: … I have had to borrow money from my family members as they have paid the daycare costs and legal fees for me as I do not have sufficient funds on my own. [para 27] [ 75 ] In her desk-application brief, the mother argued: [The father] also seems to suggest that he should not have to pay towards [the child’s] care merely because [the mother] has to go into debt with her own family members who make the homecare payments for her.

Finding on “must pay personally” aspect [ 76 ] The mother has not sufficiently proved personal coverage of the claimed-for s. 7 expenses, at least not yet. [ 77 ] While she refers (see above) to payments “not gifted” and to having had to “borrow money” and “go into debt”, she produced no evidence of: • who loaned what amounts, and when; • the application(

s) of those amounts i.e. as among home-care for the child, (potentially) other s. 7 expenses, and (potentially) non- section-7 expenses; • the terms of any loan agreement(s), written or oral, including the terms of repayment, interest (if any), rights on default, or otherwise; • copies of any written loan agreements; • financial statements, statements of net worth or similar documents reflecting the existence of the claimed loans; • any accounting e.g. showing the loan(

s) advanced, interest accrued (if any), payment(

s) made, and current balance(s); • how the family members in question have regarded, and currently regard, the advances made by them i.e. whether as loans or gifts and, if the latter, whether they are reflected in financial statements, statements of net worth or similar documents; • whether any amounts were gifted to her by family members for s. 7 expenses and, if so, what demarcates such contributions from others characterized as loans (to the extent not addressed above or below); or • anything else to give an air of reality to her “loans” characterization. [ 78 ] In light of this conclusion, I am not conducting a “reasonableness” scan of the claimed s. 7 expenses for the balance of 2019.

C. Arrears [ 79 ] The father’s bid to have his existing (per-MEP) arrears cancelled fails in the absence of evidence showing that he cannot currently clear the arrears and has no real prospect of ever clearing them: see Moen v Ropchan , 2021 ABQB 777 (paras 41-43 ). D. Conclusion [ 80 ] To recap: • the father fails in his bid to show a material change in his income.

As a result, no change to s. 3 support is warranted; • the mother is not entitled to retroactive recovery of s. 7 expenses incurred before June 30, 2019, owing to no timely notice to the father of those expenses; • for s. 7 expenses between July 1 and the end of 2019, the mother has not (to date) sufficiently proved which of the incremental expenses (as defined above) were incurred by her personally, versus by family members; and • the father’s application to cancel arrears is dismissed.

[ 81 ] The mother can file any additional evidence she has bearing her (possible) personal payment of the second-half-of-2019 s. 7 expenses (whether out of her own funds or borrowed funds and, if the latter, adding whatever evidence she has on the various proof-of- borrowing aspects noted above) via supplementary affidavit filed and served by close of business on Friday, November 19 (accompanied by a maximum 1.5-page argument), with the father being able to reply (argument only; same page limit) by close of business on Friday, November 26 th . [ 82 ] For s. 7 expenses for 2020, 2021 (so far) and ongoing, the parties can apply for directions if they are unable to agree.

E.

Costs [ 83 ] The father asserted that the mother had fabricated most, if not all, of the child-care expenses sought by her: • [per his February 12, 2021 affidavit: “I believe the receipts [put forward by the mother to prove her child-care expenses] are forged for the purposes of getting me to pay significantly more in s. 7 child support” (para 19) and “It is my opinion that … the homecare ladies [who the mother asserts provided child care] are fabricated ” (para 24); • [per his March 15, 2021 affidavit]: “I continue to maintain that [the mother] has made this [child-care] service up completely because she is angry that I am back in [the child’s] life …” (para 8); and • [per his brief]: “[The father] argues that these [child-care-related] receipts are fabricated to collect a significant award of retroactive expenses that do not exist” and “[The father] respectfully submits that these claimed monthly payments are fraudulent ….” [ 84 ] In her March 8, 2021 affidavit, the mother provided copies of child-care-expense receipts for October 2015 through December 2017.She may have provided other receipts via other affidavits or, in any case, to the father directly. [ 85 ] The father contends that the mother provided no back-up (e.g. bank account) information to show that the purported charges were actually paid (and, as noted, he asserts that the supposed care providers do not exist). [ 86 ] The mother argues (in part) that her child-care expenses have been accepted as adequately proven by the Canada Revenue Agency (i.e. accepted as legitimate deductions from her income). [ 87 ] Both parties referred to undertaking responses bearing on whether the claimed expenses were in fact incurred. [ 88 ] It does not appear that I have sufficient information on the court file to rule on whether those undertakings were sufficiently answered or, in any case, on the degree to which (if at all) the claimed expenses were actually incurred and, if so, by whom, and to whom. [ 89 ] Given the father’s allegation of fraud and the significance of that allegation to the costs equation, I authorize the mother to submit further evidence bearing on the actual incurring of the claimed child-care expenses (from any year) and the existence of the care providers (i.e. to the extent not addressed in response to the invitation to provide further evidence above), via the same supplementary referred to above (if pursued) or a stand-alone supplementary affidavit, by the same deadline above (and with a further maximum 1.5- page argument), with the father being able to reply (by his same deadline above and with a further 1.5-page limit). [ 90 ] I will rule on costs once I receive those submissions.

Application submitted via the desk-application process March 22, 2021. Desk application assigned May 8, 2021. Dated at Edmonton, Alberta this 4 th day of November, 2021. M. J. Lema J.C.Q.B.A. Submissions from: Stephanie L. Jansen Duncan Craig LLP

Lawyers Mediators for the Applicant (Respondent) David S. Patterson Patterson Family Law Office for the Respondent (Applicant)