Toliver v Koepke, 2016 ABQB 452

Court of Queen ’ s Bench of Alberta Citation: Toliver v Koepke, 2016 ABQB 452 Date: 20160817 Docket: 4803 132898 Registry: Edmonton Between: Rachelle Ann Toliver Plaintiff - and - Murray Elwood Koepke Defendant ___________________________________________ Reasons for Decision of the Honourable Madam Justice D.L. Shelley _______________________________________________________ Background

[ 1 ] The parties were married on October 12 th , 1996, separated on February 5 th , 2003 and divorced on June 26 th , 2007. [ 2 ] Many of the background facts are set out in Justice Read’s Reasons for Judgment, 2012 ABQB 307 , and, therefore, will not be repeated in detail in these Reasons. To understand what is to be decided by me, however, it is necessary to understand what has already been determined by this Court and upheld by the Court of Appeal. [ 3 ] As set out in Justice Read’s Reasons for Judgment, a trial had initially been scheduled to commence in May of 2006.

However, the parties attended a Judicial Dispute Resolution meeting (the JDR) in April, in an attempt to settle the matters between them. What occurred at the JDR remains confidential, but following discussions with Justice Watson (as he then was) at the JDR, the parties and their then counsel continued their settlement negotiations at the office of Mr. Koepke’s lawyer. At the end of the meeting, Mr. Koepke’s lawyer advised Ms. Toliver’s lawyer that “we have a deal”. It was agreed that Ms. Toliver’s lawyer would draft the divorce documents and Mr.

Koepke’s lawyer would draft the minutes of settlement. [ 4 ] Justice Read found that, over the next few weeks, Mr. Koepke’s lawyer told Ms. Toliver’s lawyer that she was having difficulty with her client and could not get instructions. During this time, Ms. Toliver’s lawyer advised the Court’s Trial Coordinator that “this matter has been settled” and the matter was taken off the trial list. Mr. Koepke’s lawyer made no comment, nor did she lodge any objection to either this letter or the removal of the matter from the trial list. Shortly thereafter, Mr.

Koepke’s lawyer filed a notice of ceasing to act. [ 5 ] Notwithstanding arguments advanced by Mr. Koepke before Justice Read, Justice Read concluded that the parties had reached a settlement agreement (the Agreement) by the end of their meeting on April 6 th , 2006. She concluded that they had intended to contract and that the essential terms of their agreement were clear on the evidence before her. She set out the terms that she found had been agreed to. Justice Read expressed her view that “Mr.

Koepke may have suffered from what is sometimes called ‘buyer’s remorse’ sometime after the Agreement was reached, but that does not alter the fact that through his counsel, he entered into a settlement agreement with Ms. Toliver.” [ 6 ] Justice Read noted that the Agreement in respect of matrimonial property was not in writing and therefore the provisions of s 37 and 38 of the Matrimonial Property Act (the MPA ) had not been met. She also observed that it was still an agreement which could be considered pursuant to Sec 8 of the Act .

There being no technical requirements in relation to the Agreement concerning child and spousal support, she concluded that those issues did not have the same compliance problems. [ 7 ] As I indicated earlier, Justice Read’s decision was upheld by the Court of Appeal. However, there was nonetheless a need for a second trial because, early in the proceedings, it was directed that the first trial would deal only with the issue of whether an agreement had been reached between the parties as a result of their discussions following the JDR.

It was specifically ordered that the issue of whether the agreement, if reached, was unconscionable would be dealt with at a later time. Therefore, the matter of unconscionability, as well as the effect of non-compliance with s 37 and 38 of the MPA , were matters to be determined in the second trial. [ 8 ] It is also relevant that, between September 25 th , 2006 and December 3 rd , 2015, there were at least 24 decisions/orders issued by at least seven Queen’s Bench Justices, as well as five Court of Appeal decisions/orders. Some of these related to the 2012 trial before Justice Read, and Mr.

Koepke’s appeal of that judgment, which was heard by the Court of Appeal in September 2013. Others relate to the costs of those proceedings, other procedural applications related to them, and Mr. Koepke’s unsuccessful application for leave to reargue the Court of Appeal decision which dismissed his appeal. Many of the orders were issued by Justice Macklin, who case managed the matter from January of 2008 up until the trial before me. [ 9 ] On February 18 th , 2014, Justice Macklin dealt with the payment of some of the costs awarded in favour of Ms. Toliver. Among other things, he directed that, if Mr.

Koepke retained counsel for the second trial, and only if he did so, such new counsel was at liberty to bring an application to release monies from those being held in court in connection with this matter. [ 10 ] The second trial was initially scheduled to be heard commencing January 19 th , 2015. At the beginning of that trial, Mr. Koepke sought and obtained an adjournment upon various terms, including that the next trial date would be peremptory on him and would proceed whether or not he had counsel or was self-represented.

When Justice Ackerl heard this application for an adjournment of the second trial, he granted Ms. Toliver $5,500 in costs in any event of the cause. Such amount was also payable out of the funds being held in court. [ 11 ] On February 25, 2015, Justice Macklin ordered that the second trial would not fetter in any way the trial judge’s discretion with regard to defences to be argued by Mr. Koepke. His order stipulated that “the trial judgment may determine whether the issues raised have already been determined or not”. Preliminary Trial Application [ 12 ] The trial before me commenced with Mr.

Koepke’s application, filed in Court that same morning, seeking; 1. removal of Ms. Reeves and all members of her law firm as counsel for Ms. Toliver “for all matters henceforth in the within litigation”; 2. a declaration that Justice Macklin’s November 25 th , 2015 decision was of no force and effect; 3. costs, including penalty costs against Ms. Reeves personally; and

4. an abridgment of time for service. [ 13 ] On November 25 th , Justice Macklin had dismissed Mr. Koepke’s application for further disclosure and further supplemental affidavit of records. He had also made a number of orders in relation to the upcoming trial, including in relation to expert reports, the filing of Form 39 and confirmation that the trial was to proceed as scheduled. Justice Macklin also awarded costs in favour of Ms. Toliver. On December 3 rd , Mr. Koepke brought an application for reconsideration of the November 25 th application.

Justice Macklin dismissed the application and awarded costs against Mr. Koepke. This was not the first time that Mr. Koepke had unsuccessfully applied for a reconsideration of Justice Macklin’s case management orders. On October 21 st , 2009, Justice Macklin had dismissed Mr. Koepke’s application for reconsideration of Justice Macklin’s May 15 th , 2009 order. [ 14 ] Amongst other grounds, on the first day of trial, Mr. Koepke accused Ms. Reeves of knowingly deceiving the Court and suppressing from the Court and Mr.

Koepke the true, official filed version of Justice Read’s Memorandum of Judgment, thereby leaving the Court and Justice Macklin to believe that “para 65 of the false CANLII version of Justice Read’s Reasons for Judgment was the true and actual version of Justice Read’s Judgement when it was actually false.” He also accused her of not acting in good faith, and of committing these actions to provide Ms.

Toliver “a massive benefit to which she was not entitled” which “resulted in gross miscarriage of justice, an abuse of the process of these Court proceedings... [which] affected the administration of justice”. [ 15 ] In advancing this serious allegation against Ms. Reeves, Mr.

Koepke was referring to a minor discrepancy between the text of para 65 of the Memorandum of Judgment signed by Justice Read, on May 9, 2012, which states: “Their agreement respecting child and spousal support does not have the same compliance problems.” and the CANLII version of this Memorandum of Judgment, which contains an additional three words and reads: “Their agreement respecting child and spousal support does not have the same compliance problems and is enforceable.” I note that by then Ms. Reeves had been acting for Ms. Toliver for about 8 years, having replaced Ms.

Toliver’s former counsel in part so that he would be able to testify at the first trial. [ 16 ] I dismissed Mr. Koepke’s application to have Ms. Reeves removed as counsel, for the reasons given by me from the Bench at that time. Preliminary Comments [ 17 ] In August of 2010, Justice O’Brien of the Alberta Court of Appeal heard an application brought by Mr. Koepke that arose out of Mr. Koepke’s appeal of two case management orders made by Justice Macklin.

One of these orders specifically provided that the sole issue of whether an agreement was reached or concluded between the parties was to be set down for trial, with no other issue being tried at that time. It specifically provided that the issue of whether the Agreement was unconscionable would not proceed to trial at that time. Rather, if there was a finding that there had been an agreement reached, the issue of unconscionability would be dealt with at a later time. Justice Macklin had made that order in October of 2009. Mr.

Koepke took the position that Justice Macklin’s order had unfairly revised the issue and scope of the trial, varying it improperly to his prejudice. The appeal of these orders followed Mr. Koepke’s application to Justice Macklin to reconsider the orders. Justice O’Brien concluded that it was within Justice Macklin’s mandate “to sequence the issues to be tried so that the litigation could proceed in an economical and efficient fashion”. He concluded that no prejudice had been caused. He further concluded that Mr.

Koepke had failed to show that his appeal from the case management orders had any realistic chance of success and that they wholly lacked merit. [ 18 ] In dismissing Mr. Koepke’s application for leave to reargue his appeal of Justice Read’s judgment, the Court of Appeal made the following observations: “A rehearing is not granted to allow another attempt at making the same arguments, nor to see if a panel member has changed his or her mind, nor to allow counsel to make additional arguments that might have been made on the original hearing of the appeal.” [ 19 ] The Court of Appeal concluded that Mr.

Koepke simply wanted to reargue certain issues. It noted that the Court is not obliged in its reasons to deal with every issue, nor to respond to every argument raised. It observed that “the Court generally does not deal with issues that will not, in the panel’s opinion, affect the outcome of the appeal”. [ 20 ] Most significantly, the Court of Appeal noted that “the appellant also proposes to reargue whether a suggestion by the respondent that the support payable be capitalized (and set off) was a repudiation of the agreement, or an invitation to amend it”. [ 21 ] The Court of Appeal also observed that: • Mr.

Koepke’s perception of questions asked during the oral argument was that some members of the panel had different views on the issues, leading him to argue that these issues were not resolved in the Memorandum of Judgment. The Court of Appeal responded by noting that judges frequently ask questions in the course of the oral submissions to elaborate on arguments and identify possible concerns. They confirmed that “the fact that a question is asked or opinion expressed does not necessarily reflect the final position of the judge, much less is it any sort of final adjudication.” • Mr.

Koepke “also quibbles about the way this Court paraphrased the decision of the trial judge”. • in seeking a reconsideration, Mr. Koepke relied on a clerical error which was contained in the Memorandum of Judgment. The Court of Appeal concluded that the clerical error did not affect the outcome.

[ 22 ] It its Memorandum of Judgment in relation to its dismissal of Mr. Koepke’s appeal of Justice Read’s judgment, the Court of Appeal rejected Mr. Koepke’s arguments about procedural fairness, including: • rejecting his argument that Justice Read had erred by not ensuring that all documents, particularly affidavits of the parties submitted during the course of the litigation, were entered as exhibits at the trial. They noted that he complained specifically about earlier notices of motion and affidavits. The Court of Appeal rejected Mr.

Koepke’s submission that the trial judge had a duty to ensure that the parties dealt with admissibility or to ensure that prior notices of motion and affidavits were entered in the trial record. The Court of Appeal noted that, pursuant to Rule 8.17 , there is a presumption that evidence at trial is given viva voce . If Mr. Koepke wanted to enter affidavit evidence, it was incumbent upon him to provide an acceptable reason for doing so.

It wasn’t the trial judge’s duty to determine whether a party wished to enter a particular document. • concluding that Justice Read made no reviewable error in her conduct of the trial and, specifically, that they were satisfied that she did not err in exercising her right to limit repetitive or irrelevant questions and rule on objections raised. • noting that Mr. Koepke’s main argument was a disagreement about the findings of fact and conclusions of Justice Read. • concluding that Mr. Koepke had not shown that Justice Read made an error in her discretionary costs award, specifically rejecting Mr.

Koepke’s argument that Ms. Toliver ought not to have received costs because the global amount of the settlement awarded was less than what she had alleged. [ 23 ] Following the dismissal of Mr. Koepke’s application for leave to reargue the appeal, Mr. Koepke complained to the Court of Appeal that he ought to have been permitted to make further oral argument on his application to reargue.

The Court of Appeal rejected this complaint, observing that such applications are always determined on the basis of written submissions. [ 24 ] Approximately one month following its dismissal of the appeal, the Court of Appeal issued its decision in relation to costs. The Court of Appeal referred to Mr. Koepke’s unsuccessful application to reargue the appeal, observing that such applications are discouraged and generally result in costs on a generous scale.

It further observed that “this particular application was marked by repeated attempts to revisit procedural directions that were made about the way the application would be considered, and the use of undersized font to avoid page limits on argument”. The unsuccessful appeal attracted a costs award of $5,000 in favour of Ms.

Toliver, while the application to reargue attracted costs of $2,500 in her favour. [ 25 ] The main reason for repeating so much of the history of this matter, and for making these preliminary comments, is to make it clear that the trial before me, which was intended to focus on a specific issue, was used as another attempt to revisit matters already decided (some of them upheld on appeal and many never appealed, in either case, matters that are now res judicata ).

Many of the comments and observations made earlier in the proceedings, by either Justice Read or various members of the Court of Appeal, apply equally to Mr. Koepke’s conduct during the trial before me. He advanced many of the same arguments; spent time looking for and referring to typographical errors or insignificant discrepancies; and seized upon out of context comments, giving them meaning which they could not reasonably have. [ 26 ] It is not my intention to address all of these, nor is it necessary to do so. Based on Mr.

Koepke’s arguments earlier in the proceedings and before me, he may interpret my failure to do so as my having failed to read or understand the arguments he was making. I remind Mr. Koepke of the Court of Appeal’s comments that a court is not obliged in its Reasons to deal with every issue or respond to every argument raised. While it was referring to issues and arguments in an appeal court, the same applies equally in a trial court. That is, I will not deal with many of the issues raised by him in his written argument because they do not, in my opinion, affect the outcome of this trial.

This is especially so in the case of matters that have already been fully canvassed and decided by other Justices who have been involved in this litigation prior to the trial before me. [ 27 ] Some examples serve to illustrate the point. Mr. Koepke was given the opportunity to submit written argument. Dates were set for the receipt of the argument, and limitations on page length etc. were imposed. After the close of the trial but prior to receipt of Mr. Koepke’s written argument, I received correspondence from Mr. Koepke which included the following: “It appears to me from this Discussion [Mr.

Koepke is referring to an exchange between Ms. Reeves and me, during her oral argument] that Justice Shelley (1) raised several matters about the Settlement Agreement that indicates how the Court cannot uphold the entire global Agreement, and (2) cannot give effect to parts of it and not other parts, and (3) if the Court does not uphold the whole Agreement, then the Court must look at everything afresh. Ms. Reeves agreed with all of these points of law and procedure. On that basis, it certainly appears that the Court and Ms.

Reeves agreed that the Court can neither uphold nor give effect to this Settlement Agreement. As such, it appears that Justice Shelley may have made her decision to dismiss the Plaintiff’s application to uphold this Settlement Agreement and find it enforceable as a matrimonial property agreement, and Ms. Reeves agreed with her reasoning and did not argue otherwise, then the remainder of the Trial issues pertaining to the Settlement Agreement would fall, and we must start afresh, start from scratch, go back to Square 1.

As such, I request Leave to make application at this time to decide that issue on these grounds, resulting in the Court dismissing the Plaintiff’s application on that matter, and sending us back to scratch.” And later in this correspondence, Mr. Koepke states: “As well, the evidence at this main Trial, on this issue, ought not to be regarded. I expect that these are matters of pure law, agreed to by Ms. Reeves, and of course by me [so unappealable!].”

[ 28 ] Having been repeatedly unsuccessful, before various members of this Court and the Court of Appeal, in having matters reargued or reopened, and in the face of the Court of Appeal’s advice that questions asked or opinions expressed by Justices during argument do not necessarily reflect their final position but, rather, are often used to elicit further commentary or identify related issues, Mr. Koepke concluded on the basis of an exchange of questions and comments which arose in Ms. Reeves’ argument, that I had already reached a conclusion, agreed to by Ms.

Reeves, which would have the effect of restarting this litigation in its entirety. I did not entertain Mr. Koepke’s Leave Application. [ 29 ] On March 29 th , Mr. Koepke submitted his written argument and case authorities. In his covering letter, Mr. Koepke complained about “the vast amount of heresay evidence of Ms. Rachel Toliver, and the arguments of Ms. Michelle Reeves not based on the file evidence”. Accordingly, he felt he “had to spend a lot of time trying to correct some of it in the litigation history

section of [his] written arguments [and that] given the page limitation, [he] could not address many of the wrong things”. Amongst other concerns, he felt he had been disadvantaged because he had to take the bus to the Law Courts, limiting his ability to carry all of his materials. He had not understood that when I granted his application to reopen the trial, which was concluded in his absence (following his failure to attend mid-way through the trial), I would expect that he would continue. Instead he thought I would set a further date for continuation of the Trial.

Because he was self-represented and had suffered a brain injury just prior to his marriage in 1996, he felt that he should have had more time to properly present his case and that the Trial should have been more spread out. He was also “not ready to proceed because of what happened at the November 25 th , 2015, court proceeding, where Justice Macklin denied further disclosure and supplementary affidavit of records”. [ 30 ] Mr. Koepke has been dealing with the consequences of his brain injury for approximately 20 years.

He is very familiar with court proceedings and has dealt with them for a considerable period of time as a self-represented individual. The record clearly shows that he is capable of preparing voluminous materials, locating appropriate case authorities, and advancing lengthy arguments on multiple issues numerous times, and often on very short notice. The amount of trial time was determined with his input. It was adjourned at his request and on the condition that it would be peremptory on him. Many accommodations were made during the course of the Trial to provide Mr.

Koepke with additional time to prepare (for example, to prepare his questions for witnesses, to prepare to give his own evidence). We often took longer breaks than usual, or adjourned earlier in the day to accommodate his need for additional time. After Mr. Koepke failed to attend, I heard and granted his application to reopen to permit him to conclude his testimony and argue his case, which resulted in the trial not being concluded within the scheduled time. One of Mr. Koepke’s expert reports was entered by agreement. That expert, Mr.

Gettle, did not appear during scheduled court time to provide viva voce evidence and Ms. Reeves agreed to waive cross- examination. Notwithstanding this accommodation, Mr. Koepke included, as part of his written argument, a two-page unsigned, unsworn “Responses to Reeves Argument” which Mr. Koepke advised was prepared by Mr. Gettle after Ms. Reeves’ argument had been made. In addition, Mr. Koepke attached a two-page response, in the form of a signed letter, from his other expert witness, Mr. Thiessen. Mr. Thiessen did testify at trial and was cross-examined by Ms. Reeves. Both of these responses to Ms.

Reeves’ argument contain new evidence. [ 31 ] Included in Mr. Koepke’s argument is the following issue: “whether R.T. [Ms. Toliver] repudiated the Settlement Agreement found by Justice Read.” I repeat, this issue was decided by Justice Read, who concluded that, although Ms. Toliver had wanted to vary a portion of the Agreement following the conclusion of the settlement, it did not constitute a repudiation and the original contract remained. This was upheld by the Court of Appeal, who refused to allow Mr. Koepke to reargue whether Ms.

Toliver’s suggestion that the support payable be capitalized was a repudiation of the Agreement. The Court of Appeal agreed with Justice Read that this did not constitute repudiation, and that the Settlement Agreement remained unaffected by it. [ 32 ] Mr. Koepke wants to reargue this issue again. He seems to have suggested that he was open to do this because of a comment made by Justice Macklin during case management. He believes that Justice Macklin indicated that he was free to re-argue repudiation at the trial before me. This is problematic for two reasons: 1.

In his February 25 th , 2015 Order, Justice Macklin, acknowledging that he could not fetter the trial judge’s discretion with regard to defences, said that the trial judge could determine whether the issues raised had already been determined; and 2. Justice Macklin fully appreciated that I do not have jurisdiction to overrule a judgment of either a member of this Court or a panel of the Court of Appeal on an issue finally determined by them. [ 33 ] Mr.

Koepke devotes over nine pages of his written argument to summarizing the history of this litigation, referring to the Agreement found by Justice Read as “the attempted Settlement Agreement”, and implicitly criticizing orders made during the course of the proceedings. He continues to complain about Justice Macklin having changed the issues and that nobody had entered Ms. Toliver’s affidavits at the first trial. He complains that Justice Macklin failed to hear and decide his application for repudiation following Justice Read’s Judgment and the Court of Appeal decision upholding it. Mr. Koepke points out that Ms.

Reeves and Ms. Toliver “well knew that M.K.’s issues for the main trial were that the settlement agreement was void due to R.T.’s repudiation, as well as for unconscionability, and if so, then the issues would be back to the issues defined in our pleadings: child support, spousal support, matrimonial property distribution and occupation rent”. Mr. Koepke continues to complain that Justice Macklin’s refusal to order further disclosure prejudiced his ability to prepare for trial.

In addition, he suggests that Justice Macklin’s Order of February 18 th , 2015, requiring an application by any new lawyer prepared to act for Mr. Koepke in order to access funds held in court for payment toward legal fees, shows that Justice Macklin was opposed to the application.

He implies that this resulted in him not being able to find a lawyer “in his extensive lawyer searches” because they knew Justice Macklin would oppose it. [ 34 ] I conclude these preliminary comments by confirming again that it is not my function in this trial to revisit matters determined by Justice Read and upheld by the Court of Appeal. It is also not my role to act as an appeal court in relation to Mr. Koepke’s dissatisfaction with rulings made by Justice Macklin in the course of case management.

I am satisfied that it is clear on the record that my task in this trial was to determine whether there was a reason not to enforce the Agreement. Trial Issues

[ 35 ] The issue to be decided by me is whether the Agreement is or is not enforceable. Specifically, this requires me to determine: 1. whether non-compliance with s 37 and 38 of the Matrimonial Property Act affects the enforceability of the Agreement as it relates to terms affecting matrimonial property; 2. whether the Agreement ought to be found to be unenforceable, in whole or in part, on the basis of unconscionability or duress, although the latter was not advanced in Mr. Koepke’s argument. Applicable Legislation and Caselaw S 37 and 38 of the Matrimonial Property Act ( MPA ) [ 36 ] S 37 of the MPA reads in part:

(1) Part 1 does not apply to property that is owned by either or both spouses or that may be acquired by either or both of them, if, in respect of that property, the spouses have entered into a subsisting written agreement with each other that is enforceable under s 38 and that provides for the status, ownership and division of that property. [ 37 ] S 38 reads as follows:

(1) An agreement referred to in

section 37 is enforceable if each spouse or each person, in the case of persons referred to in section 37(2), has acknowledged, in writing, apart from the other spouse or person

a) that the spouse or person is aware of the nature and the effect of the agreement,

b) that the spouse or person is aware of the possible future claims to property the spouse or person may have under this Act and that the spouse or person intends to give up these claims to the extent necessary to give effect to the agreement, and

c) that the spouse or person is executing the agreement freely and voluntarily without any compulsion on the part of the other spouse or person.

(2) The acknowledgement referred to in subsection (1) shall be made before a lawyer other than the lawyer acting for the other spouse or person or before whom the acknowledgment is made by the other spouse or person. [ 38 ] S 7(2) and s 7(3) of the MPA read in part: 7(2) If a property is

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,

d) an award or settlement for damages in tort in favour of a spouse, unless the award or settlement is compensation for a loss to both spouses, or

e) the proceeds of an insurance policy that is not insurance in respect of property, unless the proceeds are compensation for a loss to both spouses, 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. 7(3) The Court shall, after taking the matters in

section 8 into consideration, distribute the following in a manner that it considers just and equitable:

a) the difference between the exempted value of property described in subsection (2), referred to in this subsection as the “original property”, and the market value at the time of the trial of the original property or property acquired

i) as a result of an exchange of the original property, or ii) from the proceeds, whether direct or indirect, of a disposition of the original property;

b) property acquired by a spouse with income received during the marriage from the original property or property acquired in amanner described in clause (a)(

i) and (ii);

c) property acquired by a spouse after a decree nisi of divorce, a declaration of nullity of marriage, a judgment of judicial separationor a declaration of irreconcilability under the Family Law Act is made in respect of the spouses;

d) property acquired by a spouse by gift from the other spouse. [39] S 8 of the MPA reads as follows: The matters to be taken into consideration in making a distribution under

section 7 are the following:

a) the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as ahomemaker or parent;

b) the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition, conservation,improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or both spouses or byone or both spouses and any other person;

c) the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to theacquisition, conservation or improvement of the property;

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

i) that each spouse had at the time of marriage, and ii) that each spouse has at the time of trial;

e) the duration of the marriage;

f) whether the property was acquired when the spouses were living separate and apart;

g) the terms of an oral or written agreement between the spouses;

h) that a spouse has made

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

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order;

j) a prior order made by court;

k) a tax liability that may be incurred by a spouse as a result of the transfer or sale of property;

l) that a spouse has dissipated property to the detriment of the other spouse;

m) any fact or circumstance that is relevant. [40] In Diegel v Diegel, 2008 ABCA 389, the Alberta Court of Appeal declined “to decide whether a settlement agreement as to alawsuit that touches on matrimonial property issues can be enforceable without strict compliance with all of the formalities of s 38 of theAct”.

They did note that the proposed agreement was aimed at settlement of the entirety of the issues respecting matrimonial propertyand returned the matter to this Court for a determination of whether the parties had reached an enforceable contract. [41] In Miglin v Miglin, 2003 SCC 24, the Supreme Court of Canada stated that “a fairly negotiated agreement that represents theintention and expectations of the parties and that complies substantially with the objectives of the Divorce Act as a whole should receiveconsiderable weight”. [42] In Canadian Imperial Bank of Commerce v Ohlson, 2009 AR 140, the Alberta Court of Appeal observed thatunconscionability “aims to temper the idea of freedom to contract with the need to prevent abuse and to protect the weak”. [43] In Lydian Properties Inc v Chambers, 2009 ABCA 21, the Court of Appeal affirmed the decision of Justice Graesser, whoconcluded that there are four essential elements that need to be established by a party who alleges unconscionability: 1. that the transaction is grossly unfair and improvident; 2. that the person alleging unconscionability lacked independent legal advice or some other form of suitable advice; 3. that there was an overwhelming imbalance in the bargaining power caused by ignorance of business, illiteracy, ignorance ofthe language of the bargain, blindness, deafness, illness, senility or similar disability; and 4. the other parties knowingly taking advantage of such vulnerability. [44] As summarized in Roenisch v Bangs (1993) (AB KB), 138 AR 15, the general test for duress can besummarized into four factors:

1. whether the person alleged to have been coerced, protested; 2. whether, at the time, the person alleged to have been coerced, had an alternative course available, such as an adequate legal remedy; 3. whether the person alleging duress had been independently advised; and 4. whether after entering the contract, the person alleging duress took steps to avoid it. [ 45 ] In Orcheski v Hynes , 2007 ABQB 194 , Justice Moen observed that the test for determining duress in a family law context is less onerous than the test for “unconscionability” required in the common law of contract.

However, she also observed that the existence of a power imbalance of vulnerability on the part of one of the parties does not always lead to a finding of duress. [ 46 ] In Dickieson v Dickieson , 2011 ABQB 202 , Justice Browne relied on the Supreme Court of Canada’s decisions in Miglin and Rick v Brandsema , 2009 SCC 10 . In these cases, the Supreme Court stated that judicial intervention would be justified where agreements were found to be procedurally and substantively flawed.

The Supreme Court held that “there must be persuasive evidence brought before the Court, that one party took advantage of the vulnerability of the other party in separation or divorce negotiations that would fall short of evidence of the power imbalance necessary to demonstrate unconscionability in a commercial context.” The Court concluded that an agreement need not be enforced if one party’s exploitation of the vulnerabilities of the other during the negotiation process resulted in an agreement that deviated substantially from the legislation.

However, the Court also “stressed the importance of respecting the parties’ right to decide for themselves what constitutes for them, in the circumstances of their marriage, mutually acceptable equitable sharing”... and that “parties should generally be free to decide for themselves what bargain they are prepared to make”. Justice Browne observed in Dickieson , that “the parties chose to negotiate the distribution of assets and the debts based on information available at the time of the negotiation”.

Justice Browne concluded that “although the agreement may not be perfect, it certainly falls within the range contemplated by the legislation of entitlements to spousal support and distribution of matrimonial property”. Analysis and Reasons [ 47 ] As it is clear from the authorities referred to above, the burden is on the person seeking to set aside an agreement to provide the court with persuasive evidence demonstrating unconscionability.

The evidence must establish that exploitation by one party of the vulnerabilities of the other resulted in an agreement that deviates substantially from the applicable legislation. Most of the evidence provided by Mr. Koepke was not relevant to the issues in this trial. He wished to discuss conversations that had occurred between him and Ms. Toliver prior to their engagement; particulars of their wedding; and the first trial, the appeal, and the various other applications leading up to the trial before me. Mr. Koepke mentioned more than once that he felt that he and Ms.

Toliver had agreed, prior to their marriage, that “divorce was not an option”. If there was such an agreement, that is not the agreement that is being litigated in these proceedings. None of Mr. Koepke’s own evidence addressed anything that occurred immediately preceding or during the course of the parties’ negotiation of the Agreement that would be relevant to the issue of unconscionability. [ 48 ] The parties placed before me many orders, judgments, reasons, and other documents filed or issued earlier in this litigation.

While there is no doubt that it was important that I have some of them before me in order to determine what matters had already been determined, many of the documents entered or referred to were not relevant to issues before me, and were, therefore, of no assistance in resolving them. Ms. Toliver may have agreed to enter the irrelevant documents in response to Mr. Koepke’s argument, after the first trial, that the decision was erroneous because Justice Read did not have all of the relevant materials before her.

In that regard, I am satisfied that the volume of materials entered at this trial, coupled with my having had the benefit of hearing both parties testify, provided me with more than sufficient background information and ample opportunity to assess the credibility of the parties. [ 49 ] On the evidence before me, there is nothing to suggest that Ms. Toliver was attempting to take advantage of Mr. Koepke at any time, or that Mr. Koepke was in a compromised bargaining position during the negotiation of the Agreement. [ 50 ] In his written argument, Mr.

Koepke set out seven forms of relief that he is seeking from this Court in consequence of the trial. Some of them can be disposed of quite quickly. [ 51 ] Mr. Koepke seeks an order that Ms. Toliver repudiated the Agreement. This issue is res judicata , as the evidence he relies on was before Justice Read, who concluded that there had been no repudiation, a finding upheld by the Court of Appeal. [ 52 ] Mr. Koepke seeks “a direction to proceed back to the original legal actions” and an order to consolidate them. I see no purpose in doing so, given the analysis which follows. [ 53 ] Mr.

Koepke seeks an order that Ms. Toliver produce her up-to-date income and asset disclosure so that he may proceed with his spousal support claims and claims against Ms. Toliver’s pension and other assets. I am satisfied on the evidence that was before me at trial that Ms. Toliver has provided more than ample evidence for the purposes of determining the issues. It is equally clear on the record that it is Mr. Koepke who has failed to provide disclosure. However, for the following reasons, no further disclosure ought to be required of either party. [ 54 ] Mr.

Koepke seeks an order for distribution of all matrimonial property, and for occupation rent on the matrimonial home and vehicle, as of the date of trial. He also seeks an order for costs against Ms. Toliver for all steps taken in her enforcement proceedings for her “alleged settlement agreement”. I will deal further with these two requests as they are contingent upon my conclusion regarding Mr. Koepke’s other two requests. These are: 1. a finding that the Agreement found by Justice Read is set aside or that it is not enforceable; and

2. an order that the Agreement is not just and equitable, so it cannot be upheld by this court as a settlement agreement to settle all litigation in these proceedings. In my view, it is these latter two requests that are the substance of what is properly before me – namely, whether there is some reason that the Agreement ought not to be enforced. [ 55 ] In relation to the possible bases for setting aside the Agreement, the issue of duress was not pursued by Mr.

Koepke in his argument, nor was there any evidence advanced at trial to support a finding that he was under duress at any time leading up to the making of the Agreement. Therefore, that leaves for determination the issues of unconscionability and non-compliance with s 37 and 38 of the MPA . [ 56 ] On the evidence before me, I cannot conclude that there were any procedural flaws leading up to the conclusion of the Agreement which would justify my intervention. By Agreement, the parties had attended before Justice Watson for the purpose of attempting to resolve their issues through the JDR process.

They had the benefit of whatever comments he made following his review of their materials and his meeting with them. They continued their discussions, both parties with the benefit of counsel, and had further extensive discussions which resulted in the Agreement. The parties met separately with their counsel during the course of the discussions and had an opportunity to discuss fully with their counsel the proposal for settlement. Following the JDR and those extensive discussions, the Agreement was reached.

There is nothing in the evidence to suggest any procedural flaw. [ 57 ] This leaves the issue of whether the Agreement was substantially flawed. I interpret this stipulation by the Supreme Court to be akin to the element referred to by Justice Graesser in Lydian Properties as a grossly unfair and improvident transaction. Mr. Koepke has failed in his burden of proving that the Agreement resulted in a grossly unfair and improvident transaction.

The parties, with benefit of their own counsel, agreed to terms which might not have been identical to those that might be awarded by a court at a trial, whether that trial was held 2009 or the trial that was held before me. There is no doubt that additional information was presented at trial that was not available when the parties negotiated their Agreement. They based their Agreement on appraisal and valuation opinions obtained by experts they had commonly chose. At trial, the evidence presented in relation to the value of the matrimonial home and the value of Ms.

Toliver’s pension differed between the experts relied on by the parties. In addition, the more recent opinions were impacted by information obtained in the ensuing years. [ 58 ] Although we cannot know precisely why specific terms were agreed to, rather than others, the terms were detailed, were based on information provided by experts mutually chosen by the parties, and addressed all issues between them. While Ms. Toliver agreed to pay Mr.

Koepke spousal support for a longer period than would be expected given the length of this marriage, perhaps it was because he agreed to pay child support for her two daughters or some other reason. Mr. Koepke was to receive one half of the increase in value of Ms. Toliver’s pre-marriage residence, even though she might have been in a position to argue an unequal distribution given the circumstances. [ 59 ] As I have already mentioned, the experts retained by Mr. Koepke and Ms. Toliver did not provide identical values. This is neither unusual nor surprising. Mr. Clark provided evidence for Ms. Toliver.

He had been the expert retained jointly by the parties in 2004. In relation to the set-off, his calculations result in a higher number for Mr. Koepke than Mr. Koepke’s own expert, Mr. Thiessen. However, it is clear that Mr. Thiessen’s report, while more favorable to Ms. Toliver, was based on erroneous assumptions and information. Accordingly, I prefer the evidence of Mr. Clark. In addition, to having been jointly retained at the relevant time, it was his opinion that was taken into account when the Agreement was negotiated. [ 60 ] Mr. Gettle’s appraised value is higher than Mr. Hagen’s. Mr.

Hagen prepared his appraisals in contemplation of the settlement negotiations and the first trial. His first report was jointly commissioned and was used by the parties while negotiating the Agreement. Mr. Gettle’s report was prepared prior to the second trial. Mr. Gettle had available to him sales information for the intervening period, which he used in arriving at a higher value. [ 61 ] Mr.

Koepke has failed to convince me that the differences in values provided by the experts proves either the unconscionability of the Agreement, or that the distribution agreed to in it, represents a substantial deviation from that which would be awarded by the court having regard to the MPA and the Divorce Act . I agree with Ms. Toliver that, taking into consideration the factors set out in s 8 of the MPA , the distribution agreed to by the parties in the Agreement was within the range of alternatives that were just and equitable. [ 62 ] It is Mr. Koepke who wishes to set aside the Agreement and start from scratch.

This is surprising, given that it is Ms. Toliver’s situation that has substantially worsened since she entered into the Agreement. Underlying assumptions concerning her likely income post-separation have proven to be overly optimistic. We do not know Mr. Koepke’s current financial situation, other than that he has continued to receive WCB replacement income on a tax-free basis. His income has been stable, while Ms. Toliver’s has substantially declined. We do not know what assets Mr. Koepke has acquired, if any, but the evidence shows that Ms.

Toliver continues to reside in the same house as she had before her marriage to Mr. Koepke, and that she has adjusted her lifestyle to accommodate her reduced income. Since I have concluded that Mr. Koepke has failed to prove that the Agreement is unconscionable, it is unnecessary for me to start from scratch as Mr. Koepke wishes. However, if I were to do so, I am not certain that this would work to his advantage. [ 63 ] That leaves, then, my consideration of s 37 and 38 of the MPA .

In Diegel , the Court of Appeal declined to decide whether strict compliance with the formalities of s 38 was required in situations where there is a settlement agreement in a lawsuit that involves matrimonial property. In that case, the matter was returned to this court for a determination. That is the situation before me. I have concluded that the Agreement represents what the Supreme Court of Canada referred to in Miglin , as “a fairly negotiated agreement that represents the intention and expectations of the parties and that complies substantially with the objectors of the Divorce Act ”.

The objectives sought to be satisfied by s 38 of the MPA have been satisfied in this case, albeit the technical requirements have not. That is, I am satisfied that Mr. Koepke, represented by experienced counsel in negotiating and settling on the terms of the Agreement, was aware of the nature and effect of the Agreement, understood that it would settle all matters between himself and Ms. Toliver, and that he was

agreeing to the terms of the Agreement freely and voluntarily without any compulsion from Ms. Toliver or any other person. The technical requirements of the

section were not met because Mr. Koepke got what Justice Read referred to as ‘buyer’s remorse’ and ceased cooperating with his then lawyer to finalize the documentation. I am satisfied that this is an Agreement that this Court should uphold, notwithstanding non-compliance with the technical requirements of the MPA . Conclusion [ 64 ] For the Reasons above, I conclude that the Agreement is enforceable. [ 65 ] Mr. Koepke seeks recovery of all costs awarded to Ms. Toliver to date. While I appreciate that his request was predicated on his assumption that Ms. Reeves and I had agreed during Ms.

Reeves’ argument that I could not uphold the Agreement, even if his assumption had proven correct, I would not be in a position to “refund” costs awarded in relation to the first trial, the unsuccessful appeal, and applications related to them. In any event, given my conclusion that the Agreement is enforceable, Mr. Koepke is not entitled to such a refund, nor to costs of the second trial. [ 66 ] In the result, the spousal and child support and property distribution will be as set out in para 62 of Justice Read’s Memorandum of Judgment, reiterated in para 1 of the Judgment dated May 9, 2011. I accept Mr.

Clark’s calculation of the offset amount in relation to the spousal and child support amounts, being the sum of $17,328. When added to the net amount owing in relation to matrimonial property ($108,000), the total amount owing by Ms. Toliver to Mr. Koepke, pursuant to the Agreement, was $125,325. Ms. Toliver paid $115,000 into court, pursuant to Justice Slatter’s Order of September 2006. While there was a delay in paying the money into court while Ms. Toliver refinanced her residence, given the shortness of the delay, and the position taken by Mr.

Koepke throughout this litigation, I decline to award interest on either the period between when Justice Slatter ordered the payment into court and when the money was paid, or on the approximately $10,000 difference in the amount paid into court and the amount found to be owed under the Agreement. [ 67 ] I understand that Ms. Toliver wishes to speak to the matter of costs before I determine that issue. Given the history of this matter, I order that the parties provide written submissions in relation to the issue of costs, rather than appearing in person to argue this issue. Ms.

Reeves is ordered to provide her written submissions in relation to costs within 14 days of the date she receives these Reasons for Decision. Mr. Koepke is ordered to provide his written submissions within 14 days of receiving Ms. Reeves’s submissions. Both parties are to limit their written submissions to five pages, excluding any case authorities or copies of written offers which may be appended to the submissions. Heard from the 29 th day of February to the 4 th day of March, 2016, with written submissions concluded on or about April 8 th , 2016.

Dated at the City of Edmonton, Alberta this 17 th day of August, 2016. D.L. Shelley J.C.Q.B.A. Appearances: Michele J. Reeves for the Plaintiff Murray Elwood Koepke Self-Represented Litigant