Breed v. Breed, 2012 NSSC 285

SUPREME COURT OF NOVA SCOTIA Citation: Breed v. Breed, 2012 NSSC 285 Date: 20120727 Docket: 1201-064992 Registry: Halifax Between: Caryn Grace Breed Petitioner and Perley Stephen Breed Respondent Revised Decision: The text of the original decision has been corrected according to the erratum dated September 12, 2012. This decision replaces the previously released decision and the erratum is attached. Judge: Justice Carole A. Beaton Date of Hearing: June 4, 5, 6, 7, 8 and 11, 2012 Written Decision: July 27, 2012 Counsel: M. Jane Lenehan and Diana Musgrave, Counsel for the Petitioner, Caryn Breed Yvonne M.R.

LaHaye, QC and Deborah Gillis QC, Counsel for the Respondent, Stephen Breed By the Court : Background and Issues [ 1 ] The parties were married in March, 1989. The depth and breadth of their marital discord is acute - they are unable even to agree on their date of separation. The Petitioner identifies it as April 5, 2010 and the Respondent identifies it as September, 2008. Suffice to say the marriage, which I can be satisfied was approximately 20 years in duration, did not end well, but for most of it the parties lived what can only be described as relatively affluent lifestyle.

[ 2 ] The parties came before this Court earlier in 2012 for an Interim hearing which resulted in the issuing of an Interim Order pertaining to child support and spousal support dated February 27, 2012. The subsequent June 2012 six day trial was for the purpose of securing a Divorce Order and a Corollary Relief Judgment. After brief evidence on the point, the Divorce Order was granted on June 4.

Several days prior to trial, the parties were able to reach Partial Minutes of Settlement (hereinafter “ Minutes ” ) addressing a majority of the relief sought in the Petition for Divorce filed December 3, 2010 and the Answer, filed January 21, 2011. [ 3 ] Aside from those Minutes, the parties have four discrete issues upon which they cannot agree and seek determination by the Court. Those are framed as the following questions: 1. Should the security for spousal support provided by the Respondent be augmented by having the Petitioner remain as joint tenant on a property? 2.

Is that portion of the Petitioner's investment portfolio consisting of accounts held jointly with her mother a matrimonial asset, and further, should growth of her portfolio be characterized as income or assets? 3. What constitutes “ primary care ” of the parties ’ younger child going forward? 4. Is the Petitioner entitled to retroactive spousal support? Credibility [ 4 ] Credibility has been an overarching theme in the positions taken by each party on the four questions raised; each led evidence attacking the credibility of the other.

While credibility is not the sole determiner of legal issues raised in a trial, it is squarely in issue in this case, where the Petitioner and Respondent were the only witnesses before the Court. This Court ’ s determinations regarding the credibility of the two witnesses will inform the findings of fact made, particularly on those matters where the evidence of one party differs sharply from that of the other. [ 5 ] Forgeron, J. canvassed thoroughly the guiding principles of the task of credibility assessment in Parsons v. Parsons , 2011 NSSC 347 : [22] In Baker-Warren v.

Denault 2009 NSSC 59 , this court reviewed the factors to be considered when making credibility determinations at paras. 18 to 20. I have applied this law which states as follows: 18 For the benefit of the parties, I will review some of the factors which I have considered when making credibility determinations. It is important to note, however, that credibility assessment is not a science. It is not always possible to "articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events:" R. v.

Gagnon 2006 SCC 17 , para. 20 . I further note that "assessing credibility is a difficult and delicate matter that does not always lend itself to precise and complete verbalization:" R. v. R.E.M. 2008 SCC 51 , para. 49 . 19 With these caveats in mind, the following are some of the factors which were balanced when the court assessed credibility:

a) What were the inconsistencies and weaknesses in the witness' evidence, which include internal inconsistencies, prior inconsistent statements, inconsistencies between the witness' testimony, and the documentary evidence, and the testimony of other witnesses: Re: Novak Estate , 2008 NSSC 283 ;

b) Did the witness have an interest in the outcome or was he/she personally connected to either party;

c) Did the witness have a motive to deceive;

d) Did the witness have the ability to observe the factual matters about which he/she testified;

e) Did the witness have a sufficient power of recollection to provide the court with an accurate account;

f) Is the testimony in harmony with the preponderance of probabilities which a practical and informed person would find reasonablegiven the particular place and conditions: Faryna v. Chorney (BC CA), [1952] 2 D.L.R. 354;

g) Was there an internal consistency and logical flow to the evidence;

h) Was the evidence provided in a candid and straight forward manner, or was the witness evasive, strategic, hesitant, or biased; and

i) Where appropriate, was the witness capable of making an admission against interest, or was the witness self-serving? 20 I have placed little weight on the demeanor of the witnesses because demeanor is often not a good indicator of credibility: R v.Norman, 1993, (1993) (ON CA), 16 O.R. (3d) 295 (C.A.) at para. 55. In addition, I have also adopted the followingrule, succinctly paraphrased by Warner J. in Re: Novak Estate, supra, at para 37: There is no principle of law that requires a trier of fact to believe or disbelieve a witness's testimony in its entirety.

On the contrary, atrier may believe none, part or all of a witness's evidence, and may attach different weight to different parts of a witness's evidence. (SeeR. v. D.R., 1996, (SCC), [1996] 2 S.C.R. 291 at 93 and R. v. J.H., (ON CA), [2005] O.J. No. 39,supra). [6] The Petitioner argues the evidence of the Respondent must be approached in a guarded fashion given his failure to fileupdated financial information for trial.

The Petitioner submits, for example, that it is only through reference to other documents filed inthe proceedings (but not tendered as evidence at trial) the Court can glean information about the value of the Respondent’s businessholdings, found in an expert business valuation filed with the Court in March 2012 and referenced in the Respondent’s updated Statementof Property filed in April 2012.

The Petitioner also asserts that same Statement of Property provides the balances of the Respondent’sbank accounts as of the two contested dates of separation but gives no current information that would permit the court to assess theRespondent’s present ability to pay retroactive spousal support. [7] The Petitioner correctly points out although it is not her burden to tender evidence about the Respondent’s ability to payarrears that may be found owing, nonetheless the only reliable evidence on the point comes from the Petitioner’s Exhibit 35, Tab 1, adocument that contains a “customer snapshot” of the balances of the Respondent’s accounts at May 28, 2012, approximately one weekprior to trial. [8] The Petitioner maintains the above instances support that the Respondent has continually failed to meet his disclosureobligations, coupled with “strategic” disclosure tactics employed by him throughout the litigation, which should cause the Court to bewary of his evidence. [9] I agree any failure to disclose financial information is at the peril of the Respondent, but the effect of it is as I also found it toexist at the time of the January 2012 Interim hearing: by inference the Court is entitled to assume the Respondent’s ability to pay, leavingonly the requirement to weigh (in reference to spousal support) the Petitioner’s need.

Doing so does not of necessity require the Court todetermine the Respondent as unreliable in his evidence or lacking in credibility. [10] For his part, the Respondent argues the Court should reject the evidence of the Petitioner as she was untruthful throughout the

hearing regarding significant events including, for example, assets she claimed she disposed of to bring monies to the marriage and how she treated other assets during the marriage. [ 11 ] Counsel for the Petitioner was forthright in acknowledging that cross-examination had established her client as untruthful in relation to several matters.

Troublesome for the Court is that some of the Petitioner ’ s exaggerations were clearly established to have occurred very early on in the marriage - to reference but two examples, differing versions of employment resumes that claimed education credentials the Petitioner had never earned and a job title she never held. Throughout the litigation the Petitioner had claimed she brought certain monies to the marriage through the sale of particular assets, however documents produced during cross-examination of her established she had never owned such assets.

While the initial inclination might be to question the relevance of such dated events, the significance is the evidence about them establishes a pattern of the Petitioner taking great liberties with the truth to help advance her own interests, which clearly continued to the time of trial. [ 12 ] While it is unnecessary to recount each and every example of evasiveness and inconsistencies, both internal and external, that characterized the Petitioner ’ s evidence, overall the Petitioner ’ s credibility was seriously eroded, particularly so in relation to documentary evidence the Respondent produced at trial which served to impeach several aspects of the Petitioner ’ s evidence.

The final blow to the Petitioner ’ s credibility came with her acknowledgement that during the marriage she had falsified a Matrimonial Status Affidavit on a Deed, an incident that will be canvassed in greater detail later in this decision. [ 13 ] For all of these reasons, where their evidence sharply differs on matters in dispute, I reject that of the Petitioner and accept that of the Respondent unless otherwise indicated elsewhere herein.

While the Court is entitled to accept all, some, or none of the evidence of a witness, on the whole the evidence before this Court is replete with instances where the Petitioner proved herself to be prone to exaggeration, untruths and self-aggrandizing, obviously prepared to say whatever she perceived might advance her position. Issue One: Security for spousal support [ 14 ] It is important to consider the parties ’ recent agreement on spousal support in order to analyze the Petitioner ’ s proposal to remain on title to a commercial property as security for that support.

As a result of the Interim Order the Respondent was required to pay significant monthly child support and spousal support retroactive to June 1, 2011, reflecting the timing of the Petitioner ’ s Interim application.

Not dissimilar to that Order, the Minutes provide the Respondent will pay to the Petitioner spousal support of $24,000 per month and to third parties $1,850.00 per month on the Petitioner ’ s behalf. [ 15 ] During the marriage the parties held as joint tenants a commercial property ( “ the property ” ) in Dartmouth, which generates rental income derived from apartment units and office space leased to the Respondent ’ s corporate holdings.

An Interim Consent Order of this Court dated September 29, 2011 provided for the parties to continue sharing in the profits from the property until completion of the divorce litigation. The parties have now agreed in the Minutes the property will be owned by the Respondent as part of the division of assets. [ 16 ] Despite the Respondent retaining the property, the Petitioner argues it is critical she remain a joint tenant on the Deed to the property to provide security in relation to the Respondent ’ s spousal support obligation.

The Petitioner argues the $500,000.00 tax-free insurance coverage the Respondent is providing as security for that obligation pursuant to the Minutes is inadequate to protect her interest in the event of the Respondent ’ s premature demise, as that insurance payout would equate to only thirty-one months of support at the current rate. [ 17 ] Furthermore, argues the Petitioner, the Minutes provide that $475,000.00 of that insurance is only available until May 2018 as a “ Key Man ” insurance policy held by the Respondent ’ s company expires at that time.

The Petitioner emphasizes her vulnerability and maintains that securing her right of survivorship as joint tenant on the Deed, or in the alternative one million dollars of insurance coverage that would name her as beneficiary, are the only effective methods to adequately protect her spousal support entitlement. [ 18 ] The Respondent does not challenge the merit of the Petitioner ’ s claim for security. Rather, he argues there is already ample security for the Petitioner ’ s spousal support in place the insurance coverage provided.

The Respondent maintains that until the occurrence of certain events (referenced in paragraph 18(d)-(

i) of the Minutes), any of which could trigger a variation in the quantum of spousal support, the Petitioner is well protected without the need for additional security either through joint tenancy of the commercial property or additional insurance.

[ 19 ] The Respondent urges, on the basis of the intense litigation between the parties and the extent to which the Petitioner ’ s evidence was impeached at the hearing, that it would be unworkable to have the parties remain in a relationship of joint tenancy.

The Respondent argues the history of the marriage has shown the Petitioner is capable of both disposing of and encumbering property without the knowledge of the Respondent and he cannot have the property exposed to the potential risks continued joint tenancy could present. [ 20 ] In light of the Petitioner ’ s belief the Respondent is uninsurable, and in the absence of any definitive evidence from the Respondent as to whether he could actually secure the one million dollars in insurance coverage the Petitioner seeks, the Court is left to assess the suitability of the joint tenancy arrangement proposed by the Petitioner. [ 21 ] Key to the question of the joint tenancy relationship being maintained is whether the Court is convinced that the circumstances of these parties support the suitability and “ workability ” of such an arrangement.

The whole of the evidence at trial established the relationship between the parties was volatile as the marriage deteriorated. As this Court noted at the Interim hearing ( Breed v. Breed , 2012 NSSC 83 ): [3] To date various issues discussed in this divorce proceeding have revealed a high level of mutual distrust and animosity between Mrs. Breed and Mr. Breed, which is palpable and would seem, on the face of it, to fuel the intensity of their litigation. In that respect, this dispute is no different.

Little had changed by the time of trial, during which the Court gained even greater insight into and appreciation for the extent of the disharmony between the couple and the polarization of their positions. [ 22 ] It is not lost on the Court that the Petitioner did not attempt to respond to, much less challenge in any way, the Respondent ’ s evidence regarding an incident when she entered the same commercial property in January 2012, mere days prior to the commencement of the Interim hearing.

I find as a fact that while the Respondent was out of town, the Petitioner attended the property and proceeded to inappropriately direct the Respondent ’ s staff and make demands of a personal nature, unrelated to the business being conducted there. If the potential of that kind of interference (e.g. unwanted attendance of the Petitioner at a jointly held property) were the only concern for the arrangement the Petitioner now seeks, various methods that could be employed to prevent the same might well give the Court pause for thought.

However, of much greater concern is the evidence related to two other events concerning the Petitioner and real estate holdings. [ 23 ] The first event relates to evidence from both parties that a judgment registered against the Petitioner in 1999 by a local business was unknown to the Respondent until 2001, when it had to be satisfied in the course of a separate real estate transaction involving the couple.

This speaks to the Respondent ’ s concern the Petitioner could impinge upon or interfere with the value of the property without his knowledge. [ 24 ] The second, and in my view much more serious matter, involved the Petitioner ’ s actions in relation to one of the parties ’ former matrimonial homes.

The parties concurred in their evidence that in 2004 they executed an Agreement which transferred all of their matrimonial assets into the Petitioner ’ s name, for creditor protection purposes, while at the same time confirming the Respondent was not releasing his matrimonial interest in any of the same (Exhibit 11, Tab 6). Pursuant to and simultaneous with that Agreement, the Respondent prepared a Deed placing their South end Halifax home in the Petitioner ’ s sole name (Exhibit 11, Tab M).

I accept the evidence of the Respondent that the family ’ s occupation of that home underscored the purpose of its earlier purchase: to provide accommodations for the family closer to the children ’ s school and thereby cut down on weekday travel from their other homes located outside the city core.

I am satisfied on the Respondent ’ s evidence and supporting documentation that in October 2008, when the parties were by that time renting out the Halifax home and living elsewhere, the Petitioner both listed and sold the home without the Respondent ’ s knowledge or consent. [ 25 ] I also accept the Respondent ’ s evidence he only learned of the disposition of the home some months later when he questioned his insurance company about a refund cheque and was informed it related to an overpayment arising from the earlier sale.

As Exhibit 11, Tab P before the Court clearly illustrated, not only did the Petitioner swear the 2008 Affidavit of Matrimonial Status to advance the sale which Affidavit stated the home was never occupied by the Respondent as a matrimonial home, the Affidavit further stated the Respondent had never occupied the home... “ at all. ”

[ 26 ] During cross-examination the Petitioner was left with little choice but to acknowledge she had sworn the false Affidavit and yet, even in her acknowledgement of that untruth, the Petitioner still continued to use language apparently designed to minimize her actions, such as “ well the kids and I stayed there and sometimes Steve did ” . Then she indicated “ it was a family home, but only the children and I stayed there, ” this being an immediate contradiction of what she had said moments before.

Finally, she agreed with counsel for the Respondent the home was indeed a matrimonial home, but could not resist adding “ it was occupied by him on his own for six months ” as if that could make a difference in terms of either the untrue Affidavit she had earlier sworn or the already contradictory evidence she had just provided to the Court. [ 27 ] Equally as problematic as the false Affidavit are the broader implications arising from the fact the Petitioner apparently had no compunction about disposing of a matrimonial asset worth in excess of a half million dollars without informing her husband of the same, and then proceeded to invest most of the sale proceeds and retain the balance for herself. [ 28 ] In light of the Petitioner ’ s untruthfulness, coupled with her established history of both encumbering and disposing of real estate without the Respondent ’ s knowledge, I agree his concerns about potential misuse or abuse by the Petitioner, were she to remain as a joint tenant of the property, are justified.

The whole of the evidence has established the Petitioner as impulsive and unreliable; it would be unwise for these parties to remain as joint tenants of any property. Given the rancour, bitterness, one-upmanship, hostility and mistrust that has pervaded this case, it would be verging on reckless for the Court to endorse such an arrangement, even were I to accept, which I do not, that it has been established the security in place to protect the Petitioner ’ s spousal support is insufficient. [ 29 ] The authority for ordering a provision for security of support payments is found within the language of

section 15.2 of the Divorce Act , R.S.C. 1985, c.3 . Court endorsement of these types of arrangements is commonplace in this jurisdiction and there are reported cases that make provision for security for a spousal support order, including through the procurement of insurance naming the support payee as beneficiary. In Slater v. Slater , 2010 NSSC 353 Haley, J., faced with the question of security for support, reviewed the principles enunciated by Kelly, J. in Murphy v. Murphy , 2002 NSSF 21 , wherein the application of s. 15.2 of the Divorce Act, supra was discussed: [33]...While this

section makes no explicit mention of life insurance policies, it gives the Court a fairly broad authority to tailor appropriate support and security regimes based on a case-by-case analysis. [34] In a number of reported cases courts have ordered payors under spousal support orders to designate the payee as beneficiary to their life insurance policies... [35]...Security should be granted in any case of this nature when it is found, for whatever reason, to be legitimately and reasonably warranted under the circumstances. Mr. Murphy has persistently neglected his responsibilities to Ms.

Murphy, and it is not unreasonable to expect that he might continue to do so. Therefore, security in the form of an irrevocable designation of Ms. Murphy as beneficiary of Mr. Murphy’s life insurance policy is reasonably warranted and will be ordered. In Slater , supra the Court found: 141...security is reasonably warranted in the present case. The Petitioner is no longer a resident of Canada and after this proceeding has concluded, he will not likely have any assets in Canada.

His employer and pension plans are in the US, he has divested Canadian assets, and he has been resistant to the payment of court ordered support under the Interim Order. 142 As a result the Orders requested by the Respondent in this regard are supportable and necessary in these circumstances and the order will thus issue.

In addition the Respondent shall be permitted to contact the Petitioner’s insurance directly to ensure compliance with the security obligation. [ 30 ] Unlike Slater, supra and Murphy, supra , I do not see this as being a case where the Court need worry about the Respondent honouring his support payment obligations. I disagree with the Petitioner ’ s assessment that the extent of the security pledged is insufficient.

Given there has been an unequal division of matrimonial assets in the Petitioner ’ s favour and given the acknowledged potential for further variation of the quantum of spousal support, it is difficult to accept the Petitioner ’ s assertion that she is considerably

worse off now than she would have been if the Respondent had unexpectedly met his demise during the marriage. That two separated parties may likely never enjoy the same level of financial security as may have existed had the marriage remained intact is a reality for this couple and many others, but the Petitioner nonetheless remains well protected in my view. [ 31 ] In

summary, there may be the rare case where there is utility in or justification for keeping parties connected through a joint tenancy designation despite their divorced status, but this case is not among them. Issue Two: the Petitioner ’ s investment portfolio [ 32 ] The Petitioner is the owner of a number of accounts with BMO Investorline and Wellington West which constitute her investment portfolio. I agree with the submission by counsel for the Petitioner that the lengthy evidence at trial concerning various aspects of the portfolio may be distilled into three key topics: (

i) allegations regarding a loan by the Petitioner to a third party; (ii) the Respondent ’ s claim for half the value of those investment accounts held jointly by the Petitioner and her mother Mrs. Walter; (iii) whether the Court should characterize gains in the Petitioner ’ s investment portfolio as income or assets? (

i) The third party loan [ 33 ] Considerable time was spent cross-examining the Petitioner about a $150,000 loan she made to a former employee of the Respondent ’ s company with whom the Petitioner continued to communicate, despite the Respondent ’ s objections, after the employee was fired by the Respondent.

The Petitioner and Respondent concurred in their evidence that the Petitioner loaned the monies without the Respondent ’ s knowledge. [ 34 ] The evidence of the loan to the third party served to yet again underscore the poor communication and lack of disclosure between the parties during the marriage, and the ongoing determination of the Petitioner to forge ahead with manipulating large sums of matrimonial funds without the Respondent ’ s knowledge or consent. [ 35 ] The Petitioner ’ s evidence about the loan was curious in that she left unanswered or provided only the most vague of responses to several important questions: why did she lend such a large sum from matrimonial funds without telling her husband?

Why did she engage in the transaction without obtaining any written loan agreement and/or security from the borrower to protect her position? If the loan was “ bridge financing ” to help the borrower ’ s family purchase a home, why was there such a gap in time between the advance of the funds and final payback? More specifically, why was the payback in staggered dates and amounts? None of these questions were resolved in any meaningful way by the Petitioner ’ s evidence. The Petitioner could provide no documentary proof of her assertion she had also collected $3000.00 cash interest on the loan.

I formed the distinct impression that aspect of the evidence was being manufactured by the Petitioner as an afterthought at the moment she was being cross-examined on the topic by counsel for the Respondent, and I do not accept the Petitioner ’ s evidence that interest was collected. [ 36 ] I agree with the observation of counsel for the Petitioner that while never plainly stated, the thrust of the Respondent ’ s position seemed to be that the Court should assume there had never been any loan and the Petitioner was essentially “ laundering ” matrimonial funds to move them into her sole control.

In the end, I am satisfied the Petitioner took $150,000 of matrimonial funds out of reach of the Respondent, whether for a loan or any other reason, but the banking paper trail outlined in the evidence of the Petitioner satisfies me an amount equal to the funds eventually came back to the Petitioner. I cannot be satisfied on a balance of probabilities there was something nefarious about the loan.

Rather, the ultimate significance of the evidence was that it supported the Court ’ s impression of the Petitioner as being very capable of deceitfulness during the marriage as to the manipulation of sizeable sums of money between and among various accounts held by her.

(ii) The Petitioner and Mrs. Walter ’ s joint accounts [ 37 ] The Petitioner holds certain of her investment portfolio accounts jointly with her mother Mrs. Walter, a resident of Ontario. Throughout the litigation the Petitioner has taken the position that she is an account holder in name only as Mrs. Walter previously assigned to the Petitioner the responsibility for making investment decisions on her mother ’ s behalf. It was the Petitioner ’ s position at the Interim hearing that she did not receive account statements and had no ability to remove funds from the accounts.

The Petitioner was subject to lengthy cross-examination at trial about her ability to control the activity in the accounts. [ 38 ] What became apparent at trial was that Consent Orders for Disclosure issued after the Interim hearing but prior to trial resulted in the Respondent receiving previously undisclosed information about those accounts.

In light of that disclosure, the Respondent claims the Petitioner has been untruthful about the extent of her involvement and interest in the accounts, that the Petitioner is more than a mere administrator or trustee on behalf of her mother, and finally, that the funds are actually matrimonial in nature. [ 39 ] Section 4 (1) (

a) of the Matrimonial Property Act exempts from the definition of matrimonial assets the following: “...gifts, inheritances, trusts or settlements received by one spouse from a person other than the other spouse except to the extent to which they are used for the benefit of both spouses or their children”. [ 40 ] The Respondent argues the Petitioner has not met the burden of establishing the accounts belong only to her mother and that she has no interest in them. The Respondent argues he is entitled to fifty percent of the value of the subject accounts, if the Court is persuaded Mrs.

Walter has no true interest in the accounts other than in name only. In the alternative the Respondent seeks twenty-five percent of the value of the accounts, representing an equal share of the Petitioner ’ s half ownership of the same. [ 41 ] The Respondent asserts that if the monies did not belong to the Petitioner she would not have gone to such efforts to avoid detection of the extent of her involvement in the accounts.

The Respondent maintains the Petitioner previously edited critical information from the account statements in anticipation of their scrutiny at the Interim hearing and a comparison of those account statements with the same account statements filed after Consent Orders of Production were secured in March 2012, illustrate the earlier filed statements were tampered with by the Petitioner. The Respondent argues the Court could not have known at the time the Interim hearing decision was rendered that the Petitioner was also named as an account holder with Mrs.

Walter, and that the mailing address for the statements was one of the Petitioner ’ s Nova Scotia addresses and not the Ontario address of Mrs. Walter as that information had been redacted from the statements used at the Interim hearing. [ 42 ] At trial, the Petitioner strongly denied tampering with the documents; she asserted the statements submitted by her for the Interim hearing were not in any way altered by her but she was unable to explain the difference between the statements or the apparently redacted portions of the earlier in time statements.

Counsel for the Petitioner argued that it is questionable, if one conducts a close comparison of the two version of the statements (Exhibit 12, Tab 1 and Exhibit 13, Tabs 1 and 4), whether the account statements used at the Interim hearing versus those used at trial are actually the same documents. [ 43 ] In the end this Court does not need to determine whether the differences in the two sets of statements are because the Petitioner actually tampered with the statements put before the Court at the Interim hearing.

Such a finding would be only superfluous to the evidence given by the Petitioner herself during trial cross-examination, where she was forced to concede, in the face of documents put before her by the Respondent ’ s counsel, that : (

a) the Petitioner is indeed a named joint account holder with her mother on the relevant accounts; (

b) the account statements are in fact available to the Petitioner as a named account holder; (

c) the account statements are in fact sent to one of the Petitioner ’ s local mailing addresses and not to the Ontario address of her mother; (

d) the Petitioner does in fact have the ability to control account activity beyond deposits alone;

(

e) the relevant accounts are in fact linked to other accounts over which the Petitioner has access, control and/or the ability to conduct activity. [ 44 ] In Cashin v. Cashin , 2010 NSCA 51 , Bateman, J. on behalf of the Court stated:

(8) Pursuant to s. 4(1) of the Matrimonial Property Act, R.S.N.S. 1989, c. 275 all real and personal property acquired by either or both spouses before or during their marriage is a matrimonial asset, subject to certain enumerated exceptions. The burden of proving that an asset is not matrimonial by reason of exception falls upon the spouse making that assertion ...[emphasis added] [ 45 ] In his evidence the Respondent agreed that at the time he received a fax letter from Mrs. Walter in December 2009, he accepted its contents in which she specifically identified the subject funds as hers (Exhibit 35, Tab 18).

The Respondent says he no longer believes the contents of that fax. Curiously, neither party offered Mrs. Walter as a witness. [ 46 ] The documentary evidence establishes, as the Petitioner testified, that a total of $291,000.00 was deposited by her mother for her to manage, prior to the date the Petitioner relies upon as being the date of separation. The Petitioner invested $280,000.00 of those monies on behalf of her mother, however she also borrowed funds from her mother, of which the Petitioner clams $71,000 remains owing to Mrs. Walter (Exhibit 7, Tab 14).

It is most difficult to reconcile that if the Petitioner ’ s only role in relation to the accounts is to act as an administrator/advisor or trustee, that goes contrary to her own evidence she has personally benefited from the funds in the accounts. Obviously, she is much more than an arm ’ s length advisor to her mother ’ s investment strategy. [ 47 ] Ultimately, the Petitioner ’ s own evidence satisfies me she clearly had far more control over and involvement in the subject accounts than she had previously been prepared to acknowledge.

The Petitioner gave rambling and confusing evidence about numerous transactions she has conducted which have involved moving monies in and out of the accounts. I formed the distinct impression the Petitioner has been doing much more with the funds and the accounts than merely advising or assisting her mother with them. I am not persuaded on a balance of probabilities the Petitioner has established the funds fit within the exemption to the definition of matrimonial assets.

I find the Respondent is entitled to assert his equal interest in the Petitioner ’ s half interest in these accounts (twenty-five percent of the original $291,000 deposit by Mrs.

Walter to the joint benefit of the Petitioner). (iii) Gains in the Petitioner ’ s portfolio [ 48 ] The Respondent submits gains the Petitioner has made in the growth of her investment portfolio since the parties separation should be recognized as income available to her. [ 49 ] The Petitioner gave evidence that prior to filing her Interim application, when her stock portfolio was performing well and she believed the Respondent was limiting her access to matrimonial funds, she withdrew significant sums of money from her investment portfolio.

The Petitioner also agreed on cross-examination, albeit reluctantly, that the money she withdrew was not from capital but rather from growth, and was money she had for her use in addition to the financial support the Respondent was providing to her or for her benefit. [ 50 ] Prior to separation the Petitioner had under her sole control the sale proceeds of the Halifax home, the bulk of which she put to work funding her investment portfolio.

I agree with the legitimacy of the concern expressed by counsel for the Petitioner wherein she cautioned against “ double-accounting ” : all of the funds realized from the home sale now show on the Petitioner ’ s side of the equalization ledger in the Minutes. The Petitioner also testified she withdrew funds from her RRSP account during the same period for the same reason (that the Respondent was not providing sufficient financial support) and likewise she has now been credited with the RRSP in the equalization ledger.

It is important not to confuse the capital asset with income realized therefrom, however in her own evidence the Petitioner agreed with counsel for the Respondent that she was indeed withdrawing income from her investment portfolio without encroaching on the captial.

While I am satisfied the funds the Petitioner employed from the sale of the Halifax home were an asset, clearly the funds that capital asset subsequently generated are properly classified as income. [ 51 ] Indeed, Exhibit 14, Tab 2, Page 80 shows that the portfolio cash account, at one point worth over $771,000, had grown since the time the monies were originally invested. In her evidence the Petitioner also agreed that at one point in (January 2011) the portfolio

was worth in excess of one million dollars. [52] I consider the comments of Forgeron, J. in Jenkins v. Jenkins 2012 NSSC 117. While the case dealt with an application forinterim spousal support after a lengthy marriage, nonetheless the discussion of the concept of “means” is relevant to this case: 18 ... Means includes, not only income earned, but also capital and income earning capacity. The Supreme Court of Canada confirmedthis expansive definition in Leskun v.

Leskun 2006 SCC 25 at para 29: There is no support in the case law or in logic for the proposition that the Chambers judge was wrong to take into account the appellant'scapital assets acquired after the marital break-up. In Strang v. Strang, (SCC), [1992] 2 S.C.R. 112 (S.C.C.), the Courtstated that the traditional understanding of the word "means" includes, "all pecuniary resources, capital assets, income from employmentor earning capacity, and other sources from which the person receives gains or benefits" (p. 119). J. Payne and M.

Payne elaborate asfollows: The word means includes all pecuniary resources, capital assets, income from employment or earning capacity, and any other sourcefrom which gains or benefits are received, together with, in certain circumstances, money that a person does not have in possession butthat is available to such person. (Canadian Family Law (2001), at p. 195). (emphasis added) It is acknowledged the Petitioner went to some lengths in her evidence to distinguish between the value of a portfolio on paper and actualcash value, nonetheless I am satisfied that through her investment activities she was clearly achieving growth of the asset, and,concomitantly, sometimes experiencing negative growth (losses) of the asset. [53] The Respondent refers the Court to the decision in Cook v.

Cook 2002 NSSC 124 wherein Scanlan, J. stated in paragraph 16: ...The Court must strike a balance in deciding how much of that investment income should be attributed to current living expenses andhow much can be reinvested to build capital. Given the relatively large capital base which Mrs. Cook takes from this marriage as aresult of the division of assets that asset position cannot be ignored in this case. The income earning capacity based on capital is but onecircumstances (sic) that results from the marriage, the roles assumed by the parties and the impact upon Mrs.

Cook as a result of thebreakdown of the marriage. I again point out that it would be inappropriate to place an inordinate amount of emphasis on that factor butit simply cannot be ignored in this case. [54] Given the capital asset of the Halifax home sale proceeds has already been credited to the Petitioner, the income and/or lossesexperienced through the Petitioner’s investment of those proceeds, will undoubtedly factor in to future examination of her capacity torealize income in the context of economic independence as it relates to spousal support.

Issue Three - Primary care [55] The parties wish the Court to define or place parameters around their agreement for support of their younger child, who is inthe custody of the Petitioner. The child is seventeen years of age and will commence university in the fall of 2012. [56] Not unlike the Interim Order as to quantum of child support, the Minutes provide for an “all inclusive” amount of $9000.00 permonth payable by the Respondent to the Petitioner as long as the child “is in the primary care of Caryn Breed and remains a dependantchild of the marriage, as envisaged by the Divorce Act”.

The essence of the parties disagreement on this matter is captured in the phrasein the Minutes regarding the significance of the child “no longer residing with Caryn Breed during the summer months, i.e. if she doesnot return to live in her mother’s household; (sic) as it affects the child support payable”. [57] Determining when or if a child becomes, is or remains in the primary care of either parent is an analysis dependant upon thecircumstances that might exist at any given time.

The parties have already agreed that given their child’s present circumstances, theobligation for child support reflects the child resides primarily with the Petitioner and will continue to do so for those periods of timewhen not attending university. Presumably, the parties want to know if the current obligation or the quantum of child support payableby the Respondent, or the current obligation of the Petitioner to assume all expenses associated with or incurred by or on behalf of the

child, might be affected by a change or adjustment to the child ’ s current status as being in the Petitioner ’ s “ primary care ” . [ 58 ] In my view it is impossible to state with any precision or accuracy what might constitute “ primary care ” in future as that will depend on the circumstances of the child and/or the parties themselves as the same might exist from time to time. [ 59 ] The child is currently a child of the marriage as defined in

section 2 of the Divorce Act , supra by virtue of both her age and level of dependancy as a student. Her age will certainly change and her level of dependancy might change; it is also conceivable that such changes might not affect the primary care arrangement. The child could reach the age of majority as referenced in

section of the Federal Child Support Guidelines , SOR/97-175 and although not in attendance at university, remain financially dependant upon and in the primary care of the Petitioner. It is also conceivable that the child could continue with her present education plan but the circumstances of the Petitioner would change in a manner that disrupted or displaced the current primary care arrangement. [ 60 ] It is understandable that in putting this question before the Court the Petitioner is motivated by a desire to avoid fluctuations to the child support payment.

It is equally understandable the Respondent is motivated by a desire to avoid getting tied to a quantum of child support that exceeds the Petitioner ’ s expenses for or on behalf of the child. However, it is difficult if not impossible for this Court to define the future, which is the essence of the parties ’ request.

Any attempt to define primary care for future application to the parties ’ situation or that of their child, without knowing the then circumstances of the three individuals concerned, is meaningless short of having the Court resort to a crystal ball to conduct the exercise. [ 61 ] The evidence before me cannot support the Petitioner ’ s contention that parameters around primary care are needed to ensure the parties ’ younger child receives the same advantages as the parties ’ older child. To the contrary, there is more than ample evidence to confirm that the same has already and continues to happen.

To cite but a few examples, each child has been to private school, each child has their own vehicle, each child has unfettered access to their own bank accounts, and as of September 2012 each child will be attending university. [ 62 ] In the end, as their younger child continues to mature the parties will need to make any adjustments to child support that appropriately reflect their child ’ s situation and their own.

If they cannot agree in future on what those changes might be and how the same might affect eligibility to or quantum of child support, then a Court of competent jurisdiction might be required to do it for them. Issue Four - Retroactive spousal support [63] The Petitioner claims a total of $242, 632.77 in retroactive spousal support between May 1, 2010 and May 31, 2011 (the “ retroactive period ” ). This represents a thirteen month period prior to the effective date of support, being June 1, 2011 as found in the Interim Order for child and spousal support.

The Petitioner calculates the total claim as follows: Child support at $9098.05 per month x 13 months $118, 274.65 Spousal support at $24, 788.95 per month x 13 months $322,256.35 Third party payments by the Respondent in favour of the Petitioner x 13 months $24,167.78 Subtotal: $464,698.78 Less payments made by the Respondent in retroactive period $204, 090.76

Less adjustment (tax neutral payments received in retroactive period) $17, 975.25 Total: $242, 632.77 The Respondent does not challenge the figures contained in the Petitioner ’ s calculations; rather he argues such an award would not be appropriate under all of the circumstances. [64] Both in her evidence and in the submissions made on her behalf the Petitioner acknowledged receipt of the payments received by her during the retroactive period as discussed in some detail in the evidence of the Respondent. Those payments total $204,090.76.

It was submitted that because child support must be acknowledged as standing in priority to spousal support, the balance claimed - $242,632.77 - represents a contribution to retroactive spousal support, thereby taxable in the Petitioner ’ s hands. [65] As to retroactive spousal support, the considerations informing the analysis were distinguished from those of retroactive child support by Cromwell , J. in Kerr v.

Baranow , 2011 SCC 10 at paragraph 201 : While D.B.S . was concerned with child as opposed to spousal support, I agree with the Court of Appeal that similar considerations to those set out in the context of child support are also relevant to deciding the suitability of a “retroactive” award of spousal support. Specifically, these factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse.

However, in spousal support cases, these factors must be considered and weighed in light of the different legal principles and objectives that underpin spousal as compared with child support. Those principles and objectives are found in

section 15.2(4) and 15.2(6) of the Divorce Act , supra, and this Court is entitled to assume the agreement these parties have reached as to spousal support quantum reflects the same.

The question is whether the circumstances of the Petitioner during the retroactive period have left her deprived of the proper application of those same principles and objectives? [66] As discussed earlier the Respondent ’ s “ selective ” disclosure and the evidence offered by the Petitioner as to the Respondent ’ s ability to pay lead me to conclude his ability to pay a retroactive award is not in question; indeed the status of his bank balances as of May 28, 2012 firmly supports the same.

It is difficult to accept any hardship might be suffered if the Respondent were required to make a partial or full payment of the retroactive amount claimed.

Recognizing the Respondent ’ s evidence that his bank balances are in a constant state of flux and that he has exhausted the potential for any further corporate bonus for this year, nonetheless the whole of the documentation before the Court illustrating the Respondent ’ s overall financial picture could hardly support that he might be prejudiced under the weight of a retroactive payment. [67] I am satisfied the Respondent is, on the whole of the evidence, positioned with considerable assets and cash at his disposal, more than sufficient to meet any payment that might be required.

The Respondent ’ s own evidence on this question established only the sort of hardship related to his personal distaste for the prospect of having to fund that which he perceives as a “ cash grab ” by the Petitioner, but his chagrin is hardly the focus of the legal analysis. [68] While I am not persuaded there would be a hardship to the Respondent in terms of his present ability to meet a retroactive obligation, I decline to require him to pay retroactive support in any amount as the evidence does not remotely establish any disadvantage experienced by the Petitioner during the retroactive period. [69] I am satisfied the Petitioner ’ s entitlement to have her pre-separation standard of living perpetuated as far as possible was well met by the Respondent during the relevant period.

The pages of documentary evidence before the Court record the Petitioner ’ s spending over that time and allow me to conclude that in terms of the relatively high standard of living she enjoyed, life for the Petitioner post- separation continued essentially uninterrupted from a financial perspective.

[70] The Petitioner asserts this Court should consider the Respondent’s conduct in previously not revealing his true income for 2011as also justifying a retroactive award. Each party mounted a vigorous case from the start of the litigation, and each sought additionaldisclosure from the other throughout. While complete disclosure of the Respondent’s 2011 income did not occur until well into the case,it culminated in this Court’s determination at the Interim hearing as to the Respondent’s 2011 income for Guideline, supra purposes.

It ismoot to now examine the “blameworthiness” of the timing of that disclosure by the Respondent relative to the time of trial, since theInterim Order awarded child and spousal support retroactive to 2011 (when the Interim application was made) and reflected what theCourt determined was the Respondent’s 2011 level of income. The utility in assessing the Respondent’s 2011 income was exercised atthe Interim hearing.

The trial claim for further retroactive support extends to a time before the filing of the Interim application. [71] In considering the timeliness of or delay in seeking spousal support as it relates to a claim for retroactivity, in Kerr, supra theCourt observed: 208 ...In contrast, there is no presumptive entitlement to spousal support and, unlike child support, the spouse is in general not underany legal obligation to look out for the separated spouse's legal interests. Thus, concerns about notice, delay and misconduct generallycarry more weight in relation to claims for spousal support: see, for example, M.L.

Gordon, "Blame Over: Retroactive Child and SpousalSupport in the Post-Guideline Era" (2004-2005), 23 C.F.L.Q. 243, at pp. 281 and 291-92. 209 Where, as here, the payor's complaint is that support could have been sought earlier, but was not, there are two underlyinginterests at stake. The first relates to the certainty of the payor's legal obligations; the possibility of an order that reaches back into thepast makes it more difficult to plan one's affairs and a sizeable ‘retroactive’ award for which the payor did not plan may impose financialhardship.

The second concerns placing proper incentives on the applicant to proceed with his or her claims promptly (see D.B.S., atparas. 100-103). . . . 211 In D.B.S., Bastarache, J. referred to the date of effective notice as the “general rule” and “default option” for the choice ofeffective date of the order (paras. 118 and 121; see also para. 125). The date of the initiation of proceedings for spousal support has beendescribed by the Ontario Court of Appeal as the “usual commencement date”, absent a reason not to make the order effective as of thatdate: MacKinnon v.

MacKinnon (2005), (ON CA), 75 O.R. (3d) 175, at para. 24... [72] Among the evidence on the question of retroactivity, the Court had the benefit of copies of emails exchanged between theparties as well as their respective viva voce evidence as to the monthly financial arrangements that existed during the retroactive period. While the emails alone were very far from harmonious in tone, there is no particular reason able to be extracted from the evidence as towhy the Petitioner did not make application to the Court for relief during the period for which she now seeks a retroactive payment.

Clearly the parties argued about money during that time, however any delay, if it can properly be called that, represents only that timeduring which the Respondent and the Petitioner agreed to disagree and argued about their financial affairs, for six months prior to thefiling of the Petition and seven months after its filing, until the Petitioner made her Interim application for child and spousal support.

Again, I am satisfied on the evidence that in that time the Petitioner continued to carry on the lifestyle she had historically enjoyed. [73] The retroactive period was not a time when the Petitioner was forced to make adjustments to her day-to-day lifestyle orstandard of living such that she should now be reimbursed for the same by the Respondent.

Furthermore, it is to be remembered thatduring the same period, even though the parties were operating under a de facto split custody arrangement with respect to their twochildren, the Respondent was solely responsible for funding directly and indirectly the lifestyle of each child, without a discrete financialcontribution by the Petitioner. [74] In her evidence the Petitioner referenced the Respondent’s behaviour in forcing her to draw from her investment portfolio toraise funds as also justifying a retroactive award.

She testified she needed to do so in light of the Respondent’s unilateral decision tocontrol their joint chequing account by requiring the bank to secure his authorization for any cheque that would place the account inoverdraft, thereby controlling which of the Petitioner’s expenditures he would fund.

The Respondent corroborated the Petitioner’sevidence as to operating the account in that manner, but justified his actions on the basis that the Petitioner’s post-separation spendingwas spiralling out of control. [75] I accept the Respondent’s evidence that during the retroactive period he failed to fund only two of the Petitioner’s expenses - aretainer cheque for her legal counsel and a cheque for a farm labourer’s wages. The latter cheque was written after the Respondent,

whose evidence on the point I accept, had told the Petitioner more than once that she needed to curb her spending, especially where it related to excessive hours being paid to farm employees beyond what had been the pattern of spending on farm labour during the marriage. [76] While this Court should not be seen to endorse the methodology the Respondent was employing by the fall of 2010 - having the bank call him to authorize clearance of any cheque written by the Petitioner, the honouring of which might place the account in overdraft - I accept his evidence that his frustration with the Petitioner ’ s incessant spending was the motivator for his unilateral action.

I acknowledge the Petitioner ’ s evidence about her discomfort in having to constantly email the Respondent to tell him what cheques she was writing but the evidence from both parties has borne out that on the whole, throughout the retroactive period, in addition to other funds or monies worth he provided to the Petitioner, the Respondent continued to fund the chequing account, and the Petitioner continued to spend from it.

In terms of her activities and pattern of spending, the Petitioner carried on as she always had despite the fact the parties had separated. [77] In Kerr , supra the Court also raised the matter of the needs of the spouse in weighing a retroactive claim: 212 Other relevant considerations noted in D.B.S . include the conduct of the payor, the circumstances of the child (or in the case of spousal support, the spouse seeking support), and any hardship occasioned by the award.

The focus of concern about conduct must be on conduct broadly relevant to the support obligation, for example concealing assets or failing to make appropriate disclosure: D.B.S ., at para. 106. Consideration of the circumstances of the spouse seeking support, by analogy to the D.B.S . analysis, will relate to the needs of the spouse both at the time the support should have been paid and at present.

The comments of Bastarache J. at para. 113 of D.B.S . may be easily adapted to the situation of the spouse seeking support: “A [spouse] who underwent hardship in the past may be compensated for this unfortunate circumstance through a retroactive award.

On the other hand, the argument for retroactive [spousal] support will be less convincing where the [spouse] already enjoyed all the advantages (s)he would have received [from that support].” As for hardship, there is the risk that a retroactive award will not be fashioned having regard to what the payor can currently afford and may disrupt the payor's ability to manage his or her finances.

However, it is also critical to note that this Court in D.B.S . emphasized the need for flexibility and a holistic view of each matter on its own merits; the same flexibility is appropriate when dealing with ‘retroactive’ spousal support. [78] Unlike the situation in Kerr , in this case the claim for retroactive payment is for a time prior to the filing of the Petition for Divorce and well prior to the filing of the Interim application for support.

After reviewing hundreds of pages of exhibits including bank statements, cancelled cheques, emails between the parties, and the Petitioner ’ s budget and expenses during the retroactive period, I can come to only one conclusion : the Petitioner, like the parties ’ child in her custody, was well provided for by the Respondent during the retroactive period. She suffered little or no economic displacement during that time. [79] The evidence supports that for the Petitioner, being separated during the retroactive period was, from a financial perspective, largely no different than being married.

The Petitioner ’ s claim for retroactive support would correct no loss or displacement to her; it would serve only to transfer a considerable amount of cash to her under the thinly veiled guise of spousal support. The evidence does not persuade me there is a need or displacement the Petitioner must now recapture through a retroactive award. Conclusion [80] In conclusion, in regard to each of the four question framed as the issues in this proceeding, I find as follows:

(1) Security for spousal support beyond what was already agreed to between the parties in the Minutes is neither necessary nor, in the manner proposed is it appropriate, under all of the circumstances. (2)(

a) The investment portfolio accounts held jointly by the Petitioner and her mother are not assets exempt from the definition of matrimonial assets and as such the Respondent is entitled to one half of the Petitioner ’ s one half interest (twenty-five percent of $ 291,000.00); (

b) growth in the Petitioner ’ s investment portfolio is properly characterized as income.

(3) The Court is not in a position to predict the future of the parties and their younger child as it relates to the matter of primary care.

(4) The Petitioner is not entitled to retroactive spousal support. [81] Counsel for the Petitioner is asked to prepare the Corollary Relief Judgment giving effect to this decision, consented to as to form by counsel for the Respondent, which shall include: (

i) the parties previously identified agreement with respect to Key Man Insurance; (ii) the parties previously identified agreement with respect to rental income from the parties jointly owned commercial property (per the Interim Consent Order of September 29, 2011); and (iii) incorporation of the Partial Minutes of Settlement dated May 28, 2012. J. NOVA SCOTIA SUPREME COURT (FAMILY DIVISON) Citation : Breed v. Breed , 2012 NSSC 285 Date: 20120727 Docket: 1201-064992 Registry: Halifax Between: Caryn Grace Breed Appellant v.

Perley Stephen Breed Respondents Revised decision: The paragraph numbering of the original decision has been corrected according to this erratum dated September 12, 2012. Judge: Beaton, Carole Heard: June 4, 5, 6, 7, 8 and 11, 2012

Counsel: M. Jane Lenehan and Diana Musgrave, Counsel for the Petitioner, Caryn Breed Yvonne M.R. LaHaye, QC and Deborah Gillis QC, Counsel for the Respondent, Stephen Breed Erratum: Paragraph number 80 is now paragraph number 79. Paragraph number 79 is now paragraph number 80.