QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2006 SKQB 382 Date: 2006 08 17 Docket: F.L.D. No. 149/2006 Judicial Centre: Regina, Family Law Division BETWEEN: BRENDA LEE KRIESE and PAUL LOUIS VERHELST Counsel: David J. Flett for the petitioner Joanne C. Moser for the respondent JUDGMENT McINTYRE J. August 17, 2006 [1] The petitioner seeks child support and spousal support. The parties signed separation agreement and interspousal contract on July 16, 2004. With respect to spousal support the agreement provides that it is the intention of the parties that spousal support will be based on division of income until July 1, 2011. [2] The respondent worked as computer consultant. He carried on business through corporation, Exodus Technologies Inc. The sole source of revenue of the corporation was revenue earned by the respondent’s efforts as computer consultant. In 2005 he earned revenue as computer consultant of $124,128.00. [3] The interspousal contract provides, inter alia: 7.2 The shareable amount of Technologies earnings shall be the gross income to maximum of $125,000.00 less the actual expenses incurred to earn that income. Those expenses are estimated at $35,000.00 and include expenses related to the health plan of the Technologies. The actual amount of the expenses may be somewhat more or somewhat less than the actual amount of $35,000.00. 7.3 Paul shall receive all of the net income and shall pay one half of the net income to Brenda by way of equal monthly payments of spousal support. The amount of payment shall be adjusted yearly to reflect the changing income of the company after each year end. Any overpayment or under payment shall be made up over period of the next 12 months. The adjustment shall take place on April each year. The adjustment will consider Technologies likely future earnings based upon whether Paul’s contract is renewed with the Provincial Government. 7.5 The one half division of income shall continue up to and including June 30, 2007. Starting in the July 1, 2007 through to and including June 30, 2008 the formula shall be that Brenda shall be entitled to spousal support in the amount of 40% of the net income of Technologies based on the gross income of $125,000.00 by way of equal monthly payments of spousal support. The amount payable shall be reduced in an amount equal to 40% of Brenda’s income that she has earned. The adjustment shall take place on April each year. The adjustment will consider Technologies likely future earnings based upon whether Paul’s contract is renewed with the Provincial Government. Similarly, Brenda’s income will be estimated based upon her anticipated earnings. Should there be discrepancy between the actual income and the anticipated income, the amount will be adjusted when the final amounts are known. 7.6 The following chart shall apply: Now to June 30, 2007 50% July 1, 2007 to June 30, 2008 40% July 1, 2008 to June 30, 2009 30% July 1, 2009 to June 30, 2010 20% July 1, 2010 to June 30, 2011 10% July 1, 2011 onwards 7.7 The parties agree that on and after July 1, 2011 that neither claim spousal support from the other for any reason or cause whatsoever and that this agreement shall constitute full and sufficient waiver of any and all rights. This would include any changes either foreseeable or not foreseeable, radical changes or changes that may be causally related to the marriage. The intent is that this shall be full and final settlement of spousal support. 7.8 Brenda and Paul acknowledge and agree that Brenda has the right to continue with her homeopathy training and education in order to set up homeopathy practice. It may take two years from the present date for Brenda to complete her training and education. During that time Brenda will attempt to obtain part‑time employment. After Brenda receives her training and education in homeopathy, she shall seek work on full‑time basis. In the event that Brenda discontinues her homeopathy training and education, then she shall seek full‑time employment. In the event that Brenda receives any employment income, including self-employment income in any manner, then she will report that employment income to Paul and the appropriate percentage of the said employment income as set forth in paragraph 7.6 hereof shall be deducted off of the spousal support that Brenda is entitled to from Paul. [4] The respondent’s primary source of income through the corporation was contract with the Provincial Government for computer consulting services. In February 2006, the respondent advised the petitioner it appeared his contract with the government was coming to an end. As it turned out the respondent ended up with contract for $65,000.00 for the period April 2006 to March 31, 2007. The respondent works approximately 60 hours per month. The respondent indicates he intends to make career change and is engaged in the business of home renovation and handyman services. He has no prior training or experience in this field. [5] The petitioner currently works part-time for travel agency earning $1,473.00 per month. She may be able to gain full-time employment with her employer at the end of 2006. She had been taking home study courses toward certification in the practice of homoepathy although she has done very little of this since December 2004. She hopes to complete the program sometime late next year. [6] The petitioner argues that as the respondent’s present contract with the Provincial Government is part-time, he should be seeking additional work in the field of computer consulting. She suggests there is no evidence he has done anything to look for suitable work and suggests that he is in fact semi-retired at age 51. For the purposes of both child support and spousal support it is suggested the respondent should be deemed to have an income of $125,000.00. In terms of spousal support after deeming him to have an income of $125,000.00, the agreement should then be applied. [7] The respondent takes the position the interspousal contract recognized that there were risks that his contract with the Provincial Government may not be renewed and on the principles set forth in Miglin v. Miglin, 2003 SCC 24 (CanLII), 2003 SCJ 21;[2003] S.C.R. 303 that the petitioner’s entitlement to spousal support is as set forth in the interspousal contract. [8] In Leedahl v. Leedahl, 2006 SKQB 14 (CanLII);[2006] S.J. No. 15 (QL) (Q.B.), former husband sought to vary his spousal support obligation reached by agreement following settlement pre-trial conference and incorporated into consent order. The consent order provided that the husband was to pay $500.00 month spousal support until $5,000.00 family property settlement was paid in full. The applicant claimed material change in circumstance due to the loss of his trucking business. [9] The court in Leedahl, supra, noted that neither the spousal support agreement nor the consent order contained provision which contemplated variation of the spousal support obligation in the event of material change in circumstances. In that regard the court noted at para. ... In that respect, it is similar to the situation in Spencer v. Spencer, 2005 SKQB 116 (CanLII), (2005) 261 Sask.R. 150 (Q.B.). There, Wilson J. dealt with an application by respondent husband to vary spousal support agreement whose terms were incorporated into consent order which was for fixed term and contained no provision for review. The husband argued there had been significant change in circumstances. The parties had married in September 1995 after they cohabited for four years. They separated in December 2001. In December 2003 they settled the division of their property. The husband also agreed to pay monthly spousal support of $1,200 for three years and three months. The parties agreed to accept this agreement as full and final settlement of these issues. The agreement was incorporated into consent judgment. When the agreement was made the husband was employed with an annual salary of $100,000. In April 2004 the husband’s employment was terminated. He received severance package of $74,038. The 62 year old husband claimed his only source of income was $490 per month that he received from Canada Pension. The wife’s situation was unchanged from the time the agreement was made. Wilson J. dismissed the application, saying that the parties reached their agreement at pre‑trial conference where they were both represented by counsel and the agreement was in substantial compliance with the objectives for spousal support contained in the Divorce Act. The reasons for the decision are set out in the headnote as follows: The parties agreed that an equitable sharing of the economic consequences of marriage and its breakdown could be achieved if the wife was provided with time‑limited support. Although the husband did not anticipate that he would lose his employment, the job loss was not outside the range of reasonable outcomes that could have been anticipated by the parties when they made their agreement. Job markets changed and no employment position was secure. The agreement did not provide for the circumstances that would result in termination or variation of support. The husband should have insisted that spousal support would be reviewable if there was material change in circumstances. The husband achieved finality in situation where the wife was in ill health and had low income. He had to take responsibility for the agreement that he made. He had resources from which he could satisfy his support obligations. The application to vary spousal support was dismissed. [10] In Palmer v. Palmer, 2003 SKQB 438 (CanLII);(2003), 240 Sask. R. 25; (2003), 45 R.F.L. (5th) 447 (Sask. Q.B.), the wife brought an application for interim spousal support. The parties had signed comprehensive agreement which dealt with parenting issues, child support, spousal support and the division of family property. Under the agreement Ms. Palmer received lump sum spousal support of $5,000.00 and ongoing spousal support of $1,000.00 per month from October 2001 to July 2002. In subsequent divorce proceedings Ms. Palmer brought an application for interim spousal support pending trial. She sought to set aside the settlement agreement on the grounds of undue influence and duress or alternatively that the agreement was unfair and unconscionable. [11] The court observed at paras. [12] While Court can order interim spousal support where there is an agreement, it should be hesitant to do so. court on an interim application must be careful not to pre‑judge the issue and thereby usurp the role of the trial judge. To vary an agreement that the parties have relied upon in structuring their affairs on an interim basis would, in most circumstances, be unfair. If interim relief is granted which flies in the face of an agreement, and that agreement is subsequently upheld at trial, the fairness and equity of the interim order may be brought into question. Except in exceptional circumstances, agreements should be respected and upheld until trial when the circumstances surrounding the agreement can be fully canvassed. It is only in rare cases that court should vary from this principle. [13] There are no circumstances in this case which elevate it to one of those “rare cases”. While it is undisputed that the parties’ relationship was long one (more than 25 years), the roles of the parties and the validity of their agreement is clearly disputed. If this Court was to award interim spousal support to Ms. Palmer and the trial judge upheld the agreement, she has no resources to pay back any interim support received. The end result would be manifestly unfair to Mr. Palmer. On the other hand, if trial judge finds that the agreement should be set aside, they have the power to make retroactive spousal support order. Equity requires the agreement be respected pending trial. [12] In this instance the petitioner seeks spousal support order in which the Court is asked to impute income and then apply the provisions of their interspousal contract to determine quantum. The interspousal contract does not contemplate variation of the spousal support obligation in the event of a material change of circumstance. It will be for the trial judge to determine the intention of the parties when the agreement makes reference in paragraphs 7.3 and 7.5 to adjustments which “will consider Technologies likely future earnings based upon whether Paul’s contract is renewed with the Provincial Government.” [13] As noted in Palmer, supra, when the Court is asked to make an interim order and there is an existing interspousal contract which deals with spousal support, it is often not feasible to apply the Miglin, supra, analysis. In addition, we have in this instance, the question of whether or not to impute income. [14] In the circumstances, this is not an appropriate case in which to make an order for interim spousal support. The petitioner is entitled to support under the agreement and the circumstances as they presently exist. The parties will proceed to pre-trial conference and trial if necessary on the question of whether the respondent is obliged to pursue work in his field as computer consultant and whether to impute income. [15] With respect to child support, the petitioner seeks support for Logan and Melanie. Melanie turned 18 November 22, 2005. She completed her Grade XII last June. On May 9, 2006, she started ten-month program in hairdressing training. The parties came to an agreement with respect to assisting her insofar as her tuition payments are concerned. The petitioner seeks only table support for Melanie. There is no dispute that Melanie remains a child of the marriage while she is attending her program. [16] Insofar as the respondent’s income is concerned, the gross income to the corporation is $65,000.00 per annum. There is reference to some expenses being incurred to earn the income but there is no information as to what those expenses are. The respondent did provide “pay stub” for May 2006. It is not really a pay stub, but extrapolating from that statement I conclude the respondent’s gross taxable income from the corporation as a result of the $65,000.00 contract is approximately $53,000.00. This is in sense, an interim order and the question of the respondent’s income for child support purposes can be addressed at the pre-trial conference. [17] Based upon an income of $53,000.00 the respondent shall pay child support to the petitioner commencing May 1, 2006, in the amount of $741.00 per month for the support of their two children. Support for Melanie will continue so long as she continues in her program. [18] The issue of costs shall be left to the trial judge. J. D. E. W. McIntyre
The petitioner seeks child and spousal support. The parties signed a separation agreement and interspousal contract in July 2004. With respect to spousal support the agreement provides that it is the intention of the parties that spousal support will be based on a division of income until July 1, 2011.HELD: 1) The petitioner seeks a spousal support order in which the court is asked to impute income and then apply the provisions of their interspousal contract to determine quantum. The interspousal contract does not contemplate variation of the spousal support obligation in the event of a material change of circumstance. It will be for the trial judge to determine the intention of the parties when the agreement makes reference to the adjustments which 'will consider Technologies likely future earnings based upon whether Paul's contract is renewed with the Provincial Government'. This is not an appropriate case in which to make an order for interim spousal support. The petitioner is entitled to support under the agreement and in the circumstances as they presently exist. 2) With regard to child support, there is no question that Melanie remains a child of the marriage while she is attending her educational program. Insofar at the respondent's income is concerned, the gross income to the corporation is $65,000 per year. The respondent provided a pay stub for May 2006. It is not really a pay stub, but extrapolating from that statement the court concluded that the respondent's gross taxable income from the corporation as a result of the $65,000 contract is approximately $53,000. Child support will be ordered based on $53,000 on an interim basis.