Wheeler v Wheeler, 2016 ABQB 75

Court of Queen ’ s Bench of Alberta Citation: Wheeler v Wheeler, 2016 ABQB 75 Date: 20160204 Docket: 4801 145181 Registry: Calgary Between: Deborah Ann Wheeler Applicant/Plaintiff - and - Mark James Frederick Wheeler Respondent/Defendant _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice M.C. Erb _______________________________________________________ [ 1 ] More than five years ago, Mr. and Ms.

Wheeler entered into a formal Separation, Support and Property Agreement (“the Agreement”) that they believed resolved all of the issues arising from the breakdown of their 15-year marriage. [ 2 ] Three years after the Agreement was signed, however, circumstances arose that sent Ms. Wheeler back to a lawyer who filed a Statement of Claim, action number FL01-20386, alleging that Mr. Wheeler had concealed or failed to disclose information about the disposition of certain family corporate assets thereby denying Ms. Wheeler her rightful share. On November 3, 2015, she filed a Notice

to Disclose information and documents in the original divorce action, action number 4801-145181, in support of her current claim for Court-ordered spousal support. Mr. Wheeler has not complied with the Notice to Disclose. [ 3 ] Ms. Wheeler brought this application in morning chambers to compel Mr. Wheeler to disclose the standard 16-item list of financial documents and information. [ 4 ] Mr. Wheeler resists compliance with the Notice to Disclose on the basis that Ms. Wheeler’s right to spousal support is set out in the Agreement; it expires in 2020 and there is no provision for review.

Given the terms of the Agreement, he submits Ms. Wheeler is not entitled to his financial records and information. Background [ 5 ] The parties were married in September 1988. They have three children, all now adults with the exception of the youngest, a son born in 1992. He remains a child of the marriage while he attends university. [ 6 ] The parties separated in August 2007. They entered into the Agreement on May 27, 2010 following negotiations, which took place over a two-year period. [ 7 ] On April 19, 2011, Justice Michalyshyn issued an order severing the divorce from the corollary relief.

The parties were granted a judgment for divorce on September 1, 2011. There was no order for corollary relief because the parties had previously signed their comprehensive global settlement, which included spousal support along with the disposition of their matrimonial property and a resulting equalization payment. [ 8 ] Although both parties were represented by counsel and there had been disclosure, Ms. Wheeler says in her Statement of Claim that Mr. Wheeler failed to disclose to her information about the negotiations that led to the sale of the corporate assets.

For the purposes of the Agreement, the corporate assets (three inter-related corporate entities acquired during the marriage) were the subject of a formal business valuation dated May 26, 2008. The Wheelers agreed upon an after-tax value of $3,213,725.00, which included a net shareholder bonus payable to Mr. Wheeler of $331,658.22. [ 9 ] Five years later, in June 2013, those corporate assets sold for $15 million.

In addition, the Agreement anticipated a sale price for the matrimonial home of $3.9 million (its list price) but it actually sold for $2.4 million. [ 10 ] Paragraph 155 of the Agreement appears to provide for the possibility of a recalculation of the final division of the matrimonial property and debt upon sale of the former matrimonial home/acreage. [ 11 ] Because of these events, Ms. Wheeler seeks an order revising the quantum and duration of her spousal support. In furtherance of that order, she seeks disclosure of the proceeds realized from the sale of the matrimonial home and the corporate assets.

Her Notice to Disclose arises from the events that took place after the execution of the Agreement. In her new action, she seeks to set aside the Agreement and to recalculate the equalization payment. Analysis [ 12 ]

Section 15.2 of the Divorce Act provides that "a court may, on application by either or both spouses, make an order requiring a spouse to secure or pay . . . support." [ 13 ]

Section 15 says that for the purposes of the support provisions, "spouse" includes a former spouse. In other words, a former spouse may apply at any time for a support order. [ 14 ]

Section 15.2(4)(

c) empowers a court to consider any agreement between the spouses related to spousal support in deciding the outcome of an application. It is then a matter for the court to decide whether it will vary the agreement in all of the circumstances. This analysis must be in accordance with the Supreme Court of Canada’s decision in Miglin v Miglin , 2003 SCC 24 . [ 15 ] In the first stage of the Miglin analysis, the court will look at the circumstances surrounding the negotiation of the agreement to determine whether there is any reason to discount it.

The court also will determine whether, at the time of creation, the agreement was in substantial compliance with the general objectives of the Divorce Act . [ 16 ] At the second stage, the court will assess the extent to which enforcement of the agreement still reflects the original intention of the parties and the extent to which it is still in substantial compliance with the objectives of the Act , given the vicissitudes of life in the parties' post-divorce period.

Where a comprehensive agreement has been unimpeachably negotiated and is in substantial compliance with the objectives of the Act , the court gives it considerable weight.

Only where the current circumstances represent a significant departure from the range of reasonable outcomes anticipated by the parties in a manner that puts them at odds with the objectives of the Act will the court give the agreement little weight. [ 17 ] Yet the validity of the agreement was not the question before the Court in this morning chambers application. [ 18 ] Rule 12.41 of the Alberta Rules of Court establishes a disclosure procedure for family law applications that operates in addition to any other procedure or obligation prescribed under the Rules .

Rule 12.41 applies to all actions listed in 12.38(1), which includes a proceeding under the Divorce Act . An application under s. 15.2 of the Divorce Act is a proceeding under that Act which triggers the application of Rule 12.41. [ 19 ] Rule 12.41 permits a party to request disclosure pursuant to Form FL-17. The Notice to Disclose mandates disclosure only of

those items that are relevant and material to the application. In other words, the party must request only those documents that are “relevant and material”. The Notice to Disclose also provides that if there has been a final determination in a proceeding related to child support, spousal support, or adult interdependent partner support, the party may request documents in items 1 to 9 only. [ 20 ] The Agreement entered into by Mr. and Ms.

Wheeler was not formalized in a corollary relief order so there was "no final determination ... in a proceeding." Spousal support was part of the global agreement but it was never determined by a court or made the subject of a court order. [ 21 ] As a result, Ms. Wheeler is not precluded from seeking “relevant and material” documents through her filed Notice to Disclose. Mr. Wheeler may raise the terms of the Agreement as a defence to the ultimate application for spousal support but he cannot use it as a shield against disclosure. [ 22 ] Since Ms.

Wheeler’s application is for spousal support, some of the items she seeks in her Notice to Disclose are not relevant and material, at least not under the circumstances described to the Court by counsel for the parties, in particular: Item 5: There is no allegation that Mr. Wheeler is a student; this information is not relevant and material. Item 9: Special and extraordinary expense lists are not relevant since child support is not in issue and this information is therefore not relevant and material. Item 10: Any role Mr.

Wheeler may have as a beneficiary of a trust is not relevant and material in all the circumstances, in particular, years after the marriage ended. Items 11/ 12/13: Copies of bank statements and credit card statements are not relevant. Mr. Wheeler’s banking information disclosing his spending pattern years after the marriage ended is not relevant and material. His income and asset information should be sufficient. Item 15: This item relates more specifically to property.

Item 16: This item seeks a list of exemptions claimed for a division of matrimonial property and is therefore not relevant and material to spousal support. [ 23 ] Since the parties did not specifically address the matter of relevance and materiality, they may do so before this Court within a reasonable period of time. [ 24 ] Accordingly, the application to compel Mr. Wheeler to comply with the Notice to Disclose to the extent identified here as material and relevant is granted. [ 25 ] Costs may be spoken to within a reasonable time. Heard on the 7 th day of January, 2016.

Dated at the City of Calgary, Alberta this 4 th day of February, 2016. M.C. Erb J.C.Q.B.A. Appearances: P.L. Bell for the Applicant/Plaintiff

E.L. Lenz, QC for the Respondent/Defendant