Rowan v Price, 2023 ABKB 332

Court of King’s Bench of Alberta Citation: Rowan v Price, 2023 ABKB 332 Date: 20230601 Docket: 4801 174130 Registry: Calgary Between: Melissa Veda Rowan also known as Melissa Veda Price Plaintiff/Applicant - and - Guy Price Defendant/Respondent _______________________________________________________ Reasons for Decision of the Honourable Justice G.H. Poelman _______________________________________________________ I.

Introduction [ 1 ] The issues arising out of this one-day special hearing concern child support (including determination of income), claims to personal property and an application to sell the former matrimonial home. There is only one application before me, filed by Ms. Rowan on January 12, 2023. [ 2 ] There were a number of delays before this matter could be heard, largely caused by court scheduling difficulties, including

COVID-19 interruptions. Ultimately, Malik J. directed the application to a one-day domestic special hearing with evidence limited to affidavits. Deadlines were set for exchanges of materials. An August 22, 2022, order stated that the “hearing is for a final determination of the subject matter of the Application.” II. Child Support A. Background Facts [ 3 ] The parties began living together in September 2008, were married November 7, 2009, separated June 16, 2017 and were divorced on February 4, 2020. [ 4 ] They have two children together, both sons: V and A. Ms.

Rowan also has a daughter, S, from an earlier relationship. Mr. Price has acted as her father as she was just over a year old when cohabitation began; her surname has been changed to Price. Child support arrangements have recognized his obligation to pay child support for S as well as his two sons. [ 5 ] Ms. Rowan was the primary residential parent for the three children until August 2021. Since September 2021, the parties have shared parenting of their two sons on a two-week on, two-week off basis; S has remained in the primary care of Ms. Rowan. B. Ms. Rowan’s Income [ 6 ] Ms. Rowan has a high school education.

Thereafter, she has had limited short term, part time, employment and some educational courses that did not result in diplomas or certifications. She has never worked in a permanent, full time job and has no education or training that would indicate a particular form of employment as most suitable. [ 7 ] When in her relationship with Mr. Price, she helped on design, hosting investors and potential clients on home construction or design projects on which Mr. Price and his parents were working. She did not receive a wage or salary for her contributions.

Since separation, any income earned has been minimal and sporadic. [ 8 ] Mr. Price argues that income should be imputed to her for purposes of calculating child support. This is not strongly opposed on Ms. Rowan’s behalf. I find that the principles for imputing income under section 19(1) (

a) of the Federal Child Support Guidelines , SOR/97-175 (“ Child Guidelines ”), indicate that imputation of income is proper. Peters v Atchoay , 2022 ABCA 347 , holds that there is a duty to seek employment where a parent is healthy and can work, even at lower-end employment: para 92.

The starting point for imputing income is earning capacity “based on factors like age, education, experience, skills and health of the payor”; and the overarching goal is a parent’s obligation to support her children based on what is reasonable in the circumstances: ibid . [ 9 ] The party seeking to have income imputed to another on an initial basis “has a preliminary onus to establish some basis for the imputation sought”: ibid . Imputing income to Ms. Rowan was first raised by Mr. Price in his January 2, 2023 affidavit, and then only implicitly.

He makes the argument expressly in his concise letter filed March 30, 2023. He has not filed an application; the only one before me is Ms. Rowan’s seeking “an Order for child support retroactive to July 1, 2017” and “an Order for ongoing child support” (plus other relief addressed later in the reasons). [ 10 ] Potentially, Ms. Rowan’s child support obligations began in September 2021 when shared parenting started. However, given that Mr. Price gave no notice that he would seek an imputation of income – and thus, payment of child support by Ms.

Rowan – I exercise my discretion not to impute income retroactively ( Peters , para 60 ). Mr. Price has not proved actual employment; and I am unable to conclude that Ms. Rowan’s voluntary under-employment or unemployment was unreasonable on the record before me, given her education, employment background, childcare responsibilities and the fact of no notice. [ 11 ] Taking these factors into account, I conclude that income should be imputed to her commencing July 1, 2023.

From the evidence of her income earning capacity, I find it reasonable to assume that she will begin at an entry-level position and thus set her annual income for Child Guidelines purposes at $31,200 (approximating a minimum hourly-wage job on a full-time schedule). [ 12 ] I also assume her income will rise. She is healthy, forty years old and has shown the ability to work productively, albeit primarily with her former husband’s and his family’s business. Thus, as of July 1, 2024, her income will be imputed at $40,000 per year.

As of January 1, 2025, her income may be reviewed on application brought by either party. However, as the parties will be required to exchange income tax or other income information annually, if her income exceeds what has been imputed, her child support obligations will be based on the higher amount. C. Mr. Price’s Income [ 13 ] Mr. Price earns his income through a private corporation he controls. For most years, he takes his income in salary from the company. In one year, there were dividends as well. [ 14 ] To their credit, the parties have taken similar approaches to determining Mr.

Price’s income based on the Child Guidelines and the authorities. Taking into account both of their submissions, I have used the following methodology to determine Mr. Price’s annual income for the relevant periods:

a) The starting number is Mr. Price’s line 150, or “total income,” number from his personal income tax return (now line 15,000). This is a departure from section 18(1)(

a) of the Child Guidelines and relevant cases, which indicate that where a corporation is involved all or part of its pre-tax income should be attributed to the shareholder: Miller v Joynt , 2007 ABCA 2014, paras 19 and 20 . However, in this case it is appropriate to use the total income figure from Mr. Price’s personal income tax returns as the starting point, because generally

the corporation’s pre-tax income was paid out as a salary.

b) Adjustments required by

Schedule III of the Child Guidelines are then made, primarily dealing with dividends (affecting only one year).

c) A number of expenses deducted from corporate income relating to automotive, meals, entertainment and telephone are partially added to Mr. Price’s income – to reflect the personal nature of these expenses: Hall v Hall , 2006 ABQB 329 , para 23 . Mr. Price suggested 25 percent of the expenses be added. However, I am persuaded that 50 percent ought to be added, based on the nature of the expenses and the lack of information about them. Mr. Price has the onus of establishing the reasonable deductibility of these expenses: Cunningham v Seveny , 2017 ABCA 4 , para 28 .

As an example, his vehicle is a Tesla for which he paid over $100,000, an excessive expense as a business deduction given the nature of his business (primarily home construction, furniture and design).

d) Donations made and deducted by the corporation for Mr. Price’s personal interests are added to his personal income.

e) Depreciation is added to his personal income, as the balance sheets show no significant equipment and nothing in the evidence supports this expense. They appear to be accounting entries only made to reduce income for tax purposes: Beaudry v Beaudry , 2010 ABQB 119 , paras 25-30 .

f) Finally, the amounts added back into income are grossed up at Mr. Price’s marginal tax rate, to reflect the fact that he received personal benefits from these expenses without paying tax. [ 15 ] From the foregoing, I set Mr. Price’s income for child support purposes as follows: a) 2017 : $109,108.14 b) 2018 : $30,880.22 c) 2019 : $207,015.58 d) 2020 : $148,198.61 e) 2021 : $95,911.41 f) 2022 : $125,967.71 (because of incomplete information, this amount is taken from the management salary expense in the business’s financial statement for the applicable year end).

Thereafter, his income will be adjusted in accordance with income information which he will be required to exchange with Ms. Rowan. D. Child Support Obligations [ 16 ] The parties separated in June 2017. Service of Ms. Rowan’s statement of claim, in which child support was claimed, was accepted on June 28, 2017. That is the date of effective notice for claiming retroactive support. On that basis, Ms.

Rowan claims child support commencing July 1, 2017. [ 17 ] Furthermore, child support was first paid pursuant to the “Interim Interim Without Prejudice Consent Order” of November 21, 2018, which expressly reserved retroactive basic child support and

section 7 expenses. The general rule is that such orders will be revisited and adjusted when a final order is made: Durocher v Klementovich , 2013 ABCA 115 , para 20 . As noted above, the application which I heard was for a final determination. [ 18 ] Thus, I find that Mr. Price owes child support from July 1, 2017. His child support obligations from that date through to the present and ongoing are for three children, based on the guideline incomes I have set, while each remains a child of the marriage as defined in the Divorce Act .

He will be credited for amounts paid beginning in December 2018. [ 19 ] Shared parenting of the two sons began in September 2021. I have imputed income to Ms. Rowan commencing July 1, 2023. Thus, from that date through to the present and ongoing, Ms. Rowan owes child support for two children while each remains a child of the marriage. Support will be calculated according to the guideline incomes I have set, with credit for any amounts paid. [ 20 ] The parties’ support obligations from July 1, 2023 will be based on a simple set-off under

section 9 (

a) of the Child Guidelines . Neither has suggested an approach that would take into the account the considerations under

section 9 (

b) and (

c) and there is no evidence on which I could take them into account. [ 21 ] Ms. Rowan’s counsel prepared tables calculating the amounts owing for child support but they do not take into account all of my findings. Therefore, I ask her to revise the calculations and present new tables, with explanation, together with a proposed form of order. [ 22 ] Ms. Rowan also claims reimbursement for the children’s dental and medical prescriptions in 2021, in the total amount of $3,094.58, as special or extraordinary expenses under

section 7 of the Child Guidelines . Mr. Price’s only objection to these expenses was that he believed they had been paid by the insurer. I am satisfied from the documents attached to Ms. Rowan’s affidavits that the amount claimed only represents the portions she has paid out of pocket. Thus, the expenses of $3,094.58 must be paid by Mr. Price as he was the only parent earning income in 2021. [ 23 ] As a general argument, Mr. Price submits it is not proper for him to be paying significant child support when Ms. Rowan enjoys a “lavish” standard of living with her new partner. One can have some sympathy with his complaint.

[ 24 ] However, it is answered by two points. First, according to our law, child support is the right of the children. Their right does not disappear just because one of the parents repartners. Second, a new partner is not obligated to support the children – that remains the legal obligation of the parents. III. Personal Property A. Introduction [ 25 ] As part of their distribution of matrimonial assets, the parties dispute the treatment of two items of personal property. [ 26 ] The first comprises a small part of their household contents. The other is an investment account held by Mr. Price. B.

Art and Furniture [ 27 ] The parties attended a settlement meeting on April 6, 2017, each represented by counsel. Following the meeting, the issues on which they were able to agree were reduced to writing in a term sheet. These included treatment of some household contents being stored by Mr. Price. [ 28 ] The term sheet was initialed by the parties and their counsel. Mr. Price added additional amendments, also approved by the parties (partly in email exchanges). The documentation (“Settlement Agreement”) indicated that Ms.

Rowan would receive two paintings, described as “The Peasant” and “The Large Painting,” two statues, half of the outdoor furniture, the master bedroom suite, kitchen items and her clothing. [ 29 ] Mr. Price later took the position that he did not agree to return these items; and in particular, that Ms. Rowan was not entitled to receive the artwork (two paintings and two statues) because they were owned by Mr. Price’s corporations. [ 30 ] Mr. Price says the Settlement Agreement was meant to be provisional upon all matters between the parties being settled.

That is inconsistent with the entire tenor of the document and the correspondence surrounding it. Also, he argues that, for several reasons, he is not able to provide the property. None of those reasons are convincing and must be dismissed by the fact that effectively he warranted in the Settlement Agreement being able to deliver the property. [ 31 ] The invoices for the artwork state that the purchasers are Ms. Rowan, Mr. Price and Price Industries (with an address which was their personal residence). They show a total purchase price of $25,063.50. Mr.

Price’s corporation (later dissolved) showed no artwork listed as an asset at the material times. [ 32 ] On December 21, 2018, Antonio J. (now J.A.) issued an endorsement in which she stated “I order that the return of personal property shall be effected as indicated in the Post-Nuptial Agreement” (para 3). Having reviewed the record, it is clear to me that her reference was intended to be the April 6, 2018 Settlement Agreement. [ 33 ] In my view, Antonio J.’s order is sufficient basis for a further direction that Mr. Price comply with the Settlement Agreement.

In addition, to the extent necessary, I take into consideration “the terms of an oral or written agreement between the spouses” in making a distribution of property: Family Property Act , RSA 2000, c. F-4.7,

section 8 (g). [ 34 ] Mr. Price is therefore ordered to deliver, in good condition, the artwork, half of the outdoor furniture, master bedroom suite and kitchen items to an address designated by Ms. Rowan’s counsel, no later than one week from the date of the formal order resulting from these reasons. In default, he will pay the amount of $25,063.50 for the artwork and $20,000 for the furniture. C. Empire Life Account [ 35 ] Mr. Price holds an investment with Empire Life which, as of October 11, 2022, had a “current accumulated value” of $83,177.19. [ 36 ] The parties agree that Mr.

Price transferred some pre-cohabitation funds into the account when it was started and that this amount would be exempt from any share of matrimonial property claimed by Ms. Rowan. [ 37 ] They do not agree on what amount is exempt. Mr. Price stated in his affidavit that his exempt contributions were $76,000; Ms. Rowan calculated them at $13,886.92, but varied her position during argument to approximately $16,000. [ 38 ] The evidence on this point is unsatisfactory and incomplete. I am not confident in either party’s

interpretation of the financial reports included as exhibits to their affidavits. To make a finding on this point would be arbitrary on the record before me. I recognize that there is a divisible asset, and that Mr. Price has the obligation of establishing the continued existence of exempt property: Scheffelmeier v Krassman , 2011 ABCA 64 , paras 14-16 . I am satisfied that there is an exemption, in an amount to be determined. [ 39 ] I encourage the parties to obtain the necessary information, if necessary from the financial institutions, and arrive at an agreement. If they cannot agree, they may make further submissions on this point, with additional evidence. IV. Real Property

A. Rental Property: 19 th Street SW [ 40 ] In Mr. Price’s statement of income, assets and liabilities, he placed a value of $800,000 on residential rental property on 19 th Street SW that he owns. His affidavit contains a statement from TD Canada Trust showing an outstanding principal amount of $767,457.65 as of December 30, 2022. [ 41 ] Thus, as of December 30, 2022, there was an equity of $32,542.35, of which Ms. Rowan claims one half. Mr. Price agrees with her claim. B. Matrimonial Home: 37 th Avenue SW 1. Introduction [ 42 ] Ms. Rowan and Mr.

Price are the owners in joint tenancy of their former matrimonial home on 37 th Avenue SW, Calgary. Mr. Price continues to reside there. [ 43 ] The dispute over this property involves a number of issues. Primarily, Ms. Rowan wants it listed for sale immediately. Mr. Price wants an opportunity to purchase it first. [ 44 ] Other issues involve its valuation and an exemption claim of $250,000. 2. Valuation [ 45 ] There are competing appraisals of the property’s value. A court-ordered appraisal set the fair market value as of October 14, 2022 at $900,000.

However, the house needs significant repair before selling at a price in that range. A contractor retained by Ms. Rowan estimated the cost of repairs to be $22,650; Mr. Price has an estimate from another contractor indicating repair costs of $77,029. [ 46 ] Mr. Price obtained an appraisal setting the fair market value at $665,000 as of December 15, 2022. It is stated to be an “as is” estimate but assumes the required repairs and remediations are done, while also indicating Mr.

Price’s estimates of work to be done as one of the sources of data for the appraisal. [ 47 ] Both parties decline to fund the necessary repair work Their different views on what repairs are required may have an effect on their appraisers’ opinions, but those cannot be determined without evidence from the appraisers (which has not been given). [ 48 ] An experienced realtor proposed, by correspondence of March 31, 2023, to Ms. Rowan’s counsel, “an asking price of $799,900.00 reflecting the condition of the home. 3. Exemption Claim [ 49 ] Title to the property has a caveat filed by Mr.

Price’s parents, Eten and Dalia Price, on December 23, 2014. A related certificate of lis pendens was registered on December 20, 2018. The caveat and CLP relate to an amount of $250,000 Mr. Price’s parents advanced to Mr. Price as a down payment when the 37 th Avenue SW home was purchased in 2008. [ 50 ] The exemption was addressed in a “Post-Nuptial Agreement” made between Ms. Rowan and Mr. Price on May 18, 2017 (shortly before separation). In clause 6 the parties agreed that Mr.

Price is entitled to register a caveat for $250,000 against the property but must first discharge the caveat registered by his parents. Further, the agreement states “Guy agrees to indemnify and hold harmless Melissa, on a solicitor and own client basis, for any claim by Eten Price and Dalia Price in resulting trust or otherwise, for any subject matter which formed the basis for [his parents’ caveat].” Finally, Ms. Rowan agreed to Mr. Price having an exemption of $250,000. [ 51 ] In their April 6, 2018 Settlement Agreement, the parties agreed to the following with respect to the 37 th Avenue SW property: iii.

Melissa to get two realtors to provide market valuations iv. Guy to get his parents caveat removed and the CLP/Builders lien [ sic ] v. Property will be listed once the encumbrances are removed. However, the caveat remains on title. In fact, the senior Prices filed a statement of claim to enforce the caveat against both Mr. Rowan and Mr. Price and registered a CLP. Thereafter, without notice to Ms. Rowan, they obtained a consent judgment on November 21, 2018 against Mr. Price after removing Ms. Rowan as a defendant.

The consent judgment required the caveat and CLP to be discharged (which has not happened). [ 52 ] Following these irregular proceedings, Antonio J. included in her November 28, 2018 order a direction that “there shall be no registrations of writs or other encumbrances . . . arising from the Consent Judgment . . . unless otherwise ordered by the Case Management Justice.” [ 53 ] Mr.

Price’s former counsel acknowledged at a case management meeting on November 28, 2018 that there is only one $250,000 amount in issue: the subject of the caveat filed and action commenced by the senior Prices and the amount referred to as an exemption under the Post-Nuptial Agreement. [ 54 ] In

summary, I conclude (particularly from the consent judgment and November 28, 2018 case management order) that

whatever the merits of a dispute between Mr. Price and his parents, it does not form a charge on the property and is not enforceable against any interest of Ms. Rowan therein. 4. Sale [ 55 ] Ms. Rowan applies to have the 37 th Avenue SW property listed and sold. Mr. Price opposes this. The parties earlier agreed to sell the property (April 6, 2018 Settlement Agreement). On May 25, 2018, Mr. Price applied to have the property sold (an application that never proceeded). [ 56 ] Section 9(2) (

b) of the Family Property Act gives the court jurisdiction to order property to be sold and the proceeds divided as the court may direct; and the court may prescribe the terms and conditions of a sale under section 9(3) (d). [ 57 ] Factors supporting an order for sale of a matrimonial home in chambers include where there is no realistic hope that one of the parties can refinance the home to buy out the other party; where the sale may simplify outstanding financial matters or disputes; and where there has been a prior agreement to sell the home: Burns v Burns , 2023 ABKB 174 , paras 35-37 . [ 58 ] As noted, both parties from time to time have taken the position that the property should be sold.

The record makes it clear that neither has the resources to buy out the other. Further, Mr. Price has argued that on his current resources, he cannot afford to pay any additional child support, particularly arrears. [ 59 ] He argues that the property is his home, his children stay with him during his parenting time, and their school is nearby. However, he also owns a house that he uses for rental income (the 19 th Street property) which is in the same neighbourhood.

The income schedules he prepared for child support calculations show that for the years 2019, 2020 and 2021 (2022 not yet prepared) he has incurred a loss on this property. Finally, the 37 th Avenue property has been deteriorating over the years under Mr. Price’s control, as shown by the evidence of need for extensive repairs.. [ 60 ] For these reasons, I direct that the property be listed for sale, on the following terms:

a) Joel Semmens of ReMax Real Estate Central be appointed as listing agent;

b) The listing price shall be $900,000 or such other amount as recommended by the listing agent;

c) The parties shall accept any offers within four percent of the listing price;

d) Mr. Price shall make the matrimonial home available for showings on twelve hours’ notice;

e) Mr. Price shall keep the matrimonial home in a showable condition at all times during the listing; and

f) The parties shall follow any reasonable recommendations of the listing agent with respect to staging and price adjustments. [ 61 ] From the sale proceeds will be paid first the outstanding balance on the mortgage and transactional costs (primarily real estate commissions and legal fees).

From the remaining net proceeds, the sum of $250,000 will be paid into court, subject to a further application between the parties in this action and Eten and Dalia Price regarding distribution and entitlement to the funds. [ 62 ] The balance of the sale proceeds will be divided equally between the parties, subject to an adjustment for Ms. Rowan’s share of the Empire Life account (yet to be determined); Ms. Rowan’s entitlement to $16,043.77 for her share of the equity in the 19 th Street property; and Mr. Price paying child support arrears, unless another satisfactory arrangement confirmed by court order is made.

V.

Summary of Conclusions [ 63 ] As explained in detail above:

a) Mr. Price is liable for child support arrears, in an amount to be determined for base child support and $3,094.58 for special or extraordinary expenses;

b) Ongoing child support will be paid by Mr. Price for three children and by Ms. Rowan for two children, in an amount to be determined based on the guideline incomes set out above;

c) The parties are required to exchange income tax or other income information on or before June 30 th of each year, with adjustments to child support as may follow therefrom;

d) Mr. Price will deliver, in good condition, the artwork, half of the outdoor furniture, master bedroom suite and kitchen items to an address designated by Ms. Rowan’s counsel, no later than one week from the formal order;

e) Ms. Rowan is entitled to an amount of $32,542.35, representing her share of the equity in the 19 th Street property; and

f) The 37 th Avenue property will be listed for sale and the proceeds dealt with according to the directions given above. [ 64 ] The parties may

schedule a further appearance to deal with any matters arising from this decision.

Heard on the 4 th day of April, 2023. Dated at the City of Calgary, Alberta this 1 st day of June, 2023. G.H. Poelman J.C.K.B.A. Appearances: Laurie Tymchuk for the Plaintiff/Applicant Guy Price for the Self-Represented Litigant/Respondent