Docket: 1753 Ernest John Gadd (Respondent) Appellant Respondent by Cross-Appeal - v. -, 2011 SKCA 32

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2011 SKCA 32 Date: 20110314 Between: Docket: 1753 Ernest John Gadd (Respondent) Appellant Respondent by Cross-Appeal - and - Noella Busse (Petitioner) Respondent Appellant by Cross-Appeal Coram: Lane, Ottenbreit & Caldwell JJ.A. Counsel: Drew R. Filyk , for the Appellant/Respondent by Cross-Appeal Ian D. McKay, Q.C. , for the Respondent/Appellant by Cross-Appeal Appeal: From: 2009 SKQB 99

Heard: February 2, 2011 Disposition: Dismissed; Cross-Appeal Dismissed Written Reasons: March 14, 2011 By: The Honourable Mr. Justice Caldwell In Concurrence: The Honourable Mr. Justice Lane The Honourable Mr. Justice Ottenbreit Caldwell J.A. [1] The appellant (respondent by cross-appeal), Ernest John Gadd (“Mr. Gadd”), appealed from the March 12, 2009, judgment of theCourt of Queen’s Bench distributing family property equally between the parties and awarding spousal support to the respondent(appellant by cross-appeal), Noella Busse (“Ms. Busse”). Mr.

Gadd also brought a late application to adduce fresh evidence before thisCourt. Ms. Busse cross-appealed from only that part of the judgment distributing the family property and opposed Mr. Gadd’sapplication to adduce fresh evidence. [2] The judge set out the facts in 2009 SKQB 99. I need not repeat them. The Fresh Evidence Application [3] In Wal-Mart Canada Corp. v. Saskatchewan (Labour Relations Board), 2006 SKCA 142, 289 Sask. R. 20, (“Wal-Mart Canada”),Vancise J.A., referring to the decision of Brownridge J.A. in Maitland v. Drozda, (SK CA), [1983] 3 W.W.R. 193, 22Sask.

R. 1 (C.A.), set out the requirements for obtaining leave of this Court to adduce fresh evidence: [4] The test for the admission of fresh evidence is well known and was articulated by this Court in Maitland v. Drozda. The Courtidentified four factors which must be satisfied before fresh evidence would be accepted. Those factors are: (

a) The evidence will not be admitted, if by due diligence it could have been used at trial; (

b) The evidence must be relevant in the sense that it bears upon a decisive or potentially decisive issue in the action; (

c) The evidence must be credible in the sense that it is reasonably capable of belief; and, (

d) It must be such that if believed could reasonably, when taken with the other evidence adduced at trial, be expected to haveaffected the result. [4] The trial in this matter occurred in February 2009. Mr. Gadd sought leave to adduce fresh evidence in the form of his 2004 taxassessment notice and evidence as to Ms. Busse’s current living arrangements after trial. [5] To obtain leave, Mr. Gadd would have to overcome the significant hurdles set forth in Wal-Mart Canada; the first of which is thatthe evidence will not be admitted if, by due diligence, it could have been adduced at trial. As Mr.

Gadd’s 2004 tax assessment notice wasissued to him on June 6, 2005, with due diligence, it could have been adduced at trial and, therefore, cannot be admitted here. [6] The evidence of Ms. Busse’s new living arrangements arose after trial and is not properly the subject of an application to adducefresh evidence, but I need not say more as that evidence goes to a ground of appeal that Mr. Gadd has withdrawn. [7] Accordingly, I would deny leave to adduce fresh evidence in this matter.

The Standard of Review [8] Three standards of review are usually engaged when an appellate court reviews a trial decision: (

i) Whether the trial judge decided all questions of law correctly (see: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235); (ii) Whether the trial judge made a palpable and overriding error with respect to a material finding of fact (see: H.L. v. Canada(Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401); and (iii) Whether the trial judge erred in principle, disregarded a material matter of fact or failed to act judicially in the exercise of judicialdiscretion (see: Rimmer v.

Adshead, 2000 SKCA 12, [2002] 4 W.W.R. 119, at para. 58). [9] L’Heureux-Dubé J. set out the standard of review for spousal support orders in Hickey v. Hickey, (SCC), [1999] 2S.C.R. 518 (“Hickey”), where she said: [11] Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose anerror in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong. . . . [12] There are strong reasons for the significant deference that must be given to trial judges in relation to support orders.

Thisstandard of appellate review recognizes that the discretion involved in making a support order is best exercised by the judge who hasheard the parties directly. It avoids giving parties an incentive to appeal judgments and incur added expenses in the hope that the appealcourt will have a different appreciation of the relevant factors and evidence. This approach promotes finality in family law litigation andrecognizes the importance of the appreciation of the facts by the trial judge.

Though an appeal court must intervene where there is amaterial error, a serious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply becauseit would have made a different decision or balanced the factors differently. The Appeal [10] The Notice of Appeal raised four grounds of appeal, but in oral submissions Mr. Gadd’s counsel acknowledged that one of thosegrounds dealt with judgment enforcement, which is a matter properly left to the Court of Queen’s Bench.

As such, the Court heardargument on the following issues: 1. whether the judge failed to properly consider the evidence with respect to the fair market value of certain farm land (the “Land”) thatMr. Gadd had sold to his son such that the judge imputed an additional $151,377.00 to Mr. Gadd’s share of the family property estate; 2. whether the judge failed to properly consider the evidence with respect to an exempt contribution by Mr.

Gadd to a property inArizona such that the judge did not adjust the value of that asset in the division of family property; and 3. whether the judge failed to properly apply the appropriate consideration and weight to the various factors when determiningMs. Busse’s entitlement to spousal support and erred with respect to the calculation of the quantum of spousal support payable byMr. Gadd. [11] The first two grounds challenge evidentiary findings by the judge. At trial, Mr. Gadd bore the onus of establishing on a balance ofprobabilities that: (

i) his son paid fair market value for the Land; and (ii) Mr. Gadd had used pre-relationship RRSP funds to acquire, inpart, the Arizona property. On appeal, Mr. Gadd had the onus of establishing that the judge had made a palpable and overriding errorwith respect to a material finding of fact in respect of each of these issues (H.L. v. Canada (Attorney General)).

Having reviewed thejudge’s findings and the transcript of trial, I conclude that there was sufficient evidence to support the judge’s findings of fact in relationto each of these issues and insufficient reason to suppose the judge may have erred in principle. As such, I would dismiss the first twobranches of the appeal. [12] In oral argument, counsel for Mr. Gadd acknowledged that the standard of review applicable to spousal support orders cautionsagainst appellate intervention except in the clearest of cases (Hickey).

Counsel conceded that the judge considered all relevant matters inthe exercise of his discretion (Rimmer v. Adshead). Counsel also conceded that this aspect of the appeal could be well addressed by wayof an application for variation. Accordingly, I find no tenable basis to interfere with the judge’s exercise of discretion in relation to theaward of spousal support and the quantum of spousal support awarded. I would dismiss the third branch of the appeal. [13] In sum, I would dismiss the appeal in its entirety. The Cross-Appeal

[ 14 ] On cross-appeal, Ms. Busse raised a single ground: That the judge erred by failing to credit to Ms. Busse one-half of the value of certain farm equipment (the “Equipment”) sold by Mr. Gadd to his son. At trial, Ms. Busse submitted that the difference in value was $67,885.00. On cross-appeal, Ms. Busse submitted there was a difference of $156,057.00 in value between the sale price and the fair market value of the Equipment and that the difference in value is family property that should have been imputed to Mr. Gadd pursuant to s. 28 of The Family Property Act, S.S. 1997, c. F-6.3. [ 15 ] Mr.

Gadd sold the Equipment to his son at the same time as he sold the Land to his son. In the judgment, the judge canvassed in detail the issue of the transfer of the Land at less than fair market value. Indeed, on the whole, the judge’s written reasons were carefully crafted, are clear and cogent and contain thorough justification for each of his findings. The judgment does not, however, refer to the Equipment at all. Ms. Busse submitted that the judge must have overlooked addressing the Equipment since she had raised the issue at trial. Ms.

Busse submitted that while this oversight was likely inadvertent, it was in error and this Court could intervene on that basis. [ 16 ] The transcript of trial is incomplete, but does indicate that the judge himself raised this issue late in the trial. The following exchange between counsel and the judge occurred after counsel for Ms. Busse had cross-examined Mr. Gadd on the value of the Equipment (at pp. 415-416): (COURT RECONVENED) MR. FILYK: My Lord, if I might just for one minute – and I hope that by doing so it will clarify something.

You had, before the break, asked about whether there were exemptions being claimed on the farm equipment and whatnot. I thought that when we put the equipment list in, which Mr. Johnstone testified to, we put it before Mr. Gadd yesterday, to identify that as his equipment, and I think we can probably just get a stipulation that that’s all during the relationship equipment, that that would be – in case my friend was thinking he had to go over it line by line by line. THE COURT: So will there be an argument about tracing trade-ins, for a premarital exemption on farm equipment? MR. McKAY: (INAUDIBLE).

THE COURT: So I’m – all right, I’m probably getting ahead of myself wondering where you’re going with this evidence, and then I began to wonder during the break, are you about to lead into an argument of dissipation or transferring farm machinery for less than fair market value , but – MR. FILYK: No, just – I thought it was clear before that we weren’t claiming an exemption on that, that was all post, and we weren’t putting in argument, and I don’t want my friend to waste time if he thought that he needed to prove that it was all part of (INAUDIBLE). MR.

McKAY: I just assumed that – or sorry – I just assumed that those lists were as – THE COURT: I’ve been following the evidence as we review his tax returns, and I just didn’t know where it was going. However, carry on, and I’ll wait until the end of the trial. [ 17 ] The foregoing is the only direct reference in the transcript to the dissipation or transfer of the Equipment for less than fair market value. Oral argument and summation by counsel were not recorded and, therefore, were not available for transcription.

The transcript of the proceedings concludes as follows (at p. 438): THE COURT: Your oral argument or summations, do either of you feel they have to be recorded – MR. McKAY: No. THE COURT: -- because I will be without a clerk tomorrow. MR. FILYK: No, because what my intention is, is to provide you with some written materials that you can follow along and so is my friend. THE COURT: Thank you, gentlemen. I’ll see you tomorrow afternoon. MR. FILYK: Thank you very much. END OF PROCEEDINGS [ 18 ] The Queen’s Bench court file contains the “Oral Submission Notes” submitted by counsel for Mr.

Gadd and the “Trial Brief” submitted by counsel for Ms. Busse. The Oral Submission Notes do not mention the Equipment. Four paragraphs of the Trial Brief refer to the Land and Equipment or otherwise set forth Ms. Busse’s argument that Mr. Gadd had disposed of the Land and the Equipment at less than fair market value. The first three paragraphs are (at pp. 7-8):

In 2004 Ernie entered into an agreement with his son, Gary and his daughter-in-law for the sale to them of

Section 20-15-24 W2nd which he sold to them for $350,000.00. Mr. Gilbert, from Re/Max in Moose Jaw indicated that there were a number of parcels of land that sold in 1984 [ sic - 2004] in that district, which were similar to these lands (P0), when you take the average of the multiples of the lands, [ sic ] sold it averages approximately 1.67 times fair market value [ sic – assessed value]. Mr. Gilbert indicated that the fair market value the value [ sic ] of the

section sold was $263,100.00 and applying the multiple of 1.67 times fair market value the value of the property would be somewhere in the area of $439,377.00 substantially more than the sale price of the land. There was no indication as to the fair market value of the land at the time that the alleged relationship occurred but even assuming the value to be the same as the two quarters [that Mr. Gadd retained], which he suggested had a value of $72,000.00 there was a gift of at least $151,000.00 to his son. There is no doubt that the appreciation on the land was family property subject to division.

The terms of this sale were never brought to Noella’s attention and in effect her interest in family property was greatly affected. Similarly, with respect to the sale of the farm machinery for $63,115.00 Ernie indicated in his Examination for Discovery that the value of the Concorde Air Drill was approximately $50,000.00 wherein on his 2004 Tax Return he showed the value of the sale of the Concorde as $10,000.00.

He further indicated that the two headers would have a value of approximately $9,000.00 and $7,000.00 respectively for a total of $16,000.00 while the combine he agreed would have been worth approximately $65,000.00 according to the evidence. The total value of the farm equipment would have been $131,000.00. There was further farm equipment that was sold during that year being a 1997 swather and a 2004 cultivator which sold for a total of $28,057.00, which is suggested, would have also been family property. At the end of 2004 all of the farm debts had been paid in their entirety from the net proceeds.

There was still however the excess value of the land and machinery with the gift of land amount [ sic ] to $151,377.00 and the gift of machinery of $67,885.00 all of which would have been family property if there is a relationship found between Noella and Ernie. The total amount of the gift in 2004 was $219,262.00. [ 19 ] The last of the four paragraphs followed immediately after a chart setting out Ms. Busse’s proposal for valuing and dividing each item of family property.

I find this last paragraph to be the most cogent in answering the question of whether the judge might have inadvertently overlooked the Equipment in his written reasons (at p. 21): With respect to the sale of machinery and land to Ernie’s son and daughter-in-law the total amount that was in effect gifted to them was the sum of $219,260.00. This amount, if it was not gifted, would have been subject to distribution and Noella’s share of that would have been in excess of $109,500.00.

It is argued that this is a substantial gift conveyed for the benefit of a third party and it is unfair or inequitable that Ernie would be entitled to 50% of all of Noella’s assets and be able to retain that which he has given away. It is suggested that this must be taken back into consideration in arriving at a distribution of the family property and accordingly whatever distribution is made, if any, must taken [ sic ] this into consideration. This substantial gift of some $219,260.00 has adversely effected [ sic ] the family property calculations.

Noella had no say in this and if there is to be a distribution the substantial gift to Ernie’s son one- half of which Noella would have been entitled to would result in a payment to Noella to equalize family property regardless of what value is placed on the cottage and family home. [ 20 ] Ms. Busse’s submissions in respect of the transfer of assets at less than fair market value generally lump the Land and Equipment together for the purpose of argument; therefore, the judge could not have failed to consider the issue of the Equipment.

Given the care and consideration with which the judge made his findings and drafted his judgment, it is difficult to conclude that he accepted Ms. Busse’s submissions with respect to both the Land and the Equipment, but then inadvertently overlooked including his findings as to the Equipment in his written judgment. Rather, I find it implicit that the judge made a determination on the evidence before him that there was no disparity between the fair market value and sale price of the Equipment and, as such, there was no family properly to divide and, therefore, no value to impute to Mr.

Gadd. [ 21 ] A trial judge must make numerous decisions as to the existence of, entitlement to, and valuation of family property given the totality of the evidence before the court. However, a trial judge is not required to set forth in judgment form each and every facet of that analysis, or the judge’s reasons for accepting or rejecting each and every submission of the parties.

As there is no clear evidence of error in this case, the cross-appeal does not warrant appellate intervention. [ 22 ] In sum, I find no basis to interfere with the judgment and would dismiss both the appeal and the cross-appeal in their entirety. As neither party was successful, I would make no award as to costs. DATED at the City of Regina, in the Province of Saskatchewan, this 14 th day of March, A.D. 2011. “Caldwell J.A.” _______________________ CALDWELL J.A.

I concur “Lane J.A.” ___________________________ LANE J.A. I concur “Ottenbreit J.A.” ________________________ OTTENBREIT J.A.