Reid v Chambers, 2022 ABKB 634

Court of King’s Bench of Alberta Citation: Reid v Chambers, 2022 ABKB 634 Date: 20220921 Docket: FL03 49663 Registry: Edmonton Between: Dean Reid Applicant / Plaintiff - and - Jennifer Chambers Respondent / Defendant _______________________________________________________ Memorandum of Decision of the Honourable Justice L.K. Harris _______________________________________________________ [ 1 ] The Applicant Father (the “Father”) applies to eliminate child support arrears and reduce ongoing child support.

The Respondent Mother (the “Mother”) objects to the application. [ 2 ] The parties have one child, Jaden Dawson Chambers, born July 9, 2014. The parties were never married nor in an interdependent relationship. [ 3 ] There have been many procedural steps previously taken in Court addressing child support, the most important being the following:

• 2015 Child Support of $689 per month ordered payable by Father. • February 13, 2017 Father granted Stay of Enforcement and child support reduced to $250 per month in the interim. • December 15, 2017 Father ordered to pay child support of $771 per month. • April 8, 2019 Father ordered to continue to pay $771 per month in child support based on an imputation of income of $89,100 and is declared to be in arrears of $8,857 from December 1, 2017. This Order is not appealed, although it was amended by Ross, J on July 8, 2019. • May 27, 2021 Father ordered to pay 73.38% of

section 7 expenses in addition to s. 3 child support. Father does not attend application. • November 12, 2021 Father attended Docket Court seeking leave to bring application to revisit arrears and adjust ongoing support. Father had obtained an agreement from MEP to reduce his monthly payment to $450. • February 28, 2022 Father provided his Disclosure Statement attaching Notices of Assessment from 2018 to 2020. [ 4 ] The Father states that upon the child’s birth he and the Mother reached a verbal agreement that he would pay $500 per month. The Mother registered with MEP after one payment was late.

At that time, the Father’s relationship with the child ended and he hasn’t seen the child since then. The Mother has sole parenting responsibilities and guardianship. At the time the 2015 Order was granted, the Father was working as an owner-operator of a trucking business earning $81,000 per year, having worked for Sysco Foods for approximately 17 years. [ 5 ] The father ran into financial difficulties shortly after the 2015 Order was granted. Eventually MEP suspended his motor vehicle registration which negatively impacted his trucking enterprise. In the Fall of 2016 he sold his truck and became unemployed.

In May 2017 he filed for bankruptcy as he owed CRA in excess of $125,000. He was discharged from bankruptcy in February, 2018. [ 6 ] At some point the Father found employment with Zaychuk Trucking, which lasted until February 2020. He was again unemployed and receiving EI benefits until January, 2021. He states that he found employment in July 2021 with Pratt Food Services, and he continues to work for them.

He says that his income is now stabilized [ 7 ] The Father says that after the February, 2017 Stay Order, he continued to pay $250 per month and after January 1, 2020, he also began paying $50 per month towards the arrears. On November 1, 2021 he negotiated a new agreement with MEP whereby he would pay $450 per month, however, the arrears continue to build.

As of the date of this application arrears were estimated to be approximately $18,383. [ 8 ] The disclosure provided by the father in February 2022 shows income as follows: • 2018 $35,078 • 2019 $45,543 • 2020 $29,420 [ 9 ] The Father estimates that his 2022 income will be approximately $52,000 which includes some additional money earned from side jobs. [ 10 ] The Father argues that he has experienced a material change in circumstances such that his child support arrears and ongoing obligation should be reduced.

His child support obligations should be based upon his actual earned income, which would result in the elimination of his arrears and an ongoing obligation amounting to $392 per month. He says that his is not a case where the payor has failed to pay child support altogether – instead, he has always paid something but his circumstances have prevented him from keeping up with his obligations.

He states that payment of the arrears would amount to a “windfall” for the Mother, and in any event, he has been self-represented for most of these proceedings and accordingly should be given some leeway. [ 11 ] The Mother argues that the Father is not eligible for any change to his child support allegations, for two reasons. First, he has not demonstrated a change in circumstances. He has always been a trucker, and he has not shown any reason why he could not continue to earn at the same rate as he did in 2015. Second, the Father has not been forthcoming with disclosure.

The first financial disclosure the Mother ever received from the Father was when he filed his Disclosure Statement in February, 2022. Even then, it was deficient. The Mother responded by serving a Notice to Respond to Written Interrogatories requesting additional financial information, including bank account statements, as the Mother suspected that the Father was receiving cash for informal jobs on the side in addition to his salary from Pratt Food Services. The Mother received a Response filed July 4, 2022 which provided some, but not all of the information requested.

That new financial information showed annual income in the $47,000 range, but there also appeared to be intermittent deposits into the Father’s bank account which remain unexplained. [ 12 ] The Mother further argues that to allow this application would in effect grant the Father a “back door” appeal of the April 2019 Order assessing child support obligations and arrears.

While the Mother agrees that the date of formal and effective notice of the Father’s intentions is November 12, 2021, she states that his failure to provide fulsome financial disclosure should prevent him from obtaining an elimination of his arrears or a reduction of his ongoing child support obligations.

[13] In this case, s.77 of the Family Law Act, R.S.A. 2000 c. F- applies to authorize the variation of child support orders eitherprospectively or retroactively. Colucci v Collucci, 2021 SCC 24 (“Colucci”), and the principles of analysis detailed therein, applies toapplications to vary child support made under the FLA. [14] Colucci explains when and how child support arrears may be varied. The Court states that the child support system dependsupon “adequate, accurate and timely financial disclosure” (at para. 48).

A payor parent’s failure to make timely, proactive and fulldisclosure undermines the objective of establishing a fair standard of support for children (at para. 50).

Collucci goes on to hold at para.59 that a payor parent seeking a downward retroactive change must first show a past change in circumstances: A change in circumstances could include a change that, if known at the time, would probably have resulted in different terms, such as adrop in income (Guidelines, s. 14(a); Willick v Willick, (SCC), [1994] 3 S.C.R. 670, at p. 688; Gray, at para. 39). [15] To establish a change in circumstances, the payor parent must show a decrease in income which is significant and has somedegree of continuity. It must be real and not one of choice.

The payor parent must disclose sufficient reliable evidence for the Court todetermine when and how far their income fell. Significantly, the Court states at para. 63: Of course, a payor whose income was originally imputed because of an initial lack of disclosure cannot later claim that a change incircumstances occurs when he or she subsequently produces proper documentation showing the imputation was higher than the tableamount for their actual income. The payor cannot rely on their own late disclosure as a change in circumstances to ground a variationorder (Gray, at paras. 33-34).

This would “defeat the purpose of imputing income in the first place” and act as “a disincentive for payorsto participate in the initial court process” (Trang v Trang, 2013 ONSC 1980, 29 R.F.L. (7th) 364, at para. 53). (emphasis added) [16] In this case, the Father’s income was imputed pursuant to the April 8, 2019 Order, presumably because the Father had notprovided sufficient financial disclosure. As such, the Father cannot rely upon his disclosure produced in November 2021 to establishthat the imputation in April, 2019 was higher than his actual income.

He ought to have provided disclosure as it became available. Hisfailure to do so prevents him from addressing any arrears incurred prior to the April, 2019 Order based upon a material change incircumstances. [17] I will next address the arrears incurred between April, 2019 and today. Again, the Father must demonstrate a material changein circumstances through sufficient reliable evidence.

He attempts to meet that threshold through the disclosure of his Notices ofAssessment in November, 2021 showing that his income for 2019 was $45,543 and for 2020 was $29,420, as he was unemployedbetween February, 2020 and July, 2021 – the reduction in income and unemployment constituting the material change in circumstances. Again, Colucci addresses this situation. The Court states at para. 80 that once the payor parent establishes a change in circumstances, apresumption arises in favour of varying support to the date of effective notice.

Alternatively, where no effective notice was given beforeproceedings were commenced, such as in this case, the start date of the variation will generally be the date of formal notice. [18] If disclosure is a concern, however, this may be varied: Where no effective notice was given before proceedings were commenced, the start date of the variation will generally be the date offormal notice. However, this result is not automatic. Disclosure remains a relevant factor.

For instance, if three years have elapsed since amotion to change was served on the recipient, but full and frank disclosure is only provided on the eve of the hearing, the payor parentgenerally should not benefit from a decrease for the period between the date of formal notice and the time of disclosure. (Colucci, atpara. 95) [19] As noted above, the Father provided his Notices of Assessment for 2018 – 2020 in November, 2021.

He provided no furtherfinancial information until he partially responded to the Mother’s written interrogatories in July, 2022, and even then, it consisted only ofan incomplete set of some pay stubs and some bank statements. It was that information which then permitted the Mother, and this Courtto see at least a range of earnings for the Father in 2022. [20] The Father’s incomplete financial disclosure has remained an issue throughout these proceedings. The Father’s disclosure ofhis Notices of Assessment was significantly delayed.

His response to the Mother’s written interrogatories seeking further financialinformation was not provided until the eve of this application and even then, it was incomplete. There is no information regarding hisefforts to find alternate employment between February 2020 and July 2021. As such, I conclude that the Father is not entitled to benefitfrom a retroactive decrease in child support in order to reduce the arrears owed to the date of this application. [21] The final issue is whether the Father’s ongoing child support ought to be reduced.

As noted, he has provided evidencethrough his Affidavit that his pay has now stabilized. The few pay stubs he has provided show an hourly rate of $22.75. Extrapolatingthat hourly rate to annual earnings assuming a full-time position results in an annual salary of approximately $47,320. The paystubs alsoshow that the Father earns a small amount of overtime pay calculated at an hourly rate of $34.125, and during submissions his counselacknowledged that there was an argument to be made for the Father earning cash for side jobs from time to time.

Accordingly, theFather’s income ought to be imputed to be an amount greater than the annual salary of $47,320. [22] Determining the proper amount, however, is problematic. As noted by Kachur, J. in AR v JU, 2022 ABQB 527 at para. 48,merely producing tax returns is not enough in these circumstances. To provide tax returns to 2020 but minimal to no evidence toestablish how much overtime is currently being earned, and what income the Father is earning through other sources does not satisfy methat there is an ongoing change in circumstances to the degree argued by the Father.

While I accept that he has suffered a sustained andmaterial drop in income, I am left to exercise my discretion as to how to assess that. [23] I conclude that the Father’s income is currently less than the $89,100 imputed pursuant to the April 8, 2019 Order but morethan the $52,000 that he argues he is currently earning.

I conclude that for the purposes of assessing child support obligations, theFather’s 2022 income ought to be imputed at $70,000, which is approximately half way between the two positions. [24] Finally, to address the Father’s arguments regarding hardship, I find that more hardship would occur if the child supportarrears were eliminated or if child support was reduced to the amount argued for by the Father. The Mother has sole parenting

responsibilities, and has relied upon, reasonably, the Court orders establishing the amounts owed. To eliminate the child’s entitlement to those amounts could only result in a diminished lifestyle for the child. The payment of child support is not a “windfall” as was argued by the Father. It is an entitlement of the child and necessary to establish a baseline standard of living for the child that is roughly equal to that of his parents. [ 25 ] Based on these findings, the Father’s application to eliminate his s. 3 child support arrears is dismissed. Father shall continue to pay s. 3 child support on an ongoing basis based upon an income of $70,000 per year plus his pro rata share of the

Section 7 special or extraordinary expenses. All other terms of the Ross, J. Order dated July 8, 2019 and the Mandziuk, J. Order dated May 27, 2021 shall remain in effect. Child support may be reviewed in June, 2023 but only after full disclosure has been provided by the Father. [ 26 ] The Mother will have her costs of this application as she has been the substantially successful party. Heard on the 05 th day of August, 2022. Dated at the City of Edmonton, Alberta this 21 st day of September, 2022. L.K. Harris J.C.K.B.A. Appearances: Ron Morin Morin Law for the Applicant / Plaintiff Lorraine Snyder Skovberg Hinz for the Respondent / Defendant