Hogue v Johnston (Estate), 2021 ABQB 913

Court of Queen’s Bench of Alberta Citation: Hogue v Johnston (Estate), 2021 ABQB 913 Date: 20211122 Docket: 4803 173526; 1703 18649 Registry: Edmonton Between: Docket No. 4803 173526 Cathy Hogue Plaintiff - and - Elwood Earl Johnston (Estate) Defendant And Between: Docket No. 1703 18649 Elwood Earl Johnston (Estate), and 608506 Alberta Ltd. doing business as Earl Johnston Bobcats Plaintiffs - and - Cathy Ann Hogue, Christine Cameron and John Doe Defendants _______________________________________________________ Reasons for Decision

of the Honourable Madam Justice M. Hayes-Richards _______________________________________________________ Introduction [ 1 ] The trial of this matter is comprised of two actions which were combined for the purposes of trial. [ 2 ] In regard to Action No 4803 173526 (“Matrimonial Property Action”), the Plaintiff, Cathy Hogue (“Cathy”) and the Defendant, Earl Johnston (“Earl”) began living together in 1994, married in 2002 and initially separated June 15, 2015.

There was an attempt at reconciliation in March 2016 after Earl got into a serious motorcycle accident in Florida, but the parties separated for good on September 7, 2016. [ 3 ] In Action No 1703 18649 (“Civil Fraud Action”), the Plaintiffs are Earl and his company 608506 Alberta Ltd., an Alberta corporation doing business as Earl Johnston Bobcats (“Company”). Earl is the sole shareholder and director of the Company. The Defendants are Cathy, and her daughter from a previous marriage, Christine Cameron (“Christine”).

Cathy was the bookkeeper for the Company until shortly after the parties separated in June 2015. [ 4 ] Earl passed away on March 9, 2021, shortly before this trial commenced on June 7, 2021. He is represented in both actions by his litigation representative, Bryan Holigroski. [ 5 ] In the Matrimonial Property Action, Cathy claims for unjust enrichment and seeks an unequal distribution of matrimonial property on the basis that Earl has dissipated assets since the date of separation.

Earl is seeking an unequal distribution on the basis that Cathy dissipated funds during the marriage due to a gambling addiction and that she gave significant monetary gifts to her daughter, Christine, without his knowledge or consent. [ 6 ] Cathy initially advanced a claim for retroactive and ongoing spousal support but advised after trial that given Earl’s death, she was no longer pursuing this claim. Earl initially opposed the claim for unjust enrichment but advised in closing submissions that he accepted Cathy’s claim of unjust enrichment.

For that reason, he is content to have his exemptions valued at the date of cohabitation, and the increase in value since that date divided equally. [ 7 ] In the Civil Fraud Action, Earl and the Company seek damages against Cathy for embezzlement and fraudulent misappropriation, breach of trust, fraud and concealment of fraudulent activities, and unlawful means conspiracy.

They seek damages against Christine for embezzlement and fraudulent misappropriation, knowing receipt of funds, and unlawful means conspiracy. [ 8 ] Four witnesses gave evidence at trial: Cathy, Christine, and Justin Thoman, a forensic accountant, all testified in person; Earl’s evidence went in by consent pursuant to Rule 8.14 of the Alberta Rules of Court , AR 124/2010 (“ Alberta Rules of Court ”). Background [ 9 ] Cathy and Earl began cohabitating in 1994, and were married on January 30, 2002. [ 10 ] Cathy and Earl had no children together, but Cathy had a daughter, Christine, from a previous marriage.

Christine was fifteen years old when Cathy and Earl got together. Christine’s relationship with Earl was rocky, but improved during the last four to five years of Cathy and Earl’s marriage. Christine has two teenagers, and suffers from vestibular migraines, which come on as vertigo or pain. Her illness started in 2012 or 2013, and it took a long time and many doctors visits to get a proper diagnosis. For a period of time, Christine and her children had to live with Cathy and Earl because Christine could not function and was too sick to care for her children.

Christine’s ability to work was also affected by her illness. [ 11 ] At the time Cathy and Earl met, Earl was the director and sole shareholder of the Company. Cathy started working at the Company as the bookkeeper around November 1994, shortly after her and Earl moved in together. She continued in that position until their separation in June 2015. [ 12 ] Cathy testified that for the first three years she worked for the Company, neither she nor Earl took a paycheque because the Company was short on cash. Earl directed her to pay all of their personal expenses through the Company.

The Company would write a cheque to Cathy or Earl or their credit cards to cover expenses, but record the cheque in the Company’s books as if it had been paid to one of their suppliers. For example, a cheque would be made out to Earl and deposited into their joint bank account to cover expenses, but Cathy would record the cheque in the Company’s books as if it had been made out to one of their suppliers, such as Mixcor.

The Company continued to pay Cathy’s and Earl’s expenses in this manner throughout their cohabitation and their marriage. [ 13 ] At some point, when the Company started making more money, their accountant advised them to start paying themselves a salary, which they did.

However, they continued to pay their personal expenses through the Company in the same manner they had prior – cheques written to their benefit to cover expenses, but recorded in the Company’s books as payments to suppliers. [ 14 ] Cathy testified as to both her and Earl’s knowledge of the manner in which personal expense cheques were being improperly recorded in the Company’s books. She said that everything she did was at the direction of Earl, a direction given to her at the commencement of her employment with the Company.

She knew that it was not proper accounting practice, but she did it anyway. [ 15 ] As for Earl, it was conceded during oral argument that Earl was aware of how the personal expense cheques were being

recorded improperly in the Company’s books. In my opinion, this was a proper concession as both the oral and documentary evidence overwhelmingly support knowledge on the part of Earl. [ 16 ] The result of the improper recording of personal expenses in the Company’s books was that Cathy and Earl were able to take a lower salary and therefore pay less source deductions, but still maintain a higher standard of living. They both received a personal benefit from the improper record keeping.

The Company also received a benefit, in that it was able to claim significantly higher expenses, as payments to suppliers, that it never actually paid, which may have resulted in lower corporate income and therefore the payment of lower corporate taxes. [ 17 ] From around June 2014 to April or May of 2015, Cathy began gambling in increasing amounts. According to Cathy, after losing $3,000 in one day, she stopped gambling. This was either in April or May 2015. [ 18 ] In the late Spring of 2015, prior to the parties’ initial separation, Earl decided to retire.

He began to take an interest in the amount of money in their bank accounts and started asking to see the bank statements, something he was seldom interested in doing before. Prior to his decision to retire, Earl had always left the finances to Cathy, trusting that she was taking care of everything and paying their expenses. [ 19 ] On June 15, 2015, Earl and Cathy separated, in large part because Earl became aware that Cathy had lost significant amounts of their money to her gambling addiction. He also discovered that Cathy had been providing financial support to Christine on a regular basis since February 2013.

Documentary evidence shows that Cathy had given Christine a total of $34,200, between February 2013 and May 2015. The vast majority of that money came from Earl’s and Cathy’s joint account, with only two cheques totalling $5,100 coming from the Company’s account. When Cathy and Earl separated, Christine borrowed money from her father and paid $25,000 of the money back to Earl by way of cheque to his Company. [ 20 ] At the time of their separation in June 2015, Cathy told Earl that she had lost about $20,000 gambling. She now admits that the number is much higher.

At questioning she said it was approximately $130,000. At trial, after doing her own reconciliation, she said it was approximately $101,000. [ 21 ] In March 2016, Earl was in a motorcycle accident in Florida, resulting in serious injuries. The first person he called was Cathy, who immediately flew down to Florida with Christine to take care of him. The two reconciled for a few months, but separated for good on September 7, 2016. Earl could not get past the fact that Cathy had lost so much of their money through her gambling addiction.

Civil Fraud [ 22 ] Earl and the Company allege numerous causes of action against Cathy and Christine. They allege that Cathy used her position of trust as bookkeeper of the Company to take money without their consent and that she used the money to sustain her gambling addiction. They further allege that Cathy and Christine conspired against Earl and the Company by taking money without consent and giving it to Christine. [ 23 ] Cathy and Christine argue the Civil Fraud Action should fail for two reasons. First, it was not brought within the two-year limitation period under section 3(1) (

a) of the Limitations Act , RSA 2000, c L-12 (“ Limitations Act ”), and second, the case fails on its merits. [ 24 ] In order to address the issues in the Civil Fraud Action, it is first necessary to set out my findings of fact and credibility. These findings of fact apply equally to the Matrimonial Property Action. [ 25 ] Several reasons were advanced as to why Cathy was not a credible witness. First, she admitted to falsifying the Company’s records.

Second, she gave inconsistent evidence at questioning and trial respecting whether she had ever falsified the Company’s records for the purpose of covering up her gambling habit. And third, she provided a reconciliation of her gambling debts at the last minute, whilst on the stand at trial, without providing calculations to back up her analysis. [ 26 ] Although there is reason to be concerned about a person’s credibility when they are willing to participate in a scheme to evade personal and Company liability for taxes, I still find Cathy to be a credible witness.

She willingly admitted to her role in the scheme to pay personal expenses through the Company and to record them as expenses to suppliers. She testified that she did so originally at the direction of Earl and continued to do so because it was expected by Earl. Although she attempted at times to downplay her role as someone who was simply following Earl’s directions, I find that she was a willing participant in this scheme that continued for over twenty years. [ 27 ] I also find that Earl was fully aware of the scheme as he himself initially directed it and expected it to be followed.

It was admitted during oral argument that Earl was aware of the scheme and in my opinion, this was a proper admission fully supported by the evidence that I heard in this trial. Given the relatively low salary taken by Earl and Cathy, compared to their high standard of living, there is simply no possibility that Earl did not know what was happening. He purchased an expensive Mercedes, a Rolex, RRSPs, jewelry for Cathy, and they went on over thirty cruises together. They had a condo in Florida, motorcycles, and did extensive renovations on their home in Sherwood Park. Even Mr.

Thoman, who was called as an expert by Earl and the Company, testified that it was highly unlikely that Earl did not know what was happening with the payment of the parties’ personal expenses. [ 28 ] As to Cathy’s alleged inconsistent evidence at questioning and trial respecting whether she had ever misdescribed expenses in the books to cover-up her gambling addiction, I find that her answers were not inconsistent. She gave a more fulsome explanation at trial as to what was happening with the books than her single word answer during questioning.

While some of the expenses paid through the Company did end up covering her personal expenses related to gambling, she testified that she never wrote a Company cheque solely for that purpose. She carried on with the same scheme that she and Earl had always used to cover personal expenses, there just happened to be an approximate one-year period of time when those personal expenses included money she was using for gambling.

[ 29 ] With respect to her reconciliation of her gambling debts, I am of the opinion that little weight should be given to this document. It may very well be accurate, but it was presented for the first time while she was on the stand at trial with very little explanation as to how she came to her conclusions on the amount of money she spent/won while gambling. I will deal more with this issue later when I deal with the evidence respecting the amount of money lost to Cathy’s gambling addiction. [ 30 ] Even accounting for all of the above, I find Cathy is a credible witness.

She gave her evidence in a forthright manner, she had a good recall of past events, and she admitted facts that painted her in a bad light. She gave credit to Earl where it was due, for example on his ability to build a successful company through hard work.

At times, despite their difficult separation, it was clear that Cathy was still proud of Earl and what he had been able to accomplish through the Company during his lifetime. [ 31 ] Cathy struck me as a woman who had accepted her faults and the mistakes that she had made by gambling, but who also stood up for the decision that she had made to support her daughter. She was unapologetic for helping her daughter, and in turn her two grandchildren, despite the fact that she had done so behind Earl’s back.

I accept her explanation as to why she gave money to Christine and understand the difficult choice she had to make in keeping the payments secret from Earl, who would never have approved. [ 32 ] I also find that Christine was a credible witness. She gave her evidence in a forthright manner, admitting that she took the money from her mother and kept it a secret from Earl. I accept that she had a medical condition that resulted in an inability to work enough hours to support her two children and she took the money her mother gave her to help her make ends meet.

I also accept that she kept it a secret from Earl because she knew that he would not approve of her mother giving her money. [ 33 ] Although two of the cheques were written from the Company, Christine had legitimate reason to believe that her mom and Earl often took money from the Company for personal expenses, given that she had been asked to use Company cheques to pay for personal expenses, like furnace repairs, when her mom and Earl were in Florida. [ 34 ] When her mom and Earl separated on June 15, 2015, Christine paid $25,000 back to Earl by way of cheque written to the Company.

She thought paying the money back would help alleviate some of the stress her mother was facing from the separation. She initially gave Earl a cheque dated June 16, 2015, but had to write a second cheque dated June 20, 2016, because of issues with the first cheque clearing through the bank. [ 35 ] Earl’s evidence went in by consent pursuant to Rule 8.14 . There was no suggestion that Earl’s evidence is not credible and much of it confirms the evidence given by Cathy and Christine. [ 36 ] The expert evidence from Mr. Thoman is also accepted.

He was an impressive witness who fairly conceded points in cross- examination and clearly outlined the limitations of his expert report. He was tasked with analysing the Company’s books for the period January 2013 through to September 2015, looking for evidence of misappropriation and concealment. He analyzed all payments made to Earl and Cathy as well as payments made on credit cards. This included reviewing the payments that were processed through the Company’s bank account and the accounting for the payments recorded in the Company’s accounting records. [ 37 ] Mr.

Thoman’s conclusions confirmed that there were payments made to Earl or Cathy, or their personal credit cards, which were inappropriately categorized as payments to the Company’s suppliers. No analysis was completed to determine the ultimate use of funds paid from the Company into the bank accounts of Earl or Cathy or their credit cards.

He testified that there was so much comingling of funds from legitimate sources with the funds removed from the Company that he determined that any analysis attempting to identify the specific use of funds would be extremely limited in value compared to the cost of completing the work. [ 38 ] His evidence essentially confirmed the personal expense payment scheme testified to by Cathy. Mr. Thoman could not point to any specific withdrawal from the Company that was used for gambling money, as tracing the funds taken from the Company was not part of his analysis.

His evidence was that it was highly unlikely that Earl was not aware of the use of Company funds to pay the parties’ personal expenses. Limitations Act [ 39 ] Cathy and Christine submit that the Civil Fraud Action was brought outside the expiry of the two-year limitation period for seeking a remedial order in s. 3(1) (

a) of the Limitations Act . They argue that Earl and the Company knew or ought to have known about the money used for gambling and given to Christine in or around the date of the first separation on June 15, 2015. The Civil Fraud Action was not filed until September 19, 2017.

Earl and the Company argue that they did not know the true nature of the amount of money taken from them until May 27, 2016, when Cathy admitted to Earl that her gambling losses were more than $20,000, and therefore the two-year limitation period should start from that date. [ 40 ] Alternatively, Earl and the Company argue that the limitation period should start from the date they were made aware that Cathy would not agree to questioning on the alleged fraud and conspiracy in the Matrimonial Property Action.

The later argument being that there would have been no need for the Civil Fraud Action had Cathy agreed to questioning on the fraud and conspiracy allegations within the Matrimonial Property Action. [ 41 ] Earl and the Company have the onus of proving on a balance of probabilities that they complied with the limitation period: Limitations Act , s. 3(5) (a). [ 42 ] The alternative argument can be dealt with quickly. It is no defence to a limitation period to say that you thought you could deal with the allegations in another action, especially one in which you did not plead the fraud and conspiracy.

It was always open to Earl to bring an application to amend his pleadings in the Matrimonial Property Action to include the fraud allegations. Instead of doing so, he filed the Civil Fraud Action. The limitation period does not run from when counsel became aware that he would not be able to question on fraud and conspiracy in an action in which these torts were not claimed. The limitation period runs from when the claimant knew or ought to have known of the injury attributable to the conduct of the defendant and that the injury warrants bringing a proceeding: Limitations Act , s. 3(1) (a)(i)-(iii).

The question then is whether Earl and the Company filed the claim within two years of when they first

knew or ought to have known of the factors set out in s. 3(1) . [ 43 ] There is substantial evidence to support the position that Earl and the Company knew or ought to have known about the loss of money attributable to Cathy’s and Christine’s conduct by or shortly after June 15, 2015. At questioning, Earl said that he knew Cathy had added to their line of credit by at least $100,000 about ten hours before they separated in June 2015 because that is what caused the separation.

He further stated that the reason they separated was because Cathy had “pounded” up the lines of credit, his bank accounts were empty and his credit cards were maxed out. He also stated that by mid-June of 2015 he knew he didn’t have as much savings for retirement as planned and was concerned Cathy had been taking money from the Company without telling him.

He said that he learned that Cathy had been providing money to Christine shortly after June 15. [ 44 ] Even by Earl’s own evidence, he knew or ought to have known about the loss of money attributable to Cathy’s and Christine’s conduct around June 15, 2015, the initial date of separation.

Christine’s initial cheque to the Company for $25,000 is dated June 16, 2015, which supports Earl’s knowledge of the money provided to Christine by this point in time. [ 45 ] While it is true that Cathy was not initially forthcoming with the actual amount of money that she lost to her gambling addiction, Earl nevertheless appears to have believed it was substantially more than Cathy originally let on, around $100,000. [ 46 ] There is evidence from multiple parties, most importantly Earl himself, that by June 15, 2015, or shortly thereafter, he knew something was wrong.

The Limitations Act does not require clear information or “perfect knowledge” to commence the limitations period: Canadian National Resources Limited v Husky Oil Operations Limited , 2020 ABCA 386 at para 31 . A claimant only needs to have sufficient knowledge to impose an obligation on it to make reasonable inquiries about its rights; that will start the running of the limitation period. I find that by June 16, 2015, Earl had sufficient information to warrant the bringing of an action against Cathy and Christine. He did not commence the Civil Fraud Action until September 19, 2017, more than two years later.

For that reason, I find that the Civil Fraud Action was brought outside the limitations period and dismiss it in its entirety. [ 47 ] Regardless of my conclusion respecting the limitations period, I would have dismissed the Civil Fraud Action on its merits. I find that Earl and the Company failed to prove any of the claims of civil fraud, breach of trust, or conspiracy, on a balance of probabilities. The evidence before me clearly shows that Cathy and Earl had a long-standing practice of paying their personal expenses from Company funds and recording those expenses as if they had been paid out to suppliers.

Earl was well aware of this practice and in fact, was the one who directed Cathy to initiate the practice when she started working for the Company. [ 48 ] While Cathy continued to take money to cover their personal expenses, nothing in the evidence suggests that the amount taken from the Company changed in any significant way during the time of Cathy’s gambling addiction. What changed was the balance of the couple’s savings and the amounts owing on their credit cards and lines of credit.

Cathy may have been withdrawing money from their joint accounts and taking cash advances from their credit cards to support her gambling addiction, but I accept her evidence that she never wrote a cheque directly from the Company account to support her gambling. [ 49 ] This case is really about a wife who took money that would otherwise have been for the benefit of the family and used it to support a gambling addiction. Any money Cathy took from the Company to cover personal expenses was in accordance with Earl and the Company’s knowledge of the scheme that had been in place for over twenty years.

Earl may have expected that the money was being used for his and Cathy’s benefit, but that does not make the taking of the money a civil fraud or breach of trust. This is not a case where a bookkeeper, unbeknownst to the Company, fraudulently took money and concealed it from the Company. Here, Earl and the Company were well aware that money was being taken to cover Earl and Cathy’s personal expenses. The Company received a benefit from that scheme because the cheques were improperly described in the Company’s books as expenses paid to suppliers.

Earl received a benefit because his and Cathy’s personal expenses were being paid by the Company without the money being categorized as salary or shareholder loans. [ 50 ] It would be different if Cathy, as the bookkeeper, took money from the Company without the knowledge of Earl and the Company and then concealed it from them, but that is not what happened here. Earl was not angry that Cathy was taking money from the Company to cover their personal expenses, he was angry that one of Cathy’s personal expenses was gambling. He was fine with the scheme as long as the money being taken was for his overall benefit.

He was not fine with the scheme when the money was being used for a personal expense he did not agree with. [ 51 ] As for the money given to Christine, the evidence clearly shows this was a situation where a mother gave her daughter money to assist with living expenses, in particular rent, because her daughter was ill and unable to support herself and her children. The only evidence I have before me is that Cathy was concerned about Christine and her grandchildren and gave Christine financial assistance for their benefit. She did this without Earl’s knowledge because she knew that Earl would not approve.

The vast majority of the money came from Cathy and Earl’s personal bank accounts, which included funds paid to Cathy as part of her salary. Only $5,100 came from the Company’s account and Christine had no reason to question why she was given a Company cheque by her mother as it was her experience that Cathy and Earl often paid personal expenses by way of Company cheque. [ 52 ] Christine did nothing except receive money from a concerned mother at a time when she was suffering from a medical condition. Christine kept the payments secret from Earl because like her mother, she knew he would not approve.

There was no unlawful means conspiracy by Cathy and Christine. While they may have acted in combination to keep the payments secret from Earl, they did nothing unlawful. [ 53 ] The issue of the gambling losses is properly dealt with in the Matrimonial Property Action, as is the issue of the money given to Christine. Matrimonial Property Action [ 54 ] There are two claims brought in the Matrimonial Property Action, one for unjust enrichment and one under the Matrimonial

Property Act , RSA 2000, c M-9 (“ MPA ”). For the purposes of this trial, Earl has agreed that the unjust enrichment claim has merit, that his exempt property should be valued at the date of cohabitation, and that any increase in value of his exempt property (a shop and the Company) since that date should be divided equally. Consequently, no analysis of the unjust enrichment claim is required in this decision. [ 55 ] The Matrimonial Property Action was originally filed before the Family Property Act , RSA 2000, c F-4.7 (“ FPA ”) came into force on January 1, 2020.

Pursuant to s. 39(4) of the FPA , the provisions of the former MPA continue to apply unless the parties agree that the matter should be dealt with and disposed of under the new legislation. There was no such agreement in this case and the parties agree that the MPA applies. [ 56 ] Sections 7 and 8 of the MPA set out how property is to be distributed between spouses upon marriage breakdown. [ 57 ]

Section 7 of the MPA identifies various types of property which are treated differently by the Court when making a final distribution between spouses upon marriage breakdown.

Section 7 provides as follows: Distribution of property 7(1) The Court may, in accordance with this section, make a distribution between the spouses of all the property owned by both spouses and by each of them.

(2) If the property is (

a) property acquired by a spouse by gift from a third party, (

b) property acquired by a spouse by inheritance, (

c) property acquired by a spouse before the marriage, (

d) an award or settlement for damages in tort in favour of a spouse, unless the award or settlement is compensation for a loss to both spouses, or the proceeds of an insurance policy that is not insurance in respect of property, unless the proceeds are compensation for a loss to both spouses, the market value of that property at the time of marriage or on the date on which the property was acquired by the spouse, whichever is later, is exempted from a distribution under this section.

(3) The Court shall, after taking the matters in

section 8 into consideration, distribute the following in a manner that it considers just and equitable: (

a) the difference between the exempted value of property described in subsection (2), referred to in this subsection as the “original property”, and the market value at the time of the trial of the original property or property acquired (

i) as a result of an exchange for the original property, or (ii) from the proceeds, whether direct or indirect, of a disposition of the original property; (

b) property acquired by a spouse with income received during the marriage from the original property or property acquired in a manner described in clause (a)(

i) or (ii); (

c) property acquired by a spouse after a decree nisi of divorce, a declaration of nullity of marriage, a judgment of judicial separation or a declaration of irreconcilability under the Family Law Act is made in respect of the spouses; (

d) property acquired by a spouse by gift from the other spouse.

(4) If the property being distributed is property acquired by a spouse during the marriage and is not property referred to in subsections (2) and (3), the Court shall distribute that property equally between the spouses unless it appears to the Court that it would not be just and equitable to do so, taking into consideration the matters in

section 8 . [ 58 ]

Section 8 of the MPA provides a comprehensive list of the factors for the Court to consider in making the property division. The factors most relevant in this case are as follows: (

h) that a spouse has made (

i) a substantial gift of property to third party (

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order; (

j) a prior order made by a court; (

l) that a spouse has dissipated property to the detriment of the other spouse; (

m) any fact or circumstance that is relevant. [ 59 ] In Hodgson v Hodgson , 2005 ABCA 13 , at paras 19-21 [ Hodgson ], the Alberta Court of Appeal interpreted ss. 7 and 8 of the

MPA and established the four-step process to be followed to achieve a just and equitable division of the matrimonial property owned by the parties at the date of trial: (

a) Determine all property owned at the date of trial. (

b) Determine the property that is exempt from distribution under s. 7(2), or that can be traced to s. 7(2) property. The value of this property, as at the date of acquisition, or date of marriage, is excluded from distribution. (

c) Determine what property falls under s. 7(3). This includes the increase in value of exempt property, from the date of acquisition or marriage, to the date of trial. This property is distributed between the parties in a manner that is just and equitable taking into consideration the s. 8 factors. (

d) Divide the balance of the remaining property equally, unless it would be unjust and inequitable to do so considering the factors in s. 8. [ 60 ] The first step in the Hodgson analysis is to identify all of the property owned by the parties at the date of trial.

This should be a simple task; however, it became clear during oral submissions that additional evidence would have been helpful on this issue. [ 61 ] Due to his death, Earl was not available to testify at trial so his evidence went in by consent pursuant to Rule 8.14 of the Alberta Rules of Court , and consisted of portions of his answers given at questioning. No one else gave evidence on his behalf, even though it was originally contemplated that his Estate’s personal representative might do so.

An adjournment was never sought, although I understand that one was offered by Cathy. [ 62 ] At the conclusion of trial, counsel for Earl found himself in a position of having to make submissions about the existence of certain assets based on what he had been told by the Estate’s personal representative. Unfortunately, as pointed out by Cathy, for some of these assets, there was no evidence in the record to support these submissions, and consequently, no evidence upon which the Court could reach some of the conclusions that it was being asked to make.

The Court can only make decisions based on the evidence it has before it. [ 63 ] The disagreement between the parties centered around 1) whether Earl still had four TD bank accounts at the date of trial, and 2) whether the Company still owned equipment at the date of trial that it owed to Earl. [ 64 ] Earl argues that the four TD bank accounts were closed and the money transferred into two ATB accounts that were opened by Earl post-separation. The last statements provided for the four TD accounts are from June 2019 (3 of the accounts) and December 2020 (1 account).

The only statements provided for the two ATB accounts are for March 2021 and June 2021. Earl argues I should find that the money from the TD accounts was transferred into the two ATB accounts and the TD accounts were closed. He says that he had no employment or income post-separation and therefore the money in the ATB accounts could only have come from the TD accounts. The total in the two ATB accounts is $146,206.07.

The total in the TD accounts was $50,281.46. [ 65 ] Cathy submits that there is no evidence before me that the TD accounts are even closed, and counsel’s submissions that he was told this information from the personal representative of Earl’s estate is not evidence. [ 66 ] The parties also disagree as to whether there was any equipment left in the Company at the date of trial that was owed to Earl. [ 67 ] Cathy argues that the Company had a number of pieces of equipment, including a Caterpillar skid steer, a fuel trailer, a concrete breaker, a spare tire, four chains, four boomers, a 2007 GMC truck, a 20-foot cross trailer, and a few auger attachments.

She says that in questioning on October 8, 2019, Earl acknowledged that the Company still owed him for this equipment. She says that Earl never provided a valuation for this equipment and submits that the only valuation for the equipment is the value of $105,979.00 found in the Company’s 2018 Financial Statements. [ 68 ] Earl submits that the largest items are the Caterpillar skid steer, the 2007 GMC truck, and the 20-foot cross trailer.

The rest of the items are just attachments and ancillary bits to the particular business. [ 69 ] Counsel for Earl advised the Court that the personal representatives determined that the skid steer was disposed of in the normal course of business since 2019; however, I have no evidence in the record to support that claim. [ 70 ] Both parties agree that the 2007 GMC truck was sold for $4900 on June 8, 2020 (there is a Bill of Sale), but no one knows where that money went when the truck was sold.

Earl’s counsel submits it is reasonable to assume that the money is in one of Earl’s bank accounts. [ 71 ] The 20-foot cross trailer is apparently the same trailer that is listed as one of Earl’s personal assets, therefore he submits that it should not be double counted as Company equipment. Its value is $19,682. [ 72 ] It also appears that Earl had an excavator and a Peterbuilt truck. No one seems to know what happened to those items although it is suggested they were sold and the money placed into one of Earl’s bank accounts. [ 73 ] The evidence with respect to the existence of these assets is not ideal.

However, given that Earl had no employment income post-separation, it is reasonable to infer that at least some of the money in the ATB accounts came either from the TD accounts or from the sale of the equipment. In the totality of the circumstances, and given the less than ideal evidence, I find that the fairest determination I can make is that 1) the TD accounts were closed post-separation and the money transferred into the ATB accounts, and 2) the Company equipment still exists except for the 2007 GMC truck.

I infer that the $4900 from the sale of the GMC truck went into one of the ATB bank accounts, and I deduct that amount from the $105,979 financial statement value. I also deduct the $19,682 for the 20-foot cross trailer as it is accounted for in Earl’s personal assets. That results in an amount for the equipment of $81,397.

[ 74 ] These values will be reflected in the assets listed below. 1. Property at date of trial [ 75 ] The matrimonial home was sold prior to trial and the funds distributed equally by consent. I am therefore not including those funds in the matrimonial property calculation as per the request of the parties. [ 76 ] The parties have a condo in Florida. It was appraised in April 2021 for $265,000 USD. The parties agree that the condo will be sold and the proceeds split equally between the parties, consequently, I am directing that the Florida condo be sold forthwith and the proceeds split equally.

If there are any issues arising from the sale, the parties can come back before me for direction. I am therefore not including the Florida condo in the matrimonial property calculation as per the request of the parties. [ 77 ] Cathy’s assets and liabilities at trial can be summarized as follows: (

a) Bank Accounts – Cathy’s bank accounts had the following agreed upon values: i. TD Everyday Chequing 7923 - $ 102.58 ii. CIBC Account 7993 - $883.64 iii. Scotiabank Basic Banking 4027 - $2,144.32 iv. Scotiabank TFSA 1356 - $31.13 v. Wells Fargo US Account 3639 - $7,600 US converted at 1.2 exchange rate - $9,120 CDN (

b) Investments – Cathy’s investments had the following agreed upon values: i. Scotiabank RRSP 8826 - $17,942.20 ii. Scotiabank RRSP 3923 - $12,495.99 iii. Scotiabank Spousal RRSP 7117 - $7,948.76 (

c) Vehicles i. 2008 Cadillac CTS – the parties do not agree on the value of this vehicle. Cathy submits that the current blue book value of $5,492 is the most accurate value. Earl submits that the Cadillac should be valued at $15,000 as per Cathy’s 2018 Statement of Assets and Liabilities. I note that vehicles generally depreciate over time and that the blue book value is a starting point that changes depending on the condition of the vehicle. Cathy testified that the Cadillac is in poor condition and expensive to fix. It has 177,000 kilometres on it.

The $15,000 was an estimated value for the vehicle back in 2018. It is now 2021. After considering all of these factors I set the value of the Cadillac at $8,000. (

d) Jewelry i. Diamond Engagement Ring – the agreed upon value of the ring is $15,500, although Cathy claims an exemption which will be dealt with under the second step of Hodgson . (

e) Liabilities i. ScotiaGold Visa 6010/4025 – $4,321.68. The party’s credit card debt was paid out of the proceeds from the sale of the matrimonial home and therefore their current credit card debt is not included with their liabilities for the purposes of determining matrimonial property. The only exception is a VISA Earl had at the time of his death that was still in the parties’ joint names. The credit card company put the balance owing in Cathy’s name when Earl died. Cathy should not be liable for this debt.

It will be accounted for in the matrimonial property calculation by adding back half of the balance owing ($2160.84) to Cathy’s equalization payment. This way Earl’s Estate effectively pays the full amount of the debt even though Cathy will be responsible to pay it off. ii. Notional Tax RRSPs - $5,758.04 – factored at 15% as per the party’s agreement iii. HOA Fees on Florida Condo - $2,750 iv. Property taxes on Florida Condo - $4,807.20 [ 78 ] Earl’s assets and liabilities at trial can be summarized as follows: (

a) Bank Accounts – See paragraphs 60-74 above as to the Court’s findings respecting the TD and ATB bank accounts in existence at the date of trial. i. ATB TSFA 8244-P - $79, 613.34 ii. ATB Freedom 8479 - $66,592.73 In addition to the above referenced ATB bank accounts, Earl also had the following accounts with agreed upon values:

i. TD GIC 8AFY50A - $1,074,590.97 ii. Scotiabank Power Savings 1683 - $ 1,443.86 iii. Scotiabank Basic 2728 - $536.20 iv. Scotiabank Momentum Savings 7226 - $7,589.92 (

b) Corporate Accounts i. 608505 AB Ltd. Account 6824 - $38,883.51 ii. 608506 AB Ltd. Account GIC - $312, 119.29 iii. 608506 AB Ltd Equipment - $81,397 – see paras 60-74 above (

c) Investments – Earl’s investments had the following agreed upon values: i. Scotiabank RRSP 5197 - $223,922.51 (

d) Vehicles – Earl’s vehicles had the following agreed upon values: i. 2020 Cross Tandem Axle Cargo Trailer - $19,682 – see paras 60-74 above ii. 2015 Silverado - $30,000 iii. 2004 Mercedes - $14,000 iv. 2008 Harley - $7,000 v. 2013 Harley - $7,250 (

e) Jewelry i. Rolex – the party’s do not agree on the value of the Rolex. The Rolex was purchased in St.Thomas in 2008 or 2009 for $35,000 USD. Earl submits the value is $7000 Canadian as per his Statement of Assets and Liabilities for2017-2018. Cathy submits the value is $42,000 Canadian ($35,000 USD converted to Canadian), citing Earl’s evidence at questioning onApril 27, 2018. It is clear from a review of the questioning transcript that Earl’s answer to the question respecting the value of the Rolexwas bravado, and the culmination of a tense questioning exchange. The Rolex is 12-13 years old. It is used.

Cathy testified that it hadscratches. It is not still worth the $35,000 USD purchase price. A current appraisal would have been helpful, but in the absence of suchevidence, and given how old the Rolex is, I set the value at $15,000 Canadian. Earl takes the position that if Cathy’s ring is exempt, so is his Rolex. I will deal with that argument under the second step of Hodgson. (

f) Liabilities – the only two liabilities identified at trial for Earl relate to contingent taxes with respect to his RRSPs and Corporatetaxes. Both parties used 15% and 30% respectively for their calculations and therefore I am prepared to accept that figure as well. Thetax liabilities were estimated as follows: i. Notional Tax Corporate - $137,094.54 ii. Notional Tax RRSPs - $33,588.38 2. Exemptions [79] The second step is to identify any property which is exempt from distribution under s. 7(2) of the MPA and to establish theamount of the exemption.

The party claiming an exemption under s. 7(2) of the MPA has the onus of demonstrating that the property isexempt, on a balance of probabilities: Stockall v Stockall, 2020 ABQB 229 at para 201. Even if the original asset no longer exists, theexemption can still be established if it is traceable to other property that exists at the date of trial. The tracing can be inferred, implied orpresumed: Harrower v Harrower (1989), 68 Alta LR (2d) 97, (Alta CA) at 4 [Harrower]. (

a) Cathy’s exemptions [80] Cathy is claiming an exemption with respect to her diamond engagement ring. The diamond ring was purchased while onvacation in 2010 as a replacement for her old engagement ring. The new ring was purchased as a gift for Cathy by Earl. Cathy testifiedthat they traded in her old ring and paid $5,800 USD for the new ring. Cathy submits the new diamond ring is exempt because it was agift to Cathy as a replacement for her old engagement ring.

Earl submits the new diamond ring should not be exempt as it was simply anitem of jewelry purchased by the couple while they were on holiday, the same way the Rolex was purchased by the couple for Earlwhile on holiday. He argues that if the ring is exempt, the Rolex should also be exempt, having been bought in similar circumstances. [81] I find that neither is exempt.

The Rolex was purchased by Earl while on holiday and forms part of his matrimonial property.The only evidence I have before me respecting Cathy’s new diamond ring is her testimony that it was a gift from Earl and that part of thepayment for the new ring was the exchange of her old ring. Consequently, the value of the old ring is traceable to the new ring and Cathywould be entitled to an exemption of the value of the old ring: s. 7(2)(

c) MPA. However, Cathy has the onus of proving the exemption,including the value, and she has failed to do so on the balance of probabilities. I have no evidence before me as to the value of the

engagement ring, therefore I find I am unable to value any exemption Cathy may be entitled to. As the diamond ring was a gift from Earl to Cathy during the marriage, I will consider it under s. 7(3) (

d) MPA . (

b) Earl’s exemptions [ 82 ] Earl is claiming two exemptions which relate to the value of his shop and the Company at the commencement of cohabitation. First, he claims an $81,000 exemption for the shop. Second, he claims a $80,000 exemption for the value of the Company. i. The shop [ 83 ] The land upon which the shop was ultimately constructed was purchased in 1988. The parties appear to agree that the value of the land at the date of cohabitation (1994) is $81,000 (as per an appraisal). Cathy submits that both a mortgage ($48,000) and a writ ($3,633) registered on title should be deducted from this value.

Earl points out that the title evidences that the writ was discharged on April 2, 1993. Title shows that the mortgage was placed on title in 1993, and I have no evidence as to any payments made prior to cohabitation. I find that the total amount of the mortgage ($48,000) should be deducted from the agreed value ($81,000) and the exemption becomes $33,000. ii. The Company [ 84 ] Earl argues that the Company had equipment and machinery in 1994, in addition to ongoing business and therefore had some value that should be considered exempt.

Earl’s evidence was that he had twice the machinery in 1994 that he had when he sold the Company’s machinery at auction with Ritchie Brothers for $285, 236. Documentation respecting the exact assets owned in 1994 is no longer available because the cargo trailer storing these documents went missing from a storage lot in 2016.

Earl submits that the assets from 1994 can be traced to the assets in 2015 because such tracing can be inferred, applied or presumed, as long as a fair connection between the exempt property and the replacement property can be seen: Lovich v Lovich , 2006 ABQB 736 at para 38 , referring to Harrower . Earl’s evidence was that he sold used equipment and purchased new equipment throughout the years. [ 85 ] Cathy’s evidence was that the Company’s assets in 1994 were old and of no value.

She testified that the Company had three or four Mack Trucks that were twenty-five to thirty years old, three bobcats, three or four equipment trailers and various other equipment. She points out that Earl’s evidence was that he dissipated lots of equipment throughout the years.

She submits that exemptions must be traceable and there is no ability to trace here because there are no historical documents showing value at the date of cohabitation. [ 86 ] Although Earl used the word “dissipated” in reference to the Company’s equipment and machinery during his questioning, I find that his evidence was not intended to mean that he dissipated the property in the legal sense of wasting it, but rather that he had successively replaced the machinery. I find that the Company had value in 1994. It had ongoing business, and owned equipment.

I accept Earl’s evidence that he sold old equipment and machinery over the years to purchase new equipment and machinery. I also take into account Cathy’s evidence that the equipment the Company had in 1994 was not of significant value as it was older and in constant need of extensive repairs. [ 87 ] Earl submits that even though his evidence was that he had twice as much equipment in 1994 as he sold at the Ritchie auction, a fair and equitable value for the Company at cohabitation would be $80,000, which is less than one-third the Ritchie auction sales proceeds.

I agree with this position and value the exemption for the Company at $80,000. 3. Section 7(3) Property [ 88 ] The third step in Hodgson is to determine what property falls under s. 7(3) of the MPA . This property is distributed between the parties in a manner that is just and equitable taking into consideration the s. 8 factors. [ 89 ] This would normally include the increase in value of exempt property, from the date of acquisition or marriage to the date of trial.

In this case, Earl agrees that the date of cohabitation should be used, as he concedes the unjust enrichment claim, and he is not asking for an unequal distribution of the increase in value. [ 90 ] Cathy’s diamond ring falls under s. 7(3) (

d) of the MPA because it was a gift to Cathy from Earl during the marriage. Both Cathy’s ring and Earl’s Rolex were purchased while the parties were on one of their many Caribbean vacations. Earl had bought himself the Rolex and years later he bought Cathy the ring. After considering the factors under s. 8 MPA , I find that it is just and equitable to distribute Cathy’s ring in the same manner as Earl’s Rolex. 4.

Section 7(4) Property – Equal or Unequal Division [ 91 ] The final step in Hodgson requires the Court to divide the balance of the remaining property between the parties equally, unless it would be unjust or inequitable to do so after considering the factors set out in s. 8 of the MPA .

Equal distribution on non-exempt property is the rule and unequal distribution the exception: Jensen v Jensen , 2009 ABCA 272 at para 20 . [ 92 ] The process for considering the s. 8 factors was recently commented on by Kiss J in Dobrovolsky v Dobrovolsky , 2021 ABQB 62 at para 67 [ Dobrolvolsky ]: [67] When considering the s 8 factors, the Court is not to engage in the weighing of each party’s individual contribution to the marriage and make divisions of property proportionate to those relative contributions of each spouse.

It will be rare for the contribution of each spouse to be the same and the purpose of the MPA is to avoid a detailed analysis of the respective roles played by each of the parties to determine who did more. The principle of equality should only be departed from if it would be unjust and inequitable not to do so: Jensen at paras 20-23 .

[93] Earl argues that there should be an unequal distribution of the non-exempt property owned by each of them at the date of trialas Cathy has dissipated assets through gambling and made substantial gifts to Christine, all without his consent. Cathy argues that thereshould be an unequal distribution because Earl has spent excessive amounts of money since separation and dissipated assets throughexcessive consumption of alcohol. (

a) Substantial Gifts – s. 8(h) [94] Earl submits that the gifts to Christine should be fixed at around $35,000. He bases this on Cathy’s evidence which he sayswas $1,600 per month for two years ($38,200) plus indeterminate amounts on a discretionary basis from time to time. He submits thatthe circumstances of Christine’s repayment are highly suspect. I disagree. The documentary evidence confirms that the amount given toChristine was $34,200 and that she paid back $25,000 by way of cheque to the Company.

That results in $9,200 outstanding, which isthe amount Cathy concedes should be considered a substantial gift of property to a third party. [95] I find that it would be unjust and inequitable to Earl if this substantial gift by Cathy to Christine was not considered in thedistribution of matrimonial property. The $9,200 will be added back into Cathy’s divisible assets, as though it still existed at the date oftrial: McCulloch v McCulloch, 2003 ABQB 432 at paras 58-61. (

b) Dissipation – s. 8(l) [96] Section 8(1) of the MPA provides one of the factors that can lead to an unequal distribution of matrimonial property is whereone spouse dissipates assets to the detriment of the other. The party arguing for an unequal distribution has the onus of proving the otherspouse dissipated matrimonial assets, and further that there has been actual detriment: Fleming v Fleming, 2016 ABCA 88 at para 30;Cox v Cox, 1998 ABQB 987 at para 46 [Cox]. [97] In Cox, Paperny J explained at para 46: Dissipation does not necessarily result where an asset is worth less at trial than it was at separation.

Dissipation requires a degree ofintent although that intent does not necessarily have to extend to intentionally depriving the other spouse of a fair distribution ofmatrimonial property. It is sufficient if one spouse intends to dissipate assets (usually for their own enjoyment), and that dissipationarises in detriment to the other spouse. [98] In Dobrovolsky, Justice Kiss provided a helpful

summary of the caselaw involving dissipation. [92] In SLT v AKT, 2007 ABQB 701, at para 58, Justice Veit noted that any consideration of dissipation must begin with anassessment of what the situation was prior to separation. Dissipation, in matrimonial property litigation, is a relative term. It is usuallyused to describe an imprudent pattern of spending after separation that is different from the spending pattern prior to separation.

It wouldbe arbitrary and unfair for the Court to punish a spouse after separation for a spending pattern that was historically accepted, evencondoned, during the marriage: McAdam v McAdam, 2009 ABQB 109 at para 34. [93] The degree to which the dissipating spouse must be found to have acted in bad faith is less well-defined and will vary accordingto the facts. In Metz v Metz, 2004 ABQB 528, at para 37, dissipation was held to be another word for “waste” and that to showdissipation, there had to be an element of bad faith or neglect.

However, in Bakken v Bakken (1992), 132 AR 56, (QB), dissipation was used in a much broader sense in relation to funds used by the wife largely to pay for her personal debts (includinglegal fees, income tax, and credit cards) and for other miscellaneous expenses, none of which benefitted the husband, directly orindirectly, or discharged any financial obligation of his. [99] As indicated by Justice Kiss, dissipation is usually used to describe an imprudent pattern of spending after separation that isdifferent from the spending pattern prior to separation: Dobrovolsky at para 92.

However, in circumstances where the other spouse wasunaware of or did not condone the spending, it can also include pre-separation spending. i. Gambling [100] Although Cathy’s gambling took place prior to separation, both parties agreed it should be dealt with as dissipation. [101] Cathy concedes that the money she lost gambling between June 2014 and May 2015 should be considered dissipated funds. Shehas given varying estimates of the overall amounts lost at different times. At questioning, she admitted that she did not know the exactamount lost but estimated $130,000.

At trial, she provided a reconciliation document that showed the loss as $101,000. During oralargument, she submitted that the Court should use the higher figure of $130,000. [102] Earl submits that the number should be substantially higher, although he has not provided a value and submits that the Courtwill need to exercise a discretion in quantifying the amount of the gambling loss. He argues that even the $130,000 figure is a self-serving estimate, and points to Mr.

Thoman’s expert report as identifying suspicious transactions suggesting the amount gambled couldbe multiples of the amount admitted. [103] There is nothing in Mr. Thoman’s expert report or his testimony that assists me in determining how much money was lost toCathy’s gambling addiction. The expert report simply confirms that the parties had in place a scheme to use Company money as theirown to pay personal expenses. Mr.

Thoman was very clear that he could not give an opinion as to how much money was used forgambling, that he had not been asked to conduct such an analysis, and that such an analysis would be quite difficult given the cominglingof money in the party’s accounts with legitimate sources of income. [104] As I said earlier, I give little weight to the reconciliation document provided by Cathy. It was provided for the first time at trial,with little explanation to back up the analysis. I give more weight to Cathy’s evidence at questioning that estimated the amount at$130,000.

And while I am hesitant to use the evidence of the person who had the gambling habit they were hiding, I find it is the best

starting point for my analysis. I also note that Earl can hardly be seen to complain about the difficulties in determining how much was actually lost to gambling, when his own behaviour was a contributing factor to that difficulty. If Earl had not participated in the scheme of using Company money to pay for personal expenses, it may have been possible for Mr. Thoman to figure out how much had been lost.

Earl bares some of the responsibility for the difficulties involved in accounting for these funds. [ 105 ] The $130,000 figure represents approximately $10,800 spent on gambling per month over the twelve-month period for which Cathy admits to the gambling addiction. A review of the withdrawals and cash advances from the party’s bank accounts and credit card statements suggests it may have been more in some months and less in others, although I am in no better a position that Mr. Thoman to determine what cash was withdrawn for gambling and what was withdrawn for other purposes.

Cathy also testified that she won money at times and deposited the money back into their bank accounts. I find that $130,000, or approximately $10,800 per month, is a reasonable quantification of the actual loss of funds to gambling over the twelve-month period. ii. Alcohol consumption post-separation [ 106 ] Cathy submits that Earl spent approximately $6,000 per year on alcohol during the marriage and that he continued to spend at least that post-separation. She asks the I find that Earl dissipated $36,000 in the six years post-separation through excessive spending on alcohol.

She points the court to Boisvert v Boisvert , 2002 ABQB 449 at para 12 [ Boisvert ] which essentially held that improper spending on “liquor and whoring costs” were dissipation of matrimonial property. I decline to find that the approximately $500 per month Earl spent on alcohol was dissipation. Earl spent approximately the same amount throughout the marriage, although some of that was a work- related expense. Cathy testified that she was aware of the amount Earl spent on alcohol throughout the marriage.

As well, this is not a situation like in Boisvert , where the husband was spending money entertaining other women with matrimonial property. iii. Excessive Post-Separation Spending [ 107 ] Cathy submits that Earl has spent excessive amounts of money since separation and the Court should consider his post- separation spending habits as dissipation. She has provided the Court with a comparison of the amounts spent by each party post- separation by comparing the assets of each party at the time of separation to the assets of each party at the date of trial.

Based on her calculations, which were made without the benefit of the Court’s decision on some of the contested matters, Earl would “owe” Cathy an equalization payment of $90, 931.05 to equalize just the post-separation spending.

Cathy submits that the amount of $181,862.11 should be added back into the matrimonial property table on account of Earl’s dissipated funds. [ 108 ] Earl points out that there is no rule that post-separation spending ought to be identical and that not only is such a notion a practical impossibility given differing circumstances, needs, and the practices of the parties, but there is no jurisprudential imperative to impose that measure upon the parties.

He points out, for example, that he maintained all costs in preserving the jointly owned Florida condominium at a cost of approximately $12,000 USD per year, without any contribution from Cathy. Over the six years from separation to trial, that is $72,000 USD, although there are HOA dues outstanding and it appears Earl had someone renting the condo for a portion of the time at $600 per month. [ 109 ] Besides rejecting the underlying premise of Cathy’s position, Earl also submits that there are errors in the analysis and calculations provided by Cathy. For example, he points to the following: (

i) Cathy used her October 2015 CIBC account statement amount of $1653.53, rather than her July 2015 statement (separation was June 2015) which showed a balance of $7,839. I note that the July statement had an opening balance of $6309.85, the $7839 figure was the closing balance at the end of July. (ii) Cathy included both Earl’s TD and ATB accounts in the “before” stage of the comparison. Earl argued, and I have accepted, that the TD accounts were closed post-separation and the money transferred into the ATB accounts.

Consequently, the amount of the ATB accounts must be deducted from the “before” stage of the analysis; and (iii) Cathy’s analysis is missing an ATB RRSP owned by her that existed at the time of separation. A June 7, 2015 statement shows an amount of $6,523.36 which should be added into the analysis. [ 110 ] Earl submits that when Cathy’s numbers are recalculated to correct these errors, the difference in spending is only $23, 454.09.

Even adjusting for the $1500 difference in the June to July 2015 CIBC account statement, the difference in spending is still minimal over the course of six years. [ 111 ] The end result of these calculations is that there is no evidence before me that Earl spent excessively post-separation, or that he had an imprudent pattern of spending post-separation than prior to separation. I find that Earl did not dissipate funds post-separation. (

c) Prior Orders Made by Court (s. 8(

i) and (j) [ 112 ] Cathy received a total of $74,000 in advances that Earl submits should be deducted from Cathy’s equalization payment. These advances were as follows: • December 14, 2016 $4,000 uncharacterized advance • January 30, 2017 $20,000 uncharacterized advance • January 30, 2017 $25,000 mat property advance • September 22, 2020 $25,000 uncharacterized advance [ 113 ] Cathy also received $25,000 in advance costs on September 22, 2020 but Earl concedes these funds should not be deducted as

matrimonial property advances. [ 114 ] Cathy submits that it would be unfair to deduct these amounts as she had to live off of these funds given that Earl retained the vast majority of the assets post-separation (see her argument under excessive spending dissipation). I note that Cathy also received spousal support in the amount of $110,500. I agree with Earl that the $74,000 in court ordered advances must be deducted from Cathy’s equalization payment. 5. Matrimonial Property Division - Conclusion [ 115 ] I find it is just and equitable to divide the remaining property equally. [ 116 ] Attached as

Schedule A is a

summary of the matrimonial property division arising from the various findings I have made. [ 117 ] Earl is required to make an equalization payment to Cathy in the sum of $638,457.53. [ 118 ] I reserve the right to correct any errors in my calculations and invite counsel to contact me if there are any errors. Heard June 7-11 , 2021. Dated at the City of Edmonton, Alberta this 22 nd day of November, 2021. M. Hayes-Richards J.C.Q.B.A. Appearances: Mr. S Schaefer for Cathy Hogue in the Matrimonial Property Action Mr. Z. Soprovich For Cathy Hogue and Christine Cameron in the Civil Fraud Action Mr. N. W.

Picard, QC for Elwood Earl Johnston (Estate) in the Matrimonial Property Action Mr. G. James Thorlakson for Elwood Earl Johnston (Estate) and 608506 Alberta Ltd. doing business as Earl Johnston Bobcats in the Civil Fraud Action