JLC v RGC, 2013 ABQB 701

Court of Queen ’ s Bench of Alberta Citation: JLC v RGC, 2013 ABQB 701 Date: 20131129 Docket: 4803 152066 Registry: Edmonton Between: JLC Plaintiff - and - RGC Defendant Editorial Notice: On behalf of the Government of Alberta identifying information and personal data identifiers have been removed from this unofficial electronic version of the judgment. _ ________________________________________ ______________ Reasons for Judgment of the Honourable Mr. Justice Eric F. Macklin _________________________________________ ______________ I.

Introduction [ 1 ] The parties were married for about five years before separating. While they do not agree on the date they began cohabiting or the date of their separation the real issues in this trial are parenting arrangements for their two children, parenting arrangements for the Plaintiff wife’s son from a prior marriage, whether the Defendant was unjustly enriched during the period of cohabitation before marriage, and the division of matrimonial property. II. Background [ 2 ] The Plaintiff wife was born on April [...], 1979 and the Defendant husband was born on April [...], 1954.

They were married on August 20, 2005 at Sherwood Park, Alberta.

[ 3 ] The parties have two children; BPC (B), born February [...], 2007 and JLC (J), born November [...], 2008. The Plaintiff also has a son from a previous marriage, JTF, born May [...], 2002. JTF resided with the parties during the period of cohabitation preceding their marriage and during their marriage. [ 4 ] The Defendant operates a horse training and boarding facility, C[...] Farms. It is a sole proprietorship. He has been doing so since 1994. [ 5 ] The Defendant continues to reside in the matrimonial home at 2... Estates Drive, Sherwood Park.

Following their separation, the Plaintiff purchased a residence at [...] Highland Crescent, Sherwood Park. That house has recently sold and the Plaintiff now lives at a residence purchased by her current partner at [...] Ravine Point, Edmonton. [ 6 ] On August 19, 2005, the parties entered into a matrimonial property and prenuptial agreement. They were married the following day. On August 20, 2006, the first anniversary of their marriage, each party burned their respective copies of the prenuptial agreement intending that it would no longer be in force. [ 7 ] The parties separated in late 2009 or early 2010.

Child Custody and Child Support [ 8 ] Since the separation of the parties, they have had shared parenting of B and J though the specific regime has changed. Since September 1, 2013, parenting time has been shared on a week on/week off basis with the exchanges occurring on Mondays. This arrangement was later confirmed by a consent order. [ 9 ] With respect to JTF, the Defendant initially had reasonable and generous access.

He now has specified access to JTF, each Tuesday night from after school until 7:30, subject to JTF’s biological father’s presumptive access time as provided in Court orders granted on September 19, 2011 and October 7, 2011. He has not seen JTF, however, since an access time he had with JTF for 2 days in the summer of 2013. [ 10 ] Neither party has paid any child support since the separation. In 2010, the Plaintiff earned $71,349.73 and the Defendant earned $34,280.08. In 2011, the Plaintiff earned $121,442 and the Defendant earned $32,703.40. In 2012, the Plaintiff earned $108,780.00.

There was no evidence as to what the Defendant earned in 2012. The income earned during those years by the Plaintiff was earned while she was employed at a family owned business called Tiger Calcium. [ 11 ] The Plaintiff and her current partner are the parents of a 4½ month old baby, G, and the Plaintiff is no longer employed. She stopped working in January 2013. Property i. 6... Estates Drive, Sherwood Park [ 12 ] The Defendant purchased property located at 6... Estates Drive for $433,000 in July 2004. Title to 6... Estates Drive was registered solely in the Defendant’s name.

After the possession date and renovations were complete, the Defendant and Plaintiff began residing together in this house. [ 13 ] 6... Estates Drive was sold on February 23, 2006 for $499,000. [ 14 ] From the proceeds of the sale of 6... Estates Drive, the Defendant paid the Plaintiff $30,000 on March 2, 2006. ii. 2... Estates Drive, Sherwood Park [ 15 ] The Defendant purchased the matrimonial home on January 30, 2006 for $850,000.

Title to the matrimonial home was registered solely in the Defendant’s name. [ 16 ] The Defendant paid a deposit of $50,000 on the matrimonial home which was from funds provided by his father to C[...] Farms. He then took out a mortgage for $150,000 and a line of credit of $50,000 from Alberta Treasury Branches (ATB) for a total of $200,000.

The balance of the purchase price, a total of $600,000, was paid by the Defendant from monies received from his father’s estate as part of his inheritance. iii. [...] Highland Drive, Sherwood Park [ 17 ] After the parties separated, the Plaintiff purchased the Highland Drive home on October 17, 2011 for $575,000. [ 18 ] The initial deposit of $20,000 was a gift from the Plaintiff’s parents. [ 19 ] [...] Highland Drive was sold pursuant to a residential purchase contract on October 23, 2013 for the sum of $565,000. The balance owing on the mortgage as at October 23, 2013 was in the sum of $507,869.57. iv.

C[...] Farms

[ 20 ] The Defendant operates C[...] Farms as a sole proprietorship. It is made up of two parcels of land: a. Portion S.E. ¼

Section 3-52-22-W4, containing 105.7 acres, more or less (“Parcel A”); and b. Portion S.E. ¼

Section 3-52-22-W4, containing 40.1 acres, more or less (“Parcel B”). [ 21 ] Parcel A comprises land, buildings and site improvements related to a horse training facility. Parcel B is vacant country residential property. [ 22 ] The C[...] Farms lands were purchased by the Defendant in 1994, prior to the cohabitation or marriage of the parties. [ 23 ] The C[...] Farms lands were appraised by Robert Botten of RLB Property Appraisals Ltd. who provided his expert opinion to the Court as to the value of the lands at different points in time. The relevant dates to the analysis below and Mr.

Botten’s opinion as to the value on those dates were as follows: a. Beginning of Cohabitation in 2004: - Parcel A - $685,000 - Parcel B - $195,000 TOTAL - $880,000 b. Date of Marriage – August 20, 2005: - Parcel A - $875,000 - Parcel B - $245,000 TOTAL - $1,120,000 c. February 25, 2013 (closest date to trial): - Parcel A - $975,000 - Parcel B - $360,000 TOTAL - $1,335,000 v. The Grange Estates Shares [ 24 ] The Defendant agreed to participate in a joint venture agreement for the purchase of undeveloped property in Sherwood Park which was to be developed into a subdivision containing 50 lots.

He purchased two shares in the investment for $275,000. The joint venture was titled “Grange County Estates Ltd.” [ 25 ] The Defendant paid $25,000 as a deposit for the shares and the balance was paid by increasing the line of credit registered against the matrimonial home by $300,000. [ 26 ] One of the shares was sold in 2011 for $157,000.

Out of the proceeds of sale, the Defendant paid a matrimonial property advance of $112,500 on September 30, 2011 to the Plaintiff pursuant to an order of Justice Crighton. [ 27 ] The second share was sold on February 1, 2013 for $155,000 and after payment of legal fees and commissions, the Defendant received $149,449.54 for the second share. Liabilities [ 28 ] The parties have the following liabilities which, in my view, are relevant to the analysis of matrimonial property: i. Plaintiff a. mortgage on Highland Drive home with a balance owing at the time of sale of approximately $507,000. ii.

Defendant a. mortgage against matrimonial home with a balance owing of approximately $96,286 as at December 31, 2012; b. line of credit registered against the matrimonial home with a balance owing of approximately $349,481 as at December 7, 2012; and c. mortgage against C[...] Farms with a balance owing of approximately $101,000.

[ 29 ] Additional facts will be discussed in the context of the various issues raised by the parties. III. Issues [ 30 ] The following issues have been raised by the parties: a. parenting arrangements for the two children of the marriage; b. whether the Defendant stands in loco parentis to JTF and if so, appropriate parenting arrangements; c. has the Defendant been unjustly enriched by the efforts of the Plaintiff while the parties cohabited before marriage; d. what is the appropriate division of matrimonial property and what exemptions apply; e. child support. IV. Discussion A.

Parenting arrangements for the two children of the marriage [ 31 ] Since the separation of the parties, they have had shared parenting responsibilities on an equal basis for B and J. While the particulars of the shared parenting have changed, it has been equal. B is now in Grade 1 at Wye Elementary School in Sherwood Park and J is in Kindergarten at the same school. She attends on Mondays, Wednesdays and sometimes Fridays. [ 32 ] The Plaintiff is of the view that this shared and equal parenting arrangement is no longer appropriate.

She professes some concerns regarding the Defendant’s judgment in parenting and also argues that the children should attend a school near her current home (on Ravine Point in Edmonton) which would be significantly more convenient for her as the drive to the Wye School in Sherwood Park creates certain logistical problems. First, she must also pick up her other child, JTF, who attends a school in Edmonton.

It also creates another inconvenience in that she now has a 4½ month old child and, as she cares for him on a full-time basis, that child must also travel with her to and from the Wye Elementary School when she has parenting time with B and J. [ 33 ] In her evidence, the Plaintiff raised concerns arising out of an understanding that B (now 6 years old) had been allowed to play with an ax and operate a lawnmower. In response, the Defendant met those allegations and I am satisfied that these allegations are not as serious as the Plaintiff believed and do not impact on his parenting abilities.

Regarding an ax, he testified that B once picked up an ax but he immediately told B to put it down which he did. Regarding the lawnmower, B attempted to pull the cord and start the lawnmower when he was younger but could not do so. He now can do so and the Defendant has allowed him to but does not allow him to operate a lawnmower.

The Defendant also states that B and J are both at home around the farm and as they get older, they are allowed to do age appropriate activities around the farm, including riding a horse which B does now. [ 34 ] In my view, there is nothing to suggest that the Defendant is anything but a caring, loving father who is capable of properly caring for the children when he has custody of them. At the same time, there is no doubt that the Plaintiff is also a caring, loving parent who is fully capable of properly caring for the children when they are in her custody.

Maximum contact with 2 capable and loving parents is in a child’s best interests. I see no reason to vary the parenting arrangement that has been in place since the parties separated and as it appears at this time that both have the parenting skills necessary to take care of the children, equal shared parenting shall continue. That is in the best interests of the children. [ 35 ] A subsidiary issue related to the parenting arrangement is whether the children should attend the Wye School in Sherwood Park as they have been or whether they should attend a school closer to the Plaintiff’s home in Edmonton.

The Plaintiff wishes to send them to Grosvenor School which is near her current home and there are also other schools within a reasonable distance of the Plaintiff’s home. She says that Grosvenor has smaller class sizes which would benefit B as she is concerned that he may have a slight learning disability. This latter suggestion is not supported by other evidence and I cannot accept it as fact at this time. [ 36 ] The first consideration in determining which school the children should attend is their best interests.

The Plaintiff says that it would be in their best interests to attend a school close to her home and close to the school attended by JTF (which is also fairly close to the Plaintiff’s home). This would ensure that they are delivered to school and picked up from school on a timely basis with no delay caused by other obligations, such as the pick-up and delivery of JTF to school.

In fact, the Plaintiff’s need to drop off JTF leaves very little time to spare in getting B and J to school on time (as it is a further 25-minute drive) and her obligation to pick up B and J means that JTF must wait unless someone else can pick him up. [ 37 ] I note here that JTF is said to have some learning disabilities which are best addressed at the school he now attends, being the Edmonton Academy. This school is also near the Plaintiff’s current home.

While there was no confirming expert evidence, I do accept the Plaintiff’s evidence that JTF does suffer from a slight learning disability and the Edmonton Academy is a good school for him to have the learning issues addressed. His difficulties have manifested themselves over a longer period of time than those the Plaintiff suggests might affect B and are also confirmed by JTF’s biological father, TF. [ 38 ] The Defendant says that the children are well settled and adjusted in the Wye school in Sherwood Park where they have a number of friends. [ 39 ] The children are young.

They are in Grade 1 and Kindergarten respectively. I have no doubt that they could easily adjust to a new school and make friends there with the ease that they have made friends at their current school. In other words, I do not believe that the best interests of the children can resolve this issue as I do not believe that it is necessarily detrimental to their best interests to either stay at the current school or move to a new one.

[40] Given that the best interests of the children cannot determine the issue as to which school they should attend, I turn to theconvenience of the Plaintiff and Defendant and how that may impact on the care of all children. [41] While the Wye School is only 5 or 10 minutes away from the Defendant’s home, it is around 30 minutes from the Plaintiff’shome. The Plaintiff is a stay-at-home mother and she is obliged to ensure that JTF is transported to and from school on time as well.While she does get some help from JTF’s biological father and her current partner, neither can be counted on all of the time.

Further,since G is only 4½ months old and is in the care of the Plaintiff, she must take G with her when she transports the children to and fromschool. [42] The Defendant is sometimes obliged to be at the farm to do chores in the morning but his

schedule is flexible as he hasemployees who generally handle most of the chores and he is flexible in terms of when he goes to work. [43] When considering these facts, it is my view that the convenience of the Plaintiff should be accommodated as doing so willboth ensure easier care for her other children.

This may, in turn, also serve the best interests of B and J as there will be little or nodifficulties in ensuring that they are dropped off and picked up from school at proper times when they are in the care of the Plaintiff. [44] Accordingly, the parties shall have equal and shared parenting time with the children but the Plaintiff shall be at liberty toenroll the children in a school closer to her residence. Pick-up and drop-off of the children will be done on a weekly basis at the school. B. Does the Defendant stand in loco parentis to JTF? [45] JTF was born on May [...], 2002.

He is the son of the Plaintiff and her previous husband, TF. They have joint custody of JTFand the Plaintiff has primary residential care of him. TF testified, and it is clear, that he is an active and engaged father to JTF though histime with JTF is sometimes limited by a work

schedule that has taken him out of town. [46] When the Plaintiff and Defendant began cohabiting, JTF lived with them.

He continued to live with them throughout themarriage until the date of separation following which he continued to live with the Plaintiff. [47] The Defendant says that he stood in loco parentis to JTF throughout the period of cohabitation and marriage and, during theperiod of separation, he continued to see JTF in the role of a parent though not as often or as regularly as he saw B and J. [48] The Plaintiff says that the Defendant never stood in loco parentis to JTF and, while he may have participated to an extent insome of JTF’s activities, the Defendant did not do so regularly or for reasons related to his being an involved parent to JTF.

The Plaintiffdoes acknowledge that the Defendant did pay for some minor expenses for JTF and did have some access time with JTF after theirseparation on Tuesdays after school until 7:30 p.m. pursuant to an order dated October 7, 2011 but denies that he ever acted as a trueparent to JTF. Further, the Plaintiff and JTF’s biological father both testified to JTF’s apparently stated desire not to see the Defendant. [49] Section 2(2)(

b) of the Divorce Act defines “child of the marriage” as including “any child of whom one is the parent and forwhom the other stands in the place of a parent”. [50] In Chartier v Chartier (SCC), [1999] 1 SCR 242, the Supreme Court of Canada emphasized that thequestion of whether a parental relationship existed under s. 2(2)(

b) of the Divorce Act must be determined as of the time the familyfunctioned as a unit. That is, the material time to consider is that time before the parties separated. It then outlined those factors that aCourt must consider in determining the nature of the relationship between the child and the person alleged to be in loco parentis to thechild.

While the factors are not intended to be exhaustive, they include: ● whether the child participates in the extended family in the same way as would a biological child; ● whether the person provides financially for the child; ● whether the person disciplines the child as a parent; ● whether the person represents to the child, the family, the world that he or she is responsible as a parent to the child; ● the nature or existence of the child relationship with the absent biological parent. [51] The Plaintiff testified that she was the one responsible for providing for JTF’s needs during the cohabitation and marriage ofthe parties.

She says she paid the majority of JTF’s expenses including school fees, childcare (when needed), food, and clothing. ThePlaintiff continues to be his primary caregiver though it is acknowledged that she has primary residential care of JTF while his biologicalfather, TF, does have reasonable and generous parenting time. The Plaintiff also says that she paid for the utilities in the homes sheresided in with the Defendant. [52] The Defendant testified that he treated JTF as a member of his family. He introduced JTF to his extended family and invitedhim to family events with his mother.

The Defendant also says that he assisted with JTF’s schoolwork and went to some of his soccergames, took him to skiing lessons and paid some of his expenses including bus fees, dentist’s costs and clothing. He also said that JTFbought him father’s day cards but recognizing that JTF was between the ages of 2 and 7 when the parties were together, I fully expectthat it was not JTF who either chose to buy cards or did so. It was his mother. [53] The evidence as to the role played by the Defendant in the life of JTF while the parties were together, either cohabiting ormarried, is conflicting.

I have no doubt that the Defendant did introduce JTF to his extended family, particularly his mother, but theextent of JTF’s participation in the Defendant’s extended family appears to have been limited. Further, I am also satisfied that heoccasionally helped JTF with homework and took him to lessons though not necessarily on a regular and committed basis but more so toprovide assistance to his marital partner, the mother of JTF. I believe that any responsible adult living with the mother of a child that is

not also his would engage in such activities though not necessarily in the role of a parent but rather in the role of someone who is providing assistance to the boy’s mother. Further, and while the involvement of a biological parent does not necessarily eliminate the possibility of a third person acting in the role of a parent, I do note the active and engaged parenting by JTF’s biological father, not only during the period when JTF was living in the same home as the Defendant but also during the period of separation. Further, both the Plaintiff and TF state that Mr.

TF spends a considerable amount of his free time with JTF and he wishes to ensure that his time is not restricted in any way. [ 54 ] The onus of establishing a parental relationship is on the person alleging that it existed at the material time. It must be proven on a balance of probabilities. I am not satisfied on the evidence before me that the Defendant has established, on a balance of probabilities, that he stood in loco parentis to JTF.

I found the evidence lacking in specifying regular and ongoing activities involving JTF and the Defendant throughout the relationship that would establish something more than the relationship between a responsible adult and the child of a spouse existed. In reaching this conclusion, I did not consider the evidence of the Plaintiff and the biological father of JTF as to JTF’s wishes to be relevant to this issue.

Further, and while it is admirable that the Defendant has endeavoured to spend some time with JTF during the period of separation and divorce and has included him in activities such as golfing and skiing, I similarly do not consider these activities to be determinative of the nature of the relationship that existed during the material time, while the parties lived together. [ 55 ] In short, I find that the Defendant has failed to prove on a balance of probabilities that he stood in loco parentis to JTF during the period of cohabitation and marriage.

Notwithstanding this decision, I would hope that in the event both the Defendant and JTF express a desire to see one another, the Plaintiff would try to facilitate this, particularly if it also involves B and J. C. Has the Defendant been unjustly enriched by efforts of the Plaintiff while the parties cohabited before marriage? [ 56 ] The Plaintiff claims an entitlement to a portion of the increase in value of C[...] Farms during the period of her cohabitation with the Defendant prior to their marriage.

That is, she says that he has been unjustly enriched as a result of her contributions and she is entitled to some compensation or reimbursement for her efforts. [ 57 ] The parties began their relationship in November 2003 and they began cohabiting once they purchased a home at 6... Estate Drive in Sherwood Park. [ 58 ] The Plaintiff says that they moved into the home together in July 2004.

She also testified that on the day they moved in, the Defendant gave her a ring and they became engaged to marry. [ 59 ] The Defendant testified that after purchasing the house, renovations had to be completed before they could move in. He testified that they moved into the home on October 30, 2004. He agrees that when they moved in, he presented an engagement ring to the Plaintiff. He tendered evidence in trial of a receipt from People’s Jewellers evidencing the purchase of an engagement ring on October 21, 2004.

I accept his evidence in this respect and that the parties began their cohabitation on October 30, 2004. [ 60 ] The parties married on August 20, 2005. Their period of cohabitation prior to marriage was approximately 9 months and 3 weeks. [ 61 ] As set out earlier, the C[...] Farms consists of 2 separate parcels of land. One portion contains 105.7 acres and it includes land, buildings and site improvements on which the horse training and boarding facility operates (Parcel A). The second portion contains 40.1 acres and is vacant country lands (Parcel B).

Around the time the parties began cohabiting, Parcel A was valued at $685,000 and Parcel B was valued at $195,000. The total value of both parcels was, therefore, in the sum of $880,000. As at August 20, 2005, the date on which the parties married, Parcel A was valued at $875,000 and Parcel B at $245,000. The combined value of both parcels was, at that time, $1,120,000.

The Plaintiff claims that her efforts during the period of cohabitation in helping with morning chores, cleaning stalls, feeding and bringing horses in and out of the barn as well as her efforts in mowing the lawn in summer, shoveling snow in winter and doing things like making bank deposits when the Defendant was absent and completing forms and notices on the computer all had the cumulative effect of increasing the value of the business and lands upon which the business was being operated. [ 62 ] The Plaintiff testified that she frequently helped on the farm when the parties began cohabiting and especially when the Defendant was required to be out of town either to visit with his ill father in Calgary or to go to Nova Scotia to deal with matters relating to his grandmother’s estate.

The Plaintiff has 2 sisters, LH and GS, who were both clients of C[...] Farms. They boarded their respective horses at the farm and took riding lessons from the Defendant. They both testified that the Plaintiff would come out to the farm regularly, particularly when the Defendant was away, and help with various chores. [ 63 ] While I am satisfied that the Plaintiff did attend at the farm occasionally while the parties cohabited and before they were married, I am not satisfied she did so as regularly as she indicated in her testimony.

I do not believe that she was in any way attempting to mislead but I believe that she has confused the timing of certain events. She did so in other aspects of her evidence (for example, the date she moved in with the Defendant, the date on which she visited the Defendant’s lawyer regarding the effect of the destroyed prenuptial agreement and the date on which she and the Defendant attended the bank in relation to her dower rights).

The Plaintiff may have spent more time at the farm after the parties were married but I am satisfied that the evidence presented to her from her questioning was more accurate than her trial testimony regarding her attendance before marriage. In her answers to questioning, she testified that during the period of cohabitation before the marriage of the parties, she would attend at the farm approximately 3 times per month to help out a bit. Further, the work that she would do was no different than that which one of the hired help would do for a short time in the morning and perhaps in the evening.

This view is consistent with the fact that the Plaintiff was still maintaining a full-time job at her family’s business and was primarily responsible for the care of JTF whom she often placed in a daycare in Beaumont so that she could attend the family company’s office in Nisku. [ 64 ] The Plaintiff also testified that she purchased a horse named Baggins from the Defendant on February 2, 2005 for the sum of

$8,563. It was her evidence that she did so in order to provide some financial assistance to the Defendant with his farm operation. However, I note that once the parties separated, she took that horse and its foals with her and ultimately sold them to her sister. In my view, her purchase of the horse does not enhance her claim that the Defendant has been unjustly enriched by her contributions. [ 65 ] In Rubin v Gendemann 2012 ABCA 38 , the Court of Appeal stated in obiter dicta: It seems to us that the length of the relationship is a significant factor in a claim for unjust enrichment.

It is not difficult to imagine a relationship being so short as to negate such a claim. (at para 38) [ 66 ] In my view, the period of cohabitation, in this case being under 10 months, is too short to consider a claim by the Plaintiff that the Defendant has been unjustly enriched by her contributions. [ 67 ] Further, in order to establish a claim of unjust enrichment, the Plaintiff must establish that there has been an enrichment of the other party, a corresponding deprivation by the contributing party and the absence of juristic reason for the enrichment ( Kerr v Baranow 2011 SCC 10 ). [ 68 ] In my view, the functions performed by the Plaintiff during the period of cohabitation before marriage at the Defendant’s horse training and boarding operation were too short, too infrequent and not of sufficient value to cause the Defendant to be enriched.

The Plaintiff further testified that she simply enjoyed going out to the farm and it gave her an opportunity to visit with her sisters who both had chores to do at the farm related to their own horses. There was no deprivation suffered by the Plaintiff in the manner or extent necessary to establish an unjust enrichment claim.

I find that there was no unjust enrichment of the Defendant as a result of the Plaintiff’s efforts during the period of cohabitation before marriage. [ 69 ] Finally, and even if the Plaintiff was entitled to any compensation for the efforts she made, I find the free boarding of her horse at the farm to be adequate compensation. D. Division of matrimonial property [ 70 ] There are a number of properties owned by the parties which must be considered in determining the entitlement of each to the appropriate share in the value of the matrimonial property.

Those properties, as at the date of trial, include the following: 1. the matrimonial home located at 2... Estate Drive, Sherwood Park having a current appraised market value of $1,000,000; 2. Parcel A of the C[...] Farms lands with a current appraised value of $975,000; 3.

Parcel B of the C[...] Farms lands with a current appraised value of $360,000; 4. the Plaintiff’s residence at [...] Highland Crescent, Sherwood Park sold during trial for the sum of $565,000; 5. various pieces of furniture and antiques located in the matrimonial home. [ 71 ] The Matrimonial Property Act provides certain exemptions from distribution in s. 7. There are 5 categories of exempt properties set out in s. 7(2) and those relevant to this action are “(

a) property acquired by a spouse by gift from a third party, (

b) property acquired by a spouse by inheritance, (

c) property acquired by a spouse before the marriage”. The market value of these properties at the time of marriage, or on the date on which the property was acquired, whichever is later, is exempted from distribution. [ 72 ] Section 7(3) provides that the increase in the value of exempt property from the time of marriage or acquisition to the time of trial must be distributed in a manner that is just and equitable taking into consideration factors set out in s. 8.

Accordingly, in order to distribute matrimonial property that was, in part or in whole, acquired by using exempt property, the Court must consider the value of that property at the date of marriage or acquisition and its value at the date of trial. The difference, as indicated, must be distributed in a just and equitable fashion. i. the matrimonial home [ 73 ] The matrimonial home has a current market value of $1,000,000. It was purchased in January 2006 for the sum of $850,000.

Of that sum, the Defendant paid $600,000 out of funds he received from his father’s estate and a further $50,000 out of funds taken out of the C[...] Farms account which were also originally received from the Defendant’s father. Accordingly, $650,000 of the $850,000 purchase price is exempt property belonging to the Defendant to which he is entitled and the Plaintiff is not entitled to share in. [ 74 ] The balance owing on the mortgage on the matrimonial home is in the sum of $96,286. The equity in the property must be reduced by this amount.

Even though there is a line of credit debt against the matrimonial home in a sum close to $350,000, I will not apply that sum in its entirety so as to reduce the equity in the matrimonial home. First, the initial line of credit on the purchase of the home was in the sum of $50,000. It was increased by $300,000 for the purchase of the 2 shares in the Grange Estates. The Grange Estates shares were purchased for a total of $275,000 and at the time the line of credit was increased by $300,000, the sum of $25,000 had already been paid as a deposit.

In other words, there was only $250,000 owing for the 2 shares in the Grange Estates at the time the line of credit was increased by $300,000. There was no evidence at trial as to why the additional $50,000 was required or how it was used. Further, while the original line of credit was $50,000, there is no evidence as to whether any of that amount was paid down and if not, why not. Nevertheless, the combined mortgage and line of credit registered against the matrimonial home at the time of the purchase was $200,000.

The amount owing on the mortgage remains at $96,286 and the amount owing on the line of credit, less the $300,000 addition to it in September 2006, is $49,481. [ 75 ] The equity in the matrimonial home available for equal distribution is the increase in its value of $350,000 less the amount owing on the mortgage ($96,286) and less the sum of $49,481 reflecting the original line of credit. The net result is that the sum of

$204,233 is available for equal distribution and each party is entitled to the sum of $102,116.50. [ 76 ] In determining that an equal distribution of the equity in the matrimonial home is appropriate, I have considered the fact that the Defendant did contribute the majority of the purchase price and I have also considered his argument that the proportion of his exempt contribution to the overall purchase price should carry forward and apply to the equity.

I do not accept his argument with respect to the application of the proportionate share to the equity as the Plaintiff did contribute funds towards the purchase of furniture and the expenses of the household but more importantly, she contributed significantly by caring for their children on a day-to-day basis and managing the household. ii. Grange Estates [ 77 ] In July 2006, the Defendant purchased 2 interests in a project known as the Grange Estates for the sum of $275,000.

He paid the sum of $25,000 and provided the remainder of the funds by increasing the principal sum of the line of credit on the matrimonial home by $300,000. One of the shares was sold in 2011 for $157,000 and from that sum, the Plaintiff received a matrimonial property advance of $112,500. The Defendant received the sum of $44,500 from that first sale and deposited it into his C[...] Farms account. [ 78 ] The second share of the Grange Estates was sold in February 2013 for $155,000. After payment of legal fees and commissions, the Defendant received $149,449.54.

He did not provide any of those funds to the Plaintiff. [ 79 ] As indicated above, the line of credit registered against the matrimonial home was increased by $300,000 to secure the funds used for the purchase of the 2 Grange Estates shares. Those shares realized a total of $306,449.54. The Plaintiff was paid the sum of $112,500 as an advance against her matrimonial property claim and no portion was used to pay down the line of credit registered against the matrimonial home.

The evidence indicates that the Defendant used the balance he received from the sale of the first share ($44,500) plus the amount realized from the sale of the second share ($149,449) to pay debts he owed other than on the matrimonial home and also to pay maintenance costs relating to C[...] Farms. [ 80 ] As stated earlier, it is unclear why it was necessary to increase the principal amount owing on the line of credit by $300,000 when the cost of the 2 shares was $275,000 and the Defendant paid an initial sum of $25,000 as a deposit on the purchase of the shares.

At the time the line of credit was increased by $300,000 in September 2006, there was only $250,000 owing for the purchase of the shares. I can only assume that the $50,000 balance of the increase in the line of credit beyond what was actually needed to complete the share purchase was then used by the Defendant for some other purpose unrelated to the matrimonial home. [ 81 ] The amount owing on the line of credit, less the original $50,000 amount, is in the approximate sum of $300,000 which is the amount advanced for the purchase of the shares in the first place.

The total amount realized from the sale of the shares was in the sum of $306,449.54 though it is unclear what expenses were incurred by the Defendant on the sale of the first share. I am assuming that there were some expenses as there were approximately $5,500 in expenses relating to the sale of the second share. As a result, the balance realized on the sale is approximately equal to the balance owing on the increase in the line of credit.

The Plaintiff did receive a share in the proceeds from the sale of the first share which I consider to be a credit for the amount she is entitled to receive as her share in the distribution of matrimonial property. She is not entitled to receive any amount reflecting the sale of the 2 shares in the Grange Estates. iii. the C[...] Farms lands a. Parcel A [ 82 ] On August 20, 2005, the date of the marriage of the Plaintiff and the Defendant, Parcel A was valued at $875,000. In February 2013, it was valued at $975,000.

The increase in value is $100,000 in 8 years though the value did fluctuate during that period of time, being valued at $1,250,000 at one point in time. [ 83 ] The Plaintiff argues that she should be entitled to a share in the increased value of Parcel A as a result of her contributions to the marriage and household which allowed the Defendant to continue working on the farm and increase the value of the business.

I have already commented on the contributions of the Plaintiff to the marriage and the family and it is my view that her contributions did allow the Defendant to remain principally involved in the operation of the business and, in part, increase its value. [ 84 ] However, given that the entire C[...] Farms operation was brought into the relationship as exempt property and some of the increased value of Parcel A results from market conditions rather than the operation itself, the Plaintiff is not entitled to an equal distribution of its increase in value.

There are authorities (notably Hornby v Hornby 2007 ABQB 464 and Carmichael v Carmichael 2005 ABQB 957 ) which support the proposition that where a portion of the increased value of the property is a result of market forces, then a Court may consider exempting out to the party entitled to the exemption a portion equal to the proportionate value of that person’s contribution. [ 85 ] In this case, Mr. Botten testified that a portion of the change in value was driven by market forces though he did not specify the amount.

I am also satisfied that the increase in value not attributable to market forces was primarily attributable to the efforts of the Defendant. However, it must still be emphasized that the Plaintiff did make a contribution to the operation and management of C[...] Farms and I am satisfied that her involvement was greater following her marriage to the Defendant than it had been before when she was still working full-time in her family’s business and caring for JTF.

Further, as indicated above, she contributed significantly to the costs related to the operation of the household and significantly contributed by caring for the children on a day-to-day basis. All of these efforts by the Plaintiff helped enable the Defendant to devote more of his time and effort to the business of C[...] Farms which, in turn, served to increase its value. [ 86 ] The Plaintiff also argues that she was entitled to a refund or some form of consideration for contributing the $3,000 wedding gift from her parents to the C[...] Farms.

I am not satisfied that this contribution is either exempt or should be credited to the Plaintiff as I am not satisfied that it was not intended as anything but a wedding gift to both the Plaintiff and Defendant which they agreed to use for

the operation of C[...] Farms. [ 87 ] In all of these circumstances, it is my view that the division of the increase in value of Parcel A should be attributed at 75% to the Defendant and 25% to the Plaintiff. This would then entitle the Plaintiff to the sum of $25,000. b. Parcel B [ 88 ] Parcel B was valued at $245,000 on August 20, 2005. In February 2013 it was valued at $360,000, an increase in value of $115,000. The parcel remained vacant throughout the marriage of the parties and its increase in value was driven by market forces and not related to any contribution by the Plaintiff.

In my view, it is appropriate to split the increase in value with 85% to the Defendant and 15% to the Plaintiff. Accordingly, the Plaintiff is entitled to the sum of $17,250. iv. [...] Highland Crescent [ 89 ] This property was purchased by the Plaintiff after the separation for the sum of $575,000 on October 17, 2011. The initial deposit of $20,000 for the purchase was a gift from the Plaintiff’s parents and is, therefore, exempt. In addition, the Plaintiff paid $39,000 herself out of the funds received from the sale of the first share in Grange Estates.

As indicated above, this was, in part, an advance distribution of matrimonial property. [ 90 ] As at the time this house was sold, there remained owing on a mortgage the sum of $507,000. It was sold for $565,000 and taking into account the amount owing on the mortgage as well as the exempt amounts of $20,000 paid by the Plaintiff’s parents and $39,000 paid by the Plaintiff, the amount exceeds the amount realized on the sale. This is even before taking into account the real estate commission and legal fees associated with the sale of the house.

I find that there is no amount that need be distributed as matrimonial property. [ 91 ] In making this determination, I have considered the Defendant’s argument that the bulk of the advance of $112,500 granted by Justice Crighton in September 2011 should have been used to purchase the property and the mortgage would, therefore, have been reduced accordingly. However, it is my view that the payment reflected an advance on the Plaintiff’s matrimonial property entitlement and she was at liberty to spend it as she wished.

That advance will be taken into account in the overall determination of the equalization amounts to be paid by the Defendant. v. furniture and antiques [ 92 ] The Plaintiff purchased furniture for the matrimonial home and spent in the vicinity of $11,100 for furniture and blinds that were paid out of the $30,000 she received on distribution of the equity in the first home in which the parties lived (6... Estates Drive). She also spent $3,610 for additional furniture. While the Plaintiff claims to have an exemption for the $11,100 amount spent, I am not satisfied that it is exempt property.

However, I am satisfied that the Plaintiff is entitled to one-half of the current value of the furniture and, given that there was no evidence as to its current value, I will assign a value to the furniture of $6,000. The Plaintiff is, therefore, entitled to the sum of $3,000 on an equal distribution of that value. Additionally, the Plaintiff purchased an antique highboy for $10,000. She disputes evidence given by the Defendant that he repaid her $5,000 but I do accept that he did so.

I further accept, however, that the antique highboy she did purchase was exempt property which she brought into the marriage and she is, therefore, entitled to payment of the further sum of $5,000 which, in argument, the Defendant conceded that he was willing to pay. vi. other considerations [ 93 ] I have not considered the distribution of the proceeds from the sale of 6... Estates Drive, the first home in which the parties lived, in determining the final distribution of matrimonial property.

That property was purchased in July 2004 and was sold in February 2006 for approximately $66,000 more than it was purchased. Out of the proceeds of sale, the Defendant paid to the Plaintiff the sum of $30,000 leaving a balance of $36,000. I expect that commissions and legal fees had to be paid and, therefore, the Defendant and Plaintiff likely received about the same amount from the sale.

I would also note that the Defendant paid the Plaintiff approximately one-half of the profit in recognition of her contributions to the home. [ 94 ] I was also invited to consider all of the debts collectively owed by the parties and the Defendant suggested that they be considered matrimonial debts and equally divided. I do not agree. The parties have been separated for 4 years and the evidence was wholly inadequate as to how the debts were either incurred or continued during that time.

While some of them were paid down and then increased again, others could have been paid down but were not due to other expenses being incurred. The evidence simply does not allow this Court to consider the current existing debts to be matrimonial debts for which there is equal responsibility. As indicated above, I did take into account those amounts owing on the matrimonial home, some of which reflect a debt incurred for the purchase of the shares in the Grange Estates, and the debt owing on the C[...] Farms.

I consider the other debts to be the personal obligations of the parties in whose names those debts reside. [ 95 ] Finally, I did not take into account or consider interest that may have accrued or been paid on any of the principal sums discussed above. No evidence was led on interest payments or calculations and I have therefore treated all interest amounts that might otherwise have been considered as evening out for the parties. vii. conclusion on matrimonial property [ 96 ] In

summary, I have determined that the Plaintiff is entitled to the following amounts on a distribution of the matrimonial property: 1. Matrimonial home $102,116.50

2. Parcel A of C[...] Farms $ 25,000.00 3. Parcel B of C[...] Farms $ 17,250.00 4. Furniture and antiques $ 8,000.00 Total $152,336.50 Less advance on sale of share in Grange Estates $112,500.00 Balance $ 39,866.50 [ 97 ] The Defendant is obliged to pay the sum of $39,866.50 to the Plaintiff as an equalization payment on the distribution of matrimonial property. [ 98 ] I am cognizant of the fact that other factors were raised either in evidence or in submissions that the parties wished for me to consider in determining the appropriate division of matrimonial property.

For example, it was argued that the contents of the prenuptial agreement were relevant as they evidenced intention despite the fact that the agreement was burned by the parties with the intention that it would not be considered in force. While there was no written agreement to that effect, I consider the burning of the prenuptial agreement to be evidence of the fact that the parties did not wish it to be in force or considered in any way and accordingly, I have not taken its contents into account. I have also considered the fact that some of the funds realized on the sale of 6...

Estates Drive were already distributed and were comingled with other funds. Further, the proceeds from the sale of the 2 shares in Grange Estates were also comingled with other funds or assets. E. Child Support [ 99 ] The parties have had shared parenting of B and J since the date of separation which occurred in either November 2009 or January 2010. The parties cannot agree. In my view, the appropriate date to consider as the date of separation and for the purposes of considering payment of child support is January 1, 2010. [ 100 ] The Plaintiff earned $71,349.73 in 2010, $121,442 in 2011and $108,780 in 2012.

In 2010, the Defendant earned $34,280.08 and in 2011, he earned $32,703.40. These amounts were agreed upon by the parties and are set out in the Agreed Statement of Facts. There is no figure set out for the year 2012 for the Defendant. [ 101 ] On the basis of these income amounts, the Plaintiff would have been obliged to pay child support to the Defendant with a setoff for the amount the Defendant would have been obliged to pay the Plaintiff for the years 2010, 2011 and 2012.

The Plaintiff has not worked in 2013 so the Defendant would have been required to pay child support to the Plaintiff in 2013. [ 102 ] I was invited by counsel for the Plaintiff and the Defendant to simply provide a period of time during which the Defendant would not be obliged to pay child support and consider that the respective obligations would even out. [ 103 ] This appears to be a fair way of approaching the issue at this time and on that basis, I will relieve the Defendant from the obligation of paying child support until January 1, 2015.

I do so with the understanding and knowledge that the Plaintiff is currently in a relationship in which the children are properly and adequately cared for and the Plaintiff does have additional means by which to support them, partly as a result of the matrimonial property distribution provided for herein. V. Conclusion [ 104 ] In conclusion, I find the following: a. There shall be equal shared parenting of the 2 children of the marriage and the Plaintiff shall be entitled to determine the most convenient school for them to attend. b. The Defendant did not stand in loco parentis to JTF. c.

The Defendant was not unjustly enriched by the efforts of the Plaintiff during the period of cohabitation before their marriage. d. An equalization payment relating to the distribution of matrimonial property shall be made by the Defendant to the Plaintiff in the sum of $39,866.50. e. The Defendant shall be relieved of the obligation of paying child support until January 1, 2015. [ 105 ] The parties may arrange to see me within 30 days if they are unable to agree on costs. Heard on November 4-8 and 14, 2013. Delivered orally on November 27, 2013.

Dated at the City of Edmonton, Alberta this 29 th day of November 2013.

Eric F. Macklin J.C.Q.B.A. Appearances: Shelly Lloyd Atkinson for the Plaintiff Barry M. King for the Defendant