Blanchard v Maxwell, 2023 MBCA 89

Coram: Mr. Justice Marc M. Monnin Madam Justice Karen I. Simonsen Madam Justice Lori T. Spivak Citation: Blanchard v Maxwell, 2023 MBCA 89 Date: 20231004 Docket: AF22-30-09860 IN THE COURT OF APPEAL OF MANITOBA BETWEEN: brian geoffrey blanchard ) J. R. Stitt ) for the Appellant (Petitioner) Appellant ) ) J. L.

Wyman- and - ) for the Respondent ) ERIN RHEANNE MARIE MAXWELL ) Appeal heard and ) Decision pronounced: (Respondent) Respondent ) October 4, 2023 On appeal from 2022 MBQB 113 simonsen JA (for the Court): [1] The petitioner appeals a final order imputing his income under section 19(1) of the Federal Child Support Guidelines,SOR/97-175 [the Federal Guidelines] at $90,000 per year, for the purpose of setting child support for the parties’ two children. [2] Although this appeal was argued on the basis of the Federal Guidelines, we note, preliminarily, that it would appearthat it is the Manitoba Child Support Guidelines Regulation, Man Reg 52/2023, which mirror the relevant provisions of the FederalGuidelines (sections 19(1)(

a) and 19(1)(

g) in both Guidelines), that are applicable by virtue of both parties residing in Manitoba (see thedefinition of “applicable guidelines” of the Divorce Act, RSC 1985, c 3 (2nd Supp) at section 2(1)). [3] The petitioner appeals on the grounds that the trial judge erred by misapprehending the evidence; incorrectlyconcluding that he was intentionally underemployed under section 19(1)(a); and failing to provide adequate reasons for hisdetermination, under section 19(1)(g), that the petitioner unreasonably deducted expenses from his income. [4] At the hearing, we dismissed the appeal with reasons to follow.

These are those reasons. [5] The applicable standard of review is deferential. An appellate court should not overturn a support order unless thereasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong (see Hickey vHickey, (SCC), [1999] 2 SCR 518). [6] The petitioner is a heavy equipment mechanic.

During his marriage to the respondent, he decided to leaveemployment as a heavy equipment mechanic with an equipment dealer, where he earned in excess of $90,000 per year, to take lesserpaying employment at a bus garage while, at the same time, pursue self-employment as a heavy equipment mechanic (the business). The petitioner has since ceased employment with the bus garage and is engaged in the business full time. The business has done verywell, generating increasing revenues each year.

The petitioner’s net reported business income for income tax purposes was reduced bysome expenses for meals, his vehicle and his house that he would not have been able to deduct as an employee. [7] As well, since prior to the parties’ separation, the petitioner has operated a farm, which has lost an increasing amountof money over the years (the farming operation).

Not only were these losses shown on his income tax returns, lowering his net reportedincome, but he has continued to invest in the farming operation by purchasing equipment. [8] The petitioner argues that the trial judge erred in finding that he was intentionally underemployed when he relied on

him leaving his employment with the equipment dealer during the marriage without taking into account his stated reasonable reasons for doing so — that he wanted to have a better work/life balance and spend more time with the children. The petitioner also argues that the trial judge erred by characterizing his concern about the farming operation losses as a matter of intentional underemployment under section 19(1)(a), rather than unreasonable deduction of expenses under section 19(1)(g).

In addition, the petitioner asserts that the trial judge did not articulate the specific calculation upon which he took deducted expenses from the business income into account. [ 9 ] We are not persuaded that the trial judge concluded that the petitioner was intentionally underemployed as a consequence of him changing employment during the marriage. The concern for the trial judge was the farming operation losses. The farming operation, although started when the couple was still together, has, as noted, had growing losses each and every year.

The petitioner was unable to predict when the farm might reach a point of profitability. In our view, the trial judge was entitled to take those losses into consideration when imputing the petitioner’s income. [ 10 ] Even accepting that the trial judge should have characterized his concern about the farming operation losses as one of unreasonable deduction of expenses rather than intentional underemployment (see Thomas v Thomas , 2019 NLCA 32 at paras 30-48 ), this did not have a material impact on the conclusion he reached.

We will explain. [ 11 ] The petitioner did not provide a specific calculation or argument to the trial judge about the total expenses that could be added to his net income for imputation purposes and took the position that all of the deductions, including losses from the farming operation, should operate to reduce his income. The respondent, on the other hand, provided to the trial judge a

summary of the petitioner’s income tax returns, gross and net income, and an outline adding to his net income all of his farming operation losses and what the respondent says were unreasonable business expenses. Without these deductions, the petitioner’s annual net income would have exceeded $90,000 virtually every year in the seven years prior to trial. In our view, the trial judge, although providing limited analysis, was entitled to accept the respondent’s

summary and come to the conclusion he did. It was open to him to conclude, under section 19(1) (g), that the petitioner had unreasonably deducted some business expenses from income for child support (although not income tax) purposes. The trial judge’s concerns about the farming operation also lead to the conclusion, under section 19(1) (g), that the petitioner had unreasonably deducted the farming operation losses. [ 12 ] Therefore, we see no basis for appellate intervention with respect to the trial judge’s determination that the petitioner’s income be imputed at $90,000 per year. [ 13 ] For the foregoing reasons, the appeal was dismissed with costs. JA JA JA