Pelech v. Pelech, 2011 ABQB 35

Court of Queen ’ s Bench of Alberta Citation: Pelech v. Pelech, 2011 ABQB 35 Date: 20110125 Docket: 4803 140474 Registry: Edmonton Between: Geraldine Y. Pelech Plaintiff - and - Gregory D.W. Pelech Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr.

Justice Donald Lee _______________________________________________________ [ 1 ] The wife seeks an increase in spousal support from $2,500 per month to $5,000 per month; an Order that one of the condominiums owned by the husband’s companies be made available for her to live in free of charge; the imposition of a specified deadline by which time the trial must be held in this matter; and interim costs.

The husband seeks an Order directing the termination or suspension of any further ongoing spousal support payments pending trial; severing the corollary relief from a grant of a Divorce Judgment enabling an uncontested Divorce Judgment to be issued immediately; and a direction that accumulated arrears of spousal support be declared to have become due but not payable to the wife. As such there would not be any enforcement steps taken against the husband. [ 2 ] These parties lived in a common-law relationship since 1989 until they separated in September 2004. They married in February 2000.

There are no children of the marriage.

[ 3 ] At the time the parties commenced cohabiting, the wife had graduated from a Child and Youth Care Counselling Program, while the husband had completed a Mechanical Engineer Technology Program and was employed full-time. During the marriage the wife worked full-time outside of the home with local School Boards running programs for students, as well as helping the husband in his business. The husband attended the University of Alberta on a part-time basis and eventually earned his Engineering Degree.

Analysis [ 4 ] At the time these parties separated in September 2004 the husband was 49 years of age, and the wife was 44 years of age. The husband is presently 55 years of age and the wife is 51 years of age.

Following the separation in the Fall of 2004, these parties participated in a lengthy collaborative law process for approximately two years, the costs of which exceeded $23,000 and were paid by the husband. [ 5 ] The wife issued a Statement of Claim for Divorce in December 2006, and she made her first application for spousal support and exclusive possession of one of the condominiums in Sicamous, British Columbia in 2007.

A Consent Order dated January 16, 2008 in this Court required the husband to pay $2,000 a month for January, February, and March of 2008 as the wife’s application was adjourned until March 2008. [ 6 ] In March 2008 the Special Application was heard, and an Order issued out of this Court dated March 18, 2008 dismissing the wife’s application for exclusive possession of one of the Sicamous, British Columbia condominiums, and for interim costs. However the husband was required to pay $2,500 a month in spousal support commencing on April 1, 2008.

The husband was also required to transfer a 2001 Ford Truck to the wife, and to equalize pre-tax assets by way of an RRSP transfer to the wife. The husband’s various business interests were also to be valued and appraised. [ 7 ] In accordance with the March 18, 2008 Court Order, the vehicle and RRSPs were transferred to the wife, and Barry Gardner Chartered Accountant prepared valuations of various business interests for matrimonial property settlement purposes. Various meetings then occurred between counsel and Mr.

Gardner, but no success was reached in concluding the matrimonial property settlement. [ 8 ] In 2008 the husband total income (line 150) was $50,000, and his taxable income was $12,975. The husband’s low annual income is a reflection of the significant economic reversal in the Alberta Oilpatch particularly as it relates to the natural gas industry which the husband’s company, owned equally by the husband and his business partner, suffered in the past four years.

Revenues have gone down in the business by several million dollars also due in part to competition from Chinese manufacturers. [ 9 ] After the separation the wife went on medical leave from her employment with local School Boards running programs for students, and she received disability payments until January 2005. Between January 2005 and July 2007 the wife obtained various temporary employment positions.

After separation the wife moved to Calgary for approximately a year and then relocated to Sicamous, British Columbia where she was eventually able to obtain permanent employment in July 2007 with a Spa where she does not earn a wage or salary, but rather only a commission. [ 10 ] The move to Sicamous, British Columbia was in part because rental accommodations are far less expensive there then in Edmonton or Calgary. Even with that the wife has had difficulty at times maintaining her lifestyle and rental accommodation, which is one of the reasons she wishes to live in one of the four condominiums in Sicamous.

Two of the condominiums are owned by husband’s company alone, a third unit is owned jointly in a numbered company with the husband’s partner; and a fourth unit is no longer owned apparently by the husband. All of the condominiums in Sicamous, British Columbia are rented as seasonal accommodation primarily in the Summer, and the husband acknowledges that none of these units are rented on a long term basis.

Theoretically then they are available to the wife to live in but for the co-owner third parties. [ 11 ] The husband remains in the former matrimonial home in Sherwood Park, Alberta with his girlfriend who also lives there. She does the rentals of the four condominium units in Sicamous through a website. The former matrimonial home was recently appraised at $940,000, and the husband has had exclusive use of that property since separation. Prior to the recent downturn in the real estate market,

the former matrimonial home was worth well over a million dollars as it consists of approximately 3,000 square feet of living area on half an acre of land. [ 12 ] The husband’s total income during the entire relationship is listed below:– YEAR TOTAL (LINE 150) INCOME TAXABLE INCOME 1989 $ 56,023.00 $ 52,602.00 1990 45,757.00 43,388.00 1991 70,369.00 66,639.00 1992 92,493.00 85,537.00 1993 216,636.00 191,278.00 1994 60,902.00 42,498.00 1995 47,516.00 32,924.00 1996 134,000.00 38,413.00 1997 60,108.00 37,500.00 1998 136,943.00 16,418.00 1999 125,558.00 12,984.00 2000 27,614.00 20,423.00 2001 24,000.00 19,002.00 2002 24,003.00 18,241.00 2003 37,505.00 37,115.00 2004 30,000.00 28,689.00 2005 43,756.00 36,977.00 2006 40,012.00 32,177.00 2007 37,534.00 30,030.00 2008 50,000.00 12,975.00

2009 13,750.00 6,785.00 [ 13 ] Of particular note is that the husband’s most recent 2008 and 2009 taxable income is only $12,975 and $6,785, and his 2009 total income was only $13,750. Notwithstanding this he still has been able to maintain his large house, lose significant amounts of money in his business, as well as pay the wife significant amounts of money estimated by his counsel to exceed $150,000.

However he stopped making his $2,500 a month spousal support payments at the end of February 2010, and presently owes about $25,000 in spousal support payments. [ 14 ] It appears that the husband has been able to maintain his lifestyle essentially by using/ borrowing money from his girlfriend and family members, as well as using his business to pay for his personal expenses, and by transferring interests in certain investments such as one of the condominium units in Sicamous previously held by him to his business partner.

Conclusion [ 15 ] The husband submits that any interim spousal support would exceed his available income, and would not recognize the wife’s ability or responsibility to be gainfully employed. [ 16 ] The husband argues that the wife is significantly underemployed, having done virtually nothing to improve her personal circumstances, let alone become self-sufficient. Working as an Esthetician in the Spa is seasonal, and she has also attempted house cleaning, and commercial painting with her boyfriend on a sporadic basis without much success.

She now indicates that she has chosen a new career as a podologist, and has started her own business in Sicamous, British Columbia. [ 17 ] It is correct that the wife has earned minimum income since the separation, and I agree she likely has been underemployed. However the husband as well is underemployed in the sense that as an Engineer struggling to keep his business(es) afloat, he earns virtually no income.

I conclude that part of the wife’s financial problems stems from the economic disadvantage she has suffered as a result of the marriage breakdown. [ 18 ] During the marriage the husband had the opportunity to advance his career as well as his finances, in part because he earned his Engineering Degree during the marriage. For a period of time the husband also collected rental income after the separation from another condominium that these parties still jointly own in Sherwood Park.

While many of the everyday living expenses were expended through the husband’s various business interests while they were married, and presumably still are for the husband at this time, the wife has had to now pay for those living expenses personally since the breakdown of the marriage. [ 19 ] There is also the disparity in the current living arrangements and accommodations that these parties enjoy.

The wife has been living in various rental units and trailers in Sicamous, British Columbia, while the husband has interests in four rental condominium units, most of which remain empty except during the high rental season in the Summer months. During the marriage the wife maintained and managed these condominiums, and they regularly lived from time to time in one or more the condominiums for months at a time during the Summer months.

The husband’s new girlfriend has taken over the management of these condominium units, and he presumably still resides in these units from time to time when he is not living in his nearly million dollar home outside of Edmonton. [ 20 ] In terms of acceding to the wife’s request to grant her exclusive possession of one of those condominium units in Sicamous, British Columbia, counsel for the husband submits that I am constrained by the provision of our Matrimonial Property Act , R.S.A. 2000, c.M-8 which prevents me from transferring out of Province property from one party to the other in specie . [ 21 ] Although I am allowed to distribute All property owned by both spouses and by each of them pursuant to s. 7(1), s. 9(1) reads as follows:–

9(1) If part of the property of the spouses is situated in Alberta and part elsewhere, the Court may distribute the property situated in Alberta in such a way as to give effect to the distribution under

section 7 of all the property wherever it is situated. [ 22 ] Therefore while I can consider All property wherever it is located, I may only distribute the property situated in Alberta to give effect to s. 7. [ 23 ] Counsel for the wife submits that I have jurisdiction to order the husband to deliver up exclusive possession in the form of my in personam jurisdiction over him, even if I do not have jurisdiction to make an “ in specie ” transfer of the property itself.

While this submission may be correct, and while it is tempting to even out the situation by directing the husband to deliver up the keys to one of the condominium units in British Columbia, there is the additional complicating factor of the involvement of third parties in the ownership of these condominium units.

The husband claims that condominium unit 259 in Sicamous, British Columbia is no longer owned by him and is a revenue property for seasonal rentals; that condominium 215 is jointly owned by the husband’s company and a third party corporation 576270 Alberta Ltd.; the third unit is jointly owned in the numbered company with his partner; and the fourth unit is jointly owned by the husband’s corporation and his business partner’s corporation. [ 24 ] While some of these claims have not been backed up by actual documentation, it is safe to say that third party corporations and third parties are involved in the ownership of these properties, if in fact the husband still has any interest in them.

Therefore I am reluctant to order up the delivery of keys to any of these units on that basis alone by the husband. [ 25 ] Our Matrimonial Property Act exempts the British Columbia condominiums only if they fall within the definition

section of “matrimonial home” s. 1(c)(

i) and (ii) which reads:– (c) “matrimonial home” means property (

i) that is owned or leased by one or both spouses, (ii) that is or has been occupied by the spouses as their family home, and Whether or not the condominiums are owned by the husband, they have never been a “family home” as such. [ 26 ] As such while I may have jurisdiction over the husband irrespective of what the Matrimonial Property Act may say, I decline to make any Order as to exclusive possession of any of the Sicamous, British Columbia condominium units for the reasons described. [ 27 ] As for spousal support, the husband seeks a vacating of any ongoing spousal support because of his obvious inability to pay.

On the other hand the wife seeks an increase in interim spousal support payments from $2,500 a month to $5,000 a month. I conclude that there should be some amount of interim spousal support in the circumstances for the reasons described above, even given the husband’s extremely low income. [ 28 ] The husband obviously has resources and assets, notwithstanding the serious financial pressures that the economic downturn and Chinese competition has had on his company and business.

I conclude that an Order of interim spousal support in the sum of $1,000 a month, reduced from $2,500 a month, recognizes the change in circumstance of the husband from the March 2008 Order of this Court during which period of time he has suffered a further decline in income, while also acknowledging the wife’s continuing hardship suffered as a result of the breakdown of the marriage. It encourages the parties to resolve this matter by going to trial in this matter as soon as possible. The $1,000 a month interim spousal support payment will begin as of January 1, 2011 and continue until the trial of this matter.

The current spousal support arrears can be dealt with at trial.

[ 29 ] With respect to the trial of this matter, it appears that these parties are relatively close to being able to go to trial with the exception of Examinations for Discovery being completed on the wife, and current valuations being done on the husband’s businesses, both of which have remain contentious issues. [ 30 ] I direct that the trial of this matter take place no later than September 30, 2011, that the wife be made available for Examinations for Discovery without the payment of conduct money, and that the husband advance $10,000 through his company to pay for the costs of the valuation of his business interests.

Only through such measures are these parties ever going to get to trial within a reasonable period of time. [ 31 ] I decline however to make any Order as to interim costs payable to the wife by the husband given that the husband has already advanced significant funds to the wife since the separation, and as well she has received a significant distribution of monies as a result of the March 2008 Order. [ 32 ] Given the uncertainty as to valuations of the husband’s business interests, and given the further uncertainty of how these matters will eventually resolve themselves, I decline to grant the husband’s request to sever the Divorce Judgment from the corollary relief matters that are ongoing. [ 33 ] As a result of the parties’ mixed success in this matter, no costs are awarded for this application.

Heard on the 19 th day of January, 2011. Dated at the City of Edmonton, Alberta this 25 th day of January, 2011. Donald Lee J.C.Q.B.A. Appearances: Renée R. Cochard, Q.C. Cochard Johnson for the Plaintiff Norman W. Picard, Q.C. Barr Picard

for the Defendant