QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2007 SKQB 378 Date: 2007 10 23 Docket: D.I.V. 86/2006 Judicial Centre: Swift Current BETWEEN: ALICE REGINA LATURNUS and DALE ANTON LATURNUS Counsel: Karl P. Bazin, Q.C. for the petitioner Dale Anton Laturnus appearing on his own behalf JUDGMENT GEREIN J. October 23, 2007 [1] The within petition was launched almost four years ago and the usual relief was claimed, namely: divorce, joint custody, access, child support, spousal support and division of family property. The divorce was granted on July 26, 2006. The remaining matters proceeded to trial on December 5, 2006. However, by the end of that day settlement was achieved with respect to all matters but one. Judgments were entered accordingly. [2] The outstanding matter was that of child support, past and future. Agreement could not be reached and that dispute later proceeded to trial over two days. The dispute largely centered on what monies were owed from the past. Central to this was the determination of the respondent’s income. BACKGROUND FACTS [3] The parties have three children: Carley Laturnus, born July 27, 1988 (age 19), Stacey Laturnus, born December 5, 1990 (age 16) and Mandey Laturnus, born August 9, 1993 (age 14). When the parties separated in 2003 the children resided with their respective parents on alternate weeks. This came to an end on August 1, 2004, when the petitioner moved to Medicine Hat, Alberta. The three girls moved with her. In July, 2005, Stacey and Mandey returned to the respondent. In September, 2005, Stacey moved back with the petitioner, but Mandey remained with the respondent. That arrangement has continued to the present. The child, Carley, is now on her own. [4] There were interlocutory applications in the past, the most significant of which resulted in an order dated June 29, 2004. To that date the respondent had been paying $300.00 month as child support, but he made no payment for the month of June. That changed with the order which stipulated that he pay monthly child support of $500.00 for the three children, commencing July 1, 2004. The payments were based on an imputed annual income of $26,500.00. In addition, the order set out regime for the transportation of the children when the respondent exercised access. [5] As was noted earlier, the living arrangements changed permanently as of September, 2005, when Mandey took up permanent residence with the respondent. Yet there was no variation of the order dated June 29, 2004. It is fair and reasonable that an appropriate retroactive variation now be effected. DETERMINATION OF INCOME [6] The first task is to determine the income of the respondent. It presents some difficulty as he is farmer. His income tax returns for the years 2004, 2005 and 2006 have been filed, but certain adjustments must be made. [7] begin with the capital cost allowance. In each year he claimed such an expense. There is nothing wrong with that, but it does somewhat distort the picture of his income. His taxable income is reduced below his disposable income and this can have negative impact on the child support. This is rectified by moving portion of the capital cost allowance into income. [8] recognize that the purpose of the allowance is to provide money to purchase replacement equipment. However, not all of the money is needed and is not used for that purpose. It is that unused portion which should be allocated as part of the respondent’s income. In this instance, taking into account all of the circumstances including the nature of the farming operation, the type and vintage of the machinery, and the rate at which the allowance is being used up, I conclude that 40% of the allowance should be treated as income for the purpose of calculating child support. [9] Utility costs are the next subject. They are claimed by the respondent as farm expenses thereby reducing his taxable income. These are telephone and electricity costs and portion of these costs are for his personal benefit. It is the same for his fuel costs. Accordingly, the personal portion should be included as part of income. An appropriate percentage is 25%. [10] Then there are legal and accounting costs. An amount in each year should be attributed to the respondent personally, as opposed to the farm operation, and added into his income. The amount depends on how much was claimed and varies from year to year. [11] Taking into account the described adjustments, the respondent’s income for the indicated years is as follows: 2004 Taxable income 8,747.00 Capital Cost Allowance 9,560.00 Electricity 5,881.00 Legal and Accounting Fees 2005 Taxable income $10,134.00 Capital Cost Allowance 7,100.00 Electricity 5,143.00 Legal and Accounting Fees 2006 Taxable income $48,445.00 Capital Cost Allowance 5,807.20 Electricity 4,246.00 Legal and Accounting Fees [12] There remains final adjustment. Over the years the respondent has taken advantage of the optional inventory adjustment and that must be factored back into his income using the methodology set out in Tamke v. Tamke 2001 SKQB 528 (CanLII); [2001] S.J. No. 791 (Sask. Q.B.). The calculations are as follows: $26,345.00 Plus 2003 optional inventory adjustment $29,242.00 Less 2004 optional inventory adjustment $76,987.00 Total (Deficit) ($21,400.00) $28,510.00 Plus 2004 optional inventory adjustment $76,987.00 Less 2005 optional inventory adjustment Total $105,069.00 $60,361.20 Plus 2005 optional inventory adjustment 428.00 Less 2006 optional inventory adjustment $60,789.20 [13] As can be seen, the income of the respondent over the years has undergone serious fluctuation. It therefore is appropriate that his income, for calculating child support, be based on the average of his income in the years 2004 and 2005, which is $41,834.50 ($105,069.00 - $21,400.00 ÷2). [14] My explanation for choosing these two years is that am effecting retroactive adjustment. Following the separation there was an understanding that the respondent would pay $300.00 month as support for the three children. He did this except for the month of June, 2004, and that obligation of $300.00 is still outstanding. By the order of June 29, 2004, the payments were increased to $500.00 month. The payments were made until July 1, 2005, when two of the children moved in with the respondent for the summer. As of September 1, 2005, the one child, Mandey, was residing permanently with the respondent and the other two children were with the petitioner. That amounted to material change and variation should be retroactive to that date. [15] At that time the income which would have been known was that for the year 2004. However, that income was distorted by reason of the optional inventory adjustment. By joining it with the 2005 income the distortion is eliminated. Today have the benefit of hindsight and if am effecting retroactive variation, should take advantage of that hindsight. THE CHILD SUPPORT [16] Based on an annual gross income of $41,834.50, the respondent should have paid to the petitioner as support for two children the monthly sum of $564.00 commencing September 1, 2005. Those monies have not been paid. [17] The situation of the petitioner is not complicated. Over the years her income has been by way of salary from her employment. Her income has been as follows: 40,514.89 Based on her 2005 annual gross income of $34,263.00, she should have paid to the respondent as support for one child the monthly sum of $285.00 commencing September 1, 2005. Those monies have not been paid. [18] The respondent submits that there should be variation for the period of July and August, 2005, when two children were residing with him and one with the petitioner. accept this submission. The result is that the petitioner should have paid $476.00 month and the respondent $341.00. The monthly difference payable to the respondent is $135.00. For the two months he is entitled to credit of $270.00. [19] As of the end of June, 2006, there was another material change in that the child, Carley, became independent. Thus, each party had one child. As well, the respective incomes were basically comparable. Accordingly, no child support was payable as of June, 2006 and that continues to the present. ARREARS OF CHILD SUPPORT [20] The child support payable by the two parties should be offset. The result is that the respondent should have paid to the petitioner the monthly sum of $279.00 ($564.00 $285.00). This should have been paid from September 1, 2005, until June 1, 2006, both dates inclusive, which is period of 10 months. Accordingly, the amount payable by the respondent was $2,790.00. From that amount the sum of $270.00 should be deducted for July and August 2005, leaving balance of $2,520.00. [21] As it happened, the Maintenance Enforcement Office recovered these sums: Amount January 16, 2006 112.25 February 27, 2006 $2,045.13 April 24, 2006 2,182.88 That left shortfall of $337.12. To that must be added the sum of $300.00 from June, 2004, for total of $637.12 owing by the respondent for the basic child support. SECTION EXPENSES [22] In 2006 the child, Stacey, joined in school trip to Europe at cost of $3,024.00. I reject the submission that the respondent should pay one-half of that sum. This is for two reasons. First, Stacey paid $1,500.00 toward the cost of the trip. Secondly, the respondent was asked to contribute at the time, but he refused. The petitioner knew this and when she elected to pay the balance she did so unilaterally and on her own initiative. It would be inappropriate to now compel the respondent to contribute when he earlier expressed a contrary position. [23] From 2005 to 2007 the petitioner paid certain school fees in the amount of $524.00. She seeks one-half of that amount from the respondent. I reject that claim for the reason that the fees are ordinary, and not extraordinary, expenses and would be encompassed in the basic child support. The same applies to the cost of certain activities provided to the child Mandey by the respondent. [24] There were certain health costs and they were extraordinary and therefore to be shared by the parties. There are four items. The first is fees in the amount of $256.00 paid for chiropractic treatment administered to Stacey. These were paid by the petitioner. [25] Secondly, following the separation, fees of $1,500.00 were paid to Dr. Knight for orthodontal treatment administered to Stacey. The petitioner paid $800.00 and the respondent paid $700.00. He filed series of cancelled cheques showing payments, but they were irrelevant as they related to other charges. [26] The third matter is the cost of additional orthodontal services for Stacey. For this the petitioner paid $5,900.00 and there was no contribution by the respondent. [27] The fourth and last matter is medical and dental costs incurred by the respondent with respect to the child, Mandey, in the sum of $542.00. The petitioner has contributed nothing toward that amount. [28] The described costs were incurred over some three years in the past. During that time incomes varied somewhat and it could be said that the contributions would have varied somewhat. While this is so, I have concluded that it will be fair if the contributions are equal, taking into account that the incomes are presently comparable. [29] The consequent calculation is as follows: Description Amount Cost of chiropractor fees (Stacey) 256.00 Cost of orthodontist fees (Stacey) 5,900.00 Cost of medical fees (Mandey) 6,698.00 50% payable by each party LESS: Medical fees paid by respondent 2,807.00 PLUS: Adjustment on Dr. Knight account 50.00 Total payable by respondent 2,857.00 ACCESS EXPENSES [30] The order of June 29, 2004, stipulated that when access was being exercised, the parties were to meet at specified places. On five occasions the respondent failed to attend as directed with the result that the petitioner had to make the entire trip. She now wants to be compensated for lost wages and the cost of fuel. [31] There are two problems. The petitioner has claimed for full day’s wages. This ignores the fact that she would have been away from her employment for one-half the time in any event. In addition, she appears to be claiming for her gross wages. Her actual loss would be less. The second problem is similar. She seeks to recover the cost of fuel for the entire trip. Again, this ignores the fact she would have some cost in any event. As well, the receipts show payment of $37.48 for confectionary items. While find that the petitioner is entitled to be compensated, the amount is less than she claims. The amount is calculated as follows: Description Amount Wages for five trips ($50.00 5) 250.00 Cost of fuel [32] The judgment effecting the division of family property contains provision requiring payment of interest on any monies paid after the due date. In fact, the respondent was late in making the final payment and is liable for interest in the amount of $143.04. OTHER MATTERS [33] The judgment granted earlier directed that the respondent install shields on his power take-offs to better ensure the safety of the children. The petitioner takes exception to the respondent’s failure to do so. The respondent’s conduct here is clearly wrong. [34] The judgment further provides that there would be an exchange of photographs for the purpose of making copies. It is said that this has not been done. [35] Finally, the judgment gave certain directions respecting the bank accounts of the three children. It is said that this has not been done. [36] am in no position to address these concerns other than to say the judgment should be followed. If it happens otherwise, enforcement may be sought. [37] There is one further collateral matter. The respondent acknowledges that he has, from time to time, borrowed money from the bank accounts of the children. He was able to do this because he had signing authority. It may be that he had the consent of each child, but the fact remains that such conduct is wrong and should not be repeated. Within this proceeding cannot take any action. In the future it may be otherwise. [38] This is the money owing by the respondent: Description Amount Child support for June, 2004 300.00 Child support for September, 2005 to June, 2006 337.12 Extraordinary expenses $2,857.00 Travelling expenses of petitioner [39] In the result it is ordered as follows: (1) That the respondent shall pay to the petitioner the sum of $4,237.16; (2) That the said sum of $4,237.16 shall be paid by monthly payments of $350.00 commencing November 1, 2007; (3) That no child support is presently payable as incomes are comparable, but each party shall pay 50% of all extraordinary expenses; (4) That by May 30 of each year copy of the income tax return for the previous year shall be provided by each party to the other party; and (5) That the respondent shall forthwith pay to the petitioner as court costs the sum of $1,200.00. J. W.F. Gerein
The outstanding issue is child support, past and future. The dispute largely centered on what monies were owed from the past. Central to this was the determination of the respondent's income. HELD: 1) The respondent is a farmer. His income tax returns for the years 2004, 2005 and 2006 have been filed, but certain adjustments must be made. The purpose of the capital cost allowance is to provide money to purchase replacement equipment. However, not all of the money is needed and is not used for that purpose. It is that unused portion which should be allocated as part of the respondent's income. In this case, 40% of the allowance should be treated as income for the purpose of calculating child support. The personal portion of the utility costs should be included as part of his income, an appropriate percentage is 25%. An amount of the legal and accounting costs should be attributed to the respondent personally and added to his income, in 2004 $1,000 is added, in 2005 $5,000 is added and in 2006 $1,000 is added. The respondent has taken advantage of the optional inventory adjustment and that must be factored back into his income using the methodology set out in Tamke v. Tamke, 2001 SKQB 528. As the respondent's income has undergone serious fluctuation over the years, it is therefore appropriate that his income for calculating child support be based on the average of his income in the years 2004 and 2005. 2) The respondent will not have to pay half of the cost of Stacey joining a school trip to Europe. This is because Stacey paid half of the cost herself and because the respondent was asked to contribute at the time but refused. The petitioner knew the respondent had refused to contribute and, when she elected to pay the balance, she did so unilaterally. It would be inappropriate to compel the respondent to contribute now. 3) The school fees paid by the petitioner are not extraordinary and should be encompassed in the basis child support. The health costs in the form of orthodontic treatments are extraordinary and the parties shall contribute equally as their incomes are presently comparable. 3) On five occasions the respondent failed to attend at the agreed meeting spot with the result that the petitioner had to make the entire trip to deliver the children to the respondent so he could exercise access. She will be compensated for the actual lost wages and fuel costs that she incurred on the respondent's behalf, but not for costs she would have incurred in any event.  4) The respondent shall pay costs of $1,200.