Mulick v Mulick, 2012 ABQB 592

Court of Queen ’ s Bench of Alberta Citation: Mulick v Mulick, 2012 ABQB 592 Date: 20121001 Docket: 4803 145544 Registry: Edmonton Between: Ronald Mulick Plaintiff - and - Sonia Mulick Defendant Corrected judgment: A corrigendum was issued on November 26, 2012; the corrections have been made to the text and the corrigendum is appended to this judgment. 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 M.R. Bast _______________________________________________________ A. Introduction [ 1 ] Ron Mulick and Sonia Mulick are 57 and 54 years old respectively. They married on June 2nd, 1979. During the marriage they raised four children, who are now all adults. They separated on September 15, 2007.

The Husband was ordered to pay the Wife interim spousal support in the sum of $1,500 per month, commencing November 1, 2011, and continuing until the release of these Reasons. [ 2 ] Both parties seek a divorce in this action, and as the jurisdictional and statutory requirements have been met, the divorce is granted. B. Issues [ 3 ] There are three issues to be determined in this action: (

a) The division of matrimonial property under the Matrimonial Property Act (MPA); (

b) The Wife's claim for spousal support under the Divorce Act ; and (

c) The Husband's claim for occupation rent. C. Background (

a) The Husband's education and employment history [ 4 ] The Husband, who graduated from Grade 12 in 1972, began working on his C.G.A. designation in 1977 by correspondence. He continued taking courses towards his C.G.A. through the first 10 years of marriage, obtaining his C.G.A. designation in 1989. [ 5 ] After high school graduation, the Husband lived and worked on his parents' family farm, and he started his accounting career in 1976 by working part-time in an accounting office during tax season.

In December 1978 the Husband began to work full-time at accounting, aside from the time he took off for spring and fall farm work. [ 6 ] In February 1980, the Husband opened his own accounting office in Holden where he worked one day per week, in addition to continuing to farm with his father on his father's six ¼ sections of land.

In late 1980, the Husband purchased two ¼ sections of land from his father, and in December 1980 the parties moved into the Husband's parents' home on SE20 so as to maintain a full-time living and working presence on the farm when the parents moved into town. [ 7 ] The Husband farmed jointly with his father between at least 1980 and 1991, equally sharing income and expenses from their operation, which used the father's four ¼ sections, the Husband's two ¼ sections, and the cows owned by each of them, notwithstanding that the father had more equipment, land and a much larger cow herd.

The Husband's father was demanding and domineering and the Husband acquiesced to his father's belief that farming income should be retained in the farm. In the fall of 1987, the Husband's father sold their combined cow herd, which negatively impacted the Husband's farm income in the subsequent years. The Husband and his father continued to farm together using their combined six ¼ sections of land until the end of the 1991 crop season.

[ 8 ] Since 1992, the Husband has rented out the two 1/4 sections registered in his name, except for three years between 2001 and 2004 when he farmed those lands on his own, with some assistance from the Wife. Since 2006 the Husband also has received rental income from the four ¼ sections he inherited from his father. [ 9 ] During the years the Husband farmed jointly with his father, he underused his accounting abilities and derived only meager income from farming.

Over the ten years between September 1987 and September 1997, the Husband operated his accounting business one day per week in Holden and 4 days per week out of the matrimonial home, aside from the time he took off to farm. After moving his home office into commercial space in September 1997, the Husband operated his accounting business 4 days per week in Camrose and one day per week in Holden. In 1993 and 1994, the Husband was also involved as a partner in an auction business, which he borrowed $25,000 to buy into.

During his two year involvement in the auction business, the Husband received dividends, salary and bonuses, which he spent on a truck and other things, and was left with the $25,000 buy-in debt when the auction sold. [ 10 ] In February 2007 the Husband notified his clients of his intention to close his accounting practice after the 2007 tax season. The offices closed in July 2007, and the Husband continued with winding-up work until the fall of 2007. There was no residual value in the accounting business once it was shut down.

The Husband's plan was to look for another source of income based upon his belief that he could make more income doing something else. He moved out of the matrimonial home on September 15, 2007 and commenced employment with the Alberta Solicitor General's office in Edmonton on October 15, 2007, at a base salary of $72,000. A year later his base salary increased to $85,000. The Husband left the Solicitor General's office on January 14, 2012 and began employment with the City of Edmonton on January 16, 2012, at a base salary of $104,600.

His accrued pension benefits were transferred from the Province of Alberta to the City of Edmonton. (

b) The Wife's education and employment history [ 11 ] At the time of marriage the Wife had a Grade 12 education. She obtained dialysis training in 1984 and in 1991 she obtained her LPN credential, graduating at the top of her class. [ 12 ] Prior to marriage, the Wife worked in clerical positions, relocating from Edmonton to Camrose in anticipation of the marriage. She continued her clerical work until just prior to the birth of the first child in April 1981. She remained at home until the fall of 1984 caring for the first two children, the household, a huge garden and helping on the farm when she could.

In the summer of 1984 she took a six week training course in Edmonton to become a dialysis assistant, and with that training she secured a position working 6.5 hours per day, 3 days per week. She continued to do dialysis work until 1987, taking only two weeks off work for the birth of her third child as she was able to take that child to work with her. [ 13 ] When her second dialysis placement ended, the Wife went to work short term as an occupational therapist aide at St. Mary's Hospital, and she also did some homecare work with the Health Unit.

After obtaining her LPN credential in December 1991, the Wife worked casual hours with three different employers until she secured a full-time LPN position at Bethany long-term care in either 1993 or 1994. The Wife maintained that full-time LPN employment until June 2007, when, with the Husband backing, she quit her position at Bethany, due to a combination of job stress and the constant pain she experienced in her knees, shoulder and back. The Wife was unemployed at the time of separation in September 2007, but the day after the Husband left, the Wife went to Bethany and asked for her job back.

Initially she was only able get casual employment, at the bottom of the pay scale, without medical benefits and without her previous seniority or vacation entitlement. After a period of time, she eventually regained her medical benefits, vacation and pay lever, but not her seniority. The Wife fell during a recreational activity while on vacation in 2010, after which her doctor placed her on light duty. She collected partial disability until she had arthroscopic surgery on both knees on May 11, 2011.

The Wife's goal is to return to full-time work as an LPN, however at the time of trial she was still on full disability and only just starting a trial back-to-work program to determine if she could resume full-time LPN employment. [ 14 ] In addition to her dialysis, LPN, and other patient care work, the Wife also worked for the Husband for a number of years at his accounting business during tax season, and although the Husband issued her T4s, she never actually received any pay for that work.

The Wife also worked one day per week as a clerk at the auction mart during the Husband's two years of involvement in that business. The Wife also helped out on the farm when she could and to the extent of her ability, both during the time the parties resided on and off the farm, and during the time the Husband farmed with his father and on his own.

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c) Financial Management during the marriage [ 15 ] Aside from a joint savings account for wedding money and a joint "clearing" savings account early in the marriage, the parties maintained separate bank accounts. The Wife moved her bank account to a different financial institution after the Husband wrote an NSF cheque on the joint checking account and the bank took the money from her sole account to cover that cheque. Thereafter the parties maintained separate bank accounts in different financial institutions. [ 16 ] The parties had an understanding as to which family bills each of them would be responsible for.

They never performed any accounting to determine what share each of them paid, or to ensure that they each paid an equal share. In the early years they lived rent free on the farm, with the utilities being paid as part of farm expenses, and their food coming primarily from the Wife's garden and the farm. [ 17 ] Once they moved into town, and until 2006, the Wife used her employment income to pay the regular mortgage payments, first on the duplex and then on the Camrose matrimonial home; and during that same time frame, the Husband paid the utilities on the homes.

The Wife's income was also used to purchase her personal vehicle, a holiday trailer for the family and appliances for the home. She also paid for the maintenance of her vehicle, clothing for herself and the children, and for the majority of the family groceries. She used the sale proceeds from the holiday trailer to repay part a $15,000 promissory note loan relating to the ½ duplex, and her income paid off most of that. The Husband kept the details of his accounting and farming income to himself.

He used some of his income to buy some groceries, purchase his own clothing, purchase farm equipment, pay the ADC loan on the land in his name, share farm expenses with his father and purchase and maintain his own vehicles. The insurance on the parties' vehicles was paid by the farm as part of the farm fleet. The Husband's assertion that he contributed more significantly towards the family's day-to-day living expenses is not accepted, particularly in light of the fact his income was generally much less than that of the Wife and he left what income he could in the farm.

Both the Husband and the Wife contributed money, labor and transportation for the children's significant extracurricular dance activities, again doing no formal accounting of their contributions but instead having an understanding as to what expenses each would pay. [ 18 ] In 2006 the parties' arrangement as to who paid the mortgage payment and who paid the utilities changed when the wife discovered that the Husband had $36,000 of debt he had accumulated for taxes, credit cards and a line of credit.

That debt was consolidated into the mortgage, increasing both the outstanding mortgage balance and the amount of the monthly mortgage payments, and thereafter the Husband paid the regular mortgage payments and the Wife paid the utilities. [ 19 ] The Husband acknowledged the Wife was a hard worker who kept meticulous records of her finances. She was very careful to live and spend within her means, never incurring significant debt, and as a result only accumulated minimal savings, other than her saving of cash gifts made to her by her mother.

Even at the date of trial, when her income was reduced as a result of being on disability income, aside from the debt on her car and the line of credit she co-signed with her son Matthew, her consumer debt was less than $4,000.00. [ 20 ] On the other hand, the Husband spent freely and as a result incurred debt due to his spending exceeding his means. I accept the evidence of the Wife that the Husband left income in the farm because he didn't want his money to be used for expenses from which there was no return.

As a result of that thinking, the Husband incurred consumer debt during the marriage when he suffered cash flow problems with respect to farm, personal and family expenses, and he borrowed from and repaid both the Wife and his father to cover these debts. His financial irresponsibility is evidenced in the $36,000 of his consumer and tax debts which were consolidated into the mortgage on the matrimonial home. Since his father's death in 2005, the Husband has spent all but $59,000 of the over $240,000 of estate funds he inherited, along with the $65,000 in cash he received from the sale of an inherited asset.

The Husband used some of these inherited monies on the children and their education, to pay down the mortgage on the joint matrimonial home, to pay $20,000 to the Wife, and to pay his own debts. Exhibit 3 shows the Husband's debt history as at December 31 for the years 2004 through 2010, and his debt level at various dates since then.

His liberal spending habits and financial irresponsibility are also evidenced in the fact that notwithstanding that his pre-separation income had doubled by 2009, and has increased since then, and he has been able to benefit from sharing living expenses with his new partner since May 2009, his consumer debt level had increased to $42,531.09 at the time of trial. Further, notwithstanding his debt load and perhaps adding to it, the Husband has traveled four times to Hawaii and twice to Mexico since separation. (

d) Living arrangements during the marriage

[ 21 ] For three and one-half years in the early 1980's, the parties lived rent free in the old farm house on SE20, and the farm paid the utilities. The conditions in the farmhouse were less than ideal and made life very difficult for a family raising two infants.

The water supply had to be supplemented regularly by hauling water from town, the coal furnace which required constant attention provided poor heat, water use was limited and the Wife had to do the family laundry in town. [ 22 ] The Husband's father was an "old school" hard worker, with rigid beliefs, who often worked 16-18 hour days and expected the Husband to do the same.

During the 3.5 years the parties lived on the farm, their first two children were born, and in addition to providing primary care for the children and the household, the Wife also fed the chickens and occasionally the hogs, maintained the yard, helped out during weaning time, drove the tractor to feed the cows, tended the garden and harvested the fruits and vegetables from the large garden for use by the family throughout the winter months. [ 23 ] The Husband's father's work demands on the Husband's time caused friction between the parties, which was hard on the Husband who had to balance having a wife, children, C.G.A. school work, farm work and working off the farm.

The parties jointly decided if they were going to make their marriage work and maintain the Husband's relationship with his father in their joint farming operation, the Wife would have to get work off the farm because they could not afford rent or mortgage payment on the Husband's income. As a result, the Wife took dialysis training and secured dialysis employment.

She borrowed $15,000 from her parents to make the down payment on a ½ duplex in October 1984, qualifying for and assuming the $33,000 mortgage in her sole name. [ 24 ] In September 1987, the ½ duplex was sold and the sale proceeds were applied towards the purchase of the current Camrose matrimonial home, which was registered in the parties' joint names. The parties resided in that house together until separation. Since separation the Wife has remained in that house and the Husband had obtained accommodation in Edmonton. (

e) Child care and household duties [ 25 ] The Wife was the primary care giver of the two children born during that time and she did all of the housework. She only took two weeks off for the birth of the third child because she could take him with her to her dialysis job. She took six weeks off after the birth of the fourth child in December 1987 and then resumed work full time. The Husband asserted that he became the primary care giver for the children once he operated his accounting business out of the matrimonial home.

I find that the Husband exaggerated his involvement in child care because that claim is not supported by the other evidence. I find that the Wife provided the primary parental care of the children from April 1981 until at least 1987 when her dialysis work ended and the Husband began his home accounting office. After that the parties shared parenting responsibilities, organizing their schedules to minimize child care costs.

Both parties were involved in the children's extra-curricular activities, however it was the Wife who, throughout the entire marriage, was responsible for all of the household duties including cleaning and laundry, notwithstanding her employment outside the home, and it was also the Wife who did the majority of grocery shopping and meal preparation. [ 26 ] At the time of separation the parties' youngest child, Mary, was living with the Wife and completing post-secondary LPN training. The Wife never sought interim support for Mary or for their son Matthew, who also lived with her during school breaks.

The Husband paid Mary's tuition, books and for her car. The Husband also paid for Matthew's tuition, books and $450 per month rent during the school year through to April 2011. (

f) The estate of Michael Mulick [ 27 ] The Husband's father, Michael Mulick, died on January 7th, 2005, and aside from three minor bequests, the Husband inherited the bulk of his father's estate, including cash and investments, the father's four ¼ sections of land which had been used in the joint farming operation, farm equipment and the father's Holden house. [ 28 ] As the executor of his father's estate, the Husband retained the four ¼ sections of farm land and the Holden house in the estate for approximately one year, while waiting to see if his brother would contest the estate.

The four ¼ sections and the house were transferred from the estate to the Husband in January 2006. In January 2007 the Husband traded his father's Holden house for $65,000 cash plus title to the Holden rental house. D. Distribution of Matrimonial Property

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a) Introduction [29] The matrimonial distribution contemplated in s. 7(4) is one in which net matrimonial property is divided using a process inwhich the trial justice determines the value of the matrimonial assets, subtracts the value of matrimonial debts and thereby arrives at thenet value of matrimonial property available for distribution. Matrimonial property is to be valued as of the date of trial. [30] The Matrimonial Property Act, R.S.A. 2000, c. M-8 (MPA), and in particular sections 7 and 8, governs the distribution ofmatrimonial property.

Section 7(2) sets out 5 categories of property which are exempt from distribution, two of which have application inthis case: gifts acquired from third parties (s. 7(2)(a)) and property acquired by inheritance (s. 7(2)(b)). Section 7(3) provides that theincrease in value of exempt property or traceable property during the marriage shall be distributed in a manner that is just and equitable,after taking into consideration the factors set out in s. 8. As such two values must be determined for s. 7(2) and s. 7(3) property: its valueat the date of marriage or its acquisition; and its value at the date of trial.

General, non-exempt matrimonial property (that is propertyacquired during the marriage to which s. 7(2) and 7(3) do not apply), shall be distributed equally between the parties unless it appears tothe court that it would not be equitable to do so having regard to the factors set out in s.8. [31] Under s. 7(3), tracing of exempt property into after-acquired property is permitted, and the tracing can be inferred, implied orpresumed, provided that there is some evidence linking the exempt property to the after acquired property. [32] The Alberta Court of Appeal, in Hodgson v Hodgson, 2005 ABCA 13 at para 18-21, 248 DLR (4th) 95, set out the four-stepprocesses to be followed by a trial justice accomplishing a matrimonial property division.

Those steps are as follows: Step 1 Determine all property owned by the parties at the date of trial; Step 2 Determine the property that is exempt under s.7(2) or that can be traced tos.7(2) property. The value of that s.7(2) property at the date of itsacquisition is then excluded from distribution; Step 3 Determine the property that is exempt under s.7(3), including the increasein value of any s.7(2) property from the date of its acquisition to the dateof trial, and then distribute that exempt property in a manner that is justand equitable.

There is no statutory presumption of equal division of thisproperty and the trial justice should exercise his this her discretion indetermining how this property should be distributed taking s.8 factors intoconsideration; Further instruction with respect to s.7(3) distributions can be found theAlberta Court of Appeal cases of Mazurenko v Mazurenko (1981), 1981ABCA 104 , 30 AR 34 (CA), 124 DLR (3d) 406, leave to appealto SCC refused [1981] SCCA No 108 and Horne v Horne, 2011 ABCA116, 502 AR 261.

In Mazurenko the court stated that where there is afinding that exempt property is brought into the matrimonial regime, thenthe increment or proceeds are usually divided on an equal basis. In Hornethe Court held that the question to be asked when determining whetherexempt property was brought into the matrimonial regime is "Did theproperty come to be used for the mutual benefit and account of thespouses?" Step 4 Divide the remaining assets equally, unless it would be unjust orinequitable to do so having regard to the factors set out in s.8.

In relation to the distribution of s.7(4) property, the Court of Appeal in 2009 in Jensen v Jensen , 2009 ABCA 272 at para 20 , 464 AR 16, strongly reaffirmed the strength of the presumption of equal distribution, stating: [20] Mazurenko remains the law in Alberta. The presumption of equal distribution is the rule and unequal distribution the exception. The legislation is designed to protect against inequities arising from dissolution of marriage and to recognize a social and economic partnership. The respective contributions of the parties will rarely be identical or measure equally.

Partners allocate expectations and responsibilities in a manner satisfactory to them. Those responsibilities may change and evolve over time. Put simply, it is not a requirement (nor is it a realistic view of marriage) that the contributions of each party be equal for there to be an equal division. (

b) STEP 1: Identification of Property (Assets and Debts) at the Date of Trial [ 33 ] The Husband disputes the Wife's claim that the joint line of credit she co-signed with the parties' son Matthew should be considered a matrimonial debt. [ 34 ] This joint line of credit is an unsecured student line of credit, which had an outstanding balance of $16,680.20 at the date of the trial.

The Wife claimed that the Husband did not treat Matthew equally with their other children when it came to paying his post-secondary education expenses, and did not pay child support to her when Matthew lived with her during the summer months while on school break. However, the Husband did pay for Matthew's tuition, books and gave him money for rent.

The Wife's evidence was that Matthew had to take out an unsecured student line of credit, co-signed by the Wife, for $8,000.00 for each of his two years of post-secondary schooling at NAIT to cover his living expenses, but no back-up evidence was provided at trial to prove exactly what expenses were paid using the line of credit.

Matthew successfully completed his course of studies, has maintained a full-time job in his field of study for a number of years, and has always made all the payments on this debt, although his payments were "interest only". [ 35 ] Neither the fact that the Wife co-signed for Matthew's student line of credit nor her belief that the Husband should have contributed more to the cost of Matthew's education, makes Matthew's student line of credit a matrimonial debt.

While the Wife alleges that this debt was incurred in order to pay for the expenses of a child attending post-secondary education, the Wife made no claim at trial for child support for Matthew.

This student line of credit was not related to the acquisition of any matrimonial property, and without proof as to what expenses were paid by the line of credit, it cannot be found to have been used for the benefit of the family, and as such cannot be characterized as a matrimonial debt. [ 36 ] At trial the parties acknowledged their agreement that the Husband's RBC GIC and certain farm equipment he inherited from his father are exempt from distribution.

Further, they put on the record their agreement to divide their employment pensions at source and that each of them will retain their own CPP entitlements to the exclusion of the other. The Wife also agreed to return to the Husband his motor bike and his mother's sewing machine, upon him providing her with the family photographs which she will sort through, make copies at her expense, and then return to the Husband.

The parties also agreed on the value of many of the items of property held by them at the date of trial, and the agreed values are reflected on the following table which summarizes the property (assets and debts) of the parties at the date of trial.

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c) Valuation of Exempt and Matrimonial Property (

i) Valuation Issues [ 37 ] The following valuation issues arose during the trial:

(1) The value of the non-inherited farm equipment acquired during the marriage;

(2) The date of acquisition of the four ¼ sections of farm land the Husband inherited during the marriage, and their value at the date of acquisition;

(3) The current value of the four inherited ¼ sections of farm land;

(4) The value of the two grain bins acquired by the Husband during the marriage, and whether or not they were included in the appraised value of the farm land;

(5) The current value of the two ¼ sections of farm land acquired in the Husband's name during the marriage;

(6) The historical value of the Holden rental house, which the Husband received in trade for the original Holden house inherited by him; and

(7) Whether any adjustment should be made to the value of the farm lands in anticipation of the income tax consequences that may result from a future sale or transfer of the lands. (ii) The value of the non-inherited farm equipment acquired during the marriage [ 38 ] Neither party provided any third party valuation or expert appraisal evidence as to the value of the farm equipment acquired by the Husband during the marriage. At questioning in 2009, the Husband valued this equipment $15,000.

At trial, the Husband provided his personal estimate that the equipment had a value of $15,000 in 2007, and a value of $5,000 in 2012. The Wife maintained that the equipment should be valued at the $15,000. [ 39 ] All of this non-inherited equipment is old, the newest being the 1985 baler. It makes sense that its value would decrease to some extent with the passage of time.

Since neither party provided any third party or expert evidence as to the current value of this equipment, for the purpose of this trial, the value of this equipment will be set at $10,000. (iii) Evidence as to the value of the inherited farm lands and the Holden rental house [ 40 ] The Husband argued that he acquired the inherited farm lands and Holden rental house in January 2006 when the titles were transferred into his name. He called three witnesses whom he sought to have qualified as expert witnesses as to the values of all the farm lands and the Holden rental house at the relevant times.

The Wife argued that the Husband acquired the farms lands on the date of the Husband's father's death because, as executor of the estate, the Husband held the lands in trust for himself until they were eventually transferred to him. She called one real estate appraiser who she sought to have qualified as an expert as to the current value of all the farm lands.

The Wife called no witnesses with respect to the historical value the inherited farm lands and Holden rental house, instead relying upon the evidence of the Husband, and the values for these lands set out in the Husband's Application for Probate and Affidavits of Value on the Transfers of Land.

(1) The date of acquisition of the inherited farm lands [ 41 ] The Husband inherited the four ¼ sections of farm land as a result of his father's death in January 2005. The Husband, as executor of his father's Will, filed an Application for Probate in February 2005.

The four ¼ sections of land and original Holden house were retained in the estate until January 2006 when they were transferred into the Husband's sole name. [ 42 ] The Alberta Court of Appeal in Rooney v Wingham 2007 ABCA 188 at para 17 ,422 AR 248, held that the date of valuation for an inheritance is generally not the date of death, unless the beneficiary is avoiding the distribution of the estate in a manner that undermines the regime for the distribution of matrimonial property.

Further, the Court held (at para 18) that the value of inherited property set out on an application for probate should not ordinarily be relied upon as the market value of that inherited property. [ 43 ] The Husband inherited the lion's share of his father's estate. Only a minor bequest being made to his brother. I accept that the Husband, as executor of his father's estate, did not transfer the farm lands to himself as beneficiary until approximately one year after his father's death, as he was waiting to determine whether or not his brother would contest the estate.

The transfer of the lands from the estate to the Husband occurred more than one and a half years prior to the parties' separation and there was no evidence that either party was contemplating separation back in 2005 or 2006, or that the delay in the transfer was part of any long planned scheme by the Husband for his sole benefit or for the purpose of defeating any interest the Wife would potentially have in these lands upon separation. Therefore the date that the Husband acquired the inherited lands is Jan 5th, 2006, being the date the lands were transferred into his name.

(2) The Husband's valuation evidence [ 44 ] The Husband called evidence from four witnesses regarding the value of the inherited farm lands and Holden rental house: Three real estate appraisers and himself.

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a) The evidence of the Husband [ 45 ] The Husband stated that the $75,000 value that he placed on the original Holden house in his Application for Probate was a guess.

While the Husband acknowledged that in questioning in 2009 he gave sworn evidence that in determining the value of the inherited Holden house at the time of his Application for Probate he had spoken to a real estate agent, he did not recall that at trial. [ 46 ] In 2007 the Husband traded the inherited Holden house to the Shihinskis in exchange for $65,000 in cash and the title to their Holden house which will be referred to hereafter as the Holden rental house.

At the time of the Holden house trade, the Husband obtained market valuations for both houses from real estate broker Orest Filewych (Exhibit #12, Tab 8). Those market valuations, dated March 28, 2007, provided price ranges for the market values of the original Holden house and the Holden rental house.

The Husband and the Shihinskis agreed, for the purpose of the trade, to value the two houses at $5,000 higher than the upper end of Filewych's price ranges, and as such the trade proceeded based upon the original Holden house having a value of $145,000 and the Holden rental house having a value of $80,000. [ 47 ] The Husband further stated that he was quite familiar with land values in the Holden area and he believed that he had a good idea as to the value of the two houses at the time of the trade as a result of his work in the accounting field and seeing clients buy and sell property all the time. [ 48 ] With respect to the value of the four inherited ¼ sections, the Husband confirmed that he included the value of his father's granaries in the value of the lands and buildings in his Application for Probate.

Again the Husband confirmed that he was familiar with property values in the area, but then qualified that by saying he was mostly familiar with the value of raw land. In his Application for Probate sworn in February 2005, the Husband valued the inherited Holden house at $75,000 and the four ¼ sections with buildings at $360,000, for total of $435,000. The Husband placed the same values on these five properties one year later when he swore his Affidavit of Value on the Transfer of Land which transferred title to these properties into his name. (

b) The evidence of the Husband's real estate appraisers [ 49 ] The Husband called three witnesses with respect to the appraisal of the inherited farm lands and the Holden rental house. [ 50 ] The Husband sought to have his first appraisal witness, Ray Cossey, qualified as an expert in the appraisal of agricultural lands. Cossey prepared appraisal reports for the six ¼ sections of agricultural land held in the Husband's name, (Exhibit 12, Tab 2) and his mentor, Richard Mickiewicz, AACI co-signed those reports.

Cossey was not qualified as an expert as he was only an "appraiser-in-training" capable of taking limited responsibility for appraisal reports, he still had 2 or 3 courses and exams to complete in order to become a certified residential appraiser, and he was not licensed to do residential or agricultural appraisals on his own. [ 51 ] Cossey gave evidence in the trial as to his research and methods in preparing the appraisal reports that he prepared, and his mentor Richard Mickiewicz reviewed and co-signed.

His evidence was that: (1) he did not use any exact or prescribed formula to make the soil adjustments on his appraisals;

(2) With respect to the home ¼ at SE 20: (

i) Comparable #1 was of a poorer soil type and he could have adjusted more because of the difference in soil type and the amount of it;

(ii) Comparables #3, #4 and #5 for SE 20, only contained 80 acres of land, compared to SE 20's 160 acres, and no adjustment was made to account for the lesser acreage, and such an adjustment would have increased his appraised value; (iii) He made no time adjustment on his appraisal of the home ¼ at SE 20 and he placed no specific value on the farmyard site or its servicing; and (iv) He placed no value of the plywood shed, granaries and pole shed, even though they were all situated on the property when he viewed it; and

(3) With respect to his appraisals of the bare ¼ sections, Cossey acknowledged that his appraisals were based upon cultivated acres only, with no additional value added for the pasture or native land in each ¼ section. [ 52 ] The Husband sought to have his second appraisal witness, Dan MacDonell, qualified as an expert in the historical appraisal of agricultural lands.

MacDonell, prepared a number of Consulting Analyses (Exhibit 12, Tab 2) for the purpose of determining the January 2006 market values of the four ¼ sections inherited by the Husband and the Holden Rental house, and his mentor, Richard Mickiewicz, AACI co-signed those reports.

MacDonell was not qualified as an expert as he was an "appraiser-in-training" at the time he prepared his reports, he is not licensed to prepare appraisal reports respecting agricultural land on his own, and in his limited experience, he had only conducted one previous historical appraisal of agricultural lands at time when he was still an "appraiser-in-training". [ 53 ] MacDonell gave evidence in the trial as to his research and the methods he used in preparing his consulting Analysis, stating that: (1) he did not personally inspect any of the properties which are the subject matter of his Consulting Analyses; (2) he relied entirely on the second hand information regarding the properties contained in Cossey's appraisals; and

(3) With respect to the Holden rental property MacDonell stated that he was aware that title was transferred to the Husband for $80,000, and he admitted that a value of $80,000 was in line with two of the comparables ($83,900 and $84,000) listed in his report. [ 54 ] The Husband's third appraisal witness was Richard Mickiewicz, who held the highest ACI designation for an appraiser (AACI) and who reviewed and co-signed Cossey and MacDonell's reports.

The Plaintiff sought to have Mickiewicz qualified as an expert real estate appraiser, capable of giving opinion evidence as to the value of rural farm lands such as the Mulick's, and residential real property such as the Holden house. Mickiewicz, who had never given evidence or been qualified as an expert before, was not questioned as to his qualifications, experience or training in historical appraisals, and no application was made to have Mickiewicz specifically qualified as an expert in the historical appraisal of agricultural lands.

Based upon Mickiewicz's qualifications and experience, Mickiewicz was qualified as an expert real estate appraiser, capable of giving opinion evidence as to the value of rural farm lands such as the Mulick lands and residential real property such as the Holden revenue property. [ 55 ] As supervisor and co-signer, Mickiewicz did not inspect any of the properties which were the subject matter of Cossey's appraisals, nor did he come to his own conclusion as to the value of the properties or determine how Cossey made his adjustments.

Mickiewicz acknowledged that it would have been appropriate for Cossey to make acreage adjustments when the comparables used were half the size of the Mulick lands, and he was unable to answer questions as to some of Cossey's other methodology. [ 56 ] With respect to Cossey's report on the home ¼, SE 20, Mickiewicz acknowledged that Cossey made no time adjustment, so he

just assumed that the market was stable, but agreed that there was nothing in Cossey's report to confirm this, and as such he could not say why Cossey did not make any adjustment for time. [ 57 ] The Land Appraisal Reports prepared by non-expert Cossey and co-signed by expert Mickiewicz set a total current value on the four inherited ¼ sections and improvements (house, garage, shop and Quonset) and the two ¼ sections purchased during the marriage at $915,000.00. [ 58 ] The Consulting Analysis historical valuations prepared by non-expert MacDonell and co-signed by Mickiewicz who was not qualified as an expert in historical valuations, set January 10, 2006 total value for the four inherited ¼ sections at $478,000.00 and the Holden rental house at $110,000.00.

(3) The Wife's position and valuation evidence [ 59 ] The Wife called no evidence with respect to historical values of the farm lands or Holden rental house, instead arguing that the historical values of these lands should be determined based upon the values placed upon them by the Husband in his Application for Probate, and Affidavits of Value sworn by him and attached to Transfers of Land.

She further relied upon the Husband's oral evidence as to familiarity with land values at the relevant times. [ 60 ] The Wife called one appraiser, Glen Lawes, and sought to have him qualified as an expert real estate appraiser capable of giving opinion evidence as to the value of farm land and agricultural properties, and in particular the current value of the six ¼ sections registered in the Husband's name. Mr. Lawes, prior to his retirement at the end of 2011, had been an accredited AACI appraiser since 1974.

In addition, he had been a member of the Real Estate Institute of Canada since 1988 and he was also a land assessor for 13 years. He was fully licensed and accredited as an AACI, the highest designation for an appraiser, when he performed his appraisal of the subject lands and prepared his report. Based upon his qualifications and his vast experience, he was qualified as an expert real estate appraiser capable of providing opinion evidence as to the value of farm land and agricultural properties.

He was unshaken in his evidence as to his methodology and opinions set out in his detailed appraisal reports (Exhibit 24, Tab 3 and 4). His October 4, 2011 report provided an opinion as to the current market value of the six ¼ sections of farm land. He gave oral evidence that the current value of the improvements on the SE 20 including buildings and granaries and grain bins, remained the same as in his 2008 appraisal report.

He based the value of the improvements using a market value approach, because there was not much economic value left in the house and a cost approach, which sets the upper limit of value is really only most accurate when buildings are new. Further, in placing a value on the bare agricultural ¼ sections, he placed a value on all acres contained in each parcel, not just cultivated acres, because in his opinion while the value of native and pasture acres in each parcel was less than the value of the cultivated acres, they still had a value none the less.

Lawes placed a total current value on the four inherited ¼ sections and the improvements on SE 20 at $721,100, and a total current value on the two ¼ sections held in the Husband's name at $298,900.

(4) Adjustment for Potential future tax liability upon sale or transfer [ 61 ] The Husband sought a reduction in the current value of the farm lands for potential tax liability which he may incur in the future if he disposes of these lands. He admitted that he has no current intention to transfer or sell the lands. He further admitted that he could go back to active farming in his retirement, which could provide him with a beneficial tax status with respect to the disposition of the farm lands, but he maintained that he has no current intention to do so.

There appears to be a possibility that the lands could be transferred to his children on a tax free basis, provided that certain Income Tax Act requirements are met. [ 62 ] The Husband prepared his own calculation as to potential tax liability on a sale of the farm lands (Exhibit 12, Tab 7), but these calculations were based upon his current tax status and current tax laws, and do not take into consideration any potential capital gains exemptions that may be available.

The Husband did not provide any opinion or advice from the CRA or any independent evidence from a tax professional with respect to his potential tax liability on the future disposition of these lands. [ 63 ] The Alberta Court of Appeal in Sparrow v Sparrow , 2006 ABCA 155 at para 20 , 26 RFL (6th) 247, refused to consider a tax liability adjustment for a future sale of the husband's exempt interest in a cottage property, noting that the husband had no plans to sell the property, and future tax laws may change making the current estimation of future tax off the mark.

In Sparrow the husband provided no evidence as to what the current value of the potential future tax liability might be. Based upon these factors the trial justice concluded that the potential tax liability was too speculative to be capable of evaluation.

[ 64 ] The Husband's claim is similar to that made in Sparrow , in that he has no current intention to sell the properties and the state of future tax laws are unknown. The Husband did not provide independent evidence of his potential future tax liability, but instead provided his own opinion and calculations.

In addition to the factors relied upon by the court in Sparrow , in the case before me I am satisfied that there is a possibility that available Capital Gains Exemptions could be used to offset any future tax liability, that there remains a potential for a more favorable tax treatment if the Husband returns to farming in his retirement or the property is transferred to the children and not a third party purchaser, provided certain conditions are met.

Since the Husband has no current intention to sell or transfer the property, there are possible circumstances which would provide a more favorable tax treatment than used by the Husband in his calculations, and the state of future tax laws are uncertain. For those reasons, no adjustment for any future sale will be made. (iv) Findings as to the historical and current values of the inherited and matrimonial lands

(1) Historical Value of the four inherited ¼ sections [ 65 ] The evidence as to the value of the four inherited ¼ sections at the date of acquisition, being January 2006 came from four sources:

(1) The Husband's Application for Probate, dated February 2005;

(2) The Affidavit of Value sworn by the Husband in January 2006;

(3) Consulting Analyses prepared by MacDonell and co-signed by Mickiewicz, neither of whom were qualified as an expert in historical appraisals; and

(4) The Husband's oral evidence as to the how he arrived at the value he placed on the lands in his Application for Probate and Affidavits of Value. [ 66 ] As previously stated, the Alberta Court of Appeal in Rooney v Wingham , supra held that the value of property set out on an application for probate should not ordinarily be relied upon as the market value of property.

While there was some evidence that the Husband was aware of market values in the area based upon his work in the accounting field, and that he may have consulted a realtor as to the value of the land, there was no evidence as to what realtor he contacted or what value the realtor may have placed on the lands.

As such, the values the Husband placed on the lands in his Application for Probate and his Affidavit of Value were no more than a non-expert's best guess, where the non-expert was a person not involved in the real estate industry and had no training or qualifications regarding the determination of land values. The only other evidence as to the historical value of these lands came from MacDonell and Mickiewicz, who although not qualified as experts in the historical valuation of farm lands, were normally engaged in the business of appraising land.

Since the Wife chose not to call expert evidence as to their historical value of these lands, the best evidence adduced at trial as to the historical value of the lands came from the Consulting Analyses co-signed by MacDonell and Mickiewicz, who while not qualified as experts are at least normally in the business of appraising land, and as such the historical valued set out in the Consulting Analyses are found to be the historical values of the farm lands. [ 67 ] However, since the Consulting Analyses relied upon Cossey's 2011 appraisals, which did not place any value on the 11 granaries and two grain bins located on SE20, an adjustment must be made.

The Husband provided no appraisal or expert evidence as to the value of the 11 granaries or the 2 grain bins, but the Husband's evidence was that the his two grain bins had a value of $3,600, which is consistent with the value placed upon them by the Wife's expert, Lawes. Lawes valued the 11 granaries at $18,150 and in the absence of any other expert evidence as to the value of these granaries, their value will be set at $18,500 and added to the values set out in the Consulting Analysis so as to capture their value and ensure that both the historical and current valuations include the same "improvements".

Using the values set out in the Consulting Analysis, with the adjustment for the 11 granaries, the value of the four inherited ¼ sections and improvements on the date the Husband acquired them is found to be $496,150, calculated as follows: SE 20-48-16-W4 $190,000

SW 20-48-16-W4 $ 96,000 SW 21-48-16-W4 $ 96,000 NE 8 -48-16-W4 $ 96,000 11 granaries $ 18,150 $496,150

(2) Current value of the four inherited ¼ sections [ 68 ] The issues previously identified in non-expert Cossey's 2011 appraisals of the current value of the four inherited ¼ sections, affect the reliability of those appraisals. Those issues are not resolved merely by expert witness Mickiewicz co-signing the appraisals, as they directly impact the value reached by Cossey in his appraisals.

I prefer the evidence of expert witness Lawes, which I find to be more reliable based upon his experience and methodology, and therefore I conclude that the fair current values of the four inherited ¼ sections is that set out in Lawes' 2011 appraisal and his oral evidence as to the current value of the improvements on SE20. However, because Lawes included the two grain bins owned by the Husband in his appraised value of the improvements on SE 20, the $3,600 value he placed on those grain bins must be deducted from the value he placed on the improvements.

The value at trial of the four inherited ¼ sections is therefore found to be $717,500, calculated as follows: SE 20-48-16-W4 $181,000 SE 20 improvements $ 89,600 SW 20-48-16-W4 $163,500 SW 21-48-16-W4 $121,000 NE 8 -48-16-W4 $166,000 2 grain bins ($3,600) $717,500

(3) Historical value of the Holden rental house [ 69 ] The evidence as to the historical value of the Holden rental house came from two sources. First, non-experts MacDonell and Mickiewicz co-signed a Consulting Analysis that valued the Holden rental house in July 2007 at $110,000. Second, the oral evidence of the Husband, supported by his 2007 Affidavit of Value and Filewych's 2007 written market valuations, valued the Holden rental house at the time of the 2007 trade at $80,000.

The Husband's non-expert oral evidence as to his personal belief in the $80,000 value as set out in his sworn Affidavit of Value, is not sufficient on its own to establish the market value of the house in 2007. However, the Husband's personal belief was supported by the written market valuations he obtained from Filewych who was a real estate broker who, based upon his letterhead, appeared to be professionally involved in real estate transactions in 2007.

In addition, the evidence of the Husband was that the value of the Holden rental house was arrived at in conjunction with the Shihinskis, who were the other party involved in the negotiated trade transaction that saw the original inherited Holden house traded for the Holden rental house. Finally, MacDonell's oral evidence confirmed that the $80,000 value set out in the Affidavit of Value was somewhat consistent with two of the comparables he used in his Consulting Analysis.

[ 70 ] While all of the evidence provided with respect to the value of the Holden rental house in 2007 was provided by non-experts, I find that the evidence from 2007 which comes from the Husband's Affidavit of Value and supported by Filewych's market valuations which were prepared to assist a negotiated trade transaction, to be more reliable as to the 2007 value of the house, because it is valuation evidence produced at the time of the negotiated 2007 trade transaction and not created with hindsight looking backwards in time. For those reasons the historical value of the Holden rental house is set at $80,000.

(4) The current value of the Holden rental house [ 71 ] The parties agreed the current value of the Holden rental house is $119,000.

(5) The current value of the two ¼ sections acquired during the marriage [ 72 ] For the reasons previously stated with respect to the appraisal of the four inherited ¼ sections, I prefer the evidence of expert witness Lawes, over that of the evidence of non-expert Cossey supported by co-signer Mickiewicz, and find that the value of these two ¼ sections are as follows: NW 8-48-16-W4 $163,500 NE 20-48-16-W4 $135,400 $298,900 (

d) STEP 2: Identification of s.7(2) property or property traced to s.7(2) property [ 73 ] Both parties made claims that certain property held by each of them at the date of trial was s.7(2) property, or could be traced to s.7(2) property, making the value of that property exempt from distribution. The claims by the parties can be summarized as follows:

(1) The Wife claimed a $42,000 exemption relating to $42,000 in cash gifts given to her by her mother, which she deposited in her sole bank account;

(2) The Husband claimed an exemption equal to 50% of the $23,000 in payments he made on the mortgage on the matrimonial home after separation, which he argued were traceable to inherited monies;

(3) The Husband claimed a $20,000 exemption in respect of inherited money he gave to the Wife;

(4) The Husband claimed an exemption in respect of a $25,000 payment made by his father in 1987 on farm land purchased by the Husband during the marriage, which the Husband argued was a traceable gift;

(5) The Husband claimed the four ¼ sections of land & improvements affixed thereto, which he inherited from his father, are exempt from distribution; and

(6) The Husband claimed the Holden rental house, received in trade for the original Holden house he inherited from his father, is exempt from distribution. [ 74 ] The lands legally described as NE 20-48-16-W4 and NW 8-48-16-W4 were purchased by the Husband from his father during

the marriage at fair market value. The Husband financed the entire purchase through ADC and made all of the debt payments during the marriage from income he earned during the marriage, but for the $25,000 payment which he claims was a gift from his father. The issue with respect to the alleged $25,000 gift is dealt with elsewhere in these reasons.

NE 20-48-16-W4 and NW 8-48-16-W4 are not property that falls into any of the s.7(2) categories of exempt property, nor property that falls within any of the s.7(3) categories of property and as such these lands cannot be characterized as s.7(3) property and their value cannot be distributed under s.7(3). (i) Section 7(2)(a): Property acquired by gift from a third party

(1) Money received by the Wife from her mother [ 75 ] The Wife's evidence was that her mother gave her $42,000 which she deposited into her sole bank account. She supported that with copies of her mother's bank account statements and her own savings passbook, which I am satisfied substantiates her testimony, notwithstanding the Husband's questioning of one $10,000 deposit. The Wife's bank statements show that the $42,000 was at one point depleted to $30,046.12, before being replenished back to $39,347.28 at the date of trial.

The Wife seeks an exemption for the entire $42,000 gifted to her by her mother, and the Husband takes the position that the exemption can only be maintained at the lowest value of the bank account. [ 76 ] The funds the Wife saved to replenish the depleted gift cannot take on the exempt character of the original gift, particularly since they were funds saved by her during the marriage. A party is only entitled to an exemption if the exempt asset still exists or can be traced into an existing asset.

Since there was no evidence that there is any property at the date of trial into which the dissipated gift monies can be traced, the Wife's exemption is limited $30,046.12, which is the amount of the original gifts which remains. (2) $25,000 payout of Mortgage on farm lands held in the Husband's sole name [ 77 ] The Husband seeks to "trace" into the value of the two ¼ sections he purchased in his sole name during the marriage $25,000 that his father paid in 1987 on the mortgage on these lands.

The only evidence that the $25,000 was paid by the Husband's father, Michael Mulick, came from the Husband's oral testimony. There was no evidence that Michael Mulick ever told either of the parties that he had paid off the mortgage or that the $25,000 was a gift, and there was no evidence that either of the parties questioned Michael Mulick about this payment or were advised as to the reason for this payment.

In fact, the evidence of the Wife was that she had no knowledge of this payment by Michael Mulick until the Husband made his exemption claim in this action. [ 78 ] There was evidence at trial that when the Husband farmed with his father, they shared equally all income and expenses, including those relating to the cattle owned by them, notwithstanding that Michael Mulick owned many more cows and cow/calf pairs than the Husband.

I accept the evidence of the Wife that in 1987 the Husband's father sold all the cattle on the farm without notice to the Husband, and that he retained all the sale proceeds including those from the sale of the Husband's animals. I also accept the Wife's evidence that when she urged the Husband to demand his share of the sale proceeds from his father, the Husband refused to do so, saying that he didn't want to make waves and that in the end it wouldn't matter because the farm would eventually be his.

A short time after the sale of the cattle, the Husband's father paid $25,000 to extinguish the Husband's ADC loan on the two ¼ sections of land in the Husband's sole name. [ 79 ] There was no evidence that Michael Mulick specifically intended the $25,000 to be a gift to the Husband, and since there was some evidence that Michael Mulick failed to share with the Husband 50% of the cattle sale proceeds as he had been doing for some years, or at least the sale proceeds from the Husband's animals, I am satisfied that there is some evidence to suggest that the $25,000 could have been payment to the Husband for his share of the cattle sale proceeds.

As such, the $25,000 will not be characterized as a gift and the Husband will not be entitled any exemption relating to the $25,000 payment. (ii) 7(2)(b): Property acquired by Inheritance

(1) Farm Equipment and remaining RBC GIC Inherited by Husband [ 80 ] The parties agreed that the farm equipment and remaining GIC that the Husband inherited from his father were s.7(2)

property and entirely exempt from distribution.

(2) The Husband's $23,000 payout of the matrimonial home mortgage [ 81 ] The Husband claims that the $23,000 in payments he made on the mortgage on the matrimonial home after separation can be traced to inherited money.

He acknowledged that the placement of the inherited monies into a joint asset affects the value of the exemption he can claim, and maintained that he should receive an exemption equal to 50% of the $23,000 in payments, or in other words $11,500. [ 82 ] In response to this exemption claim, the Wife argued that the $23,000 should be characterized as a "partial repayment" of the $36,000 increase in the mortgage on matrimonial home that was required to pay off debts incurred by the Husband in his sole name. [ 83 ] The Husband's evidence on this issue came partially from Exhibit 1, which was a document he created and to which no supporting documentation was attached, and which was his attempt to account for the monies he inherited from his father.

Exhibit 1 identifies a $10,350 lump sum payment in November 2007 on the mortgage as coming from inherited funds, and then further identifies $13,097.05 paid on the mortgage as also coming from inherited funds. In his oral evidence the Husband clarified that the $13,097.05 was actually the total of the bi-weekly mortgage payments he made on the mortgage after separation until August 2008 when the mortgage was paid out.

I accept the Husband's evidence that the lump sum of $10,350 came from inherited funds, even without any specific tracing documentation, because at that time he would only have been able to come up with a lump sum of that value by accessing inherited monies. However, in the absence of tracing information that shows that the regular bi-weekly payments made between September 2007 and August 2008 came from inherited monies, and not any other source such as employment income, I cannot be satisfied that the $13,097.05 came from inherited money.

As such the Husband is only entitled to an exemption of 50% of the $10,350 lump sum payment, or in other words an exemption of $5,175.00.

(3) The Husband's gift of $20,000 to the Wife from his inheritance [ 84 ] The evidence of both parties was that the Husband gave the Wife $20,000 shortly after his father's death, from the monies he inherited from his father. The Husband admitted that he transferred the $20,000 unconditionally to the Wife as a gift, to do with as she wanted. There is no dispute that the Wife spent the money and there are no assets into which this money can be traced. Since there is no property at the date of trial into which any of this money can be traced, the Husband will not be entitled to any exemption related to this gift.

(4) The four ¼ sections of Agricultural Land Inherited by the Husband [ 85 ] The Husband inherited four ¼ sections of agricultural land from his father, and the value of these four ¼ sections at the time the Husband acquired them is exempt from distribution. The distribution of the $221,350 increase in value of these inherited farm lands between the date of their acquisition and their value at trial will be addressed later in these reasons.

(5) The Holden rental house [ 86 ] The Husband acquired his father's Holden house, by inheritance, in 2006 and then in 2007 he traded it to the Shihinskis, in exchange for $65,000 cash plus title to the Holden rental house, which the Husband continues to own. The Husband spent the $65,000 cash he received from the Shihinskis and holds no property at the date of trial that the $65,000 can be traced into. Part of the value of the original Holden house can be traced into the Holden rental house, and that value is equal to the value of the Holden rental house at its date of acquisition.

The Husband's exemption is therefore equal to $80,000. The distribution of the $39,000 increase in value of the Holden rental house between the date of the date of acquisition and its agreed value at trial will be addressed later in these reasons. (

e) STEP 3: Distribution of the increase in value of any exempt property

[ 87 ] The only s.7(3) property to be distributed in this case is the increase in value of the four ¼ sections of agricultural lands including the improvements thereon ($221,350), and the increase in value of the Holden rental house ($39,000), which is all that remains from the disposition of the inherited Holden house. The combined increase in value of these properties is $260,350. [ 88 ] There is no presumption of equal sharing of s.7(3) property.

Instead, it is left to the discretion of the Court to distribute the s.7(3) property in a manner that is just and equitable after taking into consideration the following factors set out in s.8 of the MPA . [ 89 ] The Husband in this case took the position that it would not be just or equitable for the Wife to share in any of the increase in value of his inherited lands and rental house, or alternatively if sharing were ordered, the Wife's share should be less than 50%.

The Wife took the position that it would be just and equitable for the increased value to be divided unequally in favor of the Wife because so much of the family's energy and resources went into the farm lands that the Husband eventually inherited from his father, with little in the way of income coming back into the family while the Husband was farming with his father.

My consideration of the s.8 factors and facts relevant to them follows. 8(a) - the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as a homemaker or parent; [ 90 ] The Husband exaggerated his participation in parenting. The Wife provided the primary parental care of the children from April 1981 until at least 1987. Staying at home between 1981 and 1984, she took only the most minimal time off at the birth of the third and fourth children and for a period of time she even took her third newborn to work with her starting two weeks after his birth.

The dates of her primary care correspond to the time period when the Husband and his father had the joint cattle operation. After 1987 the parties shared parental care, and were both involved in the children's extra-curricular activities. The Husband also exaggerated his contribution towards the homemaking in the family.

It was the Wife who throughout the entire marriage was responsible for all of the household duties including cleaning and laundry, notwithstanding her employment outside the home, and it was also the Wife who did the majority of grocery shopping and meal preparation. [ 91 ] The Wife supported the Husband in his relationship with his parents, notwithstanding their difficult relationship with her, she supported the Husband in his relationship with his birth mother, and with the Husband she kept the existence of his relationship with his birth mother secret from the Husband's parents.

Further, notwithstanding her strained relationship with the Husband's father, it was the Wife that provided care for Michael Mulick near the end of his life. These contributions by the Wife, while mostly not financial in nature, directly and indirectly contributed to the Husband's joint farming operation with his father, and his ultimate acquisition of his inheritance by assisting the Husband to maintain his strong relationship with his traditional and often difficult father. 8(

b) and (c): (b) - the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition, conservation, improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or both spouses or by one or both spouses and any other person; (c) - the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to the acquisition, conservation or improvement of the property; [ 92 ] I am satisfied that the Wife made contributions to the Husband's accounting business, supported him in his decision to buy into his short lived auction venture that left him with debt, and more importantly, supported the Husband in his pursuit of farming with his father, even though that joint farming venture provided the family with meager income, left the Husband underemployed in the accounting field, and forced the Wife back to work.

The Wife was a city girl who did her best to adjust to farm life, moving with the Husband to his parent's farm and performing a small amount of farm work, subject to her abilities and availability. [ 93 ] It is clear that the parties would never have been able move off the Husband's parents' farm and into their own home or been able to enjoy a holiday trailer or new appliances for their home if the Wife had not obtained the training necessary to permit her to maintain employment off the farm.

Her employment income paid for the majority of the daily living expenses of the family and the mortgage on the matrimonial homes between 1984 and 2006. This arrangement resulted in essentially all of the Wife's income being spent on ongoing expenses of the family, with little ability to accumulate any savings. This arrangement also permitted the Husband to

continue farming with his father using the land he subsequently inherited.

It also permitted the Husband to retain as much income as possible in the farm to keep his father happy, and maintain his relationship with his father, the fruit of which was his inheritance of the bulk of his father's estate. [ 94 ] There is no doubt that the Husband contributed far more to the joint farming operation than the Wife through the long hours and hard work demanded by his father, but the parties carried on their life, including their economic functions, for their mutual benefit and the case law is clear that equal sharing is not contingent upon equal contributions.

Further, the Wife's availability to do farm work, while on the farm, was affected by her need to care for infants, and after the parties moved off the farm, her availability to do farm work was affected by her employment and her care of the children while the Husband was working on the farm. [ 95 ] Counsel for the Husband argued that the parties kept their financial affairs separate during the marriage and that this fact should be taken into consideration.

The evidence established that the parties kept their bank accounts separate, with the exception of the exemptions claimed at trial they have accepted that their bank accounts in their sole names, and their pensions, CPP entitlements and vehicles are all s.7(4) property. Further they each had an understanding as to which of the family expenses they would pay, and did so throughout the marriage without ever specifically calculating each other's share or attempting to achieve a 50/50 contribution by each of them, which shows that they were financially co-dependent.

Further the evidence disclosed that while the ½ duplex was registered in the Wife's sole name, when that residence was sold to purchase the current matrimonial home, the proceeds from its sale went directly into the matrimonial home which was registered into joint names and the parties accept that the matrimonial home is s.7(4) property. As such, I cannot find that the parties kept their financial affairs separate to the extent that it should affect the distribution of property. 8(

d) the income, earning capacity, liabilities, obligations, property and other financial resources (

i) that each spouse had at the time of marriage, and (ii) that each spouse has at the time of the trial; [ 96 ] Both parties had a Grade 12 education at marriage, and they both increased their income potentials during the marriage, through training, work experience and obtaining professional credentials. The Wife obtained dialysis training in 1984 and her LPN designation in 1991.

The Husband obtained his C.G.A. designation in 1989, 10 years after the date of marriage. [ 97 ] The evidence established that since at least 2002, the Wife earned more income than the Husband, and in earlier years she made a greater contribution to the ongoing expenses of the family, essentially expending all of her income for family living expenses. This use of the Wife's income was particularly true while the Husband was actively farming, because his farming income was meager, and he left what farming income he could in the farm.

At the time of separation the Wife was unemployed with the backing of the Husband.

Since separation the Husband's income has more than doubled, and at the time of trial the Wife finds herself on full disability, receiving 66.67% of her LPN salary. 8(e) - the duration of the marriage [ 98 ] The parties cohabited for 28 years during the marriage, and had been separated approximately five and one half years at the time of trial. 8(f) - whether the property was acquired when the spouses were living separate and apart [ 99 ] The Husband acquired the inherited lands and house approximately 20 months prior to separation, and since the date of acquisition the Husband retained all the income from those properties.

There was no evidence as to the amount the property increased in value between the date of separation and the date of trial. Counsel for the Husband conceded that the income from the inherited farm lands and house were brought into the matrimonial property regime. The Husband actively excluded the Wife from any involvement with the transfer involved in the Holden house trade, preventing her from making any contribution to it, other than perhaps through her familial connection to the Shihinskis who were involved in the Holden house trade, in that Mr.

Shihinski is her brother. 8(g) - the terms of an oral or written agreement between the spouses

[ 100 ] The parties had no oral or written agreement between them with respect to the Husband's inheritance. However, they had an arrangement during the marriage, in which they each assumed certain financial responsibilities and did what was necessary in order to permit the Husband to continue farming with his father and maintain his close ties with his father, on the understanding if they did that the farm would eventually be his. Evidence of that arrangement can be seen: (

a) in the parties' move to the farm to maintain a living presence on the farm when the Husband's parents wanted to move into town; (

b) in the parties' joint decision that the Wife needed to secure employment off the farm in order to improve their living conditions, so that the Husband could keep his father happy and continue to farm with him; and (

c) in the Husband's conduct and statements to the Wife regarding the sale proceeds from the liquidation of the cattle, and in particular his refusal to demand his share of the cattle sale proceeds, even though the loss of these monies adversely affected family finances. At that time the Husband told the Wife that he did not want to make waves with his father and that it would all work out in the end because one day the farm would be his. 8(

h) that a spouse has made (

i) a substantial gift of property to a third party, or (ii) a transfer of property to a third party other than a bona fide purchaser for value; 8(

j) a prior order made by a court; [ 101 ] These factors are not relevant based upon the facts of this case. 8(

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order; [ 102 ] The Husband did give the Wife $20,000 from the monies that he inherited from his father shortly after his father's death, and those monies were spent by the Wife. 8(k) - a tax liability that may be incurred as a result of the transfer or sale of property; [ 103 ] This factor has already been addressed, and dismissed previously in these reasons. 8(

l) that a spouse has dissipated property to the detriment of the other spouse; [ 104 ] Counsel for the Wife argued that throughout the marriage the Husband had spending patterns which resulted in the repeated creation of debt, particularly the $36,000 debt which was consolidated into the matrimonial home mortgage in 2006, and his consumer debt incurred since separation. She claims this conduct amounts to dissipation of assets in that it caused a detrimental effect upon the financial positions of the parties.

The Wife suggested that the appropriate remedy for this dissipation would be an unequal distribution of property in her favor. The Husband argued that his line of credit debt incurred after separation could not be characterized as being incurred as a result of unreasonable spending because that money was spent on the parties' children and in acquiring what he needed to set up a new household after separation. [ 105 ] On the issue of dissipation, the Husband's spending of well over $200,000 in inherited cash and investments plus the further

$65,000 in cash from the Holden house trade, provides some evidence of the Husband's liberal and often unwise spending habits. However, it cannot be forgotten that the Wife received $20,000 of the inherited money spent by the Husband and she also benefited from the inherited money to the extent it was used to make $28,000 in payments on the Husband's Line of Credit prior to separation as shown on Exhibit 2. Exhibit 3, the

summary of his debt history prepared by the Husband, is unsupported by back-up documents and only provides the information at the date of separation and the self-selected dates of December 31 in each year. Again, the Husband's accounting of his increased debt in 2008 is unsupported by back-up documentation, but in that regard it can be noted that the totals shown as Mary and Matt would have encompassed payments made for their post-secondary schooling costs and a car for Mary during a period of time when the Husband paid no child support for either child.

It is also of note that the Husband's furniture and household purchases are for items which have not been included in the Husband's inventory of matrimonial property. Taken on its face, Exhibit 3 shows that the Husband's debt level has increased from $23,748.10 at the date of separation to $42,531.09 at the date of trial. [ 106 ] I am satisfied that the Husband was careless in financial management during the marriage and since separation, and that he incurred debt as a result of his habit of liberal and unwise spending beyond his means.

However, his use of inherited monies to extinguish a number of his debts improved the financial position of the parties, and offset to some extent the $36,000 the mortgage was increase to pay his debts. Conclusion [ 107 ] Having regard the facts of this case as they relate to s. 8 factors, I find the following considerations to be particularly relevant with respect to the just and equitable distribution of the increased value of the Husband's inherited properties: (

a) The parties' arrangement in which the Wife shouldered a greater share of the family's parenting, household and financial burdens for many years, in order to permit the Husband to maintain his close farming relationship with his father, on the understanding that the farm would one day belong to the Husband, which favors the Wife receiving a share of the increased value of the inherited properties; (

b) The parties' economic co-dependency, which also favors the wife receiving a share of the increased value of the inherited properties; (

c) The Husband's conduct prevented the Wife from making any contribution to the inherited properties after they were acquired; and (

d) The Husband's significant and much greater participation in the joint farming venture through his hard work on the farm, and his gift of $20,000 to the Wife from his inheritance, all of which favors the distribution of a greater share to the Husband. [ 108 ] I conclude that in the circumstances of this case it would be just and equitable for the $260,350 increase in value of the s.7(3) property to be distributed between the parties such that 60% of the increase shall be retained by the Husband and 40% of the increase, being $104,140, shall be distributed to the Wife. (

f) STEP 4: Distribution of the s.7(4) property [ 109 ] The Alberta Court of Appeal in Jensen v Jensen , 2009 ABCA 272 at para. 20 , 464 AR 16 says:

[20] Mazurenko remains the law in Alberta. The presumption of equaldistribution is the rule and unequal distribution the exception. The legislation isdesigned to protect against inequities arisin

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