WENDY BOUDREAU , Applicant – v. –, 2023 NBKB 195

IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK JUDICIAL DISTRICT OF MONCTON FAMILY DIVISION Boudreau v. Boudreau 2023 NBKB 195 FDM-385-2021 2023/11/14 BETWEEN: WENDY BOUDREAU , Applicant – and – MARIO BOUDREAU , Respondent. DECISION BEFORE: Justice Colette M. d’Entremont AT: Moncton, New Brunswick

DATE OF HEARING: October 3 and 4, 2023 DATE OF DECISION: November 14, 2023 APPEARANCES: Dustin M. Caissie, on behalf of the Applicant. Harold R. Grew, K.C., on behalf of the Respondent. d’ENTREMONT, J INTRODUCTION: [ 1 ] The Applicant, Wendy Boudreau is requesting an award of retroactive and prospective spousal support. She is asking that the court impute an income to the Respondent, Mario Boudreau, that is greater than the amount he reports to the Canada Revenue Agency. [ 2 ] For his part, Mr. Boudreau denies that he owes spousal support to Ms. Boudreau. He is also asking that an income be imputed to Ms.

Boudreau, above the amount she has reported to Canada Revenue Agency. [ 3 ] The issues relating to the division of marital assets and the marital debts has been settled. The matter is based on the Divorce Act , R.S.C., 1985, C.3. (2 nd Supp .) FACTS [ 4 ] The parties met in July of 1994; they were married in 1997. They separated on December 31 st , 2020.

The divorce was granted on the first day of the within hearing, that is October 3 rd , 2023, as by then the parties had been living separate and apart with no possibility of reconciliation and there had been a breakdown of the marriage. [ 5 ] When the parties met in July of 1994, Ms. Boudreau was collecting Social Assistance. She was twenty-eight years old, and Mr. Boudreau was thirty years old. Ms. Boudreau had been married twice previously and she had a child from a prior relationship. [ 6 ] In 1994, Mr. Boudreau was working for Spielo Moncton. His work consisted of building cabinets for gaming devices.

He worked full time, and he was paid minimum wage. It should be noted that Mr. Boudreau has a grade 12 certificate, however he cannot read or write. [ 7 ] Around 1997, Ms. Boudreau was working in retail and earning minimum wage. For her part, Ms. Boudreau had completed grade 10 in high school. [ 8 ] The couple lived modestly in a mini home on Weisner Road, in Lakeville, New Brunswick. It was owned by Mr. Boudreau’s mother. The mini home was fully paid for, and it was Mr. Boudreau’s mother who assumed the real property taxes relating to the home.

While living in the residence, the couple did not pay rent in favour of Mr. Boudreau’s mother. As well, Mr. Boudreau’s mother ran a pizza restaurant in Shediac, and she regularly gave food to the couple.

[ 9 ] On July 12 th , 1997, the parties were married. At the time, Mr. Boudreau took out a loan to pay for a suit to wear at the wedding. [ 10 ] Around this time, Ms. Boudreau worked seasonally at a fish processing plant in Grand-Barachois. Her work consisted of removing meat from lobster and crab. Typically, she worked from May to October, and she collected Employment Insurance Benefits during the other months of the year. She was employed at the fish processing plant for about three years. [ 11 ] At this juncture, Mr. Boudreau worked at the Pop Shop in Scoudouc driving a forklift.

His employment ended when the business was sold. [ 12 ] At times Mr. Boudreau built baby barns and decks for different clients. He was never a Red Seal carpenter but knew how to use a hammer and would pick up jobs here and there. [ 13 ] In 1999, the couple opened a bar on Main Street in Shediac. The name of the bar was “Bottom’s Down”. Ms. Boudreau worked as a bartender, she was responsible for the paperwork, and she cleaned the premises. Mr. Boudreau also worked at the bar. He would be responsible for picking up the bottles of liquor.

The bar remained open for five months, after which it closed as it was not profitable. [ 14 ] For some time, Mr. Boudreau owned 25 to 30 peanut dispensing machines which he installed in various establishments. He also rented a pool table. This lasted one year, then Mr. Boudreau sold these items. [ 15 ] Following the closure of the bar, between 2000 and 2001, Ms. Boudreau was employed seasonally making candles. She collected Employment Insurance benefits during the colder months of the year. [ 16 ] Around this time, Mr. Boudreau tried working in the United States.

This lasted two weeks after which he returned to New Brunswick. He then worked briefly at Kent’s in Bouctouche, but he quit this job. Then he worked at Glenwood Kitchens in Shediac. He stayed there two and a half weeks. From 2000 to 2001, he carried out carpentry and painting work at various odd jobs where he was paid minimum wage. [ 17 ] From 2004 and 2005, Ms. Boudreau worked at a senior citizens’ residence called Queen of Peace, located on Champlain Street in Dieppe. [ 18 ] In 2005, Ms.

Boudreau obtained a General Educational Development diploma. [ 19 ] In March of 2005, the couple opened a second-hand clothing store in Amherst, Nova Scotia. Both parties worked at the business. The second-hand clothing store lasted eight months, after which it was closed as the business failed. [ 20 ] In 2005, Ms. Boudreau worked at Ponderosa. [ 21 ] In 2006, Ms. Boudreau went to Medicine Hat, Alberta for about nine months. She had intended to move there, as her son was living there. During her stay in this province, she worked at the Superstore, Value Village, and at a restaurant.

There were plenty of work opportunities in the western province. [ 22 ] Mr. Boudreau joined Ms. Boudreau in Alberta from July to December of 2006, He also found employment in the western province. [ 23 ] In December of 2006, the couple moved back to New Brunswick, by then Mr. Boudreau’s mother’s health was deteriorating.

[ 24 ] In 2007, Mr. Boudreau was charged and found guilty of selling illegal cigarettes. He was fined $27,000. In the 11 years that followed, Mr. Boudreau paid the fine. [ 25 ] From 2007 to 2011, Ms. Boudreau returned to work at the fish processing plant in the Grand-Barachois area. Again, this work was seasonal, and Ms. Boudreau collected Employment Insurance Benefits from mid-fall to the late spring. Mr. Boudreau worked at this plant for one summer. [ 26 ] In 2011, Mr. Boudreau and his business partner started running a pawn shop. The first enterprise was known at Bubba Lou’s and was situated in Dieppe.

Soon after, this outfit closed and everything was moved to a second pawnshop on St. George Street in Moncton. Mr. Boudreau continued to work at the pawn shop at the time of the within trial. A lot of the transactions at the pawn shop were carried out in cash. [ 27 ] In 2011, Ms. Boudreau commenced working in the kitchen at the Notre Dame Manor on Murphy Avenue in Moncton. She worked 10-hour shifts for two days per week. She remained at this position for three and one-half years. In 2015, Ms.

Boudreau quit her employment at the Manor. [ 28 ] In 2014, the couple bought a residence on Chartersville Road, in Dieppe, New Brunswick. The title to the property was in Ms. Boudreau’s name only. The property was bought for $134,000. As it turned out, Mr. Boudreau’s credit was not good, and he did not qualify for the financing from the local bank. For her part, Ms. Boudreau qualified for the financing. She was listed as the “mortgagor” on the mortgage and Mr. Boudreau appears as the “spouse of the mortgagor” on this document.

When it was purchased, the house was in poor condition, and everything had to be gutted and redone. [ 29 ] In September or October of 2015, Ms. Boudreau commenced working at the Alouette Special Care Residence. She remained employed at this place for one year and one half. Her shifts were such that she worked two days and then had two days off. Ms. Boudreau worked full time hours. She found it to be a difficult place to work and in 2017, she quit this position. Ms. Boudreau then worked seasonal jobs at the local shopping mall. [ 30 ] In 2017, Mr. Boudreau’s mother died. Mr. Boudreau was her only child.

He inherited insurance funds of about $32,000 and $27,000 in cash which was found at her house, for a total of about $60,000. He also inherited the mini home on Weisner Road. The mini home was sold for about $80,000. Most of the funds inherited were used to renovate the home on Chartersville Road, in Dieppe. [ 31 ] From 2014, to 2017, the home on Chartersville Road was renovated mostly by Mr. Boudreau. The kitchen, bathroom, and electrical wiring were redone. A garage and mini barn were built. A heat pump was installed.

New appliances such as a new dishwasher, a refrigerator and a stove were also installed. [ 32 ] In 2018, Mr. Boudreau went on a trip to Cuba. Ms. Boudreau did not accompany him. However, at the time, Mr. Boudreau gave his wife $1,000 to $1,500 and she bought a ring with this money. [ 33 ] The next year, Mr. Boudreau went on a vacation to the Dominican Republic. Once again, Ms. Boudreau did not travel south with him. At the time, Mr. Boudreau gave Ms. Boudreau a sum of money. [ 34 ] After Mr. Boudreau’s mother died, Mr. Boudreau started giving Ms. Boudreau $100 per week until the money ran out.

However, she received no money from Mr. Boudreau after the separation of late December of 2020. [ 35 ] Between 2016 and 2018, Ms. Boudreau worked for about three months of the year at the local mall. She would generally not work during the summer months. [ 36 ] During her testimony, Ms. Boudreau indicated that for the years 2019 and 2020, she did not remember if she worked.

[ 37 ] In 2017, 2018, and 2019, the proceeds from the pawn shop allowed Mr. Boudreau to pay his bills. Given the outbreak of the Covid-19 virus and the declaration of the Worldwide Pandemic by the World Health Organization in March of 2020, the pawn shop was closed for an extended period of time. According to Mr. Boudreau, people received benefits from the government and these people did not need a pawn shop in order to get cash. Therefore, the pawn shop business deteriorated significantly. [ 38 ] In 2020, Mr.

Boudreau collected Canada Emergency Response Benefits from the Government of Canada. [ 39 ] By January of 2021, Ms. Boudreau had separated from Mr. Boudreau and she was living in Amherst, Nova Scotia. From the winter of 2021 to October of 2021, Ms. Boudreau collected social assistance benefits from the province of Nova Scotia. She received $950 per month and a rental supplement. By this time, Mr. Boudreau had stopped giving her money. [ 40 ] In October of 2021, Ms. Boudreau started working at a wine shop in Amherst. She remained at this job until November of 2022.

Her shift was part time and she worked four hours per day. [ 41 ] Ms. Boudreau testified that she has been suffering from anxiety and panic attacks since she was 20 years old. She had been prescribed medication for these conditions. Furthermore, she indicated that occasionally she suffered from episodes of vertigo and dizziness. As well, Ms. Boudreau said that she was exhausted after working her shift. At the hearing, Ms. Boudreau provided a handwritten note from her family doctor, Dr. LeBreton, indicating that she could not work until September 30, 2023, because of medical issues.

The note does not specify the nature of the medical issues. [ 42 ] In 2022, Ms. Boudreau obtained a Class 3 driver’s license which is a commercial license. [ 43 ] At the time of the trial, Ms. Boudreau was paying life insurance premiums on a life insurance policy insuring Mr. Boudreau’s life. For his part, Mr. Boudreau is asking that the policy on his life be cancelled. The benefit is $125,000 in the event of Mr. Boudreau’s death. [ 44 ] Mr. Boudreau suffers from diabetes, heart problems, high blood pressure and back pain. He can no longer bend and cannot do carpentry work. Mr.

Boudreau has been prescribed medication for his heart issues, diabetes, and high blood pressure. [ 45 ] The marital debts and marital property have been divided. As a result of which, Ms. Boudreau will receive the sum of $107,785 from Mr Boudreau. On the other hand, Mr. Boudreau will be solely responsible for debts totalling $266,296. He will keep the travel trailer worth $40,000, the Hummer valued at $15,000, the truck worth $38,000, and the residence assessed at $365,000. [ 46 ] However, the plan is that Mr.

Boudreau’s new partner will take title to the real property in Dieppe as he does not qualify for financing. He and his new partner have 90 days to refinance the home and to pay Ms. Boudreau the agreed amount. If they are not able to do so, the house will be listed for sale and sold. In which case, Ms. Boudreau’s award of $107,785 will be paid from the proceeds of the sale. [ 47 ] At the time of the trial, the real property taxes on the Chartersville Road house totalled $13,000, and the outstanding water and sewerage fees were $600. As well, money was owed to NB Power for electricity usage.

The telephone and cable had been disconnected as Mr. Boudreau was unable to pay these. [ 48 ] Ms. Boudreau’s yearly income according to her income tax returns has been as follows: 2017 $9,849 2018 $4,727 2019 $6,548 2020 $15,008 2021 $9,355 Includes $7,071 in Social Assistance payments 2022 $23,034 Includes $9,006 in Social Assistance payments

[ 49 ] Presently Ms. Boudreau’s income consists of social assistance of $11,400 per year, plus $5064 as a rent supplement for a total of $16, 464. [ 50 ] Mr. Boudreau’s income according to his income tax returns has been as follows: Year Gross Business Income Net Business Income Other Income (CERB) Total Income 2018 $30,000 $9,832 $9,832 2019 $30,000 $9,985 $9,985 2020 $6,000 ($6,529) $20,900 $14,371 2021 $12,000 ($5,867) $19,600 $13,753 2022 $28,000 $8,175 $8,175 [ 51 ] As Mr. Boudreau is self employed, he deducts expenses through his business for items for which he derives a personal benefit.

More specifically, on his latest statement of Business Activity he deducted the following: Meals and Entertainment $1,743 Motor Vehicle Expenses $5,657 Capital Cost Allowance $6,703 Phone and Internet $2,565 Total $16,793 [ 52 ] As well, Mr. Boudreau deducted $3,031 as a business use of home, which represents a portion of the expenses relating to his home including a percentage of his expenses relating to electricity, maintenance, mortgage interest, property taxes and water and sewerage rates. ISSUES [ 53 ] The issues in this matter include the following:

a) Should an income be imputed to Ms. Boudreau, and should an income be imputed to Mr. Boudreau?

b) Has Ms. Boudreau established that she has an entitlement to an award of spousal support?

c) As Mr. Boudreau’s annual income is below $20,000, how does this affect his spousal support obligation?

d) Should the life insurance policy on Mr. Boudreau’s life be cancelled?

e) Should there be an award of costs? IMPUTATION OF INCOME [ 54 ] Both parties are asking that I impute an income to the other party. [ 55 ] The argument is based on subsection 19(1) of the Federal Child Support Guidelines (SOR/197-175) which reads as follows: 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; (

b) the spouse is exempt from paying federal or provincial income tax; (

c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada; (

d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines; (

e) the spouse’s property is not reasonably utilized to generate income; (

f) the spouse has failed to provide income information when under a legal obligation to do so; (

g) the spouse unreasonably deducts expenses from income; (

h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and (

i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. [ 56 ] Mr. Boudreau relies on paragraph 19(1)(

a) of the Federal Child Support Guidelines alleging Ms. Boudreau is intentionally underemployed or unemployed. [ 57 ] In Peters v. Atchooay 2022 ABCA 347 , the Alberta Court of Appeal dealt with the

interpretation of paragraph 19(1)(

a) of the Federal Child Support Guidelines . The court decided that there is no requirement to prove a deliberate intent to evade child support through a choice of employment or lifestyle. Like the rest of the Canadian provinces, the proper analysis is a test of reasonableness when deciding whether to impute income to a parent under the Guidelines . [ 58 ] In paragraphs 92 and 93 of the decision, the Alberta Court of Appeal provided a very good

summary of the paragraph 19(1)(

a) principles. These paragraphs read as follows: [92] The following is a non-exhaustive list of principles to guide the determination of whether to impute income under s 19(1)(a): 1. General Duty to Work. There is a duty to seek employment where a parent is healthy and can work. A parent’s limited work experience or job skills do not justify a failure to pursue lower skilled employment or employment in which the necessary skills can be learned on the job.

While this may mean a job at the lower end of the wage scale, parents cannot refuse to take reasonable steps to support their children simply because they cannot obtain interesting or highly paid employment. Nor can a high-earning or highly skilled parent refuse employment indefinitely by holding out for employment commensurate with their skills and previous level of earning, job title or seniority. 2. Earning Capacity Used to Assess Reasonableness. When determining whether to impute income on the basis of under-employment or unemployment, a court must consider what is reasonable in the circumstances.

The starting point is the payor’s earning capacity, which is the objective measure by which the reasonableness of the parent’s decision or conduct is assessed. Earning capacity is determined based on factors like age, education, experience, skills, and health of the payor, along with availability of work, the freedom to relocate, and other obligations.

3. Discretion. Income will not be imputed where a parent’s decision to earn less than the maximum they are capable of making is found to be reasonable. Nor is there a presumption that a career choice resulting in a reduction in income is unreasonable. 4. Obligation to Support Children is the Overarching Goal. The reasons for under-employment or unemployment must be objectively scrutinized. A parent is required to act in a manner reflective of his or her obligations and cannot be excused from support obligations in furtherance of unrealistic, unproductive or non-remunerative career aspirations.

Persistence in unremunerative employment or repeated education initiatives may also entitle the court to impute income. Parental self-fulfillment is a consideration but does not trump child support requirements. 5. Agreements Contextualize Reasonableness. The parties’ pre-separation agreements or social contracts have some weight in determining Guidelines income, but they are not determinative.

The parenting arrangement, and the payor’s involvement or lack of involvement with the children, the length or time the arrangement has been in place, and the ages of the children may be considered in assessing the reasonableness of the payor’s under-employment or unemployment. 6. Reasonableness Is Not Fixed in Time. The payor’s history of paying child support and providing financial disclosure are objective measures by which to assess the reasonableness of the payor’s employment decision or conduct.

What is reasonable (or unreasonable) is determined at one point in time and will not necessarily remain static for the entire time the children are owed support. 7. The Ultimate Onus Rests on the Party Opposing Imputation. Assuming the financial disclosure requirements have been met, the onus is on the party opposing imputation to prove on a balance of probabilities: 1) that the under-employment or unemployment was not voluntary, that is, not due to their own decision or conduct; or, 2) that the under-employment or unemployment is as a result of one of the listed exceptions in s 19(1)(a).

If neither circumstance applies, that party must establish on a balance of probabilities that their under- employment or unemployment is reasonable, having regard to all the existing circumstances. However, where it is an initial application, the person seeking an imputation of income under s 19(1)(

a) has a preliminary onus to establish some basis for the imputation sought. Either way, each stage of the analysis requires evidence that is as objective as possible. Bare assertions will not suffice. [93] On the issue of amount, a court cannot choose an arbitrary number; “there must be a rational basis underlying the selection of any such figure ... grounded in the evidence”: Drygala at para 44.

However, if a reasonable figure can be determined in between earning capacity and actual earnings that is grounded in the evidence, it may be the more appropriate amount to impute in circumstances where the payor’s actual income is unreasonable. Horbas is a case in point, where the Manitoba Court of Appeal found the payor’s actual earnings of roughly $50,000 unreasonable but imputed an income of $100,000 rather than his $300,000 earning capacity because this compromise figure was reasonable in the circumstances and grounded in the evidence. [ 59 ] A three-step analysis of paragraph 19(1)(

a) of the Guidelines consists of the following. [ 60 ] Firstly, I must decide on a balance of probabilities whether the underemployment or unemployment was voluntary or not due to Ms. Boudreau’s own decision. Secondly, if I find that she was underemployed or unemployed, was it as a result of the exceptions found in paragraph 19(1)(

a) of the Guidelines , that is, was it justified because of the needs of the children or by reasonable education or health needs of the parent. If neither of the exceptions apply, then the payor must prove that the underemployment or unemployment is reasonable having regard to the existing circumstances. Then I must look at her earning capacity to determine the reasonableness of her conduct. The earning capacity is determined based on qualifications such as age, education, experience, skill, and health of the payor.

I must also consider work availability, the freedom to relocate and other obligations. [ 61 ] In the within circumstances, I find that Ms. Boudreau was intentionally underemployed and unemployed as she chose not to work, something she had also done in the past. In fact, during her testimony, she indicated she had a pattern of working for a while and then simply quitting her job for no reason other than to stay home because she did not like the working conditions. [ 62 ] Secondly, Ms. Boudreau’s underemployment or unemployment is not as a result of the exceptions listed in paragraph 19(1)(

a) of the Guidelines . In the within matter, the choice of not working made by Ms. Boudreau was not to care for a child, for health reasons or to further her education. I do recognize that Ms. Boudreau suffered from anxiety and panic attacks from the age of twenty. She at time has vertigo issues and is tired after she does work. The medical note from the doctor is not sufficient to substantiate the allegation that she cannot work at all. In the past, she has worked and quit her job while other times she worked part-time. [ 63 ] Finally, I have looked at Ms. Boudreau’s earning capacity to determine reasonableness. The evidence is that Ms. Boudreau is in

her late 50’s and appeared to be healthy at the time of trial. Lately, she completed a level three driver’s license. In the past, she has worked at different positions, including sales, retail, and kitchen work at a senior citizens’ home. [ 64 ] As for the availability of work, since the pandemic has ended, there appears to be all kinds of employment in the Amherst and Moncton area with all kinds of employers looking for employees. [ 65 ] Generally, I would Impute an income to Ms. Boudreau as I am of the view that, she should work and is quite capable of working at least part time. [ 66 ] Ms.

Boudreau has throughout her life worked for portions of the years, collected employment insurance for other portions of the year and collected Social Assistance benefits. She now collects $900 per month and a rent supplement totalling about $1500 per month. [ 67 ] At the time of the trial, she was in her late 50’s, she held a G.E.D. certificate and recently obtained a class three driver’s license.

I am of the view that given her age, her work experience, her education, and skills, she is able to work part-time and earn an additional $7000 per year as she is intentionally underemployed and unemployed as contemplated by paragraph 19(1)(

a) of the Guidelines . I conclude that this is reasonable in the within circumstances. [ 68 ] Ms. Boudreau relies on paragraph 19(1)(

g) of the Federal Child Support Guidelines alleging that many of Mr. Boudreau’s personal expenses are unreasonably deducted through his business and that an income should be imputed to him. [ 69 ] The decision of Szitas v. Szitas 2012 ONSC 1548 provides some guidance as to which claimed business expenses can be reasonably imputed back into a parent’s income pursuant to paragraph 19(1)(

g) of the Guidelines . Paragraphs 61 and 62 of the decision are helpful in this regard. They read as follows: [61] In order to impute claimed business expenses back into a parent’s income pursuant to section 19(1)(

g) of the Guidelines, it is not necessary to establish that the party who has claimed the deductions has acted improperly or outside the norm for claiming expenses in the income tax context.

Rather, the issue is whether the full deduction of the expense results in a fair representation of the actual disposable income that is available to the party for personal expenses.[54] In determining whether business expenses claimed by a party are unreasonable, the court must balance the business necessity of the expense against the alternative of using those monies for the purposes of child support.[55] In carrying out this analysis, the court must keep in mind that principle which the Supreme Court of Canada established in D.B.S.[56] that payor parents should not be permitted to manipulate their financial affairs so as to prefer their own interests over those of their children. [62] A review of the case-law respecting business deduction claims reveals a general theme that in determining whether claimed expenses should be added back into a parent’s income for child support purposes, an important consideration is whether there is a personal benefit derived from the business expenses that employed people would have to pay for from their income.

By way of examples: 1. In Lemmon v. Lemmon ,[57] notional deductions for home office and promotional expenses that had personal overtones were added back into the payor’s income. 2. In R.(P.C.J.) v. R. (D.C.) ,[58] the British Columbia Court of Appeal imputed income back to the payor father on account of claimed food, motor vehicle and telephone expenses because there was an element of personal benefit to these expenses. 3. In Manchester v.

Zajac ,[59] the court imputed a number of claimed business expenses for home office expenses, car expenses, utilities and capital cost allowance back to the payor as income because of the personal use aspects of the expenses. 4. In Cook v. Cook ,[60] the court imputed claimed expenses for a home office into the payor’s income on the basis that these expenses were payable by the payor whether she operated her business from the home or not, and that the payor had not adduced any evidence to establish that the cost of operating her business from the home materially increased the cost of operating her household.

5. In Osmar v. Osmar,[ 61] the court imputed home office and automobile expenses back into income as a result of the personal benefit which the party derived from the expenses. 6. In Wilson v. Wilson ,[62] the court added business expenses for meals and entertainment, and a portion of the expenses claimed for cell phone, computer and internet back into the payor parent’s income based on the personal nature of the expenses.

The court also added the amount claimed for work-space-in-the-home expenses back into the party’s income, since the party did not adduce any evidence showing that he needed a larger home to carry out his work as a commissioned salesman. The court concluded that the party would have likely incurred these same household expenses even if he did not require a home office. [ 70 ] In other words, even if claimed business expenses have been properly deducted for income tax purposes, some of these may be imputed back to the payor’s income pursuant to paragraph 19(1)(

g) of the Guidelines . When deciding if the business expense is reasonable or not, the court should balance the business necessity of the expense against the actual income available to the party for personal expenses. It is a significant factor if a personal benefit is derived from the business expense if a salaried employee would pay this out of his or her own pocket. Some of these expenses include the following:

a) Notional deductions for home offices;

b) Motor vehicle expenses as there were personal benefits;

c) Business expenses for meals and entertainment; and

d) Expenses claimed for cell phones, computer and internet; [ 71 ] Looking at the Statement of Business Earnings attached to Mr. Boudreau’s income tax returns, it appears that some of his personal expenses relating to the use of a motor vehicle, cellular phone, internet, and part of his household expenses were paid for by the pawn shop business. These deductions totaling $19,000 are allowed by Canada Revenue Agency and some are required to operate his business. However, Mr. Boudreau benefits from these personally. [ 72 ] As such, I conclude that Mr. Boudreau unreasonably deducted expenses from his income contrary to paragraph 19(1)(

g) of the Guidelines . I will impute an additional annual income of $8,000 to Mr. Boudreau. This is an amount on which he does not pay income tax. Therefore, I must gross up this amount. Using the imputed amount of $8,000 and an average income of $11,223, the DivorceMate software indicates that. Mr. Boudreau’s annual income for the purposes of calculating support is $19,807 per year. ENTITLEMENT TO SPOUSAL SUPPORT [ 73 ] Ms. Boudreau’s claim for spousal support is based on

section 15.2 of the Divorce Act , the relevant portions of this

section include the following: 15.2

(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. Factors

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including: (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse. Objectives of spousal support order

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above anyobligation for the support of any child of the marriage; (

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [74] In Bracklow v. Bracklow (SCC), [1999] 1 S.C.R. 420, the Supreme Court of Canada dealt with entitlement tospousal support. McLachlin, J. (as she then was) wrote the decision for the Court. The following passages found in paragraphs 15, 34,35, 36, 38, 39 and 41 are relevant: 15 (…) I conclude, however, that the law recognizes three conceptual grounds for entitlement to spousal support: (1) compensatory; (2)contractual; and (3) non-compensatory.

These three bases of support flow from the controlling statutory provisions and the relevant caselaw, and are more broadly animated by differing philosophies and theories of marriage and marital breakdown. (…) 34 The Divorce Act and the provincial support statutes are intended to deal with the economic consequences of the marriage breakdownfor both parties. (…) 35 Moge, supra, sets out the method to be followed in determining a support dispute.

The starting point is the objectives which theDivorce Act stipulates the support order should serve: (1) recognition of economic advantage or disadvantage arising from the marriageor its breakdown; (2) apportionment of the financial burden of child care; (3) relief of economic hardship arising from the breakdown ofthe marriage, and (4) promotion of the economic self-sufficiency of the spouses: s. 15.2(6). No single objective is paramount; all mustbe borne in mind.

The objectives reflect the diverse dynamics of the many unique marital relationships. 36 Against the background of these objectives the court must consider the factors set out in s. 15.2(4) of the Divorce Act. Generally, thecourt must look at the “condition, means, needs and other circumstances of each spouse”. This balancing includes, but is not limited to,the length of cohabitation, the functions each spouse performed, and any order, agreement or arrangement relating to support. Depending on the circumstances, some factors may loom larger than others.

In cases where the extent of the economic loss can bedetermined, compensatory factors may be paramount. On the other hand, “in cases where it is not possible to determine the extent of theeconomic loss of a disadvantaged spouse . . . the court will consider need and standard of living as the primary criteria together with theability to pay of the other party”: Ross v. Ross (1995), (NB CA), 168 N.B.R. (2d) 147 (C.A.), at p. 156, perBastarache J.A. (as he then was). There is no hard and fast rule.

The judge must look at all the factors in the light of the stipulatedobjectives of support, and exercise his or her discretion in a manner that equitably alleviates the adverse consequences of the marriagebreakdown. (…) 38 The contractual or consensual basis for support finds its source in s. 89(1)(

b) of the Family Relations Act, which counsels courts to“hav[e] regard to . . . (

b) an express or implied agreement between the spouses that one has the responsibility to support and maintain theother”, and s. 15.2(4) of the Divorce Act (“In making an order under subsection (1) . . ., the court shall take into consideration . . . (

c) anyorder, agreement or arrangement relating to support of either spouse”). Consensual considerations may either create or negate anobligation to support, under appropriate circumstances. 39 The compensatory basis for support finds its source in a number of factors mentioned in the statutes. In the British Columbia FamilyRelations Act, these include s. 89(1)(

a) and (d). “[T]he role of each spouse in their family” embraces the contributions made by thespouses to the family for which compensation may be appropriate on the collapse of the marriage.

Similarly, “the ability and capacity of... either or both spouses to support themselves” permits a court to examine whether spouses have foregone opportunities to develop theability to support themselves because of the marriage or have been rendered less able to support themselves by adverse effects of themarriage or the marriage breakdown. “[C]ustodial obligations respecting a child” (Family Relations Act, s. 89(1)(c)) may relate tocompensation. While spousal support is distinct from child support, the need to care for children has an impact on factors relevant tospousal support.

Under the Divorce Act, compensation arguments can be grounded in the need to consider the “condition” of the spouse;the “means, needs and other circumstances” of the spouse, which may encompass lack of ability to support oneself due to foregoingcareer opportunities during the marriage; and “the functions performed by each spouse during cohabitation”, which may support thesame argument. In sum, these compensatory statutory provisions can be seen to embrace the independent, clean-break model of

marriage and marriage breakdown. (…) 41

Section 15.2(6) of the Divorce Act , which sets out the objectives of support orders, also speaks to these non-compensatory factors. The first two objectives -- to recognize the economic consequences of the marriage or its breakdown and to apportion between the spouses financial consequences of child care over and above child support payments -- are primarily related to compensation.

But the third and fourth objectives are difficult to confine to that goal. “[E]conomic hardship . . . arising from the breakdown of the marriage” is capable of encompassing not only health or career disadvantages arising from the marriage breakdown properly the subject of compensation (perhaps more directly covered in s. 15.2(6)(a): see Payne on Divorce, supra, at pp. 251-53), but the mere fact that a person who formerly enjoyed intra-spousal entitlement to support now finds herself or himself without it.

Looking only at compensation, one merely asks what loss the marriage or marriage breakup caused that would not have been suffered but for the marriage. But even where loss in this sense cannot be established, the breakup may cause economic hardship in a larger, non- compensatory sense. Such an

interpretation supports the independent inclusion of s. 15.2(6)(

c) as a separate consideration from s. 15.2(6)(a). Thus, Rogerson sees s. 15.2(6) (c), “the principle of compensation for the economic disadvantages of the marriage breakdown as distinct from the disadvantages of the marriage”, as an explicit recognition of “non-compensatory” support (“Spousal Support After Moge”, supra, at pp. 371-72 (emphasis in original)). [ 75 ] Ms. Boudreau is requesting an award of spousal support from the date of separation in late January of 2021, going into the future. [ 76 ] There is no doubt that Ms. Boudreau has established an entitlement to an award of spousal support.

The parties cohabitated for 26 years, which is considered a long relationship. Ms. Boudreau was financially dependant on Mr. Boudreau during the relationship although she was employed during most of the years of cohabitation. She still has a need for spousal support. At the time of the hearing, she was 57 years of age. Ms. Boudreau has established that she has an entitlement to spousal support based on the compensatory and non compensatory (need) basis.

APPLICATION OF THE SPOUSAL SUPPORT ADVISORY GUIDELINES [ 77 ] The New Brunswick Court of Appeal, like the other courts of appeal in this country, has adopted the application of Spousal Support Advisory Guidelines , July 2008, Department of Justice by Professor Carol Rogerson ad Professor Rollie Thompson. GROSS PAYOR INCOME BELOW $20,000 [ 78 ] Generally, according to the Spousal Support Advisory Guidelines , in cases where the gross payor income is below $20,000, no spousal support is payable.

The concept is explained in paragraph 11.2 at page 111 of the Spousal Support Advisory Guidelines , which reads as follows: 11.2 The Floor A floor for the Advisory Guidelines is more significant, if it sets the amount of support at zero below that floor. In our view, that should generally be the effect of the floor. The Federal Child Support Guidelines use a very low floor, about $8,000 gross per year. The floor for spousal support has to be higher than that. There should generally not be any amount of spousal support payable until the payor’s gross income exceeds $20,000 per year.

A minimum wage or poverty line income would be too low for a floor, providing too little incentive for the payor to continue working, given prevailing tax rates. A review of the case law suggests that judges almost never order spousal support where payors make less than $20,000, or even slightly more. According to child support database information, where dependent children are involved, if the payor’s income is below $20,000 gross annually, spousal support is only ordered or agreed upon in less than 2 percent of cases and the percentages for incomes of $20,000 to $29,000 are only about 2.5 percent.

Below this floor, there will be occasional cases where there will be entitlement to spousal support. There is also a need for flexibility forincomes just above the floor, to avoid any “cliff effect’ and to accommodate ability to pay concerns. These are discussed below. [79] Mr. Boudreau’s gross annual income is and has been below $20,000 per year since the onset of the pandemic has diminished theprofits of the pawn shop. In my view, given that his annual income is below the floor of $20,000, there should be no spousal supportpayable by him. As there is no spousal support payable by Mr.

Boudreau and the parties are divorced the life insurance policy on Mr.Boudreau’s life for the benefit of Ms. Boudreau should be cancelled. COSTS [80] Both parties requested an award of costs in the event that she or he was successful. 59.01 Authority of the Court

(1) Subject to any Act and these rules, the costs of a proceeding or a step in a proceeding are in the discretion of the court and the courtmay determine by whom and to what extent costs shall be paid.

(2) Nothing in this rule shall be construed so as to interfere with the authority of the court (

a) to fix the costs of a proceeding, or a step in a proceeding, with or without reference to a tariff, instead of requiring assessment of thecosts, (

b) to allow or refuse costs in respect of a particular issue or part of a proceeding, (

c) to order costs to be assessed on a solicitor and client basis, or (

d) where parties are entitled to costs from each other, to order set-off of the costs. 59.02 Costs of a Proceeding In fixing costs, the court may consider: (

a) the amount claimed, and the amount recovered, (

b) the apportionment of liability, (

c) the complexity of the proceeding, (

d) the importance of the issues, (

e) the conduct of any party which tended to shorten or unnecessarily lengthen the duration of the proceeding, (

f) the manner in which the proceeding was conducted, (

g) any step in the proceeding, which was improper, vexatious, prolix or unnecessary, (

h) any step in the proceeding which was taken through over-caution, negligence or mistake, (

i) the neglect or refusal of any party to make an admission which should have been made, (

j) whether or not two or more defendants or respondents should be allowed more than one set of costs, where they have defended theproceeding by different solicitors, or where, although they defended by the same solicitor, they separated unnecessarily in their defence, (

k) whether two or more plaintiffs, represented by the same solicitor, initiate separate actions unnecessarily, and (

l) any other matter relevant to the question of costs. [81] With respect to costs, the following passages found in Rademaker v. Rademaker, 2002 NBCA 47, give some guidance on thequestion of costs in family matters. Paragraphs 27 and 28 read as follows: [27] The only remaining issue is that of costs. In Simms v. Simms (1996), (NB CA), 182 N.B.R. (2d) 362 therespondent cross-appealed the award of costs. The trial judge had awarded costs of $10,000.00 in addition to suit money of $7,500.00,

which the respondent submitted were inordinately low considering the length of the trial, the interlocutory proceedings, the complexity of the issues and, particularly, the amount of marital property involved, $707,314.00. Hoyt C.J.N.B. made the following comment at para.14: The trial lasted four days. Apart from two consent orders contained in the Appeal Book, we were not made aware of the number or nature of the pre-trial applications. Mrs. Simms did not call direct expert evidence about the most complex issue, valuation.

I can see no reason to invoke Tariff A of Rule 59 of the Rules of Court to determine costs at trial in family matters. Its use might often upset an otherwise delicate division of marital property. Frequently, as here, not all marital property or its value is in issue. Most important, however, is the nature of the resolution of family disputes. Rules 72, 73 and 74 recognize that family matters are considered under a different regime than most other civil disputes. I can see no reason to introduce the rigidity of Tariff A of Rule 59 to marital property disputes.

In my view, costs of $17,500.00 for this four-day trial are reasonable. [28] In the case before us the trial judge made no award as to costs after the four-day hearing even though there was a considerable amount of property involved. Furthermore, he gave no reasons for not allowing costs. I agree that in cases involving family disputes regarding the custody and access of children and child and spousal maintenance orders awarding costs under Rule 59 may generally not be appropriate.

However, in cases where division of property is at issue and an amount involved is easily determined, as in a civil case, then it is appropriate to apply the Tariff under Rule 59. [ 82 ] This was a two-day trial. The contentious issues were entitlement to spousal support and imputation of an income to both parties. [ 83 ] All in all, I am of the view that both parties had some success, however, Mr. Boudreau had more success. This because an income was imputed to both parties. As well, although Ms. Boudreau established entitlement to spousal support, given that Mr.

Boudreau’s imputed income was below the floor, no spousal support was awarded. [ 84 ] The determination of costs is at the discretion of the trial judge. Given that Mr. Boudreau has had more success in this matter he is entitled to an award of costs of $2,500. DISPOSITION [ 85 ] I order as follows:

a) In addition to her annually reported income of $18,000, an annual income of $7,000 is imputed to Ms. Boudreau.

b) In addition to his annual average income of $11,223, an additional annual income of $8,000 is imputed to Mr. Boudreau, such that his income for the purposes of the Spousal Support Advisory Guidelines is $19,807 per year.

c) Although Ms. Boudreau has established entitlement to an award of Spousal Support, given that Mr. Boudreau’s imputed income is below the threshold amount of $20,000, the request for spousal support is denied.

d) The life insurance policy on Mr. Boudreau’s life shall be terminated.

e) Mr. Boudreau is entitled to an award of costs of $2,500 payable by Ms. Boudreau. DATED at Moncton, N.B., this 14 th day of November 2023. _______________________________________ Justice Colette M. d’Entremont Justice of the Court of King’s Bench of New Brunswick