QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2007 SKQB 419 Date: 2007 11 08 Docket: Q.B.M. 97/1992 Judicial Centre: Regina BETWEEN: PETER MICHAEL MALOWANY and SHERRY LYNN MACK Counsel: Michael S. Scott for Peter Michael Malowany W. Timothy Stodalka for Sherry Lynn Mack FIAT McINTYRE J. November 8, 2007 [1] The child support order of the Provincial Court of December 11, 1991 was registered in this Court January 27, 1992, pursuant to s. of The Reciprocal Enforcement of Maintenance Orders Act, 1983, S.S. 1983, c.R-4.1. Under that order the petitioner was to pay ongoing child support to the respondent of $300.00 per month. The parties subsequently entered into an agreement of January 30, 1992 whereby the parties agreed the $300.00 per month would be without tax ramifications to either party. [2] petition has been issued pursuant to The Children’s Law Act, 1997 S.S. 1997, c.C-8.2 as am. and The Family Maintenance Act, 1997, S.S. 1997, c.F-6.2 as am. The petitioner seeks an interim order setting his ongoing child support obligation as well as addressing the arrears. The petitioner says he has been paying at a rate that is greater than his legal obligation. Arrears have accumulated and he seeks to expunge them. [3] The petitioner is part of family farm operation. He supplements his farm income with working for part of the season at local sporting retail store. He owns home in Regina and has room mate to share expenses. This generates some rental income. In reviewing the petitioner’s income tax returns the farming operation has shown loss in each year. His employment income has been $20,640.00 in 2006; $21,481.00 in 2005 and $23,382.00 in 2004. The three year average would be $21,834.00. The rental income is said to be $5,100.00 per year. In 2003 the petitioner’s employment income was $19,961.00. [4] As of September 26, 2007 the petitioner has arrears of $2,935.67. The petitioner takes the position that he has overpaid by approximately $6,300.00 over the past four years if one compares his employment income to the corresponding table support under the Federal Child Support Guidelines (SOR/97-175, as am.) The Maintenance Enforcement Office is holding funds obtained through federal garnishment. [5] The respondent takes the position that the petitioner’s line 150 income does not reflect his ability to pay. The respondent notes that when the petitioner recently sought financing for the purchase of half ton truck he indicated his income was $5,100.00 per month. Counsel noted that through use of the optional inventory adjustment the petitioner is able to average out his farm income. Counsel also refers to expenditures on credit cards which would suggest the petitioner is able to eat out at restaurants on regular basis. Counsel suggests that the petitioner could in fact work full time and earn an income of approximately $40,000.00 and child support should be fixed on that basis. [6] Counsel for the petitioner acknowledges that the child support obligation should be determined on the basis of the petitioner’s employment income. In terms of ongoing support it is appropriate to determine the petitioner’s income on the basis of the three year average of his employment income being $21,834.00 and add to that the $5,100.00 in rental income for total of $26,934.00. The petitioner is actively engaged in farming. He pursues reasonable off farm income. In the absence of something further I am not prepared to impute income. The petitioner, having been found to have an income of $26,900.00 shall pay to the respondent child support of $221.00 per month commencing June 1, 2007 payable on the 1st of each month thereafter. [7] In terms of the arrears Wurmlinger v. Cyca 2003 SKQB 152 (CanLII); (2003), 231 Sask. R. 282 (Sask. Q.B.) sets out the factors to be considered when determining whether arrears should be rescinded. The factors are: 1. The nature of the maintenance order sought to be varied; 2. The ongoing financial capacity of the payor; 3. The ongoing needs of the child; 4. Any unexplained delay in enforcing arrears; 5. Any explanation as to the delay in seeking relief from the arrears; 6. Whether enforcement of payment of arrears would cause hardship to the payor; and 7. The payor’s ability to pay the arrears at the time they were incurred. [8] It is not clear when the arrears arose. It appears that by early 2006 there was $1,300.00 in arrears. During the balance of 2006 and 2007 the arrears increased. Delay in enforcing arrears or seeking relief is not significant issue in the circumstances. Enforcement of payment of the arrears will not cause any particular hardship to the payor. There is money sitting in the Maintenance Enforcement Office as result of federal intercept. [9] In terms of the payor’s ability to pay at the time the arrears accrued the petitioner says he was paying in excess of his legal obligation. It is true that if one looked to his employment income the table amount would be approximately one-half of the $300.00 per month non-taxable that the petitioner agreed to pay back in 1992. However one cannot ignore the fact that in 1992 the payor agreed to pay $300.00 per month non-taxable. He did nothing to seek to change this obligation in all of the intervening years. I am also cognizant of the fact that the petitioner’s farming operation affords the petitioner an opportunity to manage his financial affairs. By reporting a farm loss each year the petitioner in fact pays less tax on his employment income than he would otherwise pay. In the circumstances I am not prepared to rescind any of the arrears. [10] On the issue of costs consider success to have been divided. There will be no order as to costs. J. D.E.W. McIntyre
In January 1992, the parties agreed the petitioner would pay child support of $300 per month and that it would be without tax ramifications to either party. As of September 2007, the petitioner has arrears of about $2,900. He now applies to set his child support obligation and deal with the arrears. The petitioner claims he has been paying too much in child support under the Guidelines. HELD: 1) In terms of ongoing support, it is appropriate to determine the petitioner's income on the basis of the three year average of his employment income being $21,834 and add to that the $5,100 in rental income for a total of $26,934. The petitioner is actively engaged in farming. He pursues reasonable off farm income. In the absence of something further, the Court was not prepared to impute income. He shall pay child support of $221 per month.  2) In terms of the payor's ability to pay at the time the arrears accrued, the petitioner says he was paying in excess of his legal obligation. It is true that if one looked to his employment income the table amount would be approximately half of the $300 per month non-taxable that the petitioner agreed to pay back in 1992. However, one cannot ignore the fact that he agreed to pay it. He did nothing to seek to change this obligation in all of the intervening years. The petitioner's farming operation affords the petitioner an opportunity to manage his financial affairs. By reporting a farm loss each year, the petitioner in fact pays less tax on his employment income than he would otherwise pay. In the circumstances the Court was not prepared to rescind any of the arrears.