Maurice v Matchett, 2016 ABQB 704

Court of Queen’s Bench of Alberta Citation: Maurice v Matchett, 2016 ABQB 704 Date: 20161214 Docket: 4803 164077 Registry: Edmonton Between: Wanita Mary Maurice Plaintiff/Respondent/Cross Applicant - and - Wesley Joseph Matchett Defendant/Applicant/Cross Respondent _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice Robert A. Graesser _______________________________________________________ Introduction [ 1 ] Each party has an application. Wanita Mary Maurice applies for spousal support. Her application is opposed by her husband, Wesley Joseph Matchett. Mr.

Matchett applies to strike Ms. Maurice’s claim for a division of matrimonial property on the basis of long delay. His application is opposed by Ms. Maurice. Background [ 2 ] The parties began cohabiting in July, 2011. They married in May, 2012. They separated in November, 2012. [ 3 ] At the time of separation, Ms. Maurice says that they entered into an agreement regarding the division of property and debts. They did not have legal advice at the time.

[ 4 ] The agreement, appended to Mr. Matchett’s affidavit sworn October 20, 2016, lists various items with amounts of debt attributed to each item. It is not signed. Mr. Matchett has not dealt with the agreement one way or another in his affidavits so there may be an issue as to whether the parties did come to agreement on the matrimonial property, or if the document prepared by Ms. Maurice accurately reflects their agreement. [ 5 ] I note, however, that Mr. Matchett refers to the agreement in his affidavit of October 20, 2016.

He appears to want to take advantage of some of its provisions, namely the statement that “no other claims will be made from either party”, in relation to Ms. Maurice’s claim for spousal support. [ 6 ] Of particular relevance to this application is the value of the corporation owned by the parties, Matchett Transport Ltd. It is given no value in the agreement, and has $283,000 recorded as “current debt”. [ 7 ] Two trucks are shown as being worth less than is owed against them.

American Express is shown as having a value of $15,000 (for some reason) and a debt owed of $12,000. [ 8 ] The details of the agreement are essentially:

a) Ms. Maurice signs off her interest in the corporation, and Mr. Matchett assumes the debts;

b) Mr. Matchett signs off the lake property, and Ms. Maurice assumes the debt;

c) Mr. Matchett will make the payments on both trucks until they are paid off, with Ms. Maurice keeping one;

d) Ms. Maurice is to receive $10,000 from the company in relation to Mr. Matchett’s motorcycle;

e) The corporation is to make the payments on Ms. Maurice’s American Express card as the balance owed relates to corporate purchases; and

f) The corporation will pay Ms. Maurice $64,500, which represents a debt of $106,500 minus the debt owed on the truck she was to keep (assuming all of the monthly payments are made). [ 9 ] The agreement recites that no other claims will be made by either party, including “monetary support”. [ 10 ] Apparently, the shares in the corporation were transferred by Ms. Maurice, and the lake property was transferred into Ms. Maurice’s name. Mr. Matchett made the required payments on the truck until sometime in the spring of 2016. It was to have been paid off in October, 2017. [ 11 ] According to Ms.

Maurice’s most recent affidavit, sworn October 31, 2016, Mr. Matchett “depleted my line of credit with Manulife Bank ... leaving me with maximum amounts of debt owing on my AMEX and MBNA credit cards”. [ 12 ] Ms. Maurice’s description of the agreement is that “he would repay me the $106,500 of the $130,000 that I had borrowed on my line of credit”. She states that Mr. Matchett was to pay $20,000 towards her credit card debt. [ 13 ] Ms. Maurice explains in this affidavit that she did not seek spousal support earlier because she expected to receive the payments Mr. Matchett agreed to make.

She lost her job in June, 2015 and anticipates that her employment insurance will run out shortly. [ 14 ] She says that apart from the truck payments made by Mr. Matchett or the corporation, she has only received $6,000 of the money she expected. [ 15 ] Mr. Matchett swore an affidavit on July 15, 2016. He swears that Ms.

Maurice injected $128,385.32 into Matchett Transport, but has received $128,385.32 by way of: a) $35,328.98 by way of payments on the truck she kept; b) $62,671.71 on personal expenses charged to the corporation’s AMEX card; c) $8,090.74 on personal expenses charged to the corporation’s MBNA card; and d) $23,265.93 by way of other withdrawals from the corporation. [ 16 ] Mr. Matchett says he stopped making payments on the truck ($929.71) per month “this spring”. He claims that Ms. Maurice spent $33,000 of corporation funds for their wedding. [ 17 ] Ms.

Maurice’s application for interim spousal support was heard by Hillier J on July 21, 2016. He ordered Mr. Matchett to pay $1,200 per month in spousal support commencing July 1, 2016 until further order. [ 18 ] Mr. Matchett brought a cross-application filed October 21, 2016 to vacate the July 21 order, and to dismiss the matrimonial property action for delay. [ 19 ] A second affidavit sworn October 20, 2016 was filed in relation to his application to dismiss. Positions of the parties

Ms. Maurice [20] Ms. Maurice seeks ongoing interim support in the amount of $3,500 per month, and the dismissal of Mr. Matchett’sapplication to end the matrimonial property proceedings. [21] Mr. Matchett seeks to have the spousal support order vacated, and to dismiss Ms. Maurice’s matrimonial property claimbecause of delay. Matrimonial Property Claim [22] Mr. Matchett correctly points out that matrimonial property actions are subject to Rules 4.31 and 4.33. Those rules state: 4.31(1) If delay occurs in an action, on application the Court may (

a) dismiss all or any part of a claim if the Court determines that the delay has resulted in significant prejudice to a party, or (

b) make a procedural order or any other order provided for by these rules.

(2) Where, in determining an application under this rule, the Court finds that the delay in an action is inordinate and inexcusable, thatdelay is presumed to have resulted in significant prejudice to the party that brought the application. 4.33

(2) If 3 or more years have passed without a significant advance in an action, the Court, on application, must dismiss the action asagainst the applicant, unless (

a) the action has been stayed or adjourned by order, an order has been made under subrule (9) or the delay is provided for in alitigation plan under this Part, or (

b) an application has been filed or proceedings have been taken since the delay and the applicant has participated in them for apurpose and to the extent that, in the opinion of the Court, warrants the action continuing. [23] In Madore v Madore, 2016 ABQB 146, Gates J considered these rules and focused on Rule 4.31 as the three years referencedin Rule 4.33 had not yet passed.

He reviewed a number of recent cases on these Rules and stated at paragraph 37: [37] It seems clear from the various cases which have considered this Rule, as well as the predecessor Rule, that the court’s focus inthese types of applications involves an examination of the conduct of the litigation and, specifically, whether the actions of the parties“mov[e] the litigation closer to trial in a meaningful way”: Morasch v. Alberta, 2000 ABCA 24 , at para. 6 and 8.

Thisexamination requires a functional approach that focuses on substance, as opposed to form, and, as such, examines the nature, value,importance and quality of the action taken: St Jean Estate v. Edmonton (City), 2014 ABQB 47 , at para. 17-18; Phillips v.Sowan, 2007 ABCA 101 ; Huerto v. Canniff, at para. 23, 26; Le v. 1055168 Alberta Ltd. 2013 ABQB 431 . [24] The focus under Rule 4.31 is whether the delay is inexcusable, whether it is inordinate, and whether there has been prejudiceto the applicant. [25] In Madore, the parties separated in October, 2011. They were divorced in January, 2016.

After separation, the husbandmoved to Nova Scotia and declared bankruptcy. He commenced an action for divorce and a division of matrimonial property on August22, 2012. [26] The action proceeded slowly. The husband served a notice to produce in September, 2013. The wife responded with her ownnotice to produce shortly after. The husband filed his affidavit of records. The wife filed an affidavit of records in October, 2014.

Thehusband only filed his affidavit in December, 2015, seven months after the wife had brought the application to dismiss for long delay. [27] Questioning had been set for July, 2014 but did not proceed, initially because of a power outage in Calgary and then becausethe husband did not appear. [28] Dealing firstly with inordinate delay, Gates J held at paragraph 57: [57] In my view, this is a relatively straight-forward Matrimonial Property Act action that should have moved relatively quicklythrough the standard litigation processes: completion of pleadings; production of Affidavits of Records; questioning; responses toundertakings; exchange of any required expert reports; and setting the matter down for trial.

While I acknowledge that the Respondent’sbankruptcy created a complication, it is apparent that as of June 2013, possibly sooner, the Trustee in Bankruptcy made it clear that theRespondent was free to pursue his Matrimonial Property Act action without any involvement on the part of the Trustee. Other than thecompletion of the pleadings, none of the other litigation steps described above have been completed. Indeed, some of those steps havenot even been commenced notwithstanding the passage of two months shy of three years.

In my view, this is in excess of what wasreasonable having regard to the nature of the action and the overall circumstances of the case. I find that the delay was inordinate. [29] As to the delay being inexcusable, he stated at paragraph 60: [60] I am not satisfied that any of the explanations provided by the Respondent amount to a credible excuse for the inordinate delay.Any concerns relative to the adequacy of the Applicant’s document production or the Applicant’s willingness to submit to questioningcould have been easily addressed through an application to the court.

No such application was ever taken, save for the May 15, 2015,application filed to compel the Applicant to submit to questioning. As previously discussed, the Respondent does not appear to havepursued this application with any diligence. In the absence of a credible excuse, I am satisfied that the delay in this instance isinexcusable.

[ 30 ] Gates J dealt with prejudice at paragraph 61: [61] The Respondent has not advanced any evidence or argument that raises a legitimate doubt regarding the existence of significant prejudice. Indeed, there is no mention of the issue in either of his Concise Letters or in any of his filed affidavits. In the result, I am satisfied that the Applicant is entitled to rely on the presumption set out in Rule 4.31(2). [ 31 ] The extent to which prejudice may be presumed from inordinate and inexcusable delay is dealt with in Empson v Wenzel Downhole Tools Ltd. , 2013 ABCA 418 .

There, the Court of Appeal held at paragaraph 3: [3] Rule 4.31(2) presumes prejudice when there has been inordinate and inexcusable delay, and the death of an important witness will often amount to prejudice. However, each case must be examined on its facts, and the presumption of prejudice from the death of a witness is rebuttable. Even if there are isolated issues upon which only the deceased witness could have testified, that may not amount to sufficient prejudice to warrant dismissing the action.

The chambers judge’s findings are entitled to deference, and it is not the role of this Court to decide the matter afresh.

The chambers judge’s conclusions reflect no reviewable error. [ 32 ] Yamauchi J dealt with the issue of prejudice in Donnelly v The Brick Warehouse Corporation , 2013 ABQB 621 , referencing Ravvin Holdings Ltd. v Ghitter , 2008 ABCA 208 at paragraphs 44 and 45 : [44] The Alberta Court of Appeal in Ravvin at para 39, went on to clarify this by saying: … [A]bsent evidence sufficient to raise a legitimate doubt about the existence of prejudice that is attributable to the delay, the presumption applies.

Once evidence raises such a legitimate doubt, then the applicant bears the burden of proving, on the whole of the evidence, that serious prejudice was caused by the delay. [45] The Alberta Court of Appeal held that this analysis takes place in 2 parts. First, whether there is evidence that rebuts the presumption of serious prejudice. Second, whether there is sufficient evidence of such prejudice. The factor that overarches this analysis is that this Court must “tie the likelihood of serious prejudice to the proper period of inordinate and inexcusable delay”: Ravvin at para 41.

Analysis [ 33 ] The chronology here is as follows: Marriage May 12, 2012; Separation November, 2012; Statement of Claim April 23, 2013; Statement of Defence and Counterclaim April 23, 2015; Application for spousal support June 27, 2016; Application to dismiss October 21, 2016. Rule 4.33 – three-year delay [ 34 ] On the face of the formal steps taken, the filing of the statement of defence and counterclaim by Mr. Matchett on April 23, 2015 likely re-started the time clock, especially since he filed a counterclaim against Ms. Maurice.

To the extent that the defence and counterclaim may not have materially advanced the action, it is also significant that Ms. Maurice’s lawyer wrote Mr. Matchett’s lawyer at the time on September 14, 2015 enclosing significant disclosure and inviting a proposal “to deal with the obligations my client has been saddled with”. [ 35 ] The level of disclosure was significant. This production of records by itself was something that materially advanced the action.

I do not accept that the impact of this disclosure was lessened by the trust condition imposed that “no copies of these documents be made without the prior written approval of the writer”, as argued by Mr. Lewsaw. [ 36 ] I do not need to review case law on the subject of disclosure of relevant and material records advancing a claim. Meaningful disclosure is a significant step in any lawsuit. [ 37 ] The Alberta Court of Appeal’s recent decisions on Rule 4.33, Ursa Ventures Ltd. v Edmonton (City) , 2016 ABCA 135 and Weaver v Cherniawsky , 2016 ABCA 152 , are of assistance.

Ursa makes it clear that simply completing a “step”, even one required by the Rules of Court, does not necessarily “significantly advance the action.” Everything is contextual. [ 38 ] I have no information here as to the circumstances surrounding the filing of the statement of defence and counterclaim. So there may be an issue as to whether the mere filing of the pleading significantly advanced the action. [ 39 ] But around the same time, it is clear that Ms. Maurice (through counsel) provided a large number of records relevant to matrimonial property and spousal support issues.

It does not matter that the production was not a formal one, or that it was not in response to a notice to produce, or that Mr. Matchett’s lawyer was not permitted by trust conditions to copy any of the records without Ms. Maurice’s lawyer’s consent.

[40] The reality of the supply of documents is that meaningful information to either settlement or advancement of the issues wassupplied.

The lawsuit advanced. [41] This is not the same situation as in Ursa, where an affidavit of records contained no records of which the City was unaware.That case turned more on the standard of review than determining whether the production of the particular records was a significantadvancement. [42] Here, I conclude that the documents were meaningful and were necessary to move the matter along. [43] In Weaver, the Court of Appeal stated at paragraphs 17 and 18: [17] Application of the new Rules requires a functional approach.

Their purpose and intent, as emphasized in the foundational rule1.2, is to provide fair and just resolution of claims in a timely and cost effective manner. The foundational rules parallel a cultural shift inlitigation that deemphasises trial as the dominant mechanism for resolving civil disputes in favor of

summary procedures and ADR:Hryniak v Mauldin, 2014 SCC 7 , [2014] 1 SCR 87 and Windsor v Canadian Pacific Railway, 2014 ABCA 108 , 572AR 317 at para 15; Heurto v Canniff, 2014 ABQB 534 at paras 13-15, aff’d 2015 ABCA 316 . [18] Under the delay Rules the functional approach requires the chambers judge to determine whether the step said to be a“significant advance in an action” actually moves the lawsuit forward in a meaningful way considering its nature, value, importance andquality. The genuineness and the timing of the step are also relevant.

The focus is on the substance of the step taken and its effect on thelitigation, rather than on its form: St Jean Estate v Edmonton (City), 2014 ABQB 47 at para 19, 585 AR 81; Ro-DarContracting Ltd. v Verbeek Sand & Gravel Inc., 2016 ABCA 123 , 2016 ABCA 123 (available on CanLII); Ursa Ventures Ltd.v Edmonton (City), 2016 ABCA 135 , paras 18 and 19 (available on CanLII). [44] In Weaver, the issue was whether the parties’ agreement to proceed to a JDR (that never took place) significantly advancedthe action.

The chambers judge said no, and the Court of Appeal dismissed the appeal. [45] In XS Technologies Inc. v Veritas DGC Land Ltd., 2016 ABCA 165, the Court of Appeal essentially affirmed Ursa andWeaver. [46] Here, applying the functional approach, the provision of records significantly advanced the action, such that I do not need toconsider the effect of filing a statement of defence and counterclaim. [47] I conclude that Rule 4.33 has no application here.

The three-year period has not elapsed without the action being movedalong in a significant way, during the three years before the application to dismiss was brought. Rule 4.31 – inordinate and inexcusable delay [48] That leaves the issue under Rule 4.31 as to inordinate and inexcusable delay. [49] It is fair to observe that Rule 4.33 does not give plaintiffs a licence to have three years less a day to do something to advancethe action.

Rule 4.31 contemplates situations that involve inordinate and inexcusable delay. [50] It takes exceptional circumstances for delay of less than three years to result in an action being dismissed under that rule.Those circumstances will generally involve significant prejudice to the defendant. [51] There is no information before me as to what happened between the time the statement of claim was issued and the time astatement of defence was filed almost exactly two years later.

I assume that the statement of defence and counterclaim did not come outof the blue, however. [52] There is also no information before me as to what happened between the time of the filing of the statement of defence andcounterclaim and Ms. Van Wachem’s letter of September 14, 2015, or from then until Ms. Maurice brought her spousal supportapplication in June, 2016. [53] If there was any inordinate delay, in my view, that occurred between the filing of the statement of claim for divorce and thefiling of the statement of defence and counterclaim. That was two years to the day.

There is no evidence of anything happening duringthat period. No explanation for the delay is given. [54] To the extent there was any inordinate and inexcusable delay to the time of filing the statement of defence and counterclaim,that was waived by Mr. Matchett filing his pleadings.

Any Rule 4.31 delay should have been responded to by an application to dismiss,rather than filing pleadings. [55] If evidence of waiver is required by reason of Brace v Williams, 2016 ABCA 384, the filing of a pleading is sufficientevidence. [56] I am unable to conclude that any inordinate delay occurred between the filing of the statement of defence and counterclaimand the application for spousal support, which is certainly relevant to the matrimonial property action. [57] There is no evidence of any prejudice, and the length of the delay involved here does not attract the presumption of delayinherent in inordinate and inexcusable delay. [58] As a result, I decline to dismiss Ms.

Maurice’s matrimonial property action for delay. Now that the matter is active again, I donot see any reason to make any procedural orders, although the parties are free to seek assistance under Rule 4.10 if they have anyongoing difficulties with the management of the litigation.

Spousal support Impact of delay on claim [ 59 ] There are no time limits in which actions or applications for either relief may be sought until after the divorce has been granted. [ 60 ] As noted in Wittenburg v Wittenburg , 2003 ABQB 154 , even if a divorce action were struck for delay, a new action could be commenced. [ 61 ] Mr. Matchett argues that Ms. Maurice’s application for spousal support should be dismissed because of delay. He cites Thompson v Thompson , 2007 ABQB 715 . [ 62 ] In that case, the wife commenced divorce and matrimonial property proceedings, following the separation in 1986.

The two actions were consolidated in 2000, and in 2004 the husband sought to move the matter along. A trial of the wife’s spousal support claim was adjourned in 2006, although the matrimonial property was dealt with then. [ 63 ] Read J struck corollary relief claims before trial, holding at paragraph 26: [26] If the spousal support claim is now advanced, Mr. Thompson is faced with the difficulty that, having operated for many years on the supposition that no claim for spousal support would be made, he has likely made certain decisions or pursued certain courses of conduct that he would not otherwise have taken.

It may very well be inequitable and unjust now to require him to face, in his retirement, a large retroactive lump sum spousal support payment that could effectively ruin his financial plans for his retirement. [ 64 ] Read J concluded that the delay in advancing the corollary relief claims was inordinate, and noted that the matrimonial property division had left each party with “not insignificant assets” (at paragraph 27). [ 65 ] The circumstances here are vastly different. There has been no resolution of the matrimonial property claim. Ms.

Maurice advanced a claim for spousal support some four years after separation, but only after Mr. Matchett had failed to make payments she expected following the parties’ agreement after the separation. [ 66 ] There has been delay in pursuing all of the claims advanced by Ms. Maurice, but not inordinate delay. Mr. Matchett has put no evidence forward as to any decisions or conduct based on his not facing any spousal support claim. [ 67 ] I do not find Ms. Maurice’s delay in advancing a spousal support claim any bar to having her claim determined on the merits. Analysis [ 68 ] Ms.

Maurice has certainly demonstrated that she needs assistance. [ 69 ] Mr. Matchett denies that Ms. Maurice has demonstrated need, relying on Vodden v Vodden, 2014 ABQB 312 and Veit J’s comment that need alone does not justify a spousal support award, as there must also be a connection between need and the marriage breakdown (at paragraph 25). [ 70 ] Here, the evidence shows that at least some of Ms.

Maurice’s need has resulted from the breakdown of the relationship in that she continues to service debt incurred by her during the relationship. [ 71 ] From the agreement made by the parties, it appears that she had a reasonable expectation that she would receive funds from Mr. Matchett or the corporation to offset some of the expenses. Contributions from Mr. Matchett have not materialized. [ 72 ] While some of the need may be attributed to the financial difficulties in the corporation, Mr. Matchett is still earning a living through the corporation. [ 73 ] Mr.

Matchett points to funds taken out of the corporation by Ms. Maurice, suggesting that she has been almost fully repaid the monies advanced. His materials append a number of cheques that he categorizes as money taken out of the corporation, although many of them would appear to relate to corporate expenses and not personal expenses. [ 74 ] It is difficult to see that Ms. Maurice received personal benefit from payments made by her to payees other than herself. [ 75 ] Nevertheless, this is an issue that needs to be explored in a more fulsome proceeding than a special chambers application. [ 76 ] Additionally, Mr.

Matchett points to Ms. Maurice’s apparent earning capacity and challenges her alleged health difficulties and the loss of employment, referencing ML v RL , 2014 ABQB 605 . These are again issues that need more analysis, and more evidence (such as medical reports). [ 77 ] In the end, this was a brief relationship such that entitlement to spousal support for anything but a brief duration is a legitimate issue, and needs to be explored further. [ 78 ] Mr.

Matchett’s ability to pay spousal support is also a live issue, as the corporate financial statements and his tax returns show that he is declaring an income at the minimum wage level.

[ 79 ] Ultimately, the issue of spousal support is intertwined with matrimonial property. These are issues that cannot likely be determined on the basis of conflicting affidavits. Matrimonial property disputes require at least a

summary trial if not a full trial. [ 80 ] There are credibility issues that likely need to be explored through viva voce evidence, although most of the issues revolve around the corporation such that answers may be obtained through a forensic audit and assistance from a business valuator. [ 81 ] The parties will require some form of process to resolve their issues. Having regard to their apparent means, a full trial is impractical.

I would encourage the parties to explore mediation or to resolve this dispute by way of a binding JDR. [ 82 ] In the meantime, I do not see that the interim spousal support order granted by Hillier J in July, 2016 was unreasonable, and it should continue until further order. Additionally, Mr. Matchett should continue to make the payments on the Yukon, a step that is necessary to attempt to protect the parties’ credit ratings. Conclusion [ 83 ] Mr. Matchett’s application to dismiss for delay is dismissed. [ 84 ] Mr. Matchett’s application to terminate interim spousal support is also dismissed.

He shall continue to pay $1,200 per month to Ms. Maurice until further order. He shall also continue to make the payments on the Yukon, until further order. Costs [ 85 ] Ms. Maurice sought $3,500 in interim spousal support. She has been successful in maintaining Hillier J’s order. I also ordered that Mr. Matchett continue to make the truck payment until further order. [ 86 ] She has been successful in defeating Mr. Matchett’s dismissal application. In the circumstances, Ms. Maurice should have costs of the special chambers application on Column 1. Heard on the 28 th day of November, 2016.

Dated at the City of Edmonton, Alberta, this 14 th day of December, 2016. Robert A. Graesser J.C.Q.B.A. Appearances: Yolanda Van Wachem McLennan Ross for the Plaintiff/Respondent/Cross-Applicant Jeremy D. Lewsaw Skovberg Hinz for the Defendant/Applicant/Cross-Respondent