Santha v Carlton, 2022 ABKB 657

Court of King’s Bench of Alberta Citation: Santha v Carlton, 2022 ABKB 657 Date: 20221004 Docket: FL01 36685 Registry: Calgary Between: Royal Robert Santha Appellant - and - Lindsay Carole Carlton Respondent _______________________________________________________ Reasons for Decision of the Honourable Justice M.A. Marion _______________________________________________________ I. Introduction and Background [ 1 ] This is an appeal ( Appeal ) of a December 10, 2021 Order of the Honourable Assistant Chief Judge G.H. Cornfield ( Judge ) of the Provincial Court of Alberta, pursuant to Rule 12.61 and

section 89 of the Family Law Act , SA 2003 c F-4.5 ( Order ). [ 2 ] The parties had one child together born in 2007 ( Child ).

[ 3 ] On June 28, 2021, Honourable Judge J.R. Shaw granted a Consent Final Varied Child Support Order, by which the father, Royal Santha ( Santha ) became obligated to pay the Child’s mother, Lindsay Carlton ( Carlton ), child support of $330 per month until further order of the court. It also set arrears of child support at $6,340 to be paid in monthly instalments of $170 beginning July 1, 2021 and continuing on the first of each month from then on until paid in full.

At this point in time, the Child resided with Carlton. [ 4 ] On November 15, 2021, Santha applied to vary the June 28, 2021 order in respect of parenting and child support. The reason for the application was that Carlton was moving to Mexico and the Child was to commence residing with Santha after December 31, 2021. Santha’s Payor’s Statement – Vary Child Support filed in support of the application advised that his child support arrears was in the amount of $5,490 ( Arrears ) and that he was not seeking to have the arrears reduced.

He was seeking to end his ongoing child support obligation and commence Carlton’s child support obligation when Carlton moved to Mexico and the child began to reside with him. He sought disclosure from Carlton and stated that he believed her annual income should be set at $51,000 to $80,000 per year, because she was a flight attendant with WestJet. [ 5 ] On November 19, 2021, Carlton filed her Reply to Payor’s Statement – Vary Child Support, as well as a Reply Statement – Vary Parenting. These documents indicated, among other things: (

a) Carlton’s income in 2020 was $55,860, and that she expected her gross annual income for 2021 to be $23,656.00; (

b) her income from September 2021 to December 2021 was from short-term disability; (

c) her current husband turned 60 in 2021 and lost his job as a pilot in Korea, which changed her financial situation greatly. The costs of her husband getting an Airline Transport Pilot Licence (ATPL) and type rating were so prohibitive he was not able to get a job; (

d) as a result of the pandemic and loss of her husband’s job her income was not enough to support her and her husband, and her son in Canada; (

e) she was eligible to retire after over 18 years as a flight attendant with WestJet and, as of December 5, 2021, was retiring and would no longer have an income. She said she would not have any pension plan or other income; (

f) Carlton and her husband were moving to their home in Manzanillo, Mexico because they could afford to live there. She provided a comparison of expenses between residing in Mexico versus Canada, which indicated significantly lower monthly expenses in Mexico; and (

g) she would continue to pay a portion of guitar lessons, any school-related fees, ski pass and equipment, any medical/dental expenses not covered by Santha’s insurance plan, and she would continue to contribute to the RESP she had set up for the Child. [ 6 ] The matter came before the Judge on December 10, 2021. Much of the submissions and discussion with the Judge in the application hearing related to the variation of the parenting provisions, which are not part of the Appeal before me.

With respect to child support, the parties agreed that Santha’s child support obligations would cease once the Child started residing with Santha, other than the arrears that were already owed. [ 7 ] With respect to any ongoing obligation of Carlton respecting child support, the Judge asked the parties whether a halfway point would be to simply cancel the Arrears.

Santha indicated that he was agreeable to this suggestion, although it is not clear he understood the Judge’s proposal to mean that he would not receive any child support from Carlton, because Santha later suggested that Carlton’s child support payments could be applied against his Arrears until they were paid out and then Carlton could begin paying child support. [ 8 ] Carlton advised the Judge that she will not have an income because she had retired from her job. She also represented to the Judge that she did not own any other properties in Alberta.

The Judge had again suggested that “a reasonable saw-off to me seems to be your arrears get cancelled and then we just move on”. Santha asserted that Carlton did not “retire” but quit her job, and he noted she was only 43 years old. [ 9 ] The Judge then made his decision as follows: So what I am going to do, I am simply going to say effective January 1 of 2022, because there’s been a change in parenting of the child, Santha’s obligation to pay child support as per the January [sic] 28, 2021 order, and that will include arrears, is hereby cancelled.

And then if you want to go chasing mom for child support through some other legal means, sir, you can. [ 10 ] The Judge later confirmed “so if you want to file a child support application, you can”. [ 11 ] The Order arising out of this attendance provided that there “shall be no child support payable by either party”, which had the effect of terminating Santha’s Child support obligations on January 1, 2022 (including cancelling the Arrears), and finding that Carlton would not be obligated to pay child support after the Child began residing with Santha. [ 12 ] On March 16, 2022, Justice de Wit granted Santha leave to file a notice of appeal with the Court of Queen’s Bench by April 1, 2022, which Santha did.

II. Positions of the Parties [ 13 ] Santha’s notice of appeal sets out the grounds of appeal as: the Judge did not follow the Family Law Act , section 49(1) , which provides that “every parent has an obligation to provide support for his or her child”. He seeks child support from Carlton based on her full-time income from the job she left to move to Mexico. In his written argument, he argues that the “true circumstances of the Respondent’s income were not considered or allowed to be heard” by the Judge. He argues that Carlton owned rental properties in

Alberta which would generate income. He points to the respondent being only in her mid-40s and capable of full-time employment, andthat she voluntarily resigned from her position at WestJet in 2021. [14] Carlton denies that the true circumstances of her income were not considered by the Judge. Carlton has not appealed theportion of the Order by which the Judge cancelled the Arrears. III. Supplemental Evidence on Appeal [15] In his materials filed in support of the Appeal, Santha included an affidavit which included both argument and supplementalevidence that was not before the Judge.

The supplemental evidence included “update” post-Order information from 2022, as well assome pre-2021 information that was not before the Judge in the form of emails he argues indicate Carlton’s ownership of properties inAlberta.

In response, Carlton expressed some confusion about why the additional information was being raised, and while she containedherself to argument (albeit in the form of an affidavit), she sought permission of the Court to update her situation since the Order wasgranted. [16] In oral argument, both parties gave submissions which were indirectly or directly attempting to provide supplemental evidencethat was not before the Judge. [17] An appeal of a Provincial Court decision pursuant to

section 89 of the Family Law Act is normally an appeal on the record,not a hearing de novo: Wandler v Crandall, 2017 ABCA 391 at para 33; Rule 12.68. [18] Rule 12.68 provides that “the documents provided by the clerk of the Provincial Court pursuant to rule 12.62(2) and thetranscript of the hearing before the Provincial Court form the record for the hearing of the appeal, and no other evidence may beconsidered by the Court unless otherwise ordered by the Court”. [19] In order for Santha to rely on pre-2022 evidence that was not before the Judge, he would have had to file an application toadmit fresh evidence on appeal, pursuant to Rule 12.68.

This application for further evidence must be supported with argument as to whythe record contemplated by Rule 12.62(2) is insufficient: Wandler at para 33. Santha did not file any such application or make any sucharguments.

However, in oral argument I explained the test to him and allowed him to make an application to me orally, and asked for hissubmissions as to why I should consider the supplemental evidence. [20] The appropriate test in such a circumstance is that it must meet the test in R v Palmer, (SCC), [1980] 1 SCR759 at 775; Saunder v 360373 Alberta Ltd (Arlington Apartments), 2021 ABCA 222 at para 8; see also Cameron v Benkie, 2017ABQB 346 at para 10. [21] The R v Palmer criteria is (1) the evidence should not generally be admitted if, by due diligence, it could have been adducedat the hearing; (2) the evidence must bear upon a decisive or potentially decisive issue in the hearing; (3) the evidence must be credible inthe sense that it is reasonably capable of belief; and (4) the evidence, if believed, could reasonably, when taken with other evidenceadduced at the hearing, be expected to have affected the result. [22] Santha’s argument was that the emails from prior to December 2021 only became relevant after Carlton’s husband passedaway in spring 2022.

In his submission, the evidence in the emails shows that Carlton’s husband owned several properties which maynow have passed to Carlton. [23] Santha has not met the test for fresh evidence. He fails to meet the requirements (1), (2) and (4) from R v Palmer. There is noreason why the emails he seeks to adduce now, which are emails he was a party to, which are from September and October 2021, couldnot have been included in his materials in support of his application before the Judge in December 2021.

Further, the fact the emails maypotentially be relevant in 2022 to Carlton’s income in 2022 does not bear on the decision to grant the Order in December 2021, and couldnot have affected the result. Therefore, I have not considered the emails Santha attached to his argument/affidavit in support of theAppeal. [24] As noted above, both parties attempted to provide evidence or submissions about their current situation in 2022. In my view,to the extent any of those submissions constitute evidence at all, they do not meet (2) or (4) under the R v Palmer test and I have notgiven them any weight in reaching my decision.

IV. Standard of Review [25] The application before the Judge was an application to vary child support pursuant to section 77(2) of the Family Law Act,which provides that the court “may” vary, suspend, or terminate a support order or any part of that order. Section 77(4) provides thatbefore the court makes a variation order in respect of a child support order, the court shall satisfy itself that (

a) a change ofcircumstances, including those provided for in the prescribed guidelines, has occurred since making of the order or the last variationorder made in respect of that order, or (

b) evidence of a substantial nature that was not available at the previous hearing has becomeavailable, and in making the variation order, the court shall consider that change of circumstances or evidence. [26] In DBS v SRG, 2006 SCC 37 at para 136, the majority of the Supreme Court of Canada set out the standard of a review thatapplies to decisions under section 77(2) of the Family Law Act: Before proceeding to apply the above reasoning to the facts of the four appeals, I should repeat the standard of review that applies tothese decisions. The relevant passage can be found in this Court’s decision in Hickey v. Hickey, (SCC), [1999] 2 S.C.R.518, at para. 11:

[A]ppeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of theevidence, or unless the award is clearly wrong. [27] This deferential standard of review has been more recently confirmed by the Alberta Court of Appeal in Garnett v Garnett,2019 ABCA 282, at para 4: The standard of review of support orders is deferential.

A support order should only be disturbed if it reflects an error in principle, asignificant misapprehension of the evidence, or if the award is clearly wrong: Hickey v Hickey, (SCC), [1999] 2 SCR518 at paras11-12, 172 DLR (4th) 577; DBS v SRG, 2006 SCC 37 at para 136; Spencer v Spencer, 2005 ABCA 262 at para 2. V. Issue [28] The issue on this Appeal is whether the Judge committed an error in principle, a significant misapprehension of the evidence,or if the Order is clearly wrong. VI.

Analysis [29] Santha does not take issue with the Judge’s decision to end his child support obligations, or to cancel his Arrears (somethingthat he did not even request). I address his arguments below, namely related to:

(1) Carlton’s disclosure; (2) income generating propertiesSantha believes Carlton owned or owns; and

(3) Carlton’s lack of income, including due to her ending her employment and moving toMexico. A. Santha’s Argument Relating to Disclosure [30] In argument on the Appeal, Santha indicated that he did not believe Carlton’s disclosure was complete prior to the Order. Heincluded a “demand for financial information” in his November 15, 2021 Family Law Claim application document. He says he expectedand wanted more information that Carlton could not afford to pay child support. Carlton’s evidence was that her disclosure wascomplete.

Santha did not ask the Judge at the hearing to order more financial information and to adjourn his child support applicationpending receipt of additional financial information. Santha indicated to me that he was suffering an anxiety attack during the proceedingsbefore the Judge, but there is no indication in the transcript that he alerted the Judge. In all of these circumstances, whether Santhabelieved Carlton’s disclosure was complete is not decisive.

Without some material evidence of that, or a request to adjourn, the Judgewas entitled to proceed on the merits of the application, and could only proceed based on the evidence before him. [31] In any event, even if I were to consider Santha’s supplemental evidence relating to Carlton’s alleged lack of disclosure, thereis no factual foundation before me to support that the additional disclosure sought by Santha pertaining to Carlton’s income would havehad any impact on the result before the Judge. [32] In these circumstances, the Judge’s decision not to order further disclosure was not based on an error in principle or amisapprehension of the evidence, and was not clearly wrong.

B. Santha’s Argument Relating to Income Generating Properties Owned by Carlton [33] In the course of the application, the Judge proceeded on the basis that Carlton’s position was that she had no assets orproperty that would generate income. This may have been based on an exchange where Santha asserted that she owned “four propertiesin Cochrane”, and Carlton stated that “the bank owns them” and “I don’t own anything”. These statements were not independently inevidence. [34] In argument, the Judge was not referred to Carlton’s income tax statements for 2018, 2019 and 2020, which were in evidencebefore him.

Those income tax returns indicate that Carlton earned rental property income from a property in Cochrane in each of thoseyears, which earned net rental income in the amounts of $11,059 in 2018, $6,785 in 2019, and $11,467 in 2020. [35] While one might argue that the Judge’s failure to reference this property and related income was a significant misapprehensionof evidence, I do not believe it was.

The income level associated with these properties alone, assuming it would continue in the future,had they been used as Carlton’s income pursuant to the Child Support Guidelines and tables, would have generated a $0.00 amount permonth child support obligations.

Santha did not put any child support calculations into evidence before the Judge, but I take judicialnotice that a payor income exceeding $12,000 is required to trigger a monthly payment child support amount for a single child in Alberta. [36] As there was no other evidence before the Judge respecting income earning properties as asserted by Santha, or that theexisting property was still owned by Carlton and would earn more than $12,000 in net income, the Judge did not commit an error inprinciple or a significant misapprehension of the evidence, and the Order is not clearly wrong due to income earning properties allegedlyowned by Carlton.

C. Santha’s Argument Relating to Carlton’s Employment Income 1. Carlton’s Income / Expected Income at the time of the Order [37] As noted above, Santha relies on section 49(1) of the Family Law Act, which provides that every parent has an obligation toprovide support for his or her child. That is correct, however, the obligation to provide support for a child is based on the Family Law Act

and the Child Support Guidelines in their totality, not only on

section 49. [ 38 ] Section 51(1) of Family Law Act provides that, except in circumstances set out in section, 51(2) “in making a child support order, the court shall do so in accordance with the prescribed guidelines”. Those prescribed guidelines are the Alberta Child Support Guidelines , Alta Reg 147/2005 ( Guidelines ). [ 39 ] Section 3(1) of the Guidelines provides that “unless otherwise provided under these Guidelines , the amount of a child support order for children under the age of majority is (

a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates in the income of the parent against whom the order is sought…”. [ 40 ]

Section 15 of the Guidelines provides that, absent agreement as to the annual income of a parent, a parent’s annual income is determined by the court in accordance with sections 16 to 20 of the Guidelines .

Section 16 of the Guidelines provides that, subject to sections 17 to 20 , a parent’s annual include is determined “using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency” and adjusted in accordance with

Schedule 3. [ 41 ]

Section 16 could have, but does not, define annual income as income stated on the previous year’s income tax return: Lavergne v Lavergne , 2007 ABCA 169 at para 17 .

Section 16 must be read together with section 2(3) of the Guidelines , which provides that where, “for the purposes of these Guidelines , any amount is determined on the basis of specified information, the most current information must be used”; this means that the most current information about the sources of income in the income tax returns must be used: Lavergne at para 17 ; Arnault v Arnault , 2011 ABQB 487 at para 16 . [ 42 ] So, income tax returns may provide a starting point for determination of income, but it is subject to the reality of the situation, and what is a fair income to be used: Lavergne at paras 20-22 ; Ewing v Ewing , 2009 ABCA 227 at para 22 ; Guidelines ,

section 17 . Children are entitled to be supported according to the payor’s “current income”, if ascertainable, and, if not, by a reasonably accurate estimate of the payor’s current income with an adjustment at year’s end once the actual data becomes known: Lavergne at para 22 . [ 43 ] Before the Judge, there was uncontradicted evidence that Carlton’s income fluctuated, to the point where it was drastically reduced in 2021 due to the COVID pandemic and a short-term disability. Carlton expected her income to be $23,656 in 2021.

However, there was also uncontradicted evidence that Carlton retired from WestJet on December 5, 2021, prior to the December 10, 2021 application and would have no further employment or pension income.

That is, prior to the hearing before the Judge, Carlton’s income had fluctuated to the point where it was non-existent with no expectation of employment income returning. [ 44 ] Based on the above principles and guidance from the Supreme Court of Canada and the Court of Appeal, it was not an error in principle, a misapprehension of the evidence, or clearly wrong for the Judge to recognize the reality of the situation, on the best evidence before him, that Carlton’s employment had ended, and that she would have no employment income in 2022. 2.

Imputed Income [ 45 ] Santha’s argument on Carlton’s employment income, or lack thereof, is best characterized as one that the Judge should have imputed income on Carlton pursuant to section 19(1) of the Guidelines because she voluntarily chose to retire from WestJet when she was only in her mid-40s. [ 46 ] The test in Alberta for imputing income is different than other Provinces. In 2017, the Court of Appeal confirmed the test in Keating v Keating , 2017 ABCA 428 and DBF v BF , 2017 ABCA 272 . In Keating , the Court of Appeal stated, at para 7: This

section “should be interpreted to impute income where the obligor has pursued a deliberate course of conduct for the purpose of evading child support obligations.” It requires “either proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to infer that the intention of the obligor is to undermine or avoid his or her support obligations”: Hunt v Hunt-Smolis , 2001 ABCA 229 at para 42 , 286 AR 248. [ 47 ] And at para 10: However, this Court recently confirmed that someone wishing to have the court impute income to a person must prove that the person engaged in a “deliberate course of conduct” for the purpose of evading child support obligations which requires “proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to infer that the intention of the obligor is to undermine or avoid his or her support obligations ’ ”: DBF v BF , 2017 ABCA 272 at para 77 .

The Court found the trial judge had erred when she considered whether, on a reasonableness test, the payor’s unreasonable decisions combined with her capacity to earn more were sufficient to impute income. More specifically, the trial judge erred by asking whether the payor “could have earned employment income and if so, how much, rather than asking whether there was evidence, direct or indirect, that [the payor was under-employed] with the intention of avoiding her support obligations.”: para 78.

The Court noted that this approach was rejected by the majority in Hunt , which “remains the law in Alberta until it is reconsidered by a panel of this Court”: para 78. Appellate courts in other provinces (British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec and Saskatchewan) have adopted a different approach. In those jurisdictions the reasonableness test governs; that is, the court considers what is reasonable under the circumstances.

The payor’s age, education, experience, skills, health and other obligations are considered as is the availability of work and the freedom to relocate, all in the context of parents’ legal obligation to maintain their children. [Emphasis added] [ 48 ] In 2020, the Court of Appeal again confirmed the test in Alberta in MacDonald v Brodoff , 2020 ABCA 246 , at para 10 : As noted, Hunt is the leading Alberta case regarding imputation of income under s 19(a) [ sic ] of the Guidelines .

In Hunt , a majority of this Court established that income can only be imputed for child support purposes where “the obligor has pursued a deliberate course of conduct for the purpose of evading child support obligations”: para 42. Simply failing to earn their maximum potential or failing to take reasonable employment is not enough. Imputation of income requires “either proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to infer that the intention of the obligor is to undermine or avoid his or her support

obligations”: para 42. Intention can be inferred “where the unemployment, under-employment or other acts of the obligors indicate a deliberate refusal to live up to the obligation to support one’s children”: para 73. [ 49 ] In MacDonald , at para 69 , the Court of Appeal noted it might be time to reconsider Hunt . Then, in Peters v Atchooay , 2021 ABCA 237 , the Court of Appeal granted leave to reconsider Hunt , and the appeal was heard in November 2021. To the best of my knowledge, the decision remains under reserve.

Accordingly, the Judge was bound by, and this Court continues to be bound by, the Hunt test. [ 50 ] The Hunt test has been applied in Alberta recently in the context of retirements: Kelly v Gammon , 2022 ABQB 57 and Olson- Lipinski v Lipinski , 2018 ABQB 1018 . [ 51 ] In this case, the Judge did not impute income to Carlton, even though Santha argued she could still work and that she voluntarily quit her job. The Judge must be taken to have found, without stating it expressly, that Carlton did not pursue a deliberate course of conduct for the purpose of evading child support.

That inference and that conclusion are reasonable in this case, given the evidence I outlined earlier that Carlton was entitled to retire from WestJet and had decided to move to Mexico because that is where her and her 60 year old husband (who could not find work as a pilot) could afford to live. [ 52 ] Even if I am wrong in that, I would nonetheless dismiss the Appeal and would not interfere with the Judge’s Order .

That is, even if it is assumed that the Judge erred because he did not expressly state the Hunt test for imputing income, or because he did not expressly reference that he considered imputing income, and that he therefore erred by failing to properly consider whether to impute income, this does not assist Santha. Based on the Hunt test, as confirmed and elaborated upon by the subsequent Court of Appeal decisions, I am not satisfied based on the record before the Judge that Carlton pursued a deliberate course of conduct for the purpose of evading child support obligations.

She moved to Mexico because she and her husband could afford to live there, and she retired because she was entitled to retire and it was consistent with the fact that she could not realistically commute to work from Mexico. She also advised the Judge that she would continue to pay certain expenses of the child, which reflects an intention to continue to support the Child. Accordingly, on balance, I believe the Judge would have reached the same conclusion had he expressly referenced or expressly considered imputing income.

Further, based on the same record, I would reach the same conclusion as the Judge, based on the Hunt test. There is no basis or reason to interfere. VII. Conclusion [ 53 ] Based on the foregoing, I conclude that the Judge did not make any error, or alternatively any error that justifies interfering with the Order on appeal. The Appeal is dismissed. The Order is confirmed pursuant to Rule 12.70(

a) of the Rules of Court . [ 54 ] As was noted by the Judge, the Order does not preclude Santha from applying in the future to seek child support from Carlton pursuant to

section 77 of the Family Law Act . [ 55 ] There will be no award of costs to either party in respect of this Appeal. Heard on the 8 th day of September, 2022. Dated at Calgary, Alberta this 4 th day of October, 2022. M.A. Marion J.C.K.B.A. Appearances: Royal Robert Santha Self-represented Lindsay Carole Carlton Self-represented