Barkwell v McDonald, 2021 ABQB 939

Court of Queen’s Bench of Alberta Citation: Barkwell v McDonald, 2021 ABQB 939 Date: 20211124 Docket: 4803 180371 Registry: Edmonton Between: Jay Allison Barkwell Plaintiff/Defendant by Counterclaim - and - John Darrell McDonald Defendant/Plaintiff by Counterclaim _______________________________________________________ Judgment of the Honourable Mr. Justice R. Paul Belzil _______________________________________________________ The Action [ 1 ] On June 26, 2017, Jay Allison Barkwell filed a Statement of Claim for Divorce and Division of Matrimonial Property against John Darrell McDonald.

For ease of reference throughout this decision, I will refer to the parties as the “Wife” and “Husband”. [ 2 ] The wife advances claims for a Divorce Judgment, spousal support, an equal distribution of matrimonial property, and a claim for exemptions. [ 3 ] On July 12, 2017, the husband filed a Statement of Defence and Counterclaim wherein he advances claims for a Divorce

Judgment, spousal support, a just and equitable distribution of matrimonial property (unequal distribution) and a claim for exemptions. Factual Background [ 4 ] The parties were married on October 29, 2005 and separated on October 3, 2015. They have no children.

The wife is a practicing lawyer in the tax and estate field, whereas the husband is a golf professional and manages the Millwoods Golf Course in Edmonton. [ 5 ] Pursuant to an Agreed Statement of Facts, the parties agree that each of them is entitled to some exemptions but are in substantial disagreement respecting other exemption issues, including investments held by the husband.

Credibility [ 6 ] The testimony of the parties differs in a number of material respects, including whether the husband intended to gift a portion of his inheritance to the wife, the disposition of sale proceeds from an investment in a restaurant and whether the wife fully disclosed her bank accounts during the litigation. [ 7 ] I found the wife’s testimony to be self-serving and unreliable, whereas I found the husband’s testimony to be honest and trustworthy. [ 8 ] Moreover, when considering the entirety of the evidence, in context, the wife’s evidence is not supported by other evidence, including documentary evidence, whereas the evidence of the husband is in material respects. [ 9 ] During the wife’s Questioning, she denied the existence of other bank accounts, which were later discovered.

I do not accept her evidence at trial that she “forgot” about these two Bank of Montreal accounts and in this regard was not truthful. [ 10 ] In the result, where the testimony of the parties differ, I prefer the testimony of the husband. Expert Evidence [ 11 ] The husband called Ms.

Bailey Rivard of MNP, who was qualified as an expert in the fields of forensic accounting and litigation support, including asset tracing. [ 12 ] She prepared an Original report, dated April 6, 2021. [ 13 ] In response to a Rebuttal report prepared by Raj Manek of Odyssey Chartered Accountants, dated May 9, 2021, she prepared a Surrebuttal report dated June 4, 2021. [ 14 ] At trial, Mr. Manek, who candidly acknowledged that he has no expertise in asset tracing, resiled from the opinions he reached in his report on May 9, 2021 and acknowledged that he agreed with the findings of Ms.

Rivard in her Surrebuttal report. [ 15 ] It became apparent in the course of his testimony, that Mr. Manek’s opinion only differed from that of Ms. Rivard to the extent that counsel for the wife asked him to assume a series of assumptions. [ 16 ] Suggested assumptions from counsel, absent an evidentiary foundation, have no probative value. [ 17 ] In the result, I attribute no weight to Mr. Manek’s report or testimony. [ 18 ] In contrast, I found Ms. Rivard’s evidence to be very credible and reliable.

Her conclusions were based on a very thorough analysis of documentation, subject to the caveat that some documents pertaining to several bank accounts of the wife, which were not disclosed, could not be located. Division of Matrimonial Property [ 19 ] In Hodgson v Hodgson 2005 ABCA 13 , it was held that s7 and s8 of the Matrimonial Property Act RSA 2000 c.M-8 ( MPA ) mandate a four-step process in dividing property: 1. Step one stipulates all property owned at the date of trial must be determined. 2.

Step two stipulates that property that is exempt from distribution under s7(2) must be determined, including property that can be traced to s7(2) property as at the date of acquisition or date of marriage. 3. Step three stipulates that the Court must determine the s7(3) property and the income received during the marriage and distribute the property between the parties in a manner that is just and equitable after taking s8 factors into account. 4. Step four stipulates that the balance of the s7(4) property be divided equally, unless it would be unjust and inequitable to do so after considering s8 factors.

Current property Matrimonial Home [ 20 ] The husband requests that the jointly owned matrimonial home in Edmonton be transferred to him on the condition that the wife would be released from liability from the existing mortgage and line of credit. The wife requests that the property be sold.

The husband has resided in the matrimonial home since the date of separation. [ 21 ] It is agreed between the parties that the home requires repairs, specifically relating to a mould issue arising from the use of a steam shower, which was not properly ventilated at the time of installation. [ 22 ] The parties have been separated for over six years. The Edmonton real estate market has fluctuated since the date of separation and indeed has fluctuated since the start of trial. [ 23 ] It is not possible on this evidentiary record to determine if there is any residual equity in the matrimonial home.

The property is encumbered with a large mortgage and home equity loan, and all that can be concluded is that there may or may not be residual equity. [ 24 ] A current appraisal of the matrimonial home was not tendered at trial. [ 25 ] The only way to determine if there is residual equity in the matrimonial home is to obtain a current, independent joint appraisal of the property. [ 26 ] The contents of the matrimonial home are to be divided between the parties.

Chattels Artwork [ 27 ] The parties do not agree on this disposition of a piece of art from Peter Lik entitled “Flat Iron Building”, which is in the possession of the wife. She argues that her parents gifted this piece of art to her whereas, the husband argues that it was gifted to them jointly. I conclude that this piece of art belongs to the wife. [ 28 ] The balance of Peter Lik art purchased by the husband, using inheritance money is awarded to him. [ 29 ] The parties have agreed on a division of other chattels.

RBC TFSA [ 30 ] The husband has withdrawn some substantial funds from his TFSA to pay for legal and accounting fees relating to this litigation. This issue will be dealt with during argument on costs. Darrell McDonald- Professional Golf [ 31 ] This company is used by the husband in his management of the Millwoods Golf Course. His income and expenses are put through the company. Counsel for the Husband argues that the company should be valued at zero because there will be no retained value once all expenses are paid and the husband pays out funds in trust. The husband will be retiring in October 2022.

I agree with this position and assign a zero value to the company. Sector Mortgage RRSP [ 32 ] This account has a balance as of March 2021 of $488,927, which remains unchanged at the current date. RBC Canadian Dollar Account [ 33 ] This account holds Australis Shares which fluctuate in value and have a current value of $0.17 per share. [ 34 ] Ms. Rivard concluded that 76% of these shares are directly traceable to the Aurora A Shares and remain the property of the husband.

I agree with her conclusion. [ 35 ] The remaining 26% will be divided equally and the wife’s shares will be transferred to her “in specie” at the husband’s adjusted cost base. Debt

[36] This will be calculated as of the date of separation. Exemptions [37] The exemptions issue is relevant to a number of areas: 1. The Matrimonial home. [38] This property was owned by the husband prior to the marriage and had been purchased for $160,000, subject to a mortgage of$76,000, resulting in equity of $84,000. The property was transferred into their joint names in 2006. The husband concedes that as aresult of this transaction, his exemption was reduced to $42,000. 2. Condominium located at 413, 10728 82 Avenue, Edmonton. [39] Prior to the marriage, the husband owned this condominium.

The parties agreed to a value, at the date marriage of $250,000subject to a mortgage of $189,000, resulting in net equity of $61,000. The condominium was sold in November 2006 for $335,000. Someof the sale proceeds were used to discharge a builder’s lien in the amount of $85,558, registered against title to the matrimonial home.The husband’s exemption of $54, 410, which was traced into the matrimonial home is conceded to have been reduced to $27,205 as aresult of the operation of s36 of the MPA. 3.

Cash Inheritance. [40] The husband received cash and clear title to his mother’s residence in Edmonton on her passing. [41] The cash was received in two installments: a. $231,984 received in February 2011 b. $7,823 and $29,557.88 USD received in the same month. [42] The husband concedes that the funds under heading “b” cannot traced, as they were spent by the parties during the marriage. [43] The cheque for $231,984 was deposited into the joint BMO 925 account of the parties on February 17, 2011 by the wife.

Atthat time, the husband was in California golfing. [44] It is the wife’s position that the husband agreed to this deposit into their joint account, which he denies. [45] The wife was the lawyer who handled the Estate of Mary McDonald. [46] It is noteworthy that, in her capacity as a Solicitor for the Estate, she drafted a Letter of Direction which directed the funds bepaid into the husband’s account at RBC. [47] The husband’s position is that he signed the Letter of Direction on the understanding that the funds would indeed be sent tohis RBC account for deposit as he wanted his inheritance to be preserved and not spent. [48] No Letter of Direction was prepared authorizing the funds to be deposited into the joint account of the parties, BMO account925. [49] I find as a fact, that the husband never authorized the deposit of these funds into the joint BMO 925 account, or indeed intoany account other than his own. [50] There is no evidence that the husband was advised to obtain independent legal advice pertaining to the legal effect ofdepositing these inheritance funds into their joint bank account, that is, his exposure to a claim by the wife, that he lost one half of hisexemption by virtue of this deposit. [51] The defendant testified that he relied on his wife to administer the estate properly and that he trusted her. [52] The wife could easily have contacted him in California to obtain his approval to deposit these funds into their joint bankaccount but there is no evidence that she did so. [53] Given these circumstances, I draw an adverse inference against the wife, that she did not seek the husband’s approval todeposit these funds into their joint bank account as she knew full well that he would not have agreed.

Tracing exemptions into current property [54] It is well established that in order for the husband to maintain his claim for exemptions, he is required to trace his exemptproperty into existing property Harrower v Harrower (1989), (AB CA), 97 AR 141. [55] In Scheffelmeier v Krassman, 2011 ABCA 64 , 2011 ABCA64, the Alberta Court of Appeal summarized theprinciples underlying this issue at para 14: Slatter J (as he was then), summarized the tracing principles from Harrower at para 38 of Lovich v Lovich, 2006 ABQB 736 as follows:

(

a) an exemption will be maintained if exempt property can be traced into replacement property, but some tracing must be possible. (b) “Tracing can be inferred, implied or presumed.” Physical or accounting precision in tracing is not required, as long as a fairconnection between the exempt property and the replacement property can be seen. See also Roenisch v. Roenisch (1991), 1991 ABCA163 , 115 A.R. 255, 32 R.F.L. (3d) 233 (C.A.); Hughes v. Hughes, 1998 ABCA 409, 168 D.L.R. (4th) 112, [1999] 6 W.W.R.243. (

c) if exempt property is dissipated, it loses its exemption. See also Brokopp v. Brokopp (1996), 1996 ABCA 4 , 181 A.R.91, 19 R.F.L. (4th) 1 (C.A.); Roenisch v. Roenisch, supra. (

d) the consumption or dissipation of exempt property does not create any “notional debt” that must be accounted for before the balanceof the matrimonial property is distributed. [56] Ms. Rivard undertook a very thorough tracing analysis and apportioned exemptions when funds were comingled with nonexempt funds.

I also accept her conclusion that $315,125 invested in the Sector RRSP account in January 2014 is traceable to exemptfunds and that the total balance in the cash account in December 2013 of $293,490 is traceable to exempt funds. [57] I accept her conclusion, that exempt funds were used in the PGL advance. [58] In the result, I conclude that Ms. Rivard has correctly identified and valued the husband’s exempt property, includingcomingled funds.

Section 36 of the MPA [59]

Section 36 reads as follows: 36(1) In making a decision under this Act, the Court shall not apply the doctrine of presumption of advancement to a transaction betweenthe spouses in respect of property acquired by one or both spouses before or after the marriage.

(2) Notwithstanding subsection (1), (

a) the fact that property is placed or taken in the name of both spouses as joint owners is proof, in the absence of evidence tothe contrary, that a joint ownership of the beneficial interest in the property is intended, and (

b) money that is deposited with a financial institution in the name of both spouses is deemed to be in the name of the spouses asjoint owners for the purposes of clause (a). [60] The Wife’s position is that s36(2) applies to two investments made by the husband.

a) Investment in the Purchase of an Interest in the Packrat Louie Restaurant [61] Both parties agreed to purchase an interest in a restaurant known as Packrat Louie. They incorporated a company, PGL tofacilitate their investment. [62] The investment was not successful and ultimately, they sold their interest in this failed business venture. At no time was aprofit generated. [63] The husband used some of his inheritance for this investment.

The sale of their investment and the restaurant was handled byJill Swainson, who at that time was an associate lawyer at the Edmonton Law Firm, Brownlee Fryett. [64] At that time, the wife was also an associate lawyer with the same firm.

Although later estranged, Jill Swainson and the wifewere best friends. [65] The husband was not aware that the sale proceeds were initially deposited into the Brownlee Fryett trust account and on theinstructions of the wife, the funds were deposited into the joint BMO account 925 of the parties. [66] I do not accept that in these circumstances s36(2) applies. [67] It would be unfair to apply s36(2) in circumstances wherein the husband was not aware that these funds were deposited intothis account and provided no instructions that they were to be so deposited.

b) Share Purchase Investments in Aurora Cannabis [68] Counsel for the wife argues that pursuant to this enactment, the husband is deemed to have gifted one half of his inheritance tohis wife given that the funds were initially placed into their joint chequing account 925 at the Bank of Montreal for 85 days before thehusband withdrew the funds to purchase shares in Aurora Cannabis. Counsel for the wife cites as authorities for this proposition theCourt of Appeal decisions of Harrower v Harrower 1989 ABCA 196 , 1989ABCA196 and EJ v RJ 1989 ABCA 197 ,1989 ABCA197. [69] I do not accept this

interpretation of Section 36(2). [70] The Alberta Court of Appeal in JQ v PQ 1983 ABCA 5 , 1983ABCA5 stated the following at para 8: I note that s.36 is not a definition section. S.36(1) does away with the presumption of advancement. Prior to the passage of the Act a

resulting trust might be found in all cases in which one spouse paid the purchase money but title was taken, in whole or in part, in the name of the other. Before the passage of subsection (1) a conveyance to the wife of property which had been purchased by the husband's resources would be effective because while there would be a resulting trust to the husband it would be overcome by the presumption of advancement. After the passage of subsection (1) there would be a resulting trust to the husband.

Now, under subsection (2), the resulting trust is overcome so that both have equal property interests where title is taken jointly. The same is now true with respect to joint bank accounts and, presumably, for the same reason. The

section eliminates the kind of fine analysis that previously bedevilled the courts in dealing with property that was jointly held: e.g. Gissing v. Gissing , [1971] A.C. 886 at 906 - 907 . It is to be noted that the

section speaks of prima facie proof, not a conclusive presumption … [ 71 ] The issue then becomes on the evidence before the Court whether prima facie proof has been rebutted. All of the relevant evidence must be considered. The husband bears the onus of proving that the prima facie proof has been rebutted. In GK v KK 1996 ABCA 322 at para 2 , it was held that the evidence to be considered must be unequivocal.

The relevant unequivocal evidence relating to this issue can be summarized as follows: 1) The inheritance funds were deposited by the wife into the BMO joint chequing account 925 of the parties for 85 days. 2) I find as a fact, that the husband did not agree to this deposit and was not aware that it had been made. At all material times, he was concerned about preserving his inheritance. 3) Terry Booth was a friend of the husband and the principal owner of Aurora Cannabis. Booth suggested that the husband invest in this company.

The wife did not like Booth and wanted nothing to do with him. 4) The Aurora Cannabis investment turned out to be hugely profitable but at the time there was no guaranteed return and indeed no guarantee that the investment would not be lost entirely. The husband acknowledged that he was taking a substantial risk with his inheritance investing in Aurora Cannabis.

There is no evidence that the wife was prepared to assume any risk in connection with this investment, and indeed was strongly opposed to it. 5) These transactions were facilitated by Jill Swainson, who acted for Aurora Cannabis. 6) The share purchase transactions were fully transparent and there was no attempt on the part of the husband to conceal these transactions from the wife. The wife testified that she and the husband discussed what to do with his inheritance. I find as a fact however, that no agreement was reached that the husband would make this investment.

Rather, it was the husband’s sole decision to do so. 7) The wife made no financial contribution to the purchase of the Aurora Cannabis shares. 8) Jill Swainson’s uncle, Roger Swainson, was a senior lawyer at Brownlee Fryett. The wife testified that she discussed with him the fact that the Aurora Cannabis shares were issued in the name of the husband only and according to her, Roger Swainson made “a veiled threat” to her to keep quiet about this situation. The term “veiled threat” is vague and meaningless without more evidence being called to clarify the context.

No such evidence was called. 9) Neither Jill Swainson or Roger Swainson were called as witnesses to testify. 10) There is no documentary evidence that the wife objected to the Aurora Cannabis shares being issued in the husband’s name only.

Specifically, there is no documentation that she ever demanded that one half of the Aurora Cannabis shares be transferred to her or that the direction to pay in the husband’s name only should be changed into their joint names. 11) In an email exhibited at trial, the wife did request of Jill Swainson, payment of $26,778 from the PGL sale proceeds be paid to her to be applied to a joint line of credit.

It is telling that no mention was made of this email about the status of Aurora Cannabis shares or any alleged claim on one half of the husband’s inheritance. 12) The investment shares, including shares in Aurora Cannabis were issued in the husband’s name only and placed into his RRSP and TFSA accounts. 13) The parties never maintained joint investment accounts. 14) It was the husband’s sole decision to purchase the Aurora Cannabis shares and his sole decision to later sell them.

There is no evidence that the wife ever took the position that one half of the shares were subject to her control. 15) There is no evidence that prior to separation the wife ever told the husband that she was claiming one half of these inherited funds and never attempted to assert any control as to the disposition of one half of these funds. Only the husband directed how the funds were to be disbursed. 16) When the Aurora Cannabis shares were sold, the husband made a substantial capital gain. These transactions were fully disclosed to the Canada Revenue Agency.

The parties were not able to reach agreement on the amount of capital gains tax paid on investment income. I accept the evidence of Ms. Rivard, that the amount of tax paid on investment income was $276,220 which the husband paid.

There is no evidence that the wife, who is a tax and estate lawyer, took the position that one half of the tax liability incurred was her responsibility. [ 72 ] In considering all of the foregoing evidence, which is uncontroverted, I find that that Husband has established evidence to the contrary such that he has proven that he did not intend to gift any portion of his inheritance to the wife. [ 73 ] In the result, s36(2) of the MPA has no application to these proceedings.

Section 7(3) of the MPA [ 74 ] Section 7(3) reads as follows: 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. [ 75 ] The section 7(3) property to be considered is comprised of the following:

a) The husband’s RBC RRSP;

b) Sector Mortgage RRSP;

c) The Sector non-registered fund;

d) The funds traceable to the investments in PGL;

e) Aurora Cannabis proceeds placed into the RBC TFSA accounts. [ 76 ] The wife argues that she should be entitled to one half of the incremental gains of the s7(3) property whereas, the husband argues, after considering s8 factors, she should not be entitled to any portion of these gains. [ 77 ] It is noteworthy that s7(3) gives the Court a broad discretion and does not require that the Court divide property under this subsection and contains no presumption as to the division of property, if there is a division of property.

Section 8 of the MPA [ 78 ]

Section 8 reads as follows: The matters to be taken into consideration in making a distribution under

section 7 are the following: (

a) the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as a homemaker or parent; (

b) the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition, conservation, improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or both spouses or by one or both spouses and any other person ; (

c) the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to the acquisition, conservation or improvement of the property ; (

d) the income, earning capacity, liabilities, obligations, property and other financial resources (

i) that each spouse had at the time of marriage, and (ii) that each spouse has at the time of the trial; (

e) the duration of the marriage ; (

f) whether the property was acquired when the spouses were living separate and apart; (

g) the terms of an oral or written agreement between the spouses ; (

h) that a spouse has made: (

i) a substantial gift of property to a third party, or (ii) a transfer of property to a third party other than a bona fide purchaser for value;

(

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

j) a prior order made by a court; (

k) a tax liability that may be incurred by a spouse as a result of the transfer or sale of property; (

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

m) any fact or circumstance that is relevant. [ 79 ]

Section 8 grants the Court a broad discretion. The MPA does not prioritize any of the s 8 factors, thus they are all to be considered, unless clearly not applicable.

Section 8 (

a) the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as a homemaker or parent. [ 80 ] Both parties worked during the marriage.

Section 8(

b) the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition, conservation, improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or both spouses or by one or both spouses and any other person. [ 81 ] The wife argues that she made a contribution to the PGL business, which ultimately turned out to be a failed investment. On this evidentiary record, the husband advanced funds towards this business which allowed the investment to be salvaged.

Managers were hired to run the restaurant, as both parties were working full time. [ 82 ] I accept that the wife did assist in managing the restaurant. However, I do not accept that the husband disproportionately benefited from her assistance. Notwithstanding the efforts and contributions from both parties, this business venture failed.

Section 8 (

c) the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to the acquisition, conservation or improvement of the property. [ 83 ] In Peter v Peters 1999 ABQB 874 at paras 10-13 and in Walker v Walker 2009 ABQB 209 at paras 66-70 , it was held that in the circumstances of a case, a Court may conclude that property which increases in value post separation may be found to be outside the matrimonial regime, particularly where one party made no contribution to the increase of the value in that property. [ 84 ] The facts in this case are analogous.

The increase in value of the Aurora Cannabis shares had nothing to do with the wife. The shares increased in value as a result of market forces and investment management on the part of the husband. The shares were purchased approximately 30 days before the parties separated and were received by the husband after the date of separation. [ 85 ] She opposed the investment into Aurora Cannabis, which opportunity was made available to the husband because of his friendship with Terry Booth. This investment was outside of the matrimonial regime.

Section 8(

d) the income, earning capacity, liabilities, obligations, property and other financial resources (

i) that each spouse had at the time of marriage, and (ii) that each spouse has at the time of the trial. [ 86 ] The wife, who is now 46 years of age, is healthy and financially secure. She is working at a law firm and in recent years, has earned a six-figure income each year. She has a long working life ahead of her. She is likely to receive a substantial inheritance from her parents.

Section 8(

e) the duration of the marriage. [ 87 ] This was a ten-year marriage.

Section 8(

f) whether the property was acquired when the spouses were living separate and apart.

[ 88 ] The original purchase of Aurora Cannabis shares occurred approximately one month before the separation but all increases in value occurred after the separation.

Section 8(

g) the terms of an oral or written agreement between the spouses. [ 89 ] I find as a fact that there was no agreement entered into by the parties to share inheritance and there is no documentation which supports this allegation by the wife.

Section 8(

h) that a spouse has made a substantial gift of property to a third party, or a transfer of property to a third party other than a bona fide purchaser for value- Not applicable

Section 8(

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order- Not applicable

Section 8(

j) a prior order made by a court– Not applicable

Section 8(

k) a tax liability that may be incurred by a spouse as a result of the transfer or sale of property. [ 90 ] As noted above, I find as a fact that the husband incurred a tax liability of $276,220 respecting the sale of Aurora Cannabis shares, which tax he paid. The wife made no contribution to this tax payment and there is no evidence that she ever told the husband that she was willing to assume any portion of this tax liability.

Section 8(

l) that a spouse has dissipated property to the detriment of the other spouse [ 91 ] Both parties testified to leading an extravagant lifestyle, including many trips to the United States for golfing. They would often stay at high end golf resorts. [ 92 ] The wife alleges that the husband has dissipated matrimonial assets since the date of separation, but has not provided evidence which supports this allegation. [ 93 ] Firstly, dissipation is only related to matrimonial property, which is subject to a division.

Any party is free to expend property which is not subject to a division, including exempt property. [ 94 ] Secondly, on this evidentiary record, the matrimonial assets which existed at the time of separation still exist. [ 95 ] There are sufficient assets available to pay the wife any award in this litigation she may receive.

Section 8(

m) any fact or circumstance that is relevant. [ 96 ] Counsel for the husband argues that an adverse inference should be drawn against the wife as a result of her failure to truthfully disclose at questioning the existence of two other bank accounts in her name, which the husband discovered during the litigation. [ 97 ] At trial the wife testified that she “forgot” about these Bank of Montreal accounts ending in 525 and 381. [ 98 ] It is significant that, by the time these accounts were discovered, most of the records relating to them had been destroyed. [ 99 ] Moreover, as a result of the late disclosure of these accounts, the husband retained Ms.

Rivard to do a tracing analysis which further complicated the litigation. [ 100 ] It is now readily apparent that these bank accounts were used for many transactions involving thousands of dollars over a number of years. [ 101 ] It is deeply concerning that the wife was not forthright when she was questioned under oath about whether other bank accounts existed. [ 102 ] While I accept that the evidence does not support the conclusion that the husband suffered any financial losses attributable to the operation of these accounts, nonetheless, his ability to account for all of the exempt funds was impaired by the inability to retrieve the records relating to these accounts.

[ 103 ] I draw an adverse inference against the wife that, had the existence of these accounts been properly disclosed, the information would have been unfavourable to her case. [ 104 ] After considering all of the s8 factors noted above, I have concluded that it would not be just and equitable to award the wife any portion of the s7(3) gains in the husband’s s7(2) exempt property. Section 7(4) of the MPA Section 7(4) of the MPA

(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 [ 105 ] After considering all of the s8 factors noted above, I have concluded that the s7(4) property of the parties should be divided equally. Calculating the Husband’s Equalization Payment [ 106 ] Counsel for the husband submitted two scenarios containing alternative calculations of an equalization payment to the wife. Given my conclusion that the wife has no claim to the s7(3) gains on the husband’s s7(2) exempt property, I accept the equalization calculation in scenario one. This results in an equalization payment by the husband as follows:

a) Non-registered investments $47,450.

b) Registered investments $294,727 total $342,177. Spousal Support [ 107 ] The parties are both claiming spousal support.

A) The Wife [ 108 ] Her Counsel argues that, as a result of the breakdown of the marriage, she lost the opportunity to become a partner in a large law firm, which would result in an increase in her annual income. [ 109 ] The parties separated on October 10, 2015, which is now in excess of six years. I do not accept that the breakdown of the marriage has impacted her ability to practice law in any way since the date of separation. There is no evidence that the wife, since the date of separation, was somehow prevented from pursuing her legal career fully, including becoming a partner at a law firm.

Similarly, there is no evidence that in the future she will not be able to pursue her legal career fully, including partnership. As noted, she has a long working life ahead of her. [ 110 ] Bearing in mind the provisions of the Divorce Act , she is economically self-sufficient and has not suffered any economic hardship as a result of the breakdown of the marriage. She was free to practice in any firm she wanted to. [ 111 ] As a result, her claim for spousal support is dismissed.

B) The Husband [ 112 ] As noted, the husband will retire from managing the Millwoods Golf Course in October 2022. Upon retirement, he will be entitled to CPP and OAS payments. [ 113 ] Counsel for the husband requests that the Court reserve the decision respecting his spousal support claim until November 2022, one month following his retirement. [ 114 ] The husband has substantial investments and is not supporting anyone else. [ 115 ] I do not accept that his claim for spousal support should be reserved.

Prior to retirement, he will have ample time to arrange his financial affairs, such that he can support himself. [ 116 ] Moreover, I do not accept that the breakdown of the marriage has caused him economic disadvantage. On his own testimony, since the date of separation he has maintained virtually the same lifestyle and is voluntarily retiring in October of 2022. [ 117 ] His claim for spousal support is dismissed. Conclusion and Order 1) The Divorce Judgment is granted.

2) The husband’s claim for exemptions survives and is confirmed. 3) The wife’s claim for a share of the s7(3) gains of the husband’s s7(2) exempt property is dismissed. 4) The s7(4) property of the parties is to be divided equally. 5) Within 10 days of the release of this Judgment, the parties are directed to jointly retain an independent residential property appraisal of the matrimonial home, which will be binding on both parties.

The appraisal will be prepared both on an “as is” basis and alternatively, if repairs are completed. 6) Within 14 days following the receipt of the appraisal, counsel for the husband will advise counsel for the wife in writing either that husband wishes to become the sole owner of the property subject to the conditions that the wife is released from all debt on it and that the purchase price will be based on the “as is” appraised value or declines to do so. 7) If the husband declines to become the sole owner of the property, the property is to be listed for sale within 10 days after receipt of the letter from the husband’s counsel confirming that he is declining to purchase it.

The parties are then directed to jointly retain a realtor. Both parties will cooperate fully with the realtor to set a listing price.

The husband is to grant reasonable access to the realtor to allow the property to be shown to prospective purchasers. 8) If the property is sold, any residual equity in the property after discharging the mortgage, the home equity loan, payment of any sales commissions and expenses including legal fees, will be divided equally. 9) I see no merit in directing the parties to agree on a contractor to repair the deficiencies before selling the matrimonial home as this will inevitably result in more conflict between them causing further delay.

However, if the parties decide that it would be more advantageous for them to repair the home before sale and can agree on a contractor, they are in no way precluded from proceeding with repairs before sale. 10) The contents of the matrimonial home are to be divided. 11) The wife will retain the condominium in Stony Plain, Alberta. 12) The registered investments transferred to the wife will be completed using a tax-free rollover from the husband’s RRSP to the wife’s RRSP. 13) Each party will retain chattels in their possession, including vehicles.

The wife will retain the Peter Lik painting “Flat Iron Building”. 14) Each party will retain their bank accounts. 15) The husband will retain his investments in Sector Mortgage Investment Corporation, including, both registered and non- registered investments.

The husband retains his exemption pertaining to s7(2) property and all of the growth on the exemption s7(3) property. 16) 76% of the Australis shares held in the husband’s RBC account are awarded to the husband as being exempt. 24% of the remaining shares are to be divided equally. 12% of the shares will be transferred to the wife “in specie” tax free at the husband’s adjusted cost base. 17) Each party will retain their non-registered and registered investments in their names. 18) Each party will be responsible for all debts in their names, including credit card debt. 19) The husband will pay to the wife an equalization payment as follows: a.

Non-registered investments $47,450. b. Registered investments $294,727, total $342,177. The registered investments transferred will be completed using a tax-free Rollover from the husband’s RRSP to the wife’s RRSP. 20) The claims of the wife and husband for spousal support are dismissed. 21) Costs are to be spoken to. Heard on the 21 - 25 day of June, September 27, 30, 2021. Dated at the City of Edmonton, Alberta this 24 th day of November, 2021.

R. Paul Belzil J.C.Q.B.A. Appearances: Ken Proudman BARR LLP for the Plaintiff/Defendant by Counterclaim Caroline P Lee, Q.C. Kyra Bradley DBB LLP for the Defendant/Plaintiff by Counterclaim