LANE J.A. 2005 SKQB 112 F.L.D. A.D. 1997 No. 27 J.C. W. IN THE QUEEN’S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF WEYBURN BETWEEN: DEBORAH RUTH SOANES (Formerly known as Deborah Ruth Goote) and RONALD HARRY NEWETT RESPONDENT R.J. Wormsbecker for the petitioner I.D. McKay, Q.C. for the respondent JUDGMENT MATHESON J. March 2, 2005 [1] The issue between the parties is the amount of child maintenance payable by the respondent to the petitioner for the benefit of Brady Melvin, born January 9, 1993. [2] The amount of the respondent’s income, as reported in his income tax return for the years 2001, 2002, and 2003 was $71,501.00, $73,272.00 and $74,476.00. He has asserted child maintenance should be calculated on the basis of that income. However, the respondent is the sole shareholder of Canadian Well Servicing Ltd., and he owns 50% of the shares of Southern Range Well Servicing Ltd. [3] The fiscal year end of Canadian Well Servicing Ltd. is August 31. Its net earnings, and retained earnings for the past four years were: Year Net Earnings Retained Earnings 2001 [$ 18,205.00] [$ 20,849.00] 2002 [$ 11,463.00] [$ 32,312.00] 2004 $202,380.00 $241,962.00 [4] The fiscal year end of Southern Range Well Servicing Ltd. is May 31. Its net earnings, and retained earnings, for the past four years were: Year Net Earnings Retained Earnings 2002 $174,121.00 $211,117.00 2003 $137,439.00 $348,555.00 $91,565.00 $440,121.00 [5] Notwithstanding the profitability of the companies the last couple of years, the respondent has insisted that the indebtedness of the company is $1,600,000.00. However, nearly $600,000.00 of that debt represents shareholders loans. [6] The long term debt of Canadian Well Servicing Ltd., as of May 31, 2004, was only $148,750.00. The current portion of the long term debt was deducted on its balance sheet before calculation of retained earnings. [7] As of August 31, 2004, the long term debt of Southern Range Well Servicing Ltd. was $161,303.00. The current portion of that long term debt was deducted before calculation of retained earnings. [8] The respondent has also asserted that Canadian Imperial Bank of Commerce, to whom the long term debt is owed, has placed restrictions upon the amount of money which can be extracted from both companies. But, no particulars of the alleged restrictions were provided. The retained earnings of both companies far exceeds the amount of the long term debt. [9] Based on the foregoing, it will be deemed that the respondent has additional income from Canadian Well Servicing Ltd. of $50,000.00 and from Southern Range Well Servicing Ltd. of $27,200.00. [10] There will be an Order: 1) Varying the Order dated April 9, 1997, by requiring the respondent to pay to the petitioner, for the period January 1, 2004, to July 31, 2004, as maintenance for the child, Brady Melvin, in accordance with the Federal Child Support Guidelines [SOR/97-175, as am.] (the “Guidelines”), on the basis of the respondent's annual income for that period of time, being $72,800.00, the sum of $561.00 per month. 2) Imputing the annual income of the respondent to be $150,000.00. 3) Declaring the annual income of the petitioner to be $20,000.00. 4) Requiring the respondent to pay to the petitioner, as maintenance for the child, Brady Melvin, in accordance with the Guidelines, the sum of $1,076.00 per month. 5) Requiring the respondent to pay to the petitioner 88% of the hockey expenses incurred on behalf of the child from August 1, 2003, to August 1, 2004, which expenses total $3,900.00, and to pay to the petitioner 88% of the child's hockey expenses thereafter upon being provided with proof of payment of such expenses. 6) The parties shall exchange income tax returns no later than June 15 of each year. Any adjustments to child maintenance payments, and s. expenses, shall, based on the income tax returns, be effective as of January in the year in which the income tax return was filed. 7) The respondent shall, within 30 days of filing the income tax returns for Canadian Well Services Ltd. and Southern Range Well Services Ltd., provide copy thereof to the petitioner. 8) The petitioner is entitled to costs of the application in the amount of $750.00.
The issue is the amount of child support payable by the respondent. The respondent's income as reported in his income tax return for the past 3 years has been in the $70,000 range. However, he is also the sole shareholder of a corporation and the 50% owner of another corporation. The corporations have been very profitable and the retained earnings of both companies far exceed the amount of long term debt. HELD: 1) The respondent has deemed additional income of $50,000 and $27,200 from the two companies. 2) The imputed annual income of the respondent is $150,000. 3) Costs in the amount of $750 to the petitioner.