MacLeod v. MacLeod, 2011 ABQB 247

Court of Queen ’ s Bench of Alberta Citation: MacLeod v. MacLeod, 2011 ABQB 247 Date: 20110408 Docket: 4801 132619 Registry: Calgary Between: Thomas Hendrik MacLeod Plaintiff - and - Tessa Irena MacLeod Defendant Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice S.L. Hunt McDonald _______________________________________________________ I. Introduction [ 1 ] The parties seek determination of the distribution of matrimonial property, spousal support and parenting issues.

[ 2 ] The parties cohabited for seven years and were then married for seven years, a fourteen year relationship in total. They had one child, Carleigh, born in June 2003. They separated in March 2007 and were granted a Divorce Judgment on December 14, 2009. At the date of trial, they had been separated for three and one-half years. [ 3 ] The parties agree on child support and there is little disagreement on parenting arrangements except for one matter. The parties contest the division of their matrimonial property, Ms.

MacLeod’s entitlement to spousal support, and assuming entitlement, the quantum and duration of spousal support. II. Facts A. Overview [ 4 ] The parties were both 25 years old when they met in December 1992. Neither had any significant assets. They began cohabiting in the spring of 1993 when Mr. MacLeod moved in with Ms. MacLeod in Toronto after obtaining employment there. The parties lived together and worked in Toronto from 1993 to 1995. [ 5 ] In 1995, the parties moved to London, Ontario to be nearer Mr. MacLeod’s new job with Baker Hughes. The parties married on August 2, 1999.

They lived in London until the spring of 2006. Mr. MacLeod continued to work for Baker Hughes. Ms. MacLeod was employed for two years and then opened up her own home decor business, Au Maison, which she operated until May 2006. [ 6 ] On June [...], 2003, the couple’s daughter, Carleigh Joanna MacLeod, was born. [ 7 ] The parties enjoyed a very comfortable lifestyle in London, described by Mr. MacLeod as upper middle class. Prior to Carleigh’s birth, they took at least one trip per year to Mexico, an extended trip to Europe, and a ski trip to Calgary.

Before and after Carleigh’s birth, they vacationed and spent weekends at Ms. MacLeod’s parents’ cottage near London. They ate out at restaurants, lived in a nice home and regularly entertained family and friends in their home. [ 8 ] In May 2006, Mr. MacLeod moved from London, Ontario to Calgary to start a new job as the Canadian General Manager for Honeywell. Ms. MacLeod closed her store and she and Carleigh moved to Alberta in July 2006. The parties purchased a home in Okotoks. Ms. MacLeod began working part-time as an independent sales representative for a home decor product supplier. [ 9 ] In January 2007, Mr.

MacLeod met Ms. Fox who was also employed at Honeywell. In March 2007, Mr. MacLeod left the matrimonial home because of his involvement with Ms. Fox. [ 10 ] Mr. MacLeod filed a Statement of Claim for Divorce and Division of Matrimonial Property in June 2007. Mr. and Ms. MacLeod obtained a Divorce Judgment on December 14, 2009. Mr. MacLeod and Ms. Fox were married in April 2010. B. Sale of Matrimonial Home, Interim Without Prejudice Support and Property Agreement and Purchase of Ms. MacLeod’s New Home [ 11 ] After the parties separated in March 2007, Ms.

MacLeod and Carleigh continued to live in the matrimonial home until it was sold in January 2009. During this time period Mr. MacLeod voluntarily paid for expenses related to the matrimonial home including mortgage, insurance, taxes and utility payments.

[ 12 ] Mr. MacLeod testified that over this time he became more and more concerned about the downturn in the economy and the effect that this would have on the possible sale proceeds of the matrimonial home. He testified that he attempted to get Ms. MacLeod to sell the home but she refused. Ms. MacLeod testified that she was reluctant to sell for a number of reasons. Initially, there was the issue of where she and Carleigh would live and whether they should move to Sherwood Park to be near her brother or move back to London to be near her friends and family there.

Both options would be disruptive to Carleigh and her relationship with her father. Eventually, Ms. MacLeod developed friends and a sense of community in Okotoks. She also began to develop her sales business. She decided to stay in Okotoks but this raised the issue of how she would finance the purchase of a new home and pay for her expenses since she was not earning enough to qualify for a mortgage and was uncertain as to what assets or income she would eventually have, as the parties had not settled matrimonial property, child support, and spousal support issues.

She anticipated that these issues would not be settled until after trial, which was scheduled to occur in March 2009. [ 13 ] The home was finally listed for sale in October 2008 and an offer of $1,070,000 was made within a few days of listing. Ms. MacLeod testified that she was surprised that an offer had come in so quickly and did not want to accept without having a firm agreement regarding division of matrimonial property and child and spousal support. [ 14 ] Ms. MacLeod testified that after discussing her concerns with Mr.

MacLeod they agreed to make a counteroffer of $1,100,000 with a closing date of January 15, 2009 on the condition that Mr. MacLeod agree that Ms.

MacLeod would receive the net proceeds from the sale of the home on an interim without prejudice basis and on the condition that the divorce be severed from the corollary relief issues. [ 15 ] The parties executed an “Interim Without Prejudice Support and Property Agreement” (the Interim Property Agreement) dated 17 December, 2008, after having received legal advice from their respective lawyers, the significant provisions of which state: ....The parties wish to enter into an interim agreement to deal with the issue of child support and an interim distribution of the sale proceeds from the sale of the matrimonial home.

The Husband wants to sever the divorce from the corollary relief issues and the Wife will agree provided life insurance is in place... The parties are in the process of negotiating an agreement for settlement of all rights and liabilities against and to the other and with reference to the property and estate of the other; .... Matrimonial Home 9. The parties jointly own a home at 246 Crystal Drive, Okotoks, Alberta.... 10. The Matrimonial Home has been sold with a closing date on January 15, 2009.

The Husband and Wife have agreed on an interim without prejudice basis that the Wife shall receive all of the net sale proceeds from the sale of the Matrimonial Home as an advance of matrimonial property immediately upon closing of the sale of the Matrimonial Home and the release of the funds by the purchaser’s lawyer. This advance is without prejudice to the Husband’s claim that he is entitled to an equal division of the net sale proceeds in the ultimate distribution of the matrimonial property. 11. The Wife shall use the net sale proceeds to fund the purchase of a new home in Okotoks, Alberta.

[ 16 ] The matrimonial home sold for $1,085,000 with a closing date of January 15, 2009 and Ms. MacLeod received the total net sale proceeds of $463,679.70. At the date of closing, Ms. MacLeod and Carleigh moved into a new home in Okotoks that Ms. MacLeod had purchased where they continued to reside at the date of trial. The purchase price was $494,258.80, $23,536 of which was GST. The purchase was financed using the net sale proceeds from the sale of the matrimonial home of $463,679.70 and a partial draw down of a $360,000 line of credit secured by way of a mortgage (the LOC Mortgage) against Ms.

MacLeod’s new home. The LOC Mortgage was flexible and allowed her to make interest only payments with the interest rate at prime plus one percent. [ 17 ] There is some dispute as to the meaning of the Interim Property Agreement. Mr. MacLeod testified that their agreement was that Ms. MacLeod would be paid the total proceeds from the sale of the matrimonial home for an interim period and that “interim” meant until Ms. MacLeod obtained financing, which he expected to happen in January 2009. Ms. MacLeod testified that she understood the Agreement was interim and without prejudice to Mr.

MacLeod’s right to claim his share of the proceeds. However, she stated that it was her understanding that she would repay Mr. MacLeod when the parties had come to a formal settlement of all of the outstanding matrimonial property and support issues, and failing a settlement, when the issues were decided at trial, which was scheduled for March 2009. As it turned out, the trial was adjourned and the parties have been unable to come to a settlement in the interim. Ms. MacLeod testified that as a result, she has yet to pay Mr. MacLeod his share of the net sale proceeds. [ 18 ] In May 2009, Ms.

MacLeod brought an application for interim spousal support and Mr. MacLeod brought a cross application for an interim without prejudice advance of $231,839.81 representing his share of the net sale proceeds from the matrimonial home. Ms. MacLeod’s application was granted but Mr. MacLeod’s cross-application was denied in part upon, “... it appearing to the Court that [Mr. MacLeod’s] cross application is premature in the face of an interim without prejudice Support and Property Agreement...” C. Parenting Responsibilities and Arrangements [ 19 ] Ms. MacLeod was Carleigh’s primary caregiver from 2005 to 2008. Ms.

MacLeod cared for Carleigh full-time for the first six months after her birth after which the parties hired a nanny to care for Carleigh for three days per week when Ms. MacLeod went back to work part-time. In or around November 2004, Carleigh was enrolled in daycare full-time, and Ms. MacLeod returned to work full-time. Since then, Carleigh has, for the most part, been enrolled in daycare and then in before and after school care, on a full-time basis. She is now enrolled in school full-time and continues to have before and after school care. After Carleigh’s birth, Mr.

MacLeod continued to work full-time and up until 2008, his work required him to be away from home at least 40 to 50 percent of the time. [ 20 ] After the parties separated, their parenting arrangements changed over time, with Mr. MacLeod taking on more parenting responsibilities. Although Mr. MacLeod had substantial and unpredictable business travel requirements in 2007, this lessened in 2008. In any event, Carleigh has spent substantial blocks of time being cared for by Mr. MacLeod during most of the time since the parties’ separation. [ 21 ] After the parties separated Mr.

MacLeod initially moved into Calgary but in November 2007, he moved back to Okotoks with Ms. Fox. Between November 2007 and the summer of 2008, Mr. MacLeod cared for Carleigh for six days out of fourteen and Ms. MacLeod cared for Carleigh the other eight days. [ 22 ] There were disputes between the parties over Carleigh’s relationship with Ms. Fox. When Mr. MacLeod informed Ms. MacLeod that Ms. Fox would be living with him when he moved back to Okotoks in November 2007, Ms. MacLeod requested that they see a child psychologist regarding the introduction of Ms. Fox into the relationship.

He did not agree. [ 23 ] In the summer of 2008, when Ms. MacLeod decided to stay in Okotoks, she did so on the condition that Mr. MacLeod and Ms. Fox move out of Okotoks. They agreed and moved back to Calgary. The six and eight parenting arrangement continued until sometime in October 2009 when the parties agreed to try an arrangement whereby Carleigh would be cared for by Mr. MacLeod for five consecutive days and by Ms. MacLeod for nine. In December 2009, Mr. MacLeod and Ms. Fox moved back to Okotoks to make it easier for this arrangement to work. Ms. MacLeod was angry that Mr.

MacLeod had reneged on his agreement to live elsewhere. [ 24 ] An equal shared parenting order was granted in April 2010, and the parties have been parenting Carleigh on a seven day rotating basis since then. Carleigh is now seven years old.

D. Child Support, Spousal Support and Other Funds Paid to the Time of Trial [ 25 ] In 2007 and 2008, Mr. MacLeod voluntarily paid housing expenses for the matrimonial home. The total amount Mr. MacLeod paid for housing expenses was $58,990 in 2007 and $64,632 in 2008 for a total of $123,622. [ 26 ] Mr. MacLeod agreed to pay interim monthly child support of $1,975 beginning in January 2009. In November 2010, the parties agreed that this amount would be reduced to $1,777 per month. These payments were current at the date of trial. The parties agree that Mr. MacLeod overpaid Ms.

MacLeod child support of $2,521.03 in 2009 and $3,179.97 in 2010. At the date of trial, Mr. MacLeod had paid Ms. MacLeod approximately $57,000 in child support payments in addition to approximately $5,500 in overpayments. He also paid for 100 percent of Carleigh’s daycare and kindergarten fees up until she was enrolled in school. [ 27 ] In May 2009, this Court ordered Mr. MacLeod to pay Ms. MacLeod interim monthly spousal support of $5,000, commencing April 15, 2009. These payments were also current as of the date of trial at which point Mr. MacLeod had paid Ms.

MacLeod approximately $143,000 in spousal support and had also agreed to pay an additional $10,000 in arrears for January to March 2009. [ 28 ] Mr. MacLeod has also paid Ms. MacLeod half of the net proceeds of sale of various Honeywell growth units, stock options and restricted stock options received by him between 2007 and 2010 totalling approximately $75,000. [ 29 ] Ms. MacLeod is also entitled to a payment for her share of the Honeywell vested and cashed in stock options and restricted stock which were to vest in February and March of 2011.

She will also have received additional child and spousal support of approximately $21,000 as of the date of this judgment, assuming Mr. MacLeod has remained current in his payments. [ 30 ] In

summary, between the date of separation in March 2007 and the date of trial in December 2010, Mr. MacLeod paid Ms. MacLeod approximately $400,000 in support payments and distribution of matrimonial property. In addition, as of the date of judgment, Ms. MacLeod should have received additional child and spousal support of approximately $21,000 and her share of the net proceeds from the sale of Honeywell restricted stock and stock options vesting in February and March of 2011. E. Ms. MacLeod’s Means and Needs Education, work and business experience [ 31 ] Ms. MacLeod completed a B.

Comm. with honours in 1991 at the age of 22. That same year she obtained a job as a marketing coordinator in a Toronto law firm where she worked until 1995. Her duties involved managing the customer database, working on the corporate newsletter and event planning. She earned approximately $32,000 per year. [ 32 ] In 1995, she quit her job and moved with Mr. MacLeod to London, Ontario where he had obtained new employment. When they moved, Ms.

MacLeod was unemployed and collected employment insurance, however later in 1995 she obtained employment with the London Community Business Centre as a business counsellor where she worked until 1997. Her job was to assist unemployed persons to start and operate their own businesses and she counselled and assisted them in performing all the necessary steps required including writing business plans, performing bookkeeping, marketing, and securing financing. Her salary was approximately $33,000 per year. [ 33 ] In August 1997, she quit her job with the Business Centre to start her own business.

She opened up her own home decor business, Au Maison, in the fall of 1997. She attended to all aspects of the business including renovating the store premises, planning and forecasting, purchasing, staffing, marketing, bookkeeping, and customer service. She financed the business by cashing in her RRSPs, using credit card debt, and obtaining a small business improvement loan. She opened a second store at a new location in 2002 but it was unsuccessful and she was forced to close it in 2003.

The first store was mostly profitable over its nine years of operation and made a profit of approximately $40,000 in its best year.

Present Sales Business [ 34 ] As stated, Ms. MacLeod closed her store in London, Ontario and moved to Alberta in July 2006. Prior to moving, Ms. MacLeod signed a contract with CJ Marketing, a home decor product supplier, to become their sales representative for the Province of Alberta commencing in August 2006. Her income was to be based solely on her sales commissions. CJ Marketing was not established in Alberta and Ms. MacLeod started with a blank slate. She was not provided with training, contacts or customer lists.

Her job was to make contacts, show the product line, take orders, ensure that customers got their orders and deal with problems. She was required to cover all of the costs of doing business such as hotel, car lease and gasoline expenses and to pay those costs out of her sales commissions. [ 35 ] Ms. MacLeod began establishing customers and contacts by attending a trade show in Toronto in August 2006 and has continued to attend the annual trade shows in Toronto and Edmonton every year since then.

Although the economy was strong in 2006 and her CJ sales territory included the entire Province of Alberta, she did not know the territory. She made cold calls, drove into communities, searched the internet and conducted other research to find retailers who might be interested in her product. [ 36 ] She also attempted to increase her income by selling non-competing, complementary sales lines. In 2006, Ms. MacLeod became an independent sales representative for Mercana, which sold framed art. She has since terminated this contract as it was not profitable.

In 2007, she became an independent sales representative for another supplier, KDM, which was a customer of her former store in London, Ontario. [ 37 ] Ms. MacLeod testified that the number of hours she works per week varies due to the nature of her work and the fact that the home decor retail business is cyclical. The first and third quarters of the year are her busiest and she may work up to 40 hours per week or more. Once her customers have their product she works fewer hours per week. On average, she works approximately 20 hours per week. [ 38 ] Ms.

MacLeod testified that she felt the impact of the 2008 global recession. She called Ms. Chesebrough as a witness. She gave evidence as to Ms. Macleod’s business dealings, their business relationship, and the effect of the recession on Ms. MacLeod’s sales business. Ms. Chesebrough has operated a home decor retail store with a partner for the past five years. Prior to that she managed a very similar business in the same location. Ms. MacLeod sold CJ Marketing and Mercana home decor products to Ms. Chesebrough’s store. [ 39 ] Ms. Chesebrough described her business relationship with Ms.

MacLeod as professional, attentive, available, knowledgeable and overall very positive. Ms. Chesebrough testified that Ms. MacLeod visits her store at a minimum of six to eight times per year. She stated that Ms. MacLeod’s business involves showing Ms. Chesebrough product line catalogues, giving her advice on what to order, writing up the sales, sending her the product and dealing with delivery or other problems. She first began dealing with Ms. MacLeod in early 2007 when the economy was booming.

At that time, her CJ Marketing purchase orders were between $3,000 and $4,000 each and she ordered three or four times per year. Her Mercana purchase orders were approximately $1,800 each and she ordered their products approximately six times per year. [ 40 ] Ms. Chesebrough’s evidence was clear that the recession has caused a significant drop in sales in the home decor retail market and that this directly affected Ms. MacLeod’s ability to earn commissions from sales to that market. Ms.

Chesebrough testified that in 2008 when the global economic recession hit, her sales plummeted by close to 40 percent and have stayed there since then. She described the effect of the recession on her business as shocking. Ms. Chesebrough’s sales have decreased substantially, and as a result, her orders from Ms. MacLeod have also decreased substantially. Her orders from Ms. MacLeod now average approximately $1,200 per order, and she orders only four times per year. [ 41 ] Ms. MacLeod continued to act as CJ’s sales representative at the time of trial and testified that she intends to continue to do so.

In 2010, she negotiated a reduction in her CJ sales territory to southern Alberta in exchange for a one percent override sales commission on all sales in Alberta and full sales commissions on all sales written up at trade shows. She has also increased her customer base from zero to approximately 150 customers. As a result, Ms. MacLeod stated that she thought her sales will increase substantially, assuming the economy improves. Employment opportunities

[ 42 ] Ms. MacLeod has also attempted to find alternative employment. She has applied for relatively few jobs since the date of separation. She explained that the reason for this is that there were fewer jobs available due to the economic downturn and in addition, she has only applied for jobs for which she thinks she is qualified. [ 43 ] In 2007, she applied for a position with Jayman Homes as a director of their design centre which she did not obtain. [ 44 ] In 2008, she registered with a headhunter in Edmonton.

She applied for a job with Avi Homes as the manager of a team of interior designers and the purchasing department. She expected to receive a salary of between $70,000 and $80,000. She was interviewed for this job but did not obtain it and was told that one reason was the downturn in the economy. In 2008, she also applied for a position with Dare Foods and was interviewed twice but did not obtain the job. In 2008 she was offered but declined to accept temporary employment with Dare Foods.

She testified that her reasons for declining were that it offered no opportunity for advancement, was for a limited time, and would not have allowed her to continue her sales business. She testified that she expected that both of the Dare Food jobs would have paid a salary of approximately $40,000 per year. [ 45 ] In 2009, she was interviewed for a sales position with another home decor company called Gift Craft but they were looking for agents for the Red Deer and surrounding area, which would have required her to work out of Red Deer on a daily basis.

She declined this contract because it was not possible given her parenting obligations. In December 2009, she applied for a full-time position with Dare Foods in Ontario in the sales and corporate area but was not offered a position. [ 46 ] In 2010, she applied for a job as a business development officer with the Business Development Bank but did not hear back. In 2010 she also applied for a position with Heritage Park as the manager of retail operations but was not contacted in response.

In December 2010, she applied for a position as the director of marketing with Tourism Calgary which offered a salary of between $77,000 and $96,000. As of the date of trial, she had not heard back on this application. Proposed MBA Program [ 47 ] Ms. MacLeod has recently applied for and has been accepted into the MBA program offered through Athabasca University. She testified that she believes a MBA will help her achieve self-sufficiency.

She proposes a May 2011 start date and is requesting a continuation of spousal support in order to assist her to complete the MBA in three to four years subject to extenuating circumstances. [ 48 ] Ms. MacLeod testified that she considered applying for this program in 2007 and 2008 but determined that she couldn’t afford the $42,000 tuition fee. In 2009, realizing that her skills were not marketable having received no job offers, she again began to consider the MBA program as a means of increasing her employment prospects.

However, she still did not know how she would be able to afford it and was also caring for Carleigh nine days out of fourteen at that time. Ms. MacLeod began to think the MBA program was a feasible option in the spring of 2010 when equal shared parenting was ordered, she had received some income from the proceeds of sale of Mr.

MacLeod’s growth unit stock, and was receiving interim child and spousal support. [ 49 ] The Athabasca University MBA is much less expensive than other MBA programs where tuition fees range from $70,000 to $80,000 and is more flexible since most of the courses can be completed online rather than in the classroom. It can be completed in between three and five years and requires approximately 30 hours of work per week The program is for students who are employed or operating their own businesses. There are three phases to the program with the first beginning in May 2011. The program would provide Ms.

MacLeod with the flexibility to work from home or elsewhere during times when she is not otherwise committed, which would allow her to care for Carleigh during her parenting times and continue with her sales business or obtain other employment. [ 50 ] Ms. MacLeod testified that she anticipates that an MBA will increase her employment opportunities.

She testified that her ultimate goal in completing the MBA is to obtain more marketable career skills and knowledge, gain increased confidence, and obtain a network of business contacts all to the end of assisting her to obtain fulfilling work with an above average income and ultimately to assist her in becoming economically self-sufficient. Income and Expenses

[ 51 ] For the last 13 years Ms. MacLeod has worked as a businesswoman and sales representative in the home decor retail market where she has gained valuable business experience but has never earned an income of more than $40,000 per year. [ 52 ] As the sole proprietor of Au Maison, her income consisted of whatever was left over after her business expenses were paid. During the nine years in which she ran the business, she had one year where her income was approximately $40,000 but it was usually less than that and there were years in which she had a net business loss. [ 53 ] Ms.

MacLeod’s gross business income as an independent sales representative, working an average of 20 hours per week, has increased over time. Her tax returns show a line 150 total business income of -$13,676.18 in 2007, $22,294.75 in 2008, and $20,243.77 in 2009. She testified that she estimated that she would earn a gross business income of $35,000 in 2010. [ 54 ] Ms. MacLeod’s budget estimates her total future monthly expenses for herself and Carleigh at approximately $8,745.

Her budget includes $3,189 for housing expenses which includes a $1,672 estimated mortgage payment based on an increase in her LOC Mortgage to $315,000, expenses for utilities, insurance, and taxes, and $500 for repairs and landscaping; $836 for food, meals and other miscellaneous housing expenses; $140 for her portion of childcare expenses; $520 for clothing for herself and Carleigh; $1245 for transportation expenses which includes a car loan payment of $602 per month; $289 for health and medical expenses; $1,305 for recreation and education expenses; and $1,220 for miscellaneous expenses, the majority of which is allocated to $920 per month for four years to pay for her MBA tuition.

In addition, Ms. MacLeod has estimated an expense of $3,000 per month for legal expenses. [ 55 ] The parties agree that

section 7 expenses will be shared in proportion to the parties’ respective incomes. Ms. MacLeod agrees that the

section 7 expenses which she will share with Mr. MacLeod include daycare expenses, uninsured health and dental expenses, dance expenses, counselling expenses and school expenses. She also agrees that she will discuss

section 7 expenses with Mr. MacLeod. [ 56 ] Ms. MacLeod also agrees that the RESP in Carleigh’s name will be held in trust for Carleigh and will be used for Carleigh’s education, prior to either party being required to pay

section 7 expenses for that purpose. The parties have also agreed that Mr. MacLeod will continue to contribute $50 per month to the RESP. F. Mr. MacLeod’s Means and Needs Employment history and future [ 57 ] Mr. MacLeod had just obtained a Bachelor of Engineering Science when he met Ms. MacLeod in 1992 and has been continually employed since the parties began cohabiting in 1993. [ 58 ] From 1993 to 1995, Mr.

MacLeod worked in Toronto, first as a quality controller for a small chemical manufacturer with a salary of $24,000 per year, and then in sales for Petrolite (which later became Baker Hughes) with a salary of $40,000 per year plus incentives. [ 59 ] In 1995 he took a management job with Baker Hughes in Sarnia, Ontario where he worked until 2006.

He steadily advanced in his career and eventually became their Canadian district manager responsible for all of the sales managers or account managers and their accounts across Canada. [ 60 ] In 2006 he was offered a job as the Canadian General Manager for the Process Solutions Division of Honeywell in Calgary, Alberta. The parties agreed that Mr. MacLeod should accept the job as it not only offered opportunities for advancement beyond those offered by his present employer but also offered greater financial rewards including an increased salary, stock options, bonuses and other incentives.

[ 61 ] Mr. MacLeod also testified that he has been approached for other jobs before and after coming to Calgary. In 2007 and 2008 when the economy was stronger, he received almost monthly contacts from headhunters. In 2009, he was also contacted by headhunters, but less frequently. He stated that the last position he enquired about was offering him a salary of $190,000 and a bonus of 25 percent, but no long term incentives. Income and Expenses [ 62 ] Mr. MacLeod’s income and career prospects have continued to grow. While working for Baker Hughes, Mr.

MacLeod’s income tax line 150 total income was $168,235 in 2004, $189,283 in 2005, and $258,908 in 2006. [ 63 ] He has continued to make a substantial income working at Honeywell. In 2007, his line 150 total income was $228,194 and he testified that his base salary was approximately $197,000. In 2008, his line 150 total income was $279,733, his base salary was approximately $205,000, and his net income from base salary, bonuses and stock options was $184,574.45.

In 2009, his line 150 total income was $343,921, his base salary was approximately $201,000, and his net income from base salary, bonuses and growth units was $228,480.15. As of the pay period ending December 5, 2010, his base salary was approximately $205,000 and his net income from base salary, bonuses, growth plan units and stock options was $242,615.52. [ 64 ] Mr.

MacLeod is also entitled to additional future payouts from Honeywell of an estimated $90,000 US for growth plan units, an estimated $189,949 US for restricted stock units, and an estimated $136,117 US for stock options granted to him from 2007 to 2010, as set out in Appendices B, C, and D respectively. Whether he will obtain these payouts, and the amount of the payouts, will depend upon Honeywell’s future stock market price. [ 65 ] Mr. MacLeod’s budget estimates his and Ms. Fox’s monthly expenses at $8,583, although Mr. MacLeod testified that his budget does not include all of Ms.

Fox’s expenses such as her clothing expenditures. He testified that his budget does not reflect the lifestyle he enjoyed prior to the parties’ separation. He has reduced his clothing, mortgage, personal vacation, vehicle, and grooming expenditures as well as his RRSP contributions. His monthly expenses, other than payments for child and spousal support, are $3,305 for housing; $760 for food; $240 for childcare; $165 for clothing for Carleigh and $75 for clothing for himself; $926 for transportation; $347 for health and medical; $1,815 for recreation and education; and $1,030 for miscellaneous expenses.

His total monthly expenses rise to $15,560 when child support payments of $1,975 and spousal support payments of $5,000 are included. He has also included an expense of $5,000 per month for legal fees. III. Issues 1. What is the value of the matrimonial property and debt and how should it be divided? 2. Is Ms. MacLeod entitled to spousal support and if so, in what amount and for what period of time? 3. What parenting arrangements should be ordered? IV. Discussion Issue 1: Matrimonial property evaluation and division A. Parties’ Positions [ 66 ] Mr.

MacLeod submits that he is entitled to $242,827.78 in equalization payments, as calculated in his Assets & Liabilities Chart dated December 11, 2010, plus interest on that amount of money at least back to January 2009 when the matrimonial home sold, or alternatively back to the date of separation.

[67] Ms. MacLeod calculates the amount owing to Mr. MacLeod as $191,550.73 based on Ms. MacLeod’s valuation of her home,the debt to be shared, the adjustment for the overpayment to Ms. MacLeod of approximately $6,000 in child support and theunderpayment to Ms. MacLeod of $10,675 of spousal support, and the addition of interest under the Judgment Interest Act, R.S.A. 2000,c. J-1for 2009 and 2010. Ms. MacLeod also points out that the interest payment under the Judgment Interest Act is taxable to Mr.MacLeod and not deductible to Ms. MacLeod. B.

Law [68] Property subject to matrimonial division is to be valued as of the date of trial: Hodgson v. Hodgson, 2005 ABCA 13, 361 A.R.190; Mazurenko v. Mazurenko (1981), 1981 ABCA 104 , 30 A.R. 34, 124 D.L.R. (3d) 406 (C.A.). [69] The court’s jurisdiction to distribute matrimonial property is found in the Matrimonial Property Act, R.S.A. 2000, c. M-8,which was enacted to “...legally recognize marriage as an economic partnership, founded on the presumption that the parties intend toshare the fruits of their labour during and as a result of it, on an equal basis”: Jensen v.

Jensen, 2009 ABCA 272, 464 A.R. 16 at para 1. [70]

Section 7 of the Act sets out the scheme of distribution. Certain property is exempt from distribution: s. 7(2). Any increase inthe value of exempt property during the marriage may be distributed in a manner that is just and equitable: s. 7(3). The factors to betaken into account in making this decision are set out in s. 8. It is presumed that non-exempt property is to be distributed equally unlessthe court concludes, based on the s. 8 factors, that it would be unjust or inequitable to do so: s. 7(4). C.

Analysis [71] Appendix A sets out the evaluation and division of the matrimonial assets and liabilities, the particulars of which arediscussed below. 1. Assets a. Matrimonial home [72] The most significant asset owned by the parties was the matrimonial home, the proceeds of sale of which were used by Ms.MacLeod to purchase her new home in Okotoks. [73] There are two matters in dispute in relation to the matrimonial home. The first is when Mr. MacLeod was entitled to receivehis half of the net sale proceeds from the sale of the matrimonial home. The second is the value of Ms. MacLeod’s new home. [74] Mr.

MacLeod argues that Ms. MacLeod effectively forced him to agree to advance her the total sale proceeds from thematrimonial home. He argues that she has been threatening to leave Calgary with Carleigh since the date of separation. She has alsoapplied for a number of jobs, one on the eve of trial, which would have required her to relocate to Ontario and in one case, to Red Deer.He argues that she did this in the face of the knowledge that he wanted, and was ultimately granted, an equal shared parentingarrangement. [75] He also argues that Ms.

MacLeod held back the payment of his share of the net sale proceeds so that she could put pressure onhim to accede to her demands. He argues that knowing that he was entitled to his share of the proceeds, having funds available throughher LOC Mortgage to pay him, and having secured monthly interim child support of $1,975 since January 2009 and monthly interimspousal support of $5,000 since April 2009, there was nothing stopping her from paying him or at least advancing him a substantialportion of his proceeds.

[ 76 ] Ms. MacLeod argues that there was no unfairness or pressure exerted on Mr. MacLeod to agree to the Interim Property Agreement. She stated that her reason for insisting on the receipt of the net sale proceeds was because Mr. MacLeod wanted to sell the matrimonial home and she did not want to be left with no home in which she and Carleigh could live.

She states that the reason for the agreement to advance her the total net sale proceeds was because she could not obtain a mortgage given her financial situation at the time, and was uncertain what her financial position would be given the fact that the parties had not settled matrimonial property division and child and spousal support issues. Ms. MacLeod points out that Mr. MacLeod also made the Agreement subject to the condition that the divorce be severed from the corollary relief issues, which allowed him to obtain a divorce and marry Ms. Fox. [ 77 ] It does not follow that Ms.

MacLeod discussed moving to Sherwood Park or Ontario to manipulate Mr. MacLeod. When the parties separated, Ms. MacLeod had only been in Alberta for eight months, was geographically removed from the support of her family and friends and had not had time to establish new friends or supports. She had also lost the ability to support herself in the business she had operated for nine years. By the summer of 2008, she and Carleigh were more settled in the Okotoks community and she had begun to understand and build up her sales business.

She also testified that although she applied for jobs in Red Deer and Ontario she had no intention of moving there but rather applied in one case because she was angry with Mr. MacLeod for moving back to Okotoks and in other cases to test her employment prospects. [ 78 ] The Interim Property Agreement must be read in its entire context and in the context of the circumstances under which it was made. There was clearly an agreement that Ms. MacLeod could use the total net sale proceeds to purchase her new home. However, I find that the parties intended that Ms. MacLeod would only have the benefit of Mr.

MacLeod’s portion of the proceeds until she could obtain financing on her new home and not until the issues between the parties had been settled. Ms. MacLeod obtained the LOC Mortgage financing of $360,000 in January 2009 and therefore had funds with which to pay Mr. MacLeod from that time. This means that Mr. MacLeod has been entitled to his portion of the net sale proceeds since January 2009. He has been economically disadvantaged by the fact that he has not received them. Since January 2009 to the date of trial, Mr. MacLeod has not only supported himself but has also been supporting Ms.

MacLeod and their child. He is entitled to compensation for the loss of his share of the net sale proceeds from January 2009. [ 79 ] The second issue is the value of Ms. MacLeod’s home. Ms. MacLeod values her home at $485,000 while Mr. MacLeod values it at $555,900. [ 80 ] Ms. MacLeod’s home was purchased for $494,258.80 of which $23,546 was GST.

Since its purchase, she has made approximately $30,000 worth of renovations including adding a back deck, landscaping the front and part of the back yard, and upgrading the appliances and window coverings. [ 81 ] The parties agree that the home should have been appraised but blame each other for the fact that it was not. This leaves the determination of its value up to this court. [ 82 ] Mr. MacLeod argues that the best evidence of the value of the home is the Town of Okotoks’ 2010 property tax assessment which values the property at $555,900, a value which Ms. MacLeod did not appeal.

According to the tax assessment, the home has risen in value since the date of purchase. The 2009 tax assessment valued the home at $524,300 and the 2010 assessment valued it at $555,900, an increase of approximately $25,000. [ 83 ] Ms. MacLeod argues that the best evidence of the value of her home is the going market rate. She submits that the court can take judicial notice of the fact that property tax assessments in Calgary and area are not indicative of a property’s value. Ms.

MacLeod testified that her evaluation was based on the fact that the housing market has been stagnant since she purchased the home in January 2009. She originally submitted that it should be valued at $475,000, which reflects what she paid for it less GST. At trial, she raised her valuation to $485,000. She gave evidence that a comparable home in her neighbourhood sold for $494,250 in November 2010. The tax assessment for that house was $635,600 for 2009 and $602,100 for 2010, a decrease of approximately $33,000. Thus, the Town of Okotoks increased the value of Ms.

MacLeod’s property but decreased the value of a neighbouring property between 2009 and 2010. In addition, the neighbouring property sold for $494,250 despite the fact that it was valued for tax purposes at $602,100. [ 84 ] Mr. MacLeod argues that Ms. MacLeod’s evidence that a nearby house sold for $494,250 does not support her valuation of her home. He argues that there was no evidence that the neighbouring property was comparable to Ms. MacLeod’s home, as she had not

seen its inside condition and offered no evidence as to the circumstances of sale which could have resulted in a lower sale price. Ms. MacLeod provided real estate listing information which indicated that the house was approximately 200 square feet larger than her home. [ 85 ] As the parties have argued, the value of Ms. MacLeod’s home depends upon a number of factors including the tax assessment value, sales of comparable properties in the neighbourhood and the condition and circumstances of sale of those properties.

Given that the difference between the parties’ values of $555,900 and $485,000 is only $70,900, the many variables that dictate value, and the fact that an appraisal was not presented at trial, I value the property at the midpoint between the parties’ evaluations, at $520,450. b. Matrimonial home contents and furniture [ 86 ] Mr. MacLeod argues that Ms. MacLeod owes him $10,000 for the additional home contents and furniture that she obtained after separation. Ms.

MacLeod prepared a detailed evaluation and proposed division of the matrimonial home contents and furniture and presented evidence of emails in which Mr. MacLeod agreed to her evaluation and division and in fact stated that she could keep the balance of the contents and furniture. As a result, I find that the parties agreed to an equal division of this property. c. Bank Accounts [ 87 ] Mr. MacLeod includes the money in Ms. MacLeod’s RBC Personal Chequing Account of $5,946.15 and the money in his CIBC Chequing Account of $3,302.44. Ms.

MacLeod has not included these amounts on the basis that they fluctuate over time as they are used for the payment of monthly expenses. Based on the evidence provided, it is not possible to trace where the money in these accounts originated. The account amounts are also relatively close in value. As such, it is not appropriate to include them in the matrimonial property division. d. Mr. MacLeod’s 2008 bonus and stock option [ 88 ] Mr. MacLeod retained the net amount of his 2008 bonus of $38,637.42 and the net sale proceeds from stock options received by him in 2008 of $8,580.62. Ms.

MacLeod argues that these amounts should be included in Mr. MacLeod’s divisible assets. Mr. MacLeod argues that he used that money to pay off matrimonial debt of $33,241, retaining the balance of $13,977, and includes this balance in his matrimonial assets subject to division. [ 89 ] The parties agree that a debt of $33,241 was paid by Mr. MacLeod but the evidence is not clear as to whether the debt was incurred individually or jointly. Mr.

MacLeod’s evidence is that he paid off three matrimonial debts with the proceeds of his 2008 bonus and stock options: a CIBC Visa in his name; a President’s Choice Mastercard in the parties’ joint names, and a joint line of credit. Although some of this debt was on a credit card in Mr. MacLeod’s name, there is no evidence that this was not matrimonial debt and Ms. MacLeod has not proved otherwise. [ 90 ] I agree with Mr. MacLeod’s assertion that the $13,977 balance of his 2008 bonus and stock option payment be included in his divisible assets. e. Ms.

MacLeod’s other Assets [ 91 ] The parties agree that the funds in Ms. MacLeod’s PC Financial savings account of $19,792.86 constitute her half share of the net sale proceeds from the sale of Mr. MacLeod’s Honeywell growth units paid to her on November 29, 2010 and should not to be included in her divisible assets. 2. Non-Registered Investments

[ 92 ] The parties agree and it is hereby ordered that the Honeywell growth units, restricted stock units, and stock options granted to Mr. MacLeod during the marriage, as set out in Appendices B, C and D, respectively, be shared equally between Mr. and Ms. MacLeod. Mr. MacLeod is hereby ordered to pay Ms. MacLeod one-half of the after tax net proceeds received by him from the said investments, and to provide Ms. MacLeod with proof of the number of units or shares he receives, and the gross and net proceeds of sale that he receives, from the said investments, all within 40 days of his receipt of same. 3.

Child and Spousal Support [ 93 ] The parties agree that Ms. MacLeod owes Mr. MacLeod $2,521.03 in overpayments of child support for 2009 and $3,179.97 in overpayments of child support for 2010. They also agree that Mr. MacLeod owes Ms. MacLeod $10,675.00 in spousal support arrears for the equivalent of three months’ support of $5,000 per month, after tax, for January, February and March 2009. 4. Liabilities a. Ms. MacLeod’s pre-separation debt [ 94 ] The parties agree that Ms.

MacLeod is entitled to include the following pre-separation debts in her divisible liabilities: the $32,297 increase in her LOC Mortgage used to pay for pre-separation debt secured against the matrimonial home; and $36,640.16 of liabilities consisting of $26,035.16 worth of RBC debt and $10,605 worth of BMO Mosaik credit card debt on account **2211. b. Ms. MacLeod’s increase in debt between separation and January 2009 [ 95 ] Ms. MacLeod argues that Mr.

MacLeod is responsible for the increase in her BMO Mosiak credit card debt of $14,514 and the increase in her RBC line of credit debt of $13,537, between the date of separation and January 2009 when the matrimonial property was sold, being a total of $28,049.96. She argues that the amount of $14,514 (her BMO debt at January 2009 of $25,119 minus the $10,605 already claimed as pre-separation debt) should be included in her divisible liabilities.

She also argues that the amount of $13,537 (her RBC line of credit debt at January 2009 of $39,571.12 minus $26,035 already claimed as pre-separation debt), should also be included in her divisible liabilities. [ 96 ] She argues that she was entitled to support to pay for her’s and Carleigh’s living expenses during this time and that since Mr. MacLeod paid no child or spousal support over this period, she was forced to use these two sources of credit to pay for these expenses. She argues that the credit was used to pay for non-discretionary expenses. She submits that while Mr.

MacLeod paid for housing expenses on the matrimonial home in 2007 and 2008, this also increased his equity in the home. [ 97 ] She provided an income and expense analysis showing that at the end of the month, based on the income she was receiving from her sales marketing business during that time, she was left with an average of $1,300 per month in 2007 and $876 per month in 2008.

She testified that during this period she also paid her business expenses out of her business income, paid off $30,000 worth of debt resulting from the liquidation of Au Maison, and borrowed approximately $30,000 from her parents to pay for legal expenses related to the divorce. [ 98 ] Ms. MacLeod acknowledges that Mr. MacLeod paid her $40,000 in tax free property distributions from bonuses, stock options and growth units during this time period. She also acknowledges that he paid all the expenses related to the matrimonial home which amounted to approximately $5,000 per month.

In addition, he paid for 100 percent of Carleigh’s daycare and kindergarten expenses from the date of separation until she was enrolled in school, which I am estimating conservatively at $500 per month based on Carleigh’s present before and after school care costs. There is also evidence that Ms. MacLeod used the parties’ joint credit to pay for some of her personal expenses between the date of separation and October 2007. As a result, between the average income of $1,000 per month that Ms. MacLeod was making from her business, the $5,000 monthly housing expenses paid by Mr.

MacLeod for the matrimonial home in which Ms. MacLeod and Carleigh were living, and the estimated $500 monthly daycare payments made by Mr. MacLeod, Ms. MacLeod had the benefit of approximately $6,500 per month. In addition, she received approximately $40,000 in tax free

property distributions. She also used the parties’ joint credit to pay for a portion of her expenses for approximately seven months of this period. [ 99 ] Ms. MacLeod points out that during this period Mr. MacLeod was also receiving his salary, income from stock options, and income from cashed in RRSPs. However, he was using $5,500 of this income to pay for the matrimonial home and daycare expenses and was also paying for his own living expenses. Although he cashed in RRSPs, as will be discussed below in this judgment, Ms. MacLeod is being credited for her portion of those RRSPs. Further, Mr.

MacLeod is not claiming that any of his post-separation debt is divisible. [ 100 ] Ms. MacLeod will be credited with $1,000 per month for October 2007 to December 2008, for a total of $15,000, for the increase in her post-separation debt during this period. Her business income was not sufficient to pay for her’s and Carleigh’s necessities during this time. She was therefore entitled to some support to assist her to make these payments, given the circumstances in which she found herself and the disparity between her income and Mr. MacLeod’s income. c. GST for Au Maison at April 2007 [ 101 ] Ms.

MacLeod claims that $4,362.00 be included in her divisible debt being the GST owed and paid by her in April 2007, which remained owing after the liquidation of Au Maison in 2007. I agree that this amount should be included as the evidence indicates that the parties shared in the income and expenses of Au Maison prior to separation. 5. Equalization Payment and Judgment Interest [ 102 ] In

summary, Ms. MacLeod’s assets minus liabilities total $442,852 and Mr. MacLeod’s assets minus liabilities total $24,652. The equalization payment is $442,852 - $24,652 = $418,200 divided by two which is equal to $209,100. Ms. MacLeod is ordered to pay Mr. MacLeod $209,100 as an equalization payment. Ms. MacLeod is also ordered to pay Mr.

MacLeod interest on one-half of the net sale proceeds from the matrimonial home of $231,839.81, from January 15, 2009 until December 15, 2010, and interest on the equalization payment of $209,100 from the date of judgment to the date of payment, all in accordance with the provisions of the Judgment Interest Act . 6.

Registered Retirement Savings Plans, Pension Division and Other Registered Investments [ 103 ] The parties have agreed on the valuation and division of the various RRSPs, pensions and other registered investments owned by them and their agreement is set out in Appendix A, p. 3. [ 104 ] The parties agree that since the time of separation, Mr. MacLeod has cashed in various amounts of pre-separation RRSPs and these are included in the Registered Investments to be shared with Ms. MacLeod, as shown in Appendix A. Ms.

MacLeod testified that she has not cashed in any RRSPs since the date of separation. [ 105 ] The parties also agree that the RESP in Carleigh’s name valued at $11,814.24 as of September 29, 2010 will be held in trust for Carleigh, as indicated in Appendix A. [ 106 ] In addition, the parties have also agreed that they will share their individual Canada Pension Plan credits with each other. [ 107 ] It is not unommon to value RRSPs at a discounted rate to equate to their reduced after-tax cash value at the date of division: see Corbeil v. Corbeil, 2001 ABCA 220 , 286 A.R. 330 at paras. 24 to 27 .

The parties did not address this issue. In this case, the parties were relatively young at the date of trial, being 41 and 42 years of age, healthy, and have approximately 20 to 25 years left to work and build up their retirement savings. There is no evidence that they need to draw down their RRSPs at this time. It can therefore be presumed that conversion of the RRSPs is not anticipated in the near future, which will allow these funds to earn income and grow so that the after-tax

value may be equal to the growth. As a result, a discount for taxes will not be applied for valuation purposes. Issue 2. Entitlement to Spousal Support A. Mr. MacLeod’s Position [ 108 ] Mr. MacLeod argues that the factors and objectives under the Divorce Act , R.S.C. 1985 c. 3 (2 nd Supp) dealing with spousal support do not entitle Ms. MacLeod to any future spousal support. [ 109 ] He argues that this case involves strictly compensatory support for economic disadvantages suffered as a result of the marriage and the breakdown of the marriage. He submits that Ms.

MacLeod is not entitled to continuing spousal support to be awarded on a non- compensatory basis, as there were no health reasons or limitations to her becoming fully employed during the three and one-half years since the parties’ separation. [ 110 ] First, he argues that Ms. MacLeod suffered no economic disadvantage but rather obtained a substantial economic advantage from the marriage. She had the luxury of opening and operating her own business. Other than the six months after Carleigh was born, for the most part, Ms.

MacLeod has had the benefit of childcare, which allowed her to continue to operate her business and then advance her sales business in Alberta. He argues that she obtained the significant benefits flowing from Mr. MacLeod’s employment with Honeywell and has continued to share those advantages for the three and one-half years since the parties’ separation. Mr. MacLeod argues that Ms. MacLeod has also had the economic advantage of keeping 100 percent of the equity in the matrimonial home from 2009 to present. [ 111 ] Second, Mr.

MacLeod argues that the court must consider the economic advantages and disadvantages of each spouse. He argues that he has also been disadvantaged as a result of the marriage and the breakdown of the marriage. He has been unable to obtain his share of the equity in the matrimonial home. Because of this and his obligation to support Ms. MacLeod and their daughter, he has gone into debt and collapsed almost $100,000 of his RRSPs. He testified that his new wife, Ms. Fox, has also spent $70,000 of her savings to support them. [ 112 ] Third, he argues that if Ms.

MacLeod suffered an economic disadvantage, it was only when she moved to Alberta in July 2006 to allow Mr. MacLeod to take the Honeywell position and that any resulting disadvantage suffered was for a maximum of one year, after which the parties separated. He argues that despite her relatively short period of contribution she has received lengthy and generous compensation, having received approximately $400,000 in benefits over the three and one-half years since the separation.

As a result, he argues that she has been more than compensated for any disadvantage she suffered as a result of the marriage or its breakdown. [ 113 ] Fourth, he argues that any economic disadvantage suffered by Ms. MacLeod as a result of the move to Alberta could have been lessened had she worked full-time after the separation, based on the fact that she made about the same amount of money working part- time in Alberta that she made working full-time in Ontario. [ 114 ] Fifth, he argues that even if Ms. MacLeod suffered an economic disadvantage, that does not equate to her being entitled to spousal support.

He argues that economic disadvantages resulting from a marriage and the breakdown of a marriage can be compensated for in a number of ways including through the distribution of marital assets. In this case, Ms. MacLeod will end up with her share of the divisible assets which will include her equity in her home and $170,000 worth of RRSPs. She will also potentially receive $208,000 for her one-half share of the future proceeds from Honeywell growth plan units, restricted stock units and stock options granted to Mr.

MacLeod from 2007 to 2010. [ 115 ] Sixth, he argues that if support is granted, it should be for a fixed term terminating on July 2, 2011, and be set at the lower end of the support scale of between $2,000 and $3,000 per month. He argues that while the Spousal Support Advisory Guidelines: Ottawa: Department of Justice, 2008 are a useful tool, they are not mandatory. He argues that the critical factor in determining the amount of spousal support is the length of the marriage. The longer the marriage the greater the dependence.

In this case, the parties were married for seven years, a relatively short period. [ 116 ] He argues that the objective of spousal support is not to require one spouse to support the other ad infinitum or to ensure an equalization of incomes.

[ 117 ] He argues that the $5,000 interim spousal support ordered was and is more than he can pay without dipping into capital, collapsing RRSPs or obtaining economic support from his new wife. [ 118 ] As to Ms. MacLeod’s expenses for her MBA, Mr. MacLeod argues that there is no evidence that an MBA will allow her to make more money than she presently makes on a part-time basis or would make from the jobs for which she is presently applying. Further, he argues that an MBA is not financially feasible, as Ms. MacLeod has previously admitted. She will have to pay Mr.

MacLeod an equalization payment of approximately $200,000 and her spousal support is going to come to an end. [ 119 ] Lastly, he argues that it will not serve either of the parties to grant an award subject to review in order to determine Ms. MacLeod’s financial circumstances after she has finished her MBA or after she obtains full-time employment. He points out that review orders should not be encouraged as they leave the parties in economic uncertainty and do not encourage self-sufficiency or a clean break to the marriage. B. Ms. MacLeod’s Position [ 120 ] Ms.

MacLeod argues that she is clearly entitled to spousal support on a compensatory, non-compensatory, and contractual basis. [ 121 ] She argues that she suffered substantial economic disadvantage as a result of the marriage and its break-up and conferred substantial advantages on Mr. MacLeod as a result of the marriage. She submits that while both parties contributed to the marriage until Carleigh’s birth, she moved to London to accommodate Mr. MacLeod’s career advancement, resulting in the loss of her job and career in Toronto. After Carleigh’s birth, she was Carleigh’s primary caregiver. Mr.

MacLeod was away on business 40 to 50 percent of the time and she worked around his schedule. This allowed Mr. MacLeod to concentrate on advancing his career and he did so. She argues that she suffered a serious economic disadvantage when she sold her business and moved with her family to Alberta, once again to allow Mr. MacLeod to advance his career. She submits that the advantages she conferred on Mr. MacLeod, especially those resulting from the advancement of his career and the greater income he enjoys as a result of his career, should continue to be shared for some period of time. [ 122 ] Ms.

MacLeod argues that she is also entitled to support based on a non-compensatory basis. If she is forced to live on her income from her sales business, she will not be able to pay her expenses or update her education and skills to allow her to obtain satisfying employment at the level of income which she would have enjoyed had she pursued her career and business. On the other hand, Mr. MacLeod does have sufficient income to enjoy a comfortable standard of living and continue to pay her spousal support for the time it will take her to complete her MBA and become self-sufficient. [ 123 ] Ms.

MacLeod further argues that she is also entitled to support on a contractual basis. She argues that the parties agreed to move to Alberta to allow Mr. MacLeod to advance his career and at that time he told her that she could decide whether to work part-time or be a stay-at-home mother. She argues that although she obtained part-time work prior to moving to Alberta, it was always understood that she could choose to work as little or as much as she wished.

She submits that she relied on this understanding and did not pursue full- time employment or seek to further her career as a result of that understanding. [ 124 ] Ms. MacLeod is seeking spousal support of between $4,000 and $4,500 per month, depending upon what this court finds to be Mr. MacLeod’s income. She submits that this award be reviewed in the spring of 2015 when she will have completed her MBA and found employment. She is prepared to accept conditions such as advising Mr. MacLeod when she has completed each course and that she is on track to complete her degree in the spring of 2015. C. Law 1.

Jurisdiction

[ 125 ] The Court is given jurisdiction to award spousal support, in respect of married couples, under s. 15.2 of the Divorce Act . Spousal support order 15.2

(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sum, or such lump and periodic sums, as the court thinks reasonable for the support of the other spouse. Interim order

(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1). Terms and conditions

(3) The court may make an order under subsection (1)...for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order or interim order as it thinks fit and just. 2. Factors to be considered [ 126 ]

Section 15.2(4) obliges the court to consider certain factors in determining entitlement to spousal support. 15.2

(4) In making an order under subsection (1) or an interim order under subsection (2) the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including: (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse. Misconduct in relation to the marriage is not a factor to be considered in determining entitlement to spousal support: s. 15.2 (5) of the Divorce Act . [ 127 ] Subsequent jurisprudence has further elaborated upon the circumstances of the spouses which are to be considered. In Shields v.

Shields , 2008 ABCA 213 , 432 A.R. 266 at para. 31 , the Alberta Court of Appeal summarized the significant circumstances to be considered: According to Moge , a judge is required to consider the parties’ circumstances, including the duration of the marriage, their ages, their incomes and prospective incomes, the effects of property equalization, the stages of their careers, the marital standard of living, participation in household responsibilities, childcare obligations, and the parties’ reasonable standard of living expectations.

3. Objectives [128] The factors in s. 15.2(4) of the Divorce Act must be considered against the backdrop of the objectives of spousal support ordersset out in s. 15.2(6). 15.2

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouse arising from the marriage or its breakdown; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above anyobligation for the support of any child of the marriage; (

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [129] No one objective of spousal support is more important than the other. Rather they must be balanced and examined in light ofthe condition, means, needs and other circumstances of each spouse. Conrad J.A., in Corbeil at para. 34, described the provisions as abalancing act between competing objectives: These objectives frequently pull in opposite directions.

For instance, the objective of self-sufficiency within a reasonable time may leadto short term, limited maintenance, placing an obligation on a divorced spouse to get on with his or her life and become self-sufficient.On the other hand, the objectives of compensation for economic disadvantages resulting from the marriage or recognition of hardshipsuffered as a result of the breakdown of the marriage may demand longer term (or indefinite) support. No one objective prevails.

Thebalancing of the objectives will be fact specific and influenced by the means, need and other factors set out in s. 15.2 (4) in order toarrive at a fair and just result in the circumstances. [130] In Moge v. Moge, (SCC), [1992] 3 S.C.R. 813, 99 D.L.R. (4th) 456, at para. 78, L’Heureux-Dube J. recognizedthe importance of the presiding judge’s discretion and the fact that guidelines cannot be set down that are applicable to every case: The four objectives set out in the Act can be viewed as an attempt to achieve an equitable sharing of the economic consequences ofmarriage or marriage breakdown.

At the end of the day however, courts have an overriding discretion and the exercise of such discretionwill depend on the particular facts of each case, having regard to the factors and objectives designated in the Act. 4. Three heads of entitlement [131] The courts have recognized three grounds of entitlement to spousal support: (1) compensatory; (2) contractual; and (3) non- compensatory: Bracklow v. Bracklow, (SCC), [1999] 1 S.C.R. 420, 169 D.L.R. (4th) 577 at para. 15; Miglin v. Miglin,2003 SCC 24, [2003] 1 S.C.R. 303; Corbeil at para. 29.

All three grounds of entitlement to spousal support are based on the premise thatmarriage is a “joint endeavour”, a socio-economic partnership. That is the starting point. It is the relationship that is established throughcohabitation and marriage and the expectations that may reasonably flow from that relationship that results in the obligation of support:Bracklow at paras. 44 and 49. [132] Compensatory spousal support is awarded to compensate a spouse for economic disadvantage resulting from the marriage or itsbreakdown.

The issue is what loss the marriage or marriage breakdown caused that would not have been suffered but for the marriage:Bracklow at para. 41. Where one spouse suffers an economic disadvantage or hardship to advance the economic advantage of the otherspouse, with the intention that both will advance the joint endeavour, the contributing spouse may be compensated for the disadvantage

suffered when he or she will no longer share in the economic rewards of the joint endeavour because of the breakdown of the marriage. A common example is where one spouse sacrifices career opportunities and financial independence in order to allow the other spouse to advance his or her career opportunities: Corbeil at para. 45 . [ 133 ] Spousal support is awarded on a contractual basis when it is found that there was an express or implied agreement between the parties that one would provide economic support for the other.

An agreement that one spouse will stop work or work part-time in order to stay at home and care for the children of the marriage and the home, is an agreement which should be considered by the court: Bracklow at para. 18 ; J(A.R.) v. J. (D.L.) , 2009 ABQB 22 at para. 19 . [ 134 ] The basis for awarding non-compensatory spousal support was explained in Bracklow . The statutory basis for awarding non- compensatory spousal support can be found in the third and fourth objectives under s. 15.2(6) of the Divorce Act . The s. 15.2(6) (

c) objective of relieving economic hardship of the spouses arising from the breakdown of the marriage is distinct from the s. 15.2(6) (

a) objective of recognizing economic advantages or disadvantages to spouses arising from the marriage or its breakdown and from the s. 15.2(6) (

b) objective of apportioning between the spouses financial consequences of child care, both of which are primarily compensatory in nature.

Section 15.2(6) (

c) is capable of encompassing more than health and career disadvantages but may also include “...the mere fact that a person who formerly enjoyed intra-spousal entitlement to support now finds herself or himself without it”: Bracklow at para. 41 . Similarly, the s. 15.2(6) (

d) objective of promoting self-sufficiency if practicable, may also be effected by factors other than career or educational opportunities that were sacrificed as a result of the marriage and may also include ill health or lack of jobs in areas where a spouse formerly had training: Bracklow at para. 42 . [ 135 ] Non-compensatory support is also based on the understanding that the very relationship of “mutuality and interdependence” ( Bracklow at para. 20 ) developed in a marriage can lead to expectations that result in obligations of support, as McLachlin J. explained at para. 40: ...Even if a spouse has foregone no career opportunities or has not otherwise been handicapped by the marriage, the court is required to consider that spouse’s actual ability to fend for himself or herself and the effort that has been made to do so, including efforts after the marriage breakdown....The same may be said for the Divorce Act that the court consider the “condition, means, needs and other circumstances of each spouse”.

To be sure, these factors may support arguments based on compensation for what happened during the marriage and its breakdown. But they invite an inquiry that goes beyond compensation to the actual situation of the parties at the time of the application.

Thus, the basic social obligation model may equally be seen to occupy the statutory provisions. [ 136 ] As stated in Bracklow at para. 43 , the Divorce Act “...retains the older idea that spouses may have an obligation to meet or contribute to the needs of their former partners where they have the capacity to pay, even in the absence of a contractual or compensatory foundation for the obligation. Need alone may be enough...” [Emphasis in original].

While Bracklow was a clear case of need based on disability, subsequent cases have held that need is understood by reference to the parties’ standard of living before and after marriage breakdown: J (A.R.) v. J. (D.L.) . [ 137 ] In Bracklo w at para. 49 , McLachlin J. explained the differences between the three grounds of entitlement: In

summary, the statutes and the case law suggest three conceptual bases for entitlement to spousal support: (1) compensatory, (2) contractual, and (3) non-compensatory. Marriage, as this Court held in Moge (at p. 870), is a “joint endeavour”, a socio-economic partnership. That is the starting point. Support agreements are important (although not necessarily decisive), and so is the idea that spouses should be compensated on marriage breakdown for losses and hardships caused by the marriage. Indeed, a review of cases suggests that in most circumstances compensation now serves as the main reason for support.

However, contract and compensation are not the only sources of a support obligation. The obligation may alternatively arise out of the marriage relationship itself. Where a spouse achieves economic self-sufficiency on the basis of his or her own efforts, or on an award of compensatory support, the obligation founded on the marriage relationship itself lies dormant. But where need is established that is not met on a compensatory or contractual basis, the fundamental marital obligation may play a vital role.

Absent negating factors, it is available, in appropriate circumstances, to provide just support. [ 138 ] The method of determining entitlement to spousal support is to start by considering the factors to be considered under s. 15.2(4) and apply those factors against the objectives of spousal support stated in s. 15.2(6). As a general principle, “... marriage per se does not automatically entitle a spouse to support”: Moge at para. 74 affirmed in Bracklow at para. 44 . The approach taken varies. The first step is generally to determine whether a spouse is entitled to compensatory spousal support.

If so, and the extent of that economic loss can be determined, spousal support may be limited to compensatory loss. Second, where the extent of the loss cannot be determined, courts must consider whether a spouse is entitled to non-compensatory spousal support based on need and standard of living, which includes a consideration of the other spouse’s ability to pay. Third, the court must also consider whether spousal support should be awarded as a result of an express or implicit agreement between the parties to pay spousal support. The courts must consider all grounds of entitlement

and any or all of them may be used as a basis for an award: Bracklo w at paras. 35 - 37 . 5. Quantum and duration of spousal support [ 139 ] The quantum of spousal support refers to both the amount and duration of spousal support. This will vary with the circumstances of the parties and the practical and policy considerations in each case.

All factors relevant to determining entitlement to spousal support are also relevant in determining the quantum of support. [ 140 ] In Bracklow , McLachlin J. rejected the conclusion that a demonstration of need by one spouse makes the payor spouse fully responsible to meet that need for an indefinite time into the future. Rather, the quantum and duration of a non-compensatory spousal support award depends on all of the relevant factors, applied against the backdrop of the objectives, to be considered under the Divorce Act . McLachlin J. explained at para. 53: ...The short answer to Mrs.

Bracklow’s argument is that need is but one of a number of factors that the judge must consider. Similarly, the short answer to Mr. Bracklow’s contention is that the length of the marital relationship is only one of a number of factors that may be relevant. While some factors may be more important than others in particular cases, the judge cannot proceed at the outset by fixing on only one variable. The quantum awarded, in the sense of both amount and duration, will vary with the circumstances and the practical and policy considerations affecting particular cases.

Limited means of the supporting spouse may dictate a reduction. So may obligations arising from new relationships in so far as they have an impact on means. Factors within the marriage itself may affect the quantum of a non-compensatory support obligation. For example, it may be difficult to make a case for a full obligation and expectation of mutual support in a very short marriage. (

Section 15.2(4) (

a) of the Divorce Act requires the court to consider the length of time the parties cohabited.) Finally, subject to judicial discretion, the parties by contract or conduct may enhance, diminish or negate the obligation of mutual support.

To repeat, it is not the act of saying “I do”, but the marital relationship between the parties that may generate the obligation of non-compensatory support pursuant to the Act... [ 141 ] As noted in Bracklow , s.15.2(4) of the Divorce Act expressly requires the court to consider the length of the marriage, and it is difficult to make a case for a full obligation for support arising out of a shorter marriage.

On the other end of the scale, the court commented in Moge at para. 84 that “[a]s a marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution”. While recognizing the modern day possibility of more than one marriage, it is a serious commitment and involves the potential for lifelong obligations.

There is no “statute of limitations” on commitments arising from marriage: Bracklow at para. 57 . [ 142 ] An award for a portion of a dependent spouse’s need may be granted. For example, in Bracklow at para. 54 , the court noted that although a spouse who becomes disabled near the end of a very short marriage may be entitled to support by virtue of her need, it may be unfair in the circumstances to set the quantum at the full amount of the need for an indefinite period in the future. [ 143 ] The quantum of support may also be effected by the amounts that one spouse has already paid to the other.

Contributions to the date of trial may have discharged the support obligation: Bracklow at para. 61 . [ 144 ] The objective of promoting self-sufficiency of the spouses, if practical, may be difficult to apply where the ability of a spouse to become self-sufficient, or the time that a spouse needs to become self-sufficiency, are uncertain. This may be addressed by awarding spousal support for a term subject to review.

However, if at all possible, courts should resolve the issues before them and make a permanent order, which is then only subject to variation under s. 17 of the Divorce Act on proof of a material change of circumstances. If this is not possible because there is a real contingency that should be resolved prior to making a permanent order, the issue for review should be tightly circumscribed to prevent the parties from attempting to reargue their entire case: Leskun v. Leskun , 2006 SCC 25 ; [2006] 1 S.C.R. 920 at para. 39. [ 145 ] The purpose and circumstances under which a review order under s. 15.2, or a varia

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