HORSWILL v GREY

The Plaintiff wife and the Defendant husband lived together from 2009 to 2019 and shared two children together. The Plaintiff had primary parenting of both children. The Plaintiff filed a Statement of Claim pursuant to the Family Law Act, SA 2003, c F-45 seeking, amongst other relief, retroactive and ongoing Section 3 and Section 7 child support, as well as imputation of income to the Defendant. The Defendant applied for division of family property pursuant to the Family Property Act, RSA 2000, c F-4.7; however the Court granted an amendment to the Application because it was the Matrimonial Property Act, RSA 2000, c F-47 (the “MPA”) that applied in the circumstances. Initially, the Defendant lacked standing to bring the MPA Application because he was an undischarged bankrupt. However, the defect in the Application was cured when the Defendant added the Trustee as a third-party Applicant.

The Court reviewed substantial Affidavit evidence from both parties. In assessing the credibility of the parties, Justice Reed found the Plaintiff’s evidence to be credible, open, and honest. Reed J. held that the Defendant’s evidence was sometimes credible. The lack of credibility was, in part, due to the Defendant’s failure to produce financial disclosure as required by Rule 12.41. As a result, where there was a discrepancy in the evidence, the Court favoured the evidence of the Plaintiff. The Plaintiff’s evidence established that while the Defendant was an undischarged bankrupt, he opened a liquor store in Calgary and held bank accounts under various pseudonyms.

The Court held that Rule 12.41 imposed a mandatory obligation to provide full and complete financial disclosure. Justice Reed found that the Defendant failed to comply with this obligation and breached multiple Orders requiring disclosure. Reed J. emphasized that disclosure was fundamental to determining income for child support and to identifying and valuing property.

Justice Reed set the Defendant’s income based on the best evidence before the Court, being the Defendant’s tax returns from 2019 to 2023. For 2024 forward, the Court imputed income by calculating the Defendant’s average income over the last three years. The Defendant’s failure to comply with Rule 12.41 also affected property division. The absence of disclosure prevented the Court from valuing certain assets. Reed J. relied on the best evidence available and resolved evidentiary gaps by applying an adverse inference against the Defendant. Property was apportioned between the parties such that the Plaintiff owed the Defendant an equalization payment, however, the Court directed that the retroactive child support owed to the Plaintiff be set off against the equalization payment.