nan Q.B. A.D. 1996 No. 01221 J.C. R. IN THE QUEEN'S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF REGINA BETWEEN: KAREN LEE SEIFERLING and DONALD GEORGE LANGMAIER RESPONDENT James J. Vogel for the applicant Kenneth J. Brodt for the respondent JUDGMENT DAWSON J. February 5, 1998 Karen Seiferling, the applicant, brings a motionfor variation of child support, pursuant to The FederalChild Support Guidelines (SOR/97-175) (the "guidelines"),including an amount for extraordinary expenses. She also brings an application for an order fixing the amount owing under the previous child support order of Baynton J., dated September 5, 1990. Much of the evidence herein is disputed between the parties. Both counsel confirmed that they wished the issues resolved on the basis of affidavit evidence, without resort to viva voce hearing, with the respondent, Donald Langmaier placing one caveat on this consent: that the court not draw an adverse inference against Mr. Langmaier for failing to file the financial records of his farming partner, his brother. do not draw any adverse inference against the respondent for failing to produce this material. On the evidence before me, am of the opinion that can determine the facts upon which to base an order. FACTS The parties were married on October 8, 1981, and had two children, Daniel, born June, 1983 and Kurtis, born August, 1985. They divorced on September 5, 1990. At the time of the divorce judgment, Baynton J. ordered the respondent to pay child support for the two children, and also ordered the respondent to pay the applicant's income tax on this child support. In each year since the judgment, the applicant has had to apply to court for an order for payment of this tax. The respondent explains that he wanted the court to confirm the amount payable under the order and that is why he would not pay the amount voluntarily. At the date of commencement of this application, the respondent had not paid the applicant's 1996 tax liability for the child support in the amount of $1,713.00. However, immediately prior to this matter being heard in chambers, the respondent made the payment. At the chamber hearing, the respondent also consented to the amount owing for 1997, in the amount of $1,800.00. The children continue to live with the applicant. She has remarried and babysits in her home. The applicant hasclaimed child support in accordance with the guidelines, andin addition makes a claim for s. 7 expenses. This claimrelates to orthodontic costs for Kurtis. The total cost ofsuch orthodontic work is $3,900.00. The applicant says that her new spouse has dental plan which will pay for one-half of the expense, and she seeks contribution from the respondent for the other one-half not covered. The respondent continues to farm, and resides with his fiance. The children visit him every second weekend and one-half of the school holiday periods. CHILD SUPPORT The first step in determining the amount of child support payable is to determine the respondent's annual income. This is where the parties were at odds. The guidelines state that spouse's income is the "Total Income" disclosed in the T1 General form issued by Revenue Canada, adjusted in accordance with Schedule III to the guidelines. The court may also impute income where there is evidence of unreasonable expenses, and under s. 19(2) of the guidelines, the reasonableness of an expenses deduction is not solely governed by whether the deduction is permitted under the Income Tax Act. In addition, as stated at pp. and by Wimmer J. In Magnes v. Magnes, Sask. Q.B. No. 0159664, J.C. Regina, July 22, 1997 (unreported): In the case of farmer, as with other self-employed individuals, it will usually be necessary to examine the pattern of income established over time because the income earned in any particular year may not be representative. It is permissible under the guidelines to fix the income at the average earned in the three most recent taxation years. The respondent farms with his brother. Together they farm 32 quarters of farmland. The respondent owns two and one-half quarters as does his brother. The balance is rented. The respondent has continuously cropped the land since 1994. The respondent's T1 General forms and Notices of Assessment disclose total income for the 1994, 1995 and 1996 taxation years of $30,521.00, (-$37,659.00) and $87,431.00, respectively. The respondent suggests that should deduct from his income the amount of NISA payments that he received. am not prepared to deduct from total income in each of those years the amounts that the respondent received from NISA, despite the fact that these may be non-recurring in the future. The purpose of NISA is to provide savings for the stabilization of income for farmer. That is the purpose the respondent used it for and it is appropriately calculated into income. In each of the 1994, 1995 and 1996 taxation years, the respondent claimed capital cost allowance of $36,866.00, $37,179.00 and $29,720.00, respectively. Of these amounts, $555.10 in 1994, $904.50 in 1995 and $814.10 in 1996 should be added back into the respondent's income as the capital cost allowance with respect to real property, as required by s. 11 of Schedule III. The applicant also suggested that add back to the respondent's income the capital cost allowance on personal property, such as equipment. As stated by Halvorson J. in Pyper v. Neville (1995), 1995 CanLII 5970 (SK QB), 132 Sask. R. 300, the simple deduction of expenses from gross income can be unfair, as it understates the real cash available from which payor can pay child support. Halvorson J. suggested that understatement may be remedied to degree by adding depreciation back before implementing the tables. However, as stated by Gerein J. in Jones v. Jones, (1994), 1994 CanLII 4910 (SK QB), R.F.L. (4th) 293 at 317: nan [I]t would be unfair to simply treat all of the capital cost allowance as income available for normal living expenses. This approach would ignore the reality that there are capital costs involved in operating farm and that money should be set aside for the purpose of replacing equipment as it wears out. The respondent has had significant acquisitions of equipment in these three years. This allowed him maximum depreciation deduction in each year. And while he needs to update equipment, there is an understatement of income from which he can pay support. Specifically, in 1995, his loss amounts almost totally to his depreciation deduction. I do not find deducting all of the respondent'scapital cost allowance on personal property is a reasonableexpense. In that regard I am going to impute 15% of thecapital cost allowance claimed on personal property to therespondent pursuant to s. 19 in each of the above years. Therefore, in 1994 the further income of $5,441.28 will be imputed to the respondent. In 1995, the sum of $5,431.53 is imputed to the respondent and, in 1996 the sum of $3,290.65 is imputed to the respondent. I find that the respondent's income for 1994 for thepurposes of the guidelines is $36,517.38; for 1995 it is(-$31,322.97) and for 1996 it is $91,535.75. The average ofthese three years of income is $32,243.39. That is the respondent's income for the purposes of determining child support according to the tables. I decline to include the1997 income information in this calculation, despite the factthat the guidelines require the court to use the most recentinformation. I do this because the financial evidence filedby the respondent with respect to 1997 was not sufficient norsubstantiated sufficiently to determine income. The applicant's income for the purposes of theguidelines, for the years, 1994, 1995 and 1996, respectively,was $7,226.20, $5,606.82 and $3,002.20. find that she has appropriately deducted expenses from her gross income as she has only deducted portion of her home and vehicle expenses; that portion which is attributable to her business. Theapplicant's average income for those three years, that is herincome for the purposes of calculating s. 7 expenses is$5,278.40. The respondent shall pay to the applicant commencingJanuary 1, 1998, and continuing on the first day of each monththereafter the sum of $454.00 for the support of the twochildren of the marriage, such support to continue for so longas they remain children within the meaning of the Divorce Act,R.S.C. 1985, c. 3 (2nd Supp.) as am. Further, find that the extraordinary expenses claimed for orthodontic costs of $1,950.00 is an appropriate expenses. The respondent suggests in his affidavit that the parties split this cost. However, the respondent is to pay his proportionate share, in accordance with the guidelines. The respondent's proportionate share of that expense is 86%being $1,677.00. The respondent shall pay that sum to theapplicant by five payments of $280.00, the first of whichshall be paid on the 1st day of April, 1998, and a likeamount on the 1st day of August, 1998, the 1st day ofDecember, 1988, the 1st day of April, 1999, the 1st day ofAugust, 1999 and a final sixth payment in the amount of$277.00 on the 1st day of December, 1999. There shall be a further order that the respondentpay to the applicant the sum of $1,800.00 on or before April30, 1998, as payment under the previous child support order ofSeptember 5, 1990. There will also be an order that the respondentproduce to the applicant by May 1 in each year, the documentsreferred to in s. 21 of the guidelines for the previous year. The applicant shall have solicitor/client costs of her application to determine the amount of outstanding maintenance owing for 1996 and 1997, pursuant to the order of Baynton, J. With respect to the balance of the application, the applicant shall have her taxable costs.
An application for variation of child support pursuant to the Federal Child Support Guidelines including an amount for extraordinar expenses of $3,900 for orthodontic work. The parties married in 1981 and were divorced in 1990. The father was $1,713 in arrears until immediately prior to the matter being heard in chambers. He consented to $1,800 owing for 1997. HELD:1)The father was to pay $454 for child support for the two children who lived with the mother. His proportionate share of orthodontic expenses was 86% ($1,677) to be paid by five payments of $280. 2)The respondent's average income over 1994-96 for the purpose of determining child support was $32,243.39. The 1997 income information was not included because the financial evidence was insufficient. 15% of the capital cost allowance was imputed pursuant to s19 for the 1994-96 taxation years. Deducting all of the respondent's capital cost allowance was not a reasonable expense. An adverse inference was not drawn from the failure to produce the financial records of the respondent's farming partner. 3)The applicant's average income for 1994-96 for purposes of calculating the s7 expense was $5,278.40. 4)The father was to pay $1,800 prior to April 30/98 as payment under the 1990 order. 5)The father was ordered to produce the documents referred to in s21 to the applicant by May 1st each year. 6)The applicant was awarded solicitor/client costs of her application to determine the amount of outstanding maintenance owing for 1996 and 1997 and her taxable costs on the balance of the application.