Smyth v Smyth, 2021 ABQB 13

Court of Queen’s Bench of Alberta Citation: Smyth v Smyth, 2021 ABQB 13 Date: 20210107 Docket: 4803 184241 Registry: Edmonton Between: Leanne Carol Smyth Plaintiff - and - David John Ernest Smyth Defendant _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice Douglas R. Mah _______________________________________________________ A. Background [ 1 ] This trial concerned prospective spousal support and division of matrimonial property. [ 2 ] The husband (Dr. Smyth) and the wife (Ms. Smyth) separated in May 2018 after 34 years of marriage.

During that marriage, they successfully raised three daughters who are now young women, and the family enjoyed a comfortable lifestyle. The couple is now divorcing.

[ 3 ] With regard to Ms. Smyth’s spousal support claim, the issues in dispute are: • whether some form of income should be imputed to Ms. Smyth; • the level of Dr. Smyth’s ongoing income, in light of health issues and whether certain tax-reduction strategies will be utilized in future. [ 4 ] The spouses also disagree on how matrimonial property should be divided.

In particular, they disagree about: • whether the husband has exemptions in respect of: a gift from his parents of a condo property, where the sale proceeds thereof were used as a down payment for the first matrimonial home; funds that the husband realized from the sale of his interest in a software venture; and some miscellaneous valuables; • the value of Dr. Smyth’s PC and a holding company (referred to as 886); • whether Dr. Smyth has dissipated certain registered investment assets; • how a post-separation mortgage on a vacation property in Maui should be treated; • how certain expenses paid by Dr.

Smyth in respect of the Maui property should be treated; • whether potential disposal costs on the sale of the Maui property should be factored in; and • how the contents of the property at Pigeon Lake and the former matrimonial home should be distributed. [ 5 ] I observe that long-standing grievances between the parties, that likely led to the breakdown of their relationship, continue to fester and caused them to adopt antagonistic postures toward one another during the litigation and at the trial.

Each blames the other for the current state of impasse and regards the other as unreasonable, if not vindictive. [ 6 ] My task is not to apportion blame, but rather to apportion income and assets. B. Spousal Support The wife’s earning capacity [ 7 ] It is uncontested that the wife is entitled to spousal support on a compensatory basis. [ 8 ] Ms. Smyth trained as a teacher and worked in that capacity for about eight years between 1985 and 1993. The couple married in 1986. It is acknowledged that once they had children (beginning in 1993), Ms.

Smyth became a stay-at-home mother and devoted her time to raising children and taking care of the home. This allowed Dr. Smyth to devote all of his time to building a thriving medical practice and earning a good living. [ 9 ] During the marriage, Ms. Smyth did the bookkeeping for the PC and then both the PC and 886 and was paid a salary, primarily as an income-splitting device. She has no training in bookkeeping or accounting. She has not otherwise been meaningfully employed in any capacity since the birth of their first child. Ms.

Smyth is now 58 years old. [ 10 ] In my view, it is completely unrealistic to expect Ms. Smyth to requalify as a teacher. She has been away from that profession for 27 years. The curriculum and the methods have changed. The prospect of at least two years of upgrading in university and then competing with much younger persons for any teaching opportunities would be a prohibitive and likely futile exercise. [ 11 ] Realistically, the only chance for Ms. Smyth to become employed would be in some entry-level capacity in the retail or service industries.

She testified that her back problems prevent her from standing for long periods of time. Further, she has no experience or qualifications. If she were able to obtain any type of employment, I suspect it would be on a part-time basis and at minimum wage. Moreover, with the COVID pandemic negatively affecting retail and service industries as it has, Ms. Smyth has limited, if any, potential for employment. [ 12 ] I find that Ms. Smyth is not capable of meaningful employment of any type and therefore no income should be imputed to her.

That is not to say that she should not seek some kind of work, but I see it primarily being for self-fulfillment rather than self-sustainment purposes, such as volunteer work of some sort. The husband’s earning capacity [ 13 ] The husband qualified as a medical doctor in 1995. He has carried on a successful practice ever since and until recently also worked in the local hospital and at a seniors’ care facility. a. The Experts’ Reports [ 14 ] Cameron Brinkman, a chartered accountant and chartered business valuator, was retained by Dr. Smyth’s counsel to provide an opinion on Dr.

Smyth’s guideline income for the purposes of the Federal Child Support Guidelines . He identified the following as Dr. Smyth’s income sources:

• Dr. Smyth is the sole shareholder of David Smyth Professional Corporation, being the corporate entity through which Dr. Smyth provides medical services to the Smyth Associate clinic (SAC) and from which he draws a salary. (SAC is a cost sharing arrangement with other medical doctors.) • Dr. Smyth and Ms. Smyth each have 50% of 886, which owns a commercial building in Leduc and a condo in Calgary. The Leduc commercial property is leased to SAC and an arm’s-length tenant that operates a retail pharmacy. 886 also receives rental income from the Calgary condo. • Dr.

Smyth has a vacation property in Maui in his sole name, from which vacation rentals are received. [ 15 ] The report of Mr. Brinkman indicates that Dr. Smyth’s 2019 guideline income is consistent with the three-year average of Dr. Smyth’s recurring guideline income in 2016, 2017 and 2018, being $327,000. He poses as an “alternate conclusion” the exclusion of certain non-recurring amounts. In this alternate conclusion, the income splitting feature is excluded (since the parties no longer split income) and a tax reduction vehicle known as the “pipeline” strategy is not utilized.

The alternate conclusion results in a four-year rounded average for the years 2016 to 2019 of $320,000 and a 2019 Guideline Income of $299,837. [ 16 ] At risk of over-simplification, I summarize the “pipeline” strategy as permitting Dr. Smyth to effectively receive a dividend from the PC but pay only a capital gains tax rate on those funds. A fuller description of this tax device, with illustrations, is contained at pages 4 to 6 of Mr. Philippon’s report. [ 17 ] Trevor Philippon, also a chartered accountant and chartered business valuator, provided a limited critique of Mr. Brinkman’s report on behalf of Ms.

Smyth’s counsel. Mr. Philippon agreed with Mr. Brinkman’s conclusion that the 2016 to 2018 three-year average guideline income is $327,000, which number also represents Dr. Smyth’s 2019 income. However, Mr. Philippon disagreed with Mr. Brinkman with respect to the alternate conclusion. He felt there was sufficient history of the use of the “pipeline” strategy such that the reported capital gains (and the related tax advantages of those capital gains) should be considered recurring, rather than non-recurring, which was the alternate conclusion posed by Mr. Brinkman. b. Mental Health [ 18 ] Dr.

Smyth has grappled with depression for many years. This was confirmed by Ms. Smyth. The separation and the resulting matrimonial litigation have negatively affected Dr. Smyth’s mental health. He gave a couple of recent examples where he made mistakes in treatment, one he believes may have led to the death of a long-time patient. As a result of these errors, Dr. Smyth is currently being monitored for competence by the College of Physicians and Surgeons of Alberta. [ 19 ] For the last two and a half years, Dr. Smyth has been under the care of Dr.

Scott, a psychiatrist who specializes in the care of other physicians. He has seen Dr. Smyth periodically and since COVID the appointments have taken place over the telephone. Dr. Scott described Dr. Smyth as suffering from anxiety and depression, requiring antidepressant medications and work modifications. The purpose of treatment is to improve Dr. Smyth’s mental well-being and permit him to continue practice without risk to patients. [ 20 ] After discussion with Dr. Smyth and, in consultation with the College, Dr. Scott made these recommendations to Dr.

Smyth: • that he take his prescribed medications and continue psychotherapy; • that his practice be monitored by the College and restricted in terms of days and hours; and • that he retain an assistant as part of his practice to ensure that he completes his tasks. [ 21 ] Dr. Scott commented that Dr. Smyth must comply with these recommendations in order for the College to continue to permit Dr. Smyth to practice. [ 22 ] The recommended reduced work

schedule consists of a three to four day work week, with each day comprising four to eight hours, giving up the hospital and nursing home work and taking a minimum of 12 weeks of holiday per year. Dr. Scott also said at trial that Dr. Smyth should remain off work until the stress of the “present situation” (meaning this trial) resolves. [ 23 ] Under cross-examination, Dr. Scott conceded that the recommendations were not really much different than those made the previous year and that Dr. Smyth had challenges conforming. [ 24 ] The medical evidence led on behalf of Dr.

Smyth was intended to show that, long-term, Dr. Smyth’s earning capacity is reduced because of the restrictions imposed on his practice. [ 25 ] It was obvious even to me that Dr. Smyth suffers from emotional difficulties. I observed Dr. Smyth’s mood change while he was in the witness box. During examination-in-chief, he was teary and vulnerable. During cross-examination, he was defiant if not belligerent with opposing counsel.

At points, in apparent anger and frustration, he blurted out statements such as “I’ll sell everything!” (referring to the assets) and “I’ll take the whole year off” (referring to the amount of time he requires to recuperate from his current state of emotional distress). [ 26 ] I conclude, based on what I observed and from Dr. Scott’s testimony, that this litigation weighs heavily on Dr. Smyth and that his recovery and emotional stability will be significantly enhanced when this litigation is behind him. [ 27 ] Since this judgment brings an end to the litigation early in 2021, I conclude that Dr.

Smyth’s earning capacity going forward will be much the same as in 2019. c. Conclusion on Guideline Income

[ 28 ] I conclude that the alternate scenario described in Mr. Brinkman’s report is valid. That is because the tax history shows that Dr. Smyth has only utilized the “pipeline” strategy on two occasions, once in 2015 and again in 2018. At trial, he talked about simplifying his life and said he had no intention of using the “pipeline” strategy again. I therefore accept that the extensive capital gains shown in 2018 is a non-recurring event. (The 2015 use of the “pipeline” strategy was the consequence of a one-time stock market windfall.) [ 29 ] Mr. Cameron and Mr.

Philippon otherwise agreed with one another and that evidence was unchallenged. Having previously found that Dr. Smyth’s go-forward income will be the same as is 2019 income, I conclude that his guideline income for the purposes of prospective spousal support is $299,837 per annum. Conclusion on Spousal Support [ 30 ] Given the guideline income findings above, the application of the Spousal Support Advisory Guidelines provides for a range of spousal support payable by Dr. Smyth to Ms.

Smyth of between $12,319 per month at the high end and $9,370 per month at the low end. [ 31 ] In determining the appropriate level of spousal support, I have regard to: • Ms. Smyth owns and resides in a comfortable free-and-clear title house with the couple’s youngest two daughters, which home was purchased from the proceeds of a matrimonial property advance. • The fact that Ms. Smyth will receive a still significant matrimonial property payment in this lawsuit (over and above the advance) and, as Dr.

Smyth’s counsel submits, there is some obligation on the payee spouse to invest equalization assets to generate income: Boston v Boston, 2001 SCC 43 at paras 54-57 and Salt v Salt , 2019 ABQB 595 . • Some portion of Ms. Smyth’s expenses relate to maintaining the daughters with whom she lives. It is reasonable to expect that, as adults, they are contributing to household or at least their own personal expenses. • The budget submitted by Ms. Smyth at trial is somewhat imprecise as well as dated.

Of the total of $12,372 in monthly expenses put forward, $2072.96 relates to the mortgage on the former matrimonial home which she is not paying on a monthly basis, and about two-fifths of the expenses relate to the two daughters. [ 32 ] Having regard to the foregoing factors, I conclude that Dr. Smyth should pay spousal support at the low end of the SSAG range or $9,370 per month which will put $7,001 in Ms.

Smyth’s hands after-tax, before consideration of any investment income. [ 33 ] This spousal support award is indefinite in duration owing to the “Rule of 65”, found at sections 7.5 and 7.5.1 to 7.5.3 of the SSAG and commented upon by Professors Thompson and Rogerson at page 29 of the Spousal Support Advisory Guidelines: The Revised User’s Guide (April 2016) and the cases cited therein. [ 34 ] However, it may be reviewed at the instance of either party upon Dr. Smyth attaining the age of 65 or such other event that falls within the meaning of s 17(4.1) of the Divorce Act . C.

Matrimonial Property Division Positions [ 35 ] The parties adopted these respective positions in the post-trial written submissions submitted by their counsel: • The wife says that net matrimonial property should be valued at $4,324,575, resulting in an equalization payment payable to her of $2,006,177. Ms. Smyth acknowledges that she has received an advance of $910,000, leaving a net payable amount of $1,096,177. • The husband contends that net matrimonial property should be valued at $3,332,145, resulting in a net payable amount of $599,218, after putting the $910,000 advance in Ms. Smyth’s column.

The Expert’s Reports [ 36 ] The same experts provided written opinions with respect to the valuation of the two corporate entities, PC and 886. Mr. Brinkman provided a report on behalf of Dr. Smyth dated September 18, 2020 (two months before trial) with a valuation date of July 31, 2020. Mr. Philippon provided his review of Mr. Brinkman’s report in his own report of November 3, 2020 in which he agreed completely with Mr.

Brinkman’s conclusions. [ 37 ] In an Agreed Statement of Facts provided to the Court on November 20, 2020 (immediately before trial), the parties (through their counsel) agreed that the reports of both Mr. Brinkman and Mr. Philippon would be entered into evidence by consent, which they were. [ 38 ] Despite the above, at trial: • Dr. Smyth, by his own evidence, disputed some of Mr. Brinkman’s conclusions by disagreeing with him or by referring to developments that occurred since the report had been written; and • Dr. Smyth’s counsel attempted to call, but was disallowed from calling, Mr.

Brinkman himself in order to give different and

additional evidence. [ 39 ] Counsel’s request to call Mr. Brinkman was premised on: • Mr. Brinkman giving evidence that updated his report; and • Mr. Brinkman giving evidence on the tax effect of the sale of certain assets. [ 40 ] The reasons I did not permit Mr. Brinkman to give viva voce evidence is because, first, I did not believe it is allowed by the Rules and second, because I felt it would be grossly unfair to Ms. Smyth. [ 41 ] Mr. Brinkman’s report was entered into evidence explicitly by consent and no notice requiring the expert witness to attend for cross-examination was served under Rule 5.40(1).

Hence, under sub-rule (2), the expert witness must not give oral evidence. While sub- rule (2) reserves a discretion to the Court to permit the calling of the expert witness nonetheless, I felt it would be unfair since Ms. Smyth and her counsel had no notice of this revised and additional evidence and no opportunity to have their expert prepare a response. [ 42 ] Furthermore, Rule 5.38 prescribes a process by which an expert may provide an updated opinion that revises the previous opinion, namely, by disclosing the changed opinion in writing and immediately serving it on the adverse party.

This process was not followed. A party should not be called upon to respond to expert evidence, even changed expert evidence, for the first time at trial. The only exception I could foresee are exigent circumstances for the party wishing to call the expert witness and minimal or no prejudice to the other side. Neither are present here, as Dr. Smyth had ample time to have Mr. Brinkman revise and serve any new written opinion, and certainly the presentation of such a new opinion at trial, with no notice to Ms. Smyth or her counsel, would have been prejudicial. [ 43 ] Dr.

Smyth’s own evidence regarding changes to the agreed-upon corporate valuation was an attempt at evidentiary revisionism. He disagreed with Mr. Brinkman on the treatment of prepaid overhead as an asset on the basis that the sum deposited was not portable, overlooking the fact that it has value to his medical practice as a going concern. [ 44 ] He also testified at length about matters only he would know about, about which Ms.

Smyth was in no position to refute or even test, and he produced no documentation at trial to support his claims of how the valuation of certain line items have changed in the intervening few months. [ 45 ] Moreover, Dr. Smyth asked me to accept his accounting explanation of what he described as decreases in the bank balance, accounts receivable and shareholder loan from what is shown in the valuation schedules.

He also asked me to accept the reasoning behind these transactions, although he failed to show how they benefited the parties as opposed to being only self-serving. [ 46 ] I would not go so far as to characterize these changes as dissipation but I am prepared to say that Dr. Smyth has not satisfied me, on a balance of probabilities, that these transactions, if they occurred, are justified in terms of preserving, enhancing or at least minimizing reduction of the matrimonial estate. [ 47 ] Accordingly, I am prepared to adopt the corporate valuations for the PC and 886 as determined by Mr. Brinkman (Dr.

Smyth’s own expert) and concurred in by Mr. Philippon (Ms. Smyth’s expert), despite the fact that the valuation date was at the end of July: see Zandbeck v Zandbeck , 2014 ABQB 749 at para 111 . Exemption Claims [ 48 ] Dr. Smyth claims exemptions of $49,500 and $65,000 from the so-called Featherstone condo and the sale of his software company respectively, which amounts, or some portion of them, he says, can be traced to the existing matrimonial home. [ 49 ] The Featherstone condo was owned by Dr. Smyth’s father at all relevant times.

The parties were allowed to live there rent- free for seven years during the early part of the marriage. When the couple built their initial Twin Brooks home the condo was sold and the proceeds used for down payment. Dr. Smyth says the condo was a gift to him. Ms. Smyth says the proceeds were a gift to both. [ 50 ] Dr. Smyth, before medical school, developed medical office billing software and turned it into a company. The intellectual property was developed in 1982, before marriage, and the company was sold during marriage and the proceeds also used for down payment on the Twin Brooks home. [ 51 ] Ms.

Smyth’s counsel argued that Dr. Smyth is prevented from advancing these exemption claims at trial due to the terms of a procedural Order granted by Yungwirth J on May 28, 2020. The pertinent provision reads: … The defendant must provide any documentary evidence that exists in support of his property exemption claim and any will say statement for any witnesses that he intends to provide viva voce evidence to support [of] his property exemption claim by not later than June 30, 2020.

If he fails to do so, then he will be prohibited from introducing any exemption claims at trial. [ 52 ] Documents, in the form of historical extracts from the Land Titles Office showing John Smyth (Dr. Smyth’s father) as the condo’s owner and then a transfer by him to a purchaser, were submitted into evidence. These documents shed no light whatsoever on whether the condo itself or the proceeds of sale were gifted to Dr. Smyth only or to both parties. No will-say statements were produced but then no witnesses gave viva voce evidence on this point besides the parties themselves.

I note the proceeds went into a matrimonial home for the two of them. On this evidence, either scenario is equally likely. [ 53 ] No documents were put forward to support the exemption for the software company proceeds. Again, the only live witnesses were the parties themselves. I have no evidence as to the value of the intellectual property before marriage. I heard some evidence that after marriage the software produced subscription fees and that the software company eventually sold. [ 54 ] As it turned out, Yungwirth J’s Order does not necessarily form an absolute impediment to Dr. Smyth advancing these claims.

However, in both cases, I am not satisfied on a balance of probabilities that Dr. Smyth has established these proceeds of sale as exempt pre-marital assets. [ 55 ] Dr. Smyth also claimed that a couple of bars of precious metal given to him by his parents had been sold and the proceeds applied toward matrimonial assets. No documents were produced to support these claims and I am similarly not satisfied to the required civil standard that the exemptions have been proved. Dissipation of Registered Investments? [ 56 ] Post-separation, Dr. Smyth made some questionable investment decisions.

He seems to have been always enamoured of high- risk investment in speculative oil stocks. At the time the parties separated, Dr. Smyth’s TFSA was worth $56,670.22 while his RRSP was worth $173,128.21, for a total of $229,798.43. By August 13, 2020, Dr. Smyth had sustained a loss in the two accounts of $199,372.81 by hanging on to the stocks for too long, leaving values of $7,594.20 in the TFSA and $22,831.42 in the RRSP. [ 57 ] Ms.

Smyth says that this reckless investment behaviour has resulted in the dissipation of matrimonial assets, and asked that the value of the loss be reinserted into the body of assets for distribution. See Wright-Watts v Watts , 2005 ABQB 78 at para 59 and Stojak v Stojak , 2016 ABQB 737 at para 72 . [ 58 ] Dr. Smyth counters that Ms. Smyth had no objection to his investment practices during the marriage when he made a “killing” in junior oil stocks and was able to produce enough profit to purchase a vacation property in Maui for $1.4 million USD in cash. He suggests that Ms.

Smyth should not be able to select which of his investment decisions she endorses and which she does not. [ 59 ] Dr. Smyth might be right but for the fact there was a history of questionable investments during the marriage. In one instance, poor investment decision-making resulted in depletion of the daughters’ RESP. Overall, the parties estimated that some $4.5 million in value was lost during the marriage through Dr. Smyth’s dalliance with junior oil stocks. [ 60 ] Experience should have led Dr. Smyth to realize the risk inherent with investing in junior oil stocks.

As a matter of law, when dealing with matrimonial assets in the post-separation context, the party holding the assets has a duty to exercise prudence to either preserve or increase value: Stojak at para 72 . [ 61 ] Some measure of loss is excusable. Even Ms. Smyth, who made conservative TFSA and RRSP investments, experienced losses over the same period of about 8%. She has proposed that similar reductions be applied to Dr. Smyth’s registered investments. [ 62 ] I can see that Dr. Smyth was trying to replicate his earlier successful experience with junior oil stocks but that the opposite occurred.

At some point, he should have realized that the trend was not reversing and that he should do the prudent thing and cut his losses. I will take the approach that McMahon J adopted in Wright-Watts and attribute a portion of the loss back into the property to be distributed. This kind of attribution is, by nature both discretionary and somewhat arbitrary, but I take the view that when Dr. Smyth had lost 50% of the eventual total loss, at the latest, he should have bailed at that point. Consequently, I will deduct ($199,372.10 / 2) = $99,686.05 from the total assets to be divided.

The Bank of Hawaii Mortgage [ 63 ] The property in Maui was always in Dr. Smyth’s sole name but recognized as a matrimonial asset. He agreed to provide an advance on matrimonial property to Ms. Smyth in the summer of 2019 and in order to finance that advance placed a mortgage with the BOH on the Maui condo. [ 64 ] Ms. Smyth was involved in preparing financial statements for the PC and 886 as part of the mortgage application. She testified that she understood at the time that the financial statements were preparatory to the mortgage application. She says she did not appreciate that Dr.

Smyth would use her work product to actually apply for mortgage. [ 65 ] Ultimately, the mortgage proceeds did fund the advance. [ 66 ] Ms. Smyth argues that the value of the outstanding BOH mortgage should be excluded from the analysis, and that the advance be deducted from the equalization payment at the end. She contends that by inclusion of the mortgage as property, she is being forced to finance her own matrimonial property advance. Dr. Smyth insists that it must be included because Ms.

Smyth, having prepared the financial statements for the express purpose of that mortgage application, has acquiesced to the granting of the mortgage and, moreover, is its sole beneficiary. [ 67 ] I have concluded that the BOH mortgage must be included in the calculation of divisible assets. First, for valuation purposes under the MPA, the valuation must include the assets and liabilities existing on the date of trial: Busenius v Busenius , 2006 ABQB 162 (Clackson

J) at para 27 . [ 68 ] Second, there is no dispute that the totality of the BOH mortgage proceeds (some $910,000) were paid to Ms. Smyth as a matrimonial property advance. Therefore, along with the debt, there has been a corresponding increase in the value of the matrimonial assets, the amount of which increase now sits on Ms. Smyth's side of the ledger. Logically and mathematically, the mortgage debt and the advance payment to Ms. Smyth work together towards balancing each other out. Only recognizing the increase in value and not recognizing the existence of the mortgage creates an unfairness to Dr.

Smyth, not completely cured by a deduction at the very end. [ 69 ] Third, I do have some difficulty accepting that Ms. Smyth prepared the financial backup required to apply for the mortgage, knew that Dr. Smyth was planning to apply for mortgage, but then was taken by surprise when he actually went through with it. In the least, she is deemed to have acquiesced.

[ 70 ] Fourth, she accepted the advance and it has provided her with a reasonable financial bridge to this judgment and has enabled her to acquire a comfortable clear title home. A consent Order of sorts, granted by Lema J on June 20, 2019, directed Dr. Smyth to direct the funds to Ms. Smyth.

The mortgage was incurred as a result of the marriage breakdown and should properly be accounted for as part of matrimonial property: Busenius at paras 28-29 . [ 71 ] I heard no suggestion in the evidence from either side about what else could have been done to generate the necessary funds to fund the advance. [ 72 ] While it may be true in some sense that Ms. Smyth has financed her own advance, the net result of the division of assets remains almost the same, had there been no HOB mortgage.

If the mortgage debt and the mortgage proceeds almost balance each other out, she is in no worse position financially than if the mortgage had not been taken out in the first place, and she is in a better place in terms of her living circumstances. [ 73 ] For the same reasons, I conclude that the totality of the BOH mortgage payments, and not just the property tax portion, should be attributed to both spouses. Maui Property Renovations [ 74 ] The Maui condo was purchased in Dr. Smyth’s sole name in 2015. It has since functioned as a family vacation home.

In between use by family members, the property was and is rented out on through the VRBO and Air BnB websites. A professional property manager has been retained to manage the property. [ 75 ] Dr. Smyth stated in his testimony that in a normal year the profits from rentals would cover the cost of operating the property, including the mortgage. However, due to the COVID pandemic, it has been difficult to rent out. Dr. Smyth says that he would like to keep the condo in Maui but realizes that he may have to sell it as a result of this judgment. [ 76 ] Over the course of the last two years, Dr.

Smyth estimates that he has spent about $30,000 USD to make necessary repairs to the property. He says these repairs were imperative in order for the property to continue to be attractive to renting vacationers and to maintain its value. [ 77 ] Ms. Smyth has argued that the expenses were undertaken without her knowledge or consent and that she should not be responsible for contributing.

I recognize that, owing to the degree of antipathy between the parties, communication between them since separation has been difficult and non-productive. [ 78 ] A series of cancelled HOB cheques was placed in evidence in support of these expenses. I accept what Dr. Smyth says about the necessity of incurring these expenses to maintain a revenue producing property and preserve value: Esquirol v Esquirol , 2018 ABQB 487 at para 40 . Therefore, Ms. Smyth should make an equal contribution. I give effect to that contribution by reducing Dr. Smyth’s overall assets by $30,000 USD.

See also Stuve v Stuve , 2019 ABCA 142 at para 34 . Maui Property Disposal Costs [ 79 ] Dr. Smyth claims disposal costs in relation to the Maui condo of $352,077. Counsel for Ms. Smyth suggested that there is no evidence before the Court as to whether Dr. Smyth plans to sell the Maui condo and, if so, what those disposal costs are. Counsel suggested that Dr. Smyth’s plaintive cry of “I’ll sell everything!” was a call for sympathy. Apart from that, Dr. Smyth was quite equivocal on the point. He said he wanted to hang on to the Maui property but also realized that selling it may be a possibility.

He estimated that it could take up to two years to sell the Maui property, if he chose to do so. [ 80 ] As such, the potential disposal costs are simply too speculative and I exclude them from the analysis: Sparrow v Sparrow, 2006 ABCA 155 at paras 19 and 20 and Delorme v Delorme , 2017 ABQB 699 at paras 73 and 74 . ATB Joint Bank Accounts [ 81 ] The balance in the ATB Canadian joint account was $21,141 as at August 15, 2020. Ms. Smyth says that Dr. Smyth controlled this account and the full balance should be included. Dr. Smyth makes the point that Ms.

Smyth has not contributed to the maintenance of matrimonial assets (such as the former matrimonial home since she moved out) and some provision should be made to recognize the fact that he shouldered this burden by himself. Accordingly (and somewhat arbitrarily since there was no precise evidence called on the point), I deduct $15,000 from the value of the bank account in recognition of Dr. Smyth’s costs of maintaining the home. [ 82 ] There was no controversy regarding the balance of $1560 in the ATB US joint account.

Pigeon Lake and Matrimonial Home Contents [ 83 ] Neither party suggested the physical division of this personal property. Dr. Smyth argued that Ms. Smyth’s lack of contribution to asset support should translate to her forfeiture of any interest in this property. Again, no detailed, itemized evidence was provided as to the specifics and value of these contents. Dr. Smyth also says that Ms. Smyth has already taken what she wishes. [ 84 ] In view of the above, I assign a value of $1000 to the contents of the Pigeon Lake cabin and $5000 to the contents of the matrimonial home. [ 85 ] Further, as requested by Dr.

Smyth, Ms. Smyth is directed to make copies of the childrens’ pictures and provide them to Dr. Smyth, and return to him all corporate books and records, within 60 days of the date of this decision.

Calculation methodology [ 86 ] For the purposes of calculating the division, I take the matrimonial property statement dated December 4, 2020 (appended to the written submissions of Ms. Smyth’s counsel), as it is the closest to my eventual decision, and incorporate adjustments resulting from the rulings made above. Opening Total $4,324,575 Dr. Smyth Ms.

Smyth Opening Net Assets $4,168,465 $156,110 Adjustment Description • Removal of BOH mortgage payment add-back, leaving BOH account balance as at Sept 30/20 ($31,213.39 vs $124,226.00) ($93,012) • Re-evaluation of Pigeon Lake and Matrimonial Home contents ($6,000 vs $20,000) ($14,000) • Notional tax on RRSPs @ 20% of $31,866 reduced by 50% $5,933 • Add BOH Mortgage as liability ($871,300) • Subtract 50% of investment loss ($99,686) • Subtract BOH mortgage payments ($117,713) • Subtract cost of Maui renovations ($30,000) • Subtract $15,000 from ATB Cdn Joint Account for Dr.

Smyth’s payment of maintenance costs of matrimonial home ($15,000) • Add value of MP advance $910,000 Total Subtractions ($1,240,711) Total Additions $915,933 Net difference from Opening Total ($324,778) New Total / Net Assets $3,999,797 • Net Assets – Dr. Smyth $2,933,687 • Net Assets – Ms. Smyth $1,066,110 $3,999,797 Transfer to Equalize ($933,788.50) $933,788.50 Net Matrimonial Property $1,999,898.50 $1,999,898.50 $3,999,797 D. Result [ 87 ] In the result, and to summarize: • I grant a judgment of divorce to dissolve this marriage; • Dr. Smyth shall pay spousal support to Ms.

Smyth for an indefinite period, in the monthly amount of $9,370, commencing January 1, 2021. • The spousal support Order is reviewable upon the instance of either party when Dr. Smyth attains the age of 65 years, or upon a material change in circumstances of either party that meets the test in

section 17(4.) of the Divorce Act . • Ms. Smyth is granted a judgment in the sum of $933,788.50 in respect of her matrimonial property claim. • Interest shall accrue on the judgment amount in accordance with the Judgment Interest Act commencing the date of this judgment. • Dr. Smyth shall have 90 days from the date hereof to pay this judgment. Dr. Smyth may, on notice, apply to the Court for an extension of this period if he is able to show good faith progress in funding the judgment and provided the application is made the before the expiration of the initial 90 days.

• Alternatively, Ms. Smyth may apply upon the expiration of the 90 days for an Order giving specific directions as to how the judgment is to be satisfied. • In the meantime, Dr. Smyth is prohibited from disposing of or encumbering his shares in 886, or acting in any way with respect to those shares or the business and operations of 886 that is prejudicial in any way to Ms. Smyth realizing upon this judgment, except in the normal and ordinary course of business, or as otherwise permitted by the Court. • Ms.

Smyth shall, at her option either concurrently with or before the payment of the judgment, formally relinquish her interest in the matrimonial home and 886, and resign any position she may hold in 886 and in doing so shall execute any necessary documentation to give effect to that relinquishment or resignation. Thereafter, Dr. Smyth shall be solely responsible for and shall indemnify Ms. Smyth in respect of any liabilities of 886. • Dr. Smyth shall retain the legal and beneficial ownership of the PC, the holding company referred to in these proceedings as NewCo, and the condominium property in Maui. • Ms.

Smyth is directed to make copies of the childrens’ pictures and provide them to Dr. Smyth, and return to him all corporate books and records, within 60 days of the date of this decision. • The parties have leave to request further and other directions from the Court as may be required to give effect to this judgment. [ 88 ] The parties may, if one or both so choose, approach the Court through counsel within 60 days of the date of this decision to deal with costs. Heard on the 23 rd day of November, 2020 to the 26 th day of November, 2020 and on the 30 th day of November, 2020.

Dated at the City of Edmonton, Alberta this 7 th day of January, 2021. Douglas R. Mah J.C.Q.B.A. Appearances: Paul J. Holubitsky Frohlich Rollins Schwab for the Plaintiff Corinne G. Rothecker Rothecker Law Office for the Defendant