Page v Teichgraber, 2014 ABQB 711

Court of Queen ’ s Bench of Alberta Citation: Page v Teichgraber, 2014 ABQB 711 Date: 20141119 Docket: 4803 140572 Registry: Edmonton Between: Frank I. Page Plaintiff - and - Samuel Harold Teichgraber Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Robert A. Graesser _______________________________________________________ Introduction [ 1 ] This matter came before me as a

summary trial on October 9, 2014. The Plaintiff Frank I. Page asked to provide written argument and I agreed to allow that procedure. Written argument on behalf of the Plaintiff was filed on October 15; the Defendant Samuel Harold Teichgraber provided his response on October 27. [ 2 ] The issues to be tried are related to the division of matrimonial property and child support:

Division of Ms. Page’s Special Forces pension; division of parties’ RRSPs; division of value of Ms. Page’s vehicle; Mr. Teichgraber’s claimed exemption in the matrimonial home; division of value of matrimonial home; retroactive child support; and ongoing child support. Background [3] Ms. Page and Mr. Teichgraber were married in April, 1998. They separated in November, 2006 and were divorced inSeptember, 2008. Corollary relief was severed from the divorce. [4] There are three children, now aged 11, 9 and 7. Since separation, the children have been primarily resident with Ms. Page inthe matrimonial home. [5] Mr.

Teichgraber has had a difficult work history, largely as a result of the after-effects of several motor vehicle accidents hewas involved in. Yamauchi J’s order dated February 13, 2008 imputed a Guideline income of $15,000.00 per year to him, and childsupport has been paid on that basis since then. [6] In 1994, Mr. Teichgraber purchased the residence which became the matrimonial home. In 2003, he transferred his interestto Ms. Page for no monetary consideration.

She alleges that the transfer was a gift to her; he alleges that at the time, because of hisdistressed financial circumstances, he transferred the home to Ms. Page to keep it safe from creditors and so she could look after him ifhis financial circumstances worsened. There is no information before me to suggest that any of Mr. Teichgraber’s creditors wasprejudiced. [7] Ms.

Page worked throughout the marriage as a police officer, and since separation has been solely responsible for making allpayments with respect to the home. [8] The parties have been unable to agree on the division of matrimonial property between them, the main issues relating to Mr.Teichgraber’s claim for an exemption with respect to the home, and Ms. Page’s claim for an unequal division of the equity in the home. [9] As for the division of the matrimonial property, Ms. Page argues that this is a unique case and the property should bedivided as at the date of separation.

She argues that this uniqueness flows from the length of the parties’ separation, the amount of timethat has passed since the parties’ divorce, and the fact that most of the assets are in only one of the parties’ names (Ms. Page’s). [10] With respect, I do not see these as distinguishing factors from Hodgson v Hodgson, 2005 ABCA 13, and Mazurenko vMazurenko, (1981), 1981 ABCA 104 , 30 AR 34 (CA), or the mandatory provisions of the Matrimonial Property Act, RSA2000, c M-8. I am bound by these authorities. If there are circumstances permitting deviation from these authorities, they are not presenthere.

Special Forces Pension [11] The parties are agreed that Ms. Page’s pension should be divided equally with respect to the period of joint accrual. They arealso agreed that the period of joint accrual is the date of the marriage to the date of separation. This is consistent with the approach takenby Greckol J in Hughes v Hughes, 2006 ABQB 468. Mr. Teichgraber did not contribute to Ms.

Page’s ability to work after theseparation, and he did not contribute to her ability to gain her career, such as by working to put her through school or a training program.She was a police officer when they got married, and remains a police officer. [12] While this appears to be use of the date of separation for division, contrary to Hodgson and Mazurenko, it is really theapplication of the s. 8 factors to the contributions to and growth of the pension since separation.

The pension earned during the period ofjoint accrual is divided equally between the parties; the pension earned after separation is divided unequally, being 100 percent to Ms.Page.

RRSPs [ 13 ] The parties are agreed that their RRSPs should be equalized by way of a transfer of the current value of Ms. Page’s RRSP. The RRSP that Mr. Teichgraber cashed in should be taken into account, as Ms. Page was entitled to her half when he cashed it in. [ 14 ] Using current values is appropriate, as the RRSPs are relatively passive investments, no contributions have been made since separation, and there is no basis to assume that Mr. Teichgraber’s share would not have grown in the same manner if the RRSPs had been divided on separation. Division of Ms. Page’s Vehicle [ 15 ] There is no dispute that Ms.

Page realized $1,000.00 on the sale of her vehicle at some stage after separation. The vehicle was matrimonial property, so Mr. Teichgraber is entitled to an equalization payment equal to half of that amount. Exemption in Matrimonial Home [ 16 ] Mr. Teichgraber purchased the home in June, 1994. He paid $137,000.00 by way of $57,000.00 as a down payment and $80,000.00 by way of a new mortgage. Until the parties were married in 1998, he made all payments.

Until the time of separation, the mortgage payments were largely covered by rent from basement tenants. [ 17 ] There is no evidence before me as to the value of the home (and the balance owed on the mortgage) as at the date of the marriage. Mr. Teichgraber claims an exemption of $57,000.00 reflecting his initial down payment. [ 18 ] His affidavit of September 25, 2014 deposes that he transferred the matrimonial home to Ms. Page to protect it from potential claims from his creditors, and to enable Ms.

Page to provide for him (and inferentially) for the children regardless of his ability to contribute financially to the family’s needs. [ 19 ] He argues that he had no intention to gift any interest in the matrimonial home to Ms. Page and is entitled to a resulting trust regarding her interest in it. [ 20 ] Ms. Page argues that Mr. Teichgraber has not rebutted the presumption of advancement from husband to wife, and he has thus lost any exemption he may have had. [ 21 ] Ms. Page cites EJ v RJ , 1989 ABCA 197 and GK v KK , 1996 ABCA 322 in support of her position. [ 22 ] Mr. Teichgraber relies on s. 7(2) (

c) of the Matrimonial Property Act , which provides: 7(2) If the property is ... (

c) property acquired by a spouse before the marriage ...the market value of that property at the time of marriage or on the date on which the property was acquired by the spouse, whichever is later, is exempted from a distribution under this section. [ 23 ] Mr.

Teichgraber is correct that the exceptions to this found in s. 36(1) are inapplicable here: 36(1) In making a decision under this Act, the Court shall not apply the doctrine of presumption of advancement to a transaction between the spouses in respect of property acquired by one or both spouses before or after the marriage. [ 24 ] In EJ v RJ , the husband’s mother gave him $61,500.00.

The monies were placed in joint names and then used to pay down the mortgage on a jointly-owned piece of property and to make the down payment on a property in the husband’s name only. [ 25 ] The Court of Appeal noted that under s. 7(3) (

d) of the Matrimonial Property Act , the Court is directed to distribute in a just and equitable manner “property acquired by a spouse by gift from the other spouse”. [ 26 ] It is clear from the Act that the presumption of advancement between spouses is gone but for property placed in joint names, which is “prima facie proof” that joint ownership is intended. [ 27 ] In such circumstances, “a donor has to show that he or she did not intend to create a beneficial interest” (at p 3), referencing Quigg v Quigg , 1983 ABCA 5 . [ 28 ] In EJ , Stevenson JA (as he then was) spoke about the presumption of a resulting trust, which is overcome by placing the property in joint names.

Nothing is said about the effect of placing the property in the spouse’s sole name. [ 29 ] GK v KK also refers to the presumption of advancement relating to a transfer of exempt property into joint names, but that is still in the context of s. 36 of the Matrimonial Property Act . The Court of Appeal there determined that as per Jackson v Jackson , 1989 ABCA 197 , the husband lost half of his exemption by placing the cash in joint names.

The non-exempt portion was thus part of the matrimonial property, and divided equally between the parties under s. 7(3). [ 30 ] The question here is whether the property is subject to a resulting trust, so that Mr. Teichgraber lost none of his exemption, or whether the transfer of the whole of the property to Ms. Page should be treated as a gift, to be distributed between them in a just and equitable manner.

[ 31 ] On these issues, the evidence of the parties differs. Mr. Teichgraber describes the circumstances of the transfer, and swears that no gift was intended. Ms. Page disputes that, but relies on the presumption of advancement rather than alternate facts. [ 32 ]

Summary trials are a difficult forum in which to determine factual differences. Here, to resolve the issue I must look at the whole of the circumstances surrounding the transfer in 2003. Mr. Teichgraber’s evidence now is that the transfer was intended to protect his interest in the property from potential creditors. From the evidence, however, very shortly after the property was transferred into Ms. Page’s name, it was remortgaged and the proceeds used to pay off the initial mortgage and other debts.

Thereafter, the property was charged with a line of credit, used for family purposes. [ 33 ] The use of the property after it was transferred into Ms. Page’s name suggests that it was used for the benefit of the family, and not just for Mr. Teichgraber. It is unlikely that he would have been able to refinance the property himself because of his distressed financial situation. The transfer into Ms. Page’s name allowed her to use the property and her credit for the benefit of the family. [ 34 ] In these circumstances, I conclude that more than a resulting trust was intended. I assume that had Mr.

Teichgraber not been in distressed financial circumstances, the property would have been transferred into joint names. [ 35 ] There is no convincing evidence that Mr. Teichgraber intended to gift the whole property (including his exemption) to Ms. Page. But I do not think that he can take the advantage of Ms. Page’s ability to refinance, and benefit from the mortgage and line of credit proceeds while they were a family, and then raise the spectre of a resulting trust when they were no longer a family unit.

It would be different if the property had remained subject to the original mortgage after the transfer and the property left unencumbered. The clear evidence is that the whole family benefitted from the transfer to Ms. Page. [ 36 ] I find Ms. Page’s argument as to the gift unconvincing. She responds to Mr.

Teichgraber’s statement explaining why the property was transferred to her not by disputing his evidence on the discussions at the time or his reasons at the time, but instead by arguing that the court should give no effect to a resulting trust because the transfer was done for an improper purpose – protecting it from Mr. Teichgraber’s creditors. In the absence of any evidence that any creditors were prejudiced, I see no reason to apply any ex turpi causa principles here. [ 37 ] There is some evidence of an intention to gift, as I interpret Mr.

Teichgraber’s actions and intentions as being for his and the family’s protection, so that he, his wife and children would have a house to live in, regardless of his personal financial circumstances. That does not evidence an intent to gift all of his exemption or all of his interest in the property. [ 38 ] In these circumstances, the presumption of a resulting trust has been rebutted. There is no presumption of advancement at play here, although I would be tempted to apply the provisions of s. 36(2)(a). Instead, it would appear that I must instead look at the provisions of s. 7(3) (

d) and distribute the property in a just and equitable manner. [ 39 ] In my view, a just and equitable manner is to treat the exemption as if the property had been placed in joint names instead of Ms. Page’s name alone. That would result in the loss of half of Mr. Teichgraber’s exemption. [ 40 ] The clear exemption is $57,000.00, being the amount of the down payment when he purchased the property in 1998. There is no evidence before me as to the value of the property as at the date of the marriage, so it is likely that Mr.

Teichgraber’s exemption is larger than $57,000.00 because of increases in value between 1994 and 1998 and the paying down of the mortgage over that period. Those numbers are absent from the equation, thus I conclude that the $57,000.00 figure is generous to Ms. Page. [ 41 ] I have found that Mr. Teichgraber has lost half of his exemption by transferring the property into Ms. Page’s name, so he is accordingly entitled to an exemption of $28,500.00. Distribution of Equity in Matrimonial Home [ 42 ] Mr. Teichgraber seeks an equal division of the equity, after crediting him with the value of his exemption. [ 43 ] Ms.

Page argues that she should be entitled to an unequal distribution of the equity, because she has been solely responsible for paying the mortgage payments, the line of credit, the taxes, utilities and upkeep. She claims that she has paid at least $7,000.00 towards repairs and improvements to the house, and argues that she should be given credit for making the mortgage payments and paying down the principal on the mortgage and the line of credit debt. [ 44 ] Mr. Teichgraber counters that Ms. Page and the children have had the benefit of living in the matrimonial home for the last eight years.

The increase in value is mainly as a result of market conditions, and he argues that Ms. Page should be given no additional credit for the amounts paid towards the house. [ 45 ] Ms. Page cites several cases in support of an unequal division of the equity in her favour: Warwoda v Warwoda , 2009 ABQB 582 , Underhill v Underhill , 2005 ABQB 777 and Elliott v Elliott , 2010 ABQB 789 . [ 46 ] These cases all divided the equity in the matrimonial home unequally. In Warwoda and Elliott , the equity was divided equally to the date of separation, and then unequally thereafter. In Warwoda , Ms.

Warwoda received 80 percent of the post-separation increase in value because Mr. Warwoda had allowed the mortgage to go into arrears. Ms. Warwoda struggled to bring it back into good standing by working two jobs. He had contributed nothing to the property in the nine years since separation, and had made no contribution to the welfare of the family. [ 47 ] The court rejected Mr. Warwoda’s claim for occupation rent, as he had failed to assist the family at all after separation (at para 37). [ 48 ] In Elliott , the post-separation increase was divided two thirds-one third. Post-separation, while Ms.

Elliott remained in the

property, she had paid the joint line of credit herself, she had looked after all expenses relating to the property and had paid all of the children’s s. 7 expenses. Hall J, at para 48, noted those factors and stated “(t)he factors not being as grievous as the case in Warwoda, I consider that an appropriate distribution is 2/3’s to Ms. Elliott and the remaining 1/3 to Mr. Elliott. He held at para 49 that it would be double counting to require Mr. Elliott to be responsible for half the line of credit which Ms. Elliott had paid off. [ 49 ] In Underhill , Clackson J held at para 24 that Mr.

Underhill was entitled to recognition of the fact that his payment and expenditures and labour to keep the property up, subsequent to separation, had benefitted both parties. Since the property had been purchased only two years before separation, he did not deal with any increase in value to the date of separation differently. A sixty-forty distribution in favour of Mr. Underhill was ordered. [ 50 ] Here, there is nothing egregious at all about Mr. Teichgraber’s conduct since separation.

His inability to earn more than he has would appear from the evidence to be the result of issues following his motor vehicle accidents, and not an unwillingness to support his family. Thus, I do not see that there should be any consideration of after-separation “conduct” in determining what the proper distribution should be. [ 51 ] I conclude here there is no basis to distribute the value of the equity to the date of separation other than equally. [ 52 ] As at November 24, 2008 (two years post-separation) the property was valued by Knight & Company Appraisals Inc as being worth $286,000.00.

No information has been provided as to the value of the property as at the date of separation, so I will use the $286,000.00 figure as the appropriate value to distribute equally, subject to deduction of the mortgage balance and line of credit balance at that time and deduction of Mr. Teichgraber’s exemption of $28,500.00. [ 53 ] According to Ms. Page, the debt at that date (which was the date of divorce) totaled $75,561.00, leaving equity of $210,439.00. [ 54 ] Current value, according to Knight & Co. is $365,000.00. The line of credit has been paid off, and the mortgage balance is now $43,062. Ms.

Page has been responsible for all payments, including principal reductions on debt of $32,499.00 and repairs and maintenance of $7,000.00. She has had the sole use and benefit of the house and Mr. Teichgraber’s equity in it since separation. [ 55 ] I consider that it is appropriate to take into consideration Ms. Page’s disproportionate contribution to the matrimonial home for the eight years since the parties’ separation.

It is unclear whether the cost to her of making the mortgage payments, paying off the line of credit, and maintaining the property is any greater than the cost of suitable alternate accommodation for her and the children. [ 56 ] In any event, I accept that it would be double-counting to give her credit for the payments she has made as well as giving a disproportionate share of the equity since separation. [ 57 ] In my view, the more principled approach would be to compensate her for the increase in value attributable to her efforts, rather than to eyeball the equities by providing a disproportionate share in the equity.

Here, I have the benefit of evidence of the value of the contributions, so I am not left trying to do justice by using disproportionate percentages. [ 58 ] The requirements of s. 8 in this case are met by dividing the equity equally, after giving Mr. Teichgraber his exemption, and the crediting Ms. Page with the cost of improvements to the property ($7,000) and her payment of the mortgage and line of credit (which was matrimonial debt) totaling $32,499.00. [ 59 ] She will have benefitted from using Mr. Teichgraber’s equity over the years, but he will have benefitted from Ms.

Page’s maintenance of the property and a significant increase in value since separation. [ 60 ] Mr. Teichgraber argues that if any of Ms. Page’s principal reduction on the mortgage and line of credit is to be credited to her, it should be limited to half. There is no basis for that. Ms. Page’s payments after separation should not be treated as a gift to Mr. Teichgraber. By crediting her with the full amount, she gets the full benefit of the principal reduction, and Mr. Teichgraber gets none. Since they are ultimately sharing the equity, that is appropriate.

He made no contribution to the principal reduction, and should not be entitled to any benefit from it. [ 61 ] Here, I find that the equities are neutral. Mr. Teichgraber is not to be faulted for his inability to contribute more so it is inappropriate to penalize him for under-supporting the family. Ms. Page has had the benefit of living in the home with the children, but she has maintained it and should be given credit for her disproportionate contribution by reimbursing her the amount of the benefits she bestowed on Mr. Teichgraber. [ 62 ] I reject Ms.

Page’s argument that the matrimonial home should somehow be treated like after-acquired property so s. 7(3) (

c) has no application and has no benefit to Ms. Page. [ 63 ] I do not see that the s. 8 factors favour an unequal division of the matrimonial property. [ 64 ] Curiously, if I were to perform an alternative calculation, a very similar result is achieved when giving Mr. Teichgraber the exemption I have found he is entitled to, dividing the remaining equity equally as at the date of separation/divorce and giving Ms. Page a 75 percent share of the post-divorce increase in equity, which would be a result somewhat equivalent to the approaches taken in the three cases cited to me. [ 65 ] Ms.

Page has indicated that she wishes to buy Mr. Teichgraber’s interest out, although she wants to put the property on the market immediately. It frankly makes no sense for her to buy Mr. Teichgraber out unless she is able to do so without having to remortgage the property. [ 66 ] Mr. Teichgraber proposes that the property be listed for sale and the eventual sale proceeds be divided between them. However, he suggests that the property be listed for the appraised value, $385,000.00. If Ms. Page is prepared to purchase the property at

that price, it seems to me that Mr. Teichgraber cannot do better than that. He will have a guarantee of that price, and Ms. Page will run the sole risk that the property will realize less. She will have the sole upside that the property will sell for more, but if she is prepared to take the risk of a lower price, she should have the upside of a higher price in circumstances where Mr. Teichgraber does not contest the appraised value. Retroactive Child Support [ 67 ] Because of Mr. Teichgraber’s uncertain earning capacity, Yamauchi J imputed $15,000.00 per year to him in February, 2008. Mr.

Teichgraber has paid on that basis ever since. [ 68 ] Mr. Teichgraber’s actual earnings have been as follows: 2009 $12,118.00 2010 $17,850.00 2011 $38,868.00 2012 $20,071.00 2013 $12,320.00 [ 69 ] It is clear that Mr. Teichgraber has earned more than $15,000.00 per year, on average. As argued by Ms. Page, his average has been almost exactly $20,000.00 per year. [ 70 ] Mr. Teichgraber explains the higher years 2011 and 2012 as being the result of a job he had with CIBC. He says that he was eventually unable to cope with the stresses of that job, and had to leave the CIBC’s employ.

With benefits, the higher salary continued into 2012. [ 71 ] He says that his 2014 income to the end of September has been $6,882.00. He argues that he has been unable to work more because of his medical issues. The medical evidence provided only indicates that Mr. Teichgraber suffers from depression. [ 72 ] It is unclear why Mr. Teichgraber has been only able to earn something less than a minimum wage job would provide (other than for the years he worked for CIBC). [ 73 ] DBS v SRG , 2006 SCC 37 provides the relevant law on retroactive child support claims. There is no information before me as to when Ms.

Page sought a retroactive adjustment. Mr. Teichgraber argues that it would be unfair to go back three years to 2011 because that was Mr. Teichgraber’s high water mark by way of earnings. [ 74 ] While Mr. Teichgraber did not seek to adjust child support when his income was below the imputed $15,000.00 amount in 2009, he exceeded that amount in 2010 to 2012, and did so significantly in 2011. [ 75 ] A parent has an obligation to properly support his or her children. 2009 and 2010 essentially average out. There was a significant underpayment for 2011 and 2012, and an overpayment for 2013.

It appears that 2014 will be less than 2013. [ 76 ] The parties need to be exchanging their income information regularly, and to adjust the resulting payments accordingly. Mr. Teichgraber should not be rewarded for failing to pay appropriate child support in 2011 because his income has declined since then. [ 77 ] As such, child support arrears should be calculated from 2011 to the end of 2013 based on Mr. Teichgraber’s actual income. Mr. Teichgraber should continue to pay for the balance of 2014 based on the imputed income of $15,000.00.

His payments for 2014 should be adjusted once his actual 2014 income is known. Ongoing Child Support [ 78 ] There is no evidence that Mr. Teichgraber is deliberately underemployed for the purpose of avoiding child support obligations. That is a general requirement for imputing income following Hunt v Smolis-Hunt , 1999 ABCA 196 . As long as that remains the law of Alberta, imputing income requires that prior determination. There is no information before me to do so. [ 79 ] That being said, Mr. Teichgraber has demonstrated that his income fluctuates significantly.

That is a reasonable basis to average his income over a reasonable period of time to allow for payments to be made on an expected income. Mr. Teichgraber has shown himself able to earn nearly $40,000.00 per annum; he has provided no independent evidence to explain why, over the last three years, he has been unable to work full-time at a minimum wage job. [ 80 ] If I assume that Mr. Teichgraber will earn another 25 percent on top of the $7,000.00 he earned for the first nine months of 2014, he might be expected to earn $9,333.00 in 2014.

If that amount is added to the amounts earned from 2009 to 2013, the average will be approximately $18,000.00 per year. Starting in 2015, I conclude that Mr. Teichgraber should pay ongoing child support based on his average of $18,000.00 per year. [ 81 ] The parties should provide the normal financial disclosure by the end of June each year, and appropriate adjustments made to their respective child support obligations. [ 82 ] If Ms. Page wants to pursue a claim based on Hunt v Smolis-Hunt , she will have to do so with a proper evidentiary

foundation. Conclusion [ 83 ] Ultimately, Mr. Teichgraber is entitled to his exemption of $28,500.00. From the balance of the house’s current value the remaining mortgage balance of $43,062.00 must be deducted. Ms. Page is entitled to the next $7,000.00 and $32,499.00 to reimburse her for the cost of improvements and the principal reduction on the debt secured against the home. The resulting balance of $253,949.00 is to be divided equally between the parties. [ 84 ] Mr.

Teichgraber’s equalization payment is thus his share in the matrimonial home, being $126,974.50, plus his exemption of $28,500.00, plus the car equalization payment of $500.00 for a total of $158,974.50. [ 85 ] Child support should be recalculated from and including 2011 based on Mr. Teichgraber’s actual income. 2014 should be adjusted once his actual income for 2014 is known. [ 86 ] Any arrears to the end of 2013 should be deducted from the equalization payment Mr. Teichgraber is otherwise entitled to. [ 87 ] On a go-forward basis, starting January 1, 2015, child support should be based on Mr.

Teichgraber’s six-year average income of $18,000.00, to be varied on application by either party on providing a proper evidentiary foundation to do so. Costs [ 88 ] There has been somewhat mixed success on the matrimonial property issues, although Ms. Page has been successful on the child support issues. This is the end of a somewhat lengthy action, which as plaintiff, Ms. Page has had the obligation to move along. She is likely entitled to some measure of costs, although I do not know if there have been any settlement offers along the way which should be taken into account.

If the parties cannot agree on an appropriate resolution of any claims for costs, they may make written submissions to me on the subject. [ 89 ] I will also reserve jurisdiction to resolve any issues relating to the manner and timing of the equalization payment to be made by Ms. Page. Heard on the 9 th day of October, 2014. Dated at the City of Edmonton, Alberta, this 18 th day of November, 2014. Robert A. Graesser J.C.Q.B.A. Appearances: James A. Carr Carr Quinn King for the Plaintiff Ronald G. Hopp, Q.C.

for the Defendant