Onyschuk v. Onyschuk, 2012 ABQB 616

Court of Queen ’ s Bench of Alberta Citation: Onyschuk v. Onyschuk, 2012 ABQB 616 Date: 20121004 Docket: FL03 14241 Registry: Edmonton Between: Bohdan John Onyschuk Plaintiff - and - Michelle Marie Onyschuk also known as Michelle Marie Kapty Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Brian R. Burrows _______________________________________________________ [ 1 ] Bohdn Onyschuk seeks division of the parties ’ matrimonial property. That property consists of a farm and Mr. Onyschuk ’ s pension.

The issues are mainly as to whether part of the value of the farm is exempt, whether the exemption was lost when the property was transferred into the names of both parties, and what credit should be given for payments made by Mr. Onyschuk to Ms. Onyschuk since the parties separated. [ 2 ] The parties were married October 24, 1981. They separated on September 1, 2004. They were divorced in separate proceedings on June 29, 2006. This action was commenced in June 2008. Mr. Onyschuk brought the issues forward for determination using the

summary trial procedure in the Rules of Court. The Farm Property [ 3 ] The main asset to deal with is farm property consisting of a quarter

section in Thorhild County, roughly 85 km northeast of

Edmonton. At the time the parties were married the property was owned by Mr. Onyschuk ’ s father, Mr. John Onyschuk. The parties lived in the house which is on the quarter

section from the time they were married until they separated. [ 4 ] In 1986 John Onyschuk transferred title to the property to Bohdan Onyschuk, the Plaintiff. There is evidence before me from both father and son that the transfer was a gift to Mr. Onyschuk alone, that it was not intended to be a gift to both Mr. and Ms. Onyschuk. This is corroborated by the Transfer of Land by which the transaction was effected which is in evidence.

It shows that the consideration for the transfer was $1.00, which corroborates that the transfer was a gift, and that it was to Bohdan John Onyschuk, which corroborates that it was not to both parties to the marriage. [ 5 ] Ms. Onyschuk ’ s evidence is that the gift was intended to be to both parties. [ 6 ] I accept Mr. Onyschuk ’ s evidence on this point since it is corroborated by the evidence of the donor and is consistent with the documentation by which the gift was effected. [ 7 ] The evidence includes a retrospective appraisal of the value of land as of October 1986.

It states the value to be $105,000 as at that date. There is no competing evidence. I accept that evidence. [ 8 ] In May 2001 Mr. Onyschuk transferred the title to himself and Ms. Onyschuk as joint tenants. The consideration stated in the transfer was “ No Dollars ($0.00) ” . [ 9 ] Mr. Onyschuk ’ s evidence is that the reason for the transfer was that he had applied for a mortgage and was advised by the lender that the mortgage loan would only be granted if the property was in the names of both parties.

His evidence in that regard is as follows: That I transferred the property into my wife ’ s name on May 14, 2001. I did so to get financing. I could not borrow money without my wife going on title and attached hereto and marked as Exhibit “ F ” is a copy of the Transfer of Land indicating that this is so and attached hereto and marked as Exhibit “ G ” is a copy of the title indicating this is so. This transfer was never intended to be a gift to the Defendant. I would not have transferred the land to her if I could have obtained the financing myself.

As I stated earlier, the only reason it was transferred into her name was so I could get financing. Without the Defendant on title I was unable to get financing. When I transferred the title into her name, we borrowed $130,000.00 to pay off existing debt. [ 10 ] Ms. Onyschuk ’ s evidence as to the reason for the transfer is the same. It is contained in the following exchange from the Examination for Discovery of Ms. Onyschuk which was read into evidence as part of the Plaintiff ’ s case: Q.

So I ’ ve shown you the transfer where it was transferred into your name and your husband ’ s name at that time, and I said: Was there a reason why it was transferred into both your names? A. Do I say it? Mr. Bayrak: Well, off the record (Discussion off the record)

Q. Mr. Shortreed: So your reason that it was transferred into your name? A. Because the bank wouldn ’ t give a mortgage to him unless it was in both our names. Q. So you were working at this – A. I was joined to the – Q. No, but you would not get the financing. That was the reason for the transfer. Right? A. Yes. Q. Thank you. . . . A. Can I finish up what I was going to say? Okay. He had come from going to the bank, and the bank manager or whoever at the branch said that we had both been living on the land since we were married.

My name better be on the property title, and then the financing couldn ’ t go through. Q. In other words, without the finance – without you being put on title because of your – you were working at that time? A. Yes. Q. So without your income, he could not borrow any more money. A. Yes. [ 11 ] A first mortgage of $100,000 and a second mortgage of $30,000 were registered immediately after the transfer from the Plaintiff to the Plaintiff and the Defendant jointly. The existing first and second mortgages were discharged. [ 12 ] In 2006, after the parties separated, Mr.

Onyschuk wanted to borrow further against the land in order to pay off other debt. Ms. Onyschuk agreed. The land was mortgaged for $180,000. [ 13 ] Mr. Onyschuk ’ s evidence is that Ms. Onyschuk ’ s agreement to signing the mortgage was conditional on her getting some of the proceeds. She received $5531.77. Ms. Onyschuk agrees she received the funds and says they were used to cover living expenses. [ 14 ] A recent appraisal of the land is in evidence. It shows the land ’ s present value to be $365,000. The current outstanding balance of the mortgage is $141,859.78.

The current equity in the land is $223,140.22. [ 15 ] As stated, I find that the land was received by Mr. Onyschuk from his father by way of a gift to him alone. By operation of s. 7(2) of the Matrimonial Property Act , the value of the land at the time it was acquired by Mr. Onyschuk is exempt from division. As

indicated, the evidence establishes that value to be $105,000. The increase in value since acquisition is $260,000. [ 16 ] I also find that the evidence explaining why the property was transferred from Mr. Onyschuk ’ s sole ownership to the joint ownership of the parties in 2001 establishes that joint beneficial ownership of the property was not intended. The transfer was made solely to satisfy a bank loan requirement that the property be in both names. The explanation constitutes “ evidence to the contrary ” within the meaning of s. 36(2)(

a) of the Matrimonial Property Act . The transfer had no effect on the exemption. It continues to exist. [ 17 ] The farm property is within s. 7(2) and (3) of the Matrimonial Property Act . I am therefore to distribute it in a manner I consider just and equitable having regard to the matters listed in s. 8. The starting presumption of equal division set out in s. 7(4) does not apply. [ 18 ] Mr.

Onyschuk submits that two of the matters set out in s. 8 as matters to be taken into consideration in determining how matrimonial property should be distributed between the spouses are of particular relevance in the context of this farm property and this marriage. [ 19 ] First, Mr. Onyschuk refers to s. 8(c): (

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. [ 20 ] Mr. Onyschuk observes that Ms. Onyschuk has made no contribution to the farm property since she left it on September 1, 2004. Since then Mr. Onyschuk has conserved and improved the property. He swears that in particular he has replaced the roof and furnace at a total cost of $11,791. In addition he has paid all the expenses associated with the property, the mortgage payments, insurance costs, utilities, and taxes.

He has exhibited calculations of the total he has paid to his affidavit. The total, excluding utilities but including the maintenance expenses mentioned, is $190,682.65 over the last 8.5 years. [ 21 ] Mr. Onyschuk has also provided expert opinion as to what a market rent for the property would be. The estimate of rent that would be payable for a property of this nature over the 8.5 years is $63,290 with the tenant paying utilities and the landlord paying taxes. In addition Mr.

Onyschuk has received a total of $68,200 in income from a gas well, from Shell Canada Energy for geophysical operations, and from a rental of part of the land over the period. [ 22 ] After deducting these sources of income, real and notional, from the cost associated with the property, Mr. Onyschuk calculates that he has contributed ($190,682.65 - $126,340.00) $64,342.65 to the conservation or improvement of the property since separation. He submits that this should be recognized in the distribution of the increase in value of this exempt asset. I agree. [ 23 ] Second, Mr. Onyschuk refers to s. 8(i): (

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order. [ 24 ] Mr. Onyschuk swears that since separation he has given a total of $24,204.17 to Ms. Onyschuk. This is made up of: 1. Payment out of the $180,000 mortgage after separation 5,531.77 2. Dentist Bills 5,276.70 3. Cell Phone Bills 2,095.70 4. Rent in Vancouver 300.00

5. Daughter ’ s Wedding cost 1000.00 6. Payment made on condition of retransfer of title 10000.00 [ 25 ] In my view only the first and last of these, totalling $15,531.77, are properly considered payments made in respect of a distribution of property. The first payment, as previously noted, was made out of the $180,000 mortgage proceeds as a condition imposed by Ms. Onyschuk for her consent to the mortgage (though, as noted, she had no beneficial title to the land). I am satisfied and find on the evidence that the last was a payment made on the basis of Ms.

Onyschuk ’ s agreement to reconvey her legal interest in the property to Mr. Onyschuk, an agreement on which she reneged. [ 26 ] The other items listed by Mr. Onyschuk are matters of spousal support, not distribution of property. [ 27 ] I should note that Ms. Onyschuk attempted to add a claim for spousal support to this application. Mr. Onyschuk objected that the issue of spousal support has never been raised in this action. This is purely an action for division of matrimonial property. Spousal support is properly a matter for the divorce action, a completely different proceeding. In any event Ms.

Onyschuk did not take timely steps to add any issue for determination at the

summary trial. [ 28 ] If items 2 through 5 have any relevance it is to the issue of spousal support, not to the issue of property division. I decline to take them into account here. The Pension [ 29 ] Mr. Onyschuk owns a pension fund held mostly in an RRSP. The evidence indicates that its value at the date of separation was $16,971.55. Since separation Mr. Onyschuk has made further contributions to the pension. Its current value is $67,089.53. The evidence does not indicate how much of the present value is the result of earnings or capital gains and how much is the result of contributions. Mr.

Onyschuk proposes that the separation date value be deemed for distribution purposes to have earned interest at the rate of the judgment interest rate since the date of separation. On that basis the current value of the distributable asset is $20,735.31. Mr. Onyschuk also proposes that this value should be reduced by 25% to account for the tax he will have to pay when he withdraws the funds from the RRSP. Though there was no evidence presented regarding this point, I accept that Mr. Onyschuk ’ s proposal is reasonable.

The value of the pension asset for distribution purposes therefore is (.75 x 20,735.31) $15,551.48. The Ford Focus [ 30 ] Mr. Onyschuk swears that Ms. Onyschuk took a Ford Focus vehicle when she left. Thereafter he paid $12,208.72 to pay out the lease on the vehicle. Ms. Onyschuk later traded the Ford Focus in on another vehicle. [ 31 ] Ms. Onyschuk swears that Mr. Onyschuk wanted her to take the Ford Focus as he recognized she would need a vehicle to properly take care of their daughter who lived with her after the separation. The vehicle ’ s transmission failed not long after she left Mr.

Onyschuk. [ 32 ] There is no evidence as to the value of the Ford Focus at the time of separation. Further, Ms. Onyschuk ’ s evidence supports the conclusion that it was given to her as a form of spousal and child support. It no longer exists as a matrimonial asset. There is no evidence as to what if any value Ms. Onyschuk received for it when it was disposed of. I find that neither it nor its unknown value should be taken into account in determining the division of matrimonial property in this action. Contribution to Payments Made for Benefit of the Parties ’ Child [ 33 ] Mr.

Onyschuk submitted that payments he had made for the benefit of the parties ’ daughter should be deducted from the equalization payment he will be directed to pay in this action. He acknowledged that the basis of Ms. Onyschuk ’ s claimed liability to

reimburse him in that regard was the law regarding child support. Just as spousal support is not properly addressed in this action, in which the only remedy sought is a fair division of matrimonial property, child support is also not properly a subject for determination in this action. I decline to take the payments Mr. Onyschuk made for the parties ’ child ’ s benefit and to which he believes Ms. Onyschuk should contribute into account.

Division of Matrimonial Property [ 34 ] I incorporate the conclusions reached above into the following matrimonial division statement: Assets Husband Wife Farm Property 365,000.00 Pension 15,551.48 Total Assets 380,551.48 Deductions Mortgage 141,859.78 Exemption 105,000.00 Contributions to conservation and improvement of property 64,342.65 Total Deductions 311,202.43 Distribution Assets less Deductions 69,349.05 Share on an equal division 34,674.52 34,674.53 Previous Distribution 15,531.77 Payment by Mr. Onyschuk to Ms.

Onyschuk 19,142.76 [ 35 ] To effect the matrimonial property division which I find to be just and equitable I direct:

1. That Mr. Onyschuk pay Ms. Onyschuk $19,142.76. 2. That upon Mr. Onyschuk filing an affidavit in this action establishing that he has paid Ms. Onyschuk $19,142.76 there will be an order directing the Registrar of Land Titles to cancel the existing title to the farm property (Title Number 012 139 579) and to issue a new title in the name of Bohdan John Onyschuk. The Registrar shall not, of course, act on the order until s. 191(1)(d)(ii) has been complied with. If further directions to implement the result of these proceedings are required, the parties may contact me. Heard on the 30 th day of August 2012.

Dated at the City of Edmonton, Alberta this 4 th day of October 2012. Brian R. Burrows J.C.Q.B.A. Appearances: John R. B. Shortreed for the Plaintiff The Defendant appeared without counsel.