M.D., Petitioner, – v. –, 2023 NBKB 121

IN THE COURT OF KING’S BENCH OF NEW BRUNSWICK FAMILY DIVISION JUDICIAL DISTRICT OF MONCTON M.D. v. C.M. 2023 NBKB 121 FDM-269-2018 2023/06/29 Registrar’s File Number: 1301-74299 BETWEEN: M.D., Petitioner, – and – C.M., Respondent. DECISION BEFORE: Madam Justice Colette M. d’Entremont AT: Moncton, New Brunswick DATES OF HEARING: January 17, 18, 19, and 20, 2023

March 20 and 21, 2023 DATE OF DECISION: June 29, 2023 APPEARANCES: M.D., per se C.M., per se d’Entremont, J. INTRODUCTION [ 1 ] On the first morning of the within trial, the parties indicated they agreed on the parenting order, with the exception of a few details surrounding the parenting time exercised with the children around the Christmas period. [ 2 ] As to the issues before the court, both parties are requesting that an income be imputed to the other party.

Once the imputation of income is determined, the parties are asking for a determination of the child support to be paid based on a shared parenting schedule. [ 3 ] As well, Ms. D. is asking for retroactive child support and spousal support for the period of February of 2018 to November of 2018. She is not asking for future spousal support. Mr. M. is asking that spousal support previously ordered to be paid under an interim order be varied in his favour. [ 4 ] The parties are requesting a division of the marital property, although both parties filed an assignment in bankruptcy in 2020.

They are asking for a ruling on who has rights to certain property, including three parcels of vacant land, a Kubota tractor and attachments, and equipment primarily relating to a dog breeding business. There is also a request to divide marital assets that were exempt from the bankruptcies, including a pension plan and the cash surrender value of a life insurance policy. [ 5 ] The parties are asking for an order in relation to which expenses relating to the children’s activities qualify as extraordinary expenses.

On the issue of special expenses, there is a request for a proportionate sharing of the past child care expenses, the medical and dental insurance premiums for the benefit of the children, and an orthodontic treatment invoice. [ 6 ] Although both parties previously had retained lawyers, they represented themselves at the trial. They are both well educated and quite articulate. [ 7 ] The matter is based on the Divorce Act , R.S.C., 1985, c. 3 , the Marital Property Act , R.S.N.B., 2012, c. 107 , the Bankruptcy and Insolvency Act , R.S.C., 1985, c. B-3 , and the Federal Child Support Guidelines , SOR/97-175 .

Agreement Regarding Parenting Order [ 8 ] At the beginning of the trial, the parties confirmed that they had a consensus on the issues surrounding the decision-making responsibility and most of the parenting time pertaining to the children. [ 9 ] The parties agreed to share decision-making responsibility and shared parenting time regarding the children. Throughout the school year, the parenting time will follow a 2-2-3

schedule as follows:

Monday Tuesday Wednesday Thursday Friday Saturday Sunday Mother Mother Father Father Mother Mother Mother Father Father Mother Mother Father Father Father [ 10 ] Throughout the summer vacation period beginning on the first Monday following the last day of school, parenting time shall be divided evenly between the parties on a seven-day rotation basis. The parties’ regular 2-2-3 access shall resume on the Friday prior to the commencement of the school year.

The exchanges of the children shall be at 9 a.m., and the receiving parent shall be responsible for driving to pick up the children. [ 11 ] March break shall be divided evenly between the parties with the transfer time being at noon on Wednesday of March break. The party exercising parenting time on the weekend prior to the March break shall continue his or her parenting time until Wednesday at noon of the March break, at which time the other parent shall begin her or his parenting time with the children. FACTS [ 12 ] The parties met in the winter of 2009. At the time, Mr. M. was about 36 years old.

He was employed as a school teacher. He had accumulated a pension with the New Brunswick Teachers’ Union. He owned an old farmhouse and the surrounding vacant lots consisting of about 35 acres in Elgin, New Brunswick. The property had been bought in 2001 for $105,000 by Mr. M. He had paid a deposit of $50,000 toward the purchase price of the property. [ 13 ] When the parties met, the sum of $40,000 was owing on the mortgage relating to the Elgin property. Around this time, Ms. D. was 26 years old and was employed as a financial software programmer.

The parties’ annual incomes were comparable at approximately $70,000 each. [ 14 ] The parties started cohabiting in April of 2010 in the farmhouse located in Elgin, New Brunswick. This residence would become the marital home. The parties were married on January 5, 2011. [ 15 ] They separated on January 28, 2018.

The divorce was granted on the first day of the within hearing, that is, January 17, 2023, as by then there had been a breakdown of the marriage, given that they had been living separate and apart for more than one year, and there was no possibility of reconciliation. [ 16 ] There are two children of the marriage. At the time of the trial, the children were 11 and 9 years old. Following the birth of each child, a maternity leave was taken by Ms. D. [ 17 ] In 2011, Ms. D. commenced a dog breeding business called Fiume Kennels. Both parties were involved in the dog breeding business throughout the years.

The business operated from the marital home. In order to finance the enterprise, Ms. D. cashed in her RRSP’s. In 2013, Fiume Kennels was converted from a sole proprietorship to a partnership with Ms. D. and Mr. M. having an equal interest in the business. [ 18 ] In the summer of 2014, Ms. D. ceased working as a financial software programmer and worked as an account manager for another company. This meant that she would be away from the home during the work week. [ 19 ] In 2016, Ms. D. left her employment in order to concentrate on the dog breeding business full time.

As well, she would be home to care for the children. By then, the parties had come to the realization that the younger child had developmental delays. There were numerous appointments scheduled with caregivers for the benefit of the child. Given that Ms. D. was home, this allowed her to accompany the child to various appointments with speech and occupational therapists.

[ 20 ] On July 11, 2016, the dog breeding business was incorporated as Fiume Kennels Ltd. Ms. D. concentrated her efforts on this enterprise. Both parties were directors of the corporation. Ms. D. was president and Mr. M. was named as secretary. The kennel business was of financial benefit to the family as a means of writing off certain household and personal expenses. Ms. D. handled the management of the business and the dog breeding aspect. Mr. M. helped with the daily care of the dogs, and he renewed contracts for the benefit of the enterprise. [ 21 ] On January 28, 2018, the parties separated and Mr.

M. moved out of the marital home. He moved in with family members for the next few months. Ms. D. and the children would remain in the family home located in Elgin for some time. Ms. D. also had possession of the Honda Odyssey van. In the first few months after the separation, Mr. M. exercised parenting time with the children every second weekend. [ 22 ] Following the separation, in early 2018, Mr. M.’s biweekly pay cheque continued to be deposited in the couple’s joint account for five months. As such, Ms. D. had access to about $14,000 during this period. Furthermore, Mr.

M.’s income tax rebate of $2,145 was deposited in the account in the spring of 2018. The monthly residential mortgage payment, the power bill, the Odyssey van payments, the insurance premiums, and the phone and internet invoices were paid from this account. Mr. M.’s teacher’s pay cheque continued to be deposited into the joint account until June 22, 2018. Commencing on that date, Mr. M. deposited the sum of $1,032 per month in the joint account. This was intended to be the table amount of child support based on his income of $72,054 per year. [ 23 ] By June of 2018, Mr.

M. moved out of his family member’s home and rented a residence of his own. [ 24 ] On July 26, 2018, the first interim order was granted in relation to this family. Pursuant to the order, Ms. D. was granted exclusive possession of the marital home. She would be responsible for the mortgage payments, the utility bills and all expenses relating to the upkeep of the house. Ms. D. was granted primary parenting time regarding the children. Mr.

M. had parenting time with the children every second week from Tuesday at 9 a.m. to Thursday at 5 p.m., and every second weekend from Friday at 9 a.m. to Monday at 9 a.m. [ 25 ] Mr. M. was ordered to pay monthly child support of $1,032 starting August 1, 2018, in favour of Ms. D. [ 26 ] On July 26, 2018, Ms. D. returned the Honda Odyssey van to the Honda dealer. By then, she could no longer pay $700 per month on the vehicle loan. The outstanding indebtedness was greater than the value of the vehicle. Mr. M. took possession of the van for some time.

Eventually, he returned the vehicle to the dealer as the monthly payments were more than he could pay. He paid the outstanding indebtedness of $14,800 relating to the Odyssey after the value of the vehicle was applied against part of the loan. [ 27 ] A second interim order was granted on November 27, 2018. It provided that the marital home be listed for sale, but not the nearby vacant lots. The parenting arrangement was changed to a shared parenting arrangement, such that the children followed a 2-2-3 schedule. During a 14-day period, for the first week, the children would be with Ms.

D. starting Monday at 9 a.m. for two days, then two days at Mr. M.’s house to be followed by the weekend as Ms. D.’s home commencing Friday at 9 a.m. During the second week, the children would be two days at Mr. M.’s home, two days at Ms. D.’s home, and the weekend would be with Mr. M. The Christmas break, the March break, the Easter break, and the summer break would be shared equally by the parents. This

schedule continued to be followed at the time of the within trial. [ 28 ] By September of 2018, both children were in school and were registered in after-school care at their school. [ 29 ] The order of November 27, 2018, also provided that an annual income of $24,000 would be imputed to Ms. D. She was ordered to pay monthly child support of $353 for two children. Given that Mr. M. was earning $72,868, he was ordered to pay $1,043 per month in child support. Therefore, Mr. M. paid the set-off amount of child support of $698 per month commencing December 1, 2018. Regarding spousal support, Mr.

M. was ordered to pay $395 per month (mid-range) starting December 1, 2018, in favour of Ms. D. [ 30 ] The interim order stated that Mr. M. was responsible for 70% of the special expenses and Ms. D. was responsible for the remainder. At the time, Ms. D. was responsible for paying 30% of the net child care expenses of $4,807 per year. As Mr. M. paid these, Ms. D. was to pay the sum of $120 per month to Mr. M. starting December 1, 2018. [ 31 ] Given that Mr. M. had health and medical insurance coverage for the children through his employment, Ms. D. was ordered to

pay 30% of the monthly cost of the premiums, such that she was ordered to pay $37 per month to Mr. M. starting December 1, 2018. [ 32 ] In 2019 and 2020, Ms. D. followed online courses allowing her to complete a Bachelor of Business Degree. She had previously completed a two-year diploma in Human Resources. Ms. D. had received a student loan and bursaries allowing her to finance her studies. After obtaining her degree, she applied for employment at different places. [ 33 ] In January of 2019, Ms. D. moved out of the marital home in Elgin. By then, the mortgage payments were in arrears.

From the spring to the fall of 2019, Mr. M. made some house insurance payments and mortgage payments in relation to the residence which sat vacant. In October of 2019, the Bank of Nova Scotia, holding the mortgage on the property, exercised the power of sale and sold the property at a mortgagee’s sale. By then, approximately $82,000 was due on the mortgage and the parties had defaulted on the loan. [ 34 ] Before the parties became a couple, Ms. D. had acquired a whole life insurance policy from RBC Life. She continued to pay the monthly premiums during the period of cohabitation.

The insurance premiums were about $270 per month. According to RBC Life, the cash surrender value of the insurance policy was $6,210 as of May 1, 2010, that is, at the time the parties commenced cohabiting. The cash value of the policy was $15,901 around January 29, 2018, that is, the date of separation. Ms. D. agrees that the cash surrender value of the policy should be shared equally as this represents marital property. [ 35 ] In May of 2019, Mr. M. took possession of the Kubota tractor and attachments, which had been left at the marital home. By then, Mr.

M. had been contacted by Kubota Canada Ltd. seeking payment on the related debt. The purchase of the tractor and attachments was financed through a conditional sales contract. In the spring of 2019, Mr. M. paid the outstanding payment on the Kubota tractor, and he took possession of the vehicle. The Kubota tractor and attachments had been originally bought in the name of Mr. M. while the parties were together. In fact, Mr. M. traded in another tractor that he had previously owned in order to purchase the Kubota tractor.

However, while Fiume Kennels Ltd. was operating, the corporation assumed the monthly payments on the indebtedness. Furthermore, Mr. M. was given credit for the payments he had previously paid to Kubota Canada Ltd. in the corporate accounting as a shareholder contribution. The tractor was used for snow removal, levelling land, brush cutting to expand the dog runs, and to clear trails around the marital home. The Kubota tractor and attachments were accounted for in the financial statements of Fiume Kennels Ltd. [ 36 ] By July of 2019, Fiume Kennels Ltd. owed $4,163 on a line of credit and $142 on a credit card.

By then, Fiume Kennels Ltd. ceased operating. [ 37 ] On January 28, 2020, Fiume Kennels Ltd. was dissolved pursuant to paragraph 139(1)(

c) of the Business Corporations Act. Some time after, Ms. D. started using the business name of Armonia Kennels as a hobby breeder. However, her involvement in dog breeding enterprise was to a lesser extent than previously. [ 38 ] At the time of the trial, Ms. D. once again used the business name Fiume Kennels as she was still involved in the dog breeding business. [ 39 ] Following the court order of November 27, 2018, Ms. D. was to contribute $120 per month for child care. Mr. M. was responsible for paying the child care invoice. However, in early 2019, Ms.

D. obtained a significant subsidy from the province of New Brunswick to cover a portion of child care expenses. In the end, Ms. D.’s portion of the fee was reduced to about $12 per month. Given the subsidy from the province of New Brunswick, in May of 2019, the Office of Support Enforcement ceased collecting the $120 per month from Ms. D. In the fall of 2019, Ms. D. did not request the renewal of the daycare subsidy from the province, and it was discontinued. Since 2019, Ms. D. has not contributed to child care costs. [ 40 ] As for dental expenses for the children, the insurance policy from which Mr.

M. benefits pays 80% of these expenses. [ 41 ] The following amounts not covered by the insurance company were paid out of pocket by Ms. D. in relation to dental expenses for the benefit of the children: 2018 $29 2019 $82

2020 $32 2021 $101 2022 $56 [ 42 ] Mr. M. continues to pay the monthly insurance premiums relating to dental and medical coverage for the children. He is asking that Ms. D. contribute her proportionate share to these premiums. [ 43 ] From September 2019 to 2022, Mr. M. paid the following sums for after-school child care: Sept. to Dec. 2019 $1,232 2020 $1,274 (schools were closed for some time as a result of the pandemic) 2021 $2,567 2022 $1,520 TOTAL $6,593 [ 44 ] Mr. M. is requesting that Ms.

D. contribute to the after-school child care expenses from September 2019 to December 2022. [ 45 ] Generally, on the days when the children were in Ms. D.’s care, she picked them up after school and did not require child care services. [ 46 ] Recently, the older child has not been attending after-school child care while he is in Mr. M.’s care as the child goes to his father’s house after school. Mr.

M.’s new partner is present at the home after the school day is over. [ 47 ] In the future, the parties agree that each party should be responsible for the after-school child care incurred on the days when the children are is in his or her care. [ 48 ] From 2020 to 2023, the children attended numerous day camps. These included soccer day camp, hockey day camp, laser tag day camp, and skating day camp. It was Ms. D. who registered the children in these programs. The children attended the camps on days off from school, at a time when Ms. D. was not working outside the home and Mr.

M. was not in the classroom teaching. Ms. D. paid $1,569 for these day camps, whereas Mr. M. paid $1,445 towards these expenses. In other words, Mr. M. contributed about 50% of the cost of the expense. Ms. D. is asking that Mr. M. pay 70% of the cost. [ 49 ] Regarding sports activities in which the children participated, these included hockey, ball hockey, skating, and soccer. These sports were at the community level and there was very little travel involved. From 2019 to the spring of 2023, Ms. D. paid $4,720 towards the registration fees and team fees for these extracurricular activities. For his part, Mr.

M. made an additional contribution of $3,511 towards these expenses. Ms. D. is requesting an additional sum of $2,013 from Mr. M. She is suggesting that, although he has already paid about 50% of the cost relating to registration fees for the said activities, he should have paid 70% of these expenses. [ 50 ] With respect to the children’s participation in hockey, each parent has a full set of hockey equipment for each child, including goaltender equipment, at his or her home. [ 51 ] In January of 2019, the parties’ son received an orthodontic treatment at a cost of $2,400.

The insurance company paid one-half of the invoice. Ms. D. paid this invoice, and she is requesting that Mr. M. contribute $840 to this expense. For his part, Mr. M. agrees to pay this amount. Ms. D. has deducted this expense on her tax return as a medical expense.

[ 52 ] During the period of December of 2020 to March of 2021, the younger child underwent a psychological and educational evaluation relating to Attention Deficit Hyperactivity Disorder. The cost of the evaluation was $3,600. It was paid for by Ms. D. The evaluation was carried out by Mylène Thibeault. Mr. M.’s insurer paid some of this expense. The uninsured portion was $1,500. Mr. M. paid $750 towards this expense, that is, 50% of the uninsured portion. For her part, Ms. D. is asking that Mr.

M. pay 70% of the uninsured portion, that is, that he pay an extra $300 towards this expense. [ 53 ] The marital home in Elgin was located on a one-acre lot. Title to the property was held in both parties’ names. As previously stated, the property was repossessed by the Scotiabank as the parties defaulted on the mortgage. As well, there are three vacant lots adjacent to the marital home. These three lots consist of about 36 acres of land. The parcels were purchased by Mr. M. in 2002, about nine years before the marriage. Title to these parcels of land was in Mr. M.’s name only.

The PID numbers are 00600478, 05022041 and 05022058. In general, the parties and the children used the vacant lots for recreational purposes. For example, the family walked or ran on the trails located on these lots, and they would go snowshoeing in the trails in the winter. [ 54 ] Regarding the other assets, in his pleadings and pretrial brief, Mr. M. was asking for an interest in a number of other assets.

These include the following: – Two outbuildings – 24hp Husqvarna ride-on mower – 10,000-watt generator – Honda snowblower – Wood splitter – Dog breeding equipment such as stainless steel dog crates, stainless steel grooming sink, grooming tables, and grooming supplies [ 55 ] By the end of the trial, Mr. M. agreed that some of these items were fixtures which were part of the property formerly known as the marital home, other items belonged to Fiume Kennels Ltd. and should go towards its indebtedness. Generally, Mr.

M. did not want these items returned to him as they were worth very little. [ 56 ] More specifically, one outbuilding was taken by Ms. D. from the marital home to her new residence at Lower Coverdale; the other outbuilding was a fixture at the marital home as it was permanently attached to the property. The grooming sink for the dogs was attached to the premises at the marital home and was considered to be a fixture. The wood splitter was left at the former residence and lost at the mortgagee’s sale. [ 57 ] All the dog-related equipment was owned by Fiume Kennels Ltd.

If there is any value in the remaining items, the equipment should be sold and used to pay the outstanding creditors of the corporation. [ 58 ] As to the ride-on mower, generator and snowblower, at the time of the trial, these were worth very little, and Mr. M. did not want these items. [ 59 ] Ms. D.’s annual income according to her income tax returns has been as follows: 2015 $73,140 2016 $23,936 2017 $0 2018 $0 [ 60 ] In 2019, Ms. D.’s total income was $4,740 according to her income tax return. This consisted of spousal support paid to her by Mr. M. [ 61 ] Ms.

D.’s income tax return summaries pre- and post-bankruptcy for 2020 indicate her total income to be $5,218. This is

comprised of employment income of $478 and spousal support of $4,740. There is no self-employment income recorded for the year 2020. In the said year, Ms. D. received $8,890 in scholarships. [ 62 ] Ms.

D.’s 2021 income tax return shows her income as follows: Spousal support payments $4,740 Business income ($68,387) Net self-employment income $9,158 Total income $13,898 Statement of business activities (Fiume Kennels) Gross business income $68,387 Expenses Advertising/meals $576 Taxes, licenses, membership $3,677 Office expenses $4,328 Stationary, supplies $410 Professional fees $1,180 Management $214 Repairs $1,102 Utilities $3,270 Delivery, freight $9,175 Other $29,454 Total expenses $53,386 $53,386 Net income before adjustments $15,000 Motor vehicle expenses $3,454 Business use of home $2,388 Net income $9,159 [ 63 ] Also in 2021, according to her income tax return, Ms.

D. incurred fees of $3,940 for services rendered by Lasik MD consisting of elective eye surgery. [ 64 ] In March of 2021, Ms. D. was involved in a motor vehicle accident. She has received an award of damages of $8,000 as a result of injuries sustained during the accident. [ 65 ] Ms. D., who was 40 years old at the time of the trial, described herself as a good employee. During her testimony, she indicated she was confident she would find employment that paid between $30,000 and $32,000 per year. She was actively looking for a job where the work hours are form 9 a.m. to 5 p.m. from Monday to Friday. Ms.

D. does extensive volunteer work for the children’s school and the children’s hockey teams. She presents herself very well. She is intelligent and full of energy. [ 66 ] On May 11, 2020, Ms. D. filed an assignment in bankruptcy. The exempt property, according to the filed Statement of Affairs, included household furniture and a whole life policy held with RBC (the children are beneficiaries). As well, included in the assets was a 2018 Toyota Rav 4. Toyota Credit Canada Inc. was a secured creditor in relation to the indebtedness relating to this vehicle. The estimated value of the vehicle was $16,111.

The amount admitted as a debt was $25,149 in relation to the Rav 4. [ 67 ] The documents filed by Ms. D. in relation to the bankruptcy do not indicate that she is owed money by Mr. M., nor do they indicate that she has an interest in the Kubota tractor or the three vacant lots in Elgin, N.B. [ 68 ] The unsecured creditors listed in Ms. D.’s bankruptcy documents included the following:

Bank of Montreal $21,557 Bank of Nova Scotia $114,317 National Student Loan $35,700 President’s Choice $3,550 Royal Bank of Canada $24,843 [ 69 ] The admitted liabilities totaled $225,116. Ms. D. was required to make payments to the estate of $150 per month. Ms. D. was discharged from the bankruptcy on February 21, 2021. In the event that Ms. D. acquires assets as a result of this decision, she indicated she will inform her trustee in bankruptcy. [ 70 ] For his part, Mr. M. has been employed since 2003 as a school teacher. He is trained as a music teacher.

In addition, he has been a performing musician, a sound person, a studio musician, and a drum teacher. Ms. D. believes that Mr. M. earns extra unreported income as a musician. [ 71 ] The annual income of Mr. M. as reported on his income tax returns has been as follows: 2015 $62,246 2016 $71,419 2017 $72,868 2018 $72,075 2019 $96,498 2020 $65,807 2021 $82,796 2022 $82,796 (per financial statement) [ 72 ] Mr. M. pays $760 per year as union dues to the teachers’ union. [ 73 ] On August 15, 2019, Mr. M. made a consumer proposal under

section 66.13 of the Bankruptcy and Insolvency Act . The proposal was an attempt by the debtor to send some funds to the creditors and to avoid bankruptcy. The consumer proposal was refused by the creditors. On January 17, 2020, Mr. M. made an assignment under the B.I.A . [ 74 ] The statement of affairs filed by Mr.

M. discloses exempt assets as being his teacher’s pension plan with the province of New Brunswick, a 2011 Ford Escape worth $2,264, and musical instruments worth $3,000 categorized as tools of the trade. [ 75 ] The marital home located in Elgin is listed as having a value of $82,000 with a mortgage having an outstanding indebtedness in the same amount. The three vacant lots are listed as having a value of $36,000, with an estimated net realizable value of $17,998. [ 76 ] The 2015 Kubota tractor and attachments are listed as having a value of $15,500.

The secured indebtedness relating to same was estimated to be $1,000 owing to Kubota Canada Ltd. The net realizable value was listed at $4,250. There is also a shareholder’s loan listed in the amount of $32,325 with no realizable value. As well, there are three homemade trailers listed as having a total value of $950. [ 77 ] The unsecured creditors include the Caisse populaire acadienne ltée holding a debt of $19,840. The New Brunswick Teachers’ Union was owed $1,300. The Bank of Nova Scotia was owed $114,151 in addition to the $82,000 owing on the household mortgage. Ms.

D. is listed as a potential creditor on the bankruptcy documents. The total indebtedness was $218,797.

[ 78 ] At the time of the within hearing, the trustee’s file was not closed as he was waiting the outcome of this decision with respect to the ownership of the three vacant lots. Despite this, Mr.

M. was discharged nine months after filing for bankruptcy. [ 79 ] The financial statements for Fiume Kennels Ltd. for the fiscal year July 1, 2016 to June 30, 2017 indicate the following: Revenue (mostly sale of puppies) $150,166 Expenses Vet, dog food, dog supplies $37,981 Motor vehicle $16,240 Breeding dog write-off $10,126 Amortization $13,852 Supplies/Electronics $6,268 Lease expense (Kubota) $704 Miscellaneous $5,919 Repairs $8,290 Telephone $2,249 Other $19,808 Total expenses $121,437 $121,437 Net income $28,729 [ 80 ] The financial statements for Fiume Kennels Ltd. for the period of July 1, 2017 to June 30, 2018 indicate the following: Revenue (mostly sale of puppies) $62,250 Expenses Vet, puppy food, dog supplies $4,996 General expenses Breeding dog write-off $20,507 Office supplies and computer $6,412 Lease expense (Kubota lease) $703 Vehicle fuel and mileage (Rav 4) $11,737 Telephone $3,366 Travel $1,062 Meals $475 Vet, dog food, dog supplies $18,785 Amortization expense $3,226 Other $13,735 Total expenses $80,008 $80,008 Net income – $22,754 [ 81 ] In the said period, Fiume Kennels Ltd. paid $4,120.56 to Kubota Canada Ltd.

[ 82 ] The bookkeeper for Fiume Kennels Ltd. died after the separation of the parties. Therefore, it made it difficult to obtain the final accounting for the corporation. [ 83 ] In general, Ms. D. had a better understanding than Mr. M. of the accounting principles relating to the categorization of the transactions relating to the dog breeding business. ISSUES [ 84 ] The issues in this matter include the following: – How should the parenting time be exercised by the parents in relation to the children during the days before and after Christmas Day? – Should an income be imputed to Ms. D. and to Mr.

M.? – What should be the future child support obligation, given that this is a shared parenting regime? – What are the special and extraordinary expenses, and how should they be apportioned? – Should there be an adjustment to child support and spousal support for the period before the trial? – How should the marital assets be divided, given that both parties have gone through bankruptcy? – Is there any validity to the other claims advanced by Mr. M. whereby he is asking for damages in his favour? – Should there be an award of costs? Parenting Order [ 85 ] The request for a parenting order is governed by

section 16 of the Divorce Act , which provides that when the court makes such an order, the court should take into consideration only the best interests of the children. [ 86 ] On the first day of the trial, the parties agreed that they had an agreement on the parenting time and decision-making responsibility issue. The only remaining question was the

schedule surrounding Christmas Day. Previously, the parenting order provided that one parent would exercise parenting time with the children on December 24 up to December 25 at noon and the other parent would have parenting time from December 25 at noon to December 26 th . [ 87 ] Mr. M. has requested that a day or so be added, before and after the Christmas Day schedule. This, he argues, would allow him and the children to travel from his home in Riverview to the Bathurst area where his family resides and where he and the children generally spent Christmas Day.

The drive from Moncton to Bathurst takes about three hours. [ 88 ] For her part, Ms. D. argues that there is no need to change the previous interim order as the parties are now able to communicate with each other. All in all, I conclude that it is in the best interests of the children that I grant an additional 24 hours at both ends of the previous Christmas parenting time schedule. Consequently, the Christmas parenting time

schedule shall be such that one parent shall exercise parenting time from noon on December 23 to noon on December 25 and the other parent shall exercise parenting time December 25 at noon to December 28 at 9 a.m. The remainder of the children’s Christmas break shall be divided equally by the parties. Imputation of income [ 89 ] Mr. M. is requesting that I impute income to Ms. D. such that her total annual income should be equal to his income of $82,000 per year. He advances that she is intentionally underemployed. More specifically, he argues that Ms. D. should be working 40 hours per week. Also, Mr.

M. outlines that she obtains certain financial benefits that are paid for by the dog breeding. Mr. M. relies on

section 19 of the Federal Child Support Guidelines which reads as follows: Imputing income

(1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include the following: (

a) the spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or health needs of the spouse; (

b) the spouse is exempt from paying federal or provincial income tax; (

c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada; (

d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines; (

e) the spouse’s property is not reasonably utilized to generate income; (

f) the spouse has failed to provide income information when under a legal obligation to do so; (

g) the spouse unreasonably deducts expenses from income; (

h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and (

i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust. Reasonableness of expenses

(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act . [ 90 ] In Peters v. Atchooay 2022 ABCA 347 , the Alberta Court of Appeal dealt with the

interpretation of paragraph 19(1) (

a) of the Federal Child Support Guidelines . The court decided that there is no requirement to prove a deliberate intent to evade child support through a choice of employment or lifestyle. Like the rest of the Canadian provinces, the proper analysis is a test of the reasonableness when deciding whether to impute income to a parent under the Guidelines . [ 91 ] In paragraphs 92 and 93 of the decision, the Alberta Court of Appeal provided a very good

summary of the paragraph 19(1) (

a) principles. These paragraphs read as follows: 92 The following is a non-exhaustive list of principles to guide the determination of whether to impute income under s 19(1)(a): 1. General Duty to Work . There is a duty to seek employment where a parent is healthy and can work. A parent’s limited work experience or job skills do not justify a failure to pursue lower skilled employment or employment in which the necessary skills can be learned on the job.

While this may mean a job at the lower end of the wage scale, parents cannot refuse to take reasonable steps to support their children simply because they cannot obtain interesting or highly paid employment. Nor can a high-earning or highly skilled

parent refuse employment indefinitely by holding out for employment commensurate with their skills and previous level of earning, job title or seniority. 2. Earning Capacity Used to Assess Reasonableness . When determining whether to impute income on the basis of under-employment or unemployment, a court must consider what is reasonable in the circumstances. The starting point is the payor’s earning capacity, which is the objective measure by which the reasonableness of the parent’s decision or conduct is assessed.

Earning capacity is determined based on factors like age, education, experience, skills, and health of the payor, along with availability of work, the freedom to relocate, and other obligations. 3. Discretion . Income will not be imputed where a parent’s decision to earn less than the maximum they are capable of making is found to be reasonable. Nor is there a presumption that a career choice resulting in a reduction in income is unreasonable. 4. Obligation to Support Children is the Overarching Goal . The reasons for under-employment or unemployment must be objectively scrutinized.

A parent is required to act in a manner reflective of his or her obligations and cannot be excused from support obligations in furtherance of unrealistic, unproductive or non-remunerative career aspirations. Persistence in unremunerative employment or repeated education initiatives may also entitle the court to impute income. Parental self-fulfillment is a consideration but does not trump child support requirements. 5. Agreements Contextualize Reasonableness . The parties’ pre-separation agreements or social contracts have some weight in determining Guidelines income, but they are not determinative.

The parenting arrangement, and the payor’s involvement or lack of involvement with the children, the length or time the arrangement has been in place, and the ages of the children may be considered in assessing the reasonableness of the payor’s under-employment or unemployment. 6. Reasonableness Is Not Fixed in Time . The payor’s history of paying child support and providing financial disclosure are objective measures by which to assess the reasonableness of the payor’s employment decision or conduct.

What is reasonable (or unreasonable) is determined at one point in time and will not necessarily remain static for the entire time the children are owed support. 7. The Ultimate Onus Rests on the Party Opposing Imputation . Assuming the financial disclosure requirements have been met, the onus is on the party opposing imputation to prove on a balance of probabilities: 1) that the under-employment or unemployment was not voluntary, that is, not due to their own decision or conduct; or, 2) that the under-employment or unemployment is as a result of one of the listed exceptions in s 19(1)(a).

If neither circumstance applies, that party must establish on a balance of probabilities that their under- employment or unemployment is reasonable, having regard to all the existing circumstances. However, where it is an initial application, the person seeking an imputation of income under s 19(1)(

a) has a preliminary onus to establish some basis for the imputation sought. Either way, each stage of the analysis requires evidence that is as objective as possible. Bare assertions will not suffice. 93 On the issue of amount, a court cannot choose an arbitrary number; “there must be a rational basis underlying the selection of any such figure ... grounded in the evidence”: Drygala at para 44.

However, if a reasonable figure can be determined in between earning capacity and actual earnings that is grounded in the evidence, it may be the more appropriate amount to impute in circumstances where the payor’s actual income is unreasonable. Horbas is a case in point, where the Manitoba Court of Appeal found the payor’s actual earnings of roughly $50,000 unreasonable but imputed an income of $100,000 rather than his $300,000 earning capacity because this compromise figure was reasonable in the circumstances and grounded in the evidence. [ 92 ] The matter at hand is an initial application whereby Ms.

D.’s child support obligation is to be determined based on her annual income. Ms. D. disclosed her income tax returns for the years 2015 to 2021. Her gross income varied from $0 to $73,140 per year. I recognize that some of Ms. D.’s personal expenses were paid for by the dog breeding business. Some of these expenses include the use of a vehicle, a cellular phone, electronic equipment, the internet service, and the use of a home office. [ 93 ] Ms. D. has not disclosed her tax return for 2022 as it had not been filed at the time of the trial. [ 94 ] A three-step analysis of paragraph 19(1)(

a) of the Guidelines consists of the following.

[ 95 ] Firstly, I must decide on a balance of probabilities whether the underemployment or unemployment was voluntary or not due to the payor’s own decision. Secondly, if I find that the payor parent was underemployed or unemployed, was it as a result of the exceptions found in paragraph 19(1)(

a) of the Guidelines , that is, was it justified because of the needs of the children or by reasonable educational or health needs of the parent. If neither of the exceptions apply, then the payor must prove that the underemployment or unemployment is reasonable having regard to the existing circumstances. Then I must look at the payor’s earning capacity to determine the reasonableness of the payor’s conduct. The earning capacity is determined based on qualification such as age, education, experience, skill, and health of the payor.

I must also consider work availability, the freedom to relocate and other obligations. [ 96 ] In the within circumstances, I find that Ms. D. was intentionally underemployed and unemployed as she chose not to work as she was hoping to find employment with ideal conditions. She was looking for employment from Monday to Friday with working hours from 9 a.m. to 5 p.m., despite the fact that Mr. M. had the care of the children for one-half of this time. Ms. D. was also looking for a job that paid her $60,000 per year. [ 97 ] Secondly, Ms.

D.’s underemployment or unemployment is not as a result of the exceptions listed in paragraph 19(1)(

a) of the Guidelines . In the within matter, the choice of not working made by Ms. D. was not to care for a child, for health reasons or to further her education. By the fall of 2018, both children were in school, and Mr. M. paid for after-school child care for every school day. I do recognize that after the separation Ms. D. completed an online university degree from her home. However, that was about two years before the trial. [ 98 ] Finally, I have looked at Ms. D.’s earning capacity to determine reasonableness. The evidence is that Ms. D. is 40 years old and appears to be healthy.

Lately, she completed a bachelor’s degree in business. In the past, she has worked at different positions, including computer programming, sales and running a dog breeding business. She does a tremendous amount of volunteer work including managing the children’s hockey teams. She is quite articulate. Ms. D. presents herself very well.

She was well dressed during the trial and quite confident. [ 99 ] As for the availability of work, since the pandemic has ended, there appears to be all kinds of employment in the Greater Moncton area with all kinds of employers looking for employees. [ 100 ] Generally, I will impute income to Ms. D. as I am of the view that, as a parent of two young children, she should work and she is quite capable of working. [ 101 ] Furthermore, looking at the Statement of Business Earnings attached to Ms.

D.’s income tax returns, it appears that some of her personal expenses relating to the use of a motor vehicle, cellular phone, internet, and part of her household expenses were paid for by the dog breeding business. As such, I conclude that Ms. D. unreasonably deducted expenses from her income contrary to paragraph 19(1)(

g) of the Guidelines . I will impute an annual income of $38,500 to Ms. D. This is an amount on which she does not pay income tax. Therefore, I must gross up this amount. Using the imputed amount of $38,500, the DivorceMate software indicates that Ms. D.’s annual income for the purposes of calculating child support is $41,000 per year. [ 102 ] Ms. D. had asked that I impute an additional income to Mr. M. as he gives music lessons and was involved in a band. The evidence discloses that he earned very little money from these ventures and that his expenses relating to these are greater than his income.

Therefore, I will not impute an extra income to Mr. M. for the purposes of calculating child support. Child Support [ 103 ] As for the child support obligation, given that this is a shared parenting arrangement,

section 9 of the Federal Child Support Guidelines is applicable. It reads as follows: 9 If each spouse exercises not less than 40% of parenting time with a child over the course of a year, the amount of the child support order must be determined by taking into account (

a) the amounts set out in the applicable tables for each of the spouses;

(

b) the increased costs of shared parenting time arrangements; and (

c) the conditions, means, needs and other circumstances of each spouse and of any child for whom support is sought. [ 104 ] I am also cognizant of the principles enunciated by the Supreme Court of Canada in Contino v. Leonelli-Contino , 2005 SCC 63 , in relation to how to determine the quantum of child support in the context of a shared parenting regime. [ 105 ] The decision Travis John Wetsch v. Holli Anne Kuski , 2017 SKCA 77 , contains a good description as to how to carry out the determination of child support in the context of a shared parenting order.

Paragraph 121 is helpful in this regard and it reads as follows: 121 In Tonita v Fenske , 2009 SKQB 443 , 78 RFL (6th) 84 , Gunn J. helpfully summarised the approach to be taken under s. 9 in light of the analysis called for in Contino : [31] In Professor Rollie Thompson’s annotation to the Contino decision he summarizes the step-by-step analysis laid out by Justice Bastarache as follows:

(1) Determine the Simple Set-Off Amount . ...

(2) Review the Child Expense Budgets . A court must look at the parents’ actual spending patterns, based upon child expense budgets, and not just make assumptions about spending. Further, a court should look at all the expenses of both parents under s. 9 (b); not just the additional expenses resulting from an increase in access, not just the variable or fixed expenses, not just the expenses of the recipient parent. Under s. 9(b), a court has two concerns: (

i) the overall increased total costs of child-rearing for both parents, especially duplicated costs; and (ii) any disproportionate assumption of spending by one parent or the other (paras. 52-53). These expenses should be “apportioned between the parents in accordance with their respective incomes” (para. 53), to “verify” the setoff (para. 77) and to determine “the need for significant adjustments to the set-off amounts” (para. 78).

(3) Consider the Ability of Each Parent to Bear the Increased Costs of Shared Custody and the Standard of Living for the Children in Each Household . The consideration of these two factors lies at the heart of the s. 9(

c) analysis, set out at paras. 54-72, especially paras. 69-70. In assessing each parent’s ability to bear the increased costs of shared custody, a court should look at the income levels of each parent, the disparity in incomes, and the assets and liabilities of each. The child’s standard of living in each household is “particularly useful for the exercise of discretion in a predictable manner” (para. 70). The children should not experience “a significant variation in the standard of living ... as they move from one household to another” (para. 51). As the term “household” is used, the incomes and resources of new partners in each household would presumably be relevant.

(4) Distinguish Between Initial Orders or Agreements and Variations . “An application that represents a variation of a prior support arrangement will usually raise different considerations from a s. 9 application where no prior order or agreement exists.” (para. 55) A recipient parent “may have validly incurred expenses based on legitimate expectations about how much child support would be provided”, especially for fixed costs (para. 55). [ 106 ] Firstly, with respect to paragraph 9 (

a) of the Federal Child Support Guidelines , I should consider the amounts set out in the applicable tables while taking into consideration the annual incomes of the parties. Mr. M. has an annual income of $82,796. He pays $720 in union dues. According to the applicable tables, his child support obligation for two children would be $1,174 per month based on $82,076 per year. Ms. D.’s annual income is $41,000 for the purposes of calculating child support. Her child support obligation for two children would be $595 per month. The difference between these amounts is $579 per month. [ 107 ] Regarding paragraph 9(

b) of the Federal Child Support Guidelines , I must look at the increased cost of a shared parenting arrangement. At this stage, the residence of Ms. D. as well as the residence of Mr. M. can accommodate the children. Each home has bedrooms and beds for the children. Both parties have clothing for the children in their respective homes. During the trial, neither party raised the issue of elevated cost relating to a shared parenting arrangement.

[ 108 ] Paragraph 9 (

c) of the Federal Child Support Guidelines requires that I consider the condition, means, needs and other circumstances of each spouse and of any child for whom support is sought. In the within matter, there were no child-focused budgets filed by the parties, contrary to what is required. However, I have looked at the incomes of the parties and their respective budgets as provided in their filed financial statements. I note that Mr. M. has a partner who lives with him. [ 109 ] Taking into consideration the analysis required under

section 9 of the Federal Child Support Guidelines , I am of the view that the monthly sum of $579, derived by the set-off analysis, is appropriate in the circumstances. Therefore, starting on July 1, 2023, and on the first day of every month thereafter, Mr. M. shall pay $579 per month in favour of Ms. D. as child support for the benefit of the two children. Special or Extraordinary Expenses [ 110 ]

Section 7 of the Guidelines explains the concept of special and extraordinary expenses. It reads as follows: Special or extraordinary expenses 7(1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the following expenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern prior to the separation: (

a) child care expenses incurred as a result of the employment, illness, disability or education or training for employment of the spouse who has the majority of parenting time; (

b) that portion of the medical and dental insurance premiums attributable to the child; (

c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professional counselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speech therapy and prescription drugs, hearing aids, glasses and contact lenses; (

d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’s particular needs; (

e) expenses for post-secondary education; and (

f) extraordinary expenses for extracurricular activities. Definition of “extraordinary expenses”

(1.1) For the purposes of paragraphs (1)(

d) and (f), the term extraordinary expenses means (

a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking into account that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or

(

b) where paragraph (

a) is not applicable, expenses that the court considers are extraordinary taking into account (

i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse would receive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court has otherwise determined is appropriate, (ii) the nature and number of the educational programs and extracurricular activities, (iii) any special needs and talents of the child or children, (iv) the overall cost of the programs and activities, and (

v) any other similar factor that the court considers relevant. Sharing of expense

(2) The guiding principle in determining the amount of an expense referred to in subsection (1) is that the expense is shared by the spouses in proportion to their respective incomes after deducting from the expense, the contribution, if any, from the child. Subsidies, tax deductions, etc.

(3) Subject to subsection (4), in determining the amount of an expense referred to in subsection (1), the court must take into account any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit relating to the expense. Universal child care benefit

(4) In determining the amount of an expense referred to in subsection (1), the court shall not take into account any universal child care benefit or any eligibility to claim that benefit. [ 111 ] Not all expenses incurred by a parent for a child qualify as special or extraordinary expenses. The amount provided in the applicable table referred to in the child support order has a component for expenses generally incurred by a parent in raising a child such as school supplies, community sports and regular extracurricular activities. [ 112 ] Justice Walsh explained this concept in paragraph 16 of T.M.R. v.

S.M.S. 2019 NBQB 40 : (…) Generally speaking, child support is designed to cover “all the ordinary costs of raising a child”, which are normally associated with food, shelter, clothing and other necessaries, although ordinary educational, extracurricular and recreational expenses may fall under that umbrella as well (See: Payne & Payne, Child Support Guidelines , 2017 at p. 250). [ 113 ] Ms. D. is requesting a contribution from Mr. M. towards expenses she has paid in the past years in relation to hockey, soccer and skating. These expenses were either paid for by Ms. D. or by the children’s maternal grandmother.

For his part, Mr. M. has already

contributed 50% of many of these expenses. He has also paid the previously ordered child support. In some cases, Ms. D. received a reimbursement for the fees that she had paid for the programs, either because the children did not attend the activities or because one child played as a goaltender. She did not share this reimbursement with Mr. M. In the end, Ms. D. is asking Mr.

M. to pay the difference between the 50% he has already paid and the 70%, which she advances is his proportionate share as his annual income was greater than her annual income. [ 114 ] Given that the children were participating in sports at the community level, given that Mr. M. has paid the child support, and given that the maternal grandmother paid for many of these expenses, I will not order that Mr. M. pay more than the 50% of the expenses that he has already paid.

Fees incurred as a result of participation in community sports by the children generally do not qualify as extraordinary expenses. [ 115 ] As to the various camps attended by the children during days when they were not in school, Ms. D. argues that these should be considered as child care and should qualify as special expenses under the Guidelines . However, under paragraph 7(1)(

a) of the Guidelines , special expenses include “child care expenses incurred as a result of the employment, illness, disability or education or training for employment” of the parent. Most of the fees relating to the camps were in the summer months when Mr. M. was not teaching. He required no child care and was willing to take the children any time. As well, Ms. D. had no employment at the time and had completed her degree and did not require child care to complete her online education. Therefore, Ms. D.’s request for a further contribution beyond the 50% Mr.

M. has already paid is denied. [ 116 ] The only expenses identified during the trial that qualify as true special or extraordinary expenses include: child care incurred during the school year while Mr.

M. was teaching (see 7(1)(a)), orthodontic fees (see 7(1)(c)), insurance premiums paid for health benefits for the children only (see 7(1)(b)), dental expenses that exceed the insurance reimbursement by $100 annually (see 7(1)(c), and the psycho-educational report (see 7(1)(c)). [ 117 ] Subsection 7(2) of the Guidelines provides that special and extraordinary expenses are shared by the spouses in proportion to their respective annual incomes after deducting from the expense the contribution, if any, from the child.

In determining the amount of the expense, according to subsection 7(3) of the Guidelines , the court must consider any subsidies, benefits or income tax deductions or credits relating to the expense, or any eligibility to claim these. [ 118 ] In late 2020 and early 2021, the psycho -educational assessment regarding the couple’s daughter was carried out by Mylène Thibeault. The cost for such assessment was $3,600. The uninsured portion was $1,500. It should be noted that both parties paid $750 towards this expense. The amount of $1,500 should be reduced by 25% as there is generally a tax deduction for a parent.

The net amount was $1,125. [ 119 ] Pursuant to the previous interim order, Ms. D. would pay 30% of special or extraordinary expenses and Mr. M. would pay 70% of such expenses. Therefore, Mr. M.’s responsibility for the uninsured portion of the psycho-educational assessment is 70% of $1,125, that is, $788. He has already paid $750 towards this amount. Therefore, Mr M. shall pay $38 as his share of the psycho-educational assessment. [ 120 ] In January of 2019, an orthodontic treatment was put in place for the benefit of the son. The total cost is $2,400. The uninsured portion was $1,200.

This amount should be deducted by 25% for tax consequences as it is a medical deduction under the Income Tax Act . There remains the net amount of $900. [ 121 ] In 2019, pursuant to the interim order, Ms. D. was ordered to pay 30% of the special expenses. Therefore, Mr. M.’s share of the orthodontic treatment will be 70% of $900, that is, $630. [ 122 ] Mr. M. has been paying premiums for health and medical insurance for the benefit of the children. In late 2018, Ms. D. was ordered to pay 30% of the monthly cost amounting to $37 per month.

I will order that she continue to pay this amount. [ 123 ] Regarding past child care, the previous order provided that Ms. D. pay $120 per month toward this expense in favour of Mr M. She had a provincial subsidy that covered most of this cost up to the summer of 2019 after which she did not apply for the subsidy and did not pay $120 per month. Mr. M. paid $6,593 for child care from September 2019 to December of 2022. He would benefit from an income tax deduction of 25%. Therefore, this amount should be reduced accordingly, leaving $4,945 net of income taxes. Ms.

D.’s contribution is 30% according to the previous interim order of November 2018. Therefore, she shall pay $1,483 to Mr. M. as her portion

of the past child care cost. The parties agree that, for the future, if the parties require child care, that parent who incurs such expenseshall be responsible for same. [124] Ms. D. paid out-of-pocket expenses for dental services for the children for the uninsured portion of the expenses. The years inwhich the health-related expenses exceeded the insurance reimbursement by at least $100 annually included 2019, 2020 and 2021. Inthese years, she paid $189 out of pocket for dental expenses. These should be deducted by 25% for income tax purposes, leaving a net of$142. Therefore, Mr.

M. shall pay 70% of this amount, that is, $99. [125] In 2022, Mr. M. earned $82,796 and he paid union dues of $760. I have determined that the annual income to be used for Ms. D.is $41,000. As such, the proportionate sharing formula for the future is the following: $41,000 x 100% = $41,000 x 100% = 33%$41,000 + $82,035 $123,037 [126] Therefore, Mr. M. shall pay 67% of future special or extraordinary expenses and Ms. D. shall pay 33%. Spousal Support [127] Ms. D. advances a claim for retroactive spousal support. She relies on

section 15.2 of the Divorce Act. [128] In Bracklow v. Bracklow (SCC), [1999] 1 S.C.R. 420, the Supreme Court of Canada dealt with entitlement tospousal support. McLachlin, J. (as she then was) wrote the decision for the Court. The following passages found in paragraphs 15, 34, 35,36, 38, 39, and 41 are relevant: 15 (…) I conclude, however, that the law recognizes three conceptual grounds for entitlement to spousal support: (1) compensatory;(2) contractual; and (3) non-compensatory.

These three bases of support flow from the controlling statutory provisions and the relevantcase law, and are more broadly animated by differing philosophies and theories of marriage and marital breakdown. (…) 34 The Divorce Act and the provincial support statutes are intended to deal with the economic consequences of the marriage breakdownfor both parties. (…) 35 Moge, supra, sets out the method to be followed in determining a support dispute.

The starting point is the objectives which theDivorce Act stipulates the support order should serve: (1) recognition of economic advantage or disadvantage arising from the marriageor its breakdown; (2) apportionment of the financial burden of child care; (3) relief of economic hardship arising from the breakdown ofthe marriage, and (4) promotion of the economic self-sufficiency of the spouses: s. 15.2(6). No single objective is paramount; all must beborne in mind.

The objectives reflect the diverse dynamics of the many unique marital relationships. 36 Against the background of these objectives the court must consider the factors set out in s. 15.2(4) of the Divorce Act. Generally, thecourt must look at the “condition, means, needs and other circumstances of each spouse”. This balancing includes, but is not limited to,the length of cohabitation, the functions each spouse performed, and any order, agreement or arrangement relating to support. Dependingon the circumstances, some factors may loom larger than others.

In cases where the extent of the economic loss can be determined,compensatory factors may be paramount. On the other hand, “in cases where it is not possible to determine the extent of the economicloss of a disadvantaged spouse . . . the court will consider need and standard of living as the primary criteria together with the ability topay of the other party”: Ross v. Ross (1995), (NB CA), 168 N.B.R. (2d) 147 (C.A.), at p. 156, per Bastarache J.A. (ashe then was). There is no hard and fast rule.

The judge must look at all the factors in the light of the stipulated objectives of support, andexercise his or her discretion in a manner that equitably alleviates the adverse consequences of the marriage breakdown.

(…) 38 The contractual or consensual basis for support finds its source in s. 89(1)(

b) of the Family Relations Act , which counsels courts to “hav[e] regard to . . . (

b) an express or implied agreement between the spouses that one has the responsibility to support and maintain the other”, and s. 15.2(4) of the Divorce Act (“In making an order under subsection (1) . . ., the court shall take into consideration . . . (

c) any order, agreement or arrangement relating to support of either spouse”). Consensual considerations may either create or negate an obligation to support, under appropriate circumstances. 39 The compensatory basis for support finds its source in a number of factors mentioned in the statutes. In the British Columbia Family Relations Act , these include s. 89(1) (

a) and (d). “[T]he role of each spouse in their family” embraces the contributions made by the spouses to the family for which compensation may be appropriate on the collapse of the marriage.

Similarly, “the ability and capacity of ... either or both spouses to support themselves” permits a court to examine whether spouses have foregone opportunities to develop the ability to support themselves because of the marriage, or have been rendered less able to support themselves by adverse effects of the marriage or the marriage breakdown. “[C]ustodial obligations respecting a child” ( Family Relations Act , s. 89(1)(c)) may relate to compensation. While spousal support is distinct from child support, the need to care for children has an impact on factors relevant to spousal support.

Under the Divorce Act , compensation arguments can be grounded in the need to consider the “condition” of the spouse; the “means, needs and other circumstances” of the spouse, which may encompass lack of ability to support oneself due to foregoing career opportunities during the marriage; and “the functions performed by each spouse during cohabitation”, which may support the same argument. In sum, these compensatory statutory provisions can be seen to embrace the independent, clean-break model of marriage and marriage breakdown. (…) 41

Section 15.2(6) of the Divorce Act , which sets out the objectives of support orders, also speaks to these non-compensatory factors. The first two objectives -- to recognize the economic consequences of the marriage or its breakdown and to apportion between the spouses financial consequences of child care over and above child support payments -- are primarily related to compensation.

But the third and fourth objectives are difficult to confine to that goal. “[E]conomic hardship . . . arising from the breakdown of the marriage” is capable of encompassing not only health or career disadvantages arising from the marriage breakdown properly the subject of compensation (perhaps more directly covered in s. 15.2(6)(a): see Payne on Divorce , supra , at pp. 251-53), but the mere fact that a person who formerly enjoyed intra-spousal entitlement to support now finds herself or himself without it.

Looking only at compensation, one merely asks what loss the marriage or marriage breakup caused that would not have been suffered but for the marriage. But even where loss in this sense cannot be established, the breakup may cause economic hardship in a larger, non-compensatory sense. Such an

interpretation supports the independent inclusion of s. 15.2(6)(

c) as a separate consideration from s. 15.2(6)(a). Thus, Rogerson sees s. 15.2(6) (c), “the principle of compensation for the economic disadvantages of the marriage breakdown as distinct from the disadvantages of the marriage”, as an explicit recognition of “non-compensatory” support (“Spousal Support After Moge ”, supra , at pp. 371-72 (emphasis in original)). [ 129 ] Ms. D. is requesting an award of spousal support from the date of separation in late January of 2018 to November 2018 when an interim order granted a sum of $395 per month as spousal support for her benefit.

As well, she is requesting child support from the date of separation, January 2018 to July of 2018, when the first interim order was granted. The first order of July 28, 2018 provided that Mr. M. pay child support of $1,043 per month based on his income of $77,868 per year. [ 130 ] After Mr. M. moved out of the marital home in late January of 2018, his biweekly pay cheque of $1,666 continued to be deposited in the joint account to which Ms. D. had access. As well, an income tax refund of approximately $2,000 was deposited in the said account. Following the separation, Ms.

D. and the children remained in the marital home until early 2019. As well, Ms. D. had possession and use of the Honda Odyssey van until she returned it to the dealership in the summer of 2019. [ 131 ] From the joint account, between January 2018 and July 2018, there were direct withdrawals by various creditors. These included, on a monthly basis, the mortgage payment of about $400 per month, the Odyssey van payment of about $700 per month, and a number of utilities charges such as the internet. I acknowledge that Ms.

D. has established entitlement to spousal support based on a compensatory and a non-compensatory basis for the period in question. [ 132 ] Given that all of Mr. M.’s pay cheque was deposited in a joint bank account which in turn paid for the mortgage, the motor vehicle payment, the household utilities, the household insurance, and the motor vehicle insurance, and that Ms. D. had the possession and use of the home and the Odyssey van, I will not order Mr. M. to pay additional spousal support or child support from January 2018 to November 2018, as Mr. M. had deposited sums of money from which Ms.

D. benefited that are greater than any spousal and child

support award that could be made against him during the requested timeframe. [ 133 ] Mr. M. has asked that I cancel the spousal support which he was ordered to pay pursuant to the interim order of November 2018. I will not do so as Ms. D. had established entitlement to an award of spousal support at the time and was entitled to the ordered spousal support. Division of Marital Property and Bankruptcy [ 134 ] The parties commenced cohabitating in April 2010. They were married in January of 2011. They separated in January of 2018.

In July of 2018, the applications were filed relating to the within matter, where both parties requested a division of the marital property pursuant to the Marital Property Act . [ 135 ] Mr. M. made an assignment in bankruptcy in January of 2020. Ms. D. made an assignment in bankruptcy in May of 2020. [ 136 ] Under the Bankruptcy and Insolvency Act , once the assignment in bankruptcy is filed, all the property of the bankrupt wherever situate, subject to the rights of the secured creditors, passed and vested in the trustee named in the bankruptcy order (see

section 71 of the Bankruptcy and Insolvency Act ). However, the property divisible to the creditors of a bankrupt did not include the property that is exempt from execution or seizure under the provincial laws of the province where the property is found (see paragraph 67(1)(

b) of the BIA ). In New Brunswick, the exempt property is outlined in sections 84 and 85 of the Enforcement of Money Judgments Act , S.N.B., 2013, c.23 . [ 137 ] As for the secured creditors, once the bankrupt has made an assignment, the policy of the BIA is not to interfere with secured creditors except to protect the estate of the bankrupt as to any surplus in the assets covered by the security.

Generally, secured creditors may ignore the bankruptcy and deal with their security in the usual manner. (See 2021-2022, Annotated Bankruptcy and Insolvency Act , Holden, Morawetz & Sarra, Thomson Reuters at page 774.) [ 138 ] Consequently, in January of 2020, when Mr. M. filed an assignment, all his property passed and vested to the trustee, subject to the rights of the secured creditors. In May of 2020, when Ms. D. made an assignment, all her property, subject to the rights of the secured creditors, vested in the trustee. The property vested in the trustees did not include the exempt property.

The teachers’ pension and the cash surrender value of the RBC life insurance policy were exempt property and did not pass to the trustees in bankruptcy. [ 139 ] The pension fund was acquired by Mr. M. during the years he worked as a school teacher for the Province of New Brunswick. The life insurance policy was bought by Ms. D. before the parties became a couple.

It continued to be held during the marriage. [ 140 ] There is no doubt that the pension and the cash value of the policy are marital property and are subject to equal division between the parties (see sections 2 and 3 of the Marital Property Act ). [ 141 ] Consequently, one-half of Mr. M.’s pension accumulated from the date of marriage, January 5, 2011, to the date of separation, January 28, 2018, shall be transferred for the benefit of Ms. D. As well, one-half of the cash surrender value of the RBC life insurance accumulated by Ms.

D. from the date of the marriage, January 5, 2011, to the date of separation, January 28, 2018, shall be transferred for the benefit of Mr. M. Three vacant lots [ 142 ] Prior to meeting Ms. D., Mr. M. acquired the house that would become the marital home, and the adjacent three vacant lots. The purchase price was about $110,000. Mr. M. paid a deposit of $50,000 toward the purchase price. At first, the property on which the house was located and the surrounding lots were mortgaged in favour of the Caisse populaire.

After the parties lived together for some time, the Caisse was paid out and a mortgage was executed in favour of Scotiabank. However, the Scotiabank mortgage encumbered only the one-acre lot including the residence, and not the three vacant lots.

[143] Through the marriage, the family used the vacant lots for recreational purposes. More particularly, the family members would gofor walks on the property. Mr. M. cleared pathways so that vehicles could travel on the vacant lot. [144] Mr. M. agrees that the three vacant lots are marital property. [145] Given that the three vacant lots were used for recreational purposes by the spouses and the children while the parties werecohabiting, I am convinced that these are marital property and are subject to equal division. (See definition of “family assets” and“marital property” under

section 1 of the Marital Property Act.) [146] Pursuant to subsection 3(1) of the Marital Property Act, each spouse, on application to the Court, is entitled to have the maritalproperty divided in equal shares if (

a) a judgment granting a divorce is rendered;(

b) a marriage is declared a nullity;(

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

d) a marriage has broken down and there is no reasonable prospect ofreconciliation, whether or not the spouses are living separate and apart. [147] By January of 2020, when Mr. M. became bankrupt, the parties had been living separate and apart for two years with nopossibility of reconciliation and the marriage had broken down. By then, Ms. D.’s claim to the three vacant lots had arisen as thetriggering event of separation and no prospect of reconciliation had occurred. As well, she had filed an application under the MaritalProperty Act in the prior months. [148] Although the lots are listed in Mr.

M.’s bankruptcy documents as an asset, they have not been sold and the trustee is waiting for adecision from this court. The vacant lots are valued at around $36,000. [149] In Canada, there are two primary approaches to family property division, equalization schemes and division of property schemes.New Brunswick, like Saskatchewan, Alberta, Nova Scotia, Newfoundland, and British Columbia have division of property schemes intheir family law legislation. A claim to marital property in New Brunswick gives rise to a proprietary or beneficial interest in the asset assuch, not just in its value. (See Schreyer v.

Schreyer, 2011 SCC 35, at paragraph 15.) One distinction between the two regimes is that inthe division of property jurisdictions (including New Brunswick), the non-bankrupt spouse’s property claim is not provable inbankruptcy and is not stayed or discharged on bankruptcy. (See Bowes v.

Bowes, 2022 NLCA 5, paragraph 55.) [150] As to what this implies, in our province, the following passage found at page 354 of 2021-2022 Annotated Bankruptcy andInsolvency Act, Holden, Morawetz and Sara, is relevant: New Brunswick has a special rule regarding the matrimonial home: if it has been sold prior to the bankruptcy, regardless of whether ornot the spouse had separated, each spouse is entitled to half of the proceeds of the sale.

If the titled spouse is bankrupt, the court willauthorize the trustee to take possession of the property and to dispose of it, and the spouse that is not on title is only entitled to a share ofthe net proceeds of the sale but has no right to possession: Fischel v. Fischel (1991), 1991 Carswell NB 26, 6 C.B.R. (3d) 154(N.B.Q.B.). See also: Saunders v. Saunders (1988) 1988 Carswell NB 28, 72 (C.B.R.(NS.)) 83 at para. 15, (NB KB),18 R.F.L. (3d) 298 (NBQB). [151] Regarding the three vacant lots registered in Mr. M.’s name, when he became bankrupt in January of 2020, Ms.

D. had alreadyfiled her application to divide assets and was entitled to claim a proprietary interest in the marital property. She was entitled to one-half ofthe net proceeds of the sale of the vacant lots as the triggering event of the separation had occurred in January of 2018. Ms. D. had noright to take possession. Ms. D.’s right to one-half of the net proceeds meant that her share was not available for distribution to Mr. M.’screditors. However, upon Ms.

D.’s bankruptcy in May of 2022, her trustee in bankruptcy became vested in her share of the vacant lotswhich, in turn, should be available to distribute to her creditors. [152] As such, I authorize the trustee in bankruptcy of Mr. M. to take possession and sell the three vacant lots as these assets were inexistence at the time of the bankruptcy. One-half of the net proceeds of the sale shall be for the benefit of Mr. M.’s creditors. The otherone-half of the net proceeds shall be transferred to Ms. D.’s trustee and be made available to her creditors.

Kubota tractor [153] The Kubota tractor and various attachments were acquired in the name of Mr. M. for Fiume Kennels when it operated as apartnership. Upon the incorporation of Fiume Kennels Ltd. in 2016, these assets were transferred to the said corporation. In return, Mr.M., as a 50% shareholder in Fiume Kennels Ltd., was given credit for this transfer by the corporation. [154] In January of 2020, Fiume Kennels Ltd. was dissolved by the Director of Corporate Affairs.

It has been two years since thedissolution such that the corporation cannot be revived. [155] At the time of dissolution, Fiume Kennels Ltd. had numerous debts totaling about $5,000. This remained at the time of the trial.The debts consist of a credit card and a line of credit. [156] In May of 2019, the tractor and attachments were going to be repossessed by Kubota Canada Ltd. because of non-payment of therelated indebtedness under the Conditional Sales Contract. Mr.

M. paid $1,052, which was the outstanding amount, and took possessionof the tractor and attachments. [157] The tractor and attachments are still in the possession of Mr. M. They are being stored in northern New Brunswick. Mr. M.believes that the tractor and attachments are worth $15,000. [158] The proceeds from the sale after bankruptcy of an asset that was in existence at the date of the bankruptcy is not after-acquired property. (See Re Hill (1998), (AB KB), 6 C.B.R. (4th) 38. [159] The Katoba tractor and attachments were in existence at the time of the bankruptcies.

These belong to Fiume Kennels Ltd., whichis dissolved. The assets of the corporation shall be sold and the creditors shall be paid. (See

section 144 of the Business CorporationsAct.) The net proceeds of the sale shall be used to pay the creditors of Fiume Kennels Ltd. In the event that the net proc

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