Nand v. Nand, 2011 ABQB 324

Court of Queen ’ s Bench of Alberta Citation: Nand v. Nand, 2011 ABQB 324 Date: 20110512 Docket: 4803 136690 Registry: Edmonton Between: Surila Devi Nand Plaintiff - and - Ganeshwar Nand Defendant _______________________________________________________ Reasons for Judgment of the Honourable Madam Justice D.L.

Shelley _______________________________________________________ Background [ 1 ] The parties were married on November 14, 1987, separated on October 1, 2005, and were divorced by way of a Divorce Judgment granted June 26, 2009. [ 2 ] The Nands have two sons, who are approximately 15 and 17 years old and in grades 11 and 12. Since separation, they have lived with their mother in the former matrimonial home. Mr. Nand has remarried and now lives on Vancouver Island.

[ 3 ] The corollary relief was severed from the Divorce Judgment and an Interim Corollary Relief Order, granted on July 26, 2007, has continued pending trial. Pursuant to the Order, Mr. Nand was ordered to pay

section 3 child support of $1,133.00 per month from January 1, 2007, 83.1% of the children’s

section 7 expenses, and spousal support of $1,000.00 per month. Mr. Nand stopped paying the Court ordered child and spousal support almost immediately after it was ordered. As of July 19, 2008, Maintenance Enforcement recorded arrears of $34,510.08 owing by Mr. Nand. Earlier in that same year, the arrears had climbed to over $40,000.00. As of the date of trial, Mr. Nand was current in respect of

section 3 child support and his spousal support payments, although Ms. Nand says he had not paid many of the

section 7 expenses. [ 4 ] Further background information will be provided later in this Judgment in relation to particular issues in dispute. Issues [ 5 ] The main issue between the parties is the division of matrimonial property. [ 6 ] In deciding the division of matrimonial property, I must address the following:

a) whether the matrimonial home should be immediately listed for sale and, if not, whether Ms. Nand should nonetheless be entitled to deduct the equivalent of a sales commission from the value of the home;

b) whether Ms. Nand should be required to pay occupation rent for her continued use of the matrimonial home after separation;

c) whether Ms. Nand should receive more than 50% of the matrimonial property, either on the basis of dissipation by Mr. Nand or some other basis; and

d) the valuation of other assets and liabilities of the parties. [ 7 ] Secondary issues are:

a) Ms. Nand’s entitlement to spousal support, both as to quantum and duration;

b) Mr. Nand’s obligation regarding outstanding

section 7 expenses and retro-active adjustment of

section 3 child support; and

c) whether Ms. Nand should receive security for any future payment obligations of Mr. Nand. Analysis Credibility Issues [ 8 ] Impacting my analysis of all other issues are questions concerning the credibility of each of the parties. Where their testimony differs in relation to the same events or issues, it is difficult to determine which is the more accurate.

[ 9 ] Mr. Nand complains about the length of time it has taken to get the matter to trial and indicates that he was anxious for and pressed Ms. Nand to set it for trial. However, the evidence makes it clear that he was less than forthcoming in the disclosure process. It was difficult for Ms. Nand to get disclosure from him. Even at trial she had not been provided with any information concerning businesses that she alleged he had been involved in during and following the marriage.

For example, he ignored the disclosure ordered by Justice Topolniski, failing to produce his 2008 Tax Return until just before the trial commenced. He also failed to disclose increases in income. His income was initially imputed at an amount lower than it actually was and his support obligations continued for the following years based on incomes lower than they actually were. Mr. Nand blames this on his lawyer, taking the position that he felt he did not have to disclose this to Ms. Nand because he had legal counsel who, he felt, would have worked that out.

Similarly, he blames his counsel for his failure to provide information concerning the disposition of his RRSP’s, as ordered by Justice Topolniski. He failed to provide any proof concerning his contributions to s.7 expenses, which he alleges he made, again because he feels this information was provided to his counsel a long time ago. He also blames counsel for failing to provide Income Tax Returns as ordered. Mr.

Nand testified that he didn’t produce any Visa statements because he didn’t know he had to, notwithstanding that he was served with a Notice to Disclose indicating this obligation. [ 10 ] In his direct testimony and in his pre-trial disclosure, Mr. Nand failed to mention all of the locations where he is currently employed, supplying a letter from only one such employer, although he worked at four different locations for two different employers.

Interestingly, he testified, in cross-examination, that he had given his counsel letters from both employers, apparently expecting me to accept that his counsel chose to provide only one of them to opposing counsel. He seems to believe that this incomplete disclosure and testimony is justified on the basis that he hasn’t been given slips for the income received at all four locations. [ 11 ] Making it more difficult for Ms. Nand (and this Court) to determine his actual income and financial circumstances is the fact that he deposits his pay cheques into his wife’s account.

He says that he does so because “everyone is after him”. [ 12 ] In June of 2010, Mr. Nand provided information to TD Canada Trust (which has a judgment against him) concerning his assets and liabilities. Mr. Nand failed to disclose his interest in the matrimonial home or his pension, resulting in the Bank concluding that he has a negative net worth. [ 13 ] Mr. Nand takes the position that it was a coincidence that he and Ms. Nand consolidated their debt and secured it against the matrimonial home approximately one month before he left the marriage. He maintains that Ms.

Nand knew he was leaving (although he admits that he didn’t actually tell her), and that she nonetheless consented to the refinancing against the home. [ 14 ] At examinations for discovery in 2006, Mr. Nand indicated that Ms. Nand had expressed her desire to be a nurse. At trial he said that it was he who tried to encourage her to increase her education and skills, that he had tried to force her to become a nurse. Yet at trial, he also testified that Ms. Nand had never told him she wanted to be a nurse until she said it at trial. [ 15 ] Mr.

Nand admits that he went through a form of marriage with his current wife in 2007, two years before his divorce was granted. He and his wife then completed a Canadian marriage ceremony in October 2009. The earlier ceremony, which occurred in Fiji, is described by him as “just a ritual”. [ 16 ] Ms. Nand’s testimony also raises concerns in relation to her credibility. For example, Ms. Nand denied that Mr. Nand had talked to her about wanting to sell the matrimonial home. She further suggests that she and her sons remained in the home because a Judge thought they should do so.

This is at odds with the evidence, which clearly shows that Mr. Nand had taken steps, including the commencement of applications, to either sell or refinance the house so that he could obtain equity from it, and that Ms. Nand was opposed to both. She now argues that she wishes to downsize because she finds it difficult to pay the utility payments on the house. Yet there is no evidence that she had taken any steps to list the house for sale.

Her contention that the $400.00 average monthly utility costs make is difficult for her to keep the house is at odds with several other of her actions, including her decision last summer to buy a $46,000.00 vehicle. [ 17 ] Ms. Nand admits that she looked after the couples’ finances while they were together, that Mr. Nand had no personal bank accounts, and that she had both a joint account with him and 2 separate bank accounts in her name alone. She denies, however, that she suggested the refinancing that occurred approximately one month before the separation. Rather, she asserts that Mr.

Nand proposed it and that she agreed because she didn’t know of his intention to separate. [ 18 ] In relation to the recently acquired vehicle, Ms. Nand provided a Statutory Declaration one month after having paid

$46,000.00 for it, indicating that the vehicle was worth only $30,000.00. She says she overpaid and she bases her new valuation on what some unidentified person told her, providing no evidence in support of her position. It is hard to reconcile Ms. Nand’s position that she finds it difficult to pay $400.00 a month for utilities with her decision to buy such an expensive vehicle. Presumably, there were less expensive vehicles that could have been purchased to provide her with reliable transportation. [ 19 ] Although Ms.

Nand indicates that she has had a desire to become a nurse for some time, she has done little to further that goal. She says she went to a Nursing Open House last year to check out what is available but can provide few details, other than it is a four year program and that she would likely have to repeat Grade 12 since she graduated from high school in 1985. She says she has not been able to afford to upgrade her education and therefore doesn’t expect to be in a position to pursue this “any time soon”. [ 20 ] In response to Mr.

Nand’s pointing out that she has made significant U.S. cash purchases (which were disclosed in her bank statements), she explains that these were not her funds but that she has a practice of buying U.S. cash for various friends, utilizing her advantageous Bank staff rate for these purchases. However, she is unable to identify which friends she has done this for, indicating that she has done so for a number of people and can’t remember who they were. [ 21 ] Mr. Nand also points to what he considers discrepancies in the bank account numbers and the transactions disclosed on them.

I remain confused about this issue and Ms. Nand’s attempts to explain it. In any event, in response to Mr. Nand’s assertion that she hasn’t produced all of the line of credit statements and that it appears that statements for at least some of the account numbers have not been provided, Ms. Nand responds that she produced everything that was asked for, suggesting that possibly Mr. Nand’s former lawyers have them. [ 22 ] In July of 2007 Justice Sulyma granted an Order permitting Mr. Nand to remortgage his equity in the matrimonial home in order to pay his outstanding arrears of child and spousal support. Mr.

Nand says he tried to do this but that Ms. Nand wouldn’t cooperate in the refinancing. Ms. Nand, on the other hand, says that Mr. Nand never chose to do this and asserts that his reason for not pursuing the rights he had obtained under the Order were that Mr. Nand didn’t want to make the payments and that the Bank wouldn’t agree to this. On this point, Ms. Nand’s explanation is vague and leaves me questioning why Mr. Nand would have taken the trouble to obtain an Order for the refinancing if he didn’t intend to exercise it. [ 23 ] In May of 2006, Ms.

Nand provided a Statutory Declaration indicating that she had $55,600.00 in RRSPs. However, in her production, she provided RRSP statements for December 2005 disclosing RRSPs of $38,874.00. Ms. Nand cannot provide an explanation for this discrepancy. [ 24 ] Ms. Nand complains that Mr. Nand has not paid his share of most of the s.7 expenses. However, she admits that she never sent copies of the related invoices to Mr. Nand until close to trial, with the exception of one of the expenses related to a trip. However, Ms. Nand disputes Mr.

Nand’s contention that these documents were only produced at trial, and says the invoices / receipts were provided in July 2010, several months prior to trial. Regardless of the timing, she maintains that Mr. Nand knew of the expenses all along and ought to have paid them. Division of Matrimonial Property Matrimonial Home

a) sale / commission [ 25 ] While the parties agree on the valuation of the house ($430,000.00), Ms. Nand submits that she ought to be entitled to deduct a notional real estate commission from the value (on the basis that she will have to pay such a commission on its sale). Mr. Nand disagrees, arguing that Ms. Nand has resisted all past attempts by him to have the house sold. He argues that there be no commission deducted unless the house is ordered to be sold immediately. Ms.

Nand suggests that she only remained in the house because a Judge decided that she and her sons should stay there, as if she had nothing to do with this decision. She feels that, now that the boys are close to finishing high school, she will likely downsize and move to the south side. She also suggests that she wishes to downsize because the house is too big and she cannot afford the utilities, which average about $400.00 per month.

[ 26 ] Notwithstanding Ms. Nand’s suggestion that she has remained in the matrimonial home because a Judge decided she should do so and that one of the reasons she now feels she must move is that she can’t afford to pay the utilities on the residence, I am satisfied that Ms. Nand made the decision to remain in the matrimonial home for the last 6 years and that she has resisted all of Mr. Nand’s attempts to have her move from, sell or take equity out of the residence during that period. I am sceptical not only of Ms. Nand’s intentions in respect of the sale of the residence but also of her stated reasons.

I am not inclined to permit a deduction of a notional real estate commission in these circumstances. Some time has passed since the trial of this matter and I have no information concerning whether Ms. Nand has in the interim listed the house for sale. If she has not done so, her failure to do so is supportive of Mr. Nand’s position and adds to my scepticism concerning her plans in relation to the residence. In any event, if Ms. Nand has sold the residence or is in the process of concluding a sale prior to July 30, 2011 she will be entitled to deduct the actual commission from the value of the home.

No notional deduction will be permitted in relation to some possible future sale. [ 27 ] For the purposes of settling the payment of an equalization amount, any actual commission which may be owing in relation to an existing pending arms length sale may be held back in a trust account until no later than July 30, 2011 for application to such sale, if concluded.

If so paid, it will be a deduction from the value of the property. [ 28 ] Therefore, for the purposes of determining the net value of the property, the parties are to use a gross value of $430,000.00 and deduct from it the mortgage balance as of the date of trial, to be confirmed by a mortgage statement from the mortgagee. If a sale has been concluded, or will be concluded by June 30, 2011, deductions will also be made for all typical and reasonable commissions and closing costs actually paid to conclude the sale.

b) occupation rent [ 29 ] I do not find it necessary to deal with the argument that no occupation rent should be permitted because it was not in Mr. Nand’s pleadings. Rather, I find there is no basis for awarding occupation rent to Mr. Nand on the facts of this case. Ms. Nand was granted exclusive possession of the house, presumably in large measure because the Nand’s sons were residing with her and the house was close to the schools they had been attending. Although Ms. Nand did resist attempts to get the matter to trial, it was to some extent as a result of Mr.

Nand’s failure to provide timely or adequate disclosure. More importantly, Ms. Nand bore significant costs in relation to the residence and in doing so maintained the value of the property for the benefit of both parties. She and the boys would have had to live somewhere and likely would have borne costs at least as large as the costs associated with maintaining the matrimonial home. This is not a case in which it is appropriate for Mr. Nand to receive rent from her for the period of occupation.

Valuation of Other Assets and Liabilities [ 30 ] The other major asset type of the parties are their RRSP’s, which I will deal with later in this Judgment. In addition, they have vehicles and household furnishings. Also to be taken into account are various liabilities that they have in their respective names. [ 31 ] In relation to household furnishings, Ms. Nand submits that the total value of this property held by her is approximately $5,000.00. Mr. Nand argues that it’s value is $22,950.00. He values household furnishings held by him at $2,725.00.

Neither party have obtained appraisals in relation to household furnishings. Furthermore, it is not clear precisely what furnishings are being referred to since no list detailing them was put into evidence. In the evidence binder entered at trial is a list of assets which appears to have been prepared at least two years ago by Mr. Nand. In it he lists assets in Banff and assets in Edmonton. I am assuming that it is at least some of the assets in Edmonton (which would have remained in Ms. Nand’s possession) which are the subject of this disagreement.

They include items such as a master bedroom suite, custom made drapes/curtains, two beds, a 62-inch big screen TV with entertainment centre, a 32- inch TV, two DVD players, a stereo, a leather sofa/loveseat with coffee table/end tables, a sofa set with marble coffee table/end tables, a formal dinette table/chairs/china cabinet/ornaments, a dining table with six chairs, a computer with desk/printer, religious six big wall framed arts/photos, scale changer harmonium, a gas barbeque, a lawn mower, two deep freezers and possibly kitchenware/small appliances, three hundred original audio tapes, fifty Hindi albums, forty CDs, twenty DVDs and shed tools.

In any event, Ms. Nand has indicated a willingness to sell the household furnishings to Mr. Nand for $5,000.00. [ 32 ] Without any clear identification of, or independent valuation of, this property, it is not possible for me to determine a value. I do note that Ms. Nand swore a Statutory Declaration on September 28, 2010 indicating that this property was worth $5,000.00. She swore an earlier Statutory Declaration, on May 8, 2006, estimating its worth at $10,000.00.

[ 33 ] The parties are given until June 1 to agree on a list of the household furnishings which they have provided different values for. If they fail to do so this issue may be brought back before me by no later than September 30, 2011, provided the parties have obtained appraisals for the property in dispute. [ 34 ] If the parties agree on a list of the property for which they have provided differing valuations, Mr. Nand shall be given until June 15, 2011, to tender the amount of $5,000.00 in payment for such household furnishings. If he does so, Ms. Nand will give Mr.

Nand access to the household furnishings within 10 days from the date of tender and Mr. Nand will remove such household furnishings on such date at his expense, whereupon they will become his alone and will not be reflected on any statement used for calculating the amount of the equalization payment. If he does not do so, Ms. Nand will be credited, on the equalization calculation statement, with having these household furnishings at a value of $5,000.00. [ 35 ] Ms. Nand has 2 vehicles in her possession. One is a 2002 Honda that she values at $1,000.00. The vehicle was purchased in 2002 for $31,000.00 and Mr.

Nand submits that its current value is $15,000.00. Ms. Nand has offered to sell it to Mr. Nand for $1,000.00 because she says that it does not run and is in very poor condition. No appraisal was provided for the vehicle and I am left with the parties’ differing opinions on the issue. Ms. Nand is given the option of transferring title to and possession of the 2002 Honda to Mr. Nand for $1,000.00. If she does not do so by June 15, 2011, it will valued in her hands at $15,000.00. [ 36 ] The second vehicle Ms.

Nand owns is the late model Lexus RX350 which she purchased for $46,000.00 in August of 2010, as referenced earlier in this Judgment. Ms. Nand provided no appraisal for the vehicle but asks that it be valued at $30,000.00 for the reasons set out above. I reject this explanation and value the vehicle at $46,000.00. However, she will be given credit, as against its value of $46,000.00, for the amount of the related loan that she used to pay for it. In that regard, it appears that Ms.

Nand used $35,300.00 of her line of credit in connection with this purchase (as disclosed on her August 2010 bank statement). [ 37 ] Mr. Nand admits that he has a vehicle, a 2001 MDX, which he values at approximately $12,000.00. Mr. Nand asserts that the other vehicle in his household, a CRV, belongs to his wife and that she paid for it. No appraisal has been provided in relation to either vehicle, nor has any proof of ownership been provided in relation to the CRV. The evidence indicates that Mr.

Nand’s wife had a vehicle prior to their marriage and I accept that it is likely that she continues to have her own vehicle post marriage. Therefore, Mr. Nand will be credited with the value of $12,000.00 for the MDX. [ 38 ] In her disclosure, Ms. Nand provided bank statements in relation to seven different accounts. There are hundreds of pages of statements covering the last five years. As of September 17, 2010, the total amount on deposit in these accounts was approximately $24,000.00. As seems to be his practice, Mr. Nand failed to provide any information concerning his bank accounts.

It may be that he has none, given his testimony that he deposits at least some of his earning into his wife’s account in order to avoid his creditors. This makes it impossible to know whether Mr. Nand has any cash in any bank account, either in his name or being held on his behalf by his wife. Mr. Nand expects a total income for 2010 to be approximately $100,000.00. None of this is accounted for. In addition, he shares expenses with a working spouse. Ms. Nand makes approximately $46,000.00 a year working a full-time and a part-time job. Mr. Nand seeks to include, in Ms.

Nand’s assets, the amount currently on deposit in her bank accounts but fails to provide any banking information that would confirm the amount of his income, what it is spent on and whether there is any surplus remaining to his credit. I conclude that it would be inequitable to include the balance in Ms. Nand’s bank accounts in these circumstances.

Therefore, in determining the assets and liabilities of the parties and their values, there will be no bank account balances included (other than in relation to RRSPs). [ 39 ] Both parties argue that they have debts which should be included as liabilities in determining their respective assets and liabilities. While the amount of these debts is relatively well established, the parties’ positions in relation to them differ. Ms. Nand submits that post-separation debts should not be taken into account in the circumstances of this case. In making this argument, she relies on

section 8 of the Divorce Act . She argues that, since separation, she has made significantly less than Mr. Nand, often without any assistance from him. Because Mr. Nand did not pay child and spousal support when initially ordered to do so, she alone bore the children’s expenses and her own until Mr. Nand eventually paid the arrears and began making court ordered payments to her. Notwithstanding this situation, she managed to get by without incurred any substantial debt. At the time of trial, she had a small RRSP loan of $3,775.40 and the line of credit which was largely used to purchase her vehicle. [ 40 ] Mr.

Nand, on the hand, even after cashing in $103,000.00 of RRSPs, borrowed $32,000.00 in order to pay the child and spousal support arrears, owes CRA over $21,000.00 because he was reassessed for the 2008 tax year, and has a default judgment against him of over $39,000.00 by the Toronto Dominion Bank.

[ 41 ] Mr. Nand argues that all of the post-separation debts should be included as liabilities in relation to the distribution of matrimonial property and the calculation of the resulting equalization payment. [ 42 ] It is clear that, even taking in account the child and spousal support which Ms. Nand eventually began receiving, she has supported herself and the Nand’s two sons on considerably less than Mr. Nand was making. Mr. Nand also had the benefit of sharing expenses with his current wife, who has been employed throughout this period. Mr.

Nand has clearly been living well beyond his means and he provides no adequate (or even understandable) explanation for his current predicament. In addition to earning reported income of at least $85,000.00 per year, possibly earning unreported income from two businesses, and cashing in $103,000.00 in RRSPs, he asserts that he has nonetheless incurred debt and judgment liabilities in excess of $93,000.00 over approximately five years. Having regard to the factors in

section 8 of the Matrimonial Property Act , RSA 2000, c.M-8 (“MPA”), I conclude that it would be unjust and inequitable to include the post-separation debts of the parties when valuing and distributing the property at trial. Of particular relevance, amongst the various factors I am directed to consider, are the relative incomes, earning capacities, obligations and other financial resources that the parties had at separation and thereafter (8(d)); and that excessive liabilities, for which no adequate justification has been provided by Mr. Nand, where acquired by him when he and Ms.

Nand were living separate and apart (8(f)). Request for Unequal Distribution [ 43 ] Ms. Nand seeks an uneven distribution of matrimonial property, primarily on the basis of Mr. Nand’s cashing-in of RRSPs shortly after the date of separation. She alleges that he has dissipated the sum of $103,000.00 as a result. [ 44 ] It is clear that, at the time of separation, Mr. Nand had approximately $103,000.00 in RRSPs, that he cashed in the entire amount shortly after the date of separation, and that by the time of trial he had spent the entire amount. [ 45 ] Mr.

Nand testified that the $103,000.00 was spent on two moves, payment of his taxes, legal fees, payment of a related $18,000.00 RRSP loan, furnishings for his new home and trips that he took to Fiji after the date of separation. No supporting documentation has been provided in relation to the amounts incurred or payments made for these expenses, although he was ordered to do so by Justice Topolnisky in June 2010. In any event, Mr. Nand takes the position that he does not have any obligation to explain the details of where the RRSP funds were utilized or why there was a need for him to spend them. [ 46 ] Ms.

Nand takes the position that the cashing of the RRSPs constitutes dissipation of a matrimonial asset, there being no justifiable reason why Mr. Nand took this step. In the result, Ms. Nand submits that Mr. Nand’s RRSPs should be valued as of the date of separation. [ 47 ] Mr. Nand submits that he did not dissipate the RRSPs; so his RRSPs should be valued as at the date of trial. Mr. Nand has included the value of his LAPP pension in his RRSP value, while Ms. Nand takes the position that the pension should be divided by splitting evenly the amount which accrued during the marriage. [ 48 ] While Mr.

Nand has provided no details concerning the use of the RRSP funds cashed in by him, and has only referred generally to the types of expenditures they were applied to, I also do not have any evidence which shows that Mr. Nand purposely dissipated the money so that Ms. Nand could not access it. Therefore, I must consider whether, in circumstances such as these, where a large sum of money has disappeared without adequate explanation, there can or should be a presumption of dissipation. [ 49 ] In Cox v.

Cox , 1998 ABQB 987 , Paperny J., as she then was, surveyed a number of matrimonial property cases dealing with the issue of dissipation. In para. 26 of her Judgment, she summarized the general principles as follows: 1. Section 7(4) creates a presumption of an equal distribution of non-exempt matrimonial property, unless it would not be just or equitable to do so. 2. Section 8(1) provides one of the factors that can lead to an unequal distribution where one spouse dissipates assets to the detriment of the other.

3. Dissipation, does not necessarily result where an asset is worth less at trial than it was at separation. Dissipation requires a degree of intent although than intent does not necessarily have to extend to intentionally depriving the other spouse of a fail distribution of matrimonial property. It is sufficient if one spouse intends to dissipate the assets (usually for their own enjoyment), and that dissipation arises in detriment to the other spouse. 4. There must be actual detriment to the other spouse. 5.

The law generally does not find dissipation if the reduction in assets was due to reasonable expenditures made on behalf of the family or to maintain existing matrimonial assets. However, the court will look to see if the spouse could have paid those expenses out of income rather than by depleting assets. Purely personal expenses which do not benefit the other party that are paid out of matrimonial property may also be considered dissipation (even though prior to separation they might have been matrimonial expenses). 6.

If an asset is sold or otherwise reduced, the courts will not consider this dissipation if the proceeds can be traced to another asset. The replacement assets form part of the assets available for distribution. 7. If assets are sold for less than fair market value, the courts may determine whether the sale was done improvidently, hastily or fraudulently in deciding whether it was dissipation. If the sale is effected in accordance with pre-separation negotiations it may not be considered dissipation. 8.

The total amount actually dissipated “to the detriment” of the spouse is one-half of the amount by which the asset was reduced. 9. Ultimately it is in the discretion of the trial judge, based on the consideration of all the facts, to determine whether or not dissipation exists. [emphasis added] [ 50 ] Metz v. Metz , 2004 ABQB 528 , summarized, as follows, the general principle to be used in determining whether dissipation has occurred: [37] Dissipation is another word for waste. Merely disposing of property is not dissipation.

It is well established that to show dissipation there must be an element of bad faith and neglect. Foolish economic decisions, reckless or spiteful spending, pursuit of an illusory financial objective or squandering money on addictions are examples taken from Alberta cases. [ 51 ] In Hennesey v. Hennesey , 2005 ABQB 883 , and Kazmierczak v. Kazmierczak , 2003 ABCA 227 , the Courts found that dissipation does not have to be formally proven in order to warrant an uneven distribution of property. The factors to be considered under s.8 of the MPA are broad and not closed.

Therefore, a court can consider a loss of matrimonial property as a factor even where dissipation is not formally proven. The facts in Hennesey are very close to the ones in the present case. In Hennesey , between the date of separation and the date of trial, the wife spent $112,000.00 of her RRSPs and $55,000.00 of the money from the sale of the family trucking business. She said that she spent it on furniture, on three week-long vacations, and on living expenses. Like here, apart from these general statements, there was no clear evidence as to what the money had been spent on.

Faced with this lack of evidence, Foster J. decided that, even where the evidence is vague and there is no concrete proof of dissipation, the court can take into account the loss of matrimonial property since separation. Justice Foster observed: [108] The evidence in the present case is somewhat ambiguous and incomplete. On its face, it shows in a blatantly obvious profligacy in DMH’s living expenses.

However the evidence overall gives the distinct impression that DMH has consistently spent more than she could reasonably afford since the separation. ... [110] The Act allows me to take into account DMH’s loss or spending of matrimonial property since separation, even in the absence of dissipation.

[ 52 ] In coming to his decision, Justice Foster relied on Kazmierczak , in which the Court of Appeal stated: [111] Criticism #18 of the trial judgment is related. Counsel for the wife contends that the law forbids the trial judge to look at why the wife lost a number of assets during the period of separation, unless he formally finds “dissipation”, which he did not. Counsel for the wife made this point several times, but only in oral argument, offering no authority for it. Section 7(3) of the Act tells the court to distribute the matrimonial non-exempt property “in the manner that it considers just and equitable”.

Section 8 lists some matters which the court is to take into consideration when doing that, and paragraph (

d) includes “the income, [and] earning capacity” of each spouse at marriage and at trial. The “dissipated” only occurs as part of a long list of 12 or more specific factors. Furthermore, those 12 are not exclusive, because paragraph (

m) says “any fact or circumstance that is relevant”. [112] It would be bizarre if a party’s positive contributions of or to assets should be weighed, no matter how indirect or small, yet that party’s negative contributions must be totally ignored unless they fit into a certain legal category. In the result, Justice Foster concluded that the amount the husband owed the wife should be reduced by $20,000.00, finding that approximately $40,000.00 of the wife’s expenditures were unreasonable.

To determine this amount, Justice Foster considered what limited evidence he did have as to how the RRSPs were spent and attempted to estimate how much spending is reasonable, keeping in mind the following factors: [106] One must not forget that, as Binder J. put in Richards v. Richards , 2004 Carswell Alta. 456, 2004 ABQB 263 (Alta. QB) , “[m]arital breakup is usually a costly endeavour; at a minimum parties are obliged to maintain more than one household”. [107] On the other hand, as Topolniski J. put it in S.(C.) v.

L.(T.), “[a]lthough some depreciation of capital assets may have been necessary to support two households in the manner that the parties had been previously accustomed, it is not reasonable to maintain those lifestyles where the budgets cannot afford it”. [ 53 ] In this case, Mr. Nand cashed in one of the most valuable matrimonial assets at a time when his Tax Return showed employment income of approximately $85,000.00 and, if there is any merit to Ms. Nand’s evidence on this point, he was operating two businesses on the side without reporting for any income related to them.

In that regard, I note that, at examinations for discovery, the undertakings included a request for details concerning Tropic Wood Homes, one of the alleged businesses, and that no information has ever been provided. Further in that regard, it seems reasonably clear from the evidence that Mr. Nand was operating a cleaning business with the woman who eventually became his current wife, before his separation from Ms. Nand and continuing for some time thereafter. This occurred at a time when Mr. Nand was not paying any child or spousal support.

It was also at a time when he was presumably receiving some contribution to their joint living expenses from his current wife, who was then employed. [ 54 ] This is not a situation in which Mr. Nand was living beyond his means in 2007 out of necessity (e.g., as a result of the increase in expenses in maintaining two households). At this time, Ms. Nand was forced to try and maintain the residence for herself and the Nand’s sons on her then income of approximately $30,000.00, without assistance from Mr. Nand. While Mr.

Nand may have had to bear some extraordinary expenses as a result of the separation - mainly the costs of a move and the purchase of some new furniture, it is clear that the majority of the RRSPs were spent excessively and to a large extent on non-necessities. Expenditures on such items as vacations to Fiji were made in complete disregard to the needs of the Nand children and Ms. Nand, and to their detriment. I conclude that, in these circumstances, whether characterized as dissipation or otherwise, there ought to be an unequal distribution, in favour of Ms.

Nand, as it relates to the majority of the RRSPs that were cashed in by Mr. Nand in 2007. [ 55 ] In his testimony, Mr. Nand referred to a Visa entry of $3,884.00 at Leon’s which he attributed to the purchase of furniture. In addition to this amount, which I conclude was reasonably incurred as an expense related to his move from the matrimonial home, there will be a further $2,000.00 for moving expenses (which I have to reasonably estimate given that no receipts or details were provided by Mr. Nand). Therefore, I conclude that there should be an adjustment in favour of Ms.

Nand in the amount of $48,558.00, being one-half of the RRSPs less amounts attributable to the furniture and moving expenses, to compensate her for the unjustified use of the RRSPs. In these circumstances, I conclude that it is fair and equitable to award this additional sum to Ms. Nand. [ 56 ] In relation to the RRSPs held by the parties at the date of trial, the same are to be valued as at the date of trial and split

equally. There was some disagreement between the parties as to the actual value of the RRSPs held by the parties as at the date of trial, as well as the tax adjustment that ought to be made to them. For the purposes of clarification, both parties are directed to obtain statements for all RRSPs held by them as at the date of trial. In Mr. Nand’s case, this should not include the amount of his LAPP pension. The parties will then be credited with the value of the RRSPs held by them as at the date of trial. Neither party provided any supporting documentation in relation to the rate of tax which ought to be applied.

If the parties are unable to agree as between 20 or 25% (or some rate in between) they are free to bring the matter back to me. [ 57 ] In relation to Mr. Nand’s pension, the same is to be divided in the manner suggested by Ms. Nand. That is, the value of the pension accrued from the date of marriage to the date of trial is to be divided equally. Spousal Support Ms. Nand’s Evidence [ 58 ] Ms. Nand testified that early in their marriage she worked two part-time jobs while Mr. Nand took an x-ray technician course at NAIT.

Following that, for a period of about 10 years, she worked part-time but was primarily a stay at home mother while Mr. Nand worked to support the family. She says that during this time she also looked after Mr. Nand’s mother, who had Alzheimer’s Disease. In 2001, when Mr. Nand went back to school to take an MRI course, Ms. Nand took on a second part-time job to support the family. [ 59 ] Ms. Nand maintains that, before she got married, she had wanted to be a nurse and still wishes to do so.

In the five years since separation, she has not taken any steps to realize this dream, other than attending the Open House last year, because she feels she needs to work in order to take care of her sons. Although she has not obtained much information concerning what would be required for her to become a nurse at this time, she is aware that she would have to upgrade her high school courses, since it has been over 25 years since she attended school.

She hasn’t taken any pre-qualification or pre-testing to see if she has the aptitude to complete a 4 year nursing program or whether she could attend evening classes or otherwise complete the program while still being able to work either part-time or full-time. [ 60 ] Ms. Nand currently works a full-time job at the Bank of Montreal and a part-time job (of approximately 12 hours per week) at a Superstore. Prior to separation she was earning approximately $20,000.00 per year working part-time. In 2005 her income was approximately $26,500.00.

By 2008 her income had risen to approximately $47,500.00, inclusive of approximately $7,000.00 in spousal support. In 2009 her employment income was just over $46,000.00 and she also received $12,000.00 of spousal support. [ 61 ] Ms. Nand alleges that Mr. Nand’s income tax returns do not disclose the full amount of his income. For example, she indicates that, although his 2004 Tax Return indicated an income of approximately $92,500.00, Mr. Nand also had the construction and cleaning businesses at that time, which is not reflected on the Return.

In relation to the former, of which she was aware, he has never disclosed any financial information. In relation to the latter, which he never told her about but of which she became aware, she has similarly received no financial information. Ms. Nand points out that Mr. Nand has been slow to produce financial information, notwithstanding Orders requiring him to do so. In 2007 he provided an affidavit indicating that his income was $78,746.00 and on that basis his spousal support was decreased.

When his 2007 tax return was eventually produced, just before trial, it disclosed a line 150 income of $172,005.00, of which $93,513.00 was employment income. Similarly, in relation to his estimated 2010 income, at trial Mr. Nand supplied a letter from an employer but failed to mention in his direct testimony that he has more than one employer. Mr. Nand’s Evidence [ 62 ] Mr. Nand disputes Ms. Nand’s contention that she was largely responsible for child care and taking care of the house, including caring for Mr. Nand’s mother. To the contrary, Mr.

Nand maintains that his mother did not get dementia until much later in the marriage and that she did not stay with him at all times. On the other hand, he says that she did live with the family for long periods of time and during those times would often look after the Nand sons, sometimes for 8 hours a day. [ 63 ] Given Mr. Nand’s contradictory evidence on this point, it is not clear whether he believes Ms. Nand has a desire to be a nurse or whether she resisted all of his attempts to upgrade her education because she is unmotivated. On the one hand, Mr. Nand seemed to suggest that Ms.

Nand contributed little during the course of the marriage - neither working outside the home (other than for part-time work when their sons were older) and leaving it to his mother to take care of the household and look after their sons. It is hard, then, to

reconcile Mr. Nand’s apparent belief that Ms. Nand did little during the marriage to acquire marketable skills and that she lacked the motivation to do so, with his position that she should now be self-sufficient. [ 64 ] In any event, Mr. Nand’s somewhat contradictory positions, in relation to Ms. Nand’s lack of contributions and motivation during the course of the marriage, are countered by the fact that, since separation, she has worked both a full-time job and a significant number of part-time hours. She has more than doubled her personal earnings over the five years since separation.

Yet she still earns less than half of Mr. Nand’s disclosed employment income. [ 65 ] I do not know if Ms. Nand’s current indication of her desire to become a nurse is realistic. She is currently 43 years old, Nursing is a four year program, and it is her understanding that she would require high school upgrading to qualify to enroll in the Nursing program. It is clear that she has taken no steps to further this stated objective and does not feel her current circumstances would permit her to do so at any time in the near future. [ 66 ] I conclude that Ms.

Nand was largely a stay-at-home mother during the eighteen years of the marriage prior to separation and that she assisted Mr. Nand in furthering his education. I also conclude that Ms. Nand was disadvantaged by the marriage and its breakdown, in that any career aspirations she might have had were sacrificed for the furtherance of Mr. Nand’s education and the furtherance of his career. [ 67 ] Ms.

Nand has worked very hard since separation to support herself and I conclude that the income that she has generated by working both a full-time and a part-time job is likely to remain typical of her income earning ability. [ 68 ] Ms. Nand is entitled to spousal support on both a compensatory and needs basis. She has been earning considerably less than Mr. Nand and, given her earning ability, she is likely to continue earning substantially less than him. [ 69 ] Ms. Nand should continue to receive spousal support on an indefinite basis, reviewable:

a) at any time by either party if there is a change in circumstances; or

b) on notice by either party at any time after October 18, 2013, if there has not been a change in circumstances. [ 70 ] As to the amount of spousal support that is appropriate, the current amount of $1,000.00 per month will remain in effect unless that parties wish to make further submissions on this point once they have considered the ramifications of the other parts of this Judgment on the relative needs and means of the parties.

Section 7 Expenses and

Section 3 Adjustments [ 71 ] Mr. Nand acknowledges his obligation to pay his share of

section 7 expenses but argues that Ms. Nand has failed in her obligation to provide him with invoices and receipts on a timely basis. In addition, he argues that he has paid some of the

section 7 expenses and has not been given credit for them. He says that Ms. Nand has not produced her Tax Returns for 2006 and 2007 and therefore he cannot determine the appropriate percentages for the calculation of the expenses in any event. He says he should not be penalized for not paying them earlier in these circumstances. [ 72 ] Ms. Nand requests a retroactive adjustment to the

section 3 child support that has been paid by Mr. Nand on the basis that it ought to have been based on British Columbia rates (where Mr. Nand has been residing) and should be recalculated using his actual incomes rather than the lower incomes that were imputed to him as a result of his failure to disclose.

[ 73 ] Ms. Nand’s 2006/2007 Tax Returns were not included in the disclosure materials provided at trial. They are clearly relevant to the issue of

section 7 expenses and therefore, if Ms. Nand wishes contribution to

section 7 expenses incurred during those two years, she must provide her Tax Returns. [ 74 ] Mr. Nand’s child support obligation should be calculated using B.C. rates from the date that he became resident in that province. [ 75 ] Child support is for the benefit of the children and therefore it is important that the amounts be correctly calculated. Therefore, the parties are to obtain whatever additional information is required to properly recalculate

section 3 support as well as the parties’ respective proportionate responsibilities in relation to

section 7 expenses. Additional information required of either party in order to complete these calculations is to be provided by the parties within 30 days of the issuance of this Judgment. If the parties are not then able to agree on the amount of the retroactive

section 3 adjustment or on any issues related to the proportionate responsibilities, amounts of, or appropriateness of inclusion of any item of

section 7 expenses claimed, they may bring the matter back before me for further determination. Request for Security [ 76 ] Mr. Nand argues that it is inappropriate to deduct a lump sum from the property distribution in relation to either spousal or child support. The Court has discretion to award either a lump sum or periodic support pursuant to

section 15.2(1) of the Divorce Act . However, as the Court of Appeal confirmed in Rockall v. Rockall , 2010 ABCA 278 , Alberta Courts have held that lump sum spousal support remains an exception that is awarded only in appropriate circumstances (as was the case in the authorities cited by the Court of Appeal at para. 24 of Rockall ). [ 77 ] I consider the circumstances in this case to place it into the exceptional category which would justify requiring Mr. Nand to provide security to ensure that he will meet his ongoing obligations in relation to child and spousal support. Mr.

Nand admitted that, immediately upon this Court awarding child and spousal support, he ceased making any payments to Ms. Nand because he was angered that she had made an application and that the Court had awarded more than he thought he ought to pay. As a result, over $40,000.00 in arrears accrued. In addition, the evidence clearly establishes that Mr. Nand has behaved irresponsibly since separation, liquidating substantial assets and incurring substantial debts when, given his income, there appears to be no reasonable justification for doing so.

These reasons alone justify an award for security in relation to future obligations without having to place any weight on Ms. Nand’s assertion that Mr. Nand may return to Sri Lanka once the matrimonial property is distributed. [ 78 ] The amount of security should be equal to the estimated amount of child support and spousal support which will be payable over the next four years. That amount, once calculated, will be deposited into an interest bearing trust account out of the amount that will become payable to Mr. Nand from his equity in the matrimonial home, to be held by Mr.

Kiriak in a separate trust account and to be used to make the monthly installments of child and spousal support which may become payable pursuant to this Judgment or to any future Order of this Court. If the security constituted by such trust account is not sufficient to meet all of Mr. Nand’s obligations in the future, he shall begin paying any remaining child and spousal support payments from his own resources immediately upon the trust account being fully depleted. If there any funds remaining in the trust account after Mr.

Nand’s child and spousal obligations have been fully satisfied, the balance of the funds may be paid out to him by Court Order. Conclusion [ 79 ] In the result:

a) there will not be an Order requiring sale of the matrimonial home; but if an arms length sale has not been completed prior to July 30, 2011, Ms. Nand shall not be entitled to deduct the equivalent of a sales commission from the $430,000.00 value of the home. If a sale is completed prior to such date, deductions for sale expenses will be allowed as provided in paragraph 28;

b) no occupation rent will be payable by Ms. Nand for the continued use of the matrimonial home after separation;

c) there will be an unequal distribution to the extent of an additional payment of $48,558.00 as it relates to Mr. Nand’s cashing in of approximately $103,000.00 of his RRSPs, as more particularly explained in paragraphs 43 to 57 inclusive;

d) other assets and liabilities shall be valued and distributed as set out in paragraphs 31 to 42 inclusive;

e) Mr. Nand shall pay Ms. Nand spousal support of $1,000.00 per month on an indefinite basis, reviewable at any time by either party if there is a change in circumstances or on notice by either party at any time after October 18, 2013, if there has not been a change in circumstances;

f) there will be a readjustment of

section 3 child support based on Mr. Nand’s actual income and using British Columbia rates;

g) Mr. Nand shall pay his outstanding proportionate share of

section 7 expenses in accordance with paragraph 75; and

h) Mr. Nand shall provide security for payment of future child and spousal support obligations in the amount and in the manner set out in paragraph 78. [ 80 ] In this Judgment, I have directed that certain additional information be provided in connection with certain issues in dispute. To finalize these issues, once the outstanding information has been provided, or to deal with any further issues arising from this Judgment (including, without limitation, any issues with respect to costs) the parties should contact my assistant to arrange a time for this purpose.

Any such matters are to be scheduled before me for hearing no later than September 30, 2011. Heard on the 18 th day of October, 2010. Dated at the City of Edmonton, Alberta this 12 th day of May, 2011. D.L. Shelley J.C.Q.B.A. Appearances: H.E. Young for the Plaintiff J.D. Kiriak

for the Defendant