Howley v Howley, 2012 NSSC 123

FAMILY COURT OF NOVA SCOTIA Citation: Howley v Howley, 2012 NSSC 123 Date: 20120119 Docket: 1206-5088 Registry: Sydney Between: Thomas Wendell Howley Plaintiff v. Brenda A. Howley Defendant LIBRARY HEADING Judge : The Honourable Justice M. Clare MacLellan Heard: December 1, 2010 and May 26, 2011 in Sydney , Nova Scotia Final Written Submissions: August 12, 2011 & August 15, 2011 Subject: Matrimonial debt from family business; reconstructing finances 15 years after separation. Issue: Establishing proof on a balance of probabilities on dated and insufficient records.

One party seeking adjusted RRSP value on insufficient evidence. Effect of adding a new issue to litigation on trial date. Result: Court used best values achievable on dated information to achieve division. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. IN THE SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Howley v. Howley, 2012 NSSC 123

Date: 20120119 Docket: 1206-5088 Registry: Sydney, N.S. Between: Thomas Wendell Howley Petitioner v. Brenda A. Howley Respondent Judge: The Honourable Justice M. Clare MacLellan Heard: December 1, 2010 and May 26, 2011 Written Submissions: July 4, 2011, William Burchell June 21, 2011, Darlene MacRury Final Written August 15, 2011, William Burchell Submissions: August 12, 2011, Darlene MacRury Counsel: William Burchell, counsel for Petitioner Darlene MacRury, counsel for the Respondent By the Court: [ 1 ] The petitioner is Thomas Wendell Howley; the respondent is Brenda A. Howley.

The parties married on August 14, 1971 and separated on January 10, 1994. During their marriage they became the parents of two children. Dawn Renee Howley was born June 22, 1971 and Jeffrey Wendell Howley was born October 18, 1976.

[ 2 ] When Jeffrey Wendell Howley was four years of age he developed a visual impairment and diabetes which resulted in the medical determination that he was legally blind. Jeffrey Wendell Howley is now married and lives independently. The parties agree that neither child is a child of the marriage within the meaning of the Divorce Act , RCA 1985, c. 3 (2 nd Supp) s.2(1)(b). [ 3 ] While Jeffrey Wendell Howley is no longer a child of the marriage the petitioner requested the court hear evidence and consider contributions made by Mr.

Howley to Jeffrey from the date of separation, January 10, 1994, until Jeffrey vacated the matrimonial home in March 2004. [ 4 ] The parties both owned and operated a restaurant known as Lakeview Restaurant Ltd., from 1979 until 1993. Both were directors and officers of Lakeview Restaurant Ltd. The earning from the restaurant was the family ’ s sole source of income. [ 5 ] Mr. Howley vacated the matrimonial home in 1994 - 1995 and Mrs. Howley has remained in the home. COURT HISTORY: [ 6 ] The relevant court documents filed by the parties are: - Petition for Divorce filed by Mr.

Howley February 23, 2006. - Clearance certificate issued April 4, 2006, central registry. - Request for trial date and certificate of readiness filed June 4th, 2008, from Mr. Howley . - Answer filed June 27, 2008, Mrs. Howley. - Statement of property filed June 27, 2008, Mrs. Howley. - Statement of expenses July 25, 2008, Mrs. Howley. - Statement of income July 25, 2008, Mrs. Howley. - Statement of expenses, February 15, 2010, Mr. Howley. - Statement of property, February 15, 2010, Mr. Howley. - Statement of guideline income, February 15, 2010, Mr.

Howley. [ 7 ] A settlement conference held September 23, 2010 with both parties in attendance was unsuccessful. [ 8 ] Mr. Howley ’ s petition for divorce requested the following relief, divorce and division of assets. Mrs. Howley ’ s answer filed June 27, 2008 requested child support, spousal support, costs and division of property. [ 9 ] The matter was set for a first pre-trial on October 20, 2010. The presenting issue at the time was disposition of the matrimonial home. At that time Mr. Howley sought an updated appraisal on the property while Mrs. Howley was to file updated financials.

Counsel agreed on behalf of their clients that the hearing would not involve any discussion on debts. The exchange was as follows: THE COURT: And I ’ m not dividing any debts that I don ’ t have clear proof of.

DARLENE MACRURY: I don ’ t think there ’ s any debts. WILLIAM BURCHELL : No, they ’ re long gone. [ 10 ] Mrs. Howley, through her counsel, requested confirmation of the existing R.R.S.P. ’ s and life insurance. Mr. Howley wished the issue of occupational rent to remain as a potential claim. The pre-trial clarified that there was no pension held by either party. Ms. MacRury indicated that her party wished to have a s.13 division equal to approximately two-thirds of the matrimonial home because of the responsibilities she assumed in relation to childcare. Mrs. Howley wished Mr.

Howley to retain all R.R.S.P. ’ s and insurances. In addition to the R.R.S.P. and insurance policies, Mrs. Howley was willing to pay $30,000 to purchase Mr. Howley ’ s interest in the matrimonial home. Mr. Burchell described the R.R.S.P. ’ s as “ strictly a math exercise ” . On Mr. Howley ’ s behalf Mr. Burchell maintained a 50/50 split of assets was appropriate. [ 11 ] At the end of the pre-trial information concerning the R.R.S.P. ’ s and insurances was requested by Mr. Howley ’ s counsel.

Counsel was directed to secure confirmation regarding the R.R.S.P. , two insurance policies and the value of the matrimonial home. [ 12 ] The first date of trial was December 1 st and counsel requested and received additional time to negotiate. These negotiations were not successful. The trial proceeded after a two hour delay and only the evidence from Mr. Thomas Howley was completed. The trial reconvened on May 26, 2011 when Mrs. Howley ’ s evidence was completed. At that time the divorce was granted. Counsel were advised the divorce order would not be issued until all corollary relief matters were concluded.

Written submissions were requested by counsel. Upon receipt of the submissions on July 12, counsel were asked to clarify several points in the written submissions and to provide their requested evaluations in chart form by August 12, 2011. [ 13 ] The issues that arose during hearing well exceeded those anticipated during pre-trial. These issues included: i. Sale and value of the matrimonial home. ii. Current value of R.R.S.P. ’ s. (

a) withdrawal of R.R.S.P. ’ s for: (

i) personal use (ii) business debt iii. Existence and payment of: (

a) business debts (already paid) (

b) business debts (remaining) iv. Evaluation of insurance policies (

a) Manulife (

b) London Life v. Mr. Howley ’ s contributions to maintaining the matrimonial home, and child rearing. vi. Mrs. Howley ’ s contributions to maintaining the matrimonial home, and child rearing. vii. Occupational rent. viii.

Section 13 division of assets in favour of Mrs. Howley. ix. Retroactive spousal support for Mrs. Howley.

EVIDENCE: [ 14 ] Prior to the commencement of the Lakeview Restaurant Limited Mr. Howley had different positions outside the home in which he occupied an employee status. Mrs. Howley worked in the home taking care of the children and the household. [ 15 ] The parties owned and operated a restaurant known as Lakeview Restaurant Limited in Bras d ’ Or. Both parties worked in the restaurant in various positions. The parties were directors. Mr. Howley was the president and Mrs. Howley was the secretary. The restaurant commenced operation in 1979.

Operation ceased late in 1993 or early 1994. [ 16 ] Upon separation in January 1994, Mrs. Howley undertook an upgrading course and through the assistance of provincial funding secured a licensed practical nursing certificate in 1996. At the time of separation Mr. Howley began employment on a grant. He found employment with his brother-in-law at a service station. For the past 13 years he is employed with a local business as a sales person. [ 17 ] At the time of separation Renee, the older child, was away in school attending Teacher ’ s College in Truro while Jeffrey continued his high school education.

Subsequently Renee completed her certificate in childcare development. Jeffrey attended a portion of one year at the local university taking a C.C.A. course which he did not complete. He secured some part time work as a disc jockey. Jeffrey married and left the matrimonial home in 2004. [ 18 ] Ms. Howley ’ s current partner began to cohabit with her in the matrimonial home in the spring of 2004. [ 19 ] At the time the parties separated there was no arrangement agreed to between Mr. And Mrs. Howley as to the maintenance and support of the children or the maintenance and occupation of the matrimonial home.

Neither party commenced any action to finalize the issues existing as a result of the marriage until Mr. Howley filed a petition for divorce on February 23, 2006. One effort made in October 1994 to finalize the terms in a written separation agreement was unsuccessful. EVIDENCE: December 1, 2010 (Pre-Trial prior to Trial) [ 20 ] At the commencement of hearing counsel requested additional time which they hoped would be fruitful towards settlement.

After approximately two hours it was apparent that settlement was not forthcoming and the issues were re-iterated before the court by counsel preparatory to calling evidence. 1. Mr. Burchell outlined his client ’ s position that Mr. Howley sought fifty percent of the equity in the matrimonial home. Mr. Howley wished to divide the R.R.S.P. ’ s between the parties with some minor adjustments for post separation contributions. Mr. Burchell advised that there were also some withdrawals from the R.R.S.P. account and he had recently provided Ms. MacRury a list of those withdrawals. 3. Ms.

MacRury advised that simplistic division was complicated by a series of withdrawals and deposits to the R.R.S.P. account solely by Mr. Howley. Specifically that he withdrew $18,196 more than he invested post separation. Ms. MacRury is also interested in securing the interest on the R.R.S.P. ’ s up to the date Ms. MacRury requested interest on depleted portions of R.R.S.P. This calculation was not provided in evidence by either party during the trial. 4. Ms.

MacRury indicated that it was her client ’ s position that once an accurate figure for the R.R.S.P. account was arrived at, she was willing to look at a thirty percent reduction “ for taxes ” and that would be the figure used for division purposes.

5. During the December 1 st pre-trial it was advanced for the first time that the R.R.S.P. withdrawals were associated with business debt from the restaurant owned by both parties, which ceased operation in 1994. Mr. Burchell advised that the R.R.S.P. account was also affected by personal withdrawals by both parties. 6. Ms. MacRury had recently received the information concerning the two insurance policies. Her client agreed with the stated values of Manulife and London Life policies. 7. In relation to the insurances, Mr.

Howley advised that he had received a document from Manulife (exhibit # 8) outlining that the value of that insurance was $7,842.52 as of December 31, 1993. Mr. Howley maintains the respondent agreed to a set off which would allow him to keep this policy without division. 8. Ms. MacRury advised that her client ’ s position was she wished an equalization of the assets. While reluctant to clarify whether or not Mrs. Howley was still advancing a

section 13 Matrimonial Property Act claim, she advised that Mrs. Howley was seeking to retain the matrimonial home and pay Mr. Howley $25,000 which would represent his share of the equalization of assets. Mrs. Howley believed this could be achieved by Mr. Howley retaining the R.R.S.P. ’ s, the two insurance policies plus $25,000.00. 9. The pre-trial concluded with the court alerting counsel that matters which appeared clear during the pre-trial six weeks earlier, appeared less clear on the morning of trial. The court cautioned that it would be difficult to complete the matter in the one day assigned.

It was concluded that an examination of the R.R.S.P. ’ s was required and that the division sought by Mrs. Howley in relation to the matrimonial home constituted a

section 13 Matrimonial Property Act division. EVIDENCE AT TRIAL [ 21 ] Mr. Howley gave evidence that he vacated the matrimonial home on January 10, 1994. At that time there was no clear agreement between the parties. Both children were living at home although his daughter was studying early childhood development in Truro. [ 22 ] Mr. Howley advised there never was any separation agreement achieved between the parties, rather he paid taxes and insurance plus other contributions to the home as well as allowing his wife and, subsequently, her partner to continue to reside in the matrimonial home. Mr.

Howley ’ s evidence maintains that he ’ s paid insurance from the date of separation until 2009 - 2010. Mr. Howley believes $100 remains to be paid on insurance for 2009 - 2010. [ 23 ] Mrs. Howley did not apply for or receive child support or spousal support. [ 24 ] Mr. Howley advised he paid the property taxes on the matrimonial home from the date of separation in the amount of $8,595. He advised since his son left the matrimonial home in March 2004, he paid $5,000 for property taxes. As well, Mr. Howley advised he paid $2,500 or one-half of the portion of the replacement furnace.

These three expenditures are not disputed by Mrs. Howley. [ 25 ] Mr. Howley provided a substantial list of the contributions, presents and renovations done to the matrimonial home to secure an independent living area for his son who has a severe disability. The contributions (exhibit # 2) given by Mr. Howley to his son are not disputed by Mrs. Howley. Both parties agree that any moveable items that Mr. Howley gave his son were taken with Jeffrey when he married and vacated the matrimonial home in 2004. I find the contributions and payments made by Mr.

Howley to the matrimonial home as set out in exhibit # 2 are proven. Both parties accept that these contributions in various forms were actually provided by Mr. Howley. [ 26 ] While confirming the figures contained in exhibit # 2 for property taxes and insurance, Mr. Howley advised the list was prepared one year earlier, (December 2009). Elsewhere Mr. Howley advised he paid the property insurance for 2009 - 2010 but that

$100 remained unpaid on that account and the taxes were paid to present. Mrs. Howley is unaware of the amount paid in property taxes or property insurance. She testified that she believes Mr. Howley pays these accounts. [ 27 ] Clear documentation confirming years and totals paid for insurance and taxes were not provided by either party. R.R.S.P. [ 28 ] Mr. Howley provided in exhibit # 3, his

summary of the history of the R.R.S.P. contributions existing and made from the date of separation 1994 up to and including 2008. Mr. Howley advised that exhibit # 3 is based on all income tax information contained in exhibit # 23. Exhibit #23 contains Mr. Howley ’ s tax information from 1994 to 2004. [ 29 ] Exhibit # 3 also purports to be a

summary of the balance in the R.R.S.P account at the date of separation, as well as R.R.S.P. ’ s cashed in by Mr. Howley between 1994 and 2008, as well as contributions made to that fund from 1994 to 2008. There is no dispute between the parties that exhibit # 3, together with exhibit # 23, chronicle the R.R.S.P. deposit history. The withdrawals are in dispute. No documents were tendered to support the validity of the sums withdrawn. [ 30 ] Exhibit # 15 is a Royal Bank R.R.S.P. investment account statement as of June 30, 2010 which outlines the balance to be $70,822.

The Royal Bank account is the only independent document tendered that relates to R.R.S.P. ’ s. No previous statements outlining activity from January 1, 1994 to June 30, 2010 were provided. No receipts or withdrawal documentation was provided to explain or confirm withdrawals in varying amounts from 1995 to 2003. In particular, the debts paid from R.R.S.P. were not confirmed by any documents. Mr. Howley managed the R.R.S.P. fund solely and provided Mrs. Howley money when requested. Mr. Howley was able to provide documentation to support contributions made to the account post separation. [ 31 ] Mrs.

Howley does not dispute the R.R.S.P. balance put forward by Mr. Howley. The dispute between the parties arises in relation to alleged business debts. Mr. And Mrs. Howley operated a restaurant incorporated as Lakeview Restaurant Ltd. During the course of that operation Mr. Howley advised a number of debts arose which he satisfied through post separation withdrawals from the R.R.S.P. [ 32 ] In reference to exhibit # 3, Mr. Howley outlines the business debts paid as: Q. Now why was $6,100.00 withdrawn from your R.R.S.P.? A.

That was drawn to pay Revenue Canada or provincial sales tax or GST regarding Lakeview...these were loans that had to be paid, bills ” (page 25). Q. Okay and so you withdrew these funds to pay business debts? A. Yes sir. [ 33 ] Mr. Howley advised he withdrew $2,800 from the R.R.S.P. fund in 1996 to pay “ another Revenue Canada or provincial, I haven ’ t got them which was which but they were definitely business expenses, not related to personal ” . [ 34 ] Mr.

Howley advised that he withdrew $5,119 in 1998 and advised that was to pay one of the government creditors “ I can ’ t distinguish which was which but there were provincial or Revenue Canada or HST or GST ” .

[ 35 ] Mr. Howley advised that a subsequent withdrawal in 1999 of $1,200 was for his own personal use. In subsequent years Mr. Howley indicated he withdrew $7,200 from the R.R.S.P. in order for Mrs. Howley to purchase a vehicle. He believed he and she agreed to set off this amount against her interest in his insurance policy at Manulife. The $7,200 withdrawal to buy a car for Mrs. Howley is not disputed. A set off against an insurance policy is disputed by Mrs. Howley. [ 36 ] In relation to business debts, Mr.

Howley indicated that one of the provincial bodies entered judgment against him but he was unsure which government body. During the course of his evidence Mr. Howley ’ s counsel tendered two judgments (exhibits 4 and 5), as well as the profile of Lakeview Restaurant Ltd. (exhibit # 6). Exhibit # 4 is a judgment issued under the Workman ’ s Compensation Act against Lakeview Restaurant Ltd. in the amount of $698.53, registered as judgment on the 1 st day of November, 1991. [ 37 ] The second judgment referenced in Mr.

Howley ’ s evidence (exhibit # 5) is issued from the Provincial Tax Commission against Wendell Howley personally in the amount of $6,489.91, registered on the 3 rd day of February, 1994. Mr. Howley advised that both the exhibits, # 4 and # 5 to both government agencies, were both paid out of monies from the R.R.S.P. On direct (page 34) Mr. Burchell questioned: Q. And are those exhibit # 4 and exhibit # 5 part of the debts that you paid with money from the R.R.S.P.? A. Definitely, yes sir. [ 38 ] On cross examination Mr.

Howley advised the judgment for $698.53 to Workman ’ s Compensation was paid but the larger judgment against him personally for $6,489.91 by the Provincial Tax Commission was never paid. [ 39 ] Mrs. Howley in her testimony advised that she was unaware of any judgments in relation to business debts. Mrs. Howley advised “ I just know that when we did leave or went under or whatever there was bills to the wholesalers ” . [ 40 ] In relation to non business deductions from the R.R.S.P. Mrs. Howley acknowledged that she received $7,200 in 2002 at her request from the R.R.S.P. fund in order to buy a new car.

She advised as well that she told Mr. Howley when the furnace had to be replaced in the matrimonial home, to take her portion of $2,500, from the R.R.S.P. funds. She advised Mr. Howley he could take $2,000 from the R.R.S.P. account to install a new septic system on the matrimonial property. [ 41 ] The one R.R.S.P. statement dated June 30, 2010 is the sole confirmation of the plan ’ s existence, but not the history since January, 1994. No collaboration of withdrawals for business purposes was provided. INSURANCE POLICIES [ 42 ] The parties had two life insurances that are matrimonial property.

Neither party disputes the cash surrender values. The first insurance policy is Manulife Financial with a cash surrender value as of December 31, 1993 of $7,842.52 (exhibit # 8). Mr. Howley testified he was to secure full ownership of this policy because he permitted Mrs. Howley to retain an R.R.S.P. that was solely in her name in exchange for him retaining this policy. Mrs. Howley has no knowledge of a R.R.S.P. in her name and believes the only R.R.S.P. ’ s the couple ever had were in Mr. Howley ’ s name at the Royal Bank (exhibit 15).

There ’ s been no evidence tendered to indicate that at the time of separation there were any R.R.S.P. ’ s held by Mrs. Howley. Mrs. Howley wishes credit for one-half the cash surrender value of the Manulife policy which was $7,842.52. [ 43 ] The second policy is held by London Life (exhibit # 10). The parties gave evidence that this policy existed at the time of the marriage and the cash surrender value as of April 3, 2010 is $2,983.47. The history of the London Life policy indicates that a loan of $620.86 was taken out some time during the span of the policy.

Exhibits #8 and #10 constitute all records received from Manulife and London Life.

[ 44 ] Mr. Howley does not wish to divide the Manulife cash surrender value at all, believing they agreed to a set off for approximately $7,000 taken from her R.R.S.P. during the course of the marriage. MATRIMONIAL HOME [ 45 ] The matrimonial home is appraised in the amount of $132,000 less disposition costs. The appraisal performed on the property, (exhibit # 11), is dated April 16, 2007. Mr. Howley at some point had requested an update to the current appraisal. He advised he was precluded from so doing because the respondent was not available to show the property to the appraiser. Mrs.

Howley, while not available on a specific date for an appraisal update, was willing to have the appraisal updated at a subsequent time. Given the time between the commencement of this hearing and the conclusion there was ample time for Mr. Howley to have the appraisal updated if he so chose. I reviewed the evidence from both parties and concluded that counsel have accepted this value. [ 46 ] In relation to the matrimonial home Mrs. Howley wishes the court to consider exhibit # 17 in relation to costs she incurred solely to have a new deck and roof constructed on the matrimonial home, in the amount of $11,482.75.

In the course of the evidence it became apparent that both improvements were performed after the original appraisal of $132,000 was concluded. As these improvements were implemented after the appraisal and do not effect the value of the matrimonial home. The value of the matrimonial home is fixed at $132,000 less disposition costs. [ 47 ] In relation to final distribution of assets, Mr. Howley wants the R.R.S.P. ’ s divided on a fifty fifty basis and to have his half rolled over to Mrs. Howley. He requests his half of the value of the house in cash. Mr.

Howley ’ s request for total roll-over in exchange for cash occurred during the course of hearing. BUSINESS DEBTS [ 48 ] In relation to business debts, Mr. Howley advised the business did not go into bankruptcy. He believed Mrs. Howley knew the business bills that were outstanding in relation to the company because they were receiving “ letters, bills from Revenue Canada ” . Mr. Howley acknowledged in his evidence that he does not have any receipts for business debts paid to Revenue Canada, provincial tax, or any other creditor. During examination on use of the R.R.S.P. and business debts, Mr.

Howley advised he had no documentation to confirm that he paid these business debts but that “ I could provide documentation on these others but I would need time, these business accounts ” . [ 49 ] Mr. Howley advised in his evidence that he did pay the provincial tax commission bill of $6,489.91; but he did not pay the workman ’ s compensation debt, $698.53. On direct he advised he paid the workman ’ s compensation judgment from the R.R.S.P. Elsewhere Mr. Howley in evidence maintained both judgments were paid from the R.R.S.P. [ 50 ] The method of keeping records is reflected at page 70 of Mr.

Howley ’ s testimony: QUESTION: So was the business not filing its own corporate tax returns? ANSWER: Not for the last few years it hadn ’ t, no. QUESTION: Well why would you file a personal for an incorporated business?

ANSWER: Cause they told me it was my responsibility and they were pressuring me to pay for it. QUESTION: So you have nothing, no records at all for that, do you? ANSWER: No ma ’ am, I don ’ t. [ 51 ] He maintains that he was the president of the company and that he ran the business. He also indicated that he was the bookkeeper for the company. He advised he stopped doing business returns because it was embarrassing. The business operated from 1979 to 1993 but only experienced business difficulties in the last three years of operation. Mrs.

Howley worked in the business with him; however, she had no recall of the debts owed when the business closed. [ 52 ] No receipts confirming payment for any bills associated with Lakeview Restaurant Ltd. were tendered. No evidence was provided to clarify the status of the judgments. No evidence was provided to confirm the use of R.R.S.P. withdrawals for business debts. No creditor information was provided to confirm the total history of payment for property taxes and insurance on the matrimonial home. The existence of the two judgments was proven; confirmation of satisfaction was not provided.

DECISION: [ 53 ] The relevant statutory provisions are found in the Matrimonial Property Act amended 1995-96, c. 13, s. 83 [1]

Chapter 275 of the Revised Statutes, 1989. The

preamble is particularly relevant in this case: WHEREAS it is desirable to encourage and strengthen the role of the family in society; AND WHEREAS for that purpose it is necessary to recognize the contribution made to a marriage by each spouse; AND WHEREAS in support of such recognition it is necessary to provide in law for the orderly and equitable settlement of the affairs of the spouses upon the termination of a marriage relationship; AND WHEREAS it is necessary to provide for mutual obligations in family relationships including the responsibility of parents for their children; AND WHEREAS it is desirable to recognize that childcare, household management and financial support are the joint responsibilities of the spouses and that there is a joint contribution by the spouses, financial and otherwise, that entitles each spouse equally to the matrimonial assets. [53] Matrimonial assets are defined in section 4(1) as: 4

(1) In this Act, "matrimonial assets" means the matrimonial home or homes and all other real and personal property acquired by either or both spouses before or during their marriage, with the exception of (

a) 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;

(

b) an award or settlement of damages in court in favour of one spouse; (

c) money paid or payable to one spouse under an insurance policy; (

d) reasonable personal effects of one spouse; (

e) business assets; (

f) property exempted under a marriage contract or separation agreement; (

g) real and personal property acquired after separation unless the spouses resume cohabitation. [54] Interaction of business assets and matrimonial assets are provided for in s. 4(4), s. 16(1), s.16(2) and s.18 4(4) Where property owned by a corporation would, if it were owned by a spouse, be a matrimonial asset, then shares in the corporation owned by the spouse having a market value equal to the value of the benefit the spouse has in respect of that property are matrimonial assets. R.S., c. 275, s. 4. 16

(1) Either spouse may apply to the court for the determination of any question between the spouses as to (

a) the ownership or right to possession of any particular property; (

b) whether property is a matrimonial asset or a business asset, except where an application has been made and not determined or an order has been made respecting the property under this Act. Powers of court under subsection (1)

(2) Where an application is made under subsection (1), the court may (

a) make a declaration as to the ownership or right of possession in the property; (

b) make a declaration as to whether the property is a matrimonial asset or a business asset; (

c) where the property has been disposed of, order that a spouse pay compensation for the interest of the other spouse; (

d) order that the property be partitioned or sold; (

e) order that either or both spouses give such security, including a charge on property, that the court orders, for the performance of any order under this Section,

and may make such other orders and directions as are ancillary thereto. R.S., c. 275, s. 16. 18 Where one spouse has contributed work, money or moneys worth in respect of the acquisition, management, maintenance, operation or improvement of a business asset of the other spouse, the contributing spouse may apply to the court and the court shall by order (

a) direct the other spouse to pay such an amount on such terms and conditions as the court orders to compensate the contributing spouse therefor; or (

b) award a share of the interest of the other spouse in the business asset to the contributing spouse in accordance with the contribution, and the court shall determine and assess the contribution without regard to the relationship of husband and wife or the fact that the acts constituting the contribution are those of a reasonable spouse of that sex in the circumstances. R.S., c. 275, s. 18. [55] The manner of division of assets is provided for in s. 12(1) and s. 13. Application for division of matrimonial assets: 12

(1) Where (

a) a petition for divorce is filed; (

b) an application is filed for a declaration of nullity; (

c) the spouses have been living separate and apart and there is no reasonable prospect of the resumption of cohabitation; or (

d) one of the spouses has died, either spouse is entitled to apply to the court to have the matrimonial assets divided in equal shares, notwithstanding the ownership of these assets, and the court may order such a division. Factors considered on division 13 Upon an application pursuant to

Section 12, the court may make a division of matrimonial assets that is not equal or may make a division of property that is not a matrimonial asset, where the court is satisfied that the division of matrimonial assets in equal shares would be unfair or unconscionable taking into account the following factors:

a) the unreasonable impoverishment by either spouse of the matrimonial assets; (

b) the amount of the debts and liabilities of each spouse and the circumstances in which they were incurred;

(

c) a marriage contract or separation agreement between the spouses; (

d) the length of time that the spouses have cohabited with each other during their marriage; (

e) the date and manner of acquisition of the assets; (

f) the effect of the assumption by one spouse of any housekeeping, child care or other domestic responsibilities for the family on the ability of the other spouse to acquire, manage, maintain, operate or improve a business asset; (

g) the contribution by one spouse to the education or career potential of the other spouse; (

h) the needs of a child who has not attained the age of majority; (

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

j) whether the value of the assets substantially appreciated during the marriage; (

k) the proceeds of an insurance policy, or an award of damages in tort, intended to represent compensation for physical injuries or the cost of future maintenance of the injured spouse; (

l) the value to either spouse of any pension or other benefit which, by reason of the termination of the marriage relationship, that party will lose the chance of acquiring; (

m) all taxation consequences of the division of matrimonial assets. R.S., c. 275, s. 13; revision corrected. Policies [56] I find as a fact that the two policies in existence are matrimonial assets and their cash surrender value is as specified. That is, Manulife ’ s value is $7,842.52 and London Life ’ s value is $2,933.47. There was discussion in relation to a loan affecting the London Life policy, however, I have no specifics or detail whatsoever in relation to that loan, therefore, there can be no reduction in the cash surrender value. Mrs. Howley ’ s R.R.S.P. [57] Mr. Howley maintains that Mrs.

Howley had an R.R.S.P. in her name and that he and she had agreed to set off against one of the insurance policies. Mrs. Howley denies ever having an R.R.S.P in her name and she denies any set off agreement. There is no evidence provided of any R.R.S.P. in Mrs. Howley ’ s name only, nor is there any proof of a set off arrangement in relation to a vehicle. I do accept that Mrs. Howley received funds to buy a vehicle from Mr. Howley, which he accessed through the Royal Bank R.R.S.P.

Business Debts [58] The parties ran a small business for a number of years referred to as Lakeview Restaurant Ltd. Both parties were officers and directors. Mr. Howley maintained that he paid a number of business debts from the R.R.S.P. He outlined these paid debts as occurring in: 1995 - $ 6,100 1996 - $ 2,800 1998 - $ 5,119 $14,019 Mr. Howley wishes credit for the payment in these amounts plus the two judgments. The onus of proving debts existed and were paid rests with Mr. Howley. Mr.

Howley claims that the restaurant experienced financial difficulties during the last three years of operation, which resulted in him paying the three sums specified above, as well as incurring two subsequent judgments. [59] Mr. Howley maintains that the two judgments were paid from the R.R.S.P. Elsewhere in his evidence he claims one of the judgments remains unsatisfied. Also he advised that he provided Mrs. Howley with $7,200 to buy a vehicle and that he further accessed the account on two different occasions, in 1999 in the amount of $1,200 and in the year 2003 in the amount of $14,400 for his own use.

Apart from the two registered judgments (exhibits # 4 and # 5) there is no proof of any indebtedness that the Howleys may have incurred in their capacity as directors and officers of Lakeview Restaurant Ltd. Mr. and Mrs. Howley both contradicted themselves and each other in relation to Mr. Howley ’ s claims of company debts satisfied by accessing the Royal Bank R.R.S.P. There is no proof to substantiate these losses were incurred or were ever satisfied. Mr.

Howley has not satisfied the onus on him in relation to debts allegedly paid from the R.R.S.P. in 1995, 1996 and 1998, totalling $14,019. [60] In relation to the two judgments, Mrs. Howley indicated she had no information relating to the existence of the two judgments. The larger judgment owed to the Provincial Tax Commission appears to be a judgment registered against the property that Mrs. Howley wishes to buy. It is unclear from Mr.

Howley ’ s evidence whether or not this judgment was ever paid. [61] A paid liability cannot be classified as an asset or a debt and is not included in s. 4(1) of the Matrimonial Property Act . A credit for a previously paid debt may depend on a finding of unequal distribution of assets pursuant to s. 13 of the Matrimonial Property Act. [62] The case of Selbstaedt vs. Selbstaedt, 2004 NSSF 110 at paragraphs 31 and 32 where Justice Dellapinna stated: 31 “ ... ‘ Matrimonial debt ’ is not a term found in the Matrimonial Property Act.

However, it is commonly used in our courts... ” 32 “ Once identified as ‘ matrimonial ’ the presumption of an equal division found in

section 12 that applies to matrimonial assets also applies to matrimonial debts... ” [63] The evidence is consistent with a family established restaurant designed to meet their household needs. It was not established with the intention of acquiring an asset in an entrepreneurial sense. The registered judgment against the matrimonial home was incurred running a family business, owned and operated by the parties. While not binding on the creditor, it is a matrimonial debt which they must share equally, assuming the obligation still exists . The judgment is registered against the property that Mrs. Howley hopes to

purchase and Mr. Howley has no other discernable assets to which the judgment can attach as either a business liability or a matrimonial liability. In apportioning the amount of debt attributable to Mrs. Howley, a division of fifty fifty is reasonable on these facts. I have no material before me to assess whether the judgment has been paid or whether or not the creditor is unlikely to pursue the claim.

Lakeview Restaurant Ltd. has been closed since January 1994, and according to the report from the Registrar of Joint Stock Companies (exhibit # 6), the company standing was revoked for non payment of fees on May 31, 1994. I find on a balance of probabilities it is appropriate to apportion the one judgment owed to the Provincial Tax Commission on a fifty fifty basis between the Howleys. This decision does not deal with the judgment filed by the Workman ’ s Compensation against Lakeview Restaurant Ltd. R.R.S.P. [64] The evidence indicates that there is only one R.R.S.P. involved in this case.

This asset must be shared equally between the parties. The Court has received Mr. Howley ’ s typed version indicating monies that both he and Mrs. Howley deducted from the R.R.S.P. Mr. Howley indicates that he deducted monies for business debts which had been disallowed on the basis there is no evidence of debts existing or paid. [65] Mr. Howley withdrew $15,600 for his personal use while Mrs. Howley has deducted $7,200 for her personal use from the R.R.S.P. These deductions took place between 1999 and 2003. In addition to the sums reflected in Mr. Howley ’ s break down of the R.R.S.P., Mrs.

Howley advised that she requested Mr. Howley extract another $4,500 for her portion of a furnace and a septic system. The parties agree the three deductions total $11,700.00 and were incurred for Mrs. Howley ’ s use. [66] Neither party has provided the Court with a clear history of this R.R.S.P., nor a method to calculate the interest involved given the five deductions occurring over a fourteen year period. The only document referencing this R.R.S.P. is exhibit # 15 issued from the Royal Bank of Canada which is a statement indicating that as of January 30 th , 2010 the plan was worth $70,822.31.

It is significant to note that when both counsel were asked to write post trial submissions and to provide an accurate representation of their evaluation charts, Ms. MacRury wrote: “ Mrs. Howley submits that a proper valuation for R.R.S.P. is not available from DOS, January 10, 1994, due to ongoing withdrawals by Thomas Howley from that account ” . [67] In examining the R.R.S.P. evaluation I have calculated the current value using different approaches.

The most reliable method to achieve the current value is to commence with the most recent R.R.S.P. statement from Royal Bank Statement (June 30, 2010) which was $70,822.31. Added to this sum is the difference between contributions by Mr. Howley and withdrawals for Mr. Howley which is $18,196.00. The resulting figure is $89,018.31. I have deducted $11,700 from this figure to reflect the withdrawals made for Mrs. Howley ’ s benefit, more specifically her car and her contribution to a septic system and furnace for the matrimonial home. This deduction reduces the current value to $77,318.

This amount is further reduced by 30% (23,195.40) to reflect income tax consequences. The current value of the R.R.S.P. is $54,123.00 for purposes of division. Matrimonial Home [68] Mrs. Howley wishes to purchase the matrimonial home for $132,000.00. The parties are in agreement on the disposition costs such as real estate fees, $7,590, migration fees $1,500, legal fees $575 for a total net value of $122,335 or a hundred and twenty-two thousand three hundred and thirty five dollars. [69] The parties have further agreed to share the appraisal costs of the property.

It is to be noted that there is no increase in the appraised value of the house given improvements done by the respondent as those improvements were started and completed after the appraisal was prepared. [70] I accept that Mr. Howley paid portions of the property insurance and taxes. Property taxes were paid up to December 2009; property insurance was paid in full for the year 2010 except for $100. While this calculation is vague it is the best calculation that I can

provide given the evidence provided. These are Mr. Howley ’ s estimates of what he paid. Mrs. Howley believes that her taxes and property insurance is paid, however, she is not aware if either accounts are up to date. [71] I accept the judgment against Mr. Howley ($6,489.91) affects the matrimonial home and must be satisfied. [72] The passage of time and the failure to keep or produce necessary corroborating documentation has unnecessarily compounded the difficulties in achieving an accurate asset and debt picture in order to provide an exact distribution. I note Mr.

Howley indicated on one issue that he could have provided materials if he had had more time. The chronology of the file indicates that Mr. Howley had years to produce this material if it still existed and or he wished to tender same. The certificate of readiness was filed 2.5 years prior to trial. I note in particular that exhibits 2 and 3, summaries prepared by Mr. Howley, would require reference to some source documents, none of which are provided. Mr. Howley, in the course of his own evidence, contradicts himself on what judgments and business liabilities were paid. Mrs.

Howley simply denies any knowledge of any relevant financial matters, even though she lived and worked through the operative years of Lakeview Restaurant Ltd. Separate and apart from the business she certainly could have secured information on whether or not the house she lives in is up to date on the property taxes and insurance costs. [73] I have had the entire file transcribed and have reviewed the testimony in minute detail on numerous occasions.

I am left with the decision to either walk away due to troublesome record keeping, or to be pragmatic and do the best I can with the dated incomplete evidence based on memories that have faltered over time. The pragmatic and fair solution, I believe, is to work with what I have before me but, at the same time, point out that some of the solutions the parties seek simply unattainable. I prepared the following evaluation which outlines the division achievable on the evidence.

House: $132,000.00 Less Disposition Costs: $ 9,665.00 House Net: $122,335.00 R.R.S.P.: $ 54,123.00 House: $122,335.00 Life Insurance: $ 10,826.26 Mrs. Howley Mr. Howley House: $122,335.00 RRSP: $54,123.00

RRSP: $ 11,700.00 Insurance: $10,826.00 $134,035.00 $64,949.00 $ 6,489.91 - Judgment $127,545.09 $64,426.00 Total Assets = $191,971.09 / 2 = $ 95,985.55 = $ 31,559.55 owing to Mr. Howley Ancillary Matters [74] In relation to the insurance and taxes on the matrimonial home, Mr. Howley presented two statements from Farmers Mutual (exhibits 13 and 14), confirming insurance was paid on the home up to 2006. Mr. Howley gave evidence that he believed he paid the insurance for the year 2010, except perhaps for $100. In relation to property taxes, Mr. Howley advised he paid the property taxes up to December 2009.

The dates fixed for insurance and taxes are the most reliable gleamed from the evidence of Mr. Howley and while the figures may be in estimate form, this is the best evidence presented. There has been no evidence provided by Mrs. Howley as to taxes owing on the property or the state of the insurance. I find any taxes owing up to December 2009 and any insurance for the year 2010 minus the $100, are the responsibility of Mr. Howley. Any property insurance amounting to more than $100 for the year 2009 / 2010 shall be the responsibility of Mr. Howley.

Any property taxes owing from December 30, 2009 onward shall be the responsibility of Mrs. Howley. In the event in the future it appears Mr. Howley paid more insurance or property taxes than alleged, he shall receive no additional adjustment. Neither party provided proper documents to reflect the current state of taxes and insurance on the matrimonial home. [75] I have been asked to find that Mrs. Howley is entitled to some form of spousal support; and, in particular, to find that the R.R.S.P. funds she withdrew to buy her car, was actually a form of lump sum spousal support.

I have been asked to find that her remaining in the home with her son and maintaining the property entitles her to a s. 13 Matrimonial Property Act unequal division of matrimonial assets and should reduce her equalization payment to Mr. Howley. Mrs. Howley asks the court to consider that she maintained the home and paid at least forty-five hundred dollars worth of improvements. I have been asked by Mr. Howley to require Mrs.

Howley to pay for his share of the matrimonial home in cash and have her retain the R.R.S.P. ’ s. as recognition of the fact that he paid the property taxes and insurance for a number of years. [76] From 1994 to 2008 no application was made to the court for child support or spousal support. Mrs. Howley seeks consideration of the fact no spousal support or child support was paid supports her claim for a s. 13 Matrimonial Property Act division entitling her to pay less for Mr. Howley ’ s share of the matrimonial home.

I find the issues of child support, spousal support and s. 13 Matrimonial Property Act were not presented in a manner such as would allow a decision on the balance of probability. [77] The parties both engaged in a course of conduct where both provided benefits to their son and to each other. Mrs. Howley cared for their son in the matrimonial home for 10 years after separation. She became a nurse and is self sufficient without spousal support. She was able to do so in a home which had no mortgage payment and she did not have to pay taxes and insurance. Mrs.

Howley maintained the home through proper maintenance and repair since separation. Mr. Howley provided support indirectly to the home and made substantial contributions to ensure his son ’ s comfort. His income and living situation post separation was not presented. [78] I have reviewed recent case law in relation to Mr. Howley ’ s claim for occupational rent, in particular, O ’ Reagan v. O ’ Reagan

(2009) N.S.S.C. 181 and MacEachern v. MacEachern

(2011) N.S.S.C. 215. Mr. Howley has failed to provide the clear and cogent evidence necessary for consideration in an occupational rent claim.

[79] I find it would be inappropriate to pay Mr. Howley entirely with cash, given that he first advised the court he was interested only in a fifty fifty division and only subsequently changed his position that he wished Mrs. Howley to retain the R.R.S.P. in entirety. It is not appropriate to change positions during the course of the trial unless there is merit to that change. I find there is no such merit in this case. It was recognized from the onset that Mrs. Howley earns approximately $34,000 a year and to require her to purchase the home by accepting Mr.

Howley ’ s portion of the R.R.S.P. would be inequitable to Mrs. Howley. [80] Mrs. Howley shall have 30 days to secure funding to purchase Mr. Howley ’ s interest in the matrimonial home, failing which the home shall be listed for sale on the market. The parties are to share equally in the cost of the appraisal. [81] Given the mixed results and the form of the evidence provided by both parties, there is no award for costs. _______________________ J.