McAulay v McAulay, 2021 ABQB 381

Court of Queen’s Bench of Alberta Citation: McAulay v McAulay, 2021 ABQB 381 Date: 20210513 Docket: 4806 021593 & FL06 03655 Registry: Lethbridge Between: Cindy Ann McAulay Plaintiff - and - Connor Wade McAulay Defendant _______________________________________________________ Reasons for Decision of the Honourable Madam Justice J.C. Kubik _______________________________________________________ Introduction [ 1 ] Cindy McAulay and Connor McAulay were married on May 30, 1997. They had lived together for approximately 3 years prior. When they met, Cindy was pregnant and Connor ultimately adopted this child. The couple had a second child prior to their marriage.

[ 2 ] Throughout the course of their marriage, the parties had periods of separation, followed by reconciliation. They separated briefly in 1998, reconciled, and separated again in June 2012. The separation in June 2012 lasted until March 2013. After they reconciled in March 2013 they remained together until their final separation on June 5, 2018. [ 3 ] Following their separation in June 2012 and prior to their reconciliation, the parties negotiated and executed a Divorce and Property Agreement (the “Agreement”).

The Agreement was a comprehensive division of matrimonial property, made provision for spousal support payable to Cindy, and included a reservation of child support with respect to the remaining child of the marriage, who was residing with Connor at the time of the marriage breakdown. The Agreement included a reconciliation clause which provided that the Agreement remained binding on the parties, even if they reconciled.

Issues [ 4 ] At issue in the proceedings is whether the Agreement as a whole is valid, binding and enforceable, and if not, whether the division of matrimonial property and the provisions for spousal support should be varied.

The parties also seek a Divorce Judgment and directions with respect to certain sentimental property, including old photographs and the family dog. [ 5 ] Cindy argues that the Agreement is void on the basis of duress, unconscionability, lack of disclosure, lack of performance, reconciliation, and promissory estoppel. [ 6 ] She further argues that if the Agreement is not void, it should be varied to ensure an equitable division of matrimonial property and adequate spousal support, having regard to the change in circumstances occasioned by the reconciliation. [ 7 ] In addition to the claims advanced in the divorce and matrimonial property action, Cindy also filed a claim based in constructive trust, and seeks to be compensated for the unjust enrichment to Connor, resulting from her contributions to the joint assets subsequent to reconciliation. [ 8 ] Connor argues that the Agreement is entirely enforceable, having met all of the statutory requirements for execution, and having been made in the context of full and frank disclosure, and in contemplation of reconciliation. [ 9 ] Connor states that he relied on the Agreement and performed his obligations under it, both with respect to servicing the debt obligations he undertook, and providing ongoing spousal support to Cindy from the date of the June 2012 separation, through the reconciliation period, and since the final separation.

As a result, he seeks to enforce the Agreement.

The Agreement [ 10 ] The Divorce and Property Agreement is written in plain language, and specifically speaks to the context in which the Agreement came to be – that it was negotiated with the assistance of lawyers and with independent legal advice about the legal rights and responsibilities of the parties under the Adult Interdependent Relationships Act, SA 2002, c A-4.5 ; the Divorce Act , RSC 1985, c 3 (2nd Supp ); the Matrimonial Property Act , RSA 2000, c M-8 ( MPA ); the Family Law Act , SA 2003, c F-4.5 ( FLA ); the Wills and Succession Act , SA 2010, c W-12.2 ; and the Dower Act , RSA 2000, c D-15 as well as equitable claims arising.

The requisite MPA acknowledgements and certificates of independent legal advice were executed. [ 11 ] Clause 2.5 of the Agreement forever settled Connor and Cindy’s rights to their matrimonial property and specifically provided that the Court did not have the power to change the division of matrimonial property in the Agreement. [ 12 ] Further, Clauses 2.6 through 2.11 outline the parties’ agreement that they each had full disclosure, were satisfied with the valuation of assets and debts, accepted the terms of the Agreement, gave consideration, signed voluntarily, and had an expectation that the Court would enforce the Agreement. [ 13 ] With respect to the issue of spousal support, the Agreement provided that Connor would pay Cindy support for three years, commencing July 1, 2012.

The support decreased in quantum in successive years, such that in the first year the amount payable was $3,000 per month, in the second year, $2,500 per month, and in the final year, $1,500 per month. After June 1, 2015, Connor’s obligation to pay spousal support terminated. Each party agreed to waive all future spousal support. [ 14 ] In relation to matrimonial property, Connor was to have sole ownership of the matrimonial home and be responsible for all upkeep, debt and expenses associated with it. The transfer of Cindy’s interest in the matrimonial home to Connor was to be made, if requested.

The parties divided household furnishings and vehicles by agreement, and each took the debt corresponding to the vehicle in their possession. Connor’s pension with Nabor’s Drilling Limited was divided equally over the period May 30, 1997 to July 1, 2012, and each party had the right to apply for equal distribution of their Canada Pension Plan credits. Connor retained various savings and investments, and took on debt associated with 2 Visas and a personal line of credit.

In addition to her share of the Nabor’s Drilling pension, Cindy was to receive $6,000 cash arising from the division of the savings account. [ 15 ] The division of property resulted in Connor receiving net matrimonial property totalling $71,828.12 and Cindy receiving net matrimonial property totalling $70,968.44. Clause 25.1 of the Agreement specifically stated: “In accordance with the Matrimonial Property

Summary in Attachment “B” to this Agreement there will be no settlement payment by either party.” [ 16 ] Clauses 26.1 through 26.3 of the Agreement speak to the finality of the property agreement. The parties released their respective legal and equitable claims to all property acquired during the course of the relationship, both before and after the date of the marriage. Clause 26.3 specifically provided that the parties released their respective claims to each other’s property owned at the time of the Agreement and in the future.

[ 17 ] Clause 36 of the Agreement required that any changes to or termination of the Agreement must be in writing, with independent legal advice, signed, and with certificates of independent legal advice and matrimonial property acknowledgments, as required. It was acknowledged that any changes to parenting, guardianship, child support, and spousal support might not be enforceable without further court order. Finally, Clause 36.3 provided that if the parties reconciled, the Agreement would remain in force, unless changed or terminated in the manner provided for in the Agreement. The Evidence at Trial [ 18 ] Both parties filed

summary trial affidavits and each testified at trial. None of the lawyers involved in the negotiation, preparation or execution of the Agreement testified at the

summary trial, and their file materials, save for two documents, did not form part of the record. [ 19 ] The parties both testified that, in advance of seeing lawyers, they had discussed and negotiated the general terms of the Agreement. Disclosure was provided as evidenced by a letter dated November 29, 2012, from legal counsel for Connor addressed to “Whom it may concern”. An email from legal counsel, with whom Cindy initially consulted, provides a

summary of his meeting with Cindy on December 6, 2012, and makes reference to particular items of disclosure. It appears from that email that Cindy met with him on at least two occasions and that he had at least communicated some proposed changes to a draft divorce and property agreement to her. He also provided her with at least preliminary advice as to whether the spousal support was reasonable (he described it as “light”) and cautioned her that the pension funds might not be readily accessible, even after settlement.

Cindy ultimately signed the Agreement with a different lawyer, who was arranged for her by counsel for Connor. Cindy testified that the signing appointment involved no review of the Agreement, and that she did not receive any independent legal advice from that lawyer. Nonetheless, the Agreement was signed, first by Cindy and then by Connor and both parties and legal counsel executed all of the necessary acknowledgments and certificates, including certificates of independent legal advice. [ 20 ] Prior to their June 2012 separation, the parties had a traditional marriage.

Connor was the breadwinner, and Cindy maintained the household and was largely responsible for caring for the children. The parties had a joint bank account into which Connor’s paycheque was deposited and Cindy was responsible for managing the household finances, paying bills, and utilizing the funds for groceries, household related expenses, expenses associated with the children, and all of her own personal expenses.

Just prior to the separation she had returned to school to achieve a graphic design diploma. [ 21 ] After the separation, Cindy moved out of the matrimonial home and the remaining child of the marriage stayed with Connor. Connor commenced paying Cindy spousal support of $3,000 per month immediately upon separation. [ 22 ] Following their reconciliation in March 2013, the parties managed their financial affairs separately.

While the joint bank account was maintained, it was a conduit for transfers of $3,000 per month from Connor to Cindy, and was an account out of which Connor paid the mortgage, insurance, and other debt related payments. Cindy transferred the $3,000 per month from that joint account into her personal bank account, and while she did purchase groceries and other sundries for the family from her account, the funds were spent at her discretion. She also paid for her own clothes, gas, cell phone, and entertainment from this account. Connor used his own personal bank account for his personal spending.

Following the reconciliation, Cindy no longer managed the family finances. [ 23 ] Subsequent to signing the Agreement and prior to reconciliation, Connor incorporated a company, and thereafter received all of his income from employment into this company. Deposits of funds to the joint account came from the company account. [ 24 ] After signing the Agreement, neither the transfer of the matrimonial home nor the division of the pension occurred. However, Connor paid all of the debt he acquired by virtue of the Agreement.

At the date of trial, the house was still owned in joint names, and the pension (though transferred out of the Nabor’s Drilling Limited Pension Plan) remained entirely invested. [ 25 ] As previously noted, the Agreement provided that spousal support would be payable over the course of 3 years, at a declining rate each year. During the entirety of the period from the July 1, 2012 separation to the June 2018 separation, and throughout the reconciliation, Connor transferred $3,000 per month to Cindy.

After the 2018 separation, he gave Cindy $5,000 to establish a new household, and the parties agreed that he would pay her the uncharacterized sum of $4,000 per month, as well as pay her current car payment and insurance. Save for the insurance payment, which ceased a few months prior to trial, Connor has continued to pay the uncharacterized sum of $4,000 and the car payment since the 2018 separation. [ 26 ] During the 2012 separation, Cindy completed her Graphic Design Diploma, worked an internship, and became employed following the reconciliation.

She left that employment after approximately 1 year, as she didn’t find it fulfilling. She re-employed herself after the 2018 separation and worked at the Brick until March 2020, when she was laid off due to COVID-19. She collected EI benefits until September 2020, and then returned to school to pursue an Interior Design Diploma. It is her intention to take a further year of training in order to achieve drafting certification. Her income in 2018 and 2019 was $18,309 and $37,381, respectively.

No evidence was provided as to her 2020 income, however she had earnings up until mid-March 2020 and received CERB benefits thereafter. Her 2020 income was estimated to be $30,000. Additionally, she has received $4,000 per month in tax free, uncharacterized support since the 2018 separation. [ 27 ] Cindy has re-partnered, is currently engaged, and lives with her new partner. [ 28 ] Connor continues to be employed in the oil patch, as he was throughout the marriage. His income in 2018 and 2019 was $263,000 and $306,000, respectively.

His estimated 2020 income was $117,000. [ 29 ] The couple’s 2 children, now adults, reside with Connor. One is completing college and the other university. [ 30 ] While the household goods and furnishings were divided at the 2018 separation, Cindy wishes to have some photographs of her and the children, and also seeks to have possession of the family dog.

Burden of Proof [31] Cindy challenges the validity of the Agreement. She bears the burden of proof, on a balance of probability, to demonstrate thatthe Agreement is void as a consequence of duress, unconscionability, lack of disclosure, or failure to meet the requirements of s. 38 ofthe MPA and the Family Property Act, RSA 2000, c F-4.7 (FPA). [32] She also bears the burden of proving that the reconciliation provisions of the Agreement do not apply.

This relates to provingboth that the objective intentions of the parties at the time of contracting were contrary to the written language of the agreement, or thatthere was a representation by Connor subsequent to their reconciliation that they would not be relying on the Agreement, that she reliedon that representation, and that her reliance was detrimental to her position. The Law [33] Contractual relationships reduced to writing and freely entered into by parties should not be readily interfered with.

The law ofcontract presumes that adult parties in positions of equal bargaining power, with full disclosure, and the advantage of independent legaladvice should be able to organize their affairs and resolve their disputes in the manner they see fit. [34] This principle is codified in the provisions of the MPA and the FPA, specifically sections 37 and 38 of each Act. [35] Those provisions state that the legislative presumption of equal division of matrimonial or family property does not applywhen the parties have entered into a written agreement, enforceable under

section 38, that provides for the status, ownership, anddivision of that property. Such agreements may be entered into both before and after marriage (or cohabitation) and can provide for thedistribution of property owned by the parties at (or after) the time the agreement is made, including, but not limited to the time ofseparation. This clearly contemplates pre- and post-nuptial agreements, and does not foreclose the parties making provision for theeffects of reconciliation. [36] Further, the MPA and FPA set forth the execution requirements to ensure enforceability.

Section 38 requires that anagreement be executed by the parties in writing, apart from each other, and that the parties acknowledge that they are aware of the natureand effect of the agreement, that they are aware of the possible future claims they may have, and are giving up those claims to the extentnecessary to give effect to the agreement, and that the party is executing the agreement freely, voluntary, and without compulsion of theother party.

Each spouse must make these acknowledgements before separate lawyers. [37] The codification of the execution requirements ensures knowledge, fairness, and voluntariness in contracting. Duress [38] In this case, the formal requirements of s. 38 were followed. While the parties had negotiated the general terms of theAgreement, Connor’s lawyer drafted the Agreement. Cindy had disclosure, and it was clearly brought to and discussed during herappointments with her first lawyer.

Further, she had knowledge of the family finances as she was responsible, prior to the separation, formanaging the parties day-to-day finances. She looked after the bookkeeping, bank accounts, and bill payments. The Agreement itselfdisclosed assets and debts. The distribution of those assets and debts to each party were itemized in separate schedules attached to theAgreement. Each of the parties signed the sworn declaration that the contents of those documents were true and formed part of theAgreement.

Each of the parties signed the MPA acknowledgements before independent counsel. [39] As noted in Tardif v Campbell, 2008 ABQB 766, to prove that an agreement is executed under duress, a plaintiff mustdemonstrate that the pressure was so great as to deprive him of the ability to exercise independent judgment. It is generally recognizedthat parties to settlement negotiations face a certain degree of economic pressure and may be in discrepant bargaining positions.

Absentunconscionability or duress, economic pressure, not created by the actions of the opposing party, should not undermine the agreement:Hearn v Hearn, 2004 ABQB 75 , [2004] AJ No 105. [40] The evidence does not support that the Agreement was signed under duress. The parties negotiated the general terms of theAgreement before engaging lawyers. It is also clear that Cindy received legal advice about the sufficiency of the support arrangementsfrom the first lawyer she consulted.

In the absence of evidence from the second lawyer, I have to presume, given his execution of theacknowledgments and certificates, that he fulfilled his obligations to ensure that the Agreement was being executed freely andvoluntarily, without compulsion or duress. [41] While Cindy testified that she was under financial duress at the time of signing the Agreement, the evidence shows that shewas receiving $3,000 per month in spousal support which commenced on July 1, 2012, and that immediately following the separation shecashed in a $15,000 RRSP.

There were no words or deeds on Connor’s part, which made continuing support or equal division of theproperty contingent on signing the Agreement. While Cindy faced financial pressure, that pressure arose from her choice to pay off a$4,000 debt owed by the couple’s son, which left her in a shortfall position for a period of time. This circumstance was not of Connor’smaking.

Unconscionability [42] While a lower standard for unconscionability may apply in family law proceedings (Miglin v Miglin, 2003 SCC 24 at para 82[Miglin]), proof of unconscionability requires evidence of an inequality in bargaining positions and an improvident bargain: Norberg vWynrib, (SCC), [1992] 2 RCS 226.

[ 43 ] In this case, there is no evidence to support that the Agreement was unconscionable. As previously stated, the parties negotiated the general terms of the Agreement, shared disclosure and had the advantage of legal advice. The net matrimonial property was shared equally and the support being paid at the date of separation reflected 50% of Connor’s net income.

While, arguably, the duration of support was only 3 years in the face of a 15-year marriage, at the time of the separation Cindy was in school pursuing a graphic design diploma, and the Agreement contemplated her economic self-sufficiency by July 2015. In addition, she and her first lawyer discussed the fact that the contemplated spousal support was less than she may have been entitled to, and she executed the Agreement in the face of that knowledge.

As noted by the Supreme Court of Canada in Hartshorne v Hartshorne , 2004 SCC 22 , a party cannot avoid his or her contractual obligations on the basis that he or she believed that the contract was void or unenforceable from its formation. Reconciliation Clause, Lack of Performance, and Promissory Estoppel [ 44 ] It is a fundamental principle of contractual

interpretation that the language of the contract must be interpreted, having regard to its plain meaning and the objective intention of the parties at the time of contracting. While the surrounding circumstances at the time of contracting are relevant, they must not be used to overwhelm the written words of the agreement.

Further, the subjective intentions of the parties are not relevant, and the subsequent conduct of the parties cannot be used to undermine the intent of the agreement at the time it was entered ( Sattva Capital Corp v Creston Moly Corp , 2014 SCC 53 ). [ 45 ] The contract is written in plain language. The surrounding circumstances were that the parties had separated for the second time since their marriage in 1997. The objective intentions of the parties are reflected in Clauses 2.1 through 2.12 of the Agreement, as previously described.

They entered into a contract which equally divided the matrimonial assets and debts such that they each left the marriage with approximately $71,000 in net assets. At the time of contracting Cindy had returned to school in order to retrain, the remaining child of the marriage was living with Connor, and no child support was payable by Cindy to Connor. This effectively freed Cindy to work towards economic self-sufficiency during the contemplated period of spousal support.

The Agreement bound the parties with respect to the property they owned at the time of the Agreement and all property acquired in the future. [ 46 ] At common law, reconciliation has the effect of terminating a separation agreement.

As noted in Bailey v Bailey , [1982] OJ No 3286 , this is so unless it is clear from the agreement that the parties intended all or part of it to survive a resumption of cohabitation. (Similarly, in Sydor v Sydor [2003] OJ No 3808 ; Landgon v Langdon 2015 MBQB 153 .) [ 47 ] In this case, the Agreement executed by the parties specifically contemplated reconciliation and provided that the terms of the Agreement remained binding regardless of reconciliation.

Further, it explicitly set out the requirements to terminate or change the Agreement, which included a separate written agreement, entered into with independent legal advice and executed in compliance with the requirements of the MPA . [ 48 ] Given that the original Agreement was executed freely and voluntarily, without duress and in compliance with s. 38 of the respective Acts , the reconciliation provision is presumptively binding.

Further, the MPA and FPA contemplate that parties can enter contracts which speak to future events, before, during, and after marriage. [ 49 ] In this case, the language of the contract makes clear that the Agreement was to survive the reconciliation of the parties. The reconciliation clause was a binding and enforceable term of the contract. Further, the provisions in the contract for terminating or changing it were equally relevant.

As such the reconciliation of the parties does not have the effect of terminating the Agreement, in the absence of written variation or termination of the Agreement. [ 50 ] Cindy testified at trial that, following the reconciliation, she threw away her copy of the Agreement. It was her belief that it was inapplicable in the face of the parties’ reconciliation. She also testified that she found Connor’s copy of the Agreement when she was retrieving documents to deliver to the accountant for him.

She testified that she telephoned Connor at work and asked him whether they needed to do something about the Agreement, whether they needed to talk to a lawyer about this, whether they needed to say they were back together. Her evidence was that Connor told her to throw his copy away, and that he would take care of it. She took this statement to mean that, just as he arranged for the Agreement to be prepared, he would arrange for it to be terminated. [ 51 ] Connor denies any conversation with Cindy wherein he instructed her to throw away the Agreement, and denied saying that he would take care of it.

He testified that he was, in fact, relying on the Agreement in the face of what was a rocky relationship with a history of prior separations and reconciliations. [ 52 ] Cindy’s evidence on this point raises a contradiction. If she believed the Agreement was no longer applicable because of the parties reconciliation, there would be no reason for her to have asked Connor whether they needed to take steps to say they were back together, or talk to the lawyer about changing the Agreement.

This suggests that she knew the Agreement applied in the face of reconciliation, contrary to her testimony that she was unaware of this particular term. In addition, her testimony about the destruction of the documents was inconsistent. She first testified that she threw her copy away in the summer of 2013, but testified that the conversation with Connor occurred in early spring 2013, after she had thrown away her own copy of the Agreement.

It does not make sense that she would have thrown away her own copy, prior to having the conversation with Connor, if she was concerned that there were steps which needed to be taken to terminate the Agreement. [ 53 ] Connor’s conduct following the reconciliation supports his testimony that he did not instruct Cindy to destroy the Agreement and that he would take care of it. The evidence supports his continued reliance on the Agreement. The parties maintained separate bank accounts and financial obligations, and he paid Cindy $3,000 per month.

Connor took full responsibility for the debts as set out in the Agreement. Although his performance was not to the letter of the Agreement (i.e. the house was not transferred to him, the pension was not divided, and he did not reduce the support as the Agreement contemplated) the steps not taken were not to Cindy’s detriment. While it was raised at trial that Cindy had not received a $6,000 equalization payment as set out in the

Schedule itemizing her share of the

matrimonial property, the Agreement itself stated at Clause 25.1 that no equalization payment was owing. [ 54 ] Accordingly, I do not accept Cindy’s evidence that the parties did not intend to be bound by the Agreement following their reconciliation. Further, I am satisfied that the parties’ financial and property affairs continued to be governed by the terms of the Agreement. Finally, no steps were taken to terminate or change the Agreement as required by the contract.

Cindy has neither proven a lack of performance of the terms of the contract, nor promissory estoppel. [ 55 ] On the basis of all of the above, I am satisfied that the Divorce and Property Agreement, including the reconciliation clause contained therein, is valid, binding and enforceable. The Miglin analysis [ 56 ] I must then consider whether the spousal support provisions in the Agreement should be varied. Miglin governs this analysis. The starting point for the analysis is the overarching presumption that agreements between spouses should be given considerable weight.

This respects the autonomy and freedom of the contracting parties, as well as the policy objective of encouraging negotiated agreements between spouses. [ 57 ] The Supreme Court of Canada in Miglin set out a 2-stage analysis. First, the court must look at the circumstances in which the agreement was negotiated. Second, the court must assess whether the agreement reflects the original intentions of the parties and continues to comply with the objectives of s. 15.2 of the Divorce Act . That

section requires the courts to ensure that spousal support recognizes any economic advantages or disadvantages from the marriage or its breakdown, the apportionment of any financial consequences arising from the care of any children of the marriage (over and above obligations to support such children) between spouses, relieves any economic hardship arising from the breakdown of the marriage, and, so far as is practicable, promotes the economic self-sufficiency of each spouse within a reasonable period of time.

In assessing spousal support the court must also consider the condition, means, needs, and circumstances of each spouse, including the length of time the spouses cohabited, the functions each performed, and any order, agreement, or arrangement relating to the support of either spouse. [ 58 ] In considering the first part of the test, I have already concluded the terms of the Agreement were not unconscionable, and the Agreement met all of the execution requirements and was not entered into under duress.

However, I must also consider the fairness of the Agreement in the whole of the circumstances at the time the Agreement was made. When the Agreement was negotiated the parties had few assets – a new house and vehicles all of which were encumbered by debt, and Connor’s pension. It is clear on the evidence that Cindy’s role from the start of the relationship to the time of the 2012 separation was that of a stay at home wife and mother. Her efforts allowed Connor to work long hours to establish himself in his field, and he was the bread-winner in the family.

The net matrimonial property was equally divided and the spousal support negotiated reflected 50% of Connor’s net income at that time. Cindy was in school completing a graphic design diploma, with the expectation that within 3 years she would obtain economic self-sufficiency. Cindy completed the course and commenced employment in April 2013. She continued in that employment until October 2014. The child of the marriage was residing with Connor and therefore Cindy was free of responsibilities associated with day-to-day childcare.

At trial, Cindy agreed that she had participated in the negotiation of the Agreement. [ 59 ] While 3 years of spousal support may seem a short duration in the context of a 15-year relationship, it is important to consider that Connor was taking on all of the matrimonial debt and assuming the financial responsibility of all childcare without child support being paid by Cindy. Cindy was receiving half of the accrued pension, which reflected, in part, her contribution to an asset accrued by virtue of her homemaking endeavours while Connor was employed.

The equal sharing of his net income during her period of retraining, plus the amount of support paid during years 2 and 3 to top up her early career earnings, would have equalized their respective cash flow positions at that time. [ 60 ] Having regard to the economic position of the parties at the time of the marriage breakdown in 2012, the distribution of assets and debt, and Cindy’s plan for educating and reemploying herself, I conclude that the spousal support provisions of the Agreement in 2012 were fair. [ 61 ] Turning to the second stage of the analysis, I must consider whether the Agreement still reflects the original intentions of the parties and meets the objectives set out in s. 15.2 of the Divorce Act .

The onus is on Cindy to prove, on a balance of probabilities, that her new circumstances in 2018 were not anticipated by the parties and represent a significant departure from the range of reasonable outcomes anticipated at the time the Agreement was drafted. [ 62 ] The reconciliation clause, as a valid and binding term of the Agreement, was clearly contemplated as one of the possible outcomes.

Essentially, this means that the fact that the parties’ marriage lasted an additional 6 years after the execution of the Agreement, is not a relevant consideration. [ 63 ] Cindy’s post-reconciliation circumstances include gaining greater economic self-sufficiency through work. She was employed in graphic design for 18-months following the reconciliation, worked as a waitress and as a sales person at the Brick.

While some of this work was post-separation in 2018, by the time of her layoff due to the COVID-19 Pandemic in March 2020, she was earning $37,000 per year, and was also receiving $48,000 per year in tax-free, uncharacterized support from Connor. [ 64 ] Connor’s income in 2018 was $263,000, $306,000 in 2019, and $117,000 in 2020. While he has accumulated approximately $100,000 in the corporation, a good deal of that amount reflects unpaid tax liability for 2020, both with respect to corporate tax and personal tax. [ 65 ] The children are now grown, the youngest having turned 18-years-old in 2015.

Both children reside with Connor and he continues to provide for them, without contribution from Cindy. [ 66 ] In the post-reconciliation period, Cindy received monthly payments of $3,000 from Connor. At the time of the 2018

separation, those payments increased to $4,000 per month. The payments have been uncharacterized and have therefore been tax free to Cindy. In effect, Cindy has received 9-years of tax-free spousal support since July 1, 2012. During the 6-year reconciliation period Connor paid all of the debts of the marriage, and with the exception of groceries and other minor household expenses, paid for all other costs associated with maintaining the household, including taxes, insurance, and utilities. During her periods of employment, all of Cindy’s income was hers.

After her layoff, the continuing support has allowed her to pursue continuing education to become an interior designer. At trial, she did not provide clear evidence as to her potential earning opportunity, once retrained. Cindy has no health problems which prevent her continued employment, she is engaged to her new partner, and while she pays rent to her fiancée in the sum of $1,100 per month, the parties share living expenses such as groceries. A review of her monthly budget evidences total nondiscretionary spending of $2,922.62. Connor’s monthly budget reflects nondiscretionary spending of $5,846.73.

In addition to that, Connor pays university related costs for one child of the marriage in the sum of $540 per month. [ 67 ] While it is true that Connor’s income has increased over the years, and he has accrued some income in the corporate bank account, it cannot be said that his financial position was not within the range of possible outcomes at the time the Agreement was entered into. His earnings have fluctuated up and down due to variations in the oil economy and as a result of the COVID-19 Pandemic.

As previously noted, money accrued in the corporate bank account largely reflects unpaid corporate and personal taxes for 2020. The original Nabor’s Drilling pension has grown, not due to further contributions, but as a result of investment gains.

The matrimonial home has increased in equity, but owing to retirement of debt against the property, as opposed to any substantial investments of capital by either party into the house. [ 68 ] Neither party has suffered from any of the factors set out in the Agreement which might have been characterized as a change in circumstances. [ 69 ] I am satisfied that the Agreement, considered in context with the history of spousal support paid since July 2012, has met the objectives of s. 15.2 of the Divorce Act .

Specifically, Cindy has not been economically disadvantaged or suffered an economic hardship as as result of the breakdown of the marriage, either during the reconciliation or final separation, having been paid spousal support throughout. She has not borne any financial consequences associated with child care as a consequence of the breakdown of the marriage.

Finally, she has had full opportunity to achieve economic self-sufficiency through obtaining the graphic design diploma, and since the 2018 separation to pursue additional education in a field which she finds gratifying. [ 70 ] As such, I am satisfied that the Agreement is binding, and that there is no change of circumstance which merits a variation in the spousal support provisions contained therein.

Accordingly, Connor will have no further obligation to pay spousal support effective May 15, 2021. [ 71 ] In relation to the spousal support and uncharacterized support already paid, I do not direct any reimbursement by Cindy to Connor of the amount paid which either exceeded the amount or duration required by the Agreement. In addition, I direct that neither party may seek to claim those amounts for tax purposes.

My reasons for making this direction are that requiring Cindy to repay the funds, or bear the tax consequences retroactively, would visit a financial hardship upon her and would be contrary to the stated objectives in s. 15.2 of the Divorce Act , including promoting her economic self-sufficiency. [ 72 ] As relates to the matrimonial property, having found the Agreement valid and binding with respect to all property owned at the time of the Agreement and into the future, there shall be no redistribution of the matrimonial property.

However, with respect to the Nabor’s Drilling pension, the increase in value is investment driven and not contribution driven, as Connor was no longer contributing to this pension after the 2012 separation. Had the asset been divided in 2012 Cindy would have had the opportunity to accrue investment gains on her share. As a result, fairness dictates that she receive the investment gains attributed to that share.

As such, I direct that as per the Agreement, the Nabor’s Drilling pension will be divided equally for the period May 30, 1997 – July 1, 2012, and that the parties will calculate the interest accrued on Cindy’s half-share within the investment from July 1, 2012 – May 15, 2021, which sum will be transferred to her. Constructive Trust [ 73 ] The constructive trust claim is duplicative of the matrimonial property action.

Further, there is no evidence before the Court to prove that Cindy made contributions towards the matrimonial property post reconciliation, which resulted in an enrichment to Connor or a corresponding deprivation to Cindy. The existence of the Agreement, and the payments made by Connor to retire the debt against the matrimonial home, is the juristic reason for the increase in the equity in the property, and as previously noted, any gains in the pension were investment driven. Accordingly, this claim is dismissed.

Sentimental Property Items [ 74 ] I direct that Cindy will have the photographs of she and the children which were described at trial. [ 75 ] I direct that the family dog remain in Connor’s possession. The dog remained there after both the 2012 and 2018 separations and has been in Connor’s continuous care for the past 3 years. The dog is 15 years old and should enjoy his final years in the familiar environment where he has lived his entire life. Child Support [ 76 ] Connor abandoned this claim at trial and accordingly no Order is made.

Divorce [ 77 ] Finally, the parties have lived separate and apart for in excess of one year and meet all of the requirements to be divorced. Accordingly, I grant a Divorce Judgment to be effective the 31 st day after the date of this decision. Costs [ 78 ] If they are unable to agree as to costs, the parties may make any additional written submissions with respect to costs within 30 days of this decision. Heard on the 16 th day of March, 2021 to the 17 th day of March, 2021. Dated at the City of Lethbridge, Alberta this 13 th day of May, 2021. J.C. Kubik J.C.Q.B.A. Appearances: Kurt. E. Schlachter Stringam LLP for the Plaintiff Lori G. Andreachuk, Q.C. Andreachuk Law for the Defendant