Judy Delorme Plaintiff - v. -, 2017 ABQB 699

Court of Queen’s Bench of Alberta Citation: Delorme v Delorme, 2017 ABQB 699 Date: 20171116 Docket: 4803 174498 Registry: Edmonton Between: Judy Delorme Plaintiff - and - Daniel Delorme Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice K.G. Nielsen _______________________________________________________ Table of Contents I. Introduction . 2 II. Background . 3 III. Issues . 3 IV. Divorce . 3 V. Matrimonial Property . 3 A. Law .. 3 B. Agreements . 4 C. Outstanding Property Issues . 6 1. Debt Forgiveness . 6

2. Joint Bank Accounts . 7 3. Contracting . 10 4. Contingent Tax on Agricultural Properties . 13 5. HollisWealth TFSA .. 13 6. RBC Line of Credit 14 7. Bank Accounts . 14 8. Artwork . 14 9. Registered Education Savings Plans . 15 D. Matrimonial Property Statement 15 E. Equalization Payment 16 VI. Child Support 16 A. Judy’s Guideline Income . 16 B. Daniel’s Guideline Income . 17 C. Residence of the Children . 20 1. DD .. 20 2. JD .. 20 3. ED .. 21 4. KD .. 21 D. Child Support Paid to Date . 21 E. Retroactive

Section 3 Child Support 21 F. Ongoing

Section 3 Child Support 22 G.

Section 7 Child Support 22 VII. Spousal Support 23 VIII. Conclusion . 25 IX. Costs . 26 I. Introduction [ 1 ] This is a matrimonial action between the wife, Judy Delorme (Judy), and the husband, Daniel Delorme (Daniel). Judy seeks a divorce. Each party seeks child support from the other. Daniel seeks compensatory retroactive spousal support from Judy. Both parties seek a division of matrimonial property pursuant to the Matrimonial Property Act , RSA 2000, c M-8 but they do not agree on the manner in which the property should be divided. Daniel seeks occupation rent. II.

Background [ 2 ] Judy is 49 years of age and Daniel is 47 years of age. They married on July 24, 1993. The parties separated in August 2003 but resumed cohabitation in August 2006. They separated again on about January 31, 2013 and have lived separate and apart since that date. [ 3 ] The parties have four children: DD – 22 years of age; JD – 19 years of age; ED – 18 years of age; and

KD – 15 years of age. [ 4 ] Throughout the marriage, Judy worked for the Government of Alberta as a social worker. [ 5 ] Throughout the marriage, Daniel was a director, shareholder, and officer of a company, J & D Delorme Contracting Ltd. (Contracting), which was involved in the oilfield and construction industries and conducted farming operations on lands owned jointly by Judy and Daniel (the Agricultural Properties). During the course of the marriage, the parties acquired various assets. III. Issues [ 6 ] The following issues must be determined: 1. Should a Divorce Judgment be granted? 2.

How should the matrimonial property be divided? 3. What retroactive and ongoing child support, if any, should be paid by each party? 4. What retroactive spousal support, if any, should Judy pay to Daniel? IV. Divorce [ 7 ] Judy testified as to the particulars of the marriage. The Marriage Certificate for the parties was entered as Exhibit 1. Counsel for Daniel consented to a Divorce Judgment being granted. On June 26, 2017, I granted a Divorce Judgment to the parties. V. Matrimonial Property A. Law [ 8 ]

Section 7 of the Matrimonial Property Act authorizes the Court to distribute all property owned by both spouses and each of them. Generally, property acquired by a spouse during the marriage is equally divisible unless that would not be fair in light of factors enumerated in s. 8. The market value on the date of acquisition of property acquired by a spouse by gift from a third party or inheritance is exempt from distribution. No presumption of equal division applies to the difference between exempt property and its market value at trial, and property acquired with income from that exempt property.

Section 8 factors include any relevant circumstance including: − the contributions of the spouses to a business, farm, enterprise or undertaking owned or operated by one or both spouses or by one or both spouses and any other person; − the contribution by, or on behalf of, a spouse to property; − the income, earning capacity, liabilities, obligations, property and other financial resources that each spouse had at the time of marriage, and at the time of the trial; − the duration of the marriage; − whether the property was acquired when the spouses were living separate and apart; − that a spouse has made a substantial gift of property to a third party, or a transfer of property to a third party other than a bona fide purchaser for value; − a tax liability that may be incurred by a spouse as a result of the transfer or sale of property; − that a spouse has dissipated property to the detriment of the other spouse. [ 9 ] This was a long term marriage.

Both parties have worked hard to benefit the family, and have contributed to the acquisition and maintenance of the matrimonial property. Subject to particular determinations set out below, an equal division of matrimonial property is appropriate. [ 10 ] The parties disagree on some exemptions claimed by Judy in relation to loans or gifts provided by Judy’s parents, Dorothy and Terrance McRee, to one or both of the parties over the years. Judy’s entitlement to some property relating to Contracting is in issue.

As well, each party alleges that the other dissipated assets and that the Court should therefore attribute the value of those assets at separation to the spouse alleged to have dissipated them. Further, liability for some debt incurred post-separation is in issue. B. Agreements [ 11 ] The parties agreed that they would retain the household goods and personal items which were in their personal possession at the time of the trial and that a number of other assets and liabilities which had been accumulated during the course of the marriage had a nil value.

Such assets and liabilities, therefore, have no impact on the division of matrimonial property and are not addressed in this decision.

[ 12 ] Further, Daniel holds life insurance policies with cash surrender values, on which the children are the named insureds.

The parties agreed that Daniel would transfer those life insurance policies to each of the children, and they also are not addressed further in this decision. [ 13 ] The parties have reached agreement on the values of a number of the assets which were accumulated during the course of the marriage, contingent liabilities associated with some of the assets and certain exemptions being claimed. [ 14 ] The following tables set out the values, as well as the holder or owner of the property, the person liable on debt or the beneficiary of exemptions: Agreement Re: Assets Asset Holder/Owner Value Matrimonial home – NE 14 Joint $865,000 SE 14 Joint $264,000 SW 14 Joint $246,500 31 acre acreage Joint $128,500 Winagami lake lot Daniel (by Court Order) $50,000 Key Cove lake lot Daniel (by Court Order) $185,000 Shareholder loan in Contracting Daniel $80,046 Life Insurance Policy – Daniel named insured Daniel Cash surrender value $9,046 Life Insurance Policy – Judy named insured Judy Cash surrender value $9,446 Edward Jones RRSP Judy $9,007 Scotia Bank RRSP Judy $138,233 RRSP – Daniel Daniel $204 PPSP and MEPP Pensions Judy $687,462 Common Share Bank Account Judy $9,045 High Yield Savings Account Judy $365 Personal Savings Account Judy $3 Royal Bank Savers Account Judy $169 Royal Bank E-Savings Account Judy $72 2011 Equinox Judy $6,000 2006 quad Judy $1,000 1995 Suburban Daniel $300 Skidoo Daniel $5,700 Artwork Daniel $5,134 Agreement Re: Contingent Liabilities Asset Potential Payor Amount RRSPs Judy $27,646 Pensions Judy $137,492 Winagami Lake Lot Daniel $3,500 Key Cove Lake Lot Daniel $21,400 Agreement Re: Exemption Asset Beneficiary Amount Gift of $130,440 from Judy’s Parents Judy $65,220 C.

Outstanding Property Issues 1. Debt Forgiveness a. Loan for SW 14 and SE 14 [ 15 ] In 2001, Daniel and Judy purchased the SW 14 and the SE 14. They borrowed $200,000 from Judy’s parents to purchase these lands. The terms of the loan were that interest would accrue at 6% per annum and payments of $2,500 per month would be made to be applied against both principal and interest. A mortgage in relation to this loan was registered against title to the two quarter sections of land. The funds were advanced on or about November 1, 2001 and payments were made in the subsequent years, although the monthly

payments were missed on several occasions. As stated previously, the parties separated from August 2003 to August 2006 and during this period only sporadic payments were made. As at May 1, 2007, the balance remaining on the loan was $123,449. On May 1, 2007, Mr. and Mrs. McRee forgave the outstanding balance on this loan. No documentation was created at that time with respect to the forgiveness of the loan.

The mortgage registered against title to the two parcels of land was discharged sometime after May 1, 2007. [ 16 ] Judy claims an exemption in the sum of $61,725 being one-half of the outstanding balance on the loan which was forgiven by her parents, on the basis that same was an advance of Judy’s inheritance from her parents. [ 17 ] Daniel resists the claimed exemption and argues that the forgiveness of the debt was a gift from Judy’s parents to both him and Judy, as they were both liable on the loan.

Daniel also notes that he alone was making payments toward the mortgage during the temporary separation from August 2003 to August 2006. The forgiveness of the mortgage equally and directly benefitted Judy and Daniel. He observes that there was no evidence of any direct payment from Judy’s parents to Judy. [ 18 ] Judy and Daniel owned the two quarter sections as joint tenants. The loan from Judy’s parents to purchase the two parcels was a joint loan to Judy and Daniel and a mortgage was registered against title to the two parcels of land. [ 19 ] Both Judy and Mrs.

McRee testified that the forgiveness of the amount outstanding on the loan was part of Judy’s inheritance. Mrs. McRee testified that it was not the intention of her and her husband to “benefit Daniel”. [ 20 ] Mr. and Mrs. McRee had also provided a gift to Judy alone in the sum of $130,440. Judy has claimed an exemption for 50% of this amount and Daniel has agreed to same. The amount of $130,440 was paid to Judy by a cheque from Terry McRee and Dorothy McRee.

The cheque had a note on it which reads “inheritance gift to our daughter Judy Delorme”. [ 21 ] It is clear from the document in relation to the gift in the sum of $130,440 that Mr. and Mrs. McRee intended the gift as an advance of Judy’s inheritance from them. One half of this amount, $65,220, is clearly exempt and Daniel has accepted same. [ 22 ] No documentation in relation to the forgiveness of the loan similar to the gift in the amount of $130,440 to Judy was created at the time the loan was forgiven. As stated, the loan was a joint obligation of Judy and Daniel.

It appears that payments made on the loan came from joint matrimonial assets. Further, the loan was secured against property in the joint names of Judy and Daniel. [ 23 ] While I appreciate the testimony of both Judy and her mother was to the effect that the forgiveness of the debt was an advance of Judy’s inheritance, I also appreciate that evidence was given with the benefit of hindsight, specifically in relation to the deterioration of the marriage.

Given that there was no documentation created at the time the debt was forgiven which would be consistent with the $130,440 gift, and that the debt was in fact a joint obligation of Judy and Daniel, I decline to find an exemption for 50% of the forgiveness of the debt in favour of Judy. [ 24 ] In conclusion, Judy is not entitled to the claimed exemption in the sum of $61,725. b. Proceeds of High Prairie Home [ 25 ] Judy also claims an exemption in relation to monies gifted to her by her parents in the amount of $79,780.

During the parties’ temporary separation, Judy’s parents purchased a home in High Prairie for her. When the parties reconciled, Judy sold the home and paid her parents $138,720. Her parents then gifted to her the balance of the sale proceeds, which Judy testified she used to complete the basement in the matrimonial home. [ 26 ] Daniel submits that this does not qualify as an exemption as Judy conceded that it was used to improve the matrimonial home. [ 27 ] The test for tracing property is often applied less strictly in the matrimonial property context than in others.

However, there must still be sufficient evidence to establish a basis for connecting a portion of exempt funds to matrimonial property: Chalifoux v Chalifoux , 2008 ABCA 70 , [2008] AJ No 174 at paras 40-44 , Mancini v Phelan , 2012 ABQB 536 , [2012] AJ No 1385 at para 72 . [ 28 ] Although listed as an exemption in Judy’s counsel’s Written Argument, a note in the attached Statement of Property indicates “Judy not pursuing” in relation to the alleged exemption of $39,890.21. [ 29 ] The evidence in this case regarding the use of the funds in question does not permit the Court to determine with any certainty what effect, if any, the improvement may have had on the value of the home. [ 30 ] Whether Judy seeks an exemption in relation to these funds or simply relies on the evidence as a factor under s. 8, I find that any exemption was lost when the money in question was used for the improvement of the matrimonial home and, furthermore, it is not clear to what extent the funds in question have resulted in an increase, if any, in the value of the matrimonial home. 2.

Joint Bank Accounts [ 31 ] Daniel claims that, from 2001 to December 31, 2016, Judy had funds in bank accounts held jointly by Judy and her mother in the amount of $157,377. [ 32 ] Daniel says this is an estimate only which he has been required to make as Judy has failed to provide appropriate disclosure with respect to the joint bank accounts. He takes the position that this is matrimonial property subject to equal distribution. [ 33 ] Daniel notes that Judy’s investment income dropped when the joint accounts were transferred to Mrs.

McRee’s name only around the time of the separation in 2013. [ 34 ] From the early 2000s there were several bank accounts in the joint names of Judy and Mrs. McRee. Both Judy and Mrs. McRee provided testimony in relation to these joint accounts. Both testified that all funds in the joint accounts over the years were funds

of either Mrs. McRee alone or Mrs. McRee and her husband. Both Judy and Mrs. McRee testified that Judy never contributed any funds to, nor took any money out of, the accounts. Further, Judy stated that while she did receive income tax information in relation to interest or investment income attributable to her, which was disclosed on her tax returns on an annual basis, she did not actually receive any such income from the joint accounts. She stated that this did not concern her as her parents were generous to her.

Judy stated that while she had a legal ability to withdraw funds from the joint accounts, she had a moral and ethical obligation not to do so. [ 35 ] Both Judy and Mrs. McRee described the establishment of the joint accounts as an estate planning technique. Mrs. McRee stated that if something were to happen to her and her husband, Judy, as the survivor on the joint accounts, would receive the funds in the joint accounts as an inheritance. Such inheritance would not have to go through a formal probate process. Mrs.

McRee testified that so long as the joint accounts were in existence and she was alive, the funds in the accounts were “her money”. [ 36 ] When the marital difficulties arose between Judy and Daniel, the joint accounts were closed. Mrs. McRee stated she did this as she felt that the money was “exposed”. She felt it was better to transfer the funds into accounts that were in her name solely.

She stated she did not “want to be in a situation of having to explain my money” and “I did not think I would have to defend what was mine”. [ 37 ] The presumption of advancement does not apply in the context of a gratuitous transfer by a parent to an adult child: Pecore v Pecore , 2007 SCC 17 , [2007] 1 SCR 795. Rather, there is a rebuttable presumption that the adult child is holding the property in trust for the ageing parent to facilitate the free and efficient management of that parent’s affairs.

Although the rights of survivorship in a joint account vest when the account is opened, the gift is not the fluctuating balance but the transferee’s survivorship interest in the account balance at the time of the transferor’s death. The trial judge in each case must determine the weight to be placed on a particular piece of evidence in determining intent. [ 38 ] I accept the evidence of both Judy and Mrs. McRee with respect to the reason for establishing the joint accounts and that they were closed upon the marital difficulties arising as Judy’s parents wished to, in effect, protect Judy’s future inheritance.

There is no evidence to support the suggestion that any of the funds in the joint accounts were deposited by Judy, nor that she in fact received any benefit from the funds in the joint accounts. While Judy did acknowledge that she claimed income from the joint accounts on her income tax return, I accept her evidence that she did not receive any such income. [ 39 ] I find that Mrs. McRee was the owner of the funds invested in joint accounts in the names of Judy and Mrs. McRee. As a result, none of the funds invested became matrimonial property of Judy and Daniel.

I will address the issue of dividend income further in relation to child support. [ 40 ] It is necessary to comment on the manner in which this claim was advanced by Daniel. Daniel retained an expert, Glenn Hamilton, who provided two reports in this matter and testified at the trial. In the first report filed by Mr.

Hamilton, he stated that his firm had been “engaged to review the available financial disclosure received by [counsel for Daniel] and complete a Funds Tracing Analysis to identify funds transferred out of the group of Financial Accounts, to which there may be a matrimonial interest”. [ 41 ] In that report, Mr. Hamilton’s “Summary of Findings”, included, inter alia : 1. “The financial account disclosure is materially incomplete”; 2. “In our Funds Tracing Analysis, we have identified $660,462.93 of inter-account transfers on

Schedule 1. Within these inter- account transfers, we identified instances where funds have been co-mingled between accounts held in different names. Two transactions in the amount of $104,339.05 show inter-account transfers between accounts held in different names (from accounts where the name suggests a matrimonial interest – Judy Delorme – to an account where the name suggests an unclear matrimonial interest – Judy Delorme/Dorothy McRee). In our opinion the name(

s) of the owner of the financial accounts cannot be relied upon as a means to determine a matrimonial asset, due to the co-mingling of funds between different accounts.”; and 3. “While we cannot determine an accurate estimate of net matrimonial assets transferred out of the identified account group due to incomplete disclosure and co-mingling, a judgmental estimate of the minimum matrimonial assets transferred out is between $150,000 and $200,000”. [underlining in report] [ 42 ] As a result of the involvement of an expert by Daniel, Judy retained an expert who also prepared reports and testified at the trial. [ 43 ] A possible inference invited by the

Summary of Findings quoted above is that Judy diverted funds that were otherwise matrimonial assets to the accounts in question, which were the joint accounts with her mother. Mr. Hamilton stopped short of reaching this conclusion due to “materially incomplete” disclosure. He noted that funds had been co-mingled in accounts held in different names. Some of the bank statements with respect to transfers between the joint accounts which he reviewed were in Judy’s name alone. However, a letter from one of the financial institutions explained that the accounts had been in the joint names of Judy and Mrs.

McRee throughout, and that the only reason the bank statements were in Judy’s name alone was because she had requested same following the closure of the accounts. [ 44 ] Under questioning by the Court, Mr. Hamilton stated that in fact the report which he had prepared in which the above noted

Summary of Findings appears was not an attempt to address matrimonial property at all. He stated that the report did not at all help in the fund tracing analysis. Further, he testified that he would have expected that the evidence in his report would have been used in support of a disclosure application. In fact, he took the position in the report that financial disclosure was materially incomplete.

He stated that I could make no use of either of his reports in arriving at a decision on matrimonial property. [ 45 ] Based on the documentary evidence at trial, which was all available prior to the trial, there was an insufficient evidentiary basis for Daniel advancing this claim. The approach taken by the expert retained by Daniel was of no assistance in addressing this aspect

of his matrimonial property claim and in fact extended the length of the trial and, no doubt, increased the cost of this litigation. 3. Contracting a. Shares [ 46 ] Daniel holds 50 Class A shares in Contracting. His father, Jim Delorme, owns 552 Class “S” shares with a redemption value of $100.00 per share and 60,795 Class “W” shares with a redemption value of $1.00 per share. [ 47 ] Daniel’s 50 Class A shares constitute matrimonial property. Judy agrees that the value of Daniel’s shares is $0.

Further, she agrees that the equipment used to carry on the operations of Contracting is owned by Contracting and not by Daniel in his personal capacity. She agrees in this action that the value of such equipment is in fact $0. [ 48 ] As a consequence, neither the shares nor the equipment will be addressed in the division of matrimonial property. b. Grain Inventory [ 49 ] Judy claims a share of the amount of $132,174, being the grain inventory held in Contracting which was sold between November 1, 2016 and June 30, 2017.

Judy argues that the grain was grown on the Agricultural Properties for which Contracting paid no rent. She submits that Judy and Daniel would have earned approximately $26,670 per year if they had rented the farmland to a third party, based on $70 per acre. Judy argues that Daniel should account for the disposition of the grain. That is, it should be considered to be matrimonial property. [ 50 ] Over the years, Judy and Daniel as owners of the Agricultural Properties had a business arrangement with Contracting, which carried on the agricultural operations on the Agricultural Properties.

Contracting did not pay rent to Judy and Daniel for the use of the Agricultural Properties. Contracting may have paid the taxes and utilities associated with such lands, at least to some point post- separation. [ 51 ] The annual revenues generated from the farming operations are accounted for in the financial statements for Contracting. The financial statements, as respects the farming operations, are prepared on a cash basis. Contracting, therefore, does not account for its grain inventory as an asset. Income is recognized on the sale of the inventory.

Financial statements for Contracting were entered as an exhibit at the trial for the years ending October 31, 2013 through October 31, 2016 reflecting net farming income of $45,697 in 2013, $37,472 in 2014, $33,890 in 2015 and $66,731 in 2016. That is, in these years, the revenues generated from the farming operations exceeded the expenses associated solely with the farming operations. All of that revenue was retained by Contracting.

Judy never received any of the benefit from revenue resulting from the sale of the grain. [ 52 ] As at October 31, 2016, Contracting had grain on hand that it sold between that date and trial for $132,174. [ 53 ] The arrangement between Judy and Daniel on one hand and Contracting on the other was consistent for most if not all of the duration of the marriage.

Pursuant to this arrangement, Judy and Daniel chose not to charge Contracting for the use of their lands, and Contracting bore responsibility for all of the expenses relating to the farming operations, paid at least some taxes and utilities, and retained all of the revenues generated from the farming operations. [ 54 ] Contracting is a legal entity independent from Judy and Daniel. It entered into what is effectively a contractual arrangement with Judy and Daniel to carry out farming operations on the Agricultural Properties.

There is no basis for finding that the grain inventory sold between November 1, 2016 and June 30, 2017 is matrimonial property to be divided between Judy and Daniel. As a result, Daniel is not obliged to account for the grain inventory in the amount of $132,174 as matrimonial property. c. Net Farming Income [ 55 ] In her Written Argument, Judy also submits that the net income from the farming operations carried out by Contracting should be taken into account in the ultimate division of the matrimonial property under s. 8 of the MPA .

She points to a total of $183,750 in net farming income earned by Contracting as disclosed in the October 31 year-end financial statements from 2013 to 2016. In the

Schedule which Judy submitted as part of her Written Argument setting out her position with respect to the division of the matrimonial property, she does not assign any value to it as a divisible asset, but cites it as a s. 8 factor. [ 56 ] Daniel submits that Judy ignores the loss of $43,051 in 2013 and the following information contained in Contracting’s financial statements: Year Total Liabilities Cash on Hand (Deficit)/Retained Earnings 2013 $307,373 $ 0 ($78,904) 2014 $225,845 $548 ($52,280) 2015 $170,257 $768 ($36,636) 2016 $249,976 $763 $ 7,368 [ 57 ] I have previously commented upon the business arrangement between Judy and Daniel on one hand and Contracting on the other in relation to the farming operations.

Given that Contracting is a separate legal entity and given the history of the parties’ relationship with Contracting, Judy has no direct claim to funds received by Contracting.

[58] Further, the evidence establishes that although Contracting has enjoyed net farming income in most years since separation,farming is not the sole business. Contracting’s overall operations have been highly leveraged and it has been short of cash over the yearsin question. This does not appear to be a situation where, for example, one or both of the parties’ sacrifices over the years have createdsignificant retained earnings which would weigh as a s. 8 factor. Therefore, there will be no adjustment in the division of matrimonialproperty based on net farming income as a s. 8 factor. d.

Rent Expense [59] Contracting reported rent paid to Jim Delorme in the sum of $32,100 for the year ending October 31, 2015. Contractingtransferred machinery and equipment to Jim Delorme to pay for this rent. It reported shop and land rent paid to Jim Delorme for the yearending October 31, 2016 in the sum of $14,700. [60] Judy points out that Jim Delorme did not charge Contracting any amount for rent prior to 2015. [61] Prior to the separation, Jim Delorme acted in a way which ostensibly benefited Contracting by not insisting on recognition ofa rent expense.

However, he did seek recognition of the value of this contribution to Contracting once litigation ensued between theparties. There is no suggestion that the rent expense was not legitimately incurred. [62] As with Mrs. McRee’s action in closing her joint accounts with Judy, I am not prepared in the circumstances to infer anynefarious conduct in relation to Jim Delorme charging rent, to which he was entitled, after separation. e.

Shareholder Loan [63] Daniel had a shareholder loan due from Contracting on the October 31, 2012 financial statements, being the last year offinancial statements prior to the date of separation, in the amount of $80,046. Daniel agrees that this was matrimonial property. ByOctober 31, 2015, his shareholder loan balance had decreased to nil to reflect reimbursement by Contracting of Daniel’s personalexpenses.

He was not required to pay tax on the reduction of the shareholder loan. [64] Judy submits that Daniel dissipated this shareholder loan between the parties’ final separation and trial and therefore it shouldbe valued as at the date of separation rather than trial.

She argues that rather than drawing a salary or withdrawing funds by way ofdividend, Daniel chose to draw the cash resources of Contracting to pay for his expenses, including the child support he paid to Judy.This was for Daniel’s benefit alone. [65] Daniel says that he paid for virtually all of his personal expenses through Contracting accounts and would leave it to hisaccountant to separate his personal expenses from business expenses for the purpose of preparing tax returns. Some of Daniels’ personalexpenses flowing through Contracting were expressed as income.

His accountant’s evidence was that he adjusted the shareholder loanaccount so that the shareholder loan of $80,046 was paid back to Daniel by deducting Daniel’s personal expenses from the balance of theshareholder loan. Daniel submits that the entire amount of the shareholder loan was spent to cover his personal living expenses duringthe separation. The shareholder loan was depleted to nil by October 31, 2015 and then further to a negative balance of $43,635 byOctober 31, 2016.

This negative balance was addressed by payment of a bonus and dividend to Daniel, such that, the shareholder loanbalance was $149 on the October 31, 2016 year-end financial statements. [66] Judy bears the onus to establish that Daniel dissipated the asset represented by the shareholder loan so as to warrant unequaldivision through valuation as at separation.

Dissipation connotes squandering or waste through negligence or intentional acts: Fleming vFleming, 2016 ABCA 88 at paras 29-31, Hill v Ilnicki (2000), (AB KB), 13 RFL (5th) 73, [2000] AJ No 1219 atpara 71 (QB), aff’d 2002 ABCA 209, 317 AR 389, leave denied [2002] SCCA No 448.

In appropriate circumstances, depletingmatrimonial property on living expenses to maintain a modest lifestyle may well not amount to dissipation: Scheffelmeier v Krassman,2011 ABCA 64 at para 22, Rooney v Wingham, 2007 ABCA 188 at para 37-38. [67] I will discuss Daniel’s income in more detail in relation to child support and his claim for spousal support. However, I notethat taking into account his total annual income and the reduction to $0 of the shareholder loan over the years in question, his averageannual income amounts to around $46,000.

The benefits received from Contracting constituted his sole source of income during theyears prior to and after separation. [68] Further, the decisions regarding the treatment of Daniel’s income and payment for living expenses appear to have been madeby the accountant. Based on the evidence at trial, it is doubtful that Daniel had sufficient accounting knowledge to enable him to contriveto intentionally deprive Judy of the asset. [69] In the circumstances, this evidence does not support a finding of dissipation of the amount of the shareholder loan. 4.

Contingent Tax on Agricultural Properties [70] Daniel claims that there is a liability for contingent tax associated with the ultimate disposition of the matrimonial home – NE14, the SE 14, the SW 14 and the 31 acre acreage. He asks the Court to recognize a contingent tax liability of 10% of the differencebetween the acquisition price of the respective parcels of land and the agreed values of same as set out previously in these Reasons forJudgment.

The total contingent tax liability claimed is $123,400. [71] Judy submits that the matrimonial home and surrounding land is not subject to capital gains tax as it is a primary residence.Further, there is no contingent tax liability on the Agricultural Properties as the lifetime capital gains exemptions available to Danielwould result in no tax being payable by Daniel on the disposition of the Agricultural Properties.

Judy also submits that Daniel hadagreed that there would be no contingent tax liability with respect to the ultimate disposition of the Agricultural Properties and this wasonly raised by him in his Written Argument following the trial.

[ 72 ] At the outset of the trial, both Judy and Daniel provided Matrimonial Property Statements to me. This was done to provide background with respect to the matrimonial property and to identify issues in relation to the matrimonial property.

Neither of the Matrimonial Property Statements provided by Judy and Daniel identified any contingent tax liability with respect to the ultimate disposition of the Agricultural Properties. [ 73 ] No evidence was called at the trial with respect to the capital gains exemptions available in relation to the Agricultural Properties and any contingent liabilities relating thereto. [ 74 ] The evidence before the Court is that the land is actively farmed. Without more, I infer that it would qualify as farm property under the Income Tax Act , RSC 1985, c 1 (5 th Supp).

There is no evidence that Daniel has used any of his lifetime capital gains exemption to offset a capital gain associated with the disposition of any other farmland. In the circumstances, there is no basis on the evidence before me to assess any contingent tax liability related to the Agricultural Properties, and therefore no notional capital gains liability will be included in the division of matrimonial property. 5. HollisWealth TFSA [ 75 ] At the time of separation, Judy held a Tax Free Savings Account (TFSA) with HollisWealth in the sum of $15,573.

Daniel submits that these funds which Judy spent constituted matrimonial property and that Judy should account for them. [ 76 ] Judy submits that the value of the TFSA should not be considered as matrimonial property because she used the funds in the TFSA to pay legal fees incurred in this matrimonial litigation. She reasons that Daniel has spent some of the resources at his disposal on litigation and does not have those funds on hand for division. Therefore, she should not be penalized for having used the TFSA. [ 77 ] Judy provided two Statements of Income, Assets and Liabilities in this action.

They are signed by her on September 3, 2014 and December 15, 2014. Both Statements of Income, Assets and Liabilities disclose the TFSA in the amount of $15,573. The Statements of Income, Assets and Liabilities were both provided shortly after the parties separated. The TFSA was an asset held by Judy at the time of separation. [ 78 ] I accept Judy’s evidence that the funds in the TFSA were used by her to pay legal fees incurred in this action. Judy’s lowest annual income since separation has been $108,000.

The annual average contribution from the TFSA toward Judy’s legal fees amounts to under $4,000 per year. [ 79 ] In the absence of any explanation as to why it was necessary to deplete the TFSA for legal expenses, as opposed to paying them from her income, I find it is equitable to include the value of the TFSA as at separation as an asset subject to division. 6. RBC Line of Credit [ 80 ] Judy has a Line of Credit with the Royal Bank of Canada (LOC). As at the date of trial, the LOC stood at $10,600.

She claims that the LOC is a matrimonial debt and should be accounted for in the division of matrimonial property. [ 81 ] Daniel submits that the LOC was incurred by Judy following the date of separation and should not be considered to be matrimonial debt. [ 82 ] The Statements of Income, Assets and Liabilities provided by Judy in this action, dated September 3, 2014 and December 15, 2014, do not disclose the LOC as a debt.

The documents entered as an exhibit with respect to the LOC suggest that the withdrawals against the LOC all occurred after the date of separation. [ 83 ] Judy testified that funds drawn from the LOC were used by her, at least in part, to fund this litigation. There is no suggestion that the debt incurred benefitted Daniel in any tangible way. Again, Judy was in receipt of a healthy employment income over the years in question. [ 84 ] I conclude in the circumstances that the LOC is a post-separation debt which benefitted only Judy.

I find that it would not be equitable to take it into account in the division of matrimonial property. 7. Bank Accounts [ 85 ] At the date of trial, Judy had a balance in her Royal Bank Chequing Account of $1,165. Daniel had a Royal Bank Account balance of $2,947. Although Daniel suggested these amounts should not be taken into account, no sound rationale has been provided for not including both of these balances as divisible assets. 8.

Artwork [ 86 ] Judy argues that artwork valued at $5,134 should be attributed to Daniel and should figure in the division of matrimonial property. [ 87 ] Daniel submits that any artwork constituting matrimonial property can be divided up between the parties by agreement and need not form part of the overall matrimonial property division. [ 88 ] The parties have agreed on the value of the artwork. It is in Daniel’s possession or he has indicated an intention to take the artwork. Therefore it constitutes a matrimonial asset in his hands. 9. Registered Education Savings Plans

[ 89 ] Judy is the owner of two Registered Education Savings Plans (RESPs) for the benefit of the Delorme children. One of the RESPs is with ScotiaMcLeod and as at June 13, 2017, the value of this RESP was $154,968. The other RESP is with Edward Jones and as at March 31, 2017, it had a value of $36,113. [ 90 ] From the report prepared by the expert retained by Judy, it appears that the sum of $55,245 from joint accounts in the name of Judy and Ms. McRee was deposited to the RESPs. Judy contributed the balance of the funds to the RESPs.

Daniel contributed no funds to the RESPs. [ 91 ] Judy’s position is that she wishes the entire value of the RESPs to be held in trust for the benefit of the children. [ 92 ] Daniel takes the position that both of the RESPs are matrimonial property held by Judy and should be accounted for as such in the division of matrimonial property.

Alternatively, he submits in his Written Argument that he may accept a transfer of half of the value of the RESPs to be held by himself in trust for the children. [ 93 ] Based on Judy’s testimony at trial and the fact that the grandparents contributed a significant portion of the funds in the RESPs, it is clear that the RESPs were intended for the benefit of the Delorme children to allow them to pursue their education. In fact, some of the funds have already been used by some of the children in their educational pursuits. [ 94 ] I find that the RESPs were never matrimonial property.

Judy as the holder of the RESPs has been holding same in trust for the Delorme children pursuant to the terms and conditions of establishing such RESPs. [ 95 ] Daniel seems to recognize that the RESPs were created for the benefit of the children and acknowledges that even if he held some of the RESPs, he would be holding them in trust for the children. [ 96 ] There may very well be tax and other consequences related to the transfer of some of the RESP funds from Judy to Daniel.

I see no basis for unnecessarily triggering any such tax consequences or other penalties by transferring a portion to Daniel, when the parties are agreed that the funds in the RESPs should be held for the benefit of their children. [ 97 ] The RESPs are not matrimonial property and, therefore, will not be accounted for between the parties.

Judy shall continue to hold the funds in the RESPs for the benefit of the Delorme children to be used for their educational pursuits. [ 98 ] To the extent there are any funds remaining in the RESPs after the Delorme children have completed their educational pursuits, the RESPs, net of any tax or other penalties which may arise as a result of the funds not being used for educational pursuits, shall be divided amongst the Delorme children. D.

Matrimonial Property Statement [ 99 ] Taking into consideration all of the items outlined in these Reasons for Judgment with respect to matrimonial property, I have prepared a Matrimonial Property Statement which is attached hereto as Appendix A. In the event there are any errors in my mathematical calculations, the parties are at liberty to apply to the Court for correction to these Reasons for Judgment, if need be. E.

Equalization Payment [ 100 ] Daniel has indicated that he is interested in retaining the Agricultural Properties and that he is prepared to attempt to obtain financing to make an equalization payment to Judy. Such financing may very well require that some or all of the Agricultural Properties and the lake lots be provided as security.

The Matrimonial Property Statement attached as Appendix A is prepared on the basis that Daniel would become the sole owner of the Agricultural Properties and the two lake lot properties and that he would make the equalization payment identified in Appendix A in the sum of $545,125.50. [ 101 ] Daniel shall, therefore, have 60 days from the date of these Reasons for Judgment to provide verification of financing to finalize the transfer of title to the Agricultural Properties and the two lake lots to him.

Daniel shall have a further 60 days from the provision of such verification of financing to finalize the financing and effect the transfer of the properties.

Judy shall provide whatever documentation is required to permit the financing and transfer of the properties on the basis that she is secured for the equalization payment identified in Appendix A. [ 102 ] If Daniel does not provide verification of financing within 60 days of the date of these Reasons for Judgment, or finalize the transfer of the properties to him within a further 60 days, such of the Agricultural Properties as necessary are to be sold and the equalization payment to Judy shall be made from the net sale proceeds thereof.

Alternatively, the parties may appear before me to address the mechanics of the equalization payment, if necessary. VI. Child Support [ 103 ] The obligation to pay child support is set out in the Divorce Act , RSC, 1985, c 3 (2nd Supp) and detailed in the Federal Child Support Guidelines , SOR/97-175 (the Guidelines). The starting point for determining the obligation to pay child support is a determination of the incomes of the respective spouses pursuant to the Guidelines (the Guideline Incomes). [ 104 ] Both retroactive and ongoing child support payable by each of the parties are in issue in this case. A.

Judy’s Guideline Income

[ 105 ] As stated previously, Judy has been an employee of the Government of Alberta throughout the relevant period. Therefore, her employment income is relatively straightforward. Throughout the period, she paid union or professional dues on her employment income. Pursuant to the Guidelines , a deduction must be made for such union or professional dues: s 1(

g) Schedule III of the Guidelines. [ 106 ] The complicating issue with respect to Judy’s Guideline Income arises from the fact that her tax returns indicate that she earned income from dividends, interest, and investments throughout the material years. Much of Judy’s interest and investment income in the years in question was earned as a result of funds held in accounts in the joint names of Judy and her mother. A drop in investment income attributed to Judy is reflected on her tax returns in the years after the joint accounts were closed.

I have considered the accounts in these Reasons for Judgment under the heading, Matrimonial Property. [ 107 ] Counsel for Judy, in the Written Argument on behalf of Judy, included the investment and interest income in her Guideline Income even though Judy allegedly did not receive portions of that income identified in her tax returns as having been received during 2013 and 2014. However, he also included Contracting’s pre-tax corporate income in calculating Daniel’s income.

For reasons set out below, I decline to impute Contracting’s pre-tax income to Daniel for the purposes of determining his Guideline Income. [ 108 ] As well, counsel for Judy argued that there should be a deduction for a tax gross-up in relation to dividend income.

Section 5 of

Schedule III of the Guidelines provides that the taxable amount of dividends from taxable Canadian corporations received by the spouse is to be replaced by the actual amount of those dividends received. [ 109 ] Daniel sought to include investment and interest income from Judy’s joint accounts with Mrs. McRee as divisible matrimonial property, but I have found that Daniel has not rebutted the presumption that Judy was holding the account balances in trust for Mrs. McRee.

I accepted Judy’s testimony that while the dividend and interest income was identified on her tax returns, she in fact never received any such income from those assets. However, both Mrs. McRee and Judy were content for that income to be attributed to Judy for tax purposes. [ 110 ] I decline to reduce Judy’s Guideline Income by the amount of dividend and interest, identified on her tax returns. There is no evidence before me as to the amount of interest and investment income earned on the joint accounts with her mother as distinct from the interest and investment income which she earned in her own name.

Further, counsel for Judy in the Written Argument on behalf of Judy, included the investment and interest income in her Guideline Income even though Judy allegedly did not receive some portion of that income identified in her tax returns as having been received during 2013 and 2014. [ 111 ] Therefore, Judy’s Guideline Income is set based on the total income disclosed on her annual tax returns less the amount of union and professional dues paid by her on an annual basis. [ 112 ] Judy’s Guideline Income is summarized as follows: Year Line 150 Income Less Union and Professional Dues Guideline Income 2013 $132,730 $350 $132,380 2014 $133,070 $888 $132,182 2015 $110,937 $1,574 $109,363 2016 $108,302 $1,206 $107,096 B.

Daniel’s Guideline Income [ 113 ] Daniel earns his income through Contracting. As stated, Contracting works in the oilfield and construction industries and carries out farming operations on the Agricultural Properties. Daniel testified that, essentially all of his expenses, whether they be personal or related to the operations of Contracting, are incurred in the name of and paid for by Contracting. While Daniel had a personal chequing account, he did not use it. Further, the credit card which he used for all expenses was in the name of Contracting.

He does not have a personal credit card. [ 114 ] Daniel’s evidence was that he relied on his accountant to address the division of personal and corporate expenses and how best to treat same from a tax perspective. The accountant for Contracting was called to testify.

However, not all of the accounting records were available at the trial and while the accountant was able to provide some information as to the accounting between Daniel and the company, the full picture of how income was attributed to Daniel and how his personal expenses were paid is less than clear. [ 115 ] The following table sets out the information which is available with respect to Daniel’s income over the years and the operations of Contracting: Year Daniel’s Line 150 Income Contracting’s Pre-Tax Income (Deficit) Daniels’ Shareholder Loan Account in Contracting 2013 $41,661 $(43,051) $87,192 2014 $411 $26,624 $38,478 2015 $20,431 $15,644 $0 2016 $35,562 $80,306 $149 [ 116 ] Judy argues that Daniel’s Guideline Income, having regard to s. 18 of the Guidelines , should be as follows:

Year Line 150 Income Contracting Pre-Tax Income Total Income 2013 $41,661 $41,661 2014 $26,624 $26,624 2015 $20,431 $15,644 $36,075 2016 $80,306 $80,306 [ 117 ] I have discussed Judy’s entitlement to Contracting’s net income in relation to matrimonial property.

Several issues arise with respect to her approach in determining Daniel’s income for the purposes of child support. [ 118 ] First, it ignores the fact that Contracting was in a deficit position in the amount of approximately $43,000 in 2013. [ 119 ] Second, it does not take into account Daniel’s Line 150 income in 2016. [ 120 ] Third, this analysis does not reflect the personal benefit that Daniel received over the years due to the reduction in his shareholder loan account in Contracting which was used to pay his personal expenses. [ 121 ] Daniel argues that his Guideline Income should be based on his Line 150 income and the pre-tax income of Contracting should not be taken into consideration as Contracting did not have money available and carried significant debt.

Any revenue Contracting did have was put towards legitimate business purposes such as operating expenses and paying debts. [ 122 ] In my view, neither party’s position is in keeping with the approach mandated by the Guidelines . Judy is asking the Court to impute income to Daniel under s. 19 of the Guidelines.

There are a number of possible grounds for imputing income to a spouse, such as that the spouse is underemployed, has diverted income, has failed to provide income information, unreasonably deducts expenses from income, or derived a significant portion of income from sources taxed at a lower rate than employment or business income. [ 123 ] There is no suggestion that Daniel is underemployed in the sense that he is not working to his capacity.

He has not made a move to less remunerative employment following separation. [ 124 ] The determination of Daniel’s Guideline Income requires a consideration of the personal benefit he has derived through Contracting and whether it is accurately reflected in his Line 150 income. [ 125 ] Under s. 18 of the Guidelines , if Daniel’s annual income as determined under s. 16 (tax return as adjusted) does not fairly reflect all the money available to him for the payment of child support, then the Court can consider the situations described in s. 17 and determine his annual income to include all or part of the pre-tax income of Contracting, or an amount commensurate with the service he provides to Contracting in an amount not exceeding Contracting’s pre-tax income. [ 126 ] Section 18(1)(

a) allows the Court to pierce the corporate veil to address a payor's potential diversion, manipulation or sheltering of income through the use of a corporate structure in order to avoid the payment of adequate child support: Goett v Goett , 2013 ABCA 216 at para 16 .

Section 18 is inextricably linked with s. 19 which allows a court to impute income. [ 127 ] Section 19(2) of the Guidelines makes it clear that the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act . [ 128 ] The evidence at trial was that the only credit card Daniel has used for personal expenses is a corporate credit card. The shareholder loan was paid back to him by Contracting, and stood at $149 as at October 31, 2016 by deducting Daniel’s personal expenses from the balance of the shareholder loan.

Therefore, while some of his personal expenses flowing through Contracting were expressed as income and reflected on his tax return, he received the benefit of having other personal expenses paid by Contracting and deducted from his shareholder loan account. [ 129 ] In considering matrimonial property issues, I found that Daniel did not dissipate the shareholder loan. In other words, he is not obliged to account for the value of the loan in the matrimonial property division. The shareholder loan was the vehicle through which the accountant accounted for funds used for Daniel’s living expenses.

Nevertheless, Contracting could have paid Daniel income. I recognize that Contracting’s pre-tax net income from 2013 to 2016 did not exceed the amount by which his shareholder loan account was depleted.

However, the fact remains that Daniel and Contracting used the shareholder loan account as a vehicle to even out his income over the years in question. [ 130 ] I find that the expenses set off against Daniels’ shareholder loan balance are properly taken into account in determining the benefit Daniel received from Contracting. [ 131 ] In 2013, Daniel had declared income of $41,661. [ 132 ] In 2014, Daniel’s Line 150 income was $411. His shareholder loan account was reduced by $48,714. [ 133 ] In 2015, Daniel’s Line 150 income was $20,431.

His shareholder loan account was reduced by a further $38,478. [ 134 ] In 2016, Daniel’s Line 150 income was $35,562. By October 2016, his shareholder loan account was $149. This was a year in which Contracting had pre-tax income of $80,306. [ 135 ] Judy points out that amounts received through reduction in the shareholder loan would have been tax free. Under s. 19(1)(

h) of the Guidelines , the Court can impute income if the spouse derives a significant portion of income from sources that are exempt from tax. However, repayment by Contracting to Daniel of the shareholder loan due to Daniel was repayment of a loan of after tax dollars that Daniel had made to Contracting. [ 136 ] Further, there was a dearth of evidence upon which the Court could make any determinations as to the tax implications

associated with the manner in which Daniel received benefits from Contracting. [ 137 ] Having considered this couple’s particular set of circumstances and the equities at play, I decline to gross up the amounts Daniel received. [ 138 ] I am satisfied that the following calculations reflect a fair and reasonable determination of the monies available to Daniel over the years in question for the purposes of calculating his Guideline Income for child support: Year Line 150 Income Benefit from Shareholder Loan Account Guideline Income 2013 $41,661 $0 $41,661 2014 $411 $48,714 $49,125 2015 $20,431 $38,478 $58,909 2016 $35,562 $149 $35,562 C.

Residence of the Children [ 139 ] One or more of the children have resided with Judy continuously since the date of separation. However, the children, to a certain extent, have moved back and forth between the parents or have been resident away from both parents to attend school. It is, therefore, necessary to deal with each of the children separately to address their residences since the date of separation so as to properly calculate retroactive child support pursuant to s. 3 of the Guidelines (Section 3 Child Support). 1. DD [ 140 ] At the date of separation, DD was away from home at school.

She attended this school until May 2014. When not in school, she returned home and resided with Judy. Judy was primarily responsible for her support and for her travel to school. DD turned 18 on July 27, 2013. As she was in school until May 2014 and primarily under Judy’s care, Daniel shall pay

Section 3 Child Support for DD from February 1, 2013 to May 2014. [ 141 ] From August 2015 to April 2017, DD attended university in Edmonton. When she was not in Edmonton, She resided with her grandparents. There is no evidence to suggest that

Section 3 Child Support should be paid during the period of time she resided with her grandparents. [ 142 ] From September 2016 to April 2017, DD resided in a house which Daniel rented in Edmonton while she attended the University of Alberta. Daniel resided there from January 2017 to March 2017. He is entitled to child support for the period from January 2017 to March 2017. 2. JD [ 143 ] JD resided with Judy from the date of separation until June 2016 when he completed high school. He had turned 18 in February 2016.

Daniel argues that no child support obligation for JD continued past February 2016. [ 144 ] A child who is over the age of majority falls within the definition of “child of the marriage” under s. 2(1) of the Divorce Act if he is unable to withdraw from the parents’ charge or to obtain the necessaries of life. [ 145 ] There was nothing in the evidence to suggest that JD’s need for support suddenly changed on turning 18 years old. I am satisfied on the evidence that JD was unable to withdraw from Judy’s charge until he completed his high school education, and that Judy supported JD until he finished high school.

Therefore, I find that JD remained a child of the marriage until June 2016. Child Support is payable under Section 3(2) (

a) of the Guidelines to June 30, 2016. [ 146 ] Daniel will pay

Section 3 Child Support for JD from February 1, 2013 to June 30, 2016. 3. ED [ 147 ] Following separation, ED resided with Judy in 2013 and 2014. In 2015, she resided for nine months with Judy and three months with Daniel. For all of 2016 and for the first six months of 2017, she resided with Judy. ED turned 18 on May 27, 2017 and completed high school in June 2017. Again, I am satisfied on the evidence that ED was unable to withdraw from Judy’s charge until the end of June 2017. [ 148 ] Daniel will, therefore, pay

Section 3 Child Support to Judy in respect of ED for 11 months in 2013, 12 months in 2014, nine months in 2015, 12 months in 2016, and 6 months in 2017. [ 149 ] Judy will pay

Section 3 Child Support to Daniel in respect of ED for three months in 2015. 4. KD [ 150 ] KD resided with Judy for 11 months in 2013 and the whole of 2014. In 2015, she resided for three months with Judy and for nine months with Daniel. In 2016, she resided with both parents but, primarily, with Daniel. For 2017, up to the date of trial in June, KD resided with Judy. [ 151 ] Therefore, Daniel will pay

Section 3 Child Support to Judy in respect of KD for 11 months in 2013, 12 months in 2014, three months in 2015, and six months in 2017.

[ 152 ] Judy will pay

Section 3 Child Support to Daniel in respect of KD for nine months in 2015 and 12 months in 2016. D. Child Support Paid to Date [ 153 ] The parties are agreed that pursuant to various Court Orders over the course of this litigation, Daniel has paid child support in the amount of $7,617 and Judy has paid child support in the amount of $9,136. [ 154 ] In addition, Daniel paid $1,800 directly to KD in 2017. [ 155 ] Daniel will, therefore, have credit for child support payments totaling $9,417 and Judy will have credit for child support totaling $9,136. These amounts will be set off as against any amounts owing retroactively for the period from the date of separation to trial. E. Retroactive

Section 3 Child Support [ 156 ] The parties shall pay

Section 3 Child Support, having regard to the Guideline Incomes and where the children resided, as outlined in these Reasons for Judgment. Such amounts are to be calculated having regard to the Guideline Tables for each of the years since the date of separation. Counsel are directed to make the necessary calculations to determine the total amounts owing retroactively by each of Judy and Daniel. As stated, credit will be given for all amounts paid to date by each of the parties. F. Ongoing

Section 3 Child Support [ 157 ] KD is still attending high school. Daniel submits that KD’s needs can be met in either parent’s home and therefore no ongoing support should be payable. While KD’s residence may fluctuate in the future, the parent with whom KD resides is entitled to child support until KD is no longer a child of the marriage. [ 158 ] Therefore, ongoing

Section 3 Child Support shall be paid in relation to KD. As KD is currently residing with Judy, Daniel shall pay

Section 3 Child Support in respect of KD to Judy on the basis of his Guideline Income for 2016. This will commence on July 1, 2017. It is subject to adjustment when Daniel’s 2017 Guideline Income is known and will be payable until KD is no longer a child of the marriage. Should KD’s residence change prior to ceasing to be a child of the marriage,

Section 3 Child Support may be reviewed. G.

Section 7 Child Support [ 159 ] Both Judy and Daniel claim support pursuant to

Section 7 of the Guidelines (Section 7 Child Support) from each other in respect of the expenses incurred by them for the children (Section 7 Expenses). [ 160 ] Exhibit 3 was entered, being the

Section 7 Expenses claimed by Judy from the date of separation to the date of trial. These

Section 7 Expenses totalled $45,944 and were accepted by Daniel at trial. [ 161 ] The

Section 7 Expenses incurred by Judy shall, therefore, be shared proportionately by Judy and Daniel based on the Guideline Incomes set out in these Reasons for Judgment. [ 162 ] The expenses for DD attending university net of any funds paid from the RESPs held for her benefit shall be treated as an appropriate

Section 7 Expense. [ 163 ] Daniel claimed $15,520 in

Section 7 Expenses. The backup for these expenses is set out in Exhibit 29, Tab 18. The

Section 7 Expenses were all paid by Contracting. This is in line with Daniel’s practice of paying all personal expenses through the credit card and chequing account for Contracting. [ 164 ] To the extent an expense paid by Contracting is in fact an appropriate

Section 7 Expense, same is claimable by Daniel. That is, I am satisfied that notwithstanding that Contracting initially paid such expenses, Daniel would ultimately be responsible for same when the year-end accounting was done for Contracting. [ 165 ] Some of the expenses claimed by Daniel, however, are not properly claimable as

Section 7 Expenses. For example, a claim was included for the cost of a school trip to China for JD. In fact, Daniel accompanied JD on this school trip. Accordingly, only the costs related to JD’s attendance on the school trip are recoverable by Daniel. [ 166 ] Further, Daniel included rent payments in respect of a residence occupied by DD in Edmonton while she was attending university. For three months, Daniel was residing with DD. He is entitled to child support for that period of time as indicated above. He is entitled to include rental payments as a

Section 7 Expense only in relation to the months during which DD resided in the rental without Daniel. [ 167 ] Other expenses claimed by Daniel relate to some medical expenses paid on behalf of the children, school expenses, and extracurricular activities. Such expenses paid by Daniel are proper

Section 7 Expenses. [ 168 ] Counsel are directed to review the

Section 7 Expenses claimed by Daniel, having regard to the directions set out herein. The total proper

Section 7 Expenses paid by Daniel shall be shared proportionately by Judy and Daniel based on the Guideline Incomes set out in these Reasons for Judgment. Ongoing

Section 7 Expenses shall be shared proportionately. VII. Spousal Support

[ 169 ] Judy does not claim any spousal support. [ 170 ] Daniel does not claim ongoing spousal support. However, he seeks the sum of $123,684 as a lump-sum retroactive spousal support award. He argues that he was disadvantaged by the marriage breakdown during the separation as he was no longer able to share in Judy’s income, his own income dropped due to the slowdown in Alberta’s economy, and he did not have the advantage of being able to reside in the matrimonial home.

He points to depletion of his shareholder loan account as an indication that his condition, means and needs were inadequately met by his income alone. He submits that his unmet needs are reasonably quantified as being equal to the sum of the depletion of his shareholder loan and personal expenses in Contracting charged to him during the period of separation, being $123,684 as of October 31, 2016. [ 171 ] Judy submits that Daniel has been economically advantaged by the marriage due to the generosity of her parents without which the parties would have very little in the way of property to distribute. [ 172 ]

Section 15.2 of the Divorce Act addresses spousal support orders. Sections 15.2(1) , (4) and (6) are particularly relevant to this claim: 15.2

(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse. ...

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse. ...

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (

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

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 173 ] One of the objectives of a spousal support order is to promote the economic self-sufficiency of each spouse within a reasonable period of time. Both parties are self-sufficient. [ 174 ] Both Judy and Daniel have continued in their respective occupations since the date of separation. Judy has continued to earn her income as an employee while Daniel has continued to earn his income through Contracting.

While their levels of income may differ (although it is difficult to compare them given the challenges in analyzing the accounting for Contracting), Daniel has been able to continue in his chosen field of work. There is no suggestion that Daniel has had any need to retrain or take a different position so as to become self-sufficient. [ 175 ] Each party has retained his or her income since the date of separation.

As well, each will retain significant assets through the division of the matrimonial property. [ 176 ] Daniel argues that the change in his shareholder loan account since the date of separation is indicative that his means, needs, and condition were not met by his income. I determined, when considering the shareholder loan as matrimonial property, that Daniel did not dissipate it. Rather, it was the vehicle through which he was reimbursed for a number of his personal expenses.

The fact that the value decreased as a result of personal expenses incurred by Daniel has been acknowledged through the Court’s rejection of Judy’s claim that Daniel should be accountable for the value of the shareholder loan at separation. If he had not depleted the shareholder loan account, Judy would have been entitled to half of its value.

Therefore, Judy has indirectly contributed to Daniel’s living expenses through the loss of that value. [ 177 ] In terms of economic disadvantages or hardship resulting from the marriage or its breakdown, the reality is that Daniel has carried on in most respects after the date of separation exactly as he did before the date of separation. He has maintained his business in Contracting. It is true that Contracting has experienced some lean years as reflected in the pre-tax income provided.

However, Daniel himself has continued to have his personal living expenses covered. [ 178 ] Further, Contracting, a closely held family corporation, has had the benefit of all of the farming operations conducted on the Agricultural Properties since the date of separation. The farm income is all accounted for in the financial statements for Contracting.

The net income from the farming operations has not been shared with Judy since the date of separation, despite her entitlement to a share of the value of the land farmed. [ 179 ] It is true that Daniel has not had the advantage of residing in the matrimonial home during the separation. Judy has lived in the

matrimonial home on the NE 14 with one or more of the children since the date of separation. [ 180 ] For a period of time post-separation, Contracting was paying the taxes and utilities on the Agricultural Properties, including the parcel of land on which the matrimonial home is situated. [ 181 ] Judy testified that over the period of separation she too has paid some of the utilities and taxes on the Agricultural Properties. Further, Judy testified that she carried out some post-separation renovations on the matrimonial home.

Daniel agreed that this was the case but took exception to the nature and cost of such renovations. There was no evidence before me that Judy sought any contribution from Daniel prior to trial for the expenses which she incurred in relation to maintaining and living in the matrimonial home. [ 182 ] Daniel testified that since the date of separation he has lived primarily either with his parents or in the cab of a truck or in a utility trailer situated on the Agricultural Properties. [ 183 ] From January 2017 to March 2017, Daniel shared a residence in Edmonton with DD while she was going to University.

The rent for this residence was $2,200 per month. Daniel’s evidence was that his daughter mostly lived in the residence. Daniel stated that the particular house was chosen as it was close to a junior high school and he hoped that KD would live with him in Edmonton. Further, the house was close to both bus and LRT routes which would be convenient for DD going to university. [ 184 ] Daniel seeks 50% of the rent paid for the Edmonton premises during these three months for a total of $3,300 as occupation rent payable by Judy. I have ruled that Daniel is entitled to claim the accommodation rent as a

Section 7 Expense for the time during which DD resided there alone. Further, Daniel is entitled to

Section 3 Child Support for the period from January 2017 to March 2017 when he resided there with DD. In my view, no further adjustment is required in the circumstances. [ 185 ] Daniel claims that he is entitled to a share of Judy’s CPP credits. He is free to apply for a split of Judy’s CPP credits pursuant to the relevant statute. [ 186 ] Having considered all of the circumstances, I find no basis upon which to award Daniel any amount of retroactive spousal support. Daniel’s claim for retroactive spousal support is dismissed. VIII.

Conclusion [ 187 ] The matrimonial property of the parties shall be dealt with as set out on the Matrimonial Property Statement appended hereto. Daniel shall make an equalization payment to Judy in the sum of $545,125.50. Child support shall be paid in accordance with the Guideline Incomes and the directions set out in these Reasons for Judgment. Daniel is not entitled to retroactive spousal support, nor to occupation rent. IX. Costs [ 188 ] The parties may speak to me within 60 days of the date of these Reasons for Judgment if they are otherwise unable to agree on costs.

Heard on the 26 th to 29 th days of June, 2017. Dated at the City of Edmonton, Alberta this 16 th day of November, 2017. K.G. Nielsen J.C.Q.B.A. Appearances: Dale Tumbach TC Family Law for the Plaintiff Bradley J. Smith

Barrister and Solicitor for the Defendant Appendix A Matrimonial Property Statement Assets Daniel Judy Amount Matrimonial home – NE 14 $865,000 $865,000 SE 14 $264,000 $264,000 SW 14 $246,500 $246,500 31 acre acreage $128,500 $128,500 Winagami lake lot $50,000 $50,000 Key Cove lake lot $185,000 $185,000 Life Insurance Policy – Daniel named insured $9,046 $9,046 Life Insurance Policy – Judy named insured $9,446 $9,446 Edward Jones RRSP $9,007 $9,007 Scotia Bank RRSP $138,233 $138,233 RRSP – Daniel $204 $204 PPSP and MEPP Pensions $687,462 $687,462 Common Share Bank Account $9,045 $9,045 High Yield Savings Account $365 $365 Personal Savings Account $3 $3 Royal Bank Savers Account $169 $169 Royal Bank Chequing Account $1,165 $1,165 Royal Bank E-Savings Account $72 $72 Royal Bank Account – Daniel $2,947 $2,947 HollisWealth TFSA $15,573 $15,573 2011 Equinox $6,000 $6,000 2006 quad $1,000 $1,000 1995 Suburban $300 $300 Skidoo $5,700 $5,700 Artwork $5,134 $5,134 Total Assets $1,762,331 $877,540 $2,639,871 Liabilities Daniel Judy Amount Secured $0 $0 $0 Unsecured $0 $0 $0 Contingent Liabilities RRSPs $27,646 $27,646 Pensions $137,492 $137,492 Winagami lake lot $3,500 $3,500 Key Cove lake lot $21,400 $21,400 Total Liabilities $24,900 $165,138 $190,038 Total Assets Less Liabilities $1,737,431 $712,402 $2,449,833 Exemptions

Assets Daniel Judy Amount Gift/Inheritance $65,220 $65,220 Total Exemptions $0.00 $65,220 $65,220 Total Assets less liabilities and exemptions $1,737,431 $647,182 $2,384,613 Equalization Payment -$545,125.50 $545,125.50 Each Party To Receive $1,192,306.50 $1,192,306.50 $2,384,613