Docket: 1754 Frank William Riley Appellant (Respondent) - v. -, 2011 SKCA 5

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2011 SKCA 5 Date: 20110111 Between: Docket: 1754 Frank William Riley Appellant (Respondent) - and - Colleen Sue Riley Respondent (Petitioner) Coram: Jackson, Richards & Ottenbreit JJ.A. Counsel: David R. Barth for the Appellant Joanne C. Moser for Respondent

Appeal: From: 2009 SKQB 98 Heard: November 17, 2010 Disposition: Dismissed Written Reasons: January 11, 2011 By: The Honourable Madam Justice Jackson In Concurrence: The Honourable Mr. Justice Richards The Honourable Mr. Justice Ottenbreit Jackson J.A. [1] This is an appeal from a Queen’s Bench decision, distributing family property and fixing spousal and child support (see: 2009SKQB 98, 332 Sask. R. 204). When the appeal was heard, it was dismissed orally, except for the issue regarding interest, which wasreserved.

These are the reasons for the oral decision and for the reserved issue. [2] Frank Riley and Colleen Riley were married for almost 30 years. They raised three children, who are now adults. While Ms. Rileyworked part-time throughout most of her marriage, her husband was the primary bread winner. They separated in January 2006. Ms.Riley applied on March 3, 2006 for: (

i) divorce; (ii) support for herself and for one child, who was attending university; (iii) an equaldivision of the family home; and (iv) an unequal division of the balance of the family property. [3] In deciding what constituted the family property, within the meaning of The Family Property Act, S.S. 1997, c. F-6.3, the trial judgeexcluded the house that Ms. Riley had purchased for herself shortly before the application for divorce and corollary relief.

The trialjudge equally divided the family property, valued at approximately $700,000, including a cottage and a valuable antique clock ofsignificant sentimental value. With respect to spousal support, the trial judge determined that Ms. Riley is entitled to a lump sumpayment of $50,000. The trial judge also made an order for child support for a child attending university. [4] On appeal, Mr. Riley challenged the trial judge’s conclusions in relation to the antique clock, Ms. Riley’s home and her entitlementto spousal support. It is convenient to state the issues in relation to these items as follows: 1.

Whether the trial judge erred in finding that Ms. Riley’s home was not family property and therefore not divisible between theparties? 2. Whether the trial judge erred in granting Ms. Riley ownership and possession of the clock, and valuing it at $10,000 only? 3. Whether the trial judge erred in finding that Ms. Riley was entitled to spousal support? For her part, Ms. Riley’s counsel asked for an order compelling Mr. Riley to pay judgment interest on the award of lump sum spousalsupport. Mr. Riley resisted the payment of interest, saying that he had tried to divide part of the property earlier, but Ms.

Riley wasopposed to a partial distribution. As this was a new issue raised before the Court orally, the Court reserved it. Standard of Review ​[5] When an appellate court reviews a decision of a trial court, three standards of review are usually engaged: (

i) the standard of reviewconcerning questions of law, i.e., did the trial judge decide all questions of law correctly (see: Housen v. Nikolaisen, 2002 SCC 33 atpara. 8, [2002] 2 S.C.R. 235); (ii) the standard of review as to factual findings, i.e., did the trial judge make any palpable and overridingerror with respect to a material finding of fact (see: Lensen v. Lensen, (SCC), [1987] 2 S.C.R. 672 at p. 683 and Housen atpara. 10); and (iii) the standard of review with respect to discretionary matters, i.e., did the trial judge consider all relevant matters (see:Friends of the Oldman River Society v.

Canada (Minister of Transport), (SCC), [1992] 1 S.C.R. 3 at 76-77 and thecases referred to therein). When the decision under review divides family property, all three types of review are engaged to a greater orlesser extent (see: Russell v. Russell (1999), (SK CA), 179 D.L.R. (4th) 723 (Sask. C.A.) at para. 18), but there is anoverarching consideration.

Given the provisions of The Family Property Act, with its emphasis on a “fair and equitable” distribution ofproperty, considerable deference is owed to the trial judge’s overall decision as to entitlement and valuation (see: The Family PropertyAct, ss. 21(2), 22(1) and 23(4); Russell at paras. 19 and 71; and Muranetz-Dubelt v. Dubelt, 2010 SKCA 5 at para. 12, 343 Sask. R.215).

While the standard of appellate review permits a court of appeal to intervene in the face of an error of law, a palpable andoverriding error of fact, or an abuse of discretion, the court must be aware that disturbing one of a trial judge’s many decisions as toentitlement to family property, or its valuation, may disturb the overall equities that have been achieved in arriving at what constitutes afair and equitable distribution. The standard of appellate review in family law matters reflects this deference to the trial judge’s overalldistribution of family property.

[6] With respect to the appeal in relation to spousal support, the standard of review is governed by Hickey v. Hickey, (SCC), [1999] 2 S.C.R. 518 at para. 12. The Court stated “[t]hough an appeal court must intervene when there is a material error, aserious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply because it would havemade a different decision or balanced the factors differently.” Trial judge’s decision that Ms. Riley’s home was not Family Property [7] The parties separated in January 2006. On January 29, 2006, Ms.

Riley signed an offer to purchase a house on Snowberry Way. The trial judge found that “Colleen unilaterally decided to divide the amounts in their various bank accounts, one half to each, on January30, 2006—the day that she moved out of the family home” (see: 2009 SKQB 98, para. 10). The deposit on the home was $5,000 whichMs. Riley took from one of these bank accounts, without Mr. Riley’s agreement. The mortgage was signed on February 9, 2006 (see:appeal book, vol. I, p. 103a). The title was transferred on February 10, 2006 (see: appeal book, vol. I, p. 109a). Ms. Riley tookpossession on February 11, 2006.

As I have indicated, however, the date of the petition was March 3, 2006. [8] The trial judge awarded the family home to Mr. Riley, but divided its value as of the date of adjudication, which meant that Ms.Riley shared in the profit derived from rising house prices in Regina. Snowberry Way was purchased for $155,000 but, as of September6, 2007, it was appraised at $244,000. The increase in value is thus $89,000. Mr. Riley claimed a share of this increase. [9] The trial judge found that Snowberry Way was not “family property” within the meaning of The Family Property Act and, therefore,declined to award Mr.

Riley any share in the increase. Thus, Ms. Riley received the increase in value derived from Mr. Riley’s home,but Mr. Riley did not benefit from the corresponding increase in value of Ms. Riley’s home. [10] The trial judge justified this difference in treatment on the basis of his finding that Ms.

Riley bought Snowberry Way from her ownresources, and that the equities supported that she keep the increase in value in the home: [27 ] When Colleen signed the offer to purchase on January 29, 2006, the offer was subject to mortgage approval by February 3, 2006.Colleen gave the realtor a bank draft for $2,000.00 as a deposit. This bank draft cleared in the new account which Colleen opened in herown name on January 30, 2006, and into which she had deposited her one-half share of the funds from other accounts previously held byherself and Frank.

Another $3,000.00 bank draft cleared this same account on February 1, 2006, being the balance of the promised$5,000.00 cash deposit due upon receipt of mortgage approval. [28] On February 9, 2006, Colleen signed a mortgage in her name only for $116,250.00. The balance required to close, includingproperty tax adjustments, was $150,151.47. After applying the mortgage proceeds, the amount of $35,331.65 remained owing, includingher lawyer's fees and disbursements.

This amount was covered from a $10,000.00 line of credit that Colleen had arranged with her bankon January 30, 2006, and a cash withdrawal of $25,331.65 from Colleen's new account. [29] Frank claims that family assets were used to purchase the house on Snowberry Way because Colleen withdrew $10,047.28 fromthe GIA account on March 6, 2006, to pay off the $10,000.00 line of credit. This was three days after the Petition for Divorce was issued.Colleen has accounted for the funds in the GIA account as of the date the Petition was issued, and in fact, she returned the funds to theGIA account in September of 2007.

These are the same funds that I have decided will be turned over to Frank in paragraph 20 above. Inthe circumstances, I conclude that the house on Snowberry Way was purchased by Colleen from her own resources. In addition, Colleenhas paid the mortgage interest, property taxes, insurance and upkeep for this house without any contribution from Frank.

Given thatFrank has had the use of Colleen's share of the equity in the family home on Staff Crescent since the date of separation, Colleen's use ofthe funds in the GIA account for a few months pales in comparison. [30] Having decided that Colleen's house on Snowberry Way is not family property, it is not necessary to place a value on the asset asany increase in value is not divisible.

The house belongs to Colleen solely and Colleen is solely responsible for all liabilities inconnection with this house, including the mortgage debt. [Emphasis added.] [11] According to the evidence and the trial judge’s findings, Ms. Riley “owned” an interest in the Snowberry Way property when sheapplied under The Family Property Act to divide family property. Thus, having regard for the definition of “family property” containedin The Family Property Act, the trial judge erred by finding that it was not family property.

That definition provides: 2(1) In this Act: ... “family property” means any real or personal property, regardless of its source, kind or nature, that, at the time an application is madepursuant to this Act, is owned, or in which an interest is held, by one or both spouses, or by one or both spouses and a third person, and,without limiting the generality of the foregoing, includes the following:

(

a) a security, share or other interest in a corporation or an interest in a trust, partnership, association, organization, society or other joint venture; (

b) property over which a spouse has, either alone or in conjunction with another person, a power of appointment exercisable in favour of the spouse; (

c) property disposed of by a spouse but over which the spouse has, either alone or in conjunction with another person, a power to consume, invoke or dispose of the property; (

d) property mentioned in

section 28; [Emphasis added.] The trial judge’s concern about the source of funds is irrelevant, but in that too he erred, given his earlier finding that the down payment for this home came from the parties’ joint bank accounts. Based on these errors, it is Mr.

Riley’s contention on appeal that the Snowberry Way property should be divided between the parties, in the same way as the trial judge divided the family home, i.e. , allowing both parties to participate in the increase in value between the date of application and the date of adjudication. [ 12 ] The trial judge’s finding that the Snowberry Way property is not family property is an error of law, which permits appellate intervention. It is, however, apparent that it is not every error of law in the identification of what constitutes family property that justifies appellate intervention.

Faced with such an error, a court of appeal must consider its magnitude, in the context of the whole of the decision under appeal. An appellate court cannot ignore other decisions made in the division of family property, and the impact on the overall fairness of the decision, if one aspect of the equities were to be changed. In order to give full effect to the standard of appellate review, the error in principle must be viewed in context.

A cross-appeal by the respondent is not a pre-requisite to this exercise. [ 13 ] The trial judge was required to make many findings of fact and to weigh the equities between the parties at each step. The trial judge made these findings, which were against Ms. Riley’s position: (

i) he rejected Ms. Riley’s valuation of the cottage at $122,000 in favour of Mr. Riley’s appraisal of $238,000; (ii) he ordered that an inheritance, received by Ms. Riley in the last year of marriage, be divided equally; (iii) he found rings that had been valued at $12,500 were family property and credited them to Ms. Riley’s account, notwithstanding the fact that they had been lost or stolen. Ms.

Riley did not cross-appeal on any of these matters, preferring to base her submissions on appeal on the equities regarding the whole of the decision. [ 14 ] The trial judge’s overall result recognizes certain factors pertinent to a consideration of the issue at hand. When Ms. Riley decided to leave her husband, Mr. Riley insisted upon staying in the family home. Indeed, he obtained an order for exclusive possession of the family home, which meant that Ms. Riley needed a place to live. Without a distribution of property, Ms. Riley could not afford to acquire an alternative residence. Further, unlike Mr.

Riley, who could live rent free in the unmortgaged family home, Ms. Riley was required to purchase a home and pay mortgage interest, insurance, property taxes and upkeep with no financial assistance from Mr. Riley. Mr. Riley did not pay spousal support, and he ignored an order for child support. These are also the factors, cited by the trial judge in support of his decision not to include the Snowberry Way property, as family property.

While the trial judge was clearly in error in so deciding, these are factors that would have been relevant in deciding whether an unequal distribution would be appropriate in this case. [ 15 ] At trial, Ms. Riley asked for an unequal division of the family property, other than the family home. If the trial judge had included the Snowberry Way property in the division of family property, he would been required to determine whether an unequal distribution was warranted, as asked for by Ms.

Riley, having regard for the factors set out in s. 21(3) of The Family Property Act , and what would be fair and equitable in the circumstances of this case. If this Court had been persuaded that an error of sufficient magnitude had been made, application of the principles of fairness and equity would dictate that the matter be remitted to the trial judge to have him pass on the issue of an unequal division. If the Court were to remit the matter, it is apparent from the trial judge’s assessment of the equities relating to Ms.

Riley’s home that there would be no change in his bottom-line decision concerning who should benefit from the increased value of the home. Thus, the appeal is dismissed on this point. Antique Clock: Distribution and Valuation [ 16 ] At the outset, it should be understood that the learned trial judge appropriately directed himself as to the law regarding the valuation and distribution of the family property. He considered the applicable provisions of The Family Property Act , including the definition of value contained in s. 2 , and the principles guiding distribution contained in ss. 20 and 21 of the Act .

Thus, the Court is not asked to address an error of law in relation to this asset. [ 17 ] Instead, Mr. Riley asked this Court to find that the trial judge should have distributed one of the pieces of property differently, i.e. , to him rather than to Ms. Riley, and should have valued it differently.

This Court must be cognizant that this is only one asset of many that the trial judge was required to divide. [ 18 ] The determination of which family member should be entitled to a sentimental asset requires a trial judge to make findings of fact and exercise discretion in the context of the whole of the distribution. With respect to Mr. Riley’s claim to the clock, the trial judge did

not ignore relevant evidence. He mentioned Mr. Riley’s sentimental attachment to the clock stemming from his father’s work on theclockworks as a professional jeweller and his own time, over the years, spent in ensuring the clock’s smooth operation (see: para. 42).The trial judge, however, gave greater weight to the fact that the clock had been in Ms. Riley’s family for three generations (see: para.43). It is clearly a relevant factor for a trial judge to consider the historical family connection, which proved to be the trump factor in thiscase (see: Tether v.

Tether, 2005 SKQB 531 at para. 12, aff’d 2008 SKCA 126; Ewen v. Ewen, [1996] B.C.J. No. 1674 (QL), 1996Can LII 8472; and Williams v. Williams, 2003 NBQB 125.) Having regard for the standard of appellate review, there is no basis tointerfere with the trial judge’s determination that Ms.

Riley should be entitled to this family heirloom. [19] With respect to the valuation of the clock, the trial judge had before him two experts, one who stated that the clock could fetch asignificant amount if sold in the United States, and one who cautioned against such a valuation based on the volatility of the market andcosts associated with packaging, insurance, storage and shipping. The latter expert suggested a more conservative value, based on theSaskatchewan market alone. The trial judge chose the more conservative estimate. In doing so, he did not misapprehend the evidence ormake an error in principle.

He stated that, after having regard for the testimony of both experts, he placed more weight on Ms. Riley’sexpert’s testimony (see: para. 48), and valued the clock accordingly. There is no basis upon which this Court can intervene with thatfinding. Spousal Support [20] Ms. Riley requested spousal support on both an economic and compensatory basis. The trial judge described the nature of Ms.Riley’s claim in these terms: [84] ... As had already been mentioned, for most of the marriage Colleen was a stay-at-home mom. She worked casual shifts tomaintain her registered nurse designation. This is evidenced in the

summary of the annual income earned by Colleen. In 1976, the yearthe parties were married, Colleen earned just over $8,000.00. Their first child was born in [1977]. Over the next 11 years Colleen earnedsubstantially less, sometimes as little as $350.00 per year. She did not reach the $8,000.00 level again until 1987. From 1988 to 1998, sheearned an average of approximately $20,600.00 per year. In the next six years, she had average earnings of about $36,600.00.

In 2005,the year prior to the separation, Colleen's income from employment was $43,886.63. [85] In 2006, the year the parties separated, Colleen began working extra shifts and weekends in order to earn enough income to payhousehold expenses for herself and Heather, including interest on the money she borrowed to purchase the house on Snowberry Way. Inthat year, she earned $69,737.13, which is pretty much equivalent to the salary of a registered nurse working a full-time day shift. [86] In 2007, Colleen continued to pick up extra shifts and to work overtime.

She estimated that her income might reach $90,000.00 inthat year. Despite earnings at this income level, Colleen still wants some amount of spousal support. She claims that she only worked atthis level because she needed the money to pay ongoing household expenses pending receipt of her distributive share of the matrimonialassets which she could then use to pay off debts and lower her monthly financial obligations. Colleen suffered a back injury in 2004which required her to miss some work. An MRI done in November 2006 confirmed a degenerative disc at the L4-5 level.

She takes backpain medication as needed and also wears a back support at work. She has back massages every two or three months. Her current level ofwork, she says, is not sustainable. [87] Colleen also claims that despite her age, she lacks seniority in the workplace because she did not work full-time until recently.This creates a disadvantage over other nurses her age when bidding for full-time work or better shifts. Her medical benefits are only 65%because she was mainly a casual employee. [21] The trial judge accurately instructed himself on the law.

He referred to s. 15.2(4) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp)and to the applicable jurisprudence, notably, Moge v. Moge, (SCC), [1992] 3 S.C.R. 813 (at pp. 848-49, 850, 852-53 and860-61). [22] Following a review of the law, the trial judge ordered the payment of lump sum spousal support on both an economic andcompensatory basis. His reasons are best encapsulated in this quote, taken from his reasons: [95] In this case, Colleen devoted a great deal of her time and energy to the care of the children and the household.

There is noquestion that her career as a registered nurse was secondary to her primary duties as caregiver and homemaker. While her ability to earnincome has not been seriously impaired, it is [dependent] upon her working overtime and taking shifts that other nurses her age no longerhave to work, such as evenings and weekends. [96] Frank's career, on the other hand, has progressed steadily over the years. His release from employment by SaskPower opened newopportunities for him as a self-employed contractor in the field of electrical energy transportation.

His earnings when he left SaskPowerin 2001 were in the range of $80,000.00 per annum. By 2004, his income was $114,816.00 and it has risen to $128,465.89 in 2005 and$147,750.00 in 2006 (as best as this court can estimate). His income may now be upwards of $180,000.00 per annum. Throughout themarriage and to this day, Frank was able to earn two or three times as much as Colleen. Mr. Riley challenges this award primarily on the footing that Ms. Riley earns approximately $70,000 a year as a nurse and, as the trialjudge found, she has the capacity to work additional shifts.

[ 23 ] The factors found by the trial judge, which underpin Ms. Riley’s entitlement to compensatory spousal support, are: 1. this is a long-term marriage of 30 years; 2. the functions of the spouses were that Mr. Riley was the financial provider and Ms. Riley was the homemaker, who had primary responsibility in raising their children—Mr. Riley admitted that the parties determined that Ms. Riley would work principally in the home (see: appeal book, vol. V, pp. 579-80); 3. Ms. Riley suffered economic disadvantage as a result of decisions made during the marriage and as a result of the break-up—Mr.

Riley earned significant wages during the marriage and he continues to do so; and 4. Ms. Riley’s seniority status has been affected by her long-time absence from the permanent full-time work force—she was 50 years old at the time of trial, and had only 12 years seniority. [ 24 ] Mr. Riley appealed the fact of spousal support, and not that it was awarded in the form of a lump sum. Having regard for the evidence and the findings of the trial judge, there is no basis for this Court to intervene with respect to the trial judge’s award of spousal support. Mr.

Riley challenged certain key findings of fact, notably the impact of Ms. Riley’s lack of seniority on her pension, on the basis that there was no evidence regarding this impact. There was, however, some evidence derived from Ms. Riley’s testimony and some documentary evidence. Given this, it is impossible to say that there is no evidence to support the trial judge’s findings of fact that Ms. Riley’s present income and her future economic stability will be affected by her long absence from the full-time workforce. Indeed, given Ms. Riley’s work history, the trial judge’s findings of fact were reasonable.

Interest [ 25 ] Ms. Riley’s counsel asked that interest be awarded on the outstanding spousal support order. The trial judgment was rendered on March 12, 2009. Mr. Riley filed his notice of appeal on April 9, 2009. He has not paid any spousal support, notwithstanding that the filing of the notice of appeal did not effect a stay of that part of the judgment under appeal (see: Rule 15 of The Court of Appeal Rules ). [ 26 ] The Court of Queen’s Bench derives its authority to address the question of interest from s. 77 of The Queen’s Bench Act, 1998 , S.S. 1998, c.

Q-1.01: Interest on judgments 77 Unless otherwise ordered, a verdict or judgment bears interest from the time the verdict is rendered or judgment is given, notwithstanding that entry of the judgment is suspended by any proceeding in the action, including an appeal. As this Court stated in Mycyk v. University of Saskatchewan , 2009 SKCA 71 at para. 116 , [2009] 8 W.W.R. 615, the rate of interest on judgment debts is 5%: [116] Since the repeal of ss. 11 to 14 of the Interest Act , R.S.C. 1985, c.

I-15, as amended by S.C. 1992, c. 1, s. 146 , interest on judgments in Saskatchewan is governed by s. 30 of The Executions Act , R.S.S. 1978, c. E-12: Judgment debts to carry interest 30 Every judgment debt shall carry interest at the rate of five per cent per annum from the time of entering the judgment until the judgment is satisfied, and interest at the same rate may be levied under a writ of execution on the judgment. This is also the rate of interest provided by s. 3 of the Interest Act , R.S.C. 1985, c.

I-15, whenever any interest is payable and no rate is fixed by law or agreement. [ 27 ] Based on the terms of s. 77 of The Queen’s Bench Act, 1998 , unless a court orders otherwise, a judgment for spousal support attracts interest from the date of judgment (see also: Tether v. Tether , 2009 SKQB 9 , supra at paras. 35-38 , 329 Sask. R. 224). Mr.

Riley’s counsel asked, in effect, that the Court make an order directing that s. 77 does not apply, on the footing that he had wanted to effect an earlier distribution of some items of property, where his client had been successful, and, at the same time, pay the spousal support into court, pending resolution of the appeal. [ 28 ] Having regard for the time value of money, it is difficult to conceive of circumstances when it would be appropriate for a court to exercise its discretion under s. 77 of The Queen’s Bench Act, 1998 and order that a lump sum order of spousal support would not attract judgment interest.

Useful reference may be made to LeVan v. LeVan , 2008 ONCA 388 , 90 O.R. (3d) 1, leave to appeal refused [2008] 3 S.C.R. viii. In LeVan , the husband appealed an order requiring him to pay interest on both an equalization payment and lump sum spousal support. Citing Koiter v. Koiter , [1996] O.J. 4490 (Ont. Ct. (Gen. Div.)) (QL), the Ontario Court of Appeal in LeVan (at para. 88 ) noted that “it should be the rule, rather than the exception” that an equalization payment attracts interest.

To do otherwise, the Court continued “would effectively alter the amount of the equalization payment found owing in the first place, due to the time value of money.”

[ 29 ] In the appeal before us, there has been some delay in bringing forward the appeal, and some of that delay can be attributed to Ms. Riley. On the other side of the equation, Mr. Riley has been able to defer the cost of borrowing in order to pay Ms. Riley, such that delay has had little financial effect on him. While it is true that Mr. Riley offered to pay the money into Court, it was not clear to the Court how this would compensate Ms. Riley for being without access to the lump sum payment pending appeal. Accordingly, the Court will not make an order under s. 77 removing Mr.

Riley’s obligation to pay interest on the lump sum spousal support order from the time of entering the judgment in the Court of Queen’s Bench. Fresh Evidence [ 30 ] There is a remaining matter. When the trial was heard the expert’s appraisal of the Snowberry Way property was not marked as an exhibit. In preparation for the appeal, Mr. Riley’s counsel requested that this appraisal be included in the appeal book. Ms. Riley’s counsel opposed his request, which compelled Mr. Riley to make an application to include the appraisal as fresh evidence before this Court.

Since we decided that the increase in value of the Snowberry Way property is not to be included in the distribution of family property, the fresh evidence is not necessary to decide this appeal. In our view, however, counsel for Ms. Riley should have consented to the appraisal being included in the appeal book as its omission at trial was a matter of oversight. Given our opinion in this regard, we made no order as to costs regarding this aspect of the appeal. Conclusion [ 31 ] The appeal is dismissed with costs on column 2.

There will be no order as to costs with respect to the application to adduce fresh evidence.