2013 QCCA 277, 2013 QCCA 277

Droit de la famille — 13328 2013 QCCA 277 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-022411-128 and 500-09-022412-126 (500-12-280173-059) DATE: February 14, 2013 CORAM: THE HONOURABLE PIERRE J. DALPHOND, J.A JACQUES DUFRESNE , J.A. CLÉMENT GASCON, J.A. No. 500-09-022411-128 D. C. APPELLANT – Plaintiff v. M. D. RESPONDENT – Defendant and No. 500-09-022412-126 M. D. , APPELLANT/INCIDENTAL RESPONDENT - Defendant v. D. C.

RESPONDENT/INCIDENTAL APPELLANT – Plaintiff JUDGMENT [ 1 ] THE COURT: On two appeals from a judgment of the Superior Court, District of Montreal (the Honourable Madam Justice Marie-Christine Laberge) rendered on January 17, 2012, that granted the divorce of the parties and made various orders for corollary relief. [ 2 ] For the reasons of Dalphond, J.A., with which Dufresne and Gascon, JJ.A. agree; [ 3 ] ALLOWS, in part, the appeal of M. D. as well as the appeal and incidental appeal of D.

C., without costs, and replaces paragraphs 373 through 427 of the Superior Court judgment with the following: [373] GRANTS the two parties joint custody of their children Z and A, to be exercised as follows: Z and A will live primarily with their mother and visit their father as they wish. [374] UPHOLDS arrangements already made by the parents with respect to the children's time off and vacations. [375] ORDERS that Z and A will spend the week they are both on spring break together, one year with their mother, the next year with their father, and that they will spend half of their other school holidays with their father and half with their mother. [376] ORDERS that, as of August 1, 2012 , the children will make plans directly with their father regarding the time they wish to spend with him. [377] ORDERS that the children's plans with their father, including those of Y, who has reached the age of majority but is still in school, will not the affect child support owing for three children in shared custody, the child support payments, and the alimony payments, which, taken together, make it possible for each party to have equivalent financial conditions so as to provide the children in shared custody with comparable living environments. [378] ORDERS the husband to continue to pay £6000 a month to the wife in alimony and child support, as agreed between the parties in February 2010, until reviewed by an English court.

[379] UPHOLDS the father's undertaking to pay all of the children's special expenses, tuition, school expenses, extracurricular activities, medical and dental expenses, etc., until reviewed by an English court. [380] ORDERS the husband to continue paying rent and all utilities relating to the wife's occupation of the apartment in London, until reviewed by an English court. [381] DISMISSES the request for a lump sum payment. [382] DISMISSES the application for provision for costs. [383] ORDERS the husband to pay Philip C.

Levi the amount of $22,136.27 owing pursuant to the consent of the interim relief that was implemented through a judgment dated February 17, 2010 . [384] ORDERS the sale of the former family residence in City B, Quebec, and the partition of the net proceeds therefrom; [1] [385] ORDERS the husband to continue paying all of the costs relating to the former family residence until its sale, with the understanding that he will be entitled to the reimbursement of half of the amounts paid from the wife's share of the net proceeds from the sale of the said residence. [386] RESERVES the parties' subsequent right to seek before the Superior Court a determination of the terms of the sale of the residence in City B, if needed. [387] DECLARES the husband to be the sole owner of the secondary residence in City C, including the lot belonging to the wife. [388] ORDERS the wife to transfer the titles of the lot belonging to her in City C to the husband. [389] ORDERS the husband to pay the wife the amount of $208,736.50 for the partition of the family patrimony, plus interest and additional indemnity as of September 25, 2009. [390] DECLARES the wife to be the sole owner of the moveable property formerly located at the residence in City B. [391] DECLARES the husband to be the sole owner of the moveable property, including the tractor, formerly located at the secondary residence. [392] ORDERS the wife to return to the husband the Minton porcelain dinner service given by his mother (12 settings) as well as the Brigitte Forestier roll top cabinet. [393] DECLARES the wife to be sole owner of the following works of art: - 2 works by Peter Krausz - Victor Cicanski table - work by Jos Faffard (Calf) - work by Jos Faffard (Pigs) - work by Jennifer Hornyak (Plum Red) - work by Jennifer Hornyak (Red Flowers in Pink Pot) - work by Slonem - and one or two others that have not been specifically identified (one sculpture, one drawing ) acquired in 2006 . [394] DECLARES the husband to be the sole owner of the other works of art. [395] ORDERS the husband to ask the administrator of the [Company A] U.K.

Pension Plan to proceed with the equal partition of his pension plan for the value accrued between the date of the marriage or the date of the beginning of his employment until June 30, 2005, plus interest and additional indemnity as of June 30, 2005. [396] ORDERS the equal partition of the registered earnings between December 27, 1986, and June 30, 2005, pursuant to the Quebec Pension Plan, the Canada Pension Plan, or the existing plan in the United Kingdom, if applicable. [397] DECLARES the dissolution of the partnership of acquests as of June 30, 2005. [398] DECLARES that the wife's renunciation of the partition of the husband's acquests dated June 19, 2012, is null and void. [399] DECLARES that, after the mutual acceptance of the right to the partition of the other’s acquests, the wife will be indebted to the husband in the amount of $145,560.25, plus interest and additional indemnity as of June 30, 2005. [400] ORDERS the sale of all of the immoveable property held jointly by the parties, namely, the immoveables located at the following addresses (no description of the immoveables was provided to the Court): [Address 1], Jay Peak, Vermont

[Address 2], Jay Peak, Vermont [Address 3], Unit A, Toronto [Address 3], Unit B, Toronto [Address 4], Toronto [Address 5], Unit A, Toronto [Address 5], Unit B, Toronto. [401] ORDERS the net proceeds to be partitioned equally between the parties, subject to the payment by the wife to the husband of the amount described in para. 399. [402] ORDERS both parties to sign the documents required for the sale of each of the properties described above. [403] ORDERS the husband to continue to pay taxes, mortgage, insurance, and any fees relating to the properties held jointly by the parties until the sale of each of the immovables, including condominium fees and special contributions. [404] ALLOWS the parties to make other arrangements between themselves with respect to the sale of certain assets. [405] WITHOUT COSTS .

PIERRE J. DALPHOND, J.A JACQUES DUFRESNE, J.A. CLÉMENT GASCON, J.A. Mtre Raphaël Lévy Mtre Evangelia Tsotsis LEVY,TSOTSIS For D. C. Mtre Julius Grey Mtre Elisabeth Goodwin GREY, CASGRAIN For M. D. Date of hearing : December 12, 2012 REASONS OF DALPHOND, J.A. [ 4 ] Can a judge, as an accessory measure to a divorce judgment, order that a family of former spouses and their dependent children cease to reside in London, England, and move back to Town A? With the greatest respect for the opinion of the trial judge, I do not think so. In so ruling, this court reverses the trial judge’s central assumption.

This, in turn, demands a revision of all the trial judgment’s financial aspects, which include the award of some family assets, the determination of child support and alimony. CONTEXT [ 5 ] The parties met in Toronto where the future husband – born on [...], 1954 – had been working at [Company B], a brokerage firm, and where the future wife – born on [...], 1960 – had been studying while working part-time at the same office. In 1985, the future husband was transferred to Town A and sold his Toronto home.

In June 1986, at the end of her last school year, the future wife moved to Town A where the couple lived together. On December 27, 1986, they married in West Sussex, England. They intended to continue living in Town A. [ 6 ] The couple have had four children. X was born in [...] 1988, Y in [...] 1989, Z in [...] 1995 and A in [...] 1997. At the hearing, two were still minors. During the marriage, the family resided in Town B, a borough of Town A, and enjoyed a comfortable lifestyle. The husband pursued a successful career. He worked long hours and travelled extensively.

The wife devoted herself exclusively to the family needs. [ 7 ] In the spring of 1987, the spouses purchased their first family home, a property located on [Street A] in Town B. On June 2, 1987, they signed a marriage agreement which stipulated that all assets then held, including RRSPs and the husband's shares in

[Company B], were to remain separate assets belonging exclusively to their holder. However, the titles to the matrimonial home and to other personal use real estate were to be held by the parties as joint tenants with rights of survivorship, subject to this caveat :

c) The initial equity in the matrimonial home shall be at least 153,000.00 dollars, of which C. shall be deemed to own ninety per cent (90%) and D. ten per cent (10%).

At the beginning of each calendar year, commencing January First, 1988, D.' percentage share of equity in the matrimonial home and other personal use real estate shall increase by five per cent (5%) and C.’s share will be reduced accordingly until January First, 1995, when each party’s share of equity in the matrimonial home and other personal use real estate shall be fifty per cent (50%). [ 8 ] Another provision of the 1987 marriage agreement stipulated that the parties intended to acquire real estate for investment purposes and that title would be held by the parties as joint tenants, with equity to be equal to each party's contribution.

This investment strategy was actively pursued during the marriage and the parties, as joint owners, acquired approximately 20 condominium units in Canada and in the United States during this time. [ 9 ] A new family residence was purchased in 1989, and another in 1998. The spouses’ last family residence, located on [Street A], in Town B, was purchased in June 1998 for $870,000. Major renovations were completed between August 2003 and June 2005, at a cost of approximately $1,000,000. [ 10 ] In 1996, a farm was also purchased in the town of Town C in the Eastern Townships for $208,000.

It was to be used as the family’s country house. It was registered under the sole name of the husband except for a small parcel, which had been registered under the sole name of the wife. [ 11 ] In 1997, the husband accepted a senior position in Toronto, requiring him to commute between Toronto and Town A every weekend. In the fall of 2004, the husband's employer, the subdivision of the Canadian Imperial Bank of Commerce that had acquired [Company B], offered to promote him to the position of Head of European Investment Banking in London as well as to the position of Head of Merchant Banking in Toronto.

He was expected to devote two thirds of his time in London and the remaining third in Toronto.

In addition to a base salary of £150,000/yr and entitlement to substantial performance bonuses and incentives, [2] he was granted various perks, such as a residence in London paid almost entirely by his employer, [3] a car allowance [4] as well as the payment of his children's school fees. [5] His five-year contract was due to expire in 2010 and he was planning to retire then, at age 56, after 31 years of service in the investment business. [ 12 ] On October 2, 2004, the parties entered into an agreement to modify their matrimonial status.

They elected to be governed by the rules of Quebec’s legal matrimonial regime, the "partnership of acquests", retroactive to the date of their marriage. This agreement cancelled the parties’ previous June 2, 1987 agreement. [ 13 ] In January 2005, the husband moved alone to London to assume his new position. He also purchased a condominium in Toronto ([Address 3, unit C]), and registered it under his sole name. He intended to live in this condo unit when working in Toronto as Head of Merchant Banking. [ 14 ] Around the same time, the parties decided to separate.

In April 2005, they met with a lawyer in Town A to discuss divorce proceedings but agreed to a final period of reflection before initiating proceedings. The two youngest children started attending schools in London in April 2005 as well. They were then under the care of their father. The spouses’ two eldest children stayed in Town A with their mother in order to complete the remainder of their school year. [ 15 ] In June 2005, the husband completed the necessary steps with Revenue Canada to no longer be considered a Canadian resident.

To that end, he filed a number of forms including an evaluation of his assets in order to crystallise his tax liabilities in Canada. The trial judge concluded that he has been domiciled in England since 2005. [ 16 ] On June 30, 2005, the husband filed divorce proceedings in Town A. A copy of the action was deemed served on his wife on July 7, 2005. Neither party now contests the jurisdiction of the Quebec Superior Court. [ 17 ] Later in the summer of 2005, the remaining members of the family moved to London.

The wife and the couple’s children settled into the Chelsea residence that was being provided by the bank while the husband relocated into his own flat in the South East of London. The wife intended to move back to Canada in 2007 with the couple’s two youngest children, in time to enrol those children in Canadian schools. [ 18 ] The Town B family residence was rented out to third parties as of July 2005. [6] The husband collected all rent payments – approximately $11,000/mo. in 2011 – and managed the maintenance of the residence and the payment of real estate taxes and other expenses.

The husband now alleges that between July 2005 and November 2011, he had paid $88,281 in renovation and maintenance costs. The country property, by contrast, was kept for family vacations. The husband claims that he had spent approximately $100,000 in renovating and maintaining the farmhouse between the date of separation and November 2011.

The trial judge refused to grant any compensation for these expenses claimed by the husband given that he had collected all the rents and had exercised sole control over the expenses during this period, a conclusion that seems fair in the circumstances. [ 19 ] In December 2005, the husband repurchased a condo unit in Toronto that had been sold just before the couple’s separation ([Address 5, unit C]). In August 2006, he sold the condo unit bought in early 2005 ([Address 3, unit C]), given that it was the sole property that could be disposed without his wife’s consent.

In 2007, the parties agreed to sell a condo unit purchased in 2000 ([Address 4], unit B); the net proceeds of the sale were divided equally between the parties. [ 20 ] Near the end of 2006, the husband resigned from his Toronto-based position for health reasons, a decision that entailed a reduction in income. [ 21 ] In November 2007, due to the economic conditions caused by the credit crunch, the husband’s employment was terminated, effective February 1, 2008. A termination agreement was signed in July 2008, pursuant to which he was paid a lump sum of $4,000,000

(which represented about $3,000,000 after deducting the claimed U.K. taxes [7] and legal fees) and was bound not to compete with his former employer for two years. [ 22 ] Following his termination, the husband proposed that the family return to Canada where, by his estimation, he had a better chance of finding alternative employment. The wife refused and the entire family remained in England. [ 23 ] Since then, the family has satisfied its financial needs through the lump sum paid in the husband’s termination agreement as well as through amounts earned in various investments.

By November 2011, there remained approximately $600,000 from the husband’s severance package, though a substantial portion of which has been invested in a [Company A] U.K. Pension Plan. [8] Overall, his net worth has increased substantially since June 30, 2005. In his "Statement of Income and Expenditures and Balance Sheet", dated November 29, 2011, he declared, under oath, that his net worth exceeded $4,000,000. [ 24 ] Despite two attempts in 2006 and 2008, the parties were unable to settle on the financial consequences of their separation and the judicial file was reactivated in 2010.

Between 2005 and 2010, in the absence of any court order or formal agreement, the husband assumed responsibility for the financial needs of the family. According to him, over that period the wife and children received cash and other benefits totalling approximately $2,300,000. In February 2010, an interim consent order granted child support, alimony and a provision for costs to the wife. [ 25 ] In June 2010, the wife purchased an interest in a condominium unit in the State of Washington using personal savings. [ 26 ] A five-day trial on the merits was held from November 28 to December 2, 2011.

The trial was devoted exclusively to examining questions of evidence, with more than two days being devoted to hearing experts testify on the value of the assets and potential liabilities of the parties as of June 30, 2005, their current net worth and their potential sustainable incomes.

Arguments had to be made in writing due to a shortage of court time. [9] JUDGMENT OF THE SUPERIOR COURT [ 27 ] In her judgment released on January 17, 2012 ( 2012 QCCS 395 ), Madam Justice Laberge pronounced the parties divorced and issued a ruling on the partition of the family assets and the dissolution and liquidation of the parties’ matrimonial regime, the partnership of acquests.

In essence, she ordered an equal partition of all the assets but allocated all debts (excluding mortgages) to the husband while refusing to order any reimbursement or compensation for the husband’s expenses and contributions related to the family’s property or to other holdings. [ 28 ] She estimated that approximately $1,000,000 per year would be needed to allow the family to remain in England, a sum which included the payment of tuition and boarding fees.

Having considered the needs and means of the former spouses, Laberge J. ordered the family [10] to move back to Town A in the summer of 2012, awarded the Town B home to the wife and ordered the husband to notify the tenant occupying it accordingly. [ 29 ] The amounts ordered for child support and alimony were premised on the assumption that the former spouses and their three dependant children would be living in Town A as of September 2012 and have joint custody of the two minor children, that the wife would be both unable to work and unable to derive any income from her assets, and that the husband would earn $150,000/year.

CURRENT SITUATION OF THE FAMILY [ 30 ] On July 26, 2012, a judge of this Court suspended the return order: Droit de la famille — 122089 , 2012 QCCA 1352 . All the members of the family still reside in the United Kingdom. [ 31 ] The husband, who had been employed as a secondary school math teacher in England before having moved to Canada, has recently completed the courses necessary to resume teaching math. He is now working part-time in two secondary schools in London and his annual pay totals approximately £30,000.

He is confident that he will be able to secure a full-time teaching position for the 2013/2014 academic year. [ 32 ] The wife has not yet made any attempt to become a U.K. permanent resident or a British citizen. Her tax status remains unclear and she has not filed tax returns anywhere in the world since 2005. She is apparently now completing some correspondence courses and hopes to secure employment in the U.K. healthcare system in a near future. [ 33 ] The family seems to have fully integrated into England. The couple’s children are now all dual citizens of both Canada and the U.K.

The eldest son graduated from Oxford where he read law and has now begun a promising career as a solicitor in London, where he currently resides. The eldest daughter is completing her degree in engineering at Oxford. The youngest son, 17, is now attending a school in London while the youngest daughter, 15, is enrolled in a boarding school in Kent.

ARGUMENTS OF THE PARTIES [ 34 ] The wife appeals the order that would require the family to return to Canada as well as the amounts awarded for child support and alimony, claiming that they are insufficient to meet the needs associated with continued residence in the U.K. [ 35 ] The husband does not contest the order to return to Canada. He instead challenges his and his wife’s predicted incomes and accordingly seeks a reduction in the amount of child support and alimony to be paid. Furthermore, he challenges the division of the assets as effected by the trial judge.

He claims that he is entitled to various adjustments in the partition of the family patrimony and in the liquidation of the partnership of acquests by reason of the arrangements that had been struck between the parties, the source of some of the cash that had been invested in the properties and the nature of some of the related debts. Finally, he argues that the orders made with regard to the former family residence are unfair to him. ANALYSIS

I. The judge erred in ordering the return of the family to Canada [36] Article 13(1) of the Universal Declaration of Human Rights affirms each person’s right to mobility : Everyone has the right to freedom of movementand residence within the borders of each state. Toute personne a le droit de circuler librement etde choisir sa résidence à l'intérieur d’un État. [37] Section 6(2) of the Canadian Charter of Rights and Freedoms entrenches this right in Canadian law : Every citizen of Canada and every person whohas the status of a permanent resident of Canadahas the right (

a) to move to and take up residence in anyprovince; and (

b) to pursue the gaining of a livelihood in anyprovince. Tout citoyen canadien et toute personne ayant lestatut de résident permanent au Canada ont ledroit :

a) de se déplacer dans tout le pays et d’établirleur résidence dans toute province;

b) de gagner leur vie dans toute province. [38] The Charter’s right to mobility includes a right to voluntarily leave Canada : 6.

(1) Every citizen of Canada has the right toenter, remain in and leave Canada. 6.

(1) Tout citoyen canadien a le droit dedemeurer au Canada, d’y entrer ou d’en sortir. [39] Finally, the right of an adult citizen to establish his/her residence at the place of his/her choosing is now considered to be acomponent of the right to respect for one’s private life, enshrined in both the Canadian Charter of Rights and Freedoms and the QuebecCharter of Human Rights and Freedoms. In Godbout v.

Longueuil (City), (SCC), [1997] 3 S.C.R. 844, the SupremeCourt of Canada stated at para. 99 : Suffice it to say that by virtue of both theintimately personal considerations that factor intoone’s choice as to where to live and the verysignificant effects that choice inevitably has onone’s personal affairs, the right to be free fromunjustified interference in making a decision as towhere to establish and maintain one’s homeseems to me to fall squarely within the scope ofthe Quebec Charter’s guarantee of “respect for[one’s] private life”.

Sans répéter mes commentaires antérieurs, je mebornerai à dire qu’en raison des considérationsintimes qui motivent le choix du lieu où l’onveut vivre et des répercussions extrêmementimportantes que ce choix entraîne inévitablementsur les affaires personnelles, j’estime que le droitde décider sans intervention injustifiée où l’onveut établir et maintenir sa demeure estclairement visé par la garantie du droit au«respect de [l]a vie privée» énoncée par laCharte québécoise. [40] It follows that an adult Canadian citizen cannot be forced to stay in Canada and cannot be ordered to return to Canada, subjectonly to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society (as is the case for theExtradition Act). [41] I see no reason to depart from these principles in a family law context, even when attempting to attend to the best interests of thechild.

So this Court has ruled in J.S. v. P.V., 2005 QCCA 1019 at para. 26, [2005] R.D.F. 737 and in Droit de la famille — 091332, 2009QCCA 1068 at para. 39, [2009] R.J.Q. 1581 (leave to appeal to the Supreme Court of Canada refused [2009] 3 S.C.R. ix). [42] Though the trial judge was free to suggest that the parties should return to Canada,[11] she could not order their return.

Thisconstitutes an error of law that warrants a revision of the parts of the judgment dealing with residence, schools, child support andalimony. [43] Since the parties have resided in London since 2005 and are not willing (except may be the husband) to return to Town A orelsewhere in Canada – at least in the short or medium term – I am of the view that the English courts are the most appropriate forum toassess the needs of the wife and of the couple’s three dependant children.

The courts of the U.K. are also better placed to assess theincome and means of both parties, including the revenues derived from their respective shares in the properties partitioned by thisjudgment. [44] Until varied by an English court, the amount of child support and alimony agreed upon as an interim measure in 2010, includingthe expenses to be supported by the husband, shall remain in effect. II. The investment strategy [45] As an experienced investment advisor, the husband was highly regarded by his employer who did not hesitate to confer uponhim important functions.

In 2005, he had been promoted to the position of Head of Merchant Banking at the company’s head office inToronto and Head of Investment Banking Europe at the company’s London office. He was also made a director of [Company C], thecompany that managed the [Company A] Private Equity Fund, which was itself a limited partnership that provided access to substantial

loans from the [Company A] to partners ready to tolerate considerable risk. [46] In these circumstances, he quite naturally managed the financial affairs of the family. His strategy was and seems to remaincentered on the borrowing of substantial amounts in order to purchase condo units, to finance his participation in the [Company A]Private Equity Fund and to buy shares of banks, mainly the [Company A]. [47] A document prepared by the [Company A] in December 2008 identifies eight personal loans: Credits A, B, C, D, E, F, G andH.

Credit B is described as being "the first Personal Line of Credit" to be used for private placement. Credit C was for sundry expenseswhile Credits D to H were tapped for personal loans that would finance the acquisition of shares in [Company A]. These last personalloans were secured by a hypothec on the securities acquired. For all these specific loans, the husband was the sole identified borrower.However, Credit A (described as "the second Personal Line of Credit") was a loan for $500,000 and identified both spouses as theborrower.

Credit A also referred to a contract dated December 20, 2004 and was guaranteed by an immoveable hypothec of second rankto the existing hypothec on the Town B home. [48] As of June 30, 2005, the personal loans (excluding the original hypothec on the Town B home, the one on the country houseand those on the condo units) totalled $1,790,829. The trial judge characterized all of them as "investment loans" and allocated theirliability exclusively to the husband.

With respect, in doing so the trial judge ignored the reality of the financial affairs of the parties andunfairly imposed a burden on the husband to repay loans contracted for the exclusive purpose of acquiring or improving joint assets. [49] That is, during the parties’ marriage, about 20 condominium units were acquired. On June 30, 2005, there were eight unitsjointly owned (six in Toronto[12] and two in Vermont) and one registered under the sole name of the husband (Address 3, unit C).[13]The parties paid the down payments on these units with the family’s available cash or with an amount loaned from Credit A.

The balanceof the purchase price was financed by a specific mortgage. Rental fees would barely cover operating costs and mortgage payments foreach unit. No tax was thus payable except capital gains, which would be taxed when a unit was re-sold.[14] At the commencement ofproceedings, the amount due under Credit A was $501,431. [50] The husband acquired [Company A] shares from time to time, using [Company A] specific loans to effect those purchases. Hewould hold onto these shares until he could dispose of them at a profit. In the meantime, he would cash dividends and pay the interest onthe loans.

On June 30, 2005, he owned a total of 8,850 [Company A] shares and vested options. While the vested options were worthless,[Company A] shares were trading at $75.79[15] for a total estimated market value of $670,742.[16] The related loans (Credits D, E andF) totalled $570,296 at that same time.[17] [51] The trial judge estimated that the husband’s units in the [Company A] Private Equity Fund were valued at $236,853 as of June30, 2005. Approximately $500,000 (then equivalent to US$350,000) had been loaned from Credit B to finance the purchase of theseunits.

As of June 30, 2005, the amount owed under Credit B was $501,292. III. The partition of the family assets [52] The family patrimony provisions of the Quebec Civil Code apply to couples residing in Quebec at the time of their separation(art. 3089 C.C.Q.; Droit de la famille — 2094, (QC CA), [1996] R.J.Q. 276, 278 (C.A.)). [53] Art. 415 C.C.Q. reads as follows :

415. The family patrimony is composed of the following property owned by one or the other of the spouses: the residences of the family or the rights which confer use of them, the movable property with which they are furnished or decorated and which serves for the use of the household, the motor vehicles used for family travel and the benefits accrued during the marriage under a retirement plan. The payment of contributions into a pension plan entails an accrual of benefits under the pension plan; so does the accumulation of service recognized for the purposes of a pension plan.

This patrimony also includes the registered earnings, during the marriage, of each spouse pursuant to the Act respecting the Québec Pension Plan (chapter R-9 ) or to similar plans. The earnings contemplated in the second paragraph and accrued benefits under a retirement plan governed or established by an Act which grants a right to death benefits to the surviving spouse where the marriage is dissolved as a result of death are, however, excluded from the family patrimony. Property devolved to one of the spouses by succession or gift before or during the marriage is also excluded from the family patrimony.

For the purposes of the rules on family patrimony, a retirement plan is any of the following: — a plan governed by the Supplemental Pension Plans Act (chapter R-15.1 ) or that would be governed thereby if it applied where the spouse works; — a retirement plan governed by a similar Act of a legislative jurisdiction other than the Parliament of Québec; — a plan established by

an Act of the Parliament of Québec or of another legislative jurisdiction; — a retirement-savings plan; — any other retirement-savings instrument, including an annuity contract, into which sums from any of such plans have been transferred. 415. Le patrimoine familial est constitué des biens suivants dont l'un ou l'autre des époux est propriétaire: les résidences de la famille ou les droits qui en confèrent l'usage, les meubles qui les garnissent ou les ornent et qui servent à l'usage du ménage, les véhicules automobiles utilisés pour les déplacements de la famille et les droits accumulés durant le mariage au

titre d'un régime de retraite. Le versement de cotisations au

titre d'un régime de retraite emporte accumulation de droits au

titre de ce régime; il en est de même de la prestation de services reconnus aux termes d'un régime de retraite. Entrent également dans ce patrimoine, les gains inscrits, durant le mariage, au nom de chaque époux en application de la

Loi sur le régime de rentes du Québec (chapitre R-9 ) ou de programmes équivalents. Sont toutefois exclus du patrimoine familial, si la dissolution du mariage résulte du décès, les gains visés au deuxième alinéa ainsi que les droits accumulés au

titre d'un régime de retraite régi ou établi par une loi qui accorde au conjoint survivant le droit à des prestations de décès. Sont également exclus du patrimoine familial, les biens échus à l'un des époux par succession ou donation avant ou pendant le mariage. Pour l'application des règles sur le patrimoine familial, est un régime de retraite: — le régime régi par la

Loi sur les régimes complémentaires de retraite (chapitre R-15.1 ) ou celui qui serait régi par cette loi si celle-ci s'appliquait au lieu où l'époux travaille, — le régime de retraite régi par une loi semblable émanant d'une autorité législative autre que le Parlement du Québec, — le régime établi par une loi émanant du Parlement du Québec ou d'une autre autorité législative, — un régime d'épargne-retraite, — tout autre instrument d'épargne-retraite, dont un contrat constitutif de rente, dans lequel ont été transférées des sommes provenant de l'un ou l'autre de ces régimes. [ 54 ] In the instant case, the trial judge correctly determined that the family patrimony was composed of the following assets: the family residence in Town B, the country residence in Town C, the furniture in these two properties, the artworks, [18] the pension

benefits that the husband accumulated during marriage [19] and the registered earnings of each spouse pursuant to the relevant federal or provincial pension plans. [20] The parties disagreed on the value of most of these assets and supported their evaluations with expert reports and expert testimonies. [ 55 ] The Civil Code provides that each spouse is entitled to an equal share in the value of the family patrimony ( art. 416 C.C.Q.), subject to the limited exceptions and adjustments found in articles 416 and 418 C.C.Q. [ 56 ] The partition of the former family home is the sole element being contested by the husband.

Based on the assumption that the family would be returning to Town A in the summer of 2012, the trial judge awarded the Town B home to the wife and the country property to the husband, who had requested the sale of both properties. [ 57 ] In order to give effect to that conclusion, the trial judge was required to determine the net value of the former family residence and of the farmhouse as of June 30, 2005 [21] , any tax liabilities resulting from the sale of either property as well as the modalities of payment of the resulting debt due to the husband. [ 58 ] According to the appraisal commissioned by the husband and completed by Andy Dodge, the family residence was worth $2,515,000 in October 2009, $2,856,000 at trial and about $1,872,000 on June 30, 2005.

These values are somewhat surprising given that the husband indicated in a 2005 tax emigration declaration that the property was worth $3,500,000. It seems, however, that this inflated value was only the husband’s rough and ready estimate. In the course of the trial, the husband offered to buy his wife’s equal share in the home using a value for the property of $2,900,000. [ 59 ] Philip Levi, the expert appraiser hired by the wife, proposed a fair market value of $3,704,000 as of December 31, 2008. In estimating this value, Mr.

Levi essentially relied on the husband’s suggested value in his tax emigration declaration with adjustments made in light of prevailing market conditions.

He did not visit the property nor did he attempt to appraise its fair market value according to standard guidelines. [ 60 ] The municipality had assessed the property at $2,800,000 for the roll 2007-2010, though the tax base was $2,162,500. [ 61 ] The trial judge determined that the fair market value of the house was $2,515,000 at the date of the introduction of the proceedings, relying on the value of the property estimated as of September 2009 in Wise Blackman’s report, which had been commissioned by the husband.

The trial judge then proceeded to deduct the mortgage debt owed as of June 30, 2005 ($785,464) and a provision for taxes in connection with the collected rentals ($133,197). She refused to effect any deduction for the credit lines and gifts that had been allegedly used to pay for renovations.

In the trial judge’s opinion, the husband’s testimony on point was not supported by adequately convincing evidence. [ 62 ] For the family’s farmhouse, the trial judge estimated its fair market value at $1,125,000 in September 2009 and proceeded to deduct a mortgage debt estimated at $500,000 and a provision for taxes estimated at $207,527. [ 63 ] Assuming that the family was to return to Canada and to settle in this province, the trial judge awarded the Town B residence to the wife and declared that the country property was to remain the sole property of the husband.

This allocation resulted in a debt payable by the wife to the husband in the amount of $589,433, to be paid at the date of the sale of the house or, in any case, no later than September 5, 2019. In the meantime, the debt was to bear interest plus an additional indemnity (currently a total of 6%) from the date of judgment. The trial judge also ordered a reduction of the debt owed to the husband should the mortgage balance exceed the amount indicated or if the tax provision proved insufficient.

Finally, the trial judge provided that as of the date of transfer of ownership of the Town B residence, the wife should assume all expenses related to it, including mortgage payments. [ 64 ] The husband argues that the trial judge should have ordered the sale of the house and he reiterates his offer to purchase his wife's share based on a property’s value of $2,900,000. [22] Alternatively, he contends that the modalities ordered by the trial judge do grant to the sole benefit of the wife the increase in value of the house since the introduction of the divorce proceedings, a result that he believes to be unfair.

Moreover, he submits that the trial judge erred in refusing to grant his request for specific deductions. Finally, he asks the Court to consider that, since November 2012, he has assumed responsibility for all expenses related to the house, expenses which total approximately $9,000 per month. [ 65 ] I will first deal with the refused deductions. [ 66 ] According to the husband, the renovations drained considerable amounts of money since they cost roughly twice the sum that had been initially predicted.

In order to pay the related bills, he affirms that he used Credit A, that both spouses withdrew from their RRSPs, [23] that the parties sold two condo units that they had jointly owned [24] and that he used gifts of £50,000 and £25,000 received from his mother in January and February 2005. He thus concludes that the debt owed under Credit A should have been treated as a debt related to the family home, similar to the first ranking mortgage.

Moreover, he submits that he ought to have been compensated for the use of gifts made to him. [ 67 ] The trial judge dismissed these arguments on the grounds that the evidence did not prove the husband’s factual allegations. With respect, in relation to the debt associated with Credit A, she then committed a palpable and overriding error that justifies our intervention. [ 68 ] Firstly, the evidence shows that the Town B family residence was purchased in June 1998 for $870,000.

In July 2005, the mortgage balance was $785,464, which indicates that the mortgaged debt had not been increased to finance the renovations, which were worth approximately $1,000,000. [ 69 ] Secondly, the wife herself testified on how the credit cards, the husband's remuneration, the bank credit lines, the spouses’ RRSPs and the net proceeds of the sale of the two condominium units had been used to pay for the renovations. She also stated that her husband had, at the time, spoken of how the renovations had cost approximately $1,000,000.

Thus, the wife’s very testimony confirmed the truth of the husband’s allegations regarding the cost and financing of the renovations, with the exception of the husband’s allegation

regarding the use of gifted money. [ 70 ] Thirdly, the document prepared by the [Company A] in December 2008 identified both spouses as the "borrower" under Credit A, the "Second Personal Line of Credit" in the amount of $500,000, and referred to a contract dated December 20, 2004 (a period where the renovations were carried). The same document also mentioned that the debt owed was guaranteed by an immoveable hypothec of a second rank to the existing mortgage on the Town B property.

It is thus impossible in law to conclude, as the trial judge did, that Credit A should remain the sole liability of the husband. [ 71 ] All these elements support the husband's claim that while Credit A had been initially used to fund the acquisition of jointly owned condominium units, [25] the spouses had come to treat it as a personal line of credit used to finance a part of their home renovations. [ 72 ] Finally, the evidence shows that two condo units had been sold shortly before June 30, 2005 and that these sales generated a profit of approximately $250,000 which was not used to pay the outstanding debt owed under Credit A but to pay renovation bills.

It is thus only reasonable to assume that by June 2005, Credit A was related, at least to that extent, to the financing of the renovations to the family residence. [26] [ 73 ] In conclusion, Credit A was by June 2005 related to the improvement of the family residence and thus should have been deducted when establishing the net value of the Town B home. [ 74 ] As for the gifts received by the husband from his mother in early 2005, a deduction could only possibly be claimed over half of the amount gifted since the husband still holds £34,419 in a bank account.

As for the balance – totalling £40,581 – it suffices to say that there is little evidence that it had been used to pay for part of the renovation. We therefore cannot conclude that the trial judge committed a palpable error in refusing any deduction in this regard.

Besides, this claimed deduction is relatively small when compared to the value of the property and a refusal to grant this deduction does not produce an unfair result as between the parties. [ 75 ] As for the deduction claimed by the husband for the net proceeds received in 1986 from the sale of his Toronto residence ($153,000), it suffices to say that it does not meet any of the requirements of art. 418 C.C.Q. for granting such a deduction.

The trial judge was right to refuse it. [ 76 ] In sum, for all these reasons, the wife should have been ordered to assume responsibility for the payment of the mortgage and the outstanding amount owed under Credit A, and she should have been ordered to pay the husband an amount now reduced to $338,717.

This, of course, assumes that it was appropriate to award the Town B residence to the wife in the first place. [ 77 ] For the following reasons, I consider that the Court must annul the order awarding the home to the wife as well as the resulting order directing her to pay the husband for his share in the value of that Town B property: - the award is premised on the assumption that the family would comply with the order to return to Town A, an order that is unfounded in law; - the awarding of the house is unnecessary since the wife intends to remain in London; - the awarding of the house exposes her to uncertain tax liability.

For that reason, an adjustment to the balance payable to the husband was ordered if the tax liability ended up being higher than predicted. However, the adjustment mechanism is faulty.

Any additional amount that the wife will have to pay will be borne exclusively by the husband when it should be borne equally by both parties; - the amount granted to the husband fails to account for the value accrued from September 2009 [27] until judgment was rendered; interest and additional indemnity should have been awarded as of September 2009 in order to have a fair partition of the value accrued since that date. [ 78 ] A fair result in the present case would have the parties’ co-ownership ended by requiring them to sell the Town B residence and to share, in equal portions, the net proceeds of the sale after having paid taxes [28] , the hypothecs charged on that property (including both the balance of the initial mortgage and the sums owed under Credit A [29] ), the brokers’ fees and all other expenses related to the sale of the property, such as the certificate of location. [ 79 ] Should the parties remain unable to agree on an acceptable sale price, one of the parties may petition the Superior Court for an order commanding the sale of the property according to a judicially determined price and procedure. [ 80 ] In the meantime, the husband should assume the payment of all necessary expenses.

Since the provisions of the family patrimony no longer govern, the rule enunciated in

article 1020 C.C.Q. and relating to expenses incurred in connection with joint property is now applicable. [30] The husband is thus entitled to a refund of half of these expenses incurred as of November 2012. [31] This refund shall be drawn from the wife's share in the net proceeds of the sale upon presentation of supporting documents. This debt shall bear no interest considering the circumstances of the parties. [ 81 ] Since the Town B property is to be sold and since the award of the farmhouse has not been challenged, the husband will owe the wife $208,737.

This sum represents her 50% share in the net value of the farmhouse, estimated by the trial judge to be worth $417,473 at June 30, 2005. This amount shall bear interest at the legal rate as well as any additional indemnity accrued since September 2009 (to account for the added value since that date) [32] .

If this sum has not been paid by the time the Town B property is sold, it should be deducted from the share of the husband's net proceeds upon evidence that the wife has executed the necessary deed to transfer her title to the small parcel of the country property to the husband. [ 82 ] With regards to the other components of the family patrimony, the judgment of the Superior Court shall remain unchanged. [33] IV. The liquidation of the matrimonial regime

[ 83 ] In 2004, the parties elected that their assets acquired during the marriage would be governed by the rules of the partnership of acquests, retroactive to the date of their marriage. Neither party contests the validity of that election. [ 84 ] Under this regime, the assets that the spouses possessed individually when they married or that they subsequently acquired constitute either acquests, which are to be shared, or private property, which are not to be shared (art. 448 C.C.Q.). [ 85 ] As per

article 450 C.C.Q., the following assets are private property of the husband, and are thus not to be shared : - the money gifted from his mother; - the shares in [Company B] owned or possessed by the husband when he married and the shares in [Company A] that he subsequently acquired to replace them [34] . [ 86 ] The termination indemnity, paid in connection with an event subsequent to the date of liquidation, is not an acquest. Neither are the husband’s shares in [Company A] and the condominium units and other investments acquired by the husband after June 30, 2005.

These assets fall outside the partnership of acquests and are the sole property of the husband. [ 87 ] I shall now proceed to determine the value of each spouse’s acquests. [ 88 ] On June 30, 2005, the spouses jointly owned eight condominium units. Six were located in Toronto [35] and two were located in Vermont. An additional unit was registered under the sole name of the husband ([Address 3, unit C]). [ 89 ] Pursuant to the parties’ matrimonial regime, each spouse’s interest in these properties constitutes an acquest.

Because each spouse is entitled to an equal share in the eight jointly owned properties at June 30, 2005, the total value of the acquests of each party in connection with these jointly owned condo units must be equal.

For the additional unit ([Address 3, unit C]), its full value constitutes an acquest of the husband because it is registered under his sole name. [ 90 ] For the purpose of this judgment, it is worth noting that the value of each spouse’s interest in the joint properties shall be based on the fair market value of each property minus any outstanding amount owed on a related mortgage, the real estate agent's commission and any applicable taxes.

Based on the figures advanced by the trial judge, each spouse’s interest in the seven jointly owned condo units still held at trial should be valued at $600,857. [ 91 ] On June 30, 2005, each spouse also held an equal share in the value of a condominium unit sold in 2007 ([Address 4, Toronto]).

For the purpose of liquidating the matrimonial regime, I value each share in unit 413 at $50,000 [36] and thus each spouse’s share in the value of the jointly owned condominium units at June 30, 2005 totals $650,857. [ 92 ] The net value of unit C ([Address 3]) is approximately $50,000. [37] This value must be added to the husband’s total, for an aggregate of $700,857 for his acquests in the condominium units as of June 30, 2005. [ 93 ] In addition to these real properties, the [Company A] shares held by each spouse as of June 30, 2005, the bank accounts and other assets acquired during marriage shall be considered acquests. [ 94 ] The 8,850 [Company A] shares held by the husband were then worth $670,742.

Inadvertently, the trial judge did not include these shares in her determination of the value of the husband's acquests, but did include the loans associated with the purchase of said shares. This is a material error of serious consequence on the assessment of the value of the husband's acquests as of June 30, 2005. [ 95 ] As for the husband's units in the [Company A] Employee Private Equity Fund, the trial judge concluded, based on the available evidence, that as of June 30, 2005, these units were worth $236,853.

This finding is not contested. [ 96 ] Five bank accounts contained cash amounting to $218,467 at June 30, 2005. One bank account was jointly held and contained $79,488. This account is to be considered owned by each spouse and each spouse’s equal share is thus $39,744 (art. 460 C.C.Q.). The other four accounts were opened under the sole name of the husband and must be considered his acquests, except for the HSBC U.K. account. That account stores £34,419 and would seem to be the balance of the gifts received from his mother and would therefore be the husband’s private property.

The three remaining accounts amount to $63,350 and are acquests. Therefore, the husband’s total acquests in the bank accounts amount to $103,094 ($63,350 + $39,744), while the value of the wife's acquests amount to $39,744. [ 97 ] In sum, the husband’s acquests are valued at $1,711,546 [38] as of June 30, 2005.

As for the wife's acquests, they were her interests in the condominium units ($650,857) and the joint bank account ($39,744) and her shares in [Company A] ($16,000), for a total value of $706,601 as of June 30, 2005. [ 98 ] I will now determine the liabilities attributed to these assets as of June 30, 2005 in order to establish the net value of each spouse's acquests as per art. 481 C.c.Q. [39] [ 99 ] The husband's debts include Credit B, which was used to finance participation in the [Company A] Private Equity Fund (a debt valued at $501,292); Credit C, which was used for sundry expenses ($149,998); Credit D, which was used for the acquisition of [Company A] shares in September 2003 ($320,303); Credit E, which was used for the acquisition of [Company A] shares in December 2003 ($164,139); Credit F, which was used for the acquisition of [Company A] shares in March 2005 ($85,854); two HSBC personal lines ($52,667 + $15,145) as well as credit cards (totalling $6,667). [40] As of June 30, 2005 these liabilities totalled $1,296,065. [ 100 ] Assuming that the husband shall alone assume these liabilities, [41] the overall result for the purpose of the liquidation of the matrimonial regime is a positive value of $415,481 for the husband and not a negative one of $994,541, as provided for in the judgment below. [ 101 ] When one compares the value of each spouse’s acquests, it is logical to assume that each spouse will accept to share the value of

each other’s acquests. This results in a debt of $145,560 owned by the wife to the husband. [ 102 ] To prevent any further dispute, it is declared that the renunciation (art. 469 C.C.Q.; Droit de la famille — 103309 , 2010 QCCA 2233 ) made pending this appeal was based on the assumption that the acquests of the husband had a negative value and so the renunciation is worthless. [ 103 ] That said, since the parties are co-owners of the remaining condo units, the fairest way to liquidate them would be to order the sale of these properties, as the trial judge had done.

The "net proceeds" shall then be shared equally, after deducting $145,560 from the share of the wife in the net proceeds upon evidence that, at the husband’s instigation, [Company A] has completely released the wife of any debt owed in relation to Credit B. To avoid any doubt, it is declared that the expression "net proceeds" means the proceeds of the sale of the condo units after the payment of mortgages, applicable taxes, [42] agents' fees and other necessary sale expenses. CONCLUSION [ 104 ] For these reasons, I propose to allow in part the appeals of M. D. and C.

D., without costs, and to replace paragraphs 373 through 427 of the judgment of the Superior Court with the following : [373] GRANTS the two parties joint custody of their children Z and A, to be exercised as follows: Z and A will live primarily with their mother and visit their father as they wish. [374] UPHOLDS arrangements already made by the parents with respect to the children's time off and vacations. [375] ORDERS that Z and A will spend the week they are both on spring break together, one year with their mother, the next year with their father, and that they will spend half of their other school holidays with their father and half with their mother. [376] ORDERS that, as of August 1, 2012 , the children will make plans directly with their father regarding the time they wish to spend with him. [377] ORDERS that the children's plans with their father, including those of Y, who has reached the age of majority but is still in school, will not the affect child support owing for three children in shared custody, the child support payments, and the alimony payments, which, taken together, make it possible for each party to have equivalent financial conditions so as to provide the children in shared custody with comparable living environments. [378] ORDERS the husband to continue to pay £6000 a month to the wife in alimony and child support, as agreed between the parties in February 2010, until reviewed by an English court. [379] UPHOLDS the father's undertaking to pay all of the children's special expenses, tuition, school expenses, extracurricular activities, medical and dental expenses, etc., until reviewed by an English court. [380] ORDERS the husband to continue paying rent and all utilities relating to the wife's occupation of the apartment in London, until reviewed by an English court. [381] DISMISSES the request for a lump sum payment. [382] DISMISSES the application for provision for costs. [383] ORDERS the husband to pay Philip C.

Levi the amount of $22,136.27 owing pursuant to the consent of the interim relief that was implemented through a judgment dated February 17, 2010 . [384] ORDERS the sale of the former family residence in City B, Quebec, and the partition of the net proceeds therefrom; [43] [385] ORDERS the husband to continue paying all of the costs relating to the former family residence until its sale, with the understanding that he will be entitled to the reimbursement of half of the amounts paid from the wife's share of the net proceeds from the sale of the said residence. [386] RESERVES the parties' subsequent right to seek before the Superior Court a determination of the terms of the sale of the residence in City B, if needed. [387] DECLARES the husband to be the sole owner of the secondary residence in City C, including the lot belonging to the wife. [388] ORDERS the wife to transfer the titles of the lot belonging to her in City C to the husband. [389] ORDERS the husband to pay the wife the amount of $208,736.50 for the partition of the family patrimony, plus interest and additional indemnity as of September 25, 2009. [390] DECLARES the wife to be the sole owner of the moveable property formerly located at the residence in City B. [391] DECLARES the husband to be the sole owner of the moveable property, including the tractor, formerly located at the secondary residence. [392] ORDERS the wife to return to the husband the Minton porcelain dinner service given by his mother (12 settings) as well as the Brigitte Forestier roll top cabinet. [393] DECLARES the wife to be sole owner of the following works of art:

- 2 works by Peter Krausz - Victor Cicanski table - work by Jos Faffard (Calf) - work by Jos Faffard (Pigs) - work by Jennifer Hornyak (Plum Red) - work by Jennifer Hornyak (Red Flowers in Pink Pot) - work by Slonem- and one or two others that have not been specifically identified (one sculpture, one drawing ) acquired in 2006 [394] DECLARES the husband to be the sole owner of the other works of art. [395] ORDERS the husband to ask the administrator of the [Company A] U.K.

Pension Plan to proceed with the equal partition of his pension plan for the value accrued between the date of the marriage or the date of the beginning of his employment until June 30, 2005, plus interest and additional indemnity as of June 30, 2005. [396] ORDERS the equal partition of the registered earnings between December 27, 1986, and June 30, 2005, pursuant to the Quebec Pension Plan, the Canada Pension Plan, or the existing plan in the United Kingdom, if applicable. [397] DECLARES the dissolution of the partnership of acquests as of June 30, 2005. [398] DECLARES that the wife's renunciation of the partition of the husband's acquests dated June 19, 2012, is null and void. [399] DECLARES that, after the mutual acceptance of the right to the partition of the other’s acquests, the wife will be indebted to the husband in the amount of $145,560.25, plus interest and additional indemnity as of June 30, 2005. [400] ORDERS the sale of all of the immoveable property held jointly by the parties, namely, the immoveables located at the following addresses (no description of the immoveables was provided to the Court): [Address 1], Jay Peak, Vermont [Address 2], Jay Peak, Vermont [Address 3], Unit A, Toronto [Address 3], Unit B, Toronto [Address 4], Toronto [Address 5], Unit A, Toronto [Address 5], Unit B, Toronto. [401] ORDERS the net proceeds to be partitioned equally between the parties, subject to the payment by the wife to the husband of the amount described in para. 399. [402] ORDERS both parties to sign the documents required for the sale of each of the properties described above. [403] ORDERS the husband to continue to pay taxes, mortgage, insurance, and any fees relating to the properties held jointly by the parties until the sale of each of the immovables, including condominium fees and special contributions. [404] ALLOWS the parties to make other arrangements between themselves with respect to the sale of certain assets. [405] WITHOUT COSTS .

PIERRE J. DALPHOND, J.A