Corrigan v Ewel, 2017 ABQB 179

Court of Queen’s Bench of Alberta Citation: Corrigan v Ewel, 2017 ABQB 179 Date: 20170320 Docket: 4803 166110 Registry: Edmonton Between: Sheila Ann Corrigan Plaintiff - and - Rolf Bernhard Ewel Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice J.S. Little _______________________________________________________ I. Issue [ 1 ] The issue in this

summary trial is Ms. Corrigan’s entitlement to retroactive and prospective spousal support after a long marriage and a three year separation during which she received significant support together with a substantial matrimonial property settlement. It boils down to what responsibility she has to employ her capital assets to become self-sufficient. II. Facts [ 2 ] Ms. Corrigan and Mr. Ewel lived together for a short time before their marriage in 1980. They separated in 2013 after 34 years together. They were divorced at the beginning of this trial. [ 3 ] From the outside theirs looked like a successful partnership.

When it began, Ms. Corrigan was an office worker. Mr. Ewel was a collection agent. He and a partner then started a construction firm. When it got to a point that they did not need Ms. Corrigan’s income, they agreed that she would stay home to look after their two children. She left her job at the Brick where she was making about $9.00 per hour, and they then had two more children. The construction business, to which I will refer as Redco, diversified. Mr.

Ewel testified that its income varied drastically every year but that overall Redco was successful over the course of the marriage. [ 4 ] During their marriage they lived well. Their accounts of how much money they actually spent varied, and where they differ I accept Mr. Ewel’s account as being more accurate because he appears to have a clearer understanding of their financial situation, but for the purposes of this trial the differences are inconsequential. They moved to progressively more expensive houses in Edmonton. They had nice vehicles.

They vacationed in Las Vegas a few times a year before they bought a modest house in Palm Springs which they would then visit a few times a year. They paid cash for a condo for their 32 year old daughter and continue to provide that daughter with

other financial support while she is in post-secondary education. They provide financial assistance to their youngest child who is now 25 and also in post-secondary education. They gave generously to their children and Ms. Corrigan’s parents on birthdays and at Christmas. [ 5 ] They also were able to acquire significant assets during the course of the marriage. The gross value of those assets set out in a Matrimonial Property Settlement Agreement (MPSA) dated February, 2016 was $10,197,188, and the net value was $8,744,621.

With the property settlement concluded in the MPSA, the remaining issues for determination are retroactive and prospective spousal support payable to Ms. Corrigan, but the MPSA plays into that determination. III. Retroactive Spousal Support [ 6 ] During the marriage, Mr. Ewel drew a salary of about $12,000 per month from his interest in Redco and paid Ms. Corrigan a salary of about $2500 per month. He would deposit those funds into their joint account, and Ms. Corrigan would pay the household bills.

When they needed more money, he would fund it from his interest in Redco. [ 7 ] During their separation, this situation largely continued. Just before separating they purchased a $2.4M matrimonial home (Balmoral). Ms. Corrigan stayed in it rent free, and Mr. Ewel moved back into their previous home. Mr. Ewel deposited first $13,000, then $15,000, and then $18,000 per month into their joint account, from which Ms. Ewel paid the bills including the mortgage on Balmoral and interest on their line of credit secured against Balmoral.

Those payments were about $7700 per month which left her just over $10,000 for living expenses. When they sold Balmoral in late 2016 and were able to eliminate the $7700 debt payments, he reduced the payment to $10,000 per month, all of which was available to Ms. Corrigan for her living expenses. Mr. Ewel also agreed in writing (Feb 23/16 agreement at Tab 5 of Exhibit One) to cover her health care benefits and pay tax on her income from Redco until this trial. There are two interim orders in place which obligated him to continue the payments of $10,000 per month commencing March 1, 2016 until this trial.

He made all of those payments on time. [ 8 ] In addition, during their separation he made two payments to her of $75,000 each for legal fees and related expenses. (I note that in his written submissions, Mr. Ewel’s counsel argued that one of these payments ought to be credited against the $250,000 instalment payments. That issue was not raised at trial and therefore not in Ms. Corrigan’s counsel’s submissions. I will not consider it as a credit.) He continued to pay the property taxes on their properties, golf memberships for the two of them, gas for her vehicle, and a few other expenses.

He also paid her $10,000 per year for three years as her Christmas bonus because she was kept on the Redco payroll. She retained a $15,000 insurance cheque for a claim made with respect to one of their properties. [ 9 ] Shortly after the separation Ms. Corrigan bought a 2014 Mercedes. She also put down a $5000 deposit on a Lexus which she forfeited after changing her mind. [ 10 ] The success of Mr.

Ewel’s interest in the Redco business is evidenced by his post-separation income averaging $765,000 per year from 2013 to 2015 which clearly gives him the means to pay retroactive spousal support. [ 11 ] Kerr v Baranow , 2011 SCC 10 , [2011] 1 SCR 269 sets out the four factors to be weighed in a retroactive (though the SCC does not necessarily use that term) award of spousal support: need of the recipient, conduct of the payor, delay in applying, and potential hardship to the payor. Here there has been no delay in applying, and with an income averaging $765,000 per year from 2013 to 2015 Mr.

Ewel would be hard pressed to advance a claim for hardship. [ 12 ] But I cannot get past the first two factors, namely need of the recipient and conduct of the payor. Mr. Ewel effectively has paid spousal support from the date of separation. Ms. Corrigan received in the region of $10,000 per month tax paid, and in her words Mr. Ewel was not “playing games” with or delaying those payments. She lived in the matrimonial home, received a new car and was looking at others.

She also received about $150,000 for legal fees, tax paid employment bonuses of $30,000, and a property insurance settlement of $15,000. [ 13 ] This is not a situation where Ms. Corrigan needs an additional retroactive support award to compensate her for a reduced lifestyle before the divorce as a result of the marriage breakdown. I see no reason to award retroactive spousal support. IV. Prospective Spousal Support [ 14 ] The starting point is

section 15.2 of the Divorce Act . [ 15 ] Subsection 4 requires a court to take into account the condition, means, needs and other circumstances of each spouse including the following specific factors which I will deal with first:

a) The length of cohabitation, in this case 34 years which is a long term marriage;

b) The functions performed by each. Here, this is what is colloquially known as a traditional marriage. For the most part Ms. Corrigan looked after the home and family and Mr. Ewel supplied the income. He was somewhat involved with the children’s activities, but it is clear that Ms. Corrigan was the more family-involved spouse. She gave up her career to look after the children and home.

c) Any order or arrangement relating to support. I have discussed the interim support arrangements and Orders. There is no agreement respecting prospective support. [ 16 ] For the purposes of subsection (4) and without considering the implications of the MPSA, I will assume that Ms. Corrigan is entitled to spousal support on compensatory grounds. [ 17 ] Subsection 6 then mandates that a spousal support order:

a) Recognize any economic advantages or disadvantages to the spouses arising from the marriage breakdown;

b) Apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above anyobligation for the support of any child of the marriage;

c) Relieve any economic hardship of the spouses arising from the breakdown of the mortgage; and

d) Insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable time. [18] Moge v Moge, (SCC), [1992] 3 SCR 813 tells us that all of these objectives must be considered and that noone factor is of greater importance than another. But subsection (

b) does not apply here. The parties do provide assistance to theirchildren, but they are no longer children of the marriage. [19] The Spousal Support Advisory Guidelines (SSAG), which as the name reflects are guidelines and not binding, suggest thequantum and duration of spousal support awards based on the length of cohabitation and the respective incomes of the parties. TheSSAG were developed for a number of reasons including: To create consistency and fairness. When spousal support is determined in an excessively discretionary context, similar fact situationscan generate wide variations in results.

Moreover, the widely differing understandings of the nature of the spousal support obligationgenerate concerns about unfairness at both ends of the spectrum — in some cases awards may be too high, and in others too low.Advisory guidelines should create more consistent treatment of spouses who are in similar circumstances as well as more openexplanations of how those outcomes were reached.

This can enhance the legitimacy and perceived fairness of spousal support awards, ashas been the case with the child support amounts. (SSAG, s. 1.4(2)) [20] Treating like alike might be thought of as one of the principles of justice, and therefore these stated objectives of consistencyand fairness are laudable. Our Court of Appeal, however, cautions that the guidelines must be viewed “through the lens of the criteria setforth in the Divorce Act”: DeWinter v DeWinter, 2013 ABCA 311, [2013] AJ No 972 (QL) at para 28. [21] Based on this long term marriage, Ms.

Corrigan is seeking a SSAG amount of between $22,000 and $30,000 monthlypremised on 37.5% to 50% of the difference between a $765,000 annual income for Mr. Ewel and a $50,000 annual income (discussedbelow) imputed to Ms. Corrigan. [22] As I interpret the SSAG,

section 3.3.7 sets a ceiling on the payor’s salary at $350,000. The use of the term “ceiling” isexplained in

Chapter 11 of the SSAG not as a cap but as a number beyond which the formula is discretionary. The formula isdiscretionary in any event as the SSAG are not binding. Ms. Corrigan’s counsel submits that the ceiling in fact is not in play until thepayor’s income is above $700,000 and that the suggested 37.5% to 50% income differential would still be appropriate in this case onactual incomes without reference to the ceiling. But using $350,000 and the $50,000 imputed to her, the range would be from $9375 to$12,500 per month. [23] Mr.

Ewel takes the position that the terms of the MPSA satisfy the objectives of subsection 6 and that no support is payableor alternatively that it not exceed $750 per month for 36 months. [24] For the reasons given below, I do not find the SSAG particularly helpful in this unique situation where, while the payorarguably has the ability to continue to earn a high income, that income is subject as well to the servicing of debt incurred to provide thepayee with unencumbered assets capable of producing significant income.

In that circumstance, resort must be had to the binding criteriaset out in the Divorce Act. [25] A more detailed examination of the conditions, means, needs, and other circumstances of the parties, in particular the effect ofthe MPSA, is therefore required before I determine the terms of a spousal support order that will comply with subsections 6(a), (c), and(d). V. MPSA [26] Under the terms of the MPSA, the parties were each entitled to one-half of their net assets of approximately $8,750,000. Witheach party entitled to $4,372,310.20, Mr. Ewel retained the interest in Redco and certain personal investments. Ms.

Corrigan retainedfinancial assets and a condo having an aggregate net value of $375,837 and was entitled to an equalization payment of $3,996,473.49.Mr. Ewel testified that he was prepared to pay something less if he could pay it quickly and tax paid. The compromise in the MPSA,stated as reflecting the valuation of the assets being divided, was that Ms. Corrigan actually receive $3,500,000, tax paid. Of thatamount, $3,250,000 was to be paid within 90 days of the MPSA, and $250,000 is payable over five years at $50,000 per year, secured byan assignment of Mr. Ewel’s RRSPs.

I will not comment on the implications of pledging RRSPs as security for this debt. [27] There was evidence led at the trial that the $3,250,000 payment was late due to Mr. Ewel’s difficulty in obtaining a $2M loanto finance that first instalment, but in my view nothing turns on that. It has been paid, and Mr. Ewel is current on his obligations underthe MPSA. [28] There was evidence led at the trial as well about the sale proceeds of the parties’ matrimonial home, Balmoral, for thepurpose of showing that Mr. Ewel benefited to the detriment of Ms. Corrigan. That property was held jointly.

Using rough numbers, theypurchased it for $2.4M. It sold for $1.9M. From the $1.9M, Mr. Ewel paid debt of $1.6M and kept the net proceeds of $200,000 to$300,000. Ms. Corrigan kept the furniture valued at $100,000. So he was $100,000 to $200,000 ahead of Ms. Corrigan on thattransaction, proceeds which he used to “keep this thing going”. But under the terms of the negotiated MPSA (Article 3.3) that propertywas to be transferred to Mr. Ewel on payment of the first instalment of the equalization payment, and Ms. Corrigan was entitled tocontinue her exclusive possession until he sold it.

Even if the arrangement respecting Balmoral had not clearly been set out as having

been negotiated in the MPSA, Ms. Corrigan lived in the house for three years paying utilities only, so I would consider their benefitsfrom Balmoral to be a wash. VI. Ms. Corrigan’s Condition and Means [29] It was an express term of their marriage partnership that Ms. Corrigan would manage the home and young family so that Mr.Ewel could build a successful business. It was not necessarily an express or implied term that she remain at home once the children left.Mr. Ewel testified that he “kind of thought” she would go back to work but that they never discussed it.

She testified that she did not evenintend to make any efforts in that regard. [30] Realistically, Ms. Corrigan at age 60 and a few credits short of high school graduation with no recent work experience will notnow be in the workforce, and I see no reason to require that she look to employment income for her own support.

She needs investmentincome or support, or both. [31] As was concluded by the Supreme Court of Canada in Leskun v Leskun, 2006 SCC 25, [2006] 1 SCR 920 and in Strang vStrang, (SCC), [1992] 2 SCR 112, the term “means” in sections 15.2(4) and 17(4.1) of the Divorce Act is broad enoughto encompass capital assets as well as earned income and unrealized earning capacity. [32] Ms. Corrigan currently has a one year GIC for $3M earning interest at 1% which she can cash after 90 days. She has a further$106,000 in a savings account. She has a $121,000 RRSP and a $24,500 TFSA. She has a $250,000 secured receivable from Mr.

Ewelunder the MPSA. She received matrimonial property valued at $376,000 under the MPSA (exclusive of $100,000 of furniture). Her networth is in the range of $3,877,000, comprised mostly of liquid investments. [33] Despite her inexperience in managing money, she has not seriously sought out professional advice. Mr. Algajer is a portfoliomanager at BMO Nesbitt Burns. He previously managed her RRSP and TFSA which she converted in 2013 from investments earning 6%annually to cash.

While not qualified as an expert for the purposes of this trial, I accept his explanation of the publicly available materialpresented at trial to show that on $3M, a risk free 2% GIC would produce $60,000 taxable annual income without depleting the capital, amedium risk portfolio might be expected to produce a taxable return in the region of 6% or $180,000 without depleting capital, and a riskfree annuity from an insurance company would generate an annual income of $157,000 for life, about $33,000 of which would betaxable, and which would fully deplete the capital by Ms. Corrigan’s death.

I do not find that the annuity which would fully deplete hercapital is a relevant comparable for the reasons discussed below (see e.g. Ouellette v Ouellette, 2012 BCCA 145, 32 BCLR (5th) 67). [34] Note that those income amounts assume an investment of $3M which would leave her with her $100,000 bank account and$150,000 RRSP and TFSA in addition to the $250,000 still payable by Mr. Ewel. [35] Ms.

Corrigan’s counsel suggests an imputed income of about $50,000 annually based on an investment of $2.5M ($3M in cashless $500,000 for a U.S. property) at 2% per annum, ignoring the value of her RRSP, her TFSA, her $100,000 cash, the $250,000 to bepaid under the MPSA, and her non-income producing house and car. [36] I conclude that just using the $3M available cash, Ms. Corrigan could generate an annual income of between $60,000 and$180,000 annually.

At the lower end, using a risk-free GIC, she would be preserving all of her capital and could die with the same $3M.At the higher end, she would be accepting some risk of loss of capital to generate an annual income of $180,000, but of course her capitalcould grow as well, and she has her RRSP, TFSA, $100,000 savings account, and the $250,000 receivable from Mr. Ewel as hedgesagainst that risk. Ms.

Corrigan testified that she expected to live another twenty to forty years, and I find that accepting some risk stillwith a view to preserving capital is not unreasonable given the size of her portfolio and her time horizon. VII. Ms. Corrigan’s Needs and Other Circumstances [37] Ms. Corrigan has little experience managing money. What was clear from her direct testimony tested by cross-examination isthat during the course of the marriage, money was just there. When she needed $10,000 each Christmas to buy gifts for her parents andchildren, Mr. Ewel topped up their joint account.

When they went to Vegas and later to Palm Springs, he would top up the accountsbefore they went down or use his credit cards while there. When she wanted to buy a new Lexus after separation to replace the Mercedesshe bought after separation, she drew on a line of credit or withdrew $5000 from their joint account, she is not sure which, and thendecided not to buy the car and lost the deposit. [38] Ms.

Corrigan testified that she is just waiting for her spousal support to be determined so that she can maintain exactly thesame lifestyle she enjoyed before the marriage breakdown, a lifestyle where money was plentiful. [39] Her estimate to maintain her lifestyle without contributing herself is $24,500 per month or $294,500 per year. She testifiedthat at the request of her lawyer, she filled out a budget (Exhibit 19) but was blind to what a budget was so she just guessed. [40] That guesstimate includes $66,000 annually to maintain and travel to a new U.S. vacation property she hopes to acquire.

Butshe testified that she has not looked at any properties in the U.S. because she cannot afford to do so. [41] It includes $39,500 annually for their 32 year old daughter’s education, to whom Mr. Corrigan also pays $1000 per month andfor whom he covers transportation costs. Her counsel argues that this constitutes support of a child of the marriage, but at age 32 and onher third post-secondary diploma she is not a child of the marriage. Support volunteered by her parents is not a consideration indetermining spousal support. [42] It includes $43,200 per year for the mortgage on her new house.

When pressed in cross-examination about why she took out amortgage when she knew she had $3.2M in the bank, she responded that she did not want to deplete that nest egg.

[ 43 ] It also includes $20,000 per year for repairs and maintenance on her new home. When Ms. Corrigan bought that house, she did so knowing that it needed repairs or finishing of about $100,000, and she calculates that at $20,000 for five years over the 5 year term of her 20 year amortized mortgage. [ 44 ] On a smaller scale, her budget includes $1200 annually for snow removal and lawn care on her new home, chores which she previously did at the matrimonial home.

She is in good health. [ 45 ] It also includes $600 per year for cleaning and property management which are chores she did in the matrimonial home. [ 46 ] It includes $4800 per year for oil and gas for the Mercedes, when she acknowledges that she does not know how much she spends on gas because it has been paid through Mr.

Ewel’s company credit card. [ 47 ] It includes $6000 annually for a golf membership which she does not have but would like to get if she can afford it and $480 per year for golf lessons she has never taken. [ 48 ] It includes $1000 for a gym membership that she has not used in six months. [ 49 ] When pressed on a line item for $948 annually for educational expenses, she testified that maybe she would take a knitting course in the U.S. when she bought her place there. [ 50 ] While it is not my role to parse Ms.

Corrigan’s budget and thereby indirectly substitute my priorities for hers, I find her budget to be a list of wants as opposed to needs. To maintain a lifestyle comparable to that which she enjoyed during the marriage, Ms. Corrigan’s realistic living expenses are $140,000 to $150,000 per year.

That still includes payment of the expenses of $63,000 on her $850,000 home including the mortgage, renovations, property taxes, insurance, utilities, security, internet, $18,000 per year for groceries and house supplies, $8000 for vehicular transportation, $13,000 for a loan to replace the aging 2014 Mercedes, and $40,000 for what she describes as direct expenses including $12,000 annually for gifts for her children and mother. [ 51 ] Her counsel urges me to find it reasonable that she purchase a $500,000 U.S. property to replace the one that she enjoyed during the marriage and, of course, she would be free to do so with her capital.

Her counsel, however, argues that she ought not to have to encroach on that capital to maintain her lifestyle. But if she has an obligation to deploy her capital to become self-sufficient, a compromise might be to add in an additional $20,000 annually for trips to the U.S. and rental of a property or hotel while there. That would take her expenses up to $170,000 per year to maintain a lifestyle comparable to the one she enjoyed during the marriage. VIII. Mr. Ewel’s Condition, Means, Needs, and Other Circumstances [ 52 ] By agreement, Mr.

Ewel’s average income for the period 2013 through 2015 was $765,000 per year. His accountant testified that while the 2016 financials for the Redco companies are still in draft form, he expected Mr. Ewel’s income for 2016 to be in the $200,000 range: $50,000 from Redco and $150,000 from investments. The accountant explained that business revenue was down and his investment income was down as a result of having sold investments to finance Ms. Corrigan’s equalization payment. [ 53 ] I acknowledge Mr. Ewel’s counsel’s argument that his 2016 income estimated by the accountant has not been tested by experts.

But I note as well that the three year average agreed to by the parties is a straight mathematical calculation based on Mr. Ewel’s Line 150 income and does not include the addition back of certain items which are often added when calculating the income of a self- employed business person. In any event, the three year average shows two years in the range of $575,000 and one at $1.145M (which his accountant explained as a means of getting funds out of the business in 2015 to avoid less favourable taxation in 2016) so it is clear that his income fluctuates and is subject to legitimate manipulation.

But even using a $200,000 estimate for 2016, it changes the three year average of $765,000 to a four year average of $625,000. That difference is not material for the purposes of this analysis insofar as Mr. Ewel, ignoring for now his expenses, clearly has the means to pay spousal support. [ 54 ] Mr. Ewel is now 63. He testified that he had been hoping to retire at age 65, though he has not really addressed his mind to that given his present situation. [ 55 ] Mr. Ewel testified that the construction business is not as profitable today as it has been in the past.

He is losing tenders, and the margins in Redco are declining. Nevertheless, he did not testify that Redco is in imminent danger of collapse. As noted earlier, its revenues tend to be up and down. [ 56 ] While I do not doubt the accuracy of his accountant’s estimate of his Redco income being $50,000 and his total line 150 income for 2016 as being in the $200,000 range, it would be dangerous to further assume that that situation will continue given the generous incomes he drew in previous years. [ 57 ] But in order to make the $3,250,000 instalment payment to Ms. Corrigan towards her $3.5M equalization payment, Mr.

Ewel sold income earning personal investments. He also arranged for a company loan of $2M from a chartered bank which was then advanced to him. He is fortunate to have a long time business partner who accommodated this arrangement. He is obligated to repay that loan within a year from its advance or pay tax of between $400,000 and $500,000 on it as a taxable benefit to the shareholder. He has no realistic means to make that tax payment except through borrowing or the sale of personal investments. [ 58 ] I referred above to Ms. Corrigan’s inability to budget, but in fairness Mr. Ewel has the same difficulty.

According to Exhibit 15 which is a combination of budget and record of expenses to date, he has expenses of $102,000 per month. [ 59 ] His actual living expenses including housing, food, transportation, vacation, the U.S. property, some support for the children,

and what may be considered living expenses are only about $12,000 per month. [60] The other $90,000 includes almost $15,000 per month in legal fees which cannot be an ongoing monthly figure, $9000 permonth for a mortgage which is now repaid, and $10,000 for support which is the issue in this trial. [61] It also includes $56,000 per month to retire $2,680,000 in debts: $450,000 income tax from the $2M loan, another income taxdebt of $230,000 through his holding company, and the $2M loan used to pay out Ms. Corrigan. Counsel for Ms.

Corrigan argues that itis unrealistic for him to budget to pay these debts over a five year amortization period. If that is the case, however, then a more realisticargument might be that he has to deplete his capital by $2,680,000, and that is capital he does not have without a further depletion of hisinterest in Redco which would lead to a further reduction in his income. Given his age, I find a five year plan to pay debt of $2,680,000to be reasonable. [62] On a pure capital basis, Mr. Ewel is ahead of Ms. Corrigan, though his could be considered less liquid to the extent that it isembedded in Redco. Mr.

Ewel’s personal investments comprise $370,000 in RRSPs, $67,000 in a TFSA, and about $200,000 in aninvestment account. With a $305,000 line of credit against his $570,000 home, he has home equity of $265,000, for a total of $902,000 inpersonal assets. His interest in Redco based on the values used in the MPSA is now $3,850,000 (the value of their interest in Redco fromthe MPSA less the $2M loan). His net worth is therefore in the range of $4,752,000 compared to Ms. Corrigan’s net worth of$3,877,000. [63] He testified that during the separation he deposited to Ms.

Corrigan his $12,000 salary and the $2500 salary paid to Ms.Corrigan and required a further monthly draw of $5000 from his declining shareholder loan account to cover his expenses. [64] In any event, even assuming payment of a portion of his $680,000 income tax bill from the further depletion of hisinvestment portfolio, the income that he now draws from the business needs to support him and service and repay the $2M debt. Hebudgets a five year payout which would require $400,000 per year excluding interest. Furthermore, he has five more annual payments toMs. Corrigan of $50,000 each.

In addition, to put himself in the same capital position as Ms. Corrigan, he will need to replace the other$1.5M in capital assets he deployed to pay Ms. Corrigan her negotiated share. [65] His annual expenses therefore, excluding replacing his capital and his tax debt, are $400,000 debt service plus $50,000 dueannually to Ms. Corrigan plus $144,000 living expenses for a total of $594,000. [66] On that analysis, he does not have the means to pay the level of spousal support Ms. Corrigan seeks. IX.

Requirement to Employ Capital Assets [67] I accept the principle illustrated in Ouellette, supra that an applicant spouse is not expected to erode capital assets in order tobe self-supporting when his or her spouse has ample resources to provide spousal support while preserving their capital assets. Thecorollary holds as well: a respondent spouse should not have to erode capital assets to provide support to an applicant spouse whointends to preserve her capital assets. [68] As discussed above, Mr. Ewel and Ms. Corrigan were partners not just in the marriage but in the creation and maintenance ofMr.

Ewel’s share of Redco. It provided for their needs throughout the marriage and comprised about 90% of their divisible assets. It wasthe primary source of their income. To pay Ms. Corrigan the value of Redco to which she was entitled, Mr. Ewel mortgaged his owninterest in Redco and thereby put it at risk.

I cannot conclude that he has ample resources to pay support at the level sought by Ms.Corrigan without depletion of his own capital. [69] This is not a situation where, for example, a couple while together earned investment income from a portfolio which was thensplit equally and one spouse continued to have a separate employment income while the other was not capable of working. That wouldbe a true disparity because one would have employment income and investment income and the other would have only investmentincome.

That is analogous to the situation in Martin v Martin, (ON SC), 12 RFL (6th) 415, [2004] OJ No 5170 (QL)(Sup Ct

J) referred to by counsel for Ms. Corrigan where after a long term marriage the husband’s income as a hockey coach in theNational Hockey League was independent of assets acquired by the parties during the marriage and divided on dissolution of themarriage. There, on the husband’s income of $782,000 during an NHL lockout, the Ontario Superior Court of Justice awarded the wife$12,500 per month which was to increase to $27,000 per month after the NHL lockout when the husband’s income would be $1,382,000. [70] It is analogous as well to MacDonald v MacDonald, 2005 BCCA 23, 37 BCLR (4th) 121 referred to by Ms.

Corrigan’scounsel where the wife received a $4M property settlement and the BCCA upheld a $750,000 lump sum spousal support award to a wifewhose husband earned $2.5M annually working for RBC Dominion Securities. Mr. MacDonald did not mortgage the source of hisincome in order to be able to continue to earn it. [71] Here, to earn his income, Mr. Ewel must look not to an outside source but must continue to work for the company hemortgaged to provide a source of investment income to Ms. Corrigan. [72] Even at the $26,000 midpoint submitted by Ms. Corrigan’s counsel, Ms.

Corrigan would have an income of $312,000 plus anestimated $180,000 from her investments for a total of $492,000. That is close to Mr. Ewel’s income which has to service his debt,restore his capital, and most importantly, for which he has to continue to work. And it is beyond even her budget of wants. [73] The concept of double-dipping refers to a previously capitalized and divided asset being used to pay or increase support to theparty which received part of the asset on separation.

Boston v Boston, 2001 SCC 43, [2001] 2 SCR 413 stands for the proposition that insituations where support is based on compensatory grounds, double dipping should be avoided where possible. Boston dealt with apension which was capitalized and split on separation. In our case, the asset is the parties’ interest in Redco which was capitalized andsplit in order to make the equalization payment negotiated by Ms. Corrigan.

[74] Mr. Ewel’s counsel refers to two Alberta Court of Appeal decisions which bear on this issue. The first is Ravoy v Ravoy, 2002ABCA 6, 22 RFL (5th) 197, where the Court states at para 14: The appellant raises the issue of “double-dipping”. It is submitted that because the family business was accounted for in the propertydivision, treating the appellant’s income derived therefrom as available to pay support amounts to double-dipping. This Court hasrecognized that a source of income can be an asset for one purpose and income for another; (see MacDonald, 1997 ABCA 409 ,[1998] 6 W.W.R. 86 (Alta.

C.A.), leave to appeal dismissed, [1998] S.C.C.A. No. 49 (SCC)). Where a future income stream has in factbeen divided, a trial judge might view support differently. However the future income stream was not an apparent basis of valuation ofthe business in this case. It is acknowledged that while the issue of double-dipping was not placed before the Trial Judge, the evidenceon valuation does not support a conclusion of double-dipping. We observe that even if it had, the Court maintains an overridingdiscretion under the Divorce Act to double-dip if there is need. (See Boston v.

Boston (2001) 2001 SCC 43 , 201 D.L.R. (4th)1.) [75] Neither party led evidence of how Redco was valued for the purposes of the MPSA. It may have been on the basis of itsincome stream or otherwise. In any event, it is clear to me that the parties treated Redco as an income stream as it was the mostsignificant source of their income during the marriage and that it remains Mr. Ewel’s most significant source today. I have alreadyconcluded that on a needs-based analysis, Ms.

Corrigan does not need the income from Redco. [76] The second and more recent decision is HB v AB, 2014 ABCA 152, 45 RFL (7th) 1 where the Court states at para 32: With the exception of the spousal support payable for 2006, which we will discuss further below, we would not interfere with the trialjudge’s award of spousal support for the years after division of the property took place.

In our view, he properly applied the decision ofthe Supreme Court of Canada in Boston v Boston, 2001 SCC 43 , [2001] 2 SCR 413, which pointed out that “double-counting”would occur if a former spouse, having obtained his or her share of the property, could also obtain support based on what the other partyearned from his or her share of the divided property. This situation was described as being “inherently unfair” (para 35). X. Conclusion [77] Ms.

Corrigan has not satisfied me that she requires significant spousal support to recognize any economic disadvantage orrelieve any economic hardship resulting from the marriage breakdown. [78] I conclude that to generate the income she needs to maintain her lifestyle and promote her self-sufficiency, Ms. Corrigan mustlook primarily to the equalization payment of $3.25M she received, the further $250,000 due over five years, and the $375,000 in assetsshe retained under the MPSA, all of which is tax paid, and most of which is attributable to the family business, just as Mr.

Ewel needs tokeep working for Redco to earn the salary that will allow him to maintain his lifestyle and restore his interest in Redco and the othercapital assets he employed to pay Ms. Corrigan. [79] Mr. Ewel’s counsel made much of the fact that to date Ms. Corrigan has not employed any of her assets to earn income. But Ido find that it was prudent of Ms. Corrigan to essentially freeze her assets pending determination of this trial.

While she was entitled toher settlement under the MPSA and to that extent it is not a lottery win, it was a considerable sum to be received by a person withoutsophistication in investing. The right thing to do in those circumstances is to pretend the money is not there until the implications of itbeing there are understood. [80] For that reason, in order to allow Ms.

Corrigan some time to organize the investment of her funds, get a handle on how hernew income meshes with her expenses, and on the assumption that investment income may not be payable immediately, I will orderspousal support of $7500 per month for a period of one year commencing March 1, 2017. The payment otherwise due from Mr. EwelMarch 1, 2017 will be payable with the payment due April 1, 2017 in order that I not create arrears as a result of late submission ofwritten argument. [81] The parties can speak to me regarding costs if they cannot agree. Heard on the 7th to 8th day of February, 2017.

Dated at the City of Edmonton, Alberta this 20th day of March, 2017. J.S. Little J.C.Q.B.A. Appearances:

Mr. Colquhoun for the Plaintiff Mr. Scott for the Defendant