Harrison v Harrison, 2013 ABQB 570

Court of Queen ’ s Bench of Alberta Citation: Harrison v Harrison, 2013 ABQB 570 Date: 20131108 Docket: 4803 149950 Registry: Edmonton Between: Laura Anne Harrison Plaintiff - and - Steven Allan Harrison Defendant _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice Donald Lee _________________________________________ ______________ Background [ 1 ] The Plaintiff Wife (“the Wife” or “Laura”) and the Defendant Husband (“the Husband” or “Steve”) were married July 30, 1977; had two children who are now adults; and separated on July 10, 2004.

There were two brief periods of reconciliation following the separation. The parties eventually entered into Minutes of Settlement, dated July 10, 2004 (“Minutes”). The contractual

interpretation of the terms of the Minutes is the focus of the within application/trial before me. [ 2 ] For ease of reference, sections 3, 4, and 11 of the Minutes, which are germane to the determination of the matter before me, are excerpted below:

Spousal Support 3.1. In agreeing to the Spousal Support provided for herein, Laura and Steve agree and acknowledge that they have carefully, and on the advice of their respective lawyers and financial advisors, considered the factors set out in Sections 15.2(4) and 15.2(6) of the Divorce Act , 1985 and amendments thereto, and in that regard have taken specific note of the following factors considered by them to be relevant to their particular circumstances, namely: (

a) The lengthy cohabitation of the parties during the marriage; (

b) The relative abilities of each person to provide for his or her own needs; and (

c) That with the payment of the spousal support provided for in this Agreement, The Wife is fully and properly relieved of any economic hardship that she could otherwise allege occurred by reason of the marriage or its breakdown. 3.2. Steve shall: (

a) pay to Laura for her support, the sum of $800.00 per month; (

b) commencing on the 1st day of August 2004; (

c) and continuing on the 1st day of each every month thereafter until the earlier of: (

i) Laura’s death; or (ii) Steve’s death. 3.3. Steve will not receive any spousal support from the Wife. 3.4. Steve and Laura realize that their respective financial circumstances may change in the future by reason of their health, the cost of living, either person's employment or otherwise. No such change will give either person the right to apply for and change to these spousal support provisions now or at any time in the future pursuant to the Divorce Act or any other legislation, provincial or federal.

It is understood by each person that this Agreement represents a final disposition of all financial issues between them and without limiting the generality of the foregoing, the Wife and the Husband specifically agree that none of the following events will give rise to an application for any change to the spousal support provisions of this Agreement now or at any time in the future: (

a) temporary or permanent illness or disability, mental or physical, of either person; (

b) temporary or permanent loss of employment of either person; (

c) increase or decrease in financial obligations of any nature or kind; (

d) Inflation; (

e) economic depression; (

f) increase or decrease in income of either person; (

g) assignment, bankruptcy or insolvency of either person; and (

h) windfall or inheritance of either person. 3.5 In reaching a final resolution with respect to spousal support as set out above, the following objectives are met (

a) there has been a recognition of the economic advantages and disadvantages to Laura and Steve arising out of the marriage or its breakdown; (

b) there has been an apportionment between the spouses of the financial consequences arising from the care of the children of the marriage; and (

c) the spousal support as agreed fully relieves any economic hardship of the Wife arising from the breakdown of the marriage. 3.6. For the purpose of the Income Tax Act , Steve agrees that he will not claim any deduction for support paid to the Wife in accord with this Agreement, and The Wife will not be required to report such support payments as income. Cost of Living 4.1. The spousal support payments are based on the present cost of living in Edmonton, Alberta. The spousal support payments provided for in this Agreement:

(

a) shall be increased on the 1st day of January in each year; (

b) by a percentage equal to the percentage increase in the annual Cost of Living for the immediate previous year, calculated for theProvince of Alberta as determined by the Consumer Price Index: as published by Statistics Canada; and (

c) Such increase shall be cumulative from year to year, with the first adjustment to take place on January 1 of the year following theyear in which Steve’s Canadian Forces Superannuation Act (CFSA) pension becomes indexed. Notwithstanding sub-paragraph (b),above, the first adjustment will be equal to the percentage increase in the Husband's CFSA pension when it is first indexed plus theamount set out in sub-paragraph (b). Division of Employment Pensions 11.1. Steve gives up any interest he has in the Wife's employment pension plan or any benefit from her employment pension plan, nowand in the future. 11.2.

Steve and Laura intend that Laura should be entitled to the full survivor's allowance under the Canadian Forces SuperannuationAct (CFSA) in the event that Steve dies before Laura. Therefore, Laura is entitled to apply, through the Pension Benefits Division Act,for a division of Steve’s pension benefits under the CFSA in the event that Steve seeks a divorce, enters into a common-law relationshipwith a new partner, or does anything else that may have the effect of reducing Laura's survivor's allowance under the CFSA. Steve mustdisclose to Laura if he enters into a common-law relationship of this type.

During Steve’s lifetime, any amount received by Laura as aresult of a pension division under this sub-paragraph will be deducted from the amount payable by Steve to Laura under paragraphs 3and 4 of this Agreement, after adjusting for taxes. History of the Proceedings [3] On November 19, 2010, the Wife made a court application to confirm the validity and enforceability of the Minutes. Thematter was heard before Justice Marshall, who confirmed the Minutes validity.

The Husband was ordered to reinstate making monthlyspousal support payments of $800.00, and make a retroactive payment to the Wife of $16,800.00 up to and including December 2010. [4] The matter again came before this Court on October 19, 2011, when it was adjourned sine die by Justice Binder as furtherinformation from the Husband’s Pension Administrator was required. No substantive Order was granted, and Justice Bindersubsequently retired before the matter could be returned to him. [5] On October 17, 2012, Justice Manderscheid granted an Order which divided the Husband’s pension with the CanadianArmed Forces.

This was based on the provisions of paragraph 11.2 of the Minutes that the Wife is entitled to apply for a division of theHusband’s pension benefits under the CFSA in the event that the Husband sought a divorce, entered into a common law relationship, ordid anything else that affected her survivor’s allowance. [6] The matter returned to this Court before me on February 8, 2013. The parties had agreed that viva voce evidence would becalled and certain timelines would be adhered to relative to examination in chief and cross examination.

Unfortunately the matter tooklonger than originally anticipated necessitating the Trial before me to continue on April 19, 2013 so as to hear from the lawyer whodrafted the Minutes. On August 8, 2013, we finished with the Husband’s evidence. Written submissions were agreed to as betweencounsel before the final hearing date, and the last of those written submissions was provided in mid-September 2013. Issues [7] The main issue in this matter deals with the contractual

interpretation of the Minutes entered into by the parties. It raises thefollowing sub-issues which form the basis for the viva voce hearing/trial: (

a) Following the pension division, when is the Wife required to draw down on her share of the Husband’s pension? (

b) Subsequent to the pension division, should the Husband be required to continue to make the net payment of spousal support $800.00 per month, adjusted upwards for the cost of living, until the Wife’s 60th birthday? Law [8] Perras J in Laverdiere v Laverdiere 2000 ABQB 435 at para 20, 267 AR 148 noted that: The aim of construing a contract is to determine the parties’ intentions by first determining the plain and ordinary meaning of thelanguage used in the document, within the context of the sentence, paragraph, and contract as a whole.

The Court may also examine thecircumstances in which the language was used, but will not rely on evidence to add, subtract from, vary, or qualify the written contract. The Court may also consider extrinsic evidence to discover the parties’ real intentions from the language of the contract in light of thehistory of the transaction and the setting in which the contract originated. The court, moreover, cannot change the language, but it maygive the words a broad

interpretation to achieve the aim and purpose of the parties. [9] In Anderson v Chaba, 1977 ALTASCAD 294 , [1978] 1 WWR 631 (Alta CA) at 637, McGillvray CJA reiteratedthat what the parties to a contract understood is irrelevant, it is what they said that binds them. [10] Recently in Benfield Corporate Risk Canada Limited v Beaufort International Insurance Inc, 2013 ABCA 200 at paras110-119, the Court of Appeal discussed contractual

interpretation and the danger of implying terms with respect to future events to makethem more just years later:

110. Nothing is more dangerous than courts constructing contracts which the parties did not make, to make the contracts morebusinesslike or more just: Lord Atkin in Bell v. Lever Brothers [1932] AC 161, 226, [1931] All ER Rep 1, 32A, 101 LJKB 129 (HL(E));... Or to make them into what the court supposes would be more businesslike or more just ... 111. Nor can the court imply a term simply because the parties could foresee a certain possible happening; it must be clear that bothintended the actual term in question, such as one party ending the contract: Grover v.

Stirling Bonding Co (SCC),[1935] 3 DLR 481, 493 (SCC). 112. The presumption of the law is against implying terms in a contract ... 113. The courts are particularly loath to imply a term where the parties negotiated and signed a carefully-drafted formal written contractwhich deals expressly with the general topic in question ... 115. Of course the court cannot imply a term contrary to an express provision in the written contract. So long as the written signedcontract has any legal effect, that proposition is logically unanswerable [citations omitted] ... ... 119.

Counsel and writers sometimes beguilingly suggest that the court's duty is in essence to discover the intent of the parties. Does thatmean bypassing the words of a formal signed contract in favor of the parties' competing assertions years later, all encased and cooked ina pastry shell of the trial judge's inferences and deductions? If so, it is wrong.

The court is to interpret the words of the signed contract.Subjective intent is especially irrelevant, and doubly so if the written words are clear ... [underlining added] [11] Again recently, our Court of Appeal emphasized the need for contractual certainty in Ko v Hillview Homes, 2012 ABCA 245at paras 6-8, where it said: 6. Canadian courts sometimes give the public and businesses certainty in contractual disputes. But too often they do not. Even a clearly-written signed formal contract leads often to years of discoveries, and days or weeks of trial.

Each step explores the entire history of thecontract's negotiation, the subjective musings of each party, and every possible after-the-fact disappointment or windfall. Sometimes oneparty pursues at great length and expense an alleged oral deal inconsistent with the written signed contract ... ... 8. Some courts go thus astray by encouraging parol evidence, ignoring whole-contract clauses, inventing collateral unwritten obligations,and implying far-reaching terms ... Courts also err by reluctance to hold any agreement too uncertain to enforce. Often they do so byinventing terms which the parties never imagined.

Or worse, courts leave the parties with a binding contract of unknown and unstatedcontent. The Wife’s Evidence [12] The Wife filed four Affidavits in this matter. The first Affidavit is dated September 30, 2011; the second Affidavit was filedOctober 13, 2011; the third Affidavit was filed September 21, 2012 and the final Affidavit was filed January 31, 2013. [13] She gave evidence under oath that at the date the Minutes were signed, she was 46 years of age.

Under the spousal supportprovisions of the Minutes, the Husband is required to pay her $800.00 per month until he or she died; there was no tax payable on thisamount; and the Husband was required to advise her when his pension was indexed, as it would substantially increase the monthlyamount he received and correspondingly increase the amount he needed to pay her. She testified that the Husband never did so. [14] With respect to the survivor benefits to the Husband’s pension, the Wife understood that they would be payable to her for thebalance of her life (if the Husband should predecease her).

She anticipated receiving 60 % to 70% of the net monthly amount he had beenreceiving. The Wife confirmed that the Husband is older than she was and at the time the Minutes were signed, he had worked longerthan she did. Her share of the Husband’s pension was to be used in her retirement and would form part of her retirement income. Sheindicated that she has no actual retirement plans and was advised by her financial planner that she would not have enough income toretire at age 60.

However for the purpose of this litigation, she was prepared to concede notionally that she would retire at age 60. [15] If she were to draw down on her share of the Husband’s pension at her earliest opportunity, being age 55, the income from hershare of the Husband’s pension plus her employment income would put her into a higher tax bracket. It does not make financial sense todo this.

The Wife sought the advice of her financial advisor who indicated that if the Wife’s share of the Husband’s pension wastransferred to a life income fund at age 55, and she were to draw down on that amount, the minimum amount she would net is between$312.00 and $375.00 per month. There would still be a shortfall that the Husband was required to make up. [16] The Wife gave evidence that she was aware at the time the Minutes were executed, her share of the Husband’s pension wouldbe placed into a locked in vehicle and she would not receive a monthly amount from the Pension Administrator.

There was norequirement on her to take the money out at age 55. She would be able to draw down on her share of the Husband’s pension when shewas “actually physically retired”. It was her choice as to when she retired, and when she drew down on this money. She confirmed thatthe lump sum that has been paid to her was approximately $235,000.00. [17] She testified that the Husband retired from the Military when he was 47 years of age. And that her access to the survivor’sbenefits under the Husband’s CFSA pension, was negatively affected by the Husband’s actions, namely his present common lawrelationship.

The Wife confirmed in her evidence that if her survivor benefits had not been affected by the Husband, she was prepared toleave things as they were. In fact, if the Wife did receive the survivor pension, she would have netted more than $800.00 per month. Shewould then receive 60% to 70% of the pension benefit which had been paid to the Husband during his life.

[ 18 ] Further the Husband retained legal counsel who forwarded a “without prejudice” letter dated May 14, 1999 which stated: Ms. Olson was retained to represent the Husband in the impending divorce. Divorce is imminent. The Husband was prepared to start proceedings and file for divorce. The Husband wanted significant changes to the Minutes of Settlement. [ 19 ] The Wife submits that entitlement to spousal support was conceded in the Agreement.

During the course of the Husband employment with the Canadian Armed Forces, she and their children were required to move at least five times as a result of his employment with the Military. She contends that she should continue to receive the $800.00 net per month spousal support, increased for cost of living, without any set off until the age of 60.

The Husband’s Evidence [ 20 ] The Husband filed four Affidavits in this matter – October 7, 2011; October 4, 2012; January 25, 2013; and April 5, 2013. [ 21 ] On August 8, 2013, the Husband testified that when he signed the Minutes in 2004, he believed that the spousal support set off or deduction would “kick in” or have an immediate impact once the pension was divided such that the spousal support set off and the pension division would happen simultaneously.

The Husband testified that he believed that the pension division would negate him having to pay the Wife the $800 each month. [ 22 ] He testified that his understanding was that the pension would be divided at source as he was already receiving his pension and that once the pension was divided, the Wife would receive a cheque directly from the pension administrator that would offset his spousal support obligations under paragraphs 3 and 4 of the Minutes.

He stated that at the time he was signing the Minutes, no one had discussed with him the requirement that the pension funds would be paid out in a lump sum once divided. [ 23 ] When cross-examined by the Wife’s legal counsel regarding the Husband’s belief that the pension division would be effected at source, he responded that “the lump sum payment of a pension wasn’t –wasn’t brought up.” The lawyer says in his notes there that he doesn’t recollect whether it was brought up or not, and we didn’t talk about it “mainly because there was – there was no contemplation of a divorce at the time.” He confirmed this under re-direct examination. [ 24 ] The Husband testified that he believed that the pension division and the spousal set-off would be at the same time and work together simultaneously so that once the pension kicked in there was no more spousal support – that spousal support was done and terminated. [ 25 ] He gave evidence that he cannot say whether he saw the first two drafts of the Minutes wherein each party kept their own pensions without any claim by the other.

The Husband only recalls the lawyer attending at the matrimonial home once. Notwithstanding the two original drafts, the Husband acknowledges that he did agree to give the Wife the survivorship benefits to the Wife in the event of his death with the proviso that if the Wife pre-deceased him that he would then keep his entire pension.

If both parties continued to live on then he would give the Wife the $800/month OR the pension would be divided and offset by whatever the Wife received against the Husband had been paying her in monthly in the past. [ 26 ] The Husband’s testimony was that in December of 2008, six months before he began to reside with Donna Zeisman in May 2009, he approached the Wife and suggested they divide the pension so they could make a clean break. The Wife would receive her half and he would no longer be tied to her with the monthly payment of spousal support. The Husband wanted both of them to go their separate ways.

The Wife refused to divide the pension and the status quo continued whereby the Husband continued to receive his entire monthly pension from the Pension Administrator and he continued to pay the Wife $800/month, which is roughly half his pension. [ 27 ] He stated that he did not contemplate a scenario whereby the Wife would be able to divide his pension, take half, and then still force him to pay $800/month. The Husband understood that the Wife could have it one way or another.

The Husband understood that the Wife would either continue to receive the $800/month from him, and she would receive survivorship benefits upon his death; or the $800/month came from the Pension Board and continued regardless of his death. [ 28 ] The Husband compared the Wife’s financial position against his own and testified that in addition to everything that the Wife kept for herself, (including 100% of her own pension that the Husband had an entitlement to) she also received one-half of his own pension amounting to a $235,000.00 lump sum payment such that her retirement increased by $235,000.00 and the Husband’s decreased accordingly. [ 29 ] The Husband’s evidence was that the drafting lawyer did not take the time to personally discuss matters with him.

While the lawyer did not have private communications with the Husband because he did not initiate contact with him, the Husband did not feel he received the same level of legal advice from the lawyer as the Wife. Rather the Wife would receive the legal advice from the lawyer, and it is not clear what was conveyed to the Husband in turn. The Husband testified that he did not have discussions with the lawyer “one on one” about terms of the contract whereas the Wife was exchanging emails with the lawyer that he was not privy to.

He was not aware of the emails between the Wife and the lawyer until litigation commenced regarding these Minutes. [ 30 ] In his evidence, he stated that the lawyer that signed the Minutes with him, Ms. Renwick, was selected by the Wife’s lawyer. The Husband met with Ms. Renwick for no longer than 15 minutes and signed the Minutes without receiving legal advice regarding each individual clause. He noted that Ms. Renwick did not raise any potential red flags or draw attention to any particular clause to discuss with him nor make any inquiries as to whether he wished to reconsider or think about certain clauses.

In particular, she did not explain or discuss the interplay between the pension division and the spousal support set off.

The Drafting Lawyer’s Evidence [ 31 ] The lawyer who drafted the Minutes was called as a witness in these proceedings. The drafting lawyer was retained by both parties in 2004 initially as part of a joint retainer to prepare Minutes of Settlement. He was to provide independent legal advice for one of the parties prior to signing the agreement. [ 32 ] The lawyer typically received inquiries on behalf of the two parties from the Wife, and then responded to those inquires. The Husband asked the lawyer to communicate through the Wife as he was uncomfortable with technology.

Meetings were also held from time to time at the parties’ home. Updated versions of the Minutes of Settlement would be reviewed, and any changes specifically drawn to the parties’ attention. With respect to the division of the Husband’s pension, the lawyer testified that the pension division would be by way of a lump sum payment as that is how it works under the Pension Benefits Division Act.

It was impossible to divide the monthly amount received by the Husband at source which had been the case for so long as he had been practising. [ 33 ] The lawyer confirmed that he was to deal with the “income stream” as opposed to the actual division of the pension itself. Once the Wife began to draw down on the pension as an income source, there would be a set off of the monthly amount she received as against the spousal support.

In that context, the pension was dealt with as property; and the fact that the Wife started to get an income from her share of that property should be taken into account with respect to the spousal support payments. There was no requirement on the Wife to take out an income once the pension was divided. It was reasonable to draw down on the pension late, because if done so when she is working full time, the Wife is put into a higher tax bracket.

The lawyer confirmed that the reference to the word “received” in paragraph 3.2 related to income from the pension. [ 34 ] With respect to the percentage amount that the Wife should have received from the Husband’s pension, the lawyer confirmed that it was intended to be 50%. If it was less than that, that would have been specifically addressed in the Minutes as that is not the norm. [ 35 ] The lawyer was specifically asked by Ms.

Olson under Cross-Examination if it was his understanding as the author of the Minutes that the Wife could receive $235,000.00 from the pension division, sit on that amount and not draw down on that amount while forcing the Husband to continue to pay $800/month. To this question the lawyer testified “That’s not the way that – that my thinking was – was orientated. The – the focus of this is to deal with when amounts are received as –income; I think that’s the—reasonable construction of that paragraph, that portion of the paragraph.

Parties’ positions The Wife’s Arguments Pension Division [ 36 ] The Wife argues that the parties contracted to establish a mechanism to divide the Husband’s pension and under that arrangement the Wife was entitled to ½ of the pension. She acknowledges that once the pension is divided, the property issue disappears, and the Husband receives his share and the Wife gets her share.

However the Husband’s position that the Wife must take out income from her share of the Husband’s pension now in order to “alleviate” the Husband’s obligation for spousal support is without merit. [ 37 ] The Wife submits that paragraph 11.2 of the Minutes is essentially the subject matter of this litigation; and that one cannot “add” to or “vary” the Minutes by stating that she must draw down on her share of the Husband’s pension once it was divided as that was not the intent as borne out by the Minutes nor the evidence of the drafting lawyer.

The agreement is silent as to when the Wife is required to draw down on this pension, so, it is reasonable for her to draw down on her pension when she retires. [ 38 ] She indicates that since the division of the Husband’s pension is a property matter, the presumption is one of equal division, particularly when the parties are involved in a long term relationship. She contends that the Husband acknowledged that she could apply to divide his pension if her survivor benefits were adversely affected.

The Wife argues that it was a concession she made by allowing the Husband to retain the full monthly amount of his pension, provided he did not jeopardize her survivor’s allowance. She only took steps to protect her half interest in the Husband’s pension, once that interest was threatened.

Spousal support [ 39 ] On spousal support, the Wife summarized the key rights and obligations in the Minutes to be: the Husband waived any payment of spousal support from the Wife; the Husband contracted to pay the Wife $800.00 net per month until her death or his death, whichever was earlier; the parties agreed that no change in their respective financial circumstances would give rise to an application to change the spousal support provisions; the spousal support payment from the Husband to the Wife was to be net of any tax; the spousal support payments were to be increased by the cost of living; the first adjustment was to take place on January 1 st of the year following the Husband’s Canadian Forces Superannuation Act (“CFSA”) pension being indexed; and each party was to maintain the other on their existing medical, dental, and hospital insurance benefits available through his or her employment.

She also noted that the Husband waived any interest he had in the Wife’s pension, pursuant to paragraph 11.1 of the Minutes. [ 40 ] She contends that the objectives of spousal support are compensation, economic hardship and self-sufficiency.

Given the role adopted by the Wife over the course of this 30 year relationship, the Husband acknowledged that her future earnings would be adversely affected and she should be compensated for the sacrifices she made for the family, and in particular during his military career. [ 41 ] The Wife maintains that the intent of the parties was to ensure that the Wife received $800.00 net per month for life.

She notes that at the time of the agreement, she was 47 years and the parties’ ultimate goal was to ensure/maintain her cash flow of $800 per month until her retirement so the question is whether or not she can be reasonably expected to retire at age 55. She contends that she could not afford to do so. However, she suggests that while she can also not afford to retire at age 60 either, she is prepared to be

reasonable in the circumstances of this case and notionally concede that she would draw down on her share of the Husband’s pension at that time. [ 42 ] She also argues that although the Husband complains about the quality of the independent legal advice that he had, it is established law that a party cannot escape their contractual obligations based on the perceived quality, or lack thereof, of the independent legal advice he or she received.

Further, pursuant to the Matrimonial Property Act , it is the lawyer’s duty to ensure that the statutory formalities are met with respect to independent legal advice, but a lawyer is not required to give advice with respect to the wisdom of entering into an agreement.

The Husband’s Arguments Pension Division [ 43 ] The Husband submits that it is an established legal principle that when determining whether contract language is clear and definite, the court gives the words their ordinary and common meaning unless it is apparent that the parties used the words in a special or technical sense, which is not the case here.

In regard to the case at bar, the clear wording of the Minutes was that once the pension was divided, spousal support payments would cease. [ 44 ] He maintains that the word “received” in its clear, ordinary (and even dictionary) sense means the following: meaning is as follows: “be given, presented with, or paid (something)”; “take delivery of (something sent or communicated)”; “consent to hear (an oath or confession)”; or “buy or accept goods known to be stolen”: Oxford Dictionaries. Oxford University Press (6 September 2013), online: nd Web < http://oxforddictionaries.com/definition/english/receive > .

Given that definition, the word “received” in this situation refers to when the government paid the pension funds to the Wife. Thus, once the funds were provided by cheque or transfer to the Wife and the funds were in her name, she would have received those funds. [ 45 ] These funds are now in the Wife’s name alone, she has the power and ability to access the funds in a number of ways, therefore she has “received” $235,000.00 as a result of the pension division.

Upon the Wife receiving the pension funds the Minutes require that this amount be “deducted” from the amount payable by the Husband to the Wife under the spousal support provisions. [ 46 ] The Husband submits that Justice Binder’s consideration of the question of the definition of “received” in this matter is relevant.

He states that , on October 19, 2011, Binder J observed, inter alia , that: (i) “Well, once [the Pension] is divided ... she is entitled to receive it. [And if] she was entitled to receive it tomorrow, it seems to me under this agreement on the face of it, whatever the amount would then reduce the $800 until it was exhausted ...” (Transcript: Page 3). (ii) “[A]s I read this contract, minutes of settlement, it certainly does not give the wife, your client, the option to decide when she receives it. When she is entitled to receive it—that is when the government will pay it. That’s when she receives it.

And so at that point the $800 is not payable until the money runs out” (Transcript: Page 5). (iii) “I would say that the $800—until one –half of the pension is exhausted, the $800 is not payable. So once –once the half of the pension is exhausted ... Based on the $800, because it is really a set-off under this agreement.

So if that happens in ten years – then the $800 would survive at that time” (Transcript: Page 6). [ 47 ] In terms of the implication of the word “deduct” in the Minutes, the Husband submits that its clear and ordinary dictionary meaning is “subtract or take away (an amount or part) from a total: tax has been deducted from the payments” (emphasis added). [ 48 ] He notes that paragraph 3.2 of the Minutes states that “Steve shall pay to Laura for her support, the sum of $800.00 per month” until the Wife or Husband die.

However, he argues, there is a clear set off provision contained in paragraph 11.2 which provides that “During Steve’s lifetime, any amount received by Laura as a result of a pension division under this sub-paragraph will be deducted from the amount payable by Steve to Laura under paragraphs 3 and 4 of this Agreement, after adjusting for taxes” (emphasis added).

The Husband contends that since paragraph 11.2 came later in the contract and specifically modified paragraphs 3 and 4 (given the specific reference contained therein to paragraphs 3 and 4), it operates to reduce and delineate the Husband’s obligation under paragraphs 3 and 4, and modify it in terms provided for in paragraph 11. [ 49 ] The Husband maintains that in this case, the Wife has now “received” $235,000.00 in a lump sum, therefore the set-off wording of the Minutes applies whereby any amount “received” by the Wife will be “deducted” from the amount payable by the Husband to the Wife.

He says it was intended that a set off of pension funds against the $800/month spousal support would reduce/eliminate the monthly payments of $800/month by him to the Wife. [ 50 ] The Husband argues that the Minutes do not state that the Wife shall receive one-half of the pension or direct that to happen but rather merely reinforce her right to apply for division under the very Act that grants her the right to apply.

In fact, the pension administrator’s letter September 6, 2012 states “Unfortunately the documentation that you submitted does not stipulate that the Husband’s CFSA annuity is to be divided or that you are entitled to any percentage of it.” The exact missing criteria according to this letter, is that the settlement agreement would need to state that the member’s pension benefits under the CFSA are to be divided between the member and the spouse or former spouse. The Minutes use the word “apply” in that the Wife can apply for a division.

This clause effectively amounted to no more than a reservation of her existing right to apply under the governing legislation and confirmed that she had not waived any entitlement she had to any portion of his pension. [ 51 ] The Husband submits that all revisions to the various drafts of the Minutes drafted by the lawyer benefitted the Wife only. It is also worthy of note that the Wife specifically refers to the drafting lawyer as “her lawyer” in two emails. The Husband was not included in, nor copied on these emails.

The Wife was the party communicating directly with the lawyer, neither of which communications included the Husband. The lawyer communicated with the Wife alone by email and the lawyer expected that the Wife would convey his discussions with her to the Husband. Following which the Wife would supposedly discuss these matters with the Husband and relay the “parties” wishes to the lawyer. In support of his argument, the Husband refers to excerpts from the emails

between the Wife and the lawyer which suggest that the Wife was clearly looking to advance her own best interest and that she considered the drafting lawyer was her lawyer. For example, the Wife wrote: (a) “One other question as my lawyer, am I entitled to a spousal allowance based on Steve’s income?”; and (b) “As my lawyer, to see that I am protected and based on the rest of the agreement, what are your thoughts to this?

Your opinion would be most appreciated.” [ 52 ] Further, the Husband notes that the drafting lawyer confirmed that he has no knowledge of what the Husband understands was regarding the pension division and spousal set off clauses indicating that he “can’t speak to what was in [his] mind.” Spousal support [ 53 ] The Husband maintains that the overall intention of the parties on the face of the documents was that: (

a) the Wife continued to receive $800/month (subject to Cost of Living Clause) from the Husband while he continued to receive 100% of his pension and she remained entitled to receive the survivorship allowance if he pre-deceased her; or (

b) if she was not going to be eligible to receive the survivorship allowance in the event she outlived the Husband or because something the Husband did jeopardized her entitlement, then she would be able to apply to divide the pension and then she would have half the pension but no longer have the survivorship allowance. [ 54 ] The Husband contends that if he had not asked Donna Ziesman to reside with him in May of 2009, leading to concern about the Wife’s survivorship allowance entitlement, the Wife would have continued to receive only the $800/month from the Husband directly, subject to increase under the Cost of Living

section of Minutes. Had the Wife predeceased the Husband, without pension division occurring, his spousal support obligation would cease and he would then have the benefit of 100% of his pension. [ 55 ] He submits that it was not his intention to provide the Wife with half his pension in a lump sum, allowing her to keep the funds in investments and not touch it, while continuing to cost him financially in $800/month increments. He reiterates that he was using his net pension of $1,600 to pay the $800/month to the Wife. [ 56 ] The Wife presently has half the Husband’s pension and received $235,000.00.

The $800/month payment to her came from half of the Husband’s pension, being one-half of the Husband’s net pension income he received each month. Therefore once the pension was divided and the Wife received her one-half of the pension in lump sum, this concluded the Husband’s spousal support obligation to the Wife. The Cost of Living Increase provided for in s. 4 of the Minutes was tied directly to the Husband’s pension being indexed, such that when the amount of the pension paid to him increased, he in turn increased the $800/month payment according to the formula provided in paragraph 4 of the Minutes.

It was intended that the spousal support would increase when the amount the Husband was paid by the pension administrator increased. This further supports the position that the $800/month in spousal support was being paid from the Husband’s pension. Discussion/Analysis Pension Division and the Triggering Event [ 57 ] My reading and

interpretation of the Minutes is that the Wife is not entitled to unilaterally divide the subject pension, unless the Husband did something that would jeopardize the Wife’s entitlement to the survivorship allowance under the CFSA; sought a divorce; or entered into a common law relationship with a new partner that his pension could be divided.

For its purpose, the CFSA, which is the governing legislation for the Husband’s pension, defines common law spouse as “the person to whom a contributor is married or with whom the contributor is cohabitating in a relationship of a conjugal nature, having so cohabitated for a period of at least one year.” [ 58 ] On the basis of the evidence before me, Donna Ziesman moved in late May 2009 into the Husband’s residence after he had been dating her for about 6 months. The Husband indicates that the children advised the Wife about Donna moving in with him so she was aware of this event.

And that at that time, although Ms. Ziesman and her daughter were residing with the Husband, there was no intention to necessarily enter into a common-law relationship with Donna Ziesman. [ 59 ] Also of significance is the Husband’s testimony that it was an e-mail from the Wife in January 2009 that caused him to begin contemplating divorce, but that he neither initiated a divorce nor did anything to advance the divorce.

That said, he confirmed that his legal counsel provided the Wife with a letter dated May 14, 2009 advising that she had been retained to represent him in the impending divorce, and the Wife subsequently initiated the divorce proceedings by filing a Statement of Claim for Divorce on June 12, 2009.

In this context, I note that the Wife’s action in seeking divorce would not unilaterally entitle her to a division of the pension under the Minutes [ 60 ] I am satisfied that at the time the Wife filed for divorce in June 2009, the Husband and Donna Zeisman had only been residing together for about two months and they would not be considered to be in a common law relationship until May 2010.

In other words, at the time the Wife commenced the divorce proceedings, the Husband had not triggered the need for a pension division because under the CFSA, a common law relationship status can only be established after a contributor has cohabited with “the person” in a relationship of a conjugal nature, for a period of at least one year. [ 61 ] Thus, I find that it was the Wife’s action, when she filed her Statement of Claim in June 2009, that advanced the divorce, rather than the Husband’s actions.

As such, it was the Wife’s action that jeopardized her survivorship rights under paragraph 11.2 of the Minutes. [ 62 ] I conclude that in June 2009 when the Wife filed for divorce, her survivorship benefits were not in jeopardy, and would not have been at risk until May 2010 when Donna Zeisman would be considered “common law” with the Husband under the relevant statute. [ 63 ] Further, I am persuaded that based on the evidence before me and considering the wording of the set off provision in the Minutes, the Husband’s expectation that the pension would be divided at source and paid out monthly to the Wife is reasonable.

The set off provision in the Minutes provides that “During The Husband’s lifetime, any amount received by the Wife as a result of a pension division under this sub-paragraph will be deducted from the amount payable by the Husband to the Wife under paragraphs 3 and 4 of this

Agreement, after adjusting for taxes. This, in my view, means that any amount received by the Wife will be correspondingly deducted from the amount the Husband would pay. There was no wording to suggest that it wouldn’t be a simple set off wherein the amount received by the Wife would be set off against the Husband’s obligation so that his obligation would be reduced accordingly. The two concepts of the Wife’s “receiving” and the Husband’s “deduction” are contained within the same clause and were intended to coincide one with the other. Spousal Support - Contractual

Interpretation of the Minutes [ 64 ] Regarding the contractual

interpretation of the spousal support provisions of the Minutes, the parties have two very different

interpretations of the Minutes and also different views of the intention of the clauses within the Minutes. In essence, the root of this matter is contract

interpretation, and how the spousal support provisions of the Minutes and the provision with respect to the division of the Husband’s pension interrelate. [ 65 ] The basic principle of law applicable in this situation is that in the event of ambiguity or two competing constructions of a contract, more intricate rules of contract

interpretation, such as the contra proferentem rule and admission of extrinsic evidence, may become relevant and necessary. It was on this basis that the Court permitted the extrinsic evidence of the drafting lawyer. [ 66 ] In this context, I deem it appropriate to comment that it appears to me that the drafting lawyer provided independent legal advice to the Wife, and not to the Husband.

For instance, if the drafting lawyer was actually accountable to the Husband, one would have thought that the Husband would be privy to all of the contents of the emails between the Wife and the lawyer; and that the Husband would be included on the emails, for information and records purposes, unmindful of the fact that he “wasn’t regularly using email at that point in time.” [ 67 ] In my view, the drafting Lawyer’s evidence in this matter is likely compromised as it is practically difficult to provide and interpret objectively something that one has drafted.

His evidence, in my opinion, is also quite limited by the factor that it was given more than nine years after the July 10, 2004 Minutes were negotiated and concluded. The subjective intent the lawyer believes he remembers is often really recalled only in the context of what is or was his standard practice, since the drafting lawyer, does not understandably remember a number of matters that occurred herein through his independent recollection.

Unfortunately for him and for the Wife, some of the key points he remembers or concludes about the parties’ intentions at the time are not objectively apparent to me based on the plain meaning of the Minutes. Perhaps now in hindsight, the lawyer wanted to or wished he had drafted the agreement the way he now remembers it, but simply fell short in his execution when finalizing the agreement.

In fairness to the drafting lawyer, I acknowledge that this was not an acrimonious situation between the parties where he had the benefit of another lawyer on the other side of the issues submitting alternate drafts of the Minutes.

The Wife was seeking an amicable separation, and the parties were not actively pursuing a Divorce. [ 68 ] Similarly, I am not persuaded by the Husband’s argument that he received inadequate independent legal advice from the lawyer recommended for him by the drafting lawyer is untenable, in that he did not raise his concerns at the material point in time directly to either the drafting lawyer or the lawyer providing the independent legal advice. [ 69 ] I agree with Justice Binder, who on October 19, 2011, considered this question of the definition of “received” in this matter, when he opined that once the Husband’s pension is divided and the Wife is entitled to receive it, the amount would reduce the $800 until it was exhausted.

Further, in my opinion, the use of the word “deducted” is clearly intended to mean a “set off” or reduction or deduction such that the Husband’s spousal support obligation would be reduced by whatever amount the Wife received. [ 70 ] Given that

interpretation, I conclude that paragraph 11.2 modifies paragraphs 3 and 4 such that once the pension is divided and the Wife has received these pension funds, the Husband’s spousal support obligation would be reduced by the amount of the pension that the Wife received. Based on the Minutes as I read them, it was never intended that the Wife would be entitled to divide the Husband’s pension, take half from the pension administer directly in a lump sum, and then still require the Husband to pay $800/month.

Conclusion [ 71 ] Notwithstanding the financial reasonableness of the Wife’s offer to only require full spousal support payments to continue to age 60, I direct that, given the fact that the Wife has received the pension funds, the deduction under paragraph 11.2 of the Minutes shall be implemented, such that the amount received by the Wife as a result of the pension division be set off against the amount payable by the Husband. [ 72 ] The Wife can purchase an annuity that will provide her with $800/month, which option was clearly contemplated by both the Wife and the drafting lawyer as it was specifically addressed in one of their email exchanges prior to the signing of the Minutes.

In this context, I observe that the Wife’s own Affidavit of January 31, 2013 projected annuities for years 5, 10, 15 and 20 ranging between $922.52 and $960.69 per month. Based on the 20 year annuity she would receive $922.52 monthly until the age of 75.

The Affidavit also sets out the maximum RIF withdrawals which would allow her to withdraw between $873.41 and $958.58 every month until the age of 89. [ 73 ] Alternatively, the Wife can use the “un-locking” mechanism that allows her immediate access to one-half of the $235,000.00 which gives her immediate access to $117,500.00, and draw out amounts that will net exactly $800/month.

Once she has depleted this amount she will be eligible to access the other half. [ 74 ] In the further alternative, the Wife can use any of the various methods proposed by the Husband’s RBC expert as set out in the Husband’s October 4, 2012 Affidavit wherein various options of LIFS, RIFS, and Un-locking Mechanisms are provided; or she can simply keep the $235,000.00 pension funds invested and do whatever she wishes with the funds, provided spousal support ceases entirely and each party goes their separate ways.

Spousal RRSP Payment [ 75 ] The Wife is also seeking an Order to enforce the terms of the Minutes dealing with the $1,000.00 per annum payment into a spousal RRSP and the increase in the spousal support payment for cost of living. The Husband agreed to make an annual payment to the Wife of $1,000.00 to assist her in maximizing her RRSP contribution. He was required to do so for so long as he was employed and earning at least $64,000.00 gross per year.

The Wife is seeking an Order compelling the Husband to provide his Notices of Assessment for the years 2004 to 2012; and that the Husband should make up the $1,000.00 per annum payments he contracted to pay. [ 76 ] With regard to the spousal RRSP payments, it is apparent to me that paragraph 10.8 of the Minutes is severable from and independent of the terms of the Minutes dealing with pension division and spousal support. Paragraph 10.8 reads: Steve agrees to make an annual payment to Laura of $1000.00 to assist her in maximizing her RRSP contribution, beginning in the 2004 tax year.

This obligation will apply to Steve only as long as he is employed and earning at least $64,000.00 in gross employment income annually. So long as Laura and Steve are married, Steve may choose to make this donation by way of contribution to a spousal RRSP in Laura’s name. Steve agrees not to claim any payment made to Laura under this paragraph as a deduction on his income taxes, except where he makes a contribution to a spousal RRSP in Laura’s name. [ 77 ] The wordings of that paragraph in my view are clear.

Significantly, the Husband did not contend differently in both sets of written submissions; indeed, in his rebuttal (Rebuttal/Reply Brief, at para 4(

d) of September 13, 2013) he acknowledged the clarity of that portion of the Minutes. Neither did the Husband challenge the validity of that portion of the Minutes. Consequently, I direct that, in accordance with the terms of paragraph 10.8 of the Minutes which was agreed to by the Husband, an Order will issue compelling the Husband to provide his Notices of Assessment for the years 2004 to 2012; and that the Husband should make up the $1,000.00 per annum payments he contracted to pay. Costs [ 78 ] The Parties may speak to costs within 60 days of these Reasons.

Heard on the 8 th day of February, the 19 th day of April and the 8 th day of August, 2013. Final Written Submissions filed on the 13 th day of September, 2013. Dated at the City of Edmonton, Alberta this 7 th day of November, 2013 Donald Lee J.C.Q.B.A. Appearances: Laura Bruyer Gordon Zwaenepoel for the Plaintiff Tammy L. Olson Hajduk Gibbs LLP for the Defendant