Rathlou v. Haylock Date:, 2014 BCPC 59

Citation: Rathlou v. Haylock Date: 20140410 2014 BCPC 0059 File No: 68205 Registry: Nanaimo IN THE PROVINCIAL COURT OF BRITISH COLUMBIA IN THE MATTER OF THE FAMILY LAW ACT , S.B.C. 2011 c. 25 BETWEEN: CHRISTINE HELEN RATHLOU APPLICANT AND: FRANKLIN ISMAEL HAYLOCK RESPONDENT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE GOUGE

Counsel for the Applicant: K.G. Walker Counsel for the Respondent: P.W.Avis Place of Hearing: Nanaimo , B.C. Date of Hearing: February 18, April 8, 2014 Date of Judgment: April 10, 2014 [ 1 ] Ms. Rathlou applies for spousal maintenance. [ 2 ] Ms. Rathlou and Mr. Haylock met in November, 2006, when she was 57 and divorced, and he was 60 and widowed. Ms. Rathlou moved into Mr. Haylock’s home in May, 2007 and moved out in August, 2012. During that interval, they had a marriage-like relationship. The relationship was not without difficulties. Following an argument in June, 2009, Ms.

Rathlou rented an apartment of her own for a period of about 9 months, and spent part of that time living apart from Mr. Haylock. In February, 2011, Mr. Haylock proposed marriage. Ms. Rathlou accepted the proposal, but changed her mind, and declined the proposal the next day. The parties employed the services of a relationship counsellor in the months prior to the final separation in August, 2012. [ 3 ] The triggering event for the final separation was the wedding of Mr. Haylock’s daughter in August, 2012. The stresses commonly incidental to such celebrations led to an argument between Ms. Rathlou and Mr.

Haylock and a final parting of the ways. There was some conflict in the evidence about who was at fault for the argument, and whether Mr. Haylock locked Ms. Rathlou out of the house, or whether she walked out. For the reasons which follow, I conclude that the answers to those questions are irrelevant to the issues which I must decide. For that reason, I will say no more about them. [ 4 ] Mr. Haylock is retired from the paving business, and derives most of his retirement income from the business, of which he is still a shareholder and director.

His income varies from year to year, depending on how the business prospers. His taxable income (rounded) for the past few years has been: 2009 $254,000 2010 $326,000 2011 $96,000 2012 $280,000 [ 5 ] Ms. Rathlou is a trained and qualified electrolysis technician, who owned her own business in Qualicum Beach for many years. Before she met Mr. Haylock, she had reduced her work week to two days per week, which yielded her a net pre-tax income of about $20,000 per year. She continued to work in that business, two days per week, during the time that she lived with Mr. Haylock.

Her net pre-tax income from that business for the years 2009 - 2012 was: 2009 $19,850 2010 $20,090 2011 $20,723 2012 $23,720 She also received a few thousand dollars of income each year from investments and from the rental of a house (her former matrimonial home) in Qualicum Beach, which she owns. [ 6 ] Ms. Rathlou asserts that her professional income declined during her relationship with Mr. Haylock because they travelled extensively and, for that reason, she was unable to work as much as she had done before the relationship began. The evidence does not support that inference.

She acknowledged that her gross annual professional income during the relationship was approximately equal to the corresponding figure in the years immediately preceding the relationship. [ 7 ] While Ms. Rathlou lived in Mr. Haylock’s home, Mr. Haylock paid all of the household expenses except for food (the cost of which the parties divided equally). Mr. Haylock employed a gardener and a housekeeper. Mr. Haylock and Ms. Rathlou divided the remaining household chores equally. Mr. Haylock and Ms. Rathlou travelled frequently, extensively and expensively. Mr. Haylock paid most of their travel expenses.

Shortly put, Ms. Rathlou enjoyed a very comfortable lifestyle, almost entirely at Mr. Haylock’s expense. The fact that he provided housing enabled her to earn rental income from her own house. [ 8 ] During the course of their relationship, Ms. Rathlou and Mr. Haylock each maintained separate financial affairs. Each managed her or his own investments and spent or reinvested her or his income as each saw fit. They owned no assets jointly. They had one joint credit card. [ 9 ] In May, 2012, Ms. Rathlou sold her business, at a price of $12,000. The written agreement for sale was prepared by the

purchasers.

Article 1 of the agreement for sale provides: Christine Rathlou will be able to continue to work out of the office for up to two days a week and for her own account and at no rentafter the hand-over date, until such time as she wishes to retire completely. Ms. Rathlou’s evidence is that: a. the “hand-over date” was agreed to be the date on which she completed the purchaser’s training in the requisite electrolysis skills; b. when the agreement for sale was signed, it was expected that the hand-over date would be September 30, 2012; c. as matters turned out, the hand-over date was in December, 2012. Despite the express terms of

Article 1, Ms. Rathlou insisted that: d. the mutual intention of the parties to the agreement for sale was that she would stop working in the electrolysis business, at leastin the Qualicum Beach area, on the hand-over date, and that it would be a gross breach of faith for her to continue to offer electrolysisservices in that area after that date; e.

Article 1 was intended to apply only prior to the hand-over date. She said that, for those reasons, she has not sought work as an electrolysis technician since December, 2012. [10] During argument, Mr. Walker abandoned the suggestion that Ms. Rathlou was obliged by the agreement for sale to retire. However, he sought to support her assertion that she had a moral obligation to the purchasers to refrain from competing with them afterthe end of the training period. I do not accept that argument. The agreement for sale was drafted by the purchasers.

Even whenassessing a moral obligation, as distinct from a legal one, it seems to me fair to hold the purchasers to the terms of the bargain expressedby them. In the document which they prepared, the purchasers agreed that Ms. Rathlou should be free to continue to work in herprofession, in the Qualicum Beach area, ``… until such time as she wishes to retire completely`` (underlining added). [11] Even if a reasonable basis had been established for the existence of a moral obligation owed by Ms.

Rathlou to the purchasers, Ido not think that it would be appropriate for me to take such an obligation into account in assessing Mr. Haylock`s obligations. I thinkthat a spouse who faces a claim for spousal maintenance is entitled to expect that the claimant spouse will take all reasonable steps opento her to become economically self-sufficient, and that the boundaries of `reasonable steps` are to be determined by reference to legalconstraints, rather than moral obligations. [12] Ms. Rathlou has not worked, and has not sought work, since December, 2012.

She has been living on her investment incomeand her savings. [13] I asked counsel to identify the statute under which I have authority to order spousal maintenance. Mr. Walker and Mr. Avisagree that the governing statute in this case is the Family Law Act SBC 2012, c 25, which was proclaimed in force (repealing andreplacing the Family Relations Act RSBC 1996, c 128), effective March 18, 2013. The point is not free from doubt because all of theevents relevant to the claim for spousal maintenance occurred before September 30, 2012 and this proceeding was commenced onJanuary 4, 2013.

A statute is not normally construed to deprive a person of a vested right unless the intention of the legislature to effectsuch a divestiture is clearly expressed in the statute: Bera vs Marr (BC CA), [1986] 3 WWR 442; 1 BCLR (2d) 1; 27 DLR (4th) 161. However, sections 250 - 255 of the Family Law Act expressly preserve certain rights which had vested under theauthority of the Family Relations Act before the Family Law Act came into force. Rights to spousal maintenance are not among thoseexpressly preserved.

I think it right to infer that the Legislature intended that claims for spousal maintenance adjudicated after March18, 2013 should be decided in accordance with the provisions of the Family Law Act, even if the right to maintenance accrued, and theproceeding was commenced, before that date. [14]

Section 166 of the Family Law Act provides: In making an order respecting spousal support, the court must not consider any misconduct of a spouse, except conduct that arbitrarily orunreasonably: a. causes, prolong or aggravates the need for spousal support; or b. affects the ability to provide spousal support. The events surrounding the wedding of Mr. Haylock’s daughter fall within neither exception, and so are to be ignored when addressingthe issue of spousal support. [15] I observe that

section 161 of the Family Law Act employs language which is substantially identical to that employed in section15.2 of the Divorce Act, and that the language employed differs significantly from that which was found in

section 89 of the FamilyRelations Act. I infer that the Legislature intended that, when asked to make spousal maintenance orders under the Family Law Act,courts should apply the principles established by the existing jurisprudence under the Divorce Act. The leading authorities in that fieldare Moge vs Moge (SCC), [1992] 3 SCR 813, Bracklow vs Bracklow (SCC), [1999] 1 SCR 420 and Chutter vs Chutter 2008 BCCA 507; 86 BCLR (4th) 233; 301 DLR (4th) 297; 60 RFL (6th) 263 (leave to appeal refused: [2009] SSCA#41). [16] In Bracklow, Chief Justice McLachlin held that spousal maintenance may be awarded on one or more of three bases; i.e.compensatory, contractual or non-compensatory:

a. Compensatory. In Chutter, at paragraph 50, Madam Justice Rowles said: Compensatory support is intended to provide redress to the recipient spouse for economic disadvantage arising from the marriage or theconferral of an economic advantage upon the other spouse. The compensatory support principles are rooted in the "independent" modelof marriage, in which each spouse is seen to retain economic autonomy in the union, and is entitled to receive compensation for lossescaused by the marriage or breakup of the marriage which would not have been suffered otherwise …. b.

Contractual; i.e. on a basis agreed by the parties before, during or after the marriage breakdown. c. Non-compensatory. In Chutter, at paragraph 54, Madam Justice Rowles said: Where compensatory principles do not apply, need alone may be sufficient to ground a claim for spousal support …. Non-compensatory support is grounded in the "social obligation model" of marriage, in which marriage is seen as an interdependent union. Itembraces the idea that upon dissolution of a marriage, the primary burden of meeting the needs of the disadvantaged spouse falls on hisor her former partner, rather than the state ….

Non-compensatory support aims to narrow the gap between the needs and means of thespouses upon marital breakdown, and as such, it is often referred to as the "means and needs" approach to spousal support.

Further guidance as to the “means and needs” approach to spousal maintenance was provided by Madam Justice Prowse in Yemchuk vs Yemchuk 2005 BCCA 406; 44 BCLR (4th) 77; 257 DLR (4th) 476; 16 RFL (6th) 430 at paragraphs 49 – 50 (underlining added): In considering the concept of "need" in the context of a long-term marriage involving a sharing of resources, I am satisfied that it shouldtake into account the relative standards of living of the spouses following the marriage breakdown. * * * While equalization of the standards of living of the parties is not a stated objective of spousal support, in long-term marriages in whichthe parties have approached their roles as a partnership where each contributed their various resources, both economic and non-economic,to the relationship, equality of standard of living (which is not the same as equality of income) may well be the just result. (I leave asidethose cases in which the parties, or one of them, are wealthy, since other considerations may apply.) [17] There is no basis for a compensatory award of spousal maintenance in this case.

Ms. Rathlou did not give up any income-earning opportunities during her relationship with Mr. Haylock. Her professional income during the relationship was approximatelyequal to that which she was earning immediately before she entered into the relationship. Her personal expenses during the relationshipwere significantly lower than they had been prior to the relationship because Mr. Haylock paid all of the household expenses andsubstantially all of the travel expenses. Ms. Rathlou suggests that she would not have sold her business were it not for her expectationthat the relationship would continue.

In view of the difficulties which the parties had faced during their relationship, I do not think thatit was reasonable for Ms. Rathlou to assume that it would be permanent. However, leaving that to one side, it does not appear that sheincurred any financial detriment. Under the terms of the agreement for sale, she is entitled to continue to work in the business two daysper week, as she had done before she met Mr. Haylock. If the purchasers were to assert a contrary understanding, the assertion would bebarred by the parole evidence rule: Hawrish vs Bank of Montreal (SCC), [1969] SCR 515; 2 DLR (3d) 600.

If she wereto avail herself of that opportunity, as she is entitled to do, her net income would be greater than that which she earned before she metMr. Haylock because she is no longer responsible to pay rent for her workspace. Nothing in the sale agreement precludes her fromworking longer hours at another salon, in the Qualicum Beach area if she chooses. [18] In short, Ms. Rathlou received a substantial net financial benefit from her relationship with Mr Haylock, and incurred nooffsetting financial detriment. [19] There is no basis for a contractual award of spousal maintenance. Ms.

Rathlou does not allege any agreement to paymaintenance. [20] That leaves for consideration the concept of non-compensatory spousal maintenance. [21] In Bracklow, at paragraphs 19 – 32, Chief Justice McLachlin discussed two different concepts of marriage (or marriage-likerelationships), the “independent, clean-break model” and the “mutual obligation model”. She said that each is recognized by thestatutes, and that each remains a factor to be considered in adjudicating claims for spousal maintenance. At paragraph 32, she said: Neither theory alone is capable of achieving a just law of spousal support.

The importance of the policy objectives served by both modelsis beyond dispute. It is critical to recognize and encourage the self-sufficiency and independence of each spouse. It is equally vital torecognize that divorced people may move on to other relationships and acquire new obligations which they may not be able to meet ifthey are obliged to maintain full financial burdens from previous relationships.

On the other hand, it is also important to recognize thatsometimes the goals of actual independence are impeded by patterns of marital dependence, that too often self-sufficiency at the time ofmarriage termination is an impossible aspiration, and that marriage is an economic partnership that is built upon a premise (albeitrebuttable) of mutual support.

The real question in such cases is whether the state should automatically bear the costs of these realities, orwhether the family, including former spouses, should be asked to contribute to the need, means permitting. [22] Given that the two models are mutually-inconsistent, and that each has a role to play in the adjudication of claims for non-compensatory spousal maintenance, it seems to me that the critical factor in the adjudication is the fair characterization of the particularrelationship in issue. More specifically, spousal maintenance should be more readily and generously awarded on the dissolution of a

relationship which may be properly characterized as an economic partnership built on a premise of mutual support. It should be less readily and less generously awarded on the dissolution of a relationship founded upon a premise of mutual economic independence. [ 23 ] There never was an economic partnership between Mr. Haylock and Ms. Rathlou. When they met, they were independent, economically self-sufficient adults, and they remained so throughout their relationship. Each retained separate title to her or his assets, and each managed those assets independently. Their partnership was emotional, not economic. Ms.

Rathlou’s capacity for economic self-sufficiency was not impaired, and did not diminish in any way, during the course of the relationship. She remains as well able to support herself today as she was on the day she met Mr. Haylock. She was not dependent on the state for support when they met, and there is no reason to think that she will become so now. In my view, there is no basis for an award of non-compensatory spousal maintenance in this case. [ 24 ] The application is dismissed. April 10, 2014 _______________________________ T. Gouge, PCJ