Ma v Xu, 2023 ABKB 346

Court of King’s Bench of Alberta Citation: Ma v Xu, 2023 ABKB 346 Date: 20230607 Docket: 4803 171512 Registry: Edmonton Between: Jun Dong Ma Plaintiff - and - Jun Xu Defendant _______________________________________________________ Memorandum of Decision of the Honourable Justice L.M. Angotti _______________________________________________________ [ 1 ] Jun Dong Ma and Jun Xu were married on January 18, 2001. They have been separated since 2012. They had one child, born June 22, 2002, who is currently attending post-secondary schooling. They immigrated from China to Canada in 2009.

On March 4, 2012, the parties separated, although Mr. Xu continued to live in the matrimonial home with Ms. Ma and their child until November 30, 2016. They obtained a Divorce Judgment on November 26, 2019, but their property division and child support matters remained outstanding. [ 2 ] The issues before the Court in this trial are:

a) Retroactive child support from November 1, 2016 to June 30, 2024, based upon income Ms. Ma seeks to have imputed against Mr. Xu;

b) Property division, including both matrimonial assets and matrimonial debt. [ 3 ] The trial was conducted with a Mandarin interpreter, as both parties' native language is Mandarin. At the trial, Ms. Ma was represented by counsel and Mr. Xu represented himself. [ 4 ] Overall, I found Ms. Ma to be a credible and reliable witness. Her evidence was fairly consistent and she was not shaken on cross-examination, nor was she shown to be in error or exaggerating with her evidence. [ 5 ] However, I did not find Mr. Xu to be a credible witness.

His evidence was sometimes self serving, such as blaming his lawyers for entering into consent orders or judgments without ensuring his proper understanding or using "fake income" or wrong information. It was sometimes unbelievable, such as his evidence that he had forgotten the passwords to his online banking access for his Chinese bank accounts, but that it was impossible for him to obtain new passwords without actually going back to China.

He was dishonest at times, testifying that he could not obtain the court ordered disclosure from China as he was unable to travel there, yet admitting in cross examination to being in China and dealing with the Chinese banks mere days after he was in this Court when such a disclosure order was granted. He testified that he had to pay significant funds to his lawyer as compared to Ms. Ma who had Legal Aid, but then admitted later in cross-examination that he had obtained counsel through Legal Aid also.

At times, his testimony was not supported by documentary evidence, such as his attempts to find employment or what he did with the proceeds from the sale of the China Property. Therefore, where the parties' evidence differs, I accept Ms. Ma's evidence over that of Mr. Xu and at times I do not accept Mr. Xu's evidence, even when it is the only evidence on a certain point. Property Division [ 6 ] Both parties seek an equal sharing of the matrimonial property and debt. Neither party is claiming exemptions of any kind.

The parties disagree how the equal sharing is to be calculated and whether certain claims constitute matrimonial property. [ 7 ] One of the issues is the date of valuation. It is well established in Alberta that matrimonial property is to be valued at the date of trial, not the date of separation: Hodgson v Hodgson , 2005 ABCA 13 at paras 9 and 10 . At the start of trial, Ms. Ma advised that she sought valuation of the property as of November 30, 2016, when Mr. Xu moved out of the matrimonial home. Mr. Xu agreed that this should be the date of valuation. In closing submissions, Ms.

Ma suggested that the Court could find another date for valuation, but remained prepared to use the date of November 30, 2016. The only evidence that I have with respect to the two major assets (both residential properties) comes from November 2016 and March 2017, respectively. The suggestion at the end of trial that another valuation date be used (and not even the date of trial) is thus problematic and unfair. At the beginning of the trial, the parties sought the same valuation date.

While this was not a formal agreement as provided for in ss 37 and 38 of the MPA , I note that agreement by the parties for a particular date for valuation may be grounds to depart from valuation as of the date of trial: Hodgson at para 27 ; Stuve v Stuve , 2019 ABCA 142 at para 10 . [ 8 ] Mr. Xu submitted that equal sharing should be calculated by giving Ms. Ma the residence she currently maintains as an asset and Mr. Xu property he sold as an asset. From Ms. Ma's asset value would be deducted the outstanding mortgage and the debt owed to Ms. Ma's family. From Mr.

Xu's asset value would be deducted a tax payment and the debt owed to Mr. Xu's family. By this method, Ms. Ma would then have an asset value approximately $2,700 less than the asset value of Mr. Xu, so the equalization payment would be $1,350 payable by Mr. Xu. However, that is not the appropriate method for calculating a division of property. [ 9 ] The property division of the parties is governed by the Matrimonial Property Act , RSA 2000, c M-8 (“ MPA ”).

In Hodgson at para 18-21 , the Alberta Court of Appeal summarized the four-step process set out in the MPA to be followed to achieve a just and equitable division of the matrimonial property owned by the parties at the date of trial: Step One: Determine all the property owned at the date of trial (in this case, I will use the agreed upon valuation date of November 30, 2016). Step Two: Determine what property falls under s 7(2) (in this case, there is no property that falls under s 7(2)). Step Three: Determine what property falls under s 7(3) (in this case, there is no property that falls under s 7(3)).

Step Four: Divide the balance of the remaining property equally unless it would be unjust and inequitable to do so considering the factors set out in s 8. The courts are properly reluctant to interfere with the principle of equality on s 7(4) property. It is open to the trial judge to do so, however, where equal division would be unjust and inequitable.

Step One: Determine all of the property owned (including debts) [ 10 ] In determining matrimonial property, it is net matrimonial property that is considered, such that matrimonial assets are determined, matrimonial debts are determined, and the net amount is then distributed: Carmichael v Carmichael , 2007 ABCA 3 at para 21 . [ 11 ] Throughout the trial, values for various assets or debts were given in RMB value (RMB stands for Renminbi, which is another word for the Chinese Yuan, the formal form of Chinese currency). Mr.

Xu argued that, as currency rates fluctuate, the value of any assets or debts that originated in RMB should be calculated in that currency or, in the alternative, that the proper exchange rate for the appropriate time needed to be used. However, it is not possible to fairly divide assets without converting their value to the same currency. In fact, Mr. Xu ultimately did this in his submission for the final division of property. As this action is brought in Alberta, the proper currency to use is the Canadian Dollar. Neither party provided me with conversion rates for all appropriate times, and where

conversions were done, I was either not advised of the conversion rate or not provided with the date corresponding to the conversion rate used. However, during the evidence, Mr. Xu did not offer a different Canadian Dollar value and he did not dispute converted values set out in the Notice to Admit Facts.

Therefore, I use the latter values or, if it is not in the Notice to Admit Facts, the value that seemed to be used by both parties. [ 12 ] The two main assets of the marriage were a residential property in China (the "China Property") and the matrimonial home in Edmonton (the "Edmonton Property"), although other assets are claimed by Ms. Ma. [ 13 ] Although neither party questioned my jurisdiction to deal with the China Property, the Court must still satisfy itself that it has the jurisdiction to deal with a matter.

While the Alberta Courts do not have jurisdiction over immovable property situated in a foreign country, I do have in personam jurisdiction over Mr. Xu, as he resides in Alberta and participated in the court proceedings: Mitrovic v Mitrovic , 2007 ABQB 44 at para 2 . It also appears that Mr. Xu brought a significant portion of the proceeds of the sale of the China Property into Alberta, to support himself. Further, the MPA requires the Court to consider all property held by the parties at the relevant time, whether it was in Alberta or elsewhere to determine the appropriate property division.

I am satisfied that I have jurisdiction to deal with the proceeds of the sale of the China Property, as part of the matrimonial property to be divided. [ 14 ] The parties purchased the China Property in Nanjing, China in December 2005, although it was registered in the name of Mr. Xu only. On March 30, 2017, Mr. Xu sold the property without the knowledge or consent of Ms. Ma. The contract for sale of the China Property stated that Mr. Xu had disclosed any person with an ownership right other than himself as the listed owner, but Mr. Xu did not actually disclose Ms.

Ma's ownership rights as he listed himself as "single". On this basis, he was able to sell the property. He testified that he used the proceeds to pay debts that the parties owed to his parents and to pay for his living expenses in 2017. Despite multiple court orders directing disclosure specifically with respect to the China Property, he did not provide any disclosure prior to trial and presented limited documentary evidence at trial. [ 15 ] The China Property was sold for 1.1 million RMB, less taxes of 11,000 RMB owing upon the sale.

Although the sale occurred after the date of valuation, it was only four months later and so I accept that the sale price reflects the value of the China Property as of November 30, 2016. The Notice to Admit Facts set the sale value at $208,000 CDN. Thus, the taxes owing were $2,080 CDN. [ 16 ] A couple of years after immigrating to Edmonton, the couple jointly purchased a family home (the "Edmonton Property") in August 2011. On October 12, 2017, a Court Order directed the removal of Mr. Xu from the title of the Edmonton Property and dispensed with his dower consent. Ms.

Ma has remained the sole owner of the Edmonton Property since that date and continues to reside in the Edmonton Property with the couple's child. They both agree that, as of November 30, 2016, the value of the Edmonton Property was $385,500 CDN based upon the City of Edmonton's 2016 property tax assessment. [ 17 ] Ms. Ma also seeks as matrimonial assets: 1) $20,000 CDN that was used during the marriage for Mr. Xu's business to purchase barbeque grills from China for resale in Canada; and 2) $3,500 that Mr. Xu is alleged to have taken from Ms.

Ma's bank account in July 2012 for his business. [ 18 ] In late 2010, Mr. Xu used $20,000 from his bank account to buy barbeque grills from China as part of his business, rather than putting the money towards the purchase of the Edmonton Property as requested by Ms. Ma. Ms. Ma assisted him in selling the barbeque grills, which she believes resulted in sales of $30,000 (thus $10,000 profit). However, she does not know for certain of the specific sales or what Mr. Xu did with the money. She did not testify as to when the barbeque grills were actually sold. Mr. Xu's evidence is quite different.

He testified that $10,000 was borrowed from his brother, which he repaid from the sale of the China Property. The other $10,000 was from the couple's funds. He did not testify as to the amount obtained from the resale of the grills, as no records were kept and any money he did earn he testified was paid to his lawyers. He believed that the grills were sold between 2012 and 2018 or 2019. I do not accept Mr. Xu's evidence with respect to the grills, it is vague, no documentation exists, and he is not a credible witness. However, Ms.

Ma's evidence is insufficient to establish what, if any, profit was made from the resale of the grills or what use was made of the money from the sale of the grills. There is no evidence that the money remained as an asset, as both parties agree the grills were sold and the money may have been used, such that it no longer exists. If an asset no longer exists, as money or otherwise, it is not a matrimonial asset: see Hodgson , at para 12 . [ 19 ] Ms. Ma testified that Mr.

Xu withdrew $3,500 from her bank account in July 2013, but there is no documentary evidence to show this withdrawal and no indication as to how Mr. Xu could do so without Ms. Ma's permission, as they had separate bank accounts. There is no evidence as to what was done with this money, such as the payment of living expenses, repayment of loans, or obtaining of assets.

There is insufficient evidence to determine if this money should be considered a matrimonial asset and it will not be included in the matrimonial property division. [ 20 ] In addition to matrimonial assets, the Court must consider matrimonial debt in determining an equitable distribution of family property. This includes consideration of pre-marital debt, debt during the marriage, and post-separation debt, although each is not treated the same: Kretschmer v Terrigno , 2012 ABCA 345 at para 18-20 , 24. There was no pre-marital debt to consider in this case. [ 21 ] From March 2012 to April 2013, Mr.

Xu paid the mortgage on the Edmonton Property. From May 2013 to November 2016, Ms. Ma paid the mortgage on the Edmonton Property. Ms. Ma submitted that Mr. Xu's payments from March 2012 to February 2013 should not be part of the property division, on the basis that the parties were more equally sharing the living expenses at that time. This is not an appropriate basis to consider Ms. Ma's payments, but not Mr. Xu's.

Such payments by both parties are on the same footing and so both parties' post-separation mortgage payments will be considered in the division of matrimonial property. [ 22 ] Both parties agree that various loans were received from various family members, but there is no documentary evidence with respect to the loans. I have determined the value of the loans based upon the parties' testimony, rather than the numbers they have used in their calculations. While the parties agree about some loans, other loans claimed are in dispute. [ 23 ] Mr.

Xu's parents lent the couple 88,000 RMB for the purchase of the China Property, which is the equivalent of $16,000 CDN.

[24] Both parties' parents lent the couple money for the purposes of their immigration to Canada, with Mr. Xu's parents lending$16,000 CDN and Ms. Ma's parents lending $2,200 CDN. [25] Mr. Xu's parents lent the couple $30,000 CDN and Ms. Ma's parents lent the couple $17,000 CDN for the purchase of theEdmonton Property. In addition, Ms. Ma's sister lent the couple $3,000 CDN for renovations to the Edmonton Property. [26] Mr. Xu's family also loaned the couple some US money that was deposited in Ms. Ma's account, although the amount andconversion rate is disputed.

Neither party testified as to the purpose of the loan. Ms. Ma testified that she saw the money in a bankaccount, in the amount of $2,900. Mr. Xu at one point agreed that the amount was $2,935 US, but later submitted that the loan was for$3,935 US. Ms. Ma remained adamant that the loan was for $2,935, which she believed was also the Canadian Dollar value. Based onthe evidence, I find that this loan was $2,935 CDN. [27] As of November 30, 2016, there was an outstanding mortgage balance on the Edmonton Property of $233,547.72 CDN,which Ms.

Ma has born full responsibility for paying. [28] There was also much discussion about who carried the load for living expenses, the mortgage, property taxes, or utilities atvarious times while the parties lived together. Both parties sought to have the Court take into consideration their payments of propertytaxes and utilities for the Edmonton Property as part of the matrimonial property division. These claims require a determination as towhether property taxes or utilities are properly considered part of matrimonial property. But they are neither an asset or a debt.

Thepayment of property taxes and utilities are the payment of living expenses, even though they are living expenses directly related to thehouse. They are not debts, anymore than the payment of necessary living expenses, such as groceries, insurance, or clothing, areconsidered debts. If a debt was incurred to pay these expenses, such as unpaid credit card debt or a loan from family members, then thatdebt may be part of matrimonial property. But the living expense itself is not matrimonial debt.

Therefore, I will not consider thesepayments in the division of matrimonial property, except to the extent that a debt is alleged to have been incurred to pay for these orother living expenses. [29] In addition, Ms. Ma claims two additional debts that arose post separation, but prior to the valuation date. The first was a$8,885 CDN loan from her parents in February 2016 and the second was her student loan incurred from May 2014 to November 2015. [30] Mr. Xu testified that he was not aware of the $8,885 loan, as Ms. Ma managed the finances. I accept Ms. Ma's evidence thatthis loan existed. Mr.

Xu submitted that the loan of $8,885 and the loan of $3,000 for renovations should not be considered asmatrimonial property, because the loans were used for living expenses rather than obtaining assets. However, a debt that is incurred forthe purposes of the family unit, even if used for living expenses, is a debt to be considered in the matrimonial property division. He alsosubmits that the student loan did not benefit him; he disputes that it was used to pay living expenses. Further, if he cannot claim hisstudent loan, then he submits that Ms.

Ma's student loan should not be considered. [31] All of the debts listed above are debts incurred either during the marriage or debts incurred post-separation debts but prior tothe valuation date. Thus, all of these debts are considered matrimonial property, although how they are divided will be considered inStep Four. [32] However, Mr. Xu’s student loan will not be considered in the property division. His student loan was incurred after thevaluation date of November 30, 2016. As stated in Hodgson at para 12, if property does not exist as of the date of valuation, it is notrelevant to property distribution.

As a result, his student loan is not part of the matrimonial property. [33] This same principle applies to the claim by Ms. Ma for her increased payments of rent as a result of Mr. Xu's refusal to renewthe mortgage in May 2017. As a result of Mr. Xu's refusal, although Ms. Ma was able to maintain the mortgage, she did so at a muchhigher interest rate (almost 3 times as high) from June 2017 to December 2017. In late 2017, Mr. Xu was removed from the title to theEdmonton Property and Ms. Ma was able to obtain a mortgage with an interest closer to the pre-June 2017 rate.

She claims she paidapproximately $3,500 in additional interest. There is also a claim by both parties, to the benefit of Mr. Xu, to include a mortgage rebateof $5,000 received by the couple upon transferring their mortgage to CIBC in the spring of 2013. Ms. Ma testified that the $5,000 wasused for the family's living expenses. [34] However, the issue with the claim for higher interest is that it arises after the valuation date.

The issue with the $5000 claim,is that this asset was not used to pay down the mortgage and the asset did not exist as of the valuation date, having been used for livingexpenses rather than to obtain further assets. As the parties have agreed to the valuation date, it is not appropriate to deal with assets ordebts that did not exist as of the valuation date. Therefore, I will not take into consideration the claim for increased interest or the rebatereceived from transferring the mortgage.

Step Four: Division of net matrimonial property, considering s 8of the MPA [35] As noted, steps two and three of property division do not arise in this matter. To the extent that there is property (assets ordebts) that is disputed by the parties and which I have determined is matrimonial property, I must consider the factors in s 8 to determineappropriate division. In doing so, I am mindful that both parties have sought an equal division of matrimonial property.

For any assets ordebts that were not disputed as properly part of the matrimonial division, such matrimonial property will be equally divided, consistentwith each party’s position and the presumption under s 7(4) of the MPA. [36] The disputed property relates to post-separation debt (s 8(f)). The treatment of post separation debt depends upon who or whatit benefited; if it did not benefit the other party, the matrimonial property, or the family, it is not divisible as matrimonial debt: Boelmanv Boelman, 2023 ABKB 159 , 2023 ABQB 159 at para 218 and cases cited.

[ 37 ] First, I will deal with the mortgage payments for the Edmonton Property after separation and prior to the date of valuation. Ms. Ma began paying the mortgage for the Edmonton Property in May 2013. The monthly mortgage payments (on the 21st of each month) were $1,316.55, including both principal and interest, until May 21, 2016. As of June 21, 2016, the mortgage payments were $1,222.18. Therefore, from May 2013 to November 2016, Ms. Ma paid a total of $56,045.43. Mr. Xu paid the mortgage payments immediately after separation in March 2012 to April 2013.

The evidence is that the mortgage payments at that time period were approximately the same as when Ms. Ma began paying the mortgage. Therefore, I find that Mr. Xu paid a total of $17,115.15. As these were debt payments made after separation while both parties were living in the matrimonial home (s 8(m)), they benefited both parties and maintained the matrimonial property (s 8(c)). The parties should equally share the cost of these mortgage payments from March 2012 to November 2016, including both principal and interest. [ 38 ] The $3,000 loan from Ms. Ma's sister occurred prior to separation.

As a debt incurred during the marriage which benefited both parties by improving the Edmonton Property through renovations or household items, it should be divided equally. [ 39 ] The loan from Ms. Ma's parents in February 2016 for $8,885 was used for living expenses. I accept Ms. Ma's evidence that she was paying not only the mortgage, but the majority of the utilities and property taxes, as well as a significant burden of the living expenses at this time. Mr. Xu did not seriously dispute that he was not contributing a significant or equal financial share. He agreed that he expected Ms.

Ma to shoulder this financial load, as he had paid the mortgage and other expenses for two years following separation. While I do not accept his explanation, it is clear that Ms. Ma remained the main financial provider for the family unit after separation and before Mr. Xu left the Edmonton Property. Therefore, he benefited significantly from this loan and thus, should share equally in its division. [ 40 ] Ms. Ma attended school from May 2014 to November 2015 to become a massage therapist, as a result of which she incurred student loans over $32,000.

She obtained her license for massage therapy in February 2016 and began her own massage therapy business as well as working for another clinic. She is only claiming the amount of $15,906.42, although it is not clear on the evidence or from her submissions as to why she is claiming this particular amount. There was an attempt in the evidence to clarify whether Ms. Ma received part of this money as grants that were not required to be repaid. However, the student loan documents establish that her loan repayment amount was approximately $32,000.

Of that amount, she testified that $9,000 was used for living expenses and $23,000 was used for her schooling expenses. [ 41 ] Ms. Ma submits that the student loan is simply a continuation of the couple's pattern to borrow money from their families from time to time. The student loan debt was incurred when the parties resided together in the matrimonial home, during which time Mr. Xu was living mostly for free. Ms.

Ma had obtained the education so she could attain a job better than minimum wage and has continued in that field. [ 42 ] The Alberta Court of Appeal stated in Stuve at para 34 : … The onus is on the party incurring debt after separation to demonstrate that the debt was used for the benefit of the family unit and not solely for the debtor's own purposes.

If that cannot be established, s 8 of the MPA permits unequal distribution of the debt, including sole responsibility for the debt falling to the party that incurred it: Busenius v Busenius , 2006 ABQB 162 at paras 2 , 27, 29; Esquirol v Esquirol , 2018 ABQB 487 at para 39 . [ 43 ] I find that $23,000 of this loan, used for Ms. Ma's school fees, was not to the benefit of Mr. Xu. While it allowed her to earn a higher income, she did not do so for the purpose of being able to better support Mr. Xu. She did so to better support herself and the child.

While there is an obligation on both parents to support the child (addressed further below), her higher income was also not the benefit of Mr. Xu in the calculation of child support. However, for the same reasons expressed regarding the loan of $8,885, Mr. Xu directly benefited from the $9,000 portion of the student loans that Ms. Ma put towards living expenses of the family unit. Therefore, I find that Ms. Ma must bear sole responsibility for $23,000 of her student loan, but that the $9,000 shall be divided equally between the parties. [ 44 ] The total matrimonial assets are $593,500.

The total matrimonial debt that is to be divided equally between the parties is $413,808.30, for a net amount of $179,691.70. The debt from each party's family will be borne by that party, consistent with the position of both parties. Thus, Ms. Ma has a net equity of $55,821.85 and Mr. Xu has a net equity of $123,869.85. Therefore, to equally divide the property, Mr. Xu must pay an equalization payment to Ms. Ma of $34,024.00. Child Support [ 45 ] The child of the marriage was 9 years old when the couple separated and is now above the age of majority, currently attending post-secondary school.

There is no dispute that he continues to be a child of the marriage and will be until he is finished his post-secondary training, which is expected to be completed in June 2024. [ 46 ] The Consent Divorce Judgment, granted November 26, 2019, set Mr. Xu's guideline income at $31,200 and his child support payments at $265.24 per month commencing December 1, 2018, consistent with the previous consent child support order granted on November 28, 2018. However, Mr. Xu did not pay any child support until after Ms. Ma registered the child support order with the Maintenance Enforcement Program in April 2020. Mr.

Xu provided his MEP Debtor's statement, which established that he paid a total of $9,570.06 in child support, which was confirmed by Ms. Ma [1] . [ 47 ] Mr. Xu obtained a recalculation decision, effective November 26, 2021, which set his child support payments at zero, based upon a guideline income of $12,000 from his 2020 income information. A second recalculation decision, effective November 26, 2022, again set his child support payments at zero, based upon a guideline income of $0.00 from his 2021 income information. Therefore, Mr. Xu has not paid any child support since November 26, 2021. [ 48 ] Ms.

Ma seeks retroactive child support effective November 1, 2016, based on the imputation of income to Mr. Xu. She filed her Statement of Claim on April 1, 2015 and included a claim for child support. This was the effective date of notice. The consent

Divorce Judgment specifically reserved retroactive child support from November 1, 2016 to November 30, 2019. Thus, the date for any retroactive child support shall begin as of November 1, 2016. [ 49 ] Mr. Ma's earnings for 2013 to 2023 were (based upon line 150 of her T1 General): 2013 $26,470 2014 $25,462 2015 $12,863 2016 $37,768 2017 $36,135 2018 $37,136 2019 $34,377 2020 $29,274 2021 $32,975 [ 50 ] She often worked more than one job. She was laid off from her full time job in July 2014, but continued to work part time at other jobs.

While she was in school in late 2014 and most of 2015, she continued working part time and earned over $12,000 in 2015 when she was in school for the majority of the year. [ 51 ] Mr. Xu's earnings for 2012 to 2023 were (based upon line 150 of his T1 General): 2011 $38,206 2012 $45,082 2013 $44,088 2014 $39,096 2015 $24,153 2016 $25,129 2017 $1,500 2018 $5,161 2019 $11,205 2020 $12,000 (CERB benefits only) 2021 Nil [ 52 ] The Court may impute income to a party under s 19(1)(

a) of the Federal Child Support Guidelines , SOR/97-175 (" FCSG "), where that party is intentionally under-employed or unemployed. Section 19(1) (

a) provides: 19

(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; [ 53 ] In Peter v Atchooay , 2022 ABCA 347 , the Court of Appeal set out the current test for imputing income when a party is intentionally under-employed or unemployed. While that decision related to the Alberta Child Support Guidelines , the Court was clear that the decision was also applicable to the FCSG .

The Court cited the principle set out in s 26.1(2) of the Divorce Act , RSC 1985, c 3 (2nd Supp ), that parents have a joint financial responsibility to support their children in accordance with their relative abilities to do so. The purpose of the support provisions is to ensure a fair level of support for children based on the financial means of both parents. [ 54 ] The test for the imputation of income under s 19(1)(

a) is: 1. Is the parent in question intentionally under-employed or unemployed? 2. Do the listed exceptions to imputation in s 19(1)(

a) apply? 3. Should judicial discretion to impute income be exercised? [ 55 ] As financial disclosure is complete, Ms. Ma bears the initial onus of establishing a prima facie case [2] for imputation, which is a low bar. This may be met by showing a sustained drop in income for the payor. If she does establish a prima facie case, the onus

shifts to Mr. Xu to defend the actual income claimed in relation to the test for imputation of income: Peters at para 63-64 . [ 56 ] Ms. Ma submits that Mr. Xu earned an average income of $42,000 from 2011-2014 and an average of $25,000 from 2015- 2016, following which his average income was $5,000 from 2017-2020, a significant drop. If his CERB benefits are removed, the average drops to $3,000 and some years were even zero income. She has established a prima facie case for imputation of income. [ 57 ] Now the onus shifts to Mr. Xu to establish that income should not be imputed, based on the test. Mr.

Xu submits that he should pay child support in accordance with his T1 General returns. He wants to help his son with his student loan. He submits that he has overpaid child support, based on his actual earnings, and claims that overpayment so he can use it for the purpose of assisting with the child's post secondary costs. [ 58 ] First, was Mr. Xu intentionally under-employed or unemployed? Mr. Xu worked in a warehouse job, until he was laid off in July 2014. There is no evidence that he was at fault for this lay off and thus, his loss of employment was voluntary. However, since that lay off, Mr.

Xu has either been unemployed or only worked for short periods of time. As noted at para 60 in Peters : ... At some point, however, the continued under-employment or unemployment may become unreasonable for purposes of s 19(1)(a), making imputation of income available… [ 59 ] In both 2015 and 2016, Mr. Xu earned about $15,000 less than when he was working full time. Since 2017, his income has been negligible. This has only changed recently as of November 2022, when Mr. Xu obtained a permanent and steady position in which he expects to earn approximately $50,000 annually. Mr.

Xu testified that he earned lower income, because it was difficult to find a job with his limited employment skills and lack of English language skills. These submissions go to his earning capacity. He also testified to his educational efforts to improve upon his ability to find work, which goes to the listed exceptions, and will be addressed in the next step. [ 60 ] Cogent, credible, and objective evidence is required, rather than bare assertions: Peters at para 67 .

The evidence should focus on the payor's earning capacity, such as age, technical skills, education, health, work history, and the realities of the labour market. Evidence of efforts to find alternative employment for the entire duration in question is also required. [ 61 ] Ms. Ma argues that Mr. Xu was no longer working or wanting to work to avoid child support (although it is not clear from her evidence whether he actually stated this to her). Mr. Xu has not provided a sufficient reason for this lack of income, other than an assertion that he could not find a job.

While he entered into a training program, there is no evidence that this impacted upon his ability to earn income. While Ms. Ma went to school, she worked two part time jobs, unlike Mr. Xu. Shortly after Mr. Xu obtained the second recalculation on child support, he found a job making $50,000 or more per year. His unemployment was voluntary and unreasonable in all of the circumstances. She submits that his guideline income should be imputed at $42,000 for 2017-2022 and $50,000 for 2013. [ 62 ] Mr.

Xu submits that he was unable to work at a higher income, especially while he was at NAIT in his educational program as a full time student. In the years when he was not in NAIT, he was unable to find jobs, other than some temporary work at low wages. [ 63 ] In China, Mr. Xu had a university degree in chemistry, but this would not qualify him for work in Canada without recertification. His work in China centered around international trade. English is not his first language. These all negatively impact his earning capacity.

However, despite such negative impacts, he was still able to earn a living in Edmonton of between $38,000 and $45,000 annually from 2011 to 2014. Ms. Ma, who the evidence supports struggled more with English, had an earning capacity of more than $25,000, so these issues of English and lack of transferable skills were not complete impediments to earning capacity. Therefore, the evidence supports that Mr. Xu had an earning capacity of $42,000 annually prior to attending NAIT. [ 64 ] After immigrating to Canada, Mr. Xu initially worked at T&T Supermarket parttime.

He also took some English as a Second Language courses. After these courses, he obtained a job in a warehouse in a shipper/receiver position in 2010. He worked full time in the warehouse and eventually was earning approximately $22 per hour. He was laid off in July 2014, received a severance package and obtained earnings through Employment Insurance. In 2015, he continued to receive EI.

He also did some work for Western Cannacord in 2015 and 2016, packaging products from the assembly line. [ 65 ] In 2017, he went to China from January to April, for the purpose of selling the China Property and then returned to China in late November 2017 for an undetermined period of time. He did some minimal work for a cabinet company in 2017. In 2018, he obtained work at a kitchen cabinet warehouse, assembling cabinets, but he only worked for about one month. He also worked for another unknown company, earning an unknown amount, but it was minimal based upon his tax return.

In 2019, he worked for a few months part time driving a taxi. There is no evidence of his attempts to obtain employment during these years or why these jobs were only temporary. [ 66 ] In 2018, he obtained his Class 1 licence, which would allow him to drive tractor trailer units. But there is no evidence that he attempted to obtain or did obtain work in the trucking industry. [ 67 ] In 2019, he entered NAIT. He became a full-time student in 2020, so his only earnings were from CERB benefits. He also obtained student loans.

He remained a full-time student at NAIT until the end of 2021, earning certification as a highway equipment mechanic. Although he did not provide any documentary evidence of his attendance, I accept that he engaged in this education. In 2022, he had one job for a week in March, a second job in May for 3 months, and a third job in September for 2 months. He did not provide documentation of his earnings from these positions. He testified that these jobs ended, as a result of his boss failing to abide by the employment terms or, for the last, because the business shut down.

In November 2022, he obtained his current full-time job making $22/hour, working 40 hours per week with some overtime. [ 68 ] His income dropped significantly in 2015 and 2016. He had the ability, as shown prior to July 2014, to work at full time labourer positions at more than minimum wage. While English was his second language, he had significant job experience in Canada. There is limited evidence of his attempts to obtain work, having relied upon EI for half of 2014 and most of 2015.

While his termination of employment in 2014 was not voluntary, his continued underemployment as of November 1, 2016 was no longer reasonable and had become voluntary. When he obtained his Class 1 license, he even increased his potential earning capacity, although I do not have

evidence as to how much that increase would be. Therefore, I find that he had an earning capacity of $42,000 per year since 2014 and was thus underemployed since November 1, 2016. [ 69 ] Second, do any of the listed exceptions apply to Mr. Xu's situation? The only applicable exception is reasonable education needs. Mr. Xu attended NAIT starting in late 2019, to become a highway equipment mechanic. I find that this was reasonable, as it would improve his options in terms of job availability and income potential, and he did not have other education to rely upon.

His education was for a short period of time, from fall 2019 to the end of 2021, approximately two years. His reasonable education needs do not account for the entire applicable period in which imputation of income is sought. In addition, as Ms. Ma was able to do and his son was able to do while attending school full time, I find that Mr. Xu should have been able to engage in some level of part time employment while taking his education.

Had he been working in accordance with his earning capacity prior to entering school and continued to work parttime during school, it is reasonable that he could have earned 40% of his earning capacity, being $16,800. [ 70 ] Third, should I exercise my judicial discretion to impute income?

Where a parent is intentionally under-employed or unemployed and a listed exception does not exist or does not completely exempt the relevant time period, the court may exercise a discretion to impute income, which requires a determination whether the voluntary under-employment or unemployment was reasonable in all of the circumstances. [ 71 ] A non-exhaustive list of factors was set out by the Court of Appeal in Peters at para 92 . I have already addressed the impact of Mr. Xu's earning capacity and his failure to find any work, despite his general duty to work.

These two factors support imputing income. [ 72 ] Another factor is the overarching goal of upholding the obligation of the parent to support the child. In Peters at para 79 , the Court of Appeal set out considerations of the drop in income and the effect of the reduced support upon the child as two distinct inquiries.

In relation to the latter, the Court stated: …There will be cases where no degree of under-employment will be reasonable; the payor will be expected to maximize their income and accept or continue employment - despite disdain for the employment or the absence of job satisfaction - because anything less will not provide the child with a fair level of support… [ 73 ] In this regard, not only did Mr. Xu earn significantly less in the years following his 2014 layoff, his earnings dropped to below the minimum level required to pay any child support, in accordance with the FCSG .

This had a significant impact upon his child, because there was no level of support, let alone a fair level of support: Peters , at para 137 . He also, rather than working in 2017 and 2018, took two or three trips to China, all of which he testified would cost significant amounts of money and all of which were solely for his own benefit.

These were not reasonable choices to make and prioritized his interests over that of his child. [ 74 ] Where a payor makes a decision that results in no or under employment in the short term, on the basis that in the long term it will have benefit, reasonableness is assessed in relation to whether the child will be able to benefit from the long term gain: Peters at para 80 . Mr. Xu finally obtained steady employment in 2023, during the last year of the child's post-secondary education.

His decision to take education when his child was already almost a young adult, meant that his child did not obtain the benefit of this education and increased earning capacity. [ 75 ] Another circumstance to consider is Mr. Xu's sale of the China Property and use of the proceeds, without the knowledge or consent of Ms. Ma. In effect, he used thousands of dollars from the sale of the China Property to support himself in 2017, while earning only $1,500 in reportable income.

While the sale proceeds are not being considered as income for the purposes of support and are dealt with in the division of matrimonial property, it reflects Mr. Xu's approach to his obligations of child support, which was to avoid and ignore them. He did not tell Ms. Ma about the sale nor offer in anyway to provide support for his child through the use of such monies. He was acting in bad faith, which is a sufficient basis for imputing income: Peters , at para 91 . [ 76 ] During this litigation, he demonstrated a desire to place all of the support obligation upon Ms.

Ma, forcing her to pay not only the mortgage from May 2013 onwards, but also two thirds of the property taxes and all of the living expense for the child after separation. He did not voluntarily provide any support; instead he knowingly and willingly refused to provide support for the child. This is another measure of bad faith. [ 77 ] Another circumstance to be considered is the impact of COVID, which had a significant impact upon society in 2020. It is quite possible that COVID would have negatively impacted the ability of Mr.

Xu to earn money in those years and I do not impute income for the year 2020. [ 78 ] Ms. Ma sought imputation of income for each year at $42,000, except for 2023 based on his actual expected income of $50,000. Mr. Xu has not established on a balance of probabilities that income should not be imputed, in accordance with the test set out in Peters . I find that it is appropriate to exercise my discretion to impute income, based upon Mr. Xu's earning capacity as established by his employment from 2011 to 2014 and accounting for COVID and his educational training. On that basis, I set Mr.

Xu's guideline income at: 2016 $42,000 2017 $42,000 2018 $42,000 2019 $33,600 ($42,000 prorated for 8 months, $16,800 prorated for 4 months) 2020 $12,000 2021 $16,800

2022 $42,000 2023 $50,000 [ 79 ] While Mr. Xu did not dispute that the child remains a child of the marriage, I also find that the evidence establishes this with regard to the factors set out in Miller v Joynt , 2007 ABCA 214 at para. 8-11 . The child graduated from high school in June 2020 and then did some upgrading at Central High School for a year. He began attending post-secondary schooling in September 2021 to become an acupuncturist. His tuition was paid by student loans or grants, with the exception of his initial admission fee and deposit of $510.00. Either Ms.

Ma or the son paid for his student fees, such as textbooks, over and above his tuition fees. There is no evidence that Ms. Ma was paying for any of the tuition or planning to help him pay his student loans. As of August 2020, when he was 18 years old, the child has been working part time jobs, including while going to school, for about 10 hours per week. He is doing well in his post-secondary schooling. While he does not have a significant relationship with his father, Mr. Xu testified that they still message each other and continue to remain in contact. [ 80 ] Ms. Ma also submitted that Mr.

Xu should pay a proportionate share of the child's total tuition, as a s 7 expense. However, there is no evidence that the parties ever planned to support their child in post secondary. Each of them had to obtain a student loan for their own education and are not high income earners. Ms. Ma has not provided any evidence that she plans to pay her proportionate share of the tuition. Further, the child has been able to obtain student loans and is earning some money through parttime employment. In these circumstances, it is not appropriate to order that Mr.

Xu pay a proportionate share of the tuition. [ 81 ] However, as Ms. Ma continues to support the child in his daily living, it is appropriate that Mr. Xu pay full s 3 child support based upon his income until June 1, 2024.

Based on his guideline income, I calculate s 3 child support from November 1, 2016 to June 1, 2023: Year Income Monthly Support Total 2016 $42,000 $333 2 months $666 2017 $42,000 $339 12 months $4,068 2018 $42,000 $339 12 months $4,068 2019 $33,600 $281 12 months $3,372 2020 $12,000 $0 2021 $16,800 $147 12 months $1,764 2022 $42,000 $339 12 months $4,068 2023 $50,000 $412 6 months $2,472 [ 82 ] He should have paid child support from November 1, 2016 to June 1, 2023 in the amount of $20,478. He has paid $9,570.06. Therefore, his child support arrears are set at $10,907.94, as of June 30, 2023.

These arrears may be repaid at the rate of $200 per month from July 1, 2023 to June 1, 2024 and then the rate of $600 per month from July 1, 2024 until the balance is paid. If Mr. Xu fails to make one of these payments, the remaining outstanding amount will be come immediately due and owing. [ 83 ] He shall continue to pay $412 on the first of each month, commencing July 1, 2023, up to and including June 1, 2024. Costs [ 84 ] Costs are generally awarded to the successful party, unless the Court exercises its discretion to depart from the normal rule under Rule 10.33.

This includes additional or enhanced costs, based on a number of factors including misconduct in the litigation. [ 85 ] Ms. Ma was substantially successful and there is no reason to depart from the normal rule that she be awarded costs. Ms. Ma submitted a Bill of Costs, with costs for each step in the litigation under Column 1 of

Schedule C and disbursements for the trial. I accept these numbers, being $21,300 in costs and disbursements of $4,080.73, plus GST of $1,220.24. [ 86 ] Ms. Ma sought further enhanced costs of $15,000, as a result of Mr. Xu's behaviour over the course of the litigation. She further seeks that the costs award be enforceable through MEP, due to the issue of child support at trial. Mr. Xu submits that he should not be subjected to enhanced costs, as he did not intend to disobey court orders and Ms. Ma was driving the court process, rather than attempting to settle. [ 87 ] The evidence establishes that Mr.

Xu has engaged in systemic and persistent misconduct. The most significant pattern was his refusal to comply with court orders, of which he was aware either through his counsel or by his own attendance in Court. His misconduct resulted in Ms. Ma having to bring multiple applications prior to trial and impeded Ms. Ma's ability to prosecute her claims and the Court's ability to determine the claims, due to a failure by Mr. Xu to meet his obligations of disclosure in the litigation. [ 88 ] Mr. Xu did not pay child support, despite a court order and divorce judgment to do so, both entered into by consent.

He attempted to blame his lawyer for improperly entering into those orders on his behalf, but this claim is not supported by the evidence and he did not take any steps for two years to correct the situation. Rather, he delayed payment of child support until Ms. Ma registered her order with MEP and enforcement proceedings began.

[ 89 ] Ms. Ma obtained a court order in December 2015, granting her exclusive possession and requiring Mr. Xu to leave by January 15, 2016. Despite the court order, Mr. Xu refused to leave the home unless Ms. Ma came to a settlement agreement for property division. By his own admission in cross examination, he refused to obey the court order to put pressure on Ms. Ma in the divorce process. It was only upon Ms. Ma obtaining a second court order in October 2016 that Mr. Xu finally left the home on November 30, 2016. [ 90 ] For the same reasons - to pressure Ms.

Ma to come to a settlement - in spring 2017 he refused to renew the mortgage on the Edmonton Property, resulting in Ms. Ma paying significantly higher interest rates until she obtained a court order to remove him from the title. [ 91 ] There was also a consistent theme of a lack of honesty by Mr. Xu with respect to the China Property. Despite knowing the parties were still legally married, Mr. Xu unilaterally sold the China property, knowing that he could not do so without the consent of Ms. Ma and doing so by falsely representing that he was single. Ms.

Ma testified that, in Mandarin, “single” meant he was unmarried and no marriage relationship existed. In cross-examination, Mr. Xu agreed with this translation. His explanations for how he could properly say he was single are not acceptable. On May 27, 2017, Mr. Xu swore an affidavit, but instead of deposing that he had already sold the China property and was using the proceeds to live on, he deposed that he was "unemployed with no other financial resources to rely on". Dishonesty such as this is reprehensible. [ 92 ] Despite court orders to do so, Mr.

Xu has never produced the bank records relating to the proceeds for the sale of the China Property. He testified that he tried many times to get Ms. Ma's permission to sell the China Property, but acknowledges that such permission was not received. He attempts to rely upon an order from this Court as giving him permission to sell the China Property, but that order only required Ms. Ma to provide title information pertaining to the China Property. This Court did not and could not provide Mr. Xu with the necessary permission to sell the China Property. Mr.

Xu was represented by counsel at the time of and following the order. Despite his submissions, there is no evidence that his lawyer was incompetent or failed to properly represent him. I find that Mr. Xu's attempts to represent the order as permission for him to sell the China Property are attempts at misleading and justifying his actions on the basis of a known falsehood. He was simply frustrated that Ms. Ma refused to provide her permission for him to sell the China Property, by providing both the certificate of title and power of attorney.

As a result, he determined a way to sell the property, which the evidence supports was by fraudulent means. [ 93 ] Despite court orders requiring disclosure of financial information, he refused on questioning to provide the name of the bank to which he had deposited the sale proceeds from the China Property. Prior to trial, he did not provide any disclosure with respect to the China Property or its sale. [ 94 ] At trial, he produced a handful of bank receipts, including a bank receipt reflecting the sale of the China Property and payment of the resulting taxes, which was dated March 30, 2017.

He also produced two other bank receipts, also dated March 30, 2017, which may have been his receipt of the sale proceeds. This disclosure did not comply with the court orders. [ 95 ] A fourth bank receipt was dated November 30, 2017. At trial, he confirmed that he was in China at the time of this bank transaction, which he testified was a transfer of 160,000 RMB to his parents from the proceeds of the China Property sale. He was present in this Court on November 16, 2017, when he was directed to provide Chinese bank account numbers within 30 days to permit tracing of the sale proceeds from the China Property.

Despite being in China and dealing with the proceeds of the sale through at least one bank transaction, he did not provide the required disclosure and only started looking for documents just prior to trial. [ 96 ] All of his explanations for failing to provide the documentation for the China Property are unbelievable. He attempted to excuse his failure by stating that he needed to return to China to obtain financial documents and was able to return, but he had actually done that in November 2017, knowing of the court orders.

He stated that he had forgotten his passwords, but could not retrieve them without returning to China. He had contact with his parents, but did not provide any evidence of attempts to get his banking information through them. His explanations are not accepted. [ 97 ] Based on this significant and reprehensible litigation misconduct, I exercise my discretion to award enhanced costs of $15,000. Conclusion [ 98 ] Mr. Xu must pay an equalization payment to Ms. Ma for the division of matrimonial property, in the amount of $34,024. [ 99 ] Mr.

Xu owes child support arrears of $10,907.74, payable in accordance with the above repayment plan. He shall continue to pay s 3 child support of $412 monthly, commencing July 1, 2023 up to and including June 1, 2024. [ 100 ] Costs are awarded to Ms. Ma in the amount of $41,600.97, inclusive of costs, disbursements, and GST. As this matter involved the determination of child support, the costs award is enforceable through MEP. Heard on February 13 to 17 and April 26, 2023 . Dated at the City of Edmonton, Alberta this 7 th day of June, 2023.

L.M. Angotti J.C.K.B.A. Appearances: Jerry Kiriak for the Plaintiff Jun Xu Self Represented Defendant