Lehr v Lehr, 2021 ABQB 538

Court of Queen’s Bench of Alberta Citation: Lehr v Lehr, 2021 ABQB 538 Date: 20210713 Docket: 4808 014153 Registry: Medicine Hat Between: Jennifer Anne Lehr Plaintiff - and - Donald James Lehr Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice D.V. Hartigan _______________________________________________________ INTRODUCTION [ 1 ] This

Summary Trial involves the valuation and distribution of matrimonial property acquired throughout the course of the Parties’ 22-year marriage. [ 2 ] The

Summary Trial was heard by me over two days. The trial was a blended one, in that the bulk of the evidence was provided by way of affidavit; however, the Parties also testified and were subject to cross-examination. Therefore, while

summary trials are often not an appropriate venue for determinations of credibility, given the viva voc e evidence presented at this trial and the documentation provided via affidavit by the Parties, I find that I am in a position to make findings of credibility sufficient to resolve the conflicts in evidence regarding the matters in issue.

BACKGROUND [ 3 ] Jennifer Lehr and Donald Lehr were married December 11, 1998. They initially separated on August 6, 2017. After several failed reconciliation attempts, they separated for the final time on February 1, 2019, and were divorced September 4, 2020. [ 4 ] Mr. Lehr is the registered owner of farm lands legally described as 4.27 acres on the SE 25-7-5 W4 and 12.97 acres on the SW 30-7-4-W4 (the “Farm Land”).

He also owns 2/9 of a grazing lease; the balance of that lease is owned by his mother (“The Lease”). [ 5 ] The Parties are the registered owners of the matrimonial home, #7 Riverview Court, SE, Redcliff, Alberta (the “Matrimonial Home”). The Matrimonial Home was appraised in January 2020 for $321,000. Ms. Lehr is in possession of the Matrimonial Home. [ 6 ] The Parties have other assets, including vehicles and farm equipment. The Parties also have a number of outstanding debts. [ 7 ] Mr. Lehr was self-represented in this trial, although he was assisted by his brother for clerical purposes.

I point this out because Mr. Lehr, in his submissions to the Court, particularly in his closing remarks, referenced some matters that were not properly before me by way of evidence. Counsel for the Plaintiff expressed concerns in this regard, which I share. However, when a party is self- represented, it is always of concern to the Court that they do not feel so constrained by the many and complex rules of evidence that they fail to make permitted submissions for fear of offending those rules.

Therefore, recognizing that I heard submissions that went beyond what was in evidence, I will instruct myself that, in reaching my decision, I will rely only upon evidence properly tendered either in affidavit form or in testimony. [ 8 ] I will give my decision in the following manner: First, I will address the exemptions claimed by the Parties. I will next make determinations with respect to the valuation of the matrimonial property, both real and personal. Next, I will address the implication of outstanding debts owed by the Parties.

I will then be in a position to determine the value of matrimonial property for distribution. Finally, I will address the issue of costs. I. EXEMPTIONS [ 9 ] Section 7(2) of the Family Property Act , RSA 2000, c F-4.7 , provides that certain property may be exempt from distribution between the parties. Otherwise, the presumption is an equal distribution of the parties’ property. The onus of establishing an exemption lies with the party claiming it. A. EXEMPTION: THE MATRIMONIAL HOME [ 10 ] The Plaintiff asserts an exemption with respect to the Matrimonial Home.

When the Parties bought the Matrimonial Home, the Plaintiff’s father provided $89,000 towards the purchase. The Plaintiff contends that this advance of money was a loan, as evidenced by the gift letter provided to the bank by the father, which is qualified by words, “unless the house is sold.” It is her position that by inserting those words into the letter, her father signified that he would be repaid if and when the Parties sold the house. She testified that at the time of the advance, it was her understanding that the money was meant as a loan. [ 11 ] Mr. Lehr testified that it was his understanding that Ms.

Lehr’s father had provided the money as a gift, not a loan, and that Ms. Lehr’s father did not expect to be repaid by the Parties. [ 12 ] I prefer Ms. Lehr’s testimony on this point to Mr. Lehr’s. Her version is corroborated by the wording of the gift letter itself with the insertion of the words, “unless the house is sold.” Furthermore, Mr. Lehr himself in previous discovery and affidavits referred to the advance as a loan, and only appears to have changed his position upon seeing that the document provided to the bank is titled “Gift Letter”. I find that Ms.

Lehr has established the $89,000 exemption on a balance of probabilities. B. EXEMPTION: FARM LAND [ 13 ] Mr. Lehr asserts an exemption as a result of moneys advanced to him by his father at the time of the original purchase of the Farm Land. Mr. Lehr originally purchased 813 acres, and the 17 or so acres of farm land are what remains from that purchase. [ 14 ] The original 813 acres were purchased with the assistance of his father, who provided $56,000 toward the $168,000 purchase price. This gift may be inferred from an offer made by his father for 1/3 of that land, and the $112,000 that Mr.

Lehr himself contributed to the purchase of the land. While I find that the gift is traceable to the land, it is only traceable to the remaining land. As such, the traceable portion of the original gift from the Defendant’s father is 17.24/813, or a little over 2%. I have no evidence before me of the subsequent use or history of the balance of the original gift. [ 15 ] Likewise, I have no evidence before me whether the retained farm land was more or less valuable, proportionally, than the other land that was sold. On a direct proportional basis, the remaining traceable amount of the gift from the Mr.

Lehr’s father is $1,187, which for simplicity’s sake I will round up to $1,200. I therefore find an exemption to Mr. Lehr’s benefit of $1,200. [ 16 ] In his written argument, Mr. Lehr submits that the exemption should apply to all the land in his possession, both the retained deeded land and the lease land. I reject this assertion: clearly, the gift, traceable to the extent that it is, was in relation to the purchase of the original deeded land and not to the purchase of the lease land. There is no evidence before me that the gift from the Defendant’s father was in any way related to the lease land purchase.

Given that the proof of an exemption falls to the party claiming it, Mr. Lehr’s claim in this regard necessarily fails. II. VALUE OF REAL PROPERTY (LAND)

A. THE MATRIMONIAL HOME [ 17 ] The Parties agree that the appraised value of the Matrimonial Home is $321,000. There is a mortgage on the property. [ 18 ] There is some dispute as to the value the Court should use in determining the mortgage debt remaining on the property. The Plaintiff maintains the parties separated in August of 2017. The Defendant, however, puts the separation date at February of 2019. [ 19 ] There were a number of attempted reconciliations prior to the Parties’ final separation of February 1, 2019. The commitment of the parties to that reconciliation process is in dispute.

And while I generally prefer the evidence of the Plaintiff in these proceedings, I find I cannot choose between the Parties’ positions as to the actual date of separation: whether a reconciliation is truly sought by a Party is far too subjective a matter for me to reach a firm conclusion, particularly in light of the limitations in the evidence in this

Summary Trial. I accept that the clearest date for the effective end of the relationship was February 1, 2019. [ 20 ] At that date, the balance of the mortgage was $174,751. I have already accepted that Ms. Lehr has an exemption on that property in the amount of $89,000. Therefore, the remaining equity in the property is $57,249. That equity comprises part of the matrimonial property in this action. B.

FARM LAND AND LEASE LAND [ 21 ] Both Parties provided appraisals with respect to the value of the farm and lease lands. [ 22 ] The Plaintiff’s appraiser valued the 4.27-acre farm land at $27,755, the 12.97-acre farm land at $84,305, and the total value of the lease land at $1,600,000. Mr. Lehr has a 2/9 interest in the lease land, so the value of his share would be $355,555. [ 23 ] Mr. Lehr’s appraiser came to different conclusions.

He valued the 4.27-acre and 12.97-acre parcels both at $1,200 per acre (I note there is an arithmetic or typographical error in the evaluation: 17.24 multiplied by $1,200 equals $20,688, not the $20,668 in the report). Using the factor of $1,200 per acre rather than the (slightly) mistaken conclusion, the 4.27-acre parcel would be worth, per the Defendant’s expert, $5,124 and the 12.97 parcel $15,564. The Defendant’s appraiser set the total value of the lease land at $1,152,000, which would make Mr. Lehr’s 2/9 share $256,000. [ 24 ] As noted earlier, the only viva voce evidence given at this

Summary Trial was that of the Parties. The appraisers were neither qualified as experts nor did they give evidence in the proceedings. I have two relatively thorough reports from the appraisers before me. The question, then, is whether I have sufficient evidence before me to choose between them. [ 25 ] Viva voce testimony by the appraisers, with the inherent safeguard of cross-examination, would undoubtedly have been the preferred way to assess what is, for all intents and purposes, competing expert testimony. However, as Justice Shelley pointed out in O’Neil v Yaskowich , 2018 ABQB 599 at para 13 : While issues of credibility may weigh against proceeding by

summary trial, not all conflicts in evidence require that viva voce evidence be heard.

Summary trials may be appropriate even where there is conflicting evidence if there is admissible evidence that makes it possible to make necessary findings of fact[.] [ 26 ] In this case, I find that I am able to prefer the evidence of the Plaintiff’s appraiser over that of the Defendant’s. Contained within the Plaintiff’s appraiser’s report is a detailed curriculum vitae , including his designations, experience and education.

It also shows that he has been qualified as an expert witness by the Court of Queen’s Bench in Alberta and Saskatchewan, by the Alberta Assessment Appeal Board, the City of Medicine Hat Assessment Review Board, and the National Energy Board arbitration committee. [ 27 ] No such resume is provided for the Defendant’s appraiser. Therefore, in the absence of any information as to the qualifications of Mr. Lehr’s appraiser, I accept Ms. Lehr’s proffered evidence in this regard. III.

OTHER MATRIMONIAL PROPERTY [ 28 ] In addition to the real estate described above, the Parties possess other matrimonial property. [ 29 ] Mr. Lehr is in possession of significant farm machinery, tools, and other goods. Ms. Lehr calculates their value at approximately $190,000 for farm machinery and $20,000 in shop tools. Ms. Lehr reached this total through her own investigation, but there has not been a professional appraisal of the goods. Mr. Lehr values these goods just shy of $62,000 (Defendant’s Affidavit filed March 8, 2021, p.7). Mr. Lehr argues that Ms.

Lehr’s valuations are excessive, and do not reflect “real world” prices, although, like Ms. Lehr, he does not provide a professional appraisal. [ 30 ] While I accept Ms. Lehr as being honest in reporting the results of her investigations, absent a professional or expert evaluation, I am unable to chose between their estimates. However, the thoroughness of Ms. Lehr’s investigation compels me to generally prefer her numbers. I therefore find the value of matrimonial property in Mr. Lehr’s possession to be $120,000. [ 31 ] Ms. Lehr is in possession of the household goods and a Honda motor vehicle. While Mr.

Lehr values the household goods at $20,000, I am not satisfied he has justified that number. I therefore value the household goods at $5,000. The vehicle is worth $4,391. IV. MATRIMONIAL DEBT AND DISSIPATION [ 32 ] There is a significant debt in relation to the property, namely a Farm Credit loan (“FCC”) secured by the lease lands owned by Mr. Lehr and his mother. The outstanding balance of that loan is $490,000. Mr. Lehr also claims other debts to a corporation owned by his brother’s wife, Census Management Services Ltd. (“Census Management”).

[ 33 ] The Plaintiff argues that the failure to reduce the debt on the property has effectively dissipated the value of the asset, and that that dissipation should be taken into account in the fair distribution of the matrimonial property. [ 34 ] Because the FCC loan is in Mr. Lehr’s name and his mother’s, he asserts that he is responsible for one-half of that debt, or $245,000. However, at some time prior to the breakup of the marriage, Mr. Lehr entered into a three-way partnership with his mother and his brother. This partnership was to operate the family’s ranching business.

On business statements for the partnership, the loan is shown as a liability to the partnership as a whole. The loan was to purchase cattle for the partnership. I therefore find that Mr. Lehr’s true liability for the loan is one third of the balance, or $163,333. [ 35 ] Since obtaining the loan, the partnership has only made interest payments on it. There has been no reduction of the principle on the loan, notwithstanding that the cattle purchased by those funds have long since been sold. [ 36 ] As stated, the principal on the FCC loan was never repaid, even in part, after the sale of cattle.

And while the collective debt of the partnership was not reduced, a number of significant payments were made by the partnership to individuals or other corporate entities. [ 37 ] At the alleged dissolution of the partnership, rather than pay down the FCC loan, payments were made to the Defendant’s mother of $112,000, and to the corporation owned by the Defendant’s sister-in-law (Census Management) in the amount of $140,000. It appears Mr. Lehr received only $527 when the three-way cattle ranching partnership was dissolved. [ 38 ] Mr.

Lehr claims that $80,000 of the payments to his mother was for farm expenses, yet he provides no documentation to support that assertion. He claims the money to Census Management, the company owned by the wife of one of the partners in the partnership, was variously for cattle and loans, yet the only documentation he provides in support of that claim is a string of emails which provide little enlightenment. Nor does he explain why his brother’s wife’s company ran cattle on the partnership’s ranch. [ 39 ] I find Mr. Lehr’s testimony wholly unsatisfactory on these points.

If legitimate expenses were incurred, there would be records of them. If there was a business relationship between the partnership and Census Management, including loans from that company to the partnership, there would be documentation beyond vague emails and blanket statement invoices. It further appears that Mr. Lehr is claiming that all interest payments made on the FCC loan were paid via loans obtained, again, from Census Management, and he includes those payments and corresponding loans as matrimonial debt.

Again, there appears to be no original documentation to support these loans other than summaries produced by Mr. Lehr. [ 40 ] As to the loans to Census Management which Mr. Lehr claims constitute matrimonial debt, I find that there is insufficient evidence on balance to establish that these loans were incurred for the benefit of the partnership or Mr. Lehr personally. In fact, I have serious doubts that they were bona fide loans. [ 41 ] Mr. Lehr was evasive and argumentative throughout his cross-examination.

He frequently did not answer questions or, when he chose to do so, he was unable to provide any documentary support for his assertions. I find Mr. Lehr was not a credible witness. [ 42 ] I find that the failure to reduce his share of the FCC loan was a deliberate attempt to artificially maintain a debt on the property and thereby reduce the value of the Matrimonial Property. Mr. Lehr was surely entitled to an equivalent share of the partnership funds as his brother (or Census Management) and his mother at the time of dissolution.

Yet it appears he received no substantial benefit from the sale of the very cattle the purchase of which the loan was obtained to secure. This does not make sense. Mr. Lehr should have been entitled to an amount at dissolution similar in proportion to the others. [ 43 ] I also find that Mr. Lehr has made no attempt post-separation to derive income from his grazing lease and equipment, again to maintain the artificially high debt to equity ration on that land. His 87-year-old mother apparently still runs cattle on the lease, but pays no rent.

Nor has he charged any rents for the use of the machinery on the lease, which is no doubt still being used for his mother’s cattle operation. Finally, he has not sought any other renters to utilize his portion of the lease land for cattle. [ 44 ] The law of dissipation is summarized at paragraphs 32 to 46 of Cox v Cox , 1998 ABQB 987 . The Court distilled the following principles from its analysis at para 46: [ 45 ] From the case law one can distill the following principles: 1.

Section 7 (4) creates a presumption of an equal distribution of non-exempt matrimonial property, unless it would not be just or equitable to do so.

Section 8 (

l) provides one of the factors that can lead to an unequal distribution where one spouse dissipates assets to the detriment of the other. 3. Dissipation does not necessarily result where an asset is worth less at trial than it was at separation. Dissipation requires a degree of intent although that intent does not necessarily have to extend to intentionally depriving the other spouse of a fair distribution of matrimonial property. It is sufficient if one spouse intends to dissipate the assets (usually for their own enjoyment), and that dissipation arises in detriment to the other spouse. 4.

There must be actual detriment to the other spouse. 5. The law generally does not find dissipation if the reduction in assets was due to reasonable expenditures made on behalf of the family or to maintain existing matrimonial assets. However, the court will look to see if the spouse could have paid those expenses out of income rather than by depleting assets. Purely personal expenses which do not benefit the other party that are paid out of matrimonial property may also be considered dissipation (even though prior to separation they might have been matrimonial expenses). 6.

If an asset is sold or otherwise reduced, the courts will not consider this dissipation if the proceeds can be traced to another asset.

The replacement assets form part of the assets available for distribution. 7. If assets are sold for less than fair market value, the courts may determine whether the sale was done improvidently, hastily or fraudulently in deciding whether it was dissipation. If the sale is effected in accordance with pre-separation negotiations it may not be considered dissipation. 8. The total amount actually dissipated "to the detriment" of the spouse is one-half of the amount by which the asset was reduced. 9.

Ultimately it is in the discretion of the trial judge, based on the consideration of all the facts, to determine whether or not dissipation exists. [ 46 ] Dissipation can occur in situations other than direct depletion of an asset by, say, overspending.

In NMM v NSM , 2004 BCSC 346 ( NMM ), the Court found that deliberate actions by a spouse which led to the ultimate failure of a company by loan default entitled the other spouse to compensation. [ 47 ] I find that the combination of the failure to account for his share of the partnership’s revenue, his deliberate refusal to pay down the FCC loan and the failure to attempt to derive any income from his property constitutes dissipation of matrimonial property to the detriment of Ms. Lehr. Ms.

Lehr is therefore entitled to an unequal distribution of the matrimonial property in her favour. [ 48 ] I am of the view that Mr. Lehr should have received funds similar to those of the other partners at the dissolution of their business. Had he done so, those funds could have been put towards his share of the principal owing on the FCC loan.

Similarly, leaving his land and equipment idle has meant that no additional funds have been available to pay down the debt. [ 49 ] As the Court stated in NMM , at para 93 , “the assessment of appropriate compensation in a situation such as the present is not an exact science and it is not a matter of precise accounting”. Given that the other payouts at dissolution are known, and notwithstanding the amount that could have resulted from Mr. Lehr renting his lease land is speculative, I assess Mr. Lehr’s effective dissipation at $120,000.

For ease of calculation of matrimonial property, rather than directing a $60,000 payment to Ms. Lehr, I will simply conclude that the effective matrimonial debt left on the FCC loan for matrimonial property calculations is $43,333. V. MATRIMONIAL HOME EXPENSES AND LOANS FROM MS. LEHR’S PARENTS [ 50 ] During the period of separation, Ms. Lehr has lived in the Matrimonial Home with the couple’s children. She has therefore incurred mortgage, tax, and other expenses with respect to that matrimonial property. Mr.

Lehr has therefore benefitted from those expenses, insofar as they have maintained his interest in the equity (and increased the equity) of the property. [ 51 ] Ms. Lehr claims half of the total expenses paid since separation on the home. However, she has also had the benefit of residing there for that period. Given that benefit, I find she is entitled to a payment from Mr. Lehr equal to one third of those expenses, or $21,500. [ 52 ] Ms. Lehr also claims that she should be reimbursed for loans she had to take from her parents to cover living expenses and legal costs throughout the separation and litigation.

As to the loans for living expenses, these were incurred because the matrimonial property had not been divided. As such, my division of that property below and my award above for household expenses will deal with the portions of the loans used for living expenses. As to her legal costs, those will be addressed below. I therefore find Ms. Lehr is not entitled to a separate award for the loans from her family. CONCLUSION [ 53 ] I find the Parties’ matrimonial property to be the following: 1. Equity in the matrimonial home $57,249 2. Farm Land: 4.27 acre $27,755 12.97 acre $84,305 3.

Lease Land (less FCC loan $43,333) $312,222 4. Machinery/shop tools $120,000 5. Household goods $5,000 6. Honda vehicle $4,391 Total $610,922 [ 54 ] Each Party is entitled to one-half that total, or $305,461. The Plaintiff has in her possession the equivalent of $66,640, leaving an offset to be paid to her by the Defendant of $238,821. She is also entitled to Mr. Lehr’s share of Matrimonial Home expenses of $21,500, for a total judgment of $260,321. [ 55 ] Title to the Matrimonial Home shall be transferred to Ms. Lehr’s name alone. Ms.

Lehr shall assume liability for the mortgage and the debt to her father in relation to the property.

[ 56 ] At the request of Ms. Lehr’s counsel in oral submissions, Mr. Lehr will transfer the 12.97-acre parcel of land described above to Ms. Lehr. That transfer will reduce his indebtedness to her by the value of the property, $84,305.

Any outstanding child support arrears will be satisfied by a portion of that amount first, and the rest will be applied to the debt arising from this judgment. [ 57 ] The Parties will retain all of the other assets in their possession. [ 58 ] The Defendant shall pay the remainder of this judgment to the Plaintiff in equal installments over three years, with the first payment due September 1, 2021, and the other installments on September 1, 2022 and September 1, 2023 This judgment may be registered against the title to the lease lands.

COSTS [ 59 ] The Plaintiff seeks costs in this matter on a solicitor/client basis. The Plaintiff points to the Defendant’s dismissal of counsel, delaying matters; his failure to comply with his Undertakings in a meaningful fashion; his failure to provide his expert property report on time; and the lengths to which the Plaintiff and counsel had to go in order to untangle the complex business relationships involved in the Defendant’s ranching operation. [ 60 ] As to the fact Mr. Lehr no longer had counsel at the trial of this matter, while this no doubt delayed matters, the fact that Mr.

Lehr was self-represented for part or all of the proceedings should not, in my view, be a justification for enhanced costs. Parties will often be unable to afford counsel for the entirety of litigation, if at all. [ 61 ] However, his failure to properly comply with his undertakings no doubt made the Plaintiff’s work more difficult and increased her legal costs through no fault of her own.

And while the delay in providing his expert report had no serious or deleterious effect on the Plaintiff’s case, a party should not benefit from non-compliance with the Rules of Court, nor should they merely be left in the same place they would have been if they had complied. To do so would be to reward those who disobey the rules of litigation at the expense of those who behave properly. [ 62 ] As in any litigation, the substantially successful party in a family or family property matter is entitled to costs the same as litigants in other matters. Furthermore, given my remarks above, I find that Ms.

Lehr is entitled to enhanced costs, though not on a solicitor/client basis: Mr. Lehr’s misconduct in this litigation does not rise to a level where such an award would be appropriate. [ 63 ] I therefore award costs according to

Schedule C, Column 3 of the Alberta Rules of Court . In order to address Mr. Lehr’s misconduct in this litigation, I would enhance those costs by 50%; put another way, I award Ms. Lehr the ordinary

Schedule C Column 3 costs, multiplied by 1.5. [ 64 ] Costs are payable forthwith. Heard on the 19 th day of March, 2021 and the 19 th day of April, 2021. Dated at the City of Lethbridge, Alberta this 13 th day of July, 2021. D.V. Hartigan J.C.Q.B.A. Appearances: Lori G. Andreachuk, Q.C. for the Plaintiff Donald James Lehr Self-Represented