Stackhouse v. Jack, 2013 BCSC 2236

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Stackhouse v. Jack, 2013 BCSC 2236 Date: 20131206 Docket: 10-4454 Registry: Victoria Between: Steven Kenneth Stackhouse Claimant And: Christina Katharina Jack Respondent Before: The Honourable Mr. Justice B.D. MacKenzie Reasons for Judgment Counsel for the Claimant: V.F. Hemminger Counsel for the Respondent: R.N. Stewart, Q.C. Place and Date of Trial: Victoria, B.C. April 22-26, 2013; June 3-5, 2013; and August 21-23, 2013 Place and Date of Judgment: Victoria, B.C.

December 6, 2013 Introduction [ 1 ] The issue in this litigation is whether certain assets acquired during five years of cohabitation and 22 months of marriage should be declared family assets and, if so, how they should be divided, given what the respondent Ms. Jack says is a valid “ante-nuptial settlement” agreement. [ 2 ] Mr. Stackhouse says none of the real estate and investments acquired during the relationship are family assets and should be his alone. Alternatively, Mr. Stackhouse says if they are family assets, they should be reapportioned 99% to 95% in his favour. Ms.

Jack says that the parties should receive their “excluded” pre-relationship “assets” and divide equally the increase in the value of the assets that were acquired during their relationship. Background [ 3 ] Mr. Stackhouse and Ms. Jack met in 2002. He was a pilot for WestJet. She was a flight attendant. Ms. Jack was also in the process of obtaining her commercial pilot’s licence. She was successful and is presently employed as a pilot for Air Canada Jazz. She is 37 years old. [ 4 ] Mr. Stackhouse left WestJet in 2003 in order to fly water bombers at Sproat Lake, near Port Alberni, British Columbia.

Since then he has been employed by small airline operations, as was Ms. Jack prior to her employment with Air Canada. It was during this period of time that the parties flew small planes in remote locations such as the Maldives and Sudan. Mr. Stackhouse is now employed by Viking Air. He is 52 years old. [ 5 ] When Mr. Stackhouse left WestJet to fly the water bombers, Ms. Jack left WestJet and moved with Mr. Stackhouse to Sproat Lake. [ 6 ] They began living together in April 2003. Mr.

Stackhouse purchased a home at Sproat Lake in 2004. [ 7 ] This was the matrimonial home and is one of the assets which is the subject of this litigation. [ 8 ] On October 31, 2003, the parties signed what Ms. Jack says is the ante-nuptial settlement agreement. Although there is conflicting testimony regarding whether the parties were under the influence of alcohol when they signed, both parties agree they were involved in a fairly intense argument as to the necessity of this agreement.

This agreement provided that if the parties separated they would retain assets brought into the relationship and would share equally any assets they accumulated during their relationship.

[ 9 ] Mr. Stackhouse and Ms. Jack married on July 5, 2008. One thing Mr. Stackhouse and Ms. Jack do agree on is that, despite some exciting and memorable moments connected to their exotic lifestyle flying small planes in remote locations, generally speaking, their relationship was volatile and “toxic”. Given the nature of the relationship and their personalities, the marriage was short-lived and they separated on May 16, 2010. [ 10 ] The parties’ conduct during this trial makes it clear they intensely distrust each other.

They now argue over who should pay what to whom as a result of the purchase of three properties and an investment portfolio set up during their relationship, the validity of the ante-nuptial settlement agreement, and the financial and non-financial contributions Ms. Jack may or may not have made with respect to the investment and the real estate. [ 11 ] As is often the case, the parties are far apart on what they say each should receive by way of monetary compensation, given the very brief duration of the marriage and other relevant circumstances. Mr.

Stackhouse submits that the real estate and investments that are in both their names should be retained by him and “that he not be required to direct any funds” to Ms. Jack. [ 12 ] In fact, at the outset of the trial, there was no agreement as to whether the matrimonial home at Sproat Lake was a family asset. Mr. Stackhouse said it was not a family asset, whereas Ms. Jack said all of the properties they acquired on Vancouver Island during the relationship are family assets. [ 13 ] By the end of the trial, Mr.

Stackhouse acknowledged that the Sproat Lake property should properly be deemed a family asset but asserted that there should be significant reapportionment in his favour. [ 14 ] Moreover, both parties have accused each other of being less than candid in their evidence, especially Mr. Stackhouse who has said Ms. Jack has been untruthful with respect to the savings she accumulated during their relationship as well as being less than forthright in providing full financial disclosure. In fact, Mr. Stackhouse says Ms. Jack has purposely misled him and the court throughout the trial.

Credibility [ 15 ] Before turning to the question of what may or may not be a family asset, I will address the issue of the credibility of these two litigants. [ 16 ] A significant portion of the trial focused on which party was less truthful than the other. Some of the allegations and responses are unique and somewhat bizarre. [ 17 ] For example, Mr. Stackhouse says point blank that Ms. Jack has lied to him during their relationship and has lied to the court when testifying. He refers to such matters as whether or not he was the father of her child born in August 2010. He also says Ms.

Jack tried to negotiate payment of child support from him knowing full well he was not the child’s father. [ 18 ] On the issue of credibility, Ms. Jack’s position is, not surprisingly, quite different than Mr. Stackhouse’s. [ 19 ] Ms. Jack testified she was not lying to Mr. Stackhouse when she initially assumed he was the father of her child, given they were intimate in the summer of 2009, even though she had undergone artificial insemination. However, Ms. Jack believed the chances of being impregnated this way were minimal. [ 20 ] She testified that it was because of Mr.

Stackhouse’s accusations of her infidelity that she eventually obtained a paternity test. When she received the results of this test, she was surprised Mr. Stackhouse was apparently not the father. Because she did not believe the test results, she obtained another test by taking a swab from Mr. Stackhouse’s toothbrush, which confirmed Mr. Stackhouse was not the father. [ 21 ] Even though he was not the father, Mr. Stackhouse says Ms. Jack claimed $600 a month child support in a separation agreement they were negotiating. Ms. Jack denies this. Ms.

Jack says she did not advance a claim for child support and that Mr. Stackhouse filled in the $600 a month for child support. Ms. Jack says Mr. Stackhouse did this himself in order to make it appear she is “a very bad person.” Ms. Jack says she sent another separation agreement to Mr. Stackhouse which did not include a provision for child support. Mr. Stackhouse denies this allegation. [ 22 ] As far as these drastically opposite claims are concerned, I do not know who to believe. While correspondence from the mediator supports Mr. Stackhouse’s position that child support was an issue as of July 28, 2010, Ms.

Jack points out her email to the mediator on July 25, 2010, confirming she never wanted child support from Mr. Stackhouse, even if Mr. Stackhouse was in fact the father. She wrote, “… so if Steve wants to hide money to pay less support - that is fine - I don’t care, I don’t want it.” [ 23 ] Ms. Jack says this was all before the second test confirmed Mr. Stackhouse was not the father. In any event, she says her email supports unequivocally her position that she never wanted child support from Mr. Stackhouse. [ 24 ] Mr. Stackhouse also submits that Ms.

Jack has engaged in a “blatant disregard of her requirements as a litigant” and has failed to disclose relevant information in an attempt to “stonewall” Mr. Stackhouse. [ 25 ] Mr. Stackhouse also submitted that Ms. Jack failed to disclose a joint account with her sister when she was specifically asked this at her examination for discovery. [ 26 ] At trial, Ms. Jack acknowledged there was a joint account with her sister which was opened some years ago but that she did not recall it at the time of her examination for discovery. [ 27 ] Mr. Stackhouse says this change in Ms.

Jack’s memory was only because he obtained a copy of a cheque indicating the joint account and consequently Ms. Jack realized she was caught lying. He says nothing she says should be believed.

[28] Counsel for Ms. Jack says this submission is without merit. He says Ms. Jack’s late recollection of this joint account does notmean she is an unreliable witness. He says, given the passage of time, the various accounts with different financial institutions, the use ofcash to make purchases and the failure to declare as income cash brought into Canada from foreign jurisdictions, it is understandable thatMs. Jack did not initially recall this account. [29] Ms. Jack says there has been extensive disclosure and she has met the numerous and detailed demands for disclosure byMr. Stackhouse. Ms.

Jack says she is not attempting to deceive the court and Mr. Stackhouse’s “suspicions” are not sufficient for thecourt to find Ms. Jack an untruthful witness. [30] Even though I have found Ms. Jack’s evidence somewhat vague in relation to some matters, considering the conflictingevidence on this and most of the other issues in this case, I am unable to conclude there has been a lack of disclosure on the part ofMs. Jack. [31] Mr. Stackhouse also claims that Ms.

Jack has not provided an adequate explanation regarding the use of some funds, that sheintentionally deleted emails despite the likelihood of potential litigation and that she misrepresented contributions to her RRSP and theextent of any “savings” she may have accumulated during the relationship. [32] As far as the emails are concerned, Ms. Jack says they were deleted because of Mr. Stackhouse’s inappropriate posting of aphoto of Ms.

Jack’s child with the question, “who is this child’s father,” or words to that effect. [33] These examples of conflicting evidence and “theories” underscore the polarized positions taken by these parties in thislitigation. Overall, I have had to approach the parties’ evidence with considerable caution. Taken in its entirety, I am unable to concludewho is more accurate or more reliable when they describe their relationship and their financial affairs.

As a result, when it comes tomany of the issues in this case, I must look at any objective or undisputed evidence, as modest as it may be, when determining what is afair and equitable resolution. [34] Finally, even though I am unable to decide who to believe on many of the specific matters raised in this litigation, this does notpreclude me from accepting or rejecting other aspects of the parties’ testimony, just as with any other witness’s evidence.

This isespecially so when there is some evidence which, even if not accepted in its entirety, can still support the position of each side on someof the issues that are in dispute. The Issues [35] The issue here is division of property. Given the date this action was commenced, the parties agreed this question should bedetermined pursuant to the provisions of the Family Relations Act, R.S.B.C. 2011, c. 128 (FRA).

As a result, the first question to bedetermined is which assets are family assets, pursuant to the definition of “family asset” in the FRA and the authorities. [36] Family assets, pursuant to s. 58 of the FRA, include property owned by a spouse that is ordinarily used for a family purpose, andincludes a venture to which money or money’s worth was directly or indirectly contributed. A family purpose includes assets that areheld “for the purposes of providing both parties with financial security in their later years”: Hefti v. Hefti (1998), (BCCA), 57 B.C.L.R. (3d) 171 (C.A.) at 180.

Taylor Arm Road, Sproat Lake, B.C. [37] This home was purchased in October 2004, shortly after the parties moved to Port Alberni in 2003. The purchase price was$350,000. [38] Mr. Stackhouse put $94,000 into the purchase of the home from funds he had accumulated prior to his relationship withMs. Jack. [39] The parties have agreed that this contribution of $94,000 is to be “excluded” from the present application and should be creditedto Mr. Stackhouse. [40] Even though Mr.

Stackhouse agreed in submissions that this residence is a family asset, it is helpful to analyze thecircumstances surrounding the acquisition and maintenance of this property as they are similar to the circumstances pertaining to theother real estate. [41] The Taylor Arm Road property was put in joint names. There is significant dispute as to why this was done. Mr. Stackhousesays that he acceded to Ms. Jack’s wish that it be in both names solely for “estate purposes.” That is, if he died while the parties were stilltogether, Ms. Jack would receive Mr.

Stackhouse’s one-half interest in the property as opposed to it going to his estate. However,Mr. Stackhouse says the agreement with Ms. Jack was that if they separated he would retain 100 percent of the home, despite them bothbeing registered on title. [42] In addition, Mr. Stackhouse points out that Ms. Jack made no financial contribution whatsoever to the purchase price, mortgagepayments or upkeep, even though he testified he asked her to contribute financially to the purchase price. [43] Ms. Jack denies that there was any discussion about putting the property in joint names for estate purposes.

She testified it wasput in joint names because it was to be a joint asset. [44] I pause at this time to note that I have struggled to determine who is the more accurate or truthful when it comes to the allegeddiscussions about why the real estate was put in joint names. As I have mentioned, Mr. Stackhouse says there was a discussion aboutright of survivorship and Ms. Jack says there was no discussion. There is no independent evidence to support either Ms. Jack orMr. Stackhouse’s testimony. As a result, I again do not know who to believe. As such, this issue must be determined without regard toMr.

Stackhouse’s evidence that such discussion did occur.

[45] Moreover, Ms. Jack denies Mr. Stackhouse requested that she contribute financially to the purchase of the home or for anyongoing financial contributions with respect to upkeep and maintenance of the property. Ms. Jack says this was logical because she wasworking at a local pub and Mr. Stackhouse was earning much more than she was at the time. [46] With respect to non-financial contributions to the Taylor Arm Road property, Mr. Stackhouse acknowledges Ms. Jack madesome contribution to improving the property but says these contributions were minimal. He says Ms.

Jack has exaggerated thesignificance of any improvements she made to this property. [47] On the other hand, Ms. Jack says she made a significant contribution to improving the property, such as assisting in laying acement floor, helping to update the bathroom and kitchen and participating in the construction of a deck. [48] In determining who might be more accurate with respect to what Ms. Jack may or may not have contributed to improving thematrimonial home, I am of the view both parties have somewhat misstated Ms. Jack’s role regarding her contribution to the property. Iam satisfied Mr.

Stackhouse has minimized her role while Ms. Jack has exaggerated somewhat her non-financial contribution in light ofthe issues at play in this litigation. I have concluded both parties have flavoured their evidence somewhat in order to advance theirrespective positions at trial. In any event, the undisputed fact is, even though the parties were out of the country a great deal of the timeduring their relationship, this was their principal residence until they finally separated in May 2010. [49] The property was in joint names and I am satisfied Ms.

Jack made reasonably significant direct non-financial contributions. IfMr. Stackhouse had not conceded this point, I would have concluded he would have failed to prove it was not used for a family purposeas mandated by s. 60 of the FRA. [50] The property at Taylor Arm Road is a family asset subject to any claim by Mr. Stackhouse for reapportionment and any claimby Ms. Jack for a claim for occupational rent, given Mr. Stackhouse has had the exclusive occupancy of the property since the date ofseparation. Tyee Road Condominium, Victoria, B.C. [51] This property was purchased in January 2008 as an investment.

It was the second condominium purchased during therelationship. The sale proceeds from a prior condominium went into Mr. Stackhouse’s account and were utilized to pay the deposit anddown payment on this property. It is agreed that Mr. Stackhouse put $107,400 into the purchase price of $285,000. [52] As he originally submitted with respect to the Taylor Arm Road property, Mr. Stackhouse says this was his investment aloneand was not a joint investment with Ms. Jack. [53] However, as was done with the Taylor Arm Road property, it was put in both names. Mr. Stackhouse again says, because of adiscussion with Ms.

Jack, this was only for the purpose of giving Ms. Jack the right of survivorship in the event they were still togetherat the time of Mr. Stackhouse’s death. [54] As with the Taylor Arm Road property, Ms. Jack did not contribute financially to the purchase of this property even though, asMr. Stackhouse has pointed out, she had funds available to her. Mr. Stackhouse says, if this was a joint investment, Ms. Jack should havemade some financial contribution towards its purchase. Ms. Jack testified she was never asked to contribute to the purchase of thisproperty. [55] Ms.

Jack does not dispute the lack of financial contribution but argues that this was indeed a joint investment and that theparties discussed and participated in this investment together. Ms. Jack testified they talked about investing in real estate. She says sheparticipated in searching out appropriate properties and participated in decorating and other tasks. In addition, Ms. Jack says she pickedout this specific unit. [56] Ms. Jack once again denies that estate planning was the reason the property was put in joint names.

She says they wereregistered in joint names because it was a joint investment and the fact that the purchase agreement and the extended new home warrantywere in Mr. Stackhouse’s name alone are not determinative of the issue. She says this property should be deemed a family asset. [57] Moreover, Ms. Jack says an email from Mr. Stackhouse to Ms. Jack’s sister on May 25, 2007, supports Ms. Jack’s assertion thatall of the real estate purchases in this jurisdiction were in fact joint ventures. In this email Mr. Stackhouse wrote: Real estate.

We have decided that the “muffin” as we call it - because it was supposed to be cheap and small … is not a good enoughinvestment. We want to get in to more real estate … We WILL buy another piece of real estate - and will probably do it when we arehome this summer. [58] Finally, Mr. Stackhouse acknowledged that Ms. Jack signed “some documents” and was present when they “walked through theproperty.” He agreed she bought furniture for this rental unit, albeit either on his credit card or on her credit card for which he repaid her. [59] Given that there is uncontradicted evidence as to some of what Ms.

Jack says was her involvement in the purchase of thisproperty, coupled with the fact it again was put in joint names, I am unable to conclude that Mr. Stackhouse has met the burden ofestablishing that this property is not a family asset. [60] Given the totality of the evidence, I am satisfied it was a joint endeavour with a view to securing the parties’ future financialsecurity (see Evetts v. Evetts, (BC CA), [1996] B.C.J. No. 2614 (C.A.) and Hefti). As with the Taylor Arm Roadproperty, this property is subject to any claim of reapportionment by Mr.

Stackhouse in addition to the deposit and down payment beingcredited to him, as the parties agree these funds were part of Mr. Stackhouse’s excluded assets. Yates Street Condominium

[ 61 ] This small condominium was bought in August 2008. As with the Taylor Arm Road and Tyee Road properties, Mr. Stackhouse says this was his investment alone and had nothing to do with Ms. Jack. He says he did not consult at all with Ms. Jack about the purchase of this property. [ 62 ] Conversely, Ms. Jack says the purchase of this property was the result of a delay in the completion of another building project in Tofino undertaken by the same developer who was instrumental in getting the parties involved with the Tyee Road property. [ 63 ] Ms. Jack testified that she and Mr.

Stackhouse discussed not investing in the Tofino project because of unsatisfactory delays in completion. She says they both spoke to the developer who agreed to allow them to buy the Yates Street property at the same price they were quoted some time earlier, prior to the Tofino project being undertaken. Ms. Jack testified that this was her idea. [ 64 ] Once again, it is agreed that Mr. Stackhouse paid approximately $163,400 from his excluded pre-relationship assets as a deposit and down payment towards the purchase price of $275,000. Mr. Stackhouse again notes that Ms.

Jack had approximately $132,000 available to her for investment purposes. He says if this was a joint investment, one would expect Ms. Jack to have contributed to the purchase price. However, Mr. Stackhouse does not allege he asked Ms. Jack for any financial contribution to the purchase of this particular property. [ 65 ] However, this property, like the others, was placed in joint tenancy. Mr. Stackhouse again says this was done solely for estate planning purposes so that, if he died while they were together, Ms. Jack would receive title to this property. Ms.

Jack again she says there was no discussion about her contributing to the purchase, nor was there any discussion about putting this property into joint names simply for survivorship purposes. [ 66 ] She says this too was “our investment together.” [ 67 ] On this issue, I accept the testimony of Ms. Jack as to how the parties came to purchase this particular property. Her evidence is reasonable and detailed as opposed to Mr. Stackhouse’s blanket denial that any conversation whatsoever occurred between himself and Ms.

Jack about this purchase. [ 68 ] Given the totality of the circumstances, including the content of the email of 2007, and the fact both parties are again on title as joint tenants, I am unable to conclude that Mr. Stackhouse has established that this asset was not purchased to provide for the parties’ future financial security. I therefore conclude it is a family asset. Is Ms. Jack’s Calgary, Alberta, condominium a family asset? [ 69 ] Ms. Jack owns a condominium in Calgary that was purchased after she and Mr. Stackhouse separated. Mr.

Stackhouse says, even though this property was purchased after the parties separated, it should be considered a family asset because the majority of the funds utilized by Ms. Jack to purchase this condominium were funds earned by her during their relationship. He says just because part of the purchase price originated from the proceeds she received from the sale of a condominium that she owned prior to the relationship, this should not result in the new condominium being considered an “excluded asset.” [ 70 ] Mr. Stackhouse’s argument is essentially that Ms.

Jack should not have been able to conserve her savings or the sale proceeds from the excluded condominium at the same time benefitting from the Victoria condominiums being considered family assets. He says this unfairly provides her with a shared interest in the Victoria condominiums in addition to a complete interest in the Calgary condominium. [ 71 ] This issue is somewhat complicated by the relatively unusual financial arrangements between Ms. Jack and her sister, Melissa, and the intermingling of the sale proceeds from her first condominium with Ms. Jack’s relationship earnings.

When these factors are combined with the fact that both she and Mr. Stackhouse each lost $102,000 in a Ponzi scheme they each invested in during their relationship, the question of which “proceeds” went into the second condominium is further confused. [ 72 ] Ms. Jack says she financed the purchase of her present condominium primarily from the sale proceeds from the excluded condominium. She says the sale proceeds were approximately $129,400. She put these funds into one of her accounts that also had $56,400 in it.

She then accumulated further savings of $13,200 resulting in total savings, excluding the condominium sale proceeds, of approximately $69,600. She says these “savings” and only $32,500 of the sale proceeds were invested in the failed Ponzi scheme; therefore, Ms. Jack submits approximately $97,000 in her account were sale proceeds and not a family asset. [ 73 ] Mr. Stackhouse disagrees with this submission. He says that once the funds were co-mingled, it is impossible to determine the source of the $102,000 that Ms.

Jack invested in the Ponzi scheme, and that there should be a presumption that it came from the sale of her first condominium. Therefore, Mr. Stackhouse says the majority of the purchase price of Ms. Jack’s new condominium was from income earned during the relationship and this should result in a conclusion that Ms. Jack’s post-separation condominium is a family asset. [ 74 ] In these circumstances, given the absence of clear evidence on this point, and even though I have some concerns about the unique financial relationship between Ms. Jack and her sister, I am satisfied that Ms.

Jack has established that her present condominium in Calgary is not a family asset. This determination is supported by the Revised Agreed Statement of Facts stating that Ms. Jack purchased her present condominium by obtaining a mortgage and making a down payment from “savings retained from the sale of the Arbour Lake Road condominium” and “gifts from family members.” [ 75 ] The practical result is that Ms. Jack will retain a significant portion of her excluded assets -- the proceeds of sale of her pre- relationship condominium -- just as Mr.

Stackhouse is retaining all of his excluded assets, as the parties have agreed. Valuation Date [ 76 ] Both parties accept the principle that family assets should be valued at the date of trial or “as close to it as the evidence

permits.” See Blackett v. Blackett (1989), (BC CA), 40 B.C.L.R. (2d) 99 (C.A.). Ms. Jack says that, while this isgenerally true, in this case the real estate should not be valued close to the date of trial but rather as of November 19, 2012, the secondscheduled trial date. [77] Ms. Jack says this is appropriate because the trial did not proceed in November 2012 because Mr. Stackhouse was self-represented and was not ready to proceed. Mr. Stackhouse says the only reason he was not ready to proceed was because of Ms.

Jack’slack of full and frank disclosure, having regard to the numerous documents and bank accounts he said she should disclose to him. [78] In support of her position, Ms. Jack says the parties reached a “non-binding agreement in principle,” the only term of which Iam aware of is that Mr. Stackhouse agreed to use at any future trial the September/October 2012 joint appraisals of the three real estateassets. [79] Ms. Jack says this was the reason she agreed to the adjournment. As I mentioned, Mr. Stackhouse was self-represented at thattime. Ms.

Jack says he was simply not ready to proceed and that she had indeed met her financial disclosure obligations having regard towhat was relevant to this hearing. [80] In early 2013, Mr. Stackhouse retained present counsel. In the spring of 2013, he obtained new appraisals of the three pieces ofproperty. In response, the respondent obtained new appraisals as well. The new valuations are lower than the joint appraisals obtained inthe fall of 2012. [81] Ms. Jack says that, if I accede to Mr.

Stackhouse’s submissions, he will have “repudiated the agreement in principle” and willbe able to “take advantage of a decline in the real estate market that took place in the interval to argue for lower values for these assets.” [82] As a result, the respondent says the valuation date for the real estate should be the earlier dates in 2012. [83] Conversely, Mr.

Stackhouse says the property valuations should be as close to the actual trial date as possible and as there areappraisals from each party that were obtained in April 2013, it would be fair and equitable to take the average valuation between the twolatest appraisals as best representing the present value for each of the three properties. [84] On this point, the trial commenced April 21, 2013, approximately three years after the date of separation.

This three-yeartimeframe is not exceptionally long in matrimonial litigation. [85] In these circumstances and because the agreement entered into between the parties in the fall of 2012 was “non-binding,” Iaccept Mr. Stackhouse’s submission that 2013 is the appropriate valuation date. [86] The three pieces of real estate will be valued by taking the average of the two April 2013 appraisals for each piece of property. [87] Accepting counsel’s calculations of these averages, I find the valuations of the real estate is as follows: No. Property Valuation1. Taylor Arm Road $530,0002. Yates Street $234,5003.

Tyee Road $234,000 [88] Having regard to the calculations provided by the parties, the net equity in each of these family assets for the purposes ofdetermining any compensation payment payable by one party to the other, is as follows: No. Property Net Equity1. Taylor Arm Road $300,0002. Yates Street $131,5003.

Tyee Road $234,000 TOTAL $665,500 [89] At this point, I pause to note that the net equity in the Tyee Road property takes into consideration the fact that, even thoughthere is a line of credit secured by a mortgage on this property with respect to the Smith Investments, which will be discussedsubsequently, for the purposes of this analysis the parties have agreed that the Tyee Road property should be considered mortgage freeas the line of credit will be accounted for when determining the net value of the Smith Investments.

The net equity in the Tyee Roadproperty is therefore $234,000. [90] Pursuant to this analysis and the agreement of the parties, the total net equity in the three properties is $665,500. With respect tothe credit that Mr. Stackhouse should receive for the funds he advanced for the purchase of these properties, subject to what appears tobe a $1,000 calculation error on behalf of Ms. Jack, Ms. Jack agrees that Mr. Stackhouse is entitled to receive credit of approximately$364,800 with respect to the direct financial contributions he has made to these properties. [91] The breakdown of this amount is as follows: No.

Property Amount1. Taylor Arm Road $ 94,0002. Yates Street $107,400 3. Tyee Road $163,400

TOTAL $364,800 [ 92 ] This leaves net equity in the properties of approximately $300,700 to be either divided equally pursuant to the ante-nuptial settlement agreement or pursuant to whatever reapportionment might be appropriate, having regard to the factors outlined in s. 65 of the FRA . [ 93 ] Moreover, pursuant to their respective “spread sheets,” both counsel agree that Mr. Stackhouse should receive credit for the “payments” and repair costs to the properties as well as other financial contributions to the family assets made after separation. As a result, the parties have agreed that Mr.

Stackhouse is entitled to a further credit in the amount of $107,000. [ 94 ] When I deduct this amount from the net equity in the real estate, it leaves $193,700 in the real estate to be divided between the parties. If divided equally, pursuant to the terms of the ante-nuptial settlement agreement, this would result in compensation to Ms. Jack of $96,850, subject to any determination as to occupational rent or any reapportionment in favour of Mr. Stackhouse. Occupational Rent [ 95 ] Ms. Jack says that, because Mr.

Stackhouse has had the opportunity to reside exclusively in the former matrimonial home at Sproat Lake, he “should submit to a claim for occupational rent” to offset his claim for contribution from Ms. Jack for the expense related to maintaining this property. [ 96 ] However, it is settled that a claim for contribution to expenses used in maintaining a property does not automatically lead to an entitlement to compensation for occupational rent; “Rather it is open to be made if in all of the circumstances it is equitable to do so.” See Dawson v. Dawson , 2010 BCSC 1015 , para. 55 . [ 97 ] Moreover, in L.M.R. v.

J.F.R. , 2010 BCSC 363 at para. 32 , the court said: An allowance for occupation rent is not mandatory, even where there is a claim for expenses associated with occupation. It is an equitable remedy. … the remedy is an equitable one and is not available to a party who comes to court with unclean hands or where it is not necessary to address inequity. [Emphasis added.] [ 98 ] In this case, I decline to make an order for occupational rent. In my view it is not necessary to do so in order to address inequity. Ms. Jack has agreed that Mr.

Stackhouse is entitled to receive a credit for his financial contributions to the matrimonial home, even without a claim for occupational rent. As well, all of the circumstances and the factors outlined in s. 65(1) are relevant in determining whether it would be equitable to grant Ms.

Jack’s claim for occupational rent. [ 99 ] As the court in Dawson noted at para. 55 : Occupation rent is sometimes advanced as a stand-alone claim, and sometimes dealt with in the overall division of family assets. … occupation rent is awarded when it is just and equitable to do so … [ 100 ] In my view, given the totality of the circumstances, it is not necessary or appropriate to make an allowance for occupation rent in order to address inequality. There will be no deduction to the $107,000 credit for “contributions” Mr. Stackhouse has made since separation on the basis of occupational rent.

Are the Smith Investments a family asset? [ 101 ] In April 2009 the parties jointly purchased an investment to take advantage of certain tax benefits. The tax advantages are referred to as the “Smith Manoeuvre.” [ 102 ] The investment was financed by the parties’ jointly borrowing the sum of $400,000 from the B-2-B Bank. Neither side advanced any “upfront” money. The parties also jointly borrowed a further sum of $200,000 in the form of a line of credit from HSBC. This line of credit was secured by a mortgage against the condominium on Tyee Road. [ 103 ] Ms.

Jack submits these amounts were used to “jointly purchase” investments managed by Stone & Company, described as the Stone & Sora Investments. I have characterized them together as the “Smith Investments.” [ 104 ] As of the date of the completion of the trial, the parties agreed the Smith Investments were valued at $862,640, minus the B-2-B loan of $400,013 and the HSBC line of credit secured on the Tyee Road property of $250,523, for a net equity or valuation in the Smith Investments of approximately $212,104. [ 105 ] Once again, Mr. Stackhouse says this is solely his investment, it is not a family asset, and Ms.

Jack is not entitled to any of it. [ 106 ] While Mr. Stackhouse does acknowledge that Ms. Jack signed all the necessary documentation in order to put into operation the Smith Manoeuver, he says this was only because she was on title on all the real estate ventures. He says this was the only reason she became a joint investor. [ 107 ] Ms. Jack says this is a family asset and, pursuant to the terms of the ante-nuptial settlement agreement, she is entitled to an equal share of this asset, subject to any credit in favour of Mr. Stackhouse because of his financial contributions since separation. However, Ms.

Jack says that she has already given Mr. Stackhouse credit for these deposits in the total of $107,000 that she agrees he should receive credit for with respect to payments he has made since separation. I have deducted the total of $107,000 for simplicity sake from the net value of the real estate as counsel did not provide me with a separate accounting as to post-separation payments to the Smith Investments.

[ 108 ] Ms. Jack says that, because she signed all of the necessary documents, she is entitled to be considered a joint investor and that the investment is a family asset. Ms. Jack also testifies that she and Mr. Stackhouse read the “book” and all the necessary workings of the Smith Manoeuvre and that they in fact discussed this unique investment together. She also testified that her father said to stay away from this investment but she nevertheless participated in it with Mr. Stackhouse. Ms. Jack also says they went to one or two meetings together to discuss the matter further and in fact met with Mr.

Smith himself on one occasion. Ms. Jack also points out the communication, modest as it may have been, between her and Ms. Olsen regarding what was necessary to maintain this relatively complex financial manoeuvre, supports her submission that this in fact was a joint effort. [ 109 ] In these circumstances, I agree with Ms. Jack that the investments were made for the parties’ future financial security, and therefore ordinarily and regularly used for a family purpose.

Given the totality of the circumstances, I am satisfied that the Smith Investments are a family asset. [ 110 ] If this family asset is divided equally pursuant to the terms of the ante-nuptial settlement agreement, Ms. Jack is entitled to approximately $106,050. [ 111 ] Mr. Stackhouse however wishes to collapse the Smith Investments. There is evidence in an email dated April 2, 2013, from Rob Smith at Sora Investments that as of that date the fee to liquidate this account would be $19,078. [ 112 ] In order to avoid collapse fees, the “owner” of this account would have to wait until April 2016. [ 113 ] Mr.

Stackhouse’s counsel submits that as of August 2013 it would be reasonable to estimate the collapse fees as approximately $18,000. I accept this as a reasonable estimate. Mr. Stackhouse says, if he has to share this asset with Ms. Jack, she should contribute to these fees in the same percentage amount as her net share of the asset. If this asset is to be divided equally, Ms. Jack’s contribution to the fees would be $9,000. Deducting Ms. Jack’s equal contribution to the collapse fees would mean she is entitled to $97,050 from the Smith Investments.

What equalization is appropriate for the parties’ respective RRSPs? [ 114 ] The parties have agreed that they incorporated Day VFR in 2004 and that they hold equal numbers of shares. The reason for incorporation was to enable the parties to contract their services with their employers through Day VFR, when possible, for tax reasons. [ 115 ] In 2003 and 2006 Day VFR contributed a total of approximately $28,400 to Mr. Stackhouse’s RRSPs while $18,550 was contributed to Ms. Jack’s RRSP. The difference between these contributions to the parties’ respective RRSPs is approximately $10,000. [ 116 ] Ms.

Jack says that, in order to equalize the RRSP contributions made during their relationship, it would be fair to credit or transfer to Ms. Jack’s side of the ledger $5,000. [ 117 ] Conversely, Mr. Stackhouse says he “provided” the $18,550 to Ms. Jack’s RRSP during the course of their relationship and this amount should be set off against any compensation payment Mr. Stackhouse might have to make to Ms. Jack upon a final division of property. [ 118 ] In these circumstances, I accept the submission of Ms.

Jack that, as the RRSPs are family assets, it is appropriate to award $5,000 to her as compensation for the difference in the contributions made to the RRSPs during the relationship. Moreover, this contribution by Mr. Stackhouse supports to a certain degree Ms. Jack’s submission that their investments and RRSPs were “joint efforts” aimed at their future financial security. [ 119 ] Given this equalization on behalf of Ms. Jack, the parties will retain their respective RRSPs once this $5,000 is taken into consideration.

The ante-nuptial settlement agreement - should it apply? [ 120 ] As I have mentioned, shortly after Mr. Stackhouse and Ms. Jack moved into the Taylor Arm Road property they signed a document prepared by Ms. Jack which she says outlines their intentions with respect to division of property if their relationship ended. [ 121 ] The agreement was signed October 31, 2003. It is brief and reads: Steve Stackhouse & Christina Jack - are presently common law (as of April 2003). This letter serves the purpose of identifying our separate holdings / asset prior to April 2003 - Christina has / apartment, 950 Arbour Lake Rd.

YYC - and RRSP / Stock account valued as of that date. Steve Stackhouse has 1 sail boat (Sunstar Valkyrie) RRSP /Stock / Bank account. Valued as of April 2003 - We agree not to have any claim to or access to each other’s holdings before April 2003 and agree that our assets after April 2003 are joint / communal effort. [ 122 ] Mr. Stackhouse says both he and Ms. Jack were intoxicated when they signed this document on Hallowe’en night prior to attending a party. [ 123 ] Ms. Jack denies this.

She says they argued about whether such an agreement was necessary, but it was discussed and signed in the afternoon when neither one had been drinking. [ 124 ] The document was not witnessed by anyone, nor did either side have any legal advice prior to executing this agreement. While the language is not crystal clear, it does support Ms. Jack’s submission that what they brought into the relationship was to be an

“excluded” asset and everything acquired during the relationship was to be a joint asset. In these circumstances I find this is a valid ante-nuptial settlement agreement. [125] Pursuant to the agreement, Ms. Jack agrees that the “excluded assets” would include any “up front” funds provided byMr. Stackhouse for the purchase of the real estate, even though this money went towards the purchase of assets acquired during theirrelationship. It is for this reason that Ms. Jack is prepared to credit Mr.

Stackhouse in the amount of $364,800 for his cash infusions intothe matrimonial home at Sproat Lake and the two rental condominiums in Victoria, as well as the additional $107,000 in contributionssince separation, a position consistent with the framework of property division contained in the 2003 agreement. [126] As such, Ms.

Jack says that the enforcement of the ante-nuptial settlement agreement results in her receiving a smaller part ofthe “pie” pursuant to this arrangement than if she were to resort to the “default” position in s. 56 of the FRA with respect to thepresumptive equal share in the family assets. [127] Moreover, the fact the agreement was not witnessed does not affect its validity. In these circumstance I am satisfied both partiesunderstood this was an agreement between them expressing their intentions with respect to the property they brought into theirrelationship and their property rights going forward.

In the absence of any evidence from Mr. Stackhouse that he did not understand themeaning of the agreement entered into on October 31, 2003, there is no basis to set it aside. His application to have the agreement setaside is therefore dismissed. [128] Moreover, given the totality of the evidence, I am of the view that Mr. Stackhouse and Ms. Jack did “pool their efforts” to asufficient degree to establish there was a joint effort with respect to the acquisition and maintenance of the assets they acquired duringtheir relationship, even though Mr.

Stackhouse contributed all of the financing towards these purchases. [129] Nevertheless, Ms. Jack acknowledges that this agreement can be reviewed and varied pursuant to s. 68 of the FRA. See Wittel v.Wittel, [1999] B.C.J. No. 3035 (S.C.). [130] She also acknowledges the paramount principle is one of “unfairness” and that the court has broad discretion to vary an ante-nuptial agreement if the proposed distribution would be unfair (T.L.A.T. v W.W.T., (BC CA), [1996] B.C.J. No. 1577). [131] In addition, Ms.

Jack says the correct approach when reviewing “fairness” under s. 68 is to consider what are family assets, thevaluation issues and an application of s. 65 factors. “This test maintains an appropriate level of deference to the bargains people make forthemselves,” yet operates to prevent injustices: Pavlis v. Pavlis, 2000 BCSC 565, at para. 49. I agree with these comments. Reapportionment [132] Section 65(1) of the Family Relations Act reads as follows: 65.

(1) If the provisions for division of property between spouses under

section 56,

Part 6 or their marriage agreement, as the casemay be, would be unfair having regard to (

a) the duration of the marriage, (

b) the duration of the period during which the spouses have lived separate and apart, (

c) the date when property was acquired or disposed of, (

d) the extent to which property was acquired by one spouse through inheritance or gift, (

e) the needs of each spouse to become or remain economically independent and self-sufficient, or (

f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property orthe capacity or liabilities of a spouse, the Supreme Court, on application, may order that the property covered by

section 56,

Part 6 or the marriage agreement, as thecase may be, be divided into shares fixed by the court. [133] Mr. Stackhouse seeks significant reapportionment in his favour arguing that an equal division of the net value of the familyassets would be unfair. In these circumstances, Ms. Jack says unfairness is alleviated when the spirit of the ante-nuptial settlement isapplied to the facts. She acknowledges this results in each party retaining or being credited with what they brought into the relationship. [134] As a result, Ms.

Jack submits that the final compensation payment due to her based on the division of assets as contemplated bythe ante-nuptial settlement is equal to a reasonably significant reapportionment in favour of Mr. Stackhouse, which she says isappropriate, given the short duration of the marriage, the overall seven years of co-habitation and the factors outlined in s. 65(1)(f). Ms.Jack submits that, given all of the relevant factors in s. 65 and the other circumstances, this cannot be unfair to Mr. Stackhouse. [135] Moreover, I agree with Ms.

Jack that the s. 65 factors do “not invite a debit and credit analysis” or a forensic accounting of theparties’ contributions. See Vander Ende v. Vander Ende, 2010 BCSC 597. [136] Conversely, Mr. Stackhouse says, even if the ante-nuptial settlement is adopted and even after receiving credit for the $364,800he put into the real estate by way of deposits and down payments, plus a credit for his other direct financial contributions, it would stillbe unfair not to reapportion the final division of assets in his favour primarily because this was such a short marriage.

He says not to doso would result in an unfair “windfall” to Ms. Jack. He says this is especially unfair as Ms. Jack is a pilot for Air Canada, has her owncondominium, an RRSP and other savings. On this point, I agree with Mr. Stackhouse that Ms. Jack is economically independent andself-sufficient at the young age of 37, compared to Mr. Stackhouse.

[137] I have also considered whether, in these circumstances, it is necessary, pursuant to s. 65(1)(f), to reapportion in favour of Mr.Stackhouse the net equity in the Victoria condominiums. I am not persuaded it is necessary to do so in order to alleviate unfairness to Mr.Stackhouse. The evidence is that Mr. Stackhouse presently employs a third party to manage these properties. Moreover, there is noevidence as to the cost involved in maintaining these properties. As a result, even a small reapportionment in favour of Mr.

Stackhousefor these two assets is not justified. [138] In my view, considering the totality of the circumstances, especially the fact that Mr. Stackhouse is being credited for all of thefunds he put into the real estate investments as well as his post-separation “contributions” and the relevant factors in s. 65(1) of the FRA,a compensation payment consistent with the provisions of the ante-nuptial settlement agreement would not be unfair to Mr. Stackhouse. [139] The end result is the net equity in the real estate and the Smith Investments will be divided equally between Mr. Stackhouse andMs. Jack.

The Boat La Pantera [140] Despite the fact this sailboat was used by the parties only occasionally, it was purchased during the relationship. I am satisfied itis a family asset. However, given the complete absence of any direct or indirect contribution by Ms. Jack to its purchase or maintenance,pursuant to the factors outlined in s. 65(1), I reapportion La Pantera 100 percent in favour of Mr. Stackhouse. HSBC Account [141] Mr. Stackhouse is to retain this account for his own use. Monies due from Melissa Jack Re: Kenn Borek Air [142] The parties agreed that Ms.

Jack should contribute to the compensation or equalization payment the approximate sum of$20,796, representing the income from Kenn Borek Air earned during the relationship that went into Ms. Jack’s sister’s account. Assuch, Ms. Jack agrees that this amount should be deducted from any compensation payment due to her. Conclusion [143] In conclusion, the payment to be made by Mr. Stackhouse to Ms. Jack will be as follows: Compensation Item AmountMs. Jack’s one-half share of the net equity in the real estate. $96,850 Ms. Jack’s one-half interest in the net equity of the Smith Investments. 97,050 Ms.

Jack’s equalization payment for the RRSP contributions. 5,000 SUB-TOTAL $198,900Minus amount due from Melissa Jack re Kenn Borek Air. - 20,800 TOTAL $178,100 Ancillary Orders [144] Mr. Stackhouse submitted that if I was to determine the properties were family assets, he sought an order for sale with himhaving sole conduct of sale. I am of the view it is not necessary to order the sale of the properties. Rather, Mr. Stackhouse will have allthree properties transferred into his name alone.

He can then decide whether he wishes to retain or dispose of any of the real estate.Moreover, there is insufficient evidence to allow me to conclude the properties must be sold in order for Mr. Stackhouse to pay thiscompensation order. As a result there will be no accounting for future “legal fees” or other costs associated with a potential sale of any ofthese properties (Dowling v. Dowling, (BC CA), 43 BCLR (3d) 59 (C.A.); Rick v. Brandsema, 2009 SCC 10 at para.55). [145] The end result is that there will be an order that Ms. Jack transfer to Mr.

Stackhouse her one-half interest in the properties atTaylor Arm Road, Tyee Road and Yates Street. [146] Similarly, Ms. Jack is to sign documentation and do what is necessary in order to have the Smith Investment funds transferred toMr. Stackhouse for his use alone. [147] I would assume counsel can agree or undertake to effect these transfers with a view to finalizing payment to Ms. Jack. Divorce [148] Both parties have now agreed that there should be a divorce order based on the parties having lived separate and apart for morethan one year. I so order, subject to the Registrar’s Certificate.

Costs [149] Given these conclusions, it is my view neither party can be said to have achieved substantial success. As a result each party willbear their own costs. However if the parties wish to make further submissions, they may do so.

“B.D. MacKenzie, J. The Honourable Mr. Justice B.D. MacKenzie