Hoffmann v De Baene, 2022 ABQB 505

Court of Queen’s Bench of Alberta Citation: Hoffmann v De Baene, 2022 ABQB 505 Date: 20220725 Docket: 4808 12633 Registry: Medicine Hat Between: Kristin Hoffmann Plaintiff - and - Axel De Baene Defendant _______________________________________________________ Decision of the Honourable Justice J.C.

Kubik _______________________________________________________ Introduction [ 1 ] On August 19, 2006, Kristin Hoffmann wed Axel De Baene in Bruges, Belgium. [ 2 ] Both parties were educated professionals: Kristin Hoffman (“Hoffmann”) is a Medical Doctor specialized in the practice of obstetrics and gynecology with a sub-specialty in gynecological oncology; Axel De Baene (“De Baene”) is a Doctor of Veterinary Medicine.

While they each obtained their initial professional degrees in Belgium, Hoffmann commenced a three-year fellowship at the University of Calgary in 2003, completing that program (and her oncological sub-specialty) prior to the couple’s marriage in 2006. Neither party contributed to the others acquisition of their respective medical licences prior to the marriage.

[3] Hoffmann and De Baene met in 2003 and their relationship was largely long-distance prior to their marriage, as during thattime De Baene continued to practice veterinary medicine in Belgium. De Baene also had other business interests in Belgium, includingan equine reproductive facility and a boarding kennel. [4] Following the marriage, the couple relocated to Fort McMurray, Alberta. There, Hoffmann entered into an obstetrics-gynecology practice and De Baene upgraded his qualifications to meet Canadian veterinary requirements.

During this time, he wasemployed by Fort McMurray Animal Hospital, a job secured with the assistance of Northern Lights Health Region as part of the enticingpackage of incentives given to secure Hoffmann’s employment. The incentive package also included three months paid rent and$50,000.00 towards the purchase of a residence. The couple secured a house in Fort McMurray. [5] The couple had one child, born in Fort McMurray in 2008. In 2009 they relocated to Medicine Hat where each continuedfull-time employment in their respective professions.

Irreconcilable differences arose thereafter, and the parties separated, ultimatelydivorcing in May 2021. At issue in these proceedings are: 1. The date of separation. 2. The division of the parties’ matrimonial property. 3. Quantification of retroactive and ongoing child support. 4. Entitlement to and quantification of retroactive and ongoing spousal support. High Conflict Proceedings, Sufficiency of Evidence, Relevance,and Credibility [6] Hoffmann and De Baene have been engaged in a high-conflict divorce proceeding for nearly 10 years.

It is fair to say theircurrent relationship is one of deep suspicion and acrimony. In trial this resulted in significant efforts to undermine each other’scredibility. [7] During the trial I heard historic evidence relating to the breakdown of the marriage and the subsequent custody disputebetween the parties. This evidence included allegations by each party of sexual misconduct and other types of abuse.

While filling out thenarrative around how and why the marriage failed and the subsequent litigation between the parties, these allegations of misconduct arenot relevant to the date of separation, the division of matrimonial property, child support or spousal support. As a result, I have not reliedon any of these allegations to assess the credibility of the parties, as doing so would not enhance the truth-seeking function of the courtand would unnecessarily exacerbate the high conflict relationship between the parties.

I am satisfied that the date of separation can bedetermined based on other reliable evidence given by the parties about the state of the marriage after they relocated to Medicine Hat. [8] As in all protracted litigation, various documents are no longer available, and memories have faded. This case is complicatedby the fact that at the time of trial, Hoffman was suffering from stage 3 advanced renal cancer, and had recently undergone surgerywhich resulted in the partial removal of a kidney. She reported memory problems associated with paraneoplastic syndrome, a conditionarising because of the cancer.

As a result, she struggled recalling dates and at times could not recall events. No medical evidence wastendered with respect to her diagnosis. It was implied during cross-examination that she was being untruthful about her cancer diagnosis.I am satisfied, without the provision of medical documentation, that Hoffmann has been diagnosed and treated for stage 3 renal cancer.Hoffmann is a physician with a specialty in oncology.

The suggestion that she would lie about this is without foundation, and it strainslogic to think that she would risk her professional integrity on such a mistruth particularly since there is documented evidence that shewas on a leave of absence which affected her income during the period May 2021 through to August 2021. [9] Both parties were unable to make full disclosure about all of their financial dealings, some of which date back to 2005. Thereare also gaps in both of their memories.

Examples include Hoffmann’s inability to recollect transfers in and out a joint account the partiesheld in 2006, after their relocation to Canada; and De Baene’s inability to provide invoices or bank account information to substantiatehis expenditures in relation to the Belgium property. As a result, there are gaps in the evidentiary record, none of which result from themalfeasance of either party but result from the passage of time and the vagaries of memory.

I accept the trial testimony of both parties asit relates to the financial aspects of the claim and have considered that evidence along with the documentary and expert evidenceprovided to assist the court in assessing the matrimonial property, child support and spousal support claims. Date of Separation [10] The parties dispute their date of separation. Hoffmann alleges it to be January 1, 2011; De Baene alleges December 30, 2013.It should be noted that the parties are already divorced by consent. The underlying affidavit of applicant is premised on the January 1,2011, separation date.

The date of separation is relevant to the issue of which assets are matrimonial property, and the length of themarriage for the purposes of calculating spousal support. [11] Pursuant to section 8(3)(

a) of the Divorce Act, RSC 1985, c 3 (2nd Supp), spouses are deemed to have lived separate and apartduring any period they have lived apart and either of them had the intention to live separate and apart from the other. [12] This notion of separate and apart is characterized by both a lack of consortium and a breakdown of the marriage: Herman vHerman (1969), (NS SC), 3 DLR (3d) 551 (NSSC). [13] It is not required that both parties intend to live separate and apart; the intent of one is sufficient, however there must be

objective evidence of the intent being communicated to the other. As a result, the breakdown of the marriage must be obvious, and the manner in which the parties lived their lives thereafter be consistent with that intention to live separate and apart. [ 14 ] This issue turns largely on the credibility of the Parties regarding the events they say resulted in the breakdown of their marriage, and the communication of their intention to live separate and apart. [ 15 ] Hoffmann asserts a separation date of January 1, 2011.

She testified that shortly after their child’s birth in 2008, the couple ceased to be sexually intimate. Hoffmann further testified that before and after the couple’s move to Medicine Hat in 2009, their child was co-sleeping with them, a source of friction in their marriage. This ultimately led to De Baene moving out of the matrimonial bedroom in approximately January 2011, a state which continued until they began to reside in separate households in January 2014.

Her evidence was that during this time the couple were no longer taking meals together or travelling together, other than trips to Belgium to visit their parents whereupon they would go their separate ways in Europe. Hoffmann frequently travelled alone with the child on vacation.

Based on this, Hoffmann asserts that after January 1, 2011, the Parties, though living in the same home, were no longer sharing a life. [ 16 ] Evidence called by De Baene from their nanny, Ruth Ferdinand (“Ferdinand”), and Hoffmann’s office assistant, Irene Rempel (“Rempel”), demonstrate that as early as 2009, Hoffmann consistently spoke in a negative fashion about De Baene, including in front of the child.

The testimony of both described Hoffmann as angry and prone to temper tantrums, consistent with De Baene’s testimony about her behaviour in the period between their move to Medicine Hat and the date he moved out of the matrimonial home. [ 17 ] De Baene testified that the marriage ended on December 30, 2013, when he sent Hoffmann a letter advising her that he had moved out of the matrimonial home. This letter was sent while Hoffmann and the child were in Montreal with Hoffmann’s mother celebrating Christmas.

The letter provides a timeline of events after the couple’s move to Medicine Hat in 2009, noting that after the move Hoffmann began co-sleeping with the child (a practice that continued through to the date of the letter). The letter describes that Hoffmann was routinely keeping the child in her room until De Baene left for work in the morning and returned from work at night, effectively depriving De Baene from spending time with Hoffmann and the child. De Baene alleged parental alienation by Hoffmann and described her anger and tantrums.

In the letter he also disclosed that he been secretly recording the conversations between mother and child each night. He further alleged that Hoffmann had sexually inappropriate contact with the child. [ 18 ] The concluding paragraphs of the letter read as follows: Since it appears this sort of conduct will not change, I realize I must take proactive steps in order to protect [our child]. I want [our child] to have the benefit of the family unit and hoped we could raise him together despite our problems. But you have made that impossible. Unlike you I believe [our child] needs his mother and father.

I demand that you stop this unnatural indoctrination of our son. I want you to seek therapy for your temper and anger management issues. I believe it is in [our child’s] best interests for us to discuss and agree on a parenting plan, instead of making this story public knowledge through the divorce process. I want your answer by January 15 th . I hope you realize how much I love [our child] and urge you to not underestimate my resolve to do whatever it takes to protect him.

Child’s name omitted for privacy [ 19 ] The content of the letter is consistent with Hoffmann’s testimony and makes clear that the parties were living separate and apart well prior to its December 30, 2013 date, that this state of affairs started shortly after their move to Medicine Hat in 2009 and continued to deteriorate through to the date of the letter. Hoffmann’s hostility toward De Baene was an open secret, well known to the nanny and her office staff.

De Baene was clearly aware of the intention of Hoffmann to live separate from him based on his exclusion from her life and the life of the child as referenced in the letter. That he was surreptitiously recording Hoffmann and the child is further evidence of how badly the marital state had deteriorated. [ 20 ] I therefore accept the parties commenced to live separate and apart by January 1, 2011, despite their shared residence and finances and that Hoffmann’s intention to do so was objectively known to De Baene.

This includes the evidence that they were no longer in an intimate relationship, had separate bedrooms; that Hoffmann had excluded De Baene from her and the child’s lives; and that they were consistently leading their daily lives in a separate manner following the move to Medicine Hat. Matrimonial Property [ 21 ] As the Parties separated prior to January 1, 2020, the division of their matrimonial property is governed by the Matrimonial Property Act , RSA 2000 c M-8 .

The valuation date is July 31, 2021, as agreed between the parties. [ 22 ] The matrimonial assets for valuation and distribution are the parties’ matrimonial home in the Cactus Coulee subdivision in Medicine Hat, real estate jointly owned by them in Belgium, and Hoffmann’s professional corporation known as Kristin Hoffmann Professional Corporation (“KHPC”). [ 23 ] At trial I heard evidence about Hoffmann’s 2016 acquisition of real estate in Bragg Creek and De Baene’s 2016 acquisition of real estate in Medicine Hat. I have determined that pursuant to

section 8 (

c) and (

f) of the Matrimonial Property Act these two properties will not be distributed as matrimonial property. The Parties had been separated in excess of 10 years at the date of trial, and for 5 years at the point of acquisition of these properties. It is neither just nor equitable to allow parties to share in property acquired after a long separation when neither has contributed to its acquisition or upkeep. This allows the parties to move forward with their lives in any manner they choose: Thompson v Thompson , 2006 ABQB 796 .

[ 24 ] With respect to the Parties’ vehicles, jewelry, and other personal effects the same reasoning applies. [ 25 ] Accordingly, the Bragg Creek property; De Baene’s current principal residence in Medicine Hat; the Parties’ respective vehicles, jewelry, and other personal effects shall be retained by each of them without claim by the other. Cactus Coulee Residence [ 26 ] The couple’s matrimonial home was acquired in 2009 upon their relocation to Medicine Hat.

It was sold prior to trial and the net sale proceeds of $879,967.14 are presently held in trust pending division of matrimonial property. [ 27 ] Hoffmann claims an exemption totalling $219,000.00, a down-payment for the purchase of the home, which she claims was gifted by her father as an advance on her inheritance.

She also claims two credits against the sale proceeds: one, totalling $63,405.61 reflecting 50% of the renovation costs incurred between the date the parties ceased living together and the sale of the matrimonial home; and the other, totalling $55,750.88 reflecting 50% of the insurance costs incurred during Hoffmann’s exclusive occupation of the matrimonial home after December 30, 2013. Finally, she argues that the cost of joining the City of Medicine Hat water system ($31,009.43) should be borne equally by the parties from the proceeds of sale.

This amount was already paid out of the sale proceeds of the Cactus Coulee residence. [ 28 ] De Baene, on the other hand, denies that Hoffmann has a valid exemption claim. He also argues that only renovation costs totalling $58,544.00 should be equally borne by the parties (all other amounts being upkeep costs), and the balance of net sale proceeds should be divided equally. The Exemption Claim [ 29 ] Hoffmann testified that a total of $219,000.00 had been advanced by her father towards the purchase of the couples first home in Fort McMurray.

The equity in that home was then utilized to acquire the Cactus Coulee property. The $219,000.00 advance was substantiated by a written loan agreement, dated November 26, 2002 and signed by Andre Hoffmann and Kristin Hoffmann in the presence of a witness. The terms of the loan agreement included a 4% annual interest rate, due on December 31 st of each year, and repayment of the loan by October 30, 2016. [ 30 ] The loan agreement referenced two transfers of funds, one on October 19, 2006, in the sum of $115,000.00(CDN), and the other on October 30, 2006, in the sum of $104,000.00 (CDN).

In support of these transfers, two international bank transfer slips were tendered as Exhibits. They show a transfer on October 18, 2006, from Andre Hoffmann to Kristin Hoffmann in the sum €80,784.30 (inclusive of transfer fees) and a transfer on October 30, 2006 from Andre Hoffmann to Kristin Hoffmann in the sum of €73,537.76 (inclusive of transfer fees).

There are no corresponding bank records evidencing the deposit of funds to Hoffmann’s Canadian account and no real estate purchase records to show the funds being applied to the purchase of the Fort McMurray property, however De Baene testified that he was aware that a loan was advanced by Hoffmann’s father for the purchase of the Fort McMurray house. He testified that he had not seen the written loan agreement until the divorce proceedings were commenced, but had some understanding that repayment of the loan would begin immediately. [ 31 ] De Baene argues that payments were made against principal and interest.

He alleges that two transfers from Kristin Hoffmann to Andre Hoffmann, one dated December 1, 2008, in the sum of $8,042.00 (CDN), and the other dated November 9, 2011, in the sum of $6,042.00 (CDN) are interest payments on the loan. Witnesses Ferdinand and Rempel also testified in support of his contention that the loan was repaid in full or in part. [ 32 ] Ferdinand testified that between 2009 and 2011 she had observed Hoffmann become enraged prior to a trip to Europe, as she had misplaced $14,000.00 that she intended to take with her to repay her father for the “house in Canada”.

Ferdinand further testified that Hoffmann told her that every year she took cash to Europe to repay her parents. This specific allegation was never put to Hoffmann in cross-examination. Rather, she was asked a broad question about whether she recalled repaying her father, and whether the two bank transfers to her father reflected interest payments. I give no weight to Ferdinand’s testimony on this issue, as Hoffmann was not given an opportunity to answer to these allegations during her testimony. [ 33 ] Rempel did not testify directly about payments Hoffmann may have made toward the loan.

Rather, she testified that in 2015 Hoffmann began dealing in cash to hide her financial transactions from De Baene in the context of the divorce proceedings. This testimony does not assist in determining whether any payments were made toward the loan. [ 34 ] Hoffmann had no recollection as to what the two transfers to her father were for. She could not recall whether she paid any amounts towards principal or interest prior to June 3, 2015.

On that date, however, Andre Hoffmann gave Kristin Hoffmann a letter which consolidated the loan amount ($219,000.00) with its approximate interest ($60,000.00), and declared it an advance on her inheritance, in effect turning the loan into a gift. Andre Hoffmann was not called as a witness at trial. [ 35 ] Hoffmann has proven the exemption claim based on the written documentation.

I am satisfied that funds of $219,000.00 were advanced to Hoffmann by her father for the purchase of the Fort McMurray home, that the loan, during its term, was converted to a gift by him, and that the letter evidences his intention to honour that gift. As such, the principal sum of $219,000.00 is exempt from distribution pursuant to section 7(2) (

a) of the Matrimonial Property Act . The Credit Claims [ 36 ] The renovation costs incurred from the date De Baene moved out of the matrimonial home to the date of trial are in the total sum of $126,811.22. They include upgrades relating to, and in addition to, insured water damage claims, completion of kitchen renovations commenced while the couple were still residing together in the residence, landscaping and underground sprinkler additions,

furnace, air conditioning and major appliance repair, exterior house painting, and laundry room and bathroom renovations agreed by theParties to be necessary prior to listing the home for sale. All of these renovation costs were proven with receipts. All of these renovationseither gave value to the property on sale or maintained infrastructure (heating/cooling systems, for example) necessary to ensure theparties could maximize value of the property on re-sale. I am satisfied that the cost of these renovations should be equally shared by theparties.

Therefore, Hoffmann will receive a credit in the sum of $63,405.61 from the sale proceeds. [37] With respect to the City of Medicine Hat water bill, that was a cost incurred to connect the residence to the City of MedicineHat water system, an event which occurred because a majority of the residents in the community, including Hoffmann and De Baene,petitioned for it. The connection added value to the property and because it was a necessary infrastructure upgrade, should be borneequally between the sale proceeds.

Given that the full cost of this connection was paid to the City of Medicine Hat out of the saleproceeds currently held in trust, no further adjustment is required. [38] Finally, the property insurance costs will not be borne equally between the parties. These costs were incurred while Hoffmannhad sole occupation of the premises and are costs that would have been incurred elsewhere for insurance had she not been resident in thematrimonial home.

While the premiums were extraordinarily high, and I am satisfied that there was some misunderstanding on the partof Hoffmann as to the reasonableness of these costs, the evidence does not satisfy me that De Baene delayed a change in insurance suchthat he should bear some portion of those costs. Accordingly, there will be no adjustment for this amount which will be borne in itsentirety by Hoffmann. [39] After deduction of Hoffmann’s exemption of $219,000.00 and a credit to her of $63,405.61, the balance of sale proceeds heldin trust shall be equally divided between the parties.

Belgium Property [40] Prior to their marriage Hoffmann and De Baene jointly acquired a property in Belgium for the sum of €322,000.00. Theproperty is located near Bruges and bounded on one side by a major highway. The property, at the time of purchase, consisted of a smallhouse and barn which required extensive renovation. Renovations to the property started prior to the couple’s marriage and werecompleted thereafter.

The renovations were extensive and resulted in the small house and barn being converted to a single-family home.This required a complete renovation of both buildings and the installation of heating, hot water systems, a bathroom and kitchen, newwindows, plaster and paint. The courtyard area was renovated, as was the stable and riding arena. Since the parties’ relocation to Canadathe property has been rented.

Rents are deposited to a joint Belgian bank account from which the monthly mortgage payments are made.At the date of trial, the outstanding mortgage balance was €26,875.00 and the balance in the joint bank account is €10,694.00. [41] The Parties dispute the value of the property and whether De Baene should be credited the cost of renovations to the property.The Agreed Statement of Facts indicate that the value of the property is €390,000.00, however by the time the parties arrived at trial theywere no longer in agreement on this point. [42] I have reviewed the two appraisal reports; the experts did not testify at trial.

De Baene’s expert quantified the value at€315,000.00 based on the recent approval of a further wind turbine project in the vicinity of the property. His initial evaluation was€390,000.00. Hoffmann’s expert estimated the value to be in the range of €412,290.00 to €435,195.00.

He was satisfied that the majorhighway adjacent to the property had a greater effect on its value than the new wind turbine project. [43] I am not satisfied that the wind turbine project would substantially decrease the property value, particularly given the fact thatat the time of acquisition there were already wind turbines within close proximity to the property and within the “view”. In addition, Iaccept that the attendant noise and pollution risks arising from the nearby highway are of greater consequence to the value of theproperty.

Finally, given the state of the property at the time of its purchase in 2005 for the sum of €322,000.00, and the extensiverenovations thereafter, I do not accept that the property would be of lesser value today than at the date of acquisition. I am satisfied thatthe Parties previously agreed upon valuation of €390,000.00 is a reasonable reflection of the property’s trial value. [44] De Baene testified that he paid the entire cost of the renovations totalling $201,840.00 (CDN).

Photographs depicting therenovations were tendered in evidence, as was a document prepared by De Baene itemizing the renovations and estimating the costs. Noinvoices for the work done were tendered in evidence and no bank account transactions to substantiate payment of these amounts wereprovided. A single document, written in Flemish and without translation, was tendered. It related to the heating and cooling system,however there is a dispute between the parties whether the document was an invoice or an estimate.

The total amount set out in thedocument is €9,489.00. [45] The burden of proof is on the party claiming an exemption or credit. It is clear extensive renovations were completed. It isequally clear that it was De Baene who coordinated and maintained oversight over the renovation project, hiring contractors and ensuringthat they were paid. Hoffmann has no records which substantiate that she made any ongoing financial contribution to the renovationcosts.

While the evidence is insufficient to allow me to quantify the cost of the renovations for the purpose of proof of the exemption, Iam satisfied that De Baene’s contributions to the improvements to the property can be compensated by the application of

section 8(

c) ofthe Matrimonial Property Act. On that basis, I direct that the value of the Belgium property (€390,000.00) less the difference betweenthe outstanding mortgage and the rental income retained (€16,181.00) be divided 60%-40% in favour of De Baene. [46] To give effect to this distribution, the Parties may either choose to sell the property or one party may elect to purchase theinterest of the other. If the parties have not reached a consensus on this within 60 days of the date of this decision, then the property shallbe sold, and the Parties will adjust the net sale proceeds in accordance with this decision.

Having regard to Catania v Giannattasio, (ON CA), [1999] OJ No 1197 and Mitrovic v Mitrovic, 2007 ABQB 44, I am satisfied that the Court can impose anunequal distribution of matrimonial property, regardless of where the property is situated, because the Court has jurisdiction over bothParties, the Parties are joint owners of the property and are subject to the provisions of the Matrimonial Property Act. Kristin Hoffmann Professional Corporation

[ 47 ] The single largest matrimonial asset is KHPC. While Hoffmann’s expert (Drew Jackiw, her chartered accountant) and De Baene’s expert (Robert Doran, a certified business valuator) agree that the underlying numbers used by each of them to arrive at their respective calculations are not in dispute or subject to criticism, they disagree on the appropriate manner of valuing the business. [ 48 ] Jackiw employed a liquidation approach in valuing KHPC.

He opined that because Hoffmann’s medical skill is the only asset of KHPC, her practice is not saleable and the only means by which she can extract its value is by winding it down. Based on the liquidation approach to valuation, the value of KHPC is $1,713,018.00. [ 49 ] While Doran agreed that there was no goodwill in KHPC and that medical based professional corporations, such as this one, are rarely, if ever, sold, he valued the business on a going concern basis.

He opined that because there was no evidence that Hoffmann intended to leave the practice of medicine in the near future, KHPC’s value should be based on fair market value on the open market. Based on the going concern approach to valuation, the value of KHPC is $3,100,000.00. [ 50 ] I find that the value of KHPC is $1,713,018.00. I am satisfied that the liquidation approach to valuation is the appropriate one given that Hoffmann’s medical skill is the only asset of the corporation and that there is no transferable goodwill or client base.

The corporation has no sale value on the open market and its value can only be realized on liquidation, resulting in tax consequences which should be fairly borne by both Parties. [ 51 ] I am further satisfied that the value of KHPC should be divided equally between the Parties. I have considered the factors set out in

section 8 of the Matrimonial Property Act . While there has been a substantial increase in the value of KHPC since the date of separation, primarily related to the investment account managed by Hoffmann inside KHPC, Hoffmann’s income earning potential was substantially improved by the couple’s relocation to Canada, and specifically by the opportunities open to her as a result of their relocation to Medicine Hat, including both consistent clinic and hospital based practice opportunities, and health region oversight opportunities resulting in additional pay.

While De Baene did not make a direct financial contribution to KHPC, his willingness to relocate resulted in him foregoing a potential opportunity to buy-in to the Fort McMurray Animal Hospital, and because of Hoffmann’s unwillingness to finance a buy-in at Cypress View Veterinary Clinic in Medicine Hat, he retained associate vet status during the marriage and after separation. An equal distribution reflects a share of Hoffmann’s increased earning capacity due to De Baene’s indirect contributions [1] . Child Support [ 52 ] As noted, there is one child of the marriage, age 14.

From February 20, 2014, through to November 2017, the parties shared parenting of him. Since November 2017, the child has lived in the day-to-day care of De Baene. [ 53 ] To the date of this decision child support has been paid as directed in multiple court orders premised on the Parties’ line 150 income. The most recent order is that of Brooker J, pronounced on December 11, 2019, which ordered Hoffmann to pay monthly child support of $3,060.00 commencing October 1, 2019, subject to annual adjustments on or before June 1 st of each year to reflect any change in income.

In addition, Brooker J ordered Hoffmann to pay retroactive interim child support $64,339.00 which reflected the annual changes in the parties’ line 150 income between the date of the prior order (Rawlins J; July 30, 2015) and the Brooker Order. The retroactive sum was promptly paid as was a previous retroactive sum reflected in the Rawlins Order. [ 54 ] De Baene seeks to impute the pre-tax corporate earnings of KHPC to Hoffmann for the purposes of determining her guideline income. Hoffmann argues that

section 3 child support should be based either on her line 150 income, or continue in the sum of $3,060.00 per month, regardless of her line 150 income or the pre-tax earnings of KHPC because this amount is sufficient to meet the child’s needs. She relies on

Section 4 of the Federal Child Support Guidelines in making this argument. [ 55 ] The Federal Child Support Guidelines establish the framework for determining a party’s guideline income.

Section 3 provides that the amount of child support payable is the amount set out in the applicable table based on the income of the spouse against whom the order is sought. Sections 15 through 20 speak to the determination of a party’s annual income. The starting point is the figure identified as total income in the annual T1 general (line 150, now line 15000). [ 56 ] If the court is of the opinion that using line 150 would not result in the fairest determination of income, the court may have regard to a party’s pattern of income:

section 17; or in the case of a spouse who is a shareholder, director, or officer of a corporation the court may consider the pattern of income or any non-recurring losses and determine the income to include all or part of the pre-tax income of the corporation, or an amount commensurate with the services the spouse provides to the corporation provided that amount does not exceed the corporations pre-tax income:

section 18. This effectively allows the court to pierce the corporate veil for the purposes of imputing income to the shareholder:

section 19. [ 57 ] Finally,

section 4 deals with situations where the income of the payor is over $150,000.00. In that case, the child support payable is either the amount determined in accordance with

section 3 (based on the applicable table) or if the court considers that amount inappropriate, the court may exercise its discretion to award the table amount payable on the first $150,000.00 and any additional amount the court considers appropriate having a regard to the condition, means, needs, and other circumstances of the child and the financial ability of each spouse to contribute to the support of the children. [ 58 ] Goett v Goett , 2013 ABCA 216 , sets out the factors for the court to consider in determining whether to include pre-tax corporate earnings in guideline income.

Those factors include: • The payor’s role in the corporation; • Whether the payor is a sole shareholder; • The degree of control the payor exorcises over the corporation;

• The availability of retained earnings to pay child support; and • Whether retained earnings are required to manage the business and ensure its ongoing financial viability. [ 59 ] Hoffmann is the sole shareholder and director of KHPC, which was set up to tax shelter her earnings. Since the separation she has operated a self-directed investment portfolio within KHPC, investing pre-tax income in order to save for her retirement. She is a successful investor and has amassed almost three million dollars in her retirement savings plan.

There is no other business-related purpose for the accumulation of wealth in the professional corporation. Hoffmann has complete control over the earnings of the corporation and the amount she pays herself as salary. [ 60 ] In considering the imputation of KHPC’s pre-tax earnings to Hoffmann as income, I have had regard to the effect this will have on her ability to save for her retirement, an event some years hence, but potentially earlier owing to her current health concerns which include stage 3 renal cancer, affecting not only her capacity for full-time work, but her work-life expectancy.

The inclusion of the pre-tax earnings of the corporation amounts to a yearly increase in child support payments, reflecting approximately 10% of the pre-tax income calculated in any given year. This is a nominal figure given the return on investment Hoffmann has gained, and will not have the effect of significantly impacting her ability to save for retirement. It will, however, ensure the child has access to child support from all funds which are available to Hoffmann. [ 61 ] While Hoffmann argued that I should award child support payable in the sum of $3060.00 per month or based on

section 4 of the Federal Child Support Guidelines , I am satisfied that the inclusion of the pre-tax income of KHPC ensures that the child is being provided for in a manner consistent with incomes and lifestyles in each household and that he can continue to engage in many of the activities and opportunities he enjoyed prior to the breakdown of the marriage. [ 62 ] Accordingly, on a go-forward basis, commencing August 1, 2022 Hoffmann’s guideline income, for the purposes of child support, will be calculated on the basis of the pre-tax net earnings of KHPC inclusive of Hoffmann’s salary, calculated in a manner consistent with Chart #1 of

Schedule 2 of the expert report of Robert Doran, dated April 30, 2021. Retroactive Child Support [ 63 ] De Baene seeks a retroactive child support award based on this calculation dating back to February 20, 2014. [ 64 ] Having regard to DBS v SRG , 2006 SCC 37 ; Michel v Graydon , 2020 SCC 24 ; Colucci v Colucci , 2021 SCC 24 ; and Henderson v Micetich , 2021 ABCA 103 ; the principal consideration is that child support is the right of the child.

In codifying this principle, the Federal Child Support Guidelines imply that child support will be variable from year to year based on the earnings of the payor parent and that retroactive support payments are not punitive, but rather reflect the payor parent’s legal and moral obligation to the child to pay support commensurate with their income. [ 65 ] In this case, the two child support orders which predated the trial of the action were interim without prejudice consent orders in which child support was calculated based on line 150 income only. The Rawlins Order stated specifically in its

preamble that the order was not intended to reflect any final determination with respect to support. The Brooker Order confirmed that the final determination of child support would be left to the trial judge. In addition, communications between counsel, which were not without prejudice in nature, evidenced that it was De Baene’s communicated intention to have the pre-tax earnings of KHPC imputed to Hoffmann’s income, for a period retroactive to the shared parenting order of February 20, 2014.

It is clear that both Parties contemplated this as a live issue for trial, meaning that material change of circumstances and effective notice or formal notice are not relevant considerations for the court. Similarly, this is not a case where blameworthy conduct is a necessary factor to consider.

The Parties clearly entered the orders to ensure the child was receiving what he was minimally entitled to based on line 150 and reserved the issue of quantification of the appropriate amount of support for trial. [ 66 ] Given that I have already determined that the pre-tax income of KHPC should be imputed to Hoffmann on a go-forward basis, there is no arguable reason to conclude that the proper quantification from February 20, 2014, through to the present date should not be on the same basis.

Further, the hardship to Hoffmann is minimal in that there are substantial retained earnings in the corporation to pay out the retroactive support. Finally, doing so will ensure that the child receives support based on the income available to Hoffmann over the course of the previous years while this matter has been litigated. [ 67 ] Accordingly, Hoffmann’s

Section 3 child support obligations will be recalculated for the period February 20, 2014, to July 31, 2022, based on the imputation of the pre-tax earnings of KHPC to Hoffmann’s guideline income. Table 1 in

Schedule A of this decision sets out Hoffmann’s imputed guideline income and corresponding

section 3 child support obligation from February 20, 2014 through to December 31, 2020. As full year earnings information for 2021 was not available at the date of trial, I direct that Hoffmann disclose her 2021 T1 General, T2 and the 2021 financial statements of KHPC within 30 days of this decision and that the parties calculate Hoffmann’s 2021 guideline income in the same manner. The support payable for 2022 will be calculated in accordance with Hoffmann’s 2021 guideline income.

The Parties shall calculate the retroactive support payable, and that support shall be paid by Hoffmann to De Baene within 60 days of this decision [ 68 ] Thereafter, the Parties shall disclose their financial records, on or before May 31 st of each year, and

Section 3 child support shall be recalculated effective July 1 st of each year based on the previous year’s financial information and the method set out above, until the child is no longer a child of the marriage as defined in the Federal Child Support Guidelines or further order of the court. [ 69 ] As no claim for

section 7 child support was advanced at trial, no award is granted. Spousal Support

[ 70 ] From December 15, 2019, until April 15, 2021 (when Hoffmann stopped paying spousal support while off work undergoing cancer treatment), spousal support in the sum of $2,500.00 per month has been paid as directed in the Order of Brooker J. In December 2021, Hoffmann resumed payment of spousal support in this amount. [ 71 ] De Baene seeks both ongoing and retroactive spousal support from Hoffman.

He argues that he is entitled to both compensatory and non-compensatory spousal support, calculated in accordance with the “with child support” formula applied in the Spousal Support Advisory Guidelines , and using Hoffmann’s guideline income as determined for the purposes of child support.

He seeks retroactive spousal support to 2014. [ 72 ] Hoffmann, while disputing De Baene’s entitlement to spousal support, argues that if he is entitled to support, he has been reasonably compensated since the breakdown of the marriage by the interim spousal support paid and has achieved economic self- sufficiency. [ 73 ] The marriage was short-term of 5 years duration. Both Parties had achieved their professional degrees prior to the marriage, and without financial assistance from the other.

While De Baene testified at trial as to the successful nature of his veterinary practice, kennel, and equine reproduction centre in Belgium, there is no direct evidence as to either the value of those business ventures, or his earnings in Belgium prior to his relocation to Canada with Hoffmann after their marriage. [ 74 ] Upon relocation to Canada, De Baene was required to re-certify as veterinarian. There is no evidence before me as to how long it took him to do so. During his re-certification he was employed at a veterinary practice, but not as a licenced veterinarian.

The evidence indicates that he earned $76,273.00 in 2008 which was the earliest available earning record. De Baene testified on cross- examination that in 2006 the earnings of a veterinarian in Belgium and Canada were approximately equivalent. [ 75 ] From the date of his re-certification, he was employed and paid as an associate veterinarian. De Baene’s income from employment from 2014 to 2020 is set out in

Schedule A, Table 2. [ 76 ] Hoffmann was the higher wage earner throughout the marriage and largely supported the family on her income. Her income is as previously set out in the child support

section of this decision. During the couple’s time in Fort McMurray, after the birth of the child, Hoffmann employed a full-time nanny. As such, both Hoffmann and De Baene worked full-time before the child was of school age. During “on-call” shifts, and during the nanny’s off hours, both Parties shared the childcare responsibilities depending on each of their schedules. The evidence is that while the couple lived in Fort McMurray, Hoffmann had a rigorous on-call schedule, and De Baene was providing much of the afterhours childcare. Once the couple moved to Medicine Hat, this responsibility was more equitably shared, as Hoffmann’s on-call

schedule was greatly improved by the relocation. At the time of the relocation to Medicine Hat, De Baene was in Belgium and remained there for several weeks. [ 77 ] De Baene had opportunities during the marriage to become a partner in two veterinary clinics: first in Fort McMurray and then in Medicine Hat. [ 78 ] Both De Baene and Bob Gilbert, the owner of Fort McMurray Animal Hospital, testified that these discussions were in their initial stages when Hoffmann and De Baene decided to move to Medicine Hat.

Neither De Baene nor Gilbert testified as to the proposed cost of the buy-in or share purchase, although Hoffmann testified that she believed the cost was one million dollars, a figure she viewed as too expensive. [ 79 ] The opportunity to purchase shares in Cypress View Veterinary Clinic arose in 2011, at which time 1/3 of the shares in the business were offered for sale for the sum of $280,000.00. There is no evidence as to whether this included an ownership interest in the land and building, or simply a portion of the practice itself.

Anecdotal evidence at trial placed the 2015 value of the entire operation (practice, land, and buildings) at $3,500,000.00. Both Hoffman and De Baene testified that Hoffmann was unwilling to finance the purchase of the Cypress View interest for liability reasons. De Baene made no efforts to obtain financing on his own. [ 80 ] In 2012 De Baene incorporated a professional corporation and purchased Cypress View Clinic’s large animal practice, consisting mainly of equipment. He maintained this business afterhours and on weekends until suffering a broken wrist and ankle in of a motorcycle accident in 2013.

His professional corporation has been inactive since 2015. There is no evidence before me as to the purchase price of the equipment and no tax returns or financial statements were produced to assess any returns from this business venture. [ 81 ] De Baene testified that since the date of the separation he has not enjoyed a lifestyle similar to that which the couple shared during their marriage, and that this shortfall in his financial position caused him to borrow $150,000.00 from his parents to make ends meet. [ 82 ] De Baene’s budgeted expenses are set out in

Schedule A, Table 3. [ 83 ] The significant increase in expenses in 2020 and 2021 reflects $5,500.00 per month allocated towards legal fees. Deducting this monthly amount, given the conclusion of this matter, leaves De Baene with total monthly expenses of $6,477.53.

This reflects a current monthly expense budget lower than anytime post separation, accounting for the fact that De Baene no longer has a mortgage and his childcare costs have decreased as the child has aged. [ 84 ] Section 15(4) of the Divorce Act requires the court, when making a spousal support order, to consider the condition, means, needs, and other circumstances of each spouse, including the length of the cohabitation, the functions each performed in the marriage, and any order, agreement, or arrangement for support. [ 85 ] An award of spousal support is to serve the following objectives: recognize the economic advantages or disadvantages to a spouse as a result of the breakdown of the marriage; apportion the financial consequences arising from the care of any child of the marriage over and above child support; relieve economic hardship arising from the breakdown of the marriage; and promote economic self-sufficiency within a reasonable period of time: section 15(6).

[86] Compensatory support recognizes the contributions of a spouse made during the marriage, economic losses resulting fromeither the marriage or its breakdown and any benefit which may have accrued to the other spouse as a result of these contributions.

Non-compensatory support recognizes the economic disadvantages occasioned by the breakdown of the marriage, where one party is leftunable to support themselves (See Bracklow v Bracklow (SCC), [1999] SCJ No 14). [87] In this case, I am satisfied that following the separation De Baene was entitled to spousal support on both a compensatory andnon-compensatory basis. [88] From a compensatory perspective, he was the lower income earner in the marriage and moved to Canada for the sake ofadvancing Hoffmann’s career prospects.

While the effect on his career losses (in relation to the other businesses he operated in Belgium)cannot be quantified on the evidence, he was set back while he re-certified as a veterinarian in Alberta and had lower earnings during thisperiod as a result. In addition, he lost an opportunity to buy into the Fort McMurray Animal Hospital when the family relocated toMedicine Hat, a move which advanced Hoffmann’s career and provided her with better work-life balance.

It is, however, impossible onthe evidence to determine the effect this had on De Baene’s earnings. [89] On a non-compensatory basis, De Baene suffered an economic disadvantage as a result of the breakdown of the marriage. Hisstandard of living was significantly reduced owing to the incoming earning disparity between the parties. Based on his post-separationbudgets he was in a shortfall position without the assistance of his parents. [90] That said, the Parties had a 5- year marriage with one child.

Both parties worked full-time during the marriage and sharedchildcare responsibilities (over and above the paid nanny) equally. Following the separation until November 2017, the Parties sharedparenting on a week-on week-off basis. Once De Baene had sole parenting of the child, he incurred childcare costs, but continued to beemployed on a full-time basis.

His income has increased year after year since the separation, and at present, based on his budget, his netdisposable income inclusive of child support is well in excess of his monthly budget. [91] While the Spousal Support Advisory Guidelines provide a degree of certainty in the calculation of spousal support, they do notaccount for the distribution of matrimonial property. In this case, the matrimonial property distribution will result in a large cash payoutto De Baene, reflecting an award of Hoffmann’s earning capacity as retained in her professional corporation.

As a result, I have chosennot to rely on the Spousal Support Advisory Guidelines, but rather to consider as a whole De Baene’s past and current circumstances. Bythe effect of this judgment, he will have the economic freedom to consider buying into a veterinary practice, save for his retirement, andunburden himself of any debt to his parents. He continues to earn income as a full-time veterinarian and will receive significant childsupport both on a retroactive and a go forward basis.

He is, by any measure, at the conclusion of this trial, economically self-sufficient. [92] Accordingly, while there is entitlement to spousal support, both quantum and duration are affected by the short-term nature ofthe marriage, the equitable performance of household roles by the Parties during the marriage, including in relation to childcare, the factthat economic hardship has been relived by the distribution of matrimonial property in this judgment, and the fact that De Baene is noweconomically self-sufficient. [93] In considering the retroactive claim for spousal support, I note that no support order was in place from February 2014 toDecember 2019.

From December 2019 to the date of trial, $45,000.00 in spousal support has been paid. A further $17,500.00 wasoutstanding pursuant to the Brooker Order, during the period May 2021 through November 2021. De Baene received $60,000.00 inadvance costs which is appropriately accounted for in the spousal support aspect of this claim. [94] I direct Hoffmann to pay the outstanding $17,500.00 in arrears under the Brooker Order, and to pay any sums unpaid betweenJanuary 1, 2022, and the present date, in accordance with the Brooker Order, such payments to be made within 60 days of this decision.

Ifurther direct that the Brooker Order will remain in effect through to and including the November 15, 2022, payment. This results in DeBaene receiving spousal support totalling $150,000.00, equivalent to five years support at 2,500.00 per month.

This is a reasonableamount of post separation support based on his means, needs, and other circumstances, including the significant sum of retroactive andongoing child support he will receive each month, and the matrimonial property award. [95] Following the November 15, 2022, spousal support payment, the Brooker Order is hereby terminated as is any furtherobligation to pay spousal support. The duration of 5 years, given De Baene’s current economic self-sufficiency and continued ability towork is a more than reasonable period of support given the short-term nature of the marriage.

Conclusion [96] Should the parties require any further directions to give effect to the division of matrimonial property or retroactive awards setout herein, they may

schedule a further hearing by contacting the trial coordinator. Costs [97] If the parties are unable to agree as to costs within 60 days, they may

schedule a costs hearing by contacting the trialcoordinator. Heard on the 1st day of November 2021, to the 5th day of November 2021, and the 2nd day of December 2021. Closing arguments received in writing on the 31st day of January 2022.

Dated at the City of Medicine Hat, Alberta this 25 th day of July 2022. J.C. Kubik J.C.Q.B.A. Appearances: Zubia Imtiaz, Zubia Law Office for the Plaintiff V.A. MacDonald, Q.C., MacDonald Hanley Barristers & Solicitors for the Defendant

Schedule A Table 1 Hoffmann’s imputed guideline income and corresponding

section 3 child support obligation February 20, 2014 to December 31, 2020 Year Income

Section 3 Monthly Support Obligation 2014 $375,900.00 $2,654.00 2015 $172,100.00 $767.00 2016 $ 667,400.00 $5,209.00 2017 $486,900.00 • $3,361.00 (shared parenting regime) • $4,148.00 (non-shared parenting regime) 2018 $523,200.00 $4,453.00 2019 $552,600.00 $4,708.00 2020 $546,600.00 $4,649.00 Table 2 De Baene’s income from employment from 2014 to 2020 Year Income 2014 $79,275.00 2015 $85,123.00 2016 $86,920.00 2017 $89,159.00 2018 $92,221.00 2019 $105,166.00 2020 $107,572.00

Table 3 De Baene’s budgeted expenses Year Expense Totals per month 2014 $7,344.00 2015 N/A (no budget information provided) 2016 $6.796.00 2018 $6,885.00 2019 $8,790.01 2020 $11,977.53 2021 $11,977.53