Lange v Lange, 2023 ABKB 225

Court of King’s Bench of Alberta Citation: Lange v Lange, 2023 ABKB 225 Date: 20230418 Docket: 4803 167164 Registry: Edmonton Between: Monika Teresa Lange Plaintiff - and - Randy Heath Lange Defendant _______________________________________________________ Reasons for Decision of the Honourable Justice J. A.

Fagnan _______________________________________________________ Introduction [ 1 ] The Plaintiff applied in a Special Chambers hearing on March 31, 2023 for an order imputing income to the Defendant for the purposes of ongoing child support, retroactive adjustments to child support for 2014 to 2021 totalling $79,750.98, and retroactive adjustments to spousal support for 2014 to 2019 totalling $94,493. [ 2 ] The Defendant submits that the bulk of these issues should not be dealt with in Special Chambers but rather at trial as the matter is too complex, noting that a Pre-trial Conference has been scheduled for April 25, 2023. [ 3 ] This matter has been heavily litigated for many years.

The parties have changed lawyers over that time. Plaintiff’s counsel was retained days before this application was filed on October 27, 2022. The Plaintiff deposed in her affidavit of October 22, 2023 that she had not received the file. It was clear at the hearing that counsel is not certain whether she has received the entire file from previous counsel.

[ 4 ] The parties’ Special Chambers materials and submissions do not provide a complete picture of the history of this matter. The special application process allows for limited written submissions. Relevant Orders are to be appended to the Concise Letter. Only some prior Orders were attached. I have reviewed a number of additional relevant prior Orders on the court file to attempt to fill in some of the gaps and gain some basic understanding of the history of the matter. Background [ 5 ] The parties met in Poland in 1999.

The Plaintiff was attending university in Poland and completing her Master’s degree in economics. The parties were married in 2001. The Plaintiff transferred to the University of Alberta and completed a Bachelor’s degree in chemical engineering in April 2006. The parties have two children who are now around 15 and 18 years old: Aleksander Melvin Lange - March 8, 2005 Anna-Maria Elizabeth Lange - May 29, 2008 [ 6 ] The Plaintiff is now 48 years old and the Defendant is 54. [ 7 ] The Plaintiff worked as an engineer in training from September 2006 until May 2008.

After the second child was born, she stayed home with the children. [ 8 ] The parties separated on February 15, 2014. The Defendant obtained an Emergency Protection Order (EPO) against the Plaintiff, and she left the home. [ 9 ] The Plaintiff deposes that the parties never reconciled.

She says that after that separation the Defendant lived in the basement working out of town and the parties continued to be separated, but she does not specify the precise timeframe. [ 10 ] An ex parte parenting order was granted by the Provincial Court on February 21, 2014, and was continued on March 14, 2014 before the matter was transferred to this Court. Those orders designated the Defendant as the primary custodial parent. The Plaintiff was to have parenting time as agreed by the parties and supervised at the discretion of the Defendant in consultation with Child and Family Services.

The Plaintiff was ordered not to be under the influence of alcohol or drugs 24 hours prior to or any time during her parenting time. [ 11 ] On March 20, 2014, Browne J. ordered that the Plaintiff have parenting time with the children each Tuesday and Friday from 4 p.m. to 7 p.m. and Saturday from 1 p.m. to 5 p.m. The Plaintiff was ordered to refrain from consuming alcohol prior to or during the exercise of her parenting time. She was ordered to not allow Mariusz Kolodziej to attend at the matrimonial home or be in the presence of the children.

The Plaintiff’s parenting time was anticipated in the Order to increase gradually at the discretion of Child and Family Services. The Defendant was ordered to make uncharacterized without prejudice payments of $5,000/month to the Plaintiff starting on April 1, 2014. Browne J. dismissed the Plaintiff’s application for exclusive possession of the matrimonial home. It is not clear whether both parties were living in the home at the time. The support order suggests the Plaintiff either had moved out or was planning on moving out. [ 12 ] The EPO was vacated on April 14, 2014, the

preamble stating that counsel had advised that there were criminal charges against the Plaintiff arising from the same set of circumstances, the conditions of her recognizance overlapped the terms of the EPO, and the parties wished to vacate the EPO. [ 13 ] The Consent Variation Order of Browne J. dated April 28, 2014 varied the Plaintiff’s weekend parenting time from Saturday from 1 p.m. to 5 p.m. to Sunday from 1 p.m. to 5 p.m. [ 14 ] The Defendant deposes that the parties reconciled in 2014.

The Plaintiff disagrees. [ 15 ] On June 27, 2014, Acton J. granted a Consent Order that the matrimonial home (Blackhawk) be listed for sale, and that the parties relocate to Saskatoon with no application to change the residence for a 10-month period ending June 2015. The Plaintiff was to continue to attend Alcoholic Anonymous meetings and was not to permit Mariusz Kolodziej to be in the presence of the children.

Again, it is not clear if both parties were living in the home at the time of this Order, but it suggests they were by then in a period of attempted reconciliation. [ 16 ] It appears that the move did not occur, or if it did, the parties moved back to Edmonton. Belzil J. granted a Consent Order on September 16, 2014 whereby the parties were to have 50/50 joint custody and the Plaintiff was again ordered not to allow Mariusz Kolodziej to attend the matrimonial home or otherwise be in the presence of the children.

This suggests she was in the home at that time as presumably he would only be attending the home if she were there. Although the details of the living arrangements over time cannot be resolved on the contested and incomplete affidavit evidence before the Court, it seems likely that this order was granted during the time period when the Defendant was living in the home. There is no evidence the Plaintiff worked after separation, so the Defendant would have been responsible for all of the house and living expenses. [ 17 ] The Defendant says the parties separated in April 2015.

He deposed that their reconciliation attempt ended when he discovered on a family vacation to Mexico in April 2015 that Mariusz Kolodziej was a passenger on their plane, despite the Plaintiff having previously agreed, and three prior Orders having directed, that she would not allow him to attend at the matrimonial home or be in the presence of the children. [ 18 ] In fairness to the parties, I will not refer to previous affidavits not included or referenced in the Concise Letters except to note that in an affidavit dated June 3, 2015, the Respondent attached a residential tenancy agreement dated March 1, 2015 with the tenants being Mariusz Kolodziej and the Plaintiff.

[ 19 ] On the parties’ return from Mexico in April 2015, the Plaintiff alleged in an EPO application that the Defendant assaulted her on the trip to Mexico. On April 22, 2015, the parties entered into a Mutual No Contact Order, and consequently that allegation was never adjudicated. The transcript of the ex parte hearing for the EPO was put before the Court by the Plaintiff on this application. It is evidence of the allegation only. [ 20 ] On June 25, 2015, Graesser J. granted a Consent Order for shared parenting week on/week off.

The Defendant was ordered to pay interim “without prejudice” uncharacterized support of $5,000/month starting July 1, 2015. There was a stay of enforcement on arrears for six months. It is not clear what the arrears were at the time nor to what time period they pertained. The Blackhawk home was to be listed forthwith and net proceeds divided equally on a without prejudice basis. The issue of whether a nesting Order was appropriate was adjourned to a future date if the parties could not reach an agreement.

It is not clear who was residing in the home at the time. [ 21 ] In July 2015, the Defendant applied for an order finding the Plaintiff in contempt of certain terms of prior orders.

The Plaintiff applied for an order setting the Defendant’s Guideline Income at $300,000 for s. 3 child support purposes and that the $5,000/month payments be characterized as spousal support. [ 22 ] On August 4, 2015, Topolniski J. ordered a summer parenting schedule, including a term that the Plaintiff was to ensure that during the Plaintiff’s vacation to Cuba, Mariusz Kolodziej not accompany the children nor form part of the vacation, and she was ordered to provide his passport to Defendant’s counsel to corroborate that he was not in Cuba during the vacation. [ 23 ] On November 4, 2015, Ross J. granted an Interim Order, the

preamble of which notes that the Defendant had just lost his contract with Worley Parsons. The shared parenting was to continue until Special Chambers on April 20, 2016. The Defendant was to continue paying the $5,000/month uncharacterized support, as well as the Blackhawk mortgage, property taxes, insurance, gas, and utilities totalling approximately $4,824/month. The Defendant was to pay the Plaintiff interim costs of $10,000 to get the matter to Special Chambers.

The property issues regarding sale of any duplexes, and whether the $5,000/month was child or spousal support were to be dealt with at the Special Chambers hearing. [ 24 ] Little J. was appointed Case Manager. [ 25 ] On January 14, 2016, Little J. ordered that the parties exchange full disclosure and provide those documents to the accountant Mr. Somerville so that he could complete 10 years of outstanding income tax returns of each party and 855887 Alberta Ltd. Both parties were entitled to communicate with Mr.

Somerville to provide input. $200,000 of the Line of Credit (LOC) registered against Blackhawk was to be released to the Defendant’s counsel for distribution as follows: $15,000 to Somerville; $185,000 to each party (presumably divided between them) via their respective lawyer; from the Defendant’s share, outstanding interim litigation costs of $10,000 and the balance owing for December 2015 and January 2016 support were to be paid. The Defendant was to make a formal request of Worley Parsons for a copy of its employee or contractor file for the Defendant or 855887 and provide a copy to Plaintiff’s counsel.

The Defendant was ordered to disclose the amounts he received under the contract. [ 26 ] On June 2, 2016, Little J. ordered particulars regarding exchanges of the children for the week on/week off parenting whereby the Defendant would drop off the children to the Plaintiff at the matrimonial home. He was to receive a credit of $7,500 against ongoing monthly amounts payable to the Plaintiff due to non-payment of rent by the Plaintiff’s sister for the months of February to June 2016 to be effected by the June, July and August 2016 payments being reduced from $5,000/month to $2,500/month. [ 27 ] In the

preamble to the December 13, 2016 Order, Little J. noted that two of the parties’ properties (Bonnie Doon and 70 th Avenue) were expected to be sold. He also noted that there were two prior withdrawals from the Blackhawk LOC, one of $200,000 and one of $70,000. It was reported that the Defendant had started employment in September 2016, earning $11,250/month and that the Plaintiff continued to be unemployed. The provisions of the March 20, 2014 and September 15, 2014 Orders regarding Mariusz Kolodziej were vacated.

Little J. ordered that the net sale proceeds of the Bonnie Doon and 70 th Avenue properties would be applied to the full amount owing on the Blackhawk LOC, noted as being $273,470.45 as of December 13, 2016. From the remaining net sale proceeds, the following were ordered to be paid: support arrears to MEP, mortgage arrears on Blackhawk, all outstanding taxes and utilities on five properties including Blackhawk, Bonnie Doon and 70 th Avenue and the Defendant’s LOC.

Once those payments were made, Blackhawk was to be transferred to the Plaintiff as an interim distribution if she qualified for a mortgage, and she was to take over all payments. The $5,000/month payments were characterized as $3,000/month in spousal support and $2,000/month in child support, on a without prejudice basis. $50,000 was to be paid to Mr.

Somerville from the remaining net sale proceeds. [ 28 ] On December 15, 2016, Little J. signed the Divorce Judgment, severing the corollary relief. [ 29 ] On April 19, 2017, Little J. ordered transfer of certain properties on a without prejudice basis as to the valuation or amount of equity in each of the properties or any other issues or other factors the parties may wish to raise such as possible overpayment of child or spousal support. Blackhawk and a rental property in Glenora were transferred to the Plaintiff. A Belgravia rental property and a Mexican condo were transferred to the Defendant.

Little J. amended the date for child support ($2,000/month) and spousal support ($3,000/month) referred to in the December 13, 2016 Order to March 1, 2017 instead of January 1, 2017. The Defendant was to use his best efforts to obtain the outstanding Statement of Adjustments from the sale of the parties’ Sherwood Park property by May 15, 2017 and to provide it to Mr. Sommerville. The Plaintiff was to review and approve or comment on Mr. Sommerville’s draft accounting paperwork by May 15, 2017.

The remaining net sale proceeds of the Sherwood Park property were to be split equally between the parties by April 30, 2017. The parties were to undertake a PN7 Voice of the Child Intervention focusing on whether the children wished to have a week on/week off parenting regime, or a two week on/two week off regime. [ 30 ] On September 28, 2017, the Plaintiff transferred title to Blackhawk to Mariusz Kolodziej for $10,000. In oral submissions in this special hearing, counsel stated that the Blackhawk sale was later reversed due to problems with the bank.

On the same date in September 2017, the Plaintiff transferred title to the Glenora rental property valued at $600,000 to Mariusz Kolodziej for no consideration; in March 2018, he sold it for $650,000. The Defendant deposes the sale of that rental property would have yielded $550,000 but the Court does not have access to supporting documentation in relation to the sale.

[ 31 ] The

preamble of Little J.’s June 3, 2019 Order indicates that $55,000 remained from sale of a Belgravia property and was held in trust as security for support payments. As of May 1, 2019, there were MEP arrears of $46,623.59 owing to the Plaintiff. Little J. found that the Defendant was capable of earning $100,000/month despite his various periods of unemployment. Little J. also found that the Plaintiff may have some entitlement to compensatory support but that there did not seem to be an entitlement to non compensatory support at that time, and that these issues may be dealt with at trial.

Little J. ordered that the Defendant continue to pay s. 3 child support of $2,000/month based on an income of $100,000 with no set off as there had not been shared parenting since June 2017. He ordered that the sum of $46,623.59 be paid from trust to MEP to be applied to the arrears of the Defendant. A further $5,000 was to be paid from trust to be applied to the June 2019 support payments. The balance of $3,376.41 in trust was to be released to the Plaintiff as a credit to the Defendant at MEP.

Interim spousal support was reduced as of July 1, 2019 to $1,500/month until October 1, 2019 at which time it was to be reduced to $500/month. The Plaintiff was to file an Affidavit documenting her efforts to remove the Defendant from the Blackhawk mortgage. The Defendant was ordered to comply with his outstanding undertakings by August 1, 2019 failing which the Plaintiff could apply for relief. [ 32 ] In November 2019, a forensic report by Mr. Thoman was produced regarding the Defendant’s income from 2014 to 2017. The Defendant says this Report was produced without input from him.

A revised Report is dated April 14, 2020 addressing his income from 2014 to 2018. Counsel advised during this Special Chambers hearing that there was questioning of both Mr. Thoman and the Defendant in October 2020, but no related transcripts were provided. [ 33 ] On July 8, 2020, Yungwirth J. signed a Consent Variation Order which noted in the

preamble that the Defendant had no income in 2020 other than CERB benefits. Pursuant to that Order, the Defendant’s child support was reduced from $2,000/month to $1,250/month starting July 1, 2020. Spousal support was reduced from $500/month to zero. There was a reservation of spousal support. There was a stay of enforcement of child and spousal support arrears on the condition that the Defendant pay ongoing child support of $1,250/month which would be the amount payable on an income of $85,313.

The Defendant was to provide the Plaintiff each month the particulars concerning his attempts to find employment, and all government receipts or benefits or any other sources of income received personally or through a corporation. Upon receipt of employment or a contract, either party was entitled to seek a review of child support.

Summary of past support ordered [ 34 ] Based on the prior court Orders and the incomplete information before the Court, I calculate that the Defendant has been responsible for: 2014: 9 months of $5,000 uncharacterized support = $45,000 (although it is not clear if this continued during periods of reconciliation when the Plaintiff would have been back in the home) 2015: 12 months of $5,000 uncharacterized support = $60,000 2 months of Blackhawk expenses of $4,824 = $9,648 (since there is no suggestion the Plaintiff ever contributed financially to the house expenses, the Defendant would have essentially been responsible for those expenses from separation in April 2015, representing at least another $34,000 – there is nothing in the November 2015 Order to pay expenses which would indicate what, if anything, was unpaid at that time) 2016: 12 months of $5,000 uncharacterized support = $60,000 less $7,500 as a result of rent not having been paid by the Plaintiff’s sister 12 months of Blackhawk expenses of $4,824 = $57,888 2017: 2 months of $5,000 uncharacterized support = $10,000 10 months of $2,000 child support = $20,000 10 months of $3,000 spousal support = $30,000 At least 5 months of Blackhawk expenses of $4,824 = $24,120 (unknown precisely when it was transferred to her; it was ordered to be transferred on April 19, 2017; she transferred it to her partner in September 2017) 2018: 12 months of $2,000 child support = $24,000 12 months of $3,000 spousal support = $36,000 2019: 12 months of $2,000 child support = $24,000 6 months of $3,000 spousal support = $18,000 3 months of $1,500 spousal support = $4,500 3 months of $500 spousal support = $1,500 2020: 6 months of $2,000 child support = $12,000 6 months of $1,250 child support = $7,500

6 months of $500 spousal support = $3,000 2021: 12 months of $1,250 child support = $15,000 2022: 12 months of $1,250 child support = $15,000 2023: 4 months of $1,250 child support = $5,000 Total uncharacterized: $167,500 Total child support: $122,500 Total spousal support: $93,000 Grand Total support: $383,000 Blackhawk expenses: $91,656 / 2 = $45,828 (total expenses would increase to $125,656 if one includes from April 2015 to the first Order to pay those expenses; the Defendant calculates he paid total of around $120,000) [ 35 ] Therefore, the Plaintiff would have received under the Orders at least $383,000 in support plus the benefit of some portion of the Blackhawk expenses and the equity (unknown) in Blackhawk and the Glenora rental property.

As the Defendant notes, the Blackhawk property would not be subject to capital gains tax. [ 36 ] It is against this backdrop that I will consider the Plaintiff’s application. Analysis Retroactive Child Support [ 37 ] For the purposes of child support, it appears that the Defendant had primary care of the children for seven months until September 2014 when the parties were granted 50/50 custody, but they likely subsequently mostly lived in the same house with the children from that point in time until April 2015. [ 38 ] The Plaintiff submits that no prior order set a Guideline Income for the Defendant.

However, the Order of Little J. of June 3, 2019 did set his income at $100,000. The Order of Yungwirth J. effectively set his income at around $85,313. [ 39 ] The Plaintiff hired Mr.

Thoman to calculate the Defendant’s income from 2014 to 2017 and relies on that Report for the proposition that the Defendant has received and continues to receive income he is not reporting: in 2015, he had $237,625 in earnings from Worley Parsons; in 2016, there were deposits from unknown sources of $350,965; in 2017, there were deposits in of $27,508 from unknown sources. [ 40 ] The Defendant submits that the Thoman Report is not properly before the Court as an expert report. Further, he argues that Mr.

Thoman included all credit advances, characterizing them as hidden income, and made incorrect assumptions. [ 41 ] The Thoman Report was produced in November 2019, and a revised Report was produced around six months later – in April 2020. [ 42 ] The Plaintiff says that Mr. Thoman was questioned on his Report in October 2020, more information was provided and he revised the Report. However, the revised version before the Court is dated April 14, 2020. There is no revised Report after October 2020. No relevant questioning transcripts have been provided. [ 43 ] It is clear from the Report that Mr.

Thoman was of the view that there were suspicious circumstances that would suggest the Defendant had more income than was declared on the personal and corporate tax returns prepared by Mr. Somerville. [ 44 ] Mr. Thoman was critical of the 2015 Worley Parson bonus being deposited directly to the Defendant’s personal account. The Defendant attaches a letter from Scotia Wealth Management indicating that this was done in error. [ 45 ] Mr.

Thoman noted large deposits on January 2016 ($50,000), February 2016 ($208,550) and March 2016 ($51,351), as well as some other smaller amounts and opined that these should be possible additions to income. However, it appears from the December 13, 2016 Little J. Order that at least $270,000 was borrowed on the Blackhawk LOC prior to that time; one withdrawal of $200,000 pursuant to the January 14, 2016 Order and one of $70,000 – the date is not indicated.

That LOC, the balance of which was $273,470 as at December 13, 2016 was to be paid out by proceeds of two other properties, and the remaining proceeds were to be paid as directed by Little J.’s Order, including $50,000 to Mr. Somerville. Presumably these transactions took place between December 2016 and Little J.’s Order of April 19, 2017. It is not clear how those funds may have flowed through the Defendant’s accounts, but the large deposits noted by Mr. Thoman in the relevant time period would somewhat consistent with those significant transactions during that same time period. [ 46 ] Mr.

Thoman also added in capital gains of $83,882 in 2017, however under case management orders, real properties were to be sold as indicated in the December 2016 Order and Little J. directed that those proceeds be paid out in various specific ways. It is not clear whether the capital gains should be included in income for 2017. [ 47 ] Mr. Thoman calculated the Defendant’s income without adding his list of “possible additions to income” as being:

2015 $352,139 2016 $16,087 2017 $175,749 (if capital gains are removed = $91,867) 2018 $85,313 [ 48 ] The Plaintiff argues that the Defendant should be imputed the following Guideline Income: 2015 $413,001 2016 $367,052 2017 $203,257 2018 $107,697 2019 $102,540 2020 $ 19,248 2021 $ 19,727 [ 49 ] It is not disputed that by April 2016, the Defendant had been laid off from Worley Parsons, nor that he received bonuses in 2015 of $237,625 under that contract. He says that $196,394 was received on January 16, 2015, which is consistent with the information reflected in

Schedule 1 to the Thoman Report. This was prior to the final separation in April 2015. There is no evidence that he has received similar bonuses after the Worley Parsons contract ended. [ 50 ] The Plaintiff submits that during the marriage, the Defendant worked on projects that would provide an income of over $350,000. He would receive large bonuses at the end of the project and use those funds to purchase rental properties. The Plaintiff’s evidence therefore suggests the January 2015 bonus received prior to April 2015 would likely have been invested in rental properties.

The prior Orders reveal that the parties had numerous rental properties at the time of separation. As noted, a number of rental properties were sold under case management and one rental property and Blackhawk were transferred to the Plaintiff. [ 51 ] The Defendant submits that the 2015 Worley Parsons bonus of $226,309 should be dealt with separately, presumably meaning as something other than income for support purposes.

It is not clear whether the bonus received prior to separation should be included in his 2015 income for support purposes. [ 52 ] The Defendant deposes that he struggled to replace the Worley Parsons income. [ 53 ] As previously noted, in June 2019, Little J. imputed an income of $100,000. In June 2020, Yungwirth J. effectively imputed an income of $85,313. [ 54 ] The Defendant deposes that in 2020, he did not have work.

He collected Covid CERB benefits and took out a loan/inheritance advance from his mother to pay child support and to support his new wife and their infant daughter. [ 55 ] The Defendant submits that he should be attributed the following as Guideline Income: 2015 $164,493 2016 $33,633 2017 $119,656 2018 $93,556 2019 $102,540 2020 $19,248 ($85,400 was imputed by Yungwirth J Order) 2021 $19,727 ($85,400 was imputed) 2022 $40,000 ($85,400 was imputed) [ 56 ] The amounts proposed for 2015 to 2018 are higher than what I have outlined from the Thoman Report. [ 57 ] The Defendant calculates the total child support which would have been owing for those years at $133,911 (not including child support on the 2015 bonus). [ 58 ] As previously noted, the Interim Orders would have made him responsible for paying $122,500 in child support in addition to uncharacterized support of $167,500 in addition to house expenses. [ 59 ] Plaintiff’s counsel submitted that all of the uncharacterized support should be allocated to child support.

However, it does not

appear that her calculations included arrears paid pursuant to court order. For example, she states 0 was paid in 2015 and roughly $17,000 in 2016. But $60,000/year would have been payable in uncharacterized support each year until partway into 2017. [ 60 ] No statement of current arrears was provided. Defendant’s counsel submitted that current arrears are approximately $15,000 and remain stayed under Yungwirth J.’s 2020 Order as the Defendant has consistently paid child support as per that Order.

Plaintiff’s counsel says the Defendant should have provided a a copy of the MEP statement, but presumably both parties have access to that information. The Court again is left with incomplete information. [ 61 ] The Plaintiff claims a retroactive adjustment to child support of $79,750.98 in addition to what has been paid. There is no evidence the children were in the Plaintiff’s primary care or a shared regime during a time when one parent was outside the matrimonial home in 2014.

If $18,550 is deducted from the Plaintiff’s table in relation to proposed adjusted support for 2014, as, the total adjustment would be reduced to $61,200.98. [ 62 ] The uncharacterized $5,000/month support was eventually allocated on the basis of 2/5 being child support and 3/5 being spousal support. The Plaintiff says all of the uncharacterized support should be allocated to child support.

Even if one considers only 2/5 of uncharacterized support as being attributable to child support, 2/5 or $67,000 of the uncharacterized support payable is more than the $61,201 sought. [ 63 ] The application for an interim retroactive adjustment of child support is dismissed.

Retroactive Spousal Support [ 64 ] The onus is on the Plaintiff to establish entitlement and quantum of spousal support. [ 65 ] The Plaintiff submits that she has an entitlement to both compensatory and non- compensatory spousal support from separation - which she says occurred in February 2014 - until December 31, 2019. [ 66 ] The Plaintiff deposes in her affidavit of October 27, 2022 that the parties made a mutual decision for her to stay at home after working as an engineer in training.

She deposed that her education is now obsolete, and she would have to return to university to retrain. [ 67 ] The Defendant deposes that the parties agreed the Plaintiff would stay home with the children until they began school at which time she would return to work. He deposes that he paid for several training courses including futures trading and

schedule planning software, but she never pursued these opportunities. He takes the position that she has had the means since separation to upgrade her education and pursue employment opportunities but has neglected to do so. [ 68 ] For the purposes of spousal support, it appears that the parties were physically apart starting February 15, 2014, back together at least by June 2014 and then separated for good in April 2015.

The children were around 7 and 10 years old, and therefore school age, in April 2015. [ 69 ] She deposes her income has been: 2019 $433 2020 $1,222 2021 $686 [ 70 ] This income information provided by the Plaintiff in her affidavit relates to 2019-2021, whereas her retroactive support claim ends in 2019. Her budget information relates to 2022. [ 71 ] It is likely she is entitled to compensatory support as her role enabled the Defendant to pursue his career. Non-compensatory support requires a needs and means analysis. [ 72 ] The children were school-aged when the parties separated.

There is no evidence that she has sought employment since separation. She is clearly capable of gainful employment, given that she achieved a Masters degree in economics in Poland, and a degree in Chemical Engineering at the University of Alberta. Full-time minimum wage (unskilled) employment amounts to around $30,000/year. [ 73 ] The Plaintiff is asking for spousal support terminating in 2019 due to re-partnering. However, it is not clear when she re- partnered. Mariusz Kolodziez has been in the picture since prior to the separation and she transferred two properties to him in 2017.

The Defendant deposed that he learned in May 2017 that Mr. Kolodziez was living in the matrimonial home rent free. He deposes that she has cohabited with her partner for at least seven years. [ 74 ] The Plaintiff says the Defendant owes $94,493 beyond what has been paid, based on adjusted spousal support not including any of the uncharacterized support. By my calculations on the incomplete information provided, the Defendant has been ordered over time to pay $93,000 in spousal support in addition to $167,500 in uncharacterized support, 3/5 of which would be $100,500, for a total of $260,500.

Again, the $100,500 representing 3/5 of the uncharacterized support exceeds the amount sought, and the Court has not been provided with any reliable actual current arrears information, although Defendant’s counsel submitted that $15,000 is owing. [ 75 ] I note the Defendant also paid $91,656 in matrimonial home expenses (half of which would amount to $45,828). [ 76 ] As well, it is not disputed that the Plaintiff received an income generating revenue property in 2017 and then promptly divested herself of it for no consideration. Her 2022 budget includes housing/rent/mortgage of $2,200/month.

Again, this budget does not relate to the time period for which she is seeking spousal support, but it begs the question as to whether she had an opportunity to put

herself in a mortgage-free position as a result of the properties transferred to her, and if not whether more modest accommodation would have been reasonable. As well, she is apparently re-partnered – it is not clear if the $2,200/month reflects her portion of shared costs or both of their housing expenses. [ 77 ] She says the parties have completed their property division, but also argues that the expenses the Defendant paid for the matrimonial home would properly be addressed in relation to the division of property and not spousal support.

Interim orders cannot affect a final property distribution barring some sort of binding agreement between the parties and Little J.’s Order transferring properties to each one was expressly without prejudice including as to arguments of overpayment of support. Therefore, property division appears to remain a live issue. [ 78 ] It appears that substantial sums were paid toward support arrears from time to time from monies coming from sale of properties. There may be an argument for unequal division of matrimonial property if lump sums toward support were paid out of LOC advances or net sale proceeds.

However, at least some of the Orders took arrears out of the Defendant’s share of proceeds. [ 79 ] Significantly, neither party provided a draft property statement.

The issue of property is not before the Court on this application, the history of prior distribution of property and where the parties now stand is essential to an understanding of the equities in terms of spousal support. [ 80 ] In addition, on the issue of property, there is a question of liability for significant taxes owing. [ 81 ] As noted, the parties had their corporate and personal income tax returns prepared by Dale Somerville for 2005 to 2014 as ordered by Little J. Mr. Somerville split the corporate dividends between the parties to maximize the tax advantage.

The Defendant has submitted both corporate and personal income tax returns to CRA and received back the Notices of Assessment. The Defendant says the Plaintiff has not fully cooperated with Mr. Somerville as ordered by Little J. on January 14, 2016, June 2, 2016, and April 19, 2017. Nor has she signed her 2005 to 2014 tax returns which Mr. Somerville prepared with the most tax effective splitting of corporate dividends to minimize overall tax liability. As well, she has not paid Mr.

Somerville so he is doing no further work. [ 82 ] The Defendant deposes that the parties have an estimated joint marital income tax debt with Canada Revenue Agency of about $800,000, with an accumulated six years of interest and penalties as a result of the Plaintiff’s refusal to co-operate with Mr.

Somerville. [ 83 ] The Plaintiff deposes that the taxes were filed, and she is in communication with CRA regarding the assessment. [ 84 ] The Plaintiff received a letter from CRA dated December 16, 2019 stating that the CRA determined she had received a benefit in the amount of $948,787 by way of dividends paid by 855887 in 2005, 2006, 2009, 2010, 2011, 2013, 2014, 2015, 2016, 2017 and 2018, and the CRA was considering assessing her for $74,988.26.

She says it is not clear what taxation years this pertains to and she does not have a breakdown for what owing for what years. [ 85 ] A further letter dated December 16, 2019 to the Plaintiff states that 855887 transferred dividends to her in 2016 and 2017 in the amount of $18,277, and CRA was considering assessing her for $7,172.61. [ 86 ] A letter dated February 16, 2023 from CRA to the Defendant demands payment of $468,843.79, payable within 14 days. [ 87 ] The amount of the total tax liability which relates to tax years prior to April 2015 is not clear.

However, it appears that the Defendant was likely a T4 employee in 2017 and 2018. [ 88 ] Further, the Plaintiff deposed that the Defendant historically earned an income in excess of $350,000. The Plaintiff takes issue with dividends being assigned to her after the date of separation when she had no access to the company or accounts. However, given the evidence before the Court, it is likely that much of the dividend income the Plaintiff was deemed to have received as indicated in the CRA letter to her of December 16, 2019 related to the years prior to separation.

She also deposed that his bonuses during the relationship were invested into rental properties. There is no suggestion that he dissipated his income or their matrimonial property. [ 89 ] It is reasonable to conclude that the taxes owing in relation to the period from 2005 to April 2015 are likely to be characterized at trial as joint matrimonial debt.

However, the Court does not have detailed information in relation to the tax debt and the years to which it relates and therefore is not in a position to assess how that liability may affect division of property and in turn spousal support. [ 90 ] The Plaintiff has divested herself of a rental property for no consideration that might have been available to pay for whatever portion of that joint debt is ultimately allocated to her. Her counsel suggested she had to transfer assets to avoid losing them to CRA.

That is not a justification for increased support or an unequal division in her favour of the CRA liability relating to the period of cohabitation in an eventual property division. [ 91 ] The application for an interim retroactive adjustment of spousal support is dismissed. Ongoing Child Support [ 92 ] The Defendant deposes that he lives in Calgary with his new partner and young child and has found work in Saskatchewan with a Manitoba company, Industrial Solutions Inc, requiring him to travel back and forth.

The Defendant apparently entered into a contract with Industrial Connections Machinery on March 9, 2022 and has incorporated a new corporation and agreed to defer payment of his invoices until December 2022 in order to assist with the company’s cash flow. He deposed that the remuneration is $10,000/month and reasonable expenses are approximately 25% of this total for a net income of $7,500/month or $90,000 per year which he proposes should be his Guideline Income for March 2022 to December 2022. However, no documents have been attached as exhibits to support his claimed 25% of expenses.

[93] The Plaintiff says his income should be imputed at $350,000 per year with child support payable in the sum of $4,773.00. ThePlaintiff argues that if the Defendant is actually working for $10,000/month with no bonus options, then he is under-employed, relyingon Peters v Atchooay, 2002 ABCA 347, and therefore income should be imputed under s 19(1)(

a) of the Guidelines. [94] The Plaintiff argues that the Defendant has consistently refused or delayed providing his disclosure.

She says that although hewas to report his employment attempts following the July 8, 2020 Order, she received nothing from him. [95] While there were various Orders that the Defendant provide disclosure, it appears from the Thoman Report, which theDefendant says was prepared without his input, that significant disclosure was available as outlined in the Report and schedules thereto. [96] The Plaintiff argues that the Defendant has worked as a Senior Project Manager and his profile confirms he continues to be aManager in Construction with FWS Group and ALIS indicates that the average wage for a Construction Manager is $50.61/hour or anannual salary of $103,970 with a Senior Manager earning on average $102.41/hour or an annual salary of $210,385. [97] She does not believe his sole compensation is accurately set out in the current employment contract.

He has not provided anyverification of payment or expenses in his update affidavit regarding his current contract. [98] The Plaintiff argues that line 150 of his personal tax returns is not an appropriate income for a Shareholder/Director. ThePlaintiff relies on FCSG s 18(1), Sweezey v Sweezey, 2016 ABQB 131 and Cunningham v Sevigny, 2017 ABCA to the effect that theonus is on the shareholder to justify the deductions from the business or corporation's gross revenues.

She says that nothing else has beenprovided as to corporate income and how to address the extra payments, expenses, and dividends. [99] Alternatively, the Plaintiff submits that the minimum Guideline Income should be $120,000 with s 3 child support payable inthe sum of $1,735.00, and a requirement that the Defendant immediate notify the Defendant of any bonus paid. [100] The Plaintiff acknowledges in her Concise Letter that the Defendant is currently contracting through a new numberedcorporation, 2444235 Alberta Ltd, which was incorporated on July 8, 2022. [101] The Defendant points out that he will not have year end financials for this new corporation until the summer. [102] In broad strokes, the Defendant was laid off from Worley Parsons, he did ultimately find work as an employee, his work wasaffected by Covid, and he has managed to increase his income since then.

There is nothing to suggest he would be eligible for an end ofproject bonus at this point in time or in the immediate future. He has taken on work out of province.

I am not satisfied on the evidencecurrently before the Court that the Defendant is currently underemployed. [103] The Court is not in a position on the evidence before it to estimate what expenses should be deducted in relation to travel. [104] On a without prejudice basis pending provision of more detailed information regarding expenses and of course, subject tovariation up or down at trial on better evidence, the Defendant’s income is set at $120,000/year. This is in keeping with the Plaintiff’sposition in the alternative.

It is also within the range of compensation put forward by the Plaintiff for a Construction Manager’s income. Appropriateness of Special Chambers to address retroactive support adjustments [105] I have outlined a number of factors that speak against dealing with retroactive interim adjustments to child and spousal supportin this matter. Although I have found no sufficient basis to make such adjustments, this determination is made on an inadequate record. [106] As noted at the outset, this matter has been heavily litigated for many years. The parties have changed lawyers throughout thattime.

Plaintiff’s counsel was retained days before the application was filed and it is not clear that she has the entire file from previouscounsel. The Special Chambers materials and submissions do not provide a complete history of this matter. The Special Applicationprocess allows for only limited written submissions. Relevant Orders are supposed to be appended to the Concise Letter. Only someprior Orders were attached.

I have reviewed a number of other prior Orders on the Court file to attempt to fill in some of the gaps andgain an adequate understanding of the history of the matter, however this is unsatisfactory as counsel did not address them. Both counselreferred to documents that are not before the Court.

Although a number of Orders dealt with interim distributions of significant property,no draft property division statements were provided on this Application, nor any information as to the equity in real property at the timeof transfer or a detailed accounting as to the amount of support arrears which were paid over time through proceeds of sale. [107] The Plaintiff essentially asks the Court to revisit numerous Interim Orders in a further Interim Order. Interim orders are onlytemporary and tend to be estimates based on incomplete evidence. Such orders must often be made on a paper record.

It is impossible toresolve disputed issues of credibility on a paper record. The eventual trial judge has the jurisdiction, as well as the responsibility, torevisit the amount of support ordered on an interlocutory basis back to the effective date of the first interim order.

Final orders, becausethey are final, are usually only made on undisputed paper records, or after viva voce trials: MacMinn v MacMinn (1995), (AB CA), 174 AR 261 (CA); Barter v Barter (1996), 1996 ABCA 248 , 42 Alta LR (3d) 221; Walker v Walker, 2001ABCA 106; Phillips v Phillips, 2005 ABCA 44; Lapp v Lapp, 2008 ABCA 15; Hartley v Del Pero, 2010 ABCA 182; Kerslake vKerslake, 2016 ABCA 150; Anand v Anand, 2016 ABCA 23; FJN v JK, 2019 ABCA 305; AAA v KN, 2020 ABCA 141. [108] Since orders are presumptively valid, a parent who pays in accordance with an interim order, even knowing that it might bevaried at trial, will generally not have engaged in "blameworthy conduct": Durocher v Klementovich, 2013 ABCA 115 citing DBS atparas 65, 108. [109] Numerous material facts will need to be explored and resolved at the trial of this matter requiring further information relating toa number of issues, including but not limited to: - the dates of separation/reconciliation

- support/house expense arrears owing at various material times - appropriate allocation of uncharacterized support as child support, spousal support or property division or a combination thereof - characterization of Worley Parsons bonuses received prior to April 2015 as matrimonial property or income for support purposes - reasonableness of the Defendant’s efforts to seek employment in the years following being laid off by Worley Parsons - an accounting of the net sale proceeds from sale of real property - where the net sale proceeds went and how they should be characterized - characterization/treatment of capital gains attributed to the Defendant on properties sold to third parties under case management - how past LOC withdrawals should be treated - the values of the real property transferred to each party and the impact of differing tax treatment on those values - the mortgage balances on those properties at the time of transfer and other relevant times - explanation as to what happened to the proceeds of the rental property transferred to the Plaintiff and then to her partner - entitlement to spousal support and quantum for various periods - steps toward self-sufficiency taken by the Plaintiff - the date of re-partnering by the Plaintiff - draft statements of property division; what was sold, what debts were paid, what was retained and by whom, what family debt was and is still owing - details regarding the tax debt relating to the period prior to separation and allocation of that tax debt - the parties’ needs and means since 2014. [ 110 ] Interim orders are intended to meet immediate need.

If there was an immediate need, this could have been dealt with years ago. In fact, the Plaintiff applied as early as July 2015 to impute an income of $300,000 to the Defendant. The Thoman Report was issued in November 2019 and revised in April 2020, both dates preceding the most recent Child Support Order of Yungwirth J. on July 8, 2020. Apparently, questioning occurred in October 2020. It is now April of 2023. [ 111 ] The Plaintiff argued that Special Chambers is an appropriate forum as this matter may never get to trial.

There is no agreement between the parties that the Court grant a final order in this Special Chambers Application. A Special Chambers hearing with no oral evidence, on partial issues and on inadequate evidence is no substitute for a proper trial of this matter. The parties ultimately have control over whether or not this goes to trial, or alternatively to arbitration. [ 112 ] I hope that this decision will be of some assistance to the parties in moving forward toward final resolution.

Conclusion [ 113 ] The applications for interim retroactive adjustments to child support and spousal support are dismissed. [ 114 ] On a without prejudice basis, the Defendant’s income is set at $120,000 for the purposes of ongoing child support, starting May 1, 2023. He has an ongoing duty to provide income disclosure. [ 115 ] Costs of this application are in the cause. Heard on the 31 st day of March, 2023. Dated at the City of Edmonton, Alberta this 18 th day of April, 2023. J. A. Fagnan J.C.K.B.A.

Appearances: Diane Ridley for the Plaintiff William J. Coll for the Defendant