L.M.K. v. J.M.K., 2015 MBQB 1

• Judge: Johnston, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: January 05, 2015
• Jurisdiction: Manitoba
• Citations: 2015 MBQB 1;(2015), 313 Man.R.(2d) 34 (QBFD)

L.M.K. v. J.M.K. (2015), 313 Man.R.(2d) 34 (QBFD)

MLB headnote and full text

Temp. Cite: [2015] Man.R.(2d) TBEd. JA.031

L.M.K. (petitioner) v. J.M.K. (respondent)

(FD 03-01-71843; 2015 MBQB 1)

Indexed As: L.M.K. v. J.M.K.

Manitoba Court of Queen's Bench

Family Division

Winnipeg Centre

Johnston, J.

January 5, 2015.

Summary:

Married parents of three children separated in 2009. They entered into a detailed separation agreement (endorsed in a final order), which provided, inter alia, for the calculation of the father's income for child support purposes and the payment of extraordinary expenses under s. 7 of the Federal Child Support Guidelines. In 2013, the father's employment was terminated and one child became independent. The father moved to vary the agreement. The mother brought a cross-motion as well. At issue was the determination of the father's income and corresponding child support obligation as well as the payment of s. 7 expenses.

The Manitoba Court of Queen's Bench, Family Division, determined the issues.

Editor's Note: Certain names in the following case have been initialized or the case otherwise edited to prevent the disclosure of identities where required by law, publication ban, Maritime Law Book's editorial policy or otherwise.

Family Law - Topic 3357

Separation agreements, domestic contracts and marriage contracts - Effect of agreement - Maintenance of children - [See first Family Law - Topic 3375 ].

Family Law - Topic 3375

Separation agreements, domestic contracts and marriage contracts - Variation - Of maintenance - Married parents of three children separated in 2009 - They entered into a detailed separation agreement (endorsed in a final order), which provided a "protocol" for the calculation of child support based on the higher of the father's income as disclosed in line 101 or line 150 of his income tax return - At the time, the father was employed by the federal government and received income from farming and rental properties - In 2013, the father's employment was terminated and one child became independent - At issue on the father's motion to vary was whether the protocol for the determination of the father's income was binding on the court - The Manitoba Court of Queen's Bench, Family Division, stated that "the 'protocol' established in the Separation Agreement of the parties as a mechanism for determining the [father's] income on an annual basis is not binding on this court when a variation is considered" - If there was a material change in circumstances sufficient for the court to consider variation, then a fresh consideration of the issue of income determination had to be undertaken - See paragraphs 22 to 27.

Family Law - Topic 3375

Separation agreements, domestic contracts and marriage contracts - Variation - Of maintenance - Married parents of three children separated in 2009 - They entered into a detailed separation agreement (endorsed in a final order), which provided a "protocol" for the calculation of child support based on the higher of the father's income as disclosed in line 101 or line 150 of his income tax return - At the time, the father was employed by the federal government and received income from farming and rental properties - In 2013, the father's employment was terminated and one child became independent - The father moved to vary the order - The Manitoba Court of Queen's Bench, Family Division, held that any child support obligation to the eldest child ceased as of June 30, 2013 - This material change in circumstances was a "triggering" event, providing for a reconsideration of the balance of the issues as of July 1, 2013 - There was to be no variation of the parties' agreement or the final order prior to that date - See paragraphs 28 to 31.

Family Law - Topic 4045.4

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Special or extraordinary expenses (incl. calculation of amount) - Under a separation agreement (endorsed in a final order), the father was to contribute two thirds of the children's "proven" extraordinary expenses under s. 7 of the Federal Child Support Guidelines to a maximum of $2,000 per year - The Manitoba Court of Queen's Bench, Family Division, having found a material change in circumstances justifying variation of the agreement and order, accepted "that the [father's] contribution towards s. 7 expenses should be restricted to a maximum of $2,000 per year, notwithstanding the ... finding that his income is and has been substantially higher than that that has been disclosed, and also that the ordering of 'retroactive' contributions should be restricted to a maximum of three years" - The payment of s. 7 expenses was not conditional on consultation, dialogue or the provision of receipts - See paragraphs 70 to 78.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - Under a separation agreement (endorsed in a final order), the father paid child support based on the higher of his income as disclosed in line 101 or line 150 of his income tax return - At the time the agreement was executed, the father was employed by the federal government and received income from farming and rental properties - In 2013, the father's employment was terminated and one child became independent - The father moved to vary the order, asserting that his current income was $60,149.12 - The mother brought a cross-motion, seeking, inter alia, imputation of income to the father - The Manitoba Court of Queen's Bench, Family Division, having found a material change in circumstances justifying variation of the agreement and order, imputed income to the father for child support purposes at an annual sum of $125,000 - The court found the mother's argument that the father had diverted income, had not reasonably used his property to generate income and had unreasonably deducted expenses "highly persuasive" - The father had made significant annual deductions for capital cost allowances (CCA) - There was strong support for the mother's position that this was not reasonable and that the annual business losses should be disregarded or "added back" - The father had greatly benefited from the fact that his "self-employed" income had virtually been disregarded since the date of separation - Whether through adding back all or a portion of the CCA or disregarding the "business" portion of the tax return all together, there was room to impute income - See paragraphs 32 to 69.

Cases Noticed:

Osmar v. Osmar, [2000] O.T.C. 398 (Sup. Ct.), refd to. [para. 37].

Cooke v. Colomy (1998), 128 Man.R.(2d) 219 (Q.B. Fam. Div.), refd to. [para. 50].

Cornelius v. Andres (1999), 134 Man.R.(2d) 140; 193 W.A.C. 140 (C.A.), refd to. [para. 51].

Shaw v. Shaw (1997), 120 Man.R.(2d) 310 (Q.B.), refd to. [para. 51].

D.B.S. v. S.R.G., [2006] 2 S.C.R. 231; 351 N.R. 201; 391 A.R. 297; 377 W.A.C. 297; 2006 SCC 37, refd to. [para. 73].

Counsel:

Alison L. Bennet, for the petitioner;

Charles Guberman, for the respondent.

These motions were heard by Johnston, J., of the Manitoba Court of Queen's Bench, Family Division, Winnipeg Centre, who delivered the following judgment on January 5, 2015.