H. M.-T. Applicant v. D.R.G.M., 2023 NBKB 180

2023 NBKB 180 Court File No.: FDF-256-2019 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK FAMILY DIVISION JUDICIAL DISTRICT OF FREDERICTON UNDER THE Family Law Act, S.N.B. 2020, c. 23 BETWEEN: H. M.-T. Applicant -and- D.R.G.M. Respondent COUNSEL AT HEARING: Natacha I. Bosse - for the Applicant Grant Ogilvie, K.C. - for the Respondent CORRIGENDUM WHEREAS the Decision rendered orally and signed by Mr. Justice Danys R.X.

Delaquis on October 20, 2023, contained a typographical error at paragraph 21; AND WHEREAS a request was made of the Court on December 15, 2023, to amend the decision; NOW THEREFORE IT IS HEREBY ORDERED THAT: 1. The third last word of the last sentence of paragraph 21 is amended to read as “M.C.” DATED at the City of Saint John, Province of New Brunswick this ___ day of January 2024. _____________________________ Danys R.X. Delaquis Judge of the Court of King’s Bench of New Brunswick - Family Division 2023 NBKB 180 Court File No.: FDF-256-2019 IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK

FAMILY DIVISION JUDICIAL DISTRICT OF FREDERICTON UNDER THE Family Law Act, S.N.B. 2020, c. 23 BETWEEN: H. M.-T. Applicant -and- D.R.G.M. Respondent Before: The Honourable Mister Justice Danys R.X. Delaquis Date of hearing: October 20, 2023 Date of Decision: October 20, 2023 Appearances: Natacha I. Bosse - for the Applicant Grant Ogilvie, K.C. - for the Respondent

Summary of Proceeding: Disclosure of common law spouse’s income information DECISION DELAQUIS, J., (Orally): BACKGROUND [1] A motion for pre-trial disclosure is before the Court. Both parties were asking for full disclosure of household incomeinformation because the issue to be determined at the hearing scheduled for October 27, 2023, is the amount of child support payablepursuant to s. 9 of the Federal Child Support Guidelines, (“Guidelines”). There is no dispute that the parents have a shared parentingarrangement further to my decision rendered on August 4, 2023, reported at H.M. v D. M., 2023 NBKB 140 .

[ 2 ] The issue was first raised by the parties at the Case Management Conference on September 21, 2023. At that time, one of the stumbling blocks was, and remains, disclosure of the Respondent’s common law spouses’ income. The Court was specifically advised that M. C., a lawyer, was aware of the issue before the Court on September 21, 2023, and in fact conveyed through counsel that she opposed disclosure as requested by the Applicant. [ 3 ] As a result, the Court did not rule on the request and instead advised the parties that it would hear the motion at a date to be fixed by the Clerk.

The Court specifically stated a hearing would be set to give the parties – including M. C. – the opportunity to present argument and evidence on the issue before the Court. [ 4 ] Prior to the hearing today, the parties filed the following documents and evidence: • Pre-Hearing Brief on Behalf of the Applicant. • Affidavit sworn to by K.L.M. (the Applicant’s mother) providing, inter alia , financial information about her and her husband.

This was submitted because the Applicant resides with her parents at this time. • The Applicant’s 2022 Notice of Assessment and Tax Return. • A Child-Focused Budget by the Applicant. • Pre-Hearing Brief by the Respondent. • Affidavit sworn to by the Respondent. [ 5 ] At the hearing, the Respondent submitted a Child-Focused Budget as well as a 1-page

summary of EI benefits paid to M.C. between September 3 and October 14, 2023. In other words, the amount of EI benefits she currently receives as a result of her maternity leave. Counsel further confirmed that she received Tax Returns for the Respondent’s numbered company, also owned by M.C., as well as Rental Income information. It is my understanding that the Respondent also provided his 2022 Tax Return. [ 6 ] The parties have therefore continued to provide each other with ongoing disclosure.

What is now at the heart of the request is disclosure of M.C.’s income information for 2021, 2022 and 2023. [ 7 ] Counsel for the Applicant confirmed that she is not asking “for everything”, namely full Tax Returns from M.C. She is simply seeking confirmation of her income by way of a NOA or T-4 or some other documentation. [ 8 ] M.C. knew about this hearing and had notice of this hearing as counsel for the Respondent confirmed. M.C. did not appear with or without counsel, nor did she submit any evidence to the Court setting out her position.

Her position was conveyed through counsel for the Respondent, to the effect that she maintains her refusal to produce her income information for 2021, 2022 and 2023. The Respondent argues that M.C. is a non-party and that should therefore not be compelled to disclose such information. He argues it would intrusive. [ 9 ] For the purposes of this oral decision, I will not recite all of the evidence except to state that I have reviewed and considered all the documentation filed with the Court.

ISSUE [ 10 ] The issue is whether M.C.’s income information for 2021, 2022 and 2023 should be produced prior to the hearing. [ 11 ] Counsel for the Applicant has agreed to file and serve an amended Child Focused Budget which will include information about her household income, the details of which were not previously known to her. For clarity, I will order that she file and serve an amended child-focused budget on or before Tuesday, October 24, 2024. LAW AND ANALYSIS

[12] The parties have a shared parenting arrangement with respect to the child.

Section 9 of the Federal Child SupportGuidelines therefore applies to the quantification of child support. It reads as follows: 9. Where a spouse exercises a right of access to, or has physical custody of, a child for not less than 40 per cent of the time overthe course of a year, the amount of the child support order must be determined by taking into account: (

a) the amounts set out in the applicable tables for each of the spouses; (

b) the increased costs of shared custody arrangements; and (

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought. [13] Contino v. Leonelli-Contino, 2005 SCC 63 tells us that the Court must consider all of factors in

section 9 of the Guidelines.Section 9(

c) specifically requires the court to consider the “conditions, means, needs and other circumstances of each spouse”. AsBastarache, J.A. clearly explained in Contino at paragraph 68:

Section 9(

c) vests the court a broad discretion for conducting an analysis of the resources and needs of both the parents and thechildren. As mentioned earlier, this suggests that the Table amounts used in the simple set-off are not presumptively applicable and thatthe assumptions they hold must be verified against the facts, since all three factors must be applied. Here again, it will be important tokeep in mind the objectives of the Guidelines mentioned earlier, requiring a fair standard of support for the child and fair contributionsfrom both parents.

The court will be especially concerned here with the standard of living of the child in each household and theability of each parent to absorb the costs required to maintain the appropriate standard of living in the circumstances. [Emphasis added] [14] Professor Rollie Thompson in The TLC of Shared Parenting: Time, Language and Cash (27th Annual Institute of Family Law,County of Carleton Law Association, April 13-14, 2018) - 32 CFLQ 315 at 343-344) explains the policy considerations that underlie thes. 9 analysis and the “message” in Contino: If there is any strong message coming out of Contino, it is that a child in a shared custody arrangement should not experience significantdifferences in his or her standard of living when moving back and forth between the two parental households.

There are good policyreasons for this approach, although not elaborated in Contino. Implicit in a true shared custody arrangement is a greater sharing ofparental resources in the interests of the child, with a greater commitment to equality than in other post-separation arrangements.

Thenthere is a second, more pragmatic reason: a significant differential in household living standards can destabilize the shared arrangement,encouraging the child to shift towards the home with the higher standard. … once the support issues are squarely placed before the court, this ought to be the guiding principle in shared custody cases. [footnotesomitted] [15] Although the Respondent contends that his spouses’ financial circumstances are not relevant to child support considerations,the case law indicates otherwise.

For the purpose of this oral decision, I will only refer to these decisions on this point: B.P.E. v. A.E.,2016 BCCA 335 at para. 52; C.N.G. v. S.M.R., 2007 BCSC 822 at paras. 47 and 48; Klebe v Klebe, 2020 BCSC 652 ; A.H.B. v.C.L.B., 2019 BCCA 349; Gottinger v. Runge, 2018 SKQB 343 ; H.A.K. v. T.J.W. [2013] S.J. No. 156; Krammer v. Ackerman,2020 SKQB 207 ; Gladwin v. Gladwin 1997 CarswellNS 77, (NS FC). [16] I refer to the case of A.H.B. v.

C.L.B., 2019 BCCA 349 at para. 37, where the Court of Appeal ordered production of themother’s new spouse’s financial information on the grounds that it may be relevant to a full analysis pursuant to Contino v. Leonelli-Contino, 2005 SCC 63: [36] It may well be that both parties’ income for child support purposes has changed materially in the last number of years. There hasnot been an examination of the way in which the conditions, means, needs and other circumstances of each spouse and the child mayaffect child support obligations in a shared parenting arrangement.

This Court has commented on the relevance of “household income” tothe s. 9(

c) analysis in shared custody cases in B.P.E. v. A.E., 2016 BCCA 335 at para. 44 and following. The effect of that analysis is that

the financial circumstances of Ms. B.’s household, including her spouse, might be relevant to a proper calculation of the parties’respective child support obligations after taking account of each party’s income for child support purposes and after a set-off calculation. [37] In these circumstances, financial disclosure by Ms. B.’s spouse may be relevant to certain issues in a future hearing or trial.Accordingly, I think it was an error not to order Ms. B.’s spouse make financial disclosure, at least for equipping a court to determinechild support obligations in the context of a Contino analysis.

I would make that order. [17] While all the considerations of s. 9 will need to be considered by the Trial Judge in this case, the focus of the request fordisclosure especially engages the considerations of s. 9(c). In this case, the Applicant may ask the ask the Court to deviate from the set-off amount depending on what the disclosure shows. In S.A.H. v. K.A.H., 2022 NBCA 17 at paragraph 28, the Court of Appealexplained that a trial judge may deviate from the straight set off amount: [28] There is discretion to deviate from a straight set-off, with reasons.

The judge exercised his discretion in this case, and he laid outwhy he thought the existing child support order was fair for the reason C. continued to be in the primary care of his mother. As an aside,I would observe that, because of the inadequate financial disclosure, it would not have been possible for the judge to conduct a detailed s.9 analysis in any event (see A.S.L. v. L.S.L., 2020 NBCA 15, [2020] N.B.J. No. 63 (QL); G.F. v. J.A.C.F.; J.C.M. v. M.J.M.; F.M. v. T.H.,2016 NBCA 29, 449 N.B.R. (2d) 240). [18] Madam Justice Baird noted in S.A.H. v.

K.A.H. that the calculation is more complex that a simple set-off because, inter alia,the Court must consider various circumstances in exercising discretion under s. 9 of the Guidelines: [23] In some cases, it is only one parent who buys or primarily buys the school supplies and pays for the lunches at school, the clothingand the extracurricular expenses, or perhaps the uninsured portion of dental and medical expenses.

In that case, the obligation on a judgeto consider the increased costs of shared parenting and “the conditions, means, needs and other circumstances of each spouse and of anychild for whom support is sought” may cause the judge to deviate from the straight set-off.

Section 9 has been described as a “vexing”section for lawyers and judges because it sets out a two-step process to the analysis, but it allows for a deviation from a straight set-off asa matter of discretion. (…) [25] An analysis under s. 9 is more complex than a simple set-off calculation. It is clear that a s. 9 analysis also requires considerationof the increased costs of shared parenting and a comparison of the household standards of living, the rationale being that children shouldexpect to enjoy comparable standards of living in each parental household.

A simple calculation based on a straight set-off between theincomes of the parents was described by Bastarache J. in Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 S.C.R. 217, as the“starting point” (para. 44). It is then incumbent upon each parent to provide child-focused budgets in which they particularize theexpenses they incur for the children. He eschewed a strict formulaic approach (paras. 37-39 and 82). [19] As noted by the Court in H.A.K. v. T.J.W., supra, at paragraph 5: “The ability to absorb increased costs can be the result ofresources available to that parent’s household.

Accordingly, income information of the respondent’s present spouse is relevant”. In myview, the exercise of discretion that the Court will need to undertake in this case may be hampered by a lack of full disclosure withrespect to the Respondent’s household income. [20] In Gladwin v. Gladwin, supra, the Court did order pre-trial disclosure of the income and assets of the wife of the respondentpayor in the context of a spousal support variation application.

In making the production order, the Court noted the following: [49] The disclosure provisions of the Civil Procedure Rules have consistently been interpreted in a liberal and broad fashion to facilitateand encourage disclosure of all relevant information in virtually all types of litigation. In family law many feel trials should be a lastresort. If we as courts wish to encourage counsel and parties to negotiate rather than litigate, we must equip them to do so. We mustfacilitate disclosure of relevant information as early as possible.

Doing so enhances the possibility of negotiation, mediation or otherpretrial processes resolving issues. Absent disclosure many counsel might reasonably take the view that a negotiated or mediatedsettlement should not be entered into.

[50] Where someone cohabits with another as a spouse or in a spouse-like relationship they will, virtually by definition, share expenses. Whether the sharing of those expenses is done in a fair and reasonable fashion will virtually always be an issue if means and/or need are issues before a court. Any informed evaluation of the reasonableness of the sharing will require disclosure by both the parties to the sharing. [51] There are steps that must be taken before a third party may be compelled to disclose financial information. The information must be relevant.

The third party must be given appropriate notice under the disclosure rule being used - whether rule 18, 19 or 20. [52] Where one enters a spousal or spousal-like relationship with another there are consequences. We as judges should be clear in saying that one of those consequences where there is financial entwinement is compellable disclosure to enable informed consideration of the sharing of expenses. Maintaining the illusion of there being privacy issues that may block disclosure in these circumstances needlessly complicates and polarizes litigation.

New partners or spouses should know that if expenses are shared in any way, their personal financial affairs are relevant and discoverable. If I as a Judge am anything less than clear in stating this, counsel will advise clients of this lack of clarity and the issue will continue to be litigated - I would effectively be creating rather than preventing disputes. [ 21 ] To be clear, I am mindful of the privacy interests at play here. I do not downplay those interests in the least in this case. There may be circumstances where the privacy interests of a non-party carry the day in terms of disclosure.

But not in this case. The Respondent argues in his brief at paragraph 30 that: “The Applicant is looking to embark on an intrusive invasion of the Respondent’s partner’s finances in the hopes that she may gain financially from the income earned by [M.C.] ” I disagree. [ 22 ] First, this argument suggests that the refusal to produce is not about M.C.’s privacy interests but rather the Applicant’s alleged nefarious intentions to enrich herself at everyone’s expense. Second, there is no evidence to support the Respondent’s contention.

Third, the Applicant has provided full disclosure of her parents’ (who are nonparties) income information for the same reason that she seeks reciprocal disclosure from the Respondent’s household income: it is relevant and necessary. [ 23 ] In any event, there are limits with respect to how such disclosure may be assessed by the Court. For example, M.C.’s income cannot be used to calculate the set-off amount. However, that is not the basis for the relief.

While her income cannot be characterized as income that is “available” to the Applicant, it is relevant to support considerations under the rubric of the “conditions, means, needs and other circumstances of each spouse” as set out in s. 9(

c) of the Guidelines . [ 24 ] The Respondent also argues that it may not be necessary to know the actual amount of M.C.’s income. It is open to the Trial Judge to assess the interplay between the amount of her income and the means needs and circumstances of the parties based on an appreciation of all the evidence, including child focused budgets which reflect the pro rata percentage of household income in relation to various expenses. For example, the Respondent’s household expenses and debts may be significant enough to overtake a significant amount of their combined income. [ 25 ] In

summary, I am ordering production of some of M.C.’s financial information for the following reasons: • Full disclosure of all relevant financial information has always been the cornerstone of a calculation of child support and spousal support – it is essential that the Court has all relevant financial information to ensure a fulsome s. 9 analysis in this case; • The information is relevant to the issues before the Court which involve the application of s. 9 of the Guidelines ;

• The financial circumstances of each household, including those of a spouse are relevant to a proper calculation of the parties’respective child support obligations after taking account of each party’s income for child support purposes and after a set-off calculation. • The starting point of the s. 9 analysis is calculating the set-off amount.

M.C.’s income will not be relied upon to calculate the set-off amount. • Deviation from the set off amount will require the Court to exercise discretion under s. 9 of the Guidelines if called upon to do so.The Court will determine what importance and weight to give to the financial disclosure after hearing all the evidence and argumentfrom counsel. It will remain open to the Court to decide, for example, that the set-off amount is fair as the Respondent suggests, evenafter considering the disclosure because of the holistic and contextual analysis that will be undertaken.

For example, it is undisputed thatthe Respondent and his spouse have two very young children to care and provide for, in addition to the child in this case. He is payingfor expenses related to extra-curricular activities for the child as well. In any event, the determination of whether the set-off is the properamount of child support is not made here; it will be made after hearing all the evidence and argument. • The EI information already produced by the Respondent does not provide the yearly income assessment that is necessary under s.9.

For example, M.C. started receiving EI in September 2023 which is when she may have stopped working at that time. Regardless, shedid work in 2023 for a certain period of time. • In this case, the privacy interests are outweighed by the need for disclosure. This is a pre-hearing disclosure request. Thedisclosure is not to be used for any improper purpose by any party in accordance with the implied undertaking rule. This means thedocuments that are produced as part of the discovery process cannot be used for collateral ulterior purposes: 051766 N.B. Ltd. v. Wilbur,2005 NBQB 443 and Rocca Enterprises Ltd. et al. v.

University Press of New Brunswick Ltd. and Crowther, (NB KB). Furthermore, the final decision in this matter will not refer to the names of the parties. It would be hard to consider a lessintrusive way to obtain relevant information. • The request is not a fishing expedition. The Applicant is not asking for production for full tax returns for 2021 and 2022, onlyincome confirmation by way of T4’s or basic NOA.

The information is required for a full analysis of household incomes pursuant to s. 9of the Guidelines and will be limited in scope, based on the period of 2021, 2022 and 2023 for which the Court must assess child support.It will be open to the Respondent to argue that 2021 and 2022 are no longer an issue in terms of arrears and/or subject to a

section 9analysis and to present evidence on this point. Because the parties don’t agree on the status of alleged arrears or how they should becalculated, it remains an issue before the Court. • In my view, it would be inequitable to require the Applicant to proceed to trial without the requested disclosure. • One of the policy objectives that underlies full disclosure in family law is that it promotes settlements.

In this case, I am satisfiedthat full disclosure of the party’s respective household incomes will assist them in pursuing settlement discussions. • Disclosure will not result in any delay in the proceedings. It will in effect ensure that the hearing proceeds as scheduled with allthe relevant information, and thereby avoid any requests for an adjournment by one of the parties based on last-minute requests fordocumentation. • I find that M.C. had reasonable notice of this hearing and decided to not make submissions, proffer evidence, or otherwise attend.M.C. is a lawyer.

She was aware of the request for production of her financial information even at the September 21, 2023, CaseManagement Conference as confirmed by counsel. I adjourned that Case Management Conference for the specific purpose of providingthe parties - and M.C. - with the opportunity to present evidence and/or argument at a later date. She was aware of this hearing onOctober 20, 2023, and indeed conveyed a clear message of her ongoing refusal to produce the requested income information to the Courtthrough counsel for the Respondent. • I will not Order that M.C. produce her full Tax Returns for 2021 and 2022.

I will adopt a more limited approach to disclosure in

this specific case because that is what is being requested by the Applicant. DISPOSITION [ 26 ] For the above reasons, I will make the following order with respect to disclosure: 1. Production of M.C.’s 2021 and 2022 T-4’s or Notices of Assessments (not both, her choice) on or before October 24, 2023. 2. Production of documentation confirming M.C.’s employment income for 2023 on or before October 24, 2023.

The Respondent/M.C. will be permitted to decide what type of documentation to produce to confirm this information, i.e., last pay stub, a Record of Employment, confirmation from her employer, Statutory Declaration, etc. 3. The Applicant shall file and serve an amended child-focused budget on or before October 24, 2023. 4. There shall be no order of costs on the motion. Costs shall be determined after the hearing. [ 27 ] I have indicated the above deadlines for production because the hearing is scheduled to take place on Friday October 27, 2023.

The parties will need this information to prepare their case and their Pre-Trial Briefs. However, the parties have requested that a Settlement Conference be scheduled rather than proceeding to the hearing on October 27, 2023. I will hear the parties on this point. If they proceed to a Settlement Conference on October 27, 2023, production is still required in advance. However, if the hearing is adjourned and the Settlement Conference proceeds at a later date, I will entertain submissions to extend the date for production of documents if necessary.

DATED at Saint John, New Brunswick this ______ day of October 2023. _________________________________ Danys R.X. Delaquis Judge of the Court of King’s Bench of New Brunswick - Family Division