H.L.M. Petitioner And: R.D.M. Respondent Before: The Honourable Justice Jonathan M. Coady Appearances: H.L.M., on her own behalf Peter C. Ghiz, lawyer for the Respondent Place v. dates of hearing -, 2024 PESC 1

SUPREME COURT OF PRINCE EDWARD ISLAND Citation: H.L.M. v. R.D.M ., 2024 PESC 1 Date: 20240103 Docket: S1-DV-1101/8780 Registry: Charlottetown Between: H.L.M. Petitioner And: R.D.M. Respondent Before: The Honourable Justice Jonathan M. Coady Appearances: H.L.M., on her own behalf Peter C.

Ghiz, lawyer for the Respondent Place and dates of hearing - Charlottetown, Prince Edward Island May 29, 30, 31 and June 1, 2023 Place and date of additional evidence - Charlottetown, Prince Edward Island December 4, 2023 Place and date of additional submissions - Charlottetown, Prince Edward Island December 12, 2023 Deadline for additional submissions - Charlottetown, Prince Edward Island December 21, 2023 Place and date of written decision - Charlottetown, Prince Edward Island January 3, 2024

FAMILY LAW – equalization – spousal support – occupational rent The parties were married in 1993 and separated in 2018. The main dispute was the equalization amount payable between the parties inrelation to their family property. Neither party had properly accounted for the family property in the equalization calculations theypresented to the court. After following the statutory formula for equalization directed by

Part I of the Family Law Act, the court ordereda very modest equalization amount be paid by the husband. Each party claimed spousal support. While the marriage was a relatively long one, neither party demonstrated entitlement to supportbased on the evidence presented to the court. Absent from the record was any weighty evidence of economic advantages, disadvantages,or hardships experienced by either party as a result of the marriage or its breakdown. In the years following separation, each party hadalso taken steps to become self-sufficient.

Each party owned several assets at the date of separation, including RRSPs and pensions, thatwere capable of generating similar incomes in retirement. No order for spousal support was made. The court exercised its discretion and declined to order that occupational rent be paid by the wife to the husband. There were factorsweighing for and against an order for occupational rent.

However, when the entire financial circumstances of the parties were consideredas a whole, the court was not satisfied that the relief was needed in order to achieve an overall financial result that was fair and just in thisparticular case. STATUTES REFERRED TO: Family Law Act, R.S.P.E.I. 1988, c. F-2.1; Divorce Act, R.S.C. 1985, c. 3 (2nd Supp). CASES CONSIDERED: Miller v. White, 2022 PESC 4; Van Delst v. Hronowsky, 2021 ONSC 2353, aff’d 2022 ONCA 349; Sanders v.Sanders, (ON SC); Purcell v. Purcell, (ON SC); Leckie v. Leckie, (ONCA); Dembeck v. Wright, 2012 ONCA 852; Koughan v. Dow, 2015 PECA 2; Nahatchewitz v.

Nahatchewitz, (ONCA); Gervasio v. Gervasio, 2007 ONCA 780; Yeates v. Yeates, (ON SC), aff’d 2008 ONCA 519; W. v. W., 2005PESCAD 6; L.M.P. v. L.S., 2011 SCC 64; Moge v. Moge (SCC), [1992] 3 S.C.R. 813; Enman v. Enman, 2000PESCTD 37; Griffiths v. Zambosco, (ON CA); Goeldner v. Goeldner, (ON CA); Chhom v.Green, 2023 ONCA 692. Coady, J.: I. Introduction [1] The petitioner, H.L.M. (“Petitioner”), and the respondent, R.D.M. (“Respondent”), were married on August 7, 1993. Theyseparated on February 18, 2018.

Notwithstanding a number of interventions by the court through its case management and pre-trialprocesses, the parties were unable to resolve the issues arising from the breakdown of their marriage. A trial was necessary. II. Issues [2] At trial, the court was asked to determine three main issues: (

a) the equalization amount payable between the parties in relation to their family property; (

b) whether either party was entitled to spousal support and, if so, the quantum and duration of that support; and (

c) whether the Respondent was entitled to occupational rent from the Petitioner and, if so, the amount due. [3] The main dispute between the parties – and the focus of the trial – was the determination of the net family property of each party

for the purpose of calculating the equalization amount between them under s. 6(1) of the Family Law Act , R.S.P.E.I. 1988, c. F-2.1 . III. Divorce [ 4 ] The parties have lived separate and apart since 2018. All of the elements necessary to grant a divorce are pleaded and have been established on the record. According to their pleadings, the parties also consent to a divorce being granted. Given that the statutory and evidentiary requirements have been satisfied, the divorce judgment is granted by the court. IV. Equalization of family property [ 5 ] Equalization of family property is governed by

Part I of the Family Law Act . The general steps to be followed in order to equalize family property were summarized by the court in Miller v. White , 2022 PESC 4 at para. 10 . A. Agreed facts [ 6 ] Several facts were agreed upon by the parties in relation to family property, including the value and ownership of certain assets and debts as of the date of marriage and the date of separation. This common ground is found in the record as well as the submissions made by the parties at the end of trial, including the equalization calculations presented by the Petitioner and the lawyer for the Respondent.

The facts not in dispute for the purpose of equalization are summarized below: Asset Value Owner(

s) Ford CMAX $7,500.00 Petitioner Furniture, tools, and household contents $5,072.00 Petitioner Furniture, tools, and household contents $1,500.00 Respondent Account receivable $1,976.00 Petitioner Bell pension (including savings plan) $206,651.00 Petitioner PEI pension $110,826.00 Respondent BMO spousal RRSP 392 $102,370.00 Respondent Bell spousal RRSP $6,644.00 Respondent BMO Investorline spousal RRSP 602-19 $34,700.00 Respondent Debt Value Owner(

s) CIBC Visa $2,820.00 Petitioner Pre-marital asset Value Owner(

s) Toyota Tercel $7,000.00 Petitioner Toyota 4Runner $3,000.00 Respondent Island Tel pension $7,228.05 Respondent Trimark savings plan account [1] $10,203.65 Respondent RRSP rollover $10,000.00 Respondent [ 7 ] While each party believed that the family home had a higher value at the date of trial, neither party contested its appraised value as of February 1, 2018 ($240,000.00) or its joint ownership. There was also no serious challenge by the Respondent to the value of the mortgage ($41,193.00) or the value of the home equity line of credit ($36,527.20) registered against the family home.

The best evidence before the court in relation to the family home and its related liabilities was presented by the Petitioner. In her equalization calculation, the Petitioner included these assets and liabilities. The Respondent, in contrast, did not include them because he submitted that the family home simply ought to be sold and the net proceeds divided between the parties. [ 8 ] The Family Law Act directs that the family home and its associated liabilities ought to be included in the calculation of net family property and, for that reason, they are included by the court.

The practical reality is that these values will be divided equally between the parties and, so long as they are attributed jointly, the equalization amount between the parties will not change as a result of their inclusion. For convenience, the value and ownership of the family home together with its liabilities, as found by the court for the purpose of calculating the equalization amount due, is summarized below: Asset Value Owner(

s) Family home $240,000.00 Joint Debt Value Owner(

s) Mortgage $41,193.00 Joint HLOC $36,527.20 Joint B. Facts in dispute [ 9 ] The parties were unable to agree about the value of other assets owned as of the date of marriage and the date of separation. While the parties were generally in agreement about the ownership of these remaining assets, the parties were unable to agree about the value of them. The court has therefore determined the values based on its assessment of the evidence presented at trial.

(

i) Dodge Caravan [ 10 ] The parties agree that the Respondent owned a Dodge Caravan at the time of separation; however, they disagree about its value. The Petitioner asserts that the vehicle was worth $800.00. The Respondent did not include the vehicle in the equalization calculation he presented to the court; however, in his sworn statement of property, the Respondent valued it at $500.00. Neither party seriously contested the value of the vehicle and, in the interest of fairness to both parties, the court fixes its value at the midpoint between their respective positions.

For the purpose of equalization, the Dodge Caravan was owned by the Respondent and its value is fixed by the court in the amount of $650.00. (ii) Deck furniture [ 11 ] The Petitioner testified that deck furniture, which was in the possession of the Respondent immediately following separation, was advertised for sale in 2019 for $750.00. According to the Respondent, it was not sold and the furniture, tools, and household contents owned by him on the date of separation, and having a value of $1,500.00, includes the deck furniture.

There is no dispute between the parties that the Respondent possessed the deck furniture after the separation of the parties and, by virtue of its use and advertisement for sale, the court infers that it had at least some modest value. For the purpose of equalization, the court fixes the value of the deck furniture in the amount of $250.00 in addition to the value of the other furniture, tools, and household contents owned by the Respondent. (iii) Jewelry [ 12 ] The parties agree that jewelry was owned by the Petitioner on the date of separation.

They do not agree, however, about its value or the number of rings in question. The Respondent testified that he believed there were six rings of value. The Petitioner countered that she had only three rings. The Respondent values the six rings at $26,899.00 for the purpose of equalization, while the Petitioner claims that there are just three rings worth $2,400.00 based on their salvage value.

Neither party qualified an expert at trial in order to obtain opinion evidence about the value of the rings in question. [ 13 ] With this patchy evidentiary record, the court must determine the number and value of the rings owned by the Petitioner. The court finds it is more likely than not that the Petitioner was the owner of three rings on the date of separation: an engagement ring fused together with the wedding band (“wedding set”); a birthstone ring; and an anniversary ring.

While the Respondent testified that he understood that the Petitioner had more rings, that evidence, in the end, was not of sufficient weight for the court to be able to make a finding on a balance of probabilities that the Petitioner owned additional rings of value on the date of separation. [ 14 ] Determining the value of the rings owned by the Petitioner is also a challenging enterprise for the court. The Petitioner testified that the salvage value of the three rings was $2,400.00 excluding a diamond which was received from her deceased grandmother and incorporated into the wedding set.

The court accepts this evidence about the origin of the diamond and, for that reason, it is excluded by the court for the purpose of valuation. [2] The Petitioner also testified that the birthstone ring was purchased in 2006 for $528.00 USD and that the anniversary ring was purchased in 2002 for $539.00 USD. No exchange rate information was presented to the court, but the court accepts that these amounts were the purchase prices for the birthstone and anniversary rings. For his part, the Respondent relies on an appraisal of the wedding set and a certificate of evaluation for the birthstone ring.

Those documents record values of $6,400.00 and $4,800.00 respectively. He also estimates that the anniversary ring is worth $2,100.00. [ 15 ] For the purpose of equalization, the court does not accept or rely on the values recorded in the appraisal and the certificate of evaluation. It reached that conclusion for a number of reasons. First, notwithstanding that the documents were admitted into the record by the Petitioner, the documents still contain opinions for which no expert was qualified or examined.

Second, the documents, on their face, contain a number of disclaimers or qualifications about their stated values. For example, the appraisal is clear that it is the approximate price one could expect to pay to replace the ring, but one should not expect to be able to sell the ring for the stated value. Similarly, the certificate of evaluation states that it records only “replacement value” and expressly provides for a number of limitations, including that the document is not a guarantee, includes no warranty about the stated value, and is not for use by any person other than the purchaser of the ring.

Third, the value stated in the appraisal does not accord with other evidence presented and accepted by the court. For example, the appraisal includes a diamond that was received by the Petitioner from her deceased grandmother and is properly excluded for the purpose of any valuation of family property. In these circumstances, the court did not attach weight to the appraisal and the certificate of evaluation. [ 16 ] The task of the court is to value the jewelry owned by the Petitioner on the date of separation. This value is neither the salvage value nor the replacement value of the three rings.

Rather, the value of the jewelry likely falls between the positions taken by the parties. With the paucity of evidence in the record, the court places more weight on the testimony given by the Petitioner – the owner of the three rings – and finds that, for the purpose of equalization, the value of the jewelry is $4,000.00. [3] This amount is more than the salvage value presented by the Petitioner but less than the values relied upon by the Respondent. It also takes account of the modest purchase prices for the birthstone and anniversary rings.

Given the state of the record, the court finds this value to be fair and reasonable in the circumstances. (iv) Artwork [ 17 ] While the parties agree for the purpose of equalization that any paintings were owned by the Petitioner, they disagree about the number of paintings to be included in the family property of the Petitioner as well as the value of them. The Petitioner includes only two paintings and claims that the artwork is valued at $600.00 after taking account of commission (40%) if the paintings were sold at a local gallery.

She excludes a third painting – the largest painting – on the ground that it was a gift from the Respondent before marriage. Despite its size, the Petitioner claims that the third painting has a value of $500.00. For his part, the Respondent states that the artwork has a value of $1,900.00 and, for the purpose of his equalization calculation, he included all three paintings in the family property of the Petitioner.

No expert evidence was presented by the parties in relation to the artwork. [ 18 ] Based on the limited evidence presented at trial, the court finds that three paintings form part of the family property of the Petitioner as of the date of separation. However, the third painting – being the largest one – is found to be a gift from the Respondent to the Petitioner before the date of marriage. It is properly deducted from the family property of the Petitioner.

[ 19 ] The court also accepts the value attributed to the two smaller paintings by the Petitioner free from any deduction for commission, being $1,000.00. The search is for the value of the artwork owned on the date of separation, rather than its value after taking account of potential costs associated with realizing its monetary worth in the future. In this case, there was no evidence of any anticipated sale of the paintings and, given their origin and value, it is unlikely that a gallery sale would be required in any event.

In fact, the evidence of the Petitioner was that she intended to keep the artwork. [ 20 ] For the purpose of equalization, the third painting was owned by the Petitioner on the date of marriage, is properly deducted from her family property and, given its larger size, the court finds that it has a value of $650.00 for the purpose of equalization. (

v) BMO RRSP 209 [ 21 ] The Petitioner presented an account statement in her name as of March 31, 2018 which recorded the balance on that date to be $94,723.54. The Respondent relied on this amount for the purpose of his equalization calculation. However, the date of separation was February 18, 2018. The Petitioner testified that she examined the balance of the RRSP on the date of separation and found it to be $91,880.00.

This testimony was not challenged by the Respondent. [ 22 ] Mindful of the statutory direction in s. 4(2) of the Family Law Act , the court accepts the testimony of the Petitioner and finds that the RRSP was owned by the Petitioner and, as of the close of business on the date of separation, its value was $91,880.00. (vi) BMO LIRA 384-14 [ 23 ] The Petitioner presented an account statement in her name as of March 31, 2018 which recorded the balance on that date to be $82,714.56. The Respondent again relied on this amount for the purpose of equalization. However, the date of separation was February 18, 2018.

The Petitioner testified that she examined the balance of the LIRA on the date of separation and found it to be $80,592.00.

Again, this testimony was not challenged by the Respondent. [ 24 ] Consistent with the direction in s. 4(2) of the Family Law Act , the court accepts the testimony of the Petitioner and finds that the LIRA was owned by the Petitioner and, as of the close of business on the date of separation, its value was $80,592.00. (vii) Holland College pensions [ 25 ] The parties were married on August 7, 1993, separated on February 18, 2018 and, at various points in time, each of them had a pension with Holland College.

The Petitioner began employment with Holland College on February 27, 1980, ended her employment on March 27, 1998, and transferred a lump sum in the amount of $86,777.31 out of the pension plan on or about April 20, 1998. [4] This lump sum was transferred into a locked-in retirement account in the name of the Petitioner. That account is now divided in two parts: (

i) the BMO RRSP 209; and (ii) the BMO LIRA 384-14. For his part, the Respondent began employment with Holland College on January 26, 1988 and ended that employment on or about April 1, 1993. [5] As of December 31, 1993, the total value of the contributions made by the Respondent and Holland College was $21,255.23. [6] Interest was credited to the pension of the Respondent at a rate of 4% annually. [7] The Respondent did not transfer a lump sum out of the pension plan when his employment ended.

At the date of separation, the commuted value of the pension owned by the Respondent was calculated to be $59,442.85. [8] [ 26 ] In her equalization calculation, the Petitioner attributes $59,433.00 to the Respondent for his pension from Holland College as of the date of separation. The Petitioner then deducts $9,368.42 to account for the value of the pension owned by the Respondent on the date of marriage.

As for her own pension from Holland College, the Petitioner deducts $65,422.00 for the portion of the pension owned as of the date of marriage, which she calculates as being 75% of the value of the pension or 13.5 years of service before the marriage and 4.5 years of service after the marriage. [ 27 ] In his equalization calculation, the Respondent attributes the values of the BMO RRSP 209 and the BMO LIRA 384-14 to the Petitioner. However, no deduction is made for the pre-marital value of those accounts attributable to the lump sum transferred by the Petitioner from her pension at Holland College.

As for his own pension from Holland College, the Respondent includes $59,433.00 for his pension from Holland College as of the date of separation, but he also deducts $59,433.00 on the ground that the pension is a pre- marital asset. [ 28 ] Neither party has properly accounted for the pensions from Holland College. The “net family property” of a spouse means the value of all property owned on the date of separation, including the income from that property, after deducting the value of property owned by the spouse on the date of the marriage ( Family Law Act , s. 4(1) (b); and Miller at para. 10 ).

Based on the best evidence available in the record, the court finds that the pension owned by the Respondent had a value of $59,422.85 on the date of separation and a value of $21,255.23 on the date of marriage. [9] The court also finds that the pension owned by the Petitioner as of the date of marriage had a value of $64,562.32. [10] The court further finds that the lump sum amount transferred by the Petitioner on or about April 20, 1998 remains in, and is now divided between, the BMO RRSP 209 and the BMO LIRA 384-14. (viii) Income tax adjustments [ 29 ] The parties also disagree about the applicability and amount of adjustments for future income tax liability. [ 30 ] As part of her equalization calculation, the Petitioner adjusted a number of her own assets for income tax liability: (

i) Bell pension; (ii) BMO RRSP 209; (iii) BMO LIRA 384-14; and (iv) Holland College pension. She discounted those assets by 26% with the exception of her pre-marital pension amount from Holland College, which she adjusted at a rate of 20%. The Petitioner also adjusted the following assets owned by the Respondent: (

i) BMO spousal RRSP 392; (ii) Bell spousal RRSP; (iii) BMO Investorline spousal RRSP 602-19; (iv) Island Tel pension; and (

v) RRSP rollover. She adjusted those assets at a rate of 19% save and except for the Island Tel pension and RRSP rollover, which were adjusted by 20%. [ 31 ] The Petitioner made no adjustment to the Holland College pension of the Respondent because, in her view, the commuted value calculated for that pension already accounted for future income tax. She also used different adjustment rates because, based on her

assessment, the parties were in different “tax brackets”. Finally, no adjustment was made by the Petitioner to the PEI pension owned bythe Respondent because the value agreed upon by the parties already accounted for income tax liability.[11] [32] As part of his equalization calculation, the Respondent also adjusted a number of his own assets for income tax liability: (

i) BMOspousal RRSP 392; (ii) Bell spousal RRSP; (iii) BMO Investorline spousal RRSP 602-19; (iv) PEI pension; (

v) Island Tel pension; (vi)Holland College pension; and (vii) RRSP rollover. All of those assets were adjusted by 26%.[12] The Respondent applied the samepercentage adjustment to the following assets owned by the Petitioner as of the date of separation: (

i) Bell pension; (ii) BMO RRSP 209;and (iii) BMO LIRA 384-14. [33] The court finds that the following items of property require adjustment to account for income tax liability. In the case of thePetitioner, those assets include: (

i) Bell pension; (ii) BMO RRSP 209; (iii) BMO LIRA 384-14; and (iv) Holland College pension. In thecase of the Respondent, those assets include: (

i) BMO spousal RRSP 392; (ii) Bell spousal RRSP; (iii) BMO Investorline spousal RRSP602-19; (iv) Island Tel pension; (

v) RRSP rollover; and (vi) Holland College pension. All of these assets have a value; however, whenthat value is ultimately received by either party in the form of future income, it will be subject to income tax. Accounting for this incometax liability is fair, reasonable, and consistent with the direction in s. 4(1)(

b) of the Family Law Act to account for “other liabilities”when determining net family property. [34] No adjustment was made by the court for the PEI pension owned by the Respondent because its value, as determined by theactuary and agreed upon by the parties, already accounted for income tax liability.[13] [35] The court is also not persuaded by the submission made by the Petitioner that the Holland College pension owned by theRespondent does not require an adjustment because the commuted value calculated for that pension already accounts for future incometax liability. The court reached that conclusion for a number of reasons: (

a) First, there is no evidence in the valuation package obtained through Holland College that the commuted value calculated forthe Respondent accounted for future income tax liability. No such assumption is identified.[14] This is contrasted with the valuationpackage for the PEI pension.[15] (

b) Second, the commuted value of a pension is generally understood to be an estimate of the current lump sum value of a pension ifit is paid out or transferred on the date of the calculation. In the context of marriage breakdown, the commuted value of the pension isgenerally used for the purpose of dividing the pension between spouses or, in this jurisdiction, equalizing its value between spouses. Theincome tax liability associated with the pension benefits actually received by a spouse in the future is a separate matter. (

c) Third, case law supports the view that, even where the commuted value of a pension has been calculated, there is an additionaladjustment for future income tax liability. See e.g. Van Delst v. Hronowsky, 2021 ONSC 2353 at paras. 31-38, aff’d 2022 ONCA 349;and Sanders v. Sanders, (ON SC); and Purcell v. Purcell, (ON SC). In the end, this result also ensures consistent treatment between the parties in order to arrive at an equalization amount that is fair to bothof them [36] The remaining issue to be decided is the amount of this income tax adjustment.

While the Petitioner argues that marginal taxrates ought to be used, it is not clear from the evidence how the Petitioner determined that her “tax bracket” was 26% while the “taxbracket” of the Respondent was 20%.[16] Based on the latest income tax return information available for both parties,[17] the Petitionerhad a taxable income of $57,830.00 while the Respondent had a taxable income of $45,844.00. The combined federal and provincialmarginal tax rates for those incomes were 34.3% and 28.8% respectively – not 26% and 20%.

However, using these combined marginalrates to adjust for future income tax liability is neither fair nor reasonable in this particular case for a few reasons. [37] A marginal tax rate is the rate applied to the next dollar earned. For example, if the Petitioner earned an additional one thousanddollars of taxable income in 2020, she would have paid tax on that additional sum at a rate of 34.3% (or $343.00). However, when all ofher taxable income for that year is considered, the average tax rate of the Petitioner was approximately 22%.

The average rate is lowerbecause the Petitioner paid income taxes at lower rates on the initial income she earned up to the ceiling for each marginal rate, and thePetitioner receives, like every Canadian resident, a basic personal tax credit to reduce her income taxes.

In other words, the average ratetakes account of every dollar earned – not just the next dollar. [38] When seeking to adjust for the income tax liability of certain assets like RRSPs and pensions, it is a rare case when there isevidence that those assets will be immediately withdrawn and the full amount added to the taxable income of a spouse in one taxationyear. In such a case, an adjustment at the marginal rate may be appropriate.

However, in other cases, such as this one, where the value ofthese retirement-related assets will likely be withdrawn gradually over time by the parties and be one source – among others – of annualtaxable income, using an adjustment that is closer to the average tax rate in order to estimate future income tax liability is more fair andreflective of the actual financial circumstances of the parties. [39] In this case, given the ages of the Petitioner and the Respondent and their recent income tax returns, the future taxable income ofthe parties is likely to be drawn from a number of sources over time, including governmental benefits, RRSPs, and pensions.

Also, thebest evidence before the court is that the incomes of the parties have been relatively similar and consistent since the date of separation. In2019 and 2020, the taxable income of the Petitioner was $56,809.22[18] and $57,830.00. Between 2019 and 2022, the taxable income ofthe Petitioner was $54,205.00, $45,844.00, $31,283.00,[19] and $52,541.00. The court finds that this general pattern in income is likelyto continue or trend downward as the parties move forward.

So, for example, the average income tax rate for the Petitioner would beapproximately 21% based on estimated future taxable income of $56,000.00 and the average tax rate of the Respondent would beapproximately 19% based on an estimated future taxable income of $50,000.00.[20] After weighing all of the evidence presented by theparties with a view to determining net family property values which are fair and just in the particular circumstances of this case, the courtfixes the income tax adjustment for both parties at a rate of 20%. (ix) Retiring allowances

[40] Each party received income after the date of separation as a result of the end of their employment. Those payments werecategorized as “retiring allowances” for income tax purposes. The Petitioner reported income in the amount of $67,943.00 in 2019.[21]The Respondent reported income in the amount of $11,982.19 in 2020.[22] The question for the court is whether those amounts, in thisparticular case, constitute “property” for the purpose of equalization under

Part I of the Family Law Act (Family Law Act, s. 4(1)(c)). [41] The Petitioner, for her part, included the retiring allowance paid to the Respondent in her equalization calculation. Shediscounted its value by 20% to account for income tax. She did not, however, include her own retiring allowance in the calculationpresented to the court. The Respondent, on the other hand, included both retiring allowances in his equalization calculation and adjustedeach of them by 26% for income tax.[23] [42] In Leckie v.

Leckie, (ON CA), the Ontario Court of Appeal found that a trial judge erred when calculatingnet family property by including part of a severance package received by each spouse when they left their employment. The packageswere received after the parties separated and offered to employees as part of a corporate restructuring. The size of the package dependedupon years of service. The trial judge had apportioned each severance package by dividing the years of marriage by the years of serviceand including that share in each family property calculation.

The Ontario Court of Appeal concluded that the trial judge made a legalerror by doing so. In short, “[t]he severance packages did not exist at the date of separation. Neither party had any entitlement to such apackage as at the date of valuation. They are not property as of separation.” See Leckie at para. 4. See also Dembeck v. Wright, 2012ONCA 852 at paras. 48-50. [43] In this case, both retiring allowances were paid after the date of separation. Based on the testimony of the Petitioner, she alsoreceived the allowance as part of an “involuntary” severance package as a result of a workplace reduction program.

For the court, thisallowance was in lieu of notice to the Petitioner and, in essence, payment of future income. Consistent with the direction in Leckie, theallowance received by the Petitioner was not property as of the date of separation and is properly excluded from the calculation of her netfamily property. As for the allowance received by the Respondent, the court was presented with no admissible evidence about how itwas calculated or how the entitlement of the Respondent arose.

While the Petitioner expressed her opinion that the allowance wascalculated based on years of service and grounded in a union contract, that opinion evidence was not admissible and cannot be reliedupon by the court. Also, no contract or other evidence related to entitlement was presented to the court in this case. In the circumstances,absent evidence about entitlement and with evidence that the allowance was received after the date of separation, the allowance receivedby the Respondent is not included by the court in the calculation of his net family property.

In another case with a more fulsomeevidentiary record, the result may be different. [44] In

summary, the retiring allowances received by each party after the date of separation are not included by the court for thepurpose of equalizing family property in this particular case. The allowances do, however, remain relevant when the court examines theentire financial circumstances of the parties for the purpose of assessing the outstanding claims for spousal support and occupationalrent. (

x) Pre-marital assets [45] The net family property of a spouse is calculated by deducting the value of property owned on the date of marriage (Family LawAct, s. 4(1)(b)(ii); and Miller at para. 10).

The burden of proving that deduction rests with the spouse claiming it (Family Law Act, s.4(7); and Miller at para. 10). [46] In this case, the Petitioner seeks to deduct a number of items from her family property calculation, including the value of thehome she owned before marriage, the furniture and contents of that household, and the value of a collection of silver coins she receivedfrom her grandmother. [47] The first deduction at issue relates to the value of the home owned solely by the Petitioner before marriage.

The Petitionertestified that she purchased the home in 1991 for approximately $62,000.00 and later sold the home in 1997 for approximately$85,000.00. At the time of its purchase, the home was mortgaged in the amount of approximately $45,000.00. In an effort to determinethe value of the home at the time of marriage, the Petitioner estimated that the home was valued at approximately $75,000.00 andsubject to a mortgage of approximately $43,000.00. [48] No documentation supporting the testimony of the Petitioner was presented to the court; however, the Respondent also did notcontest this evidence.

In fact, the Respondent accepted this evidence from the Petitioner as being true. But, the Respondent countered bymaking the submission that the “exemption” for the home owned solely by the Petitioner on the date of marriage was “lost” when thePetitioner later used the proceeds to contribute to the homes subsequently owned jointly by the parties. [49] The court does not find the submission by the Respondent – that the deduction due to the Petitioner was subsequently lost – to bepersuasive for a few reasons: (

a) First, the text of the Family Law Act provides for the deduction of “the value of property that the spouse owned on the date ofthe marriage” (Family Law Act, s. 4(1)(b)(ii)). That property is also “valued at the date of the marriage” (Family Law Act, s. 4(1)(b)(ii)).This is contrasted with the textual treatment of gifts, inheritances, damages, and proceeds from insurance. The Family Law Act insiststhat, in order to be deducted, those types of property must be “acquired by the spouse after the date of the marriage and owned by thespouse on the valuation date” (Family Law Act, s. 4(1)(b)(iii)).

When those types of property are not owned at the date of separation, thededuction is lost (Koughan v. Dow, 2015 PECA 2 at paras. 27-29). So, while the submission by the Respondent is quite right in thecontext of gifts, inheritances, damages and proceeds from insurance, it is not supported by the text of the statute when it comes toproperty owned by the Petitioner on the date of marriage. Pre-marital property is deductible on different terms according to the textualchoices made by the Legislature. (

b) Second, there is case law supporting a deduction for the value of a home taken into the marriage and later sold by a spouse. InNahatchewitz v. Nahatchewitz, (ON CA), the parties lived in a house the husband had owned prior to marriage. Thehouse was sold during the marriage and the net proceeds were invested in another home that the parties occupied. The Ontario Court ofAppeal held that the husband was entitled to a deduction for the value of the home owned at the date of marriage. See also Gervasio v.

Gervasio, 2007 ONCA 780 at paras. 7 and 9; and Yeates v. Yeates, at paras. 96-101 (ON SC), aff’d 2008 ONCA519. The position advanced by the Respondent does not accord with this case law. (

c) Third, the Prince Edward Island Court of Appeal has previously interpreted s. 4(1)(b)(ii) of the Family Law Act in the sameway as it is now being applied by the court in this case (W. v. W., 2005 PESCAD 6 at paras. 8-12). According to the Court of Appeal,there is no basis in s. 4(1)(b)(ii) of the Family Law Act for concluding that, when the pre-marital assets of one spouse becomeintermingled with those of the other spouse during marriage, they “lose” their statutory status as deductible pre-marital assets (W. v. W.at para. 8).

Endorsing the submission made by the Respondent would be inconsistent with this direction from our appellate court. [50] The court accepts the testimony of the Petitioner and finds that the Petitioner is entitled to a deduction in the amount of$32,000.00. That is the value of the home owned by the Petitioner on the date of marriage less the mortgage registered against that homeon the date of marriage.

This net value is properly deductible under s. 4(1)(b)(ii) of the Family Law Act. [51] The evidence presented to the court does not, however, support the deduction being claimed by the Petitioner for the furnitureand contents of the home owned by her on the date of marriage. The Petitioner is seeking a deduction in the amount of $4,000.00, butcandidly acknowledged in her testimony that she had nothing to support that figure. The furniture and contents were moved to, and usedby, the parties in later homes.

However, after weighing all of the evidence, the court finds that there was insufficient evidence to supportthe deduction being sought by the Petitioner. The burden of proving the deduction rested with the Petitioner (Family Law Act, s. 4(7)).And there was simply no detailed evidence about the furniture and contents beyond the value asserted by the Petitioner. In the end, theparties agree about the value of the furniture, tools, and household contents of the family home owned by them at the time of separationand, in the circumstances, that valuation appears to be fair and reasonable in the circumstances.

No additional deduction has beenestablished in favour of the Petitioner. [52] The final deduction at issue is the value of a collection of silver coins. The evidence before the court is that the Petitioner wasgifted a collection of silver coins from her grandmother before the marriage. During the marriage, the Petitioner testified that sheconverted those coins into cash in the amount of $880.00 so that playground equipment could be purchased for the children of themarriage. Again, none of this evidence was challenged in any material way by the Respondent.

Rather, the Respondent argued that theexemption for the coins was “gone” when they were converted and used to purchase joint family property. For the reasons stated inparagraph [49], the court does not accept this submission on behalf of the Respondent. After weighing all of the evidence, the courtaccepts the testimony of the Petitioner and finds that the coins were gifted to, and owned by, the Petitioner on the date of marriage. Thevalue of those coins is fixed in the amount of $880.00 based on the best evidence available to the court. C.

Summary [53] The value and ownership of the assets in dispute between the parties, as determined by the court and adjusted for income taxliability, are summarized below: Asset Value Owner(s)Dodge Caravan $650.00 RespondentDeck furniture $250.00 RespondentJewelry (three rings) $4,000.00 PetitionerArtwork (three paintings) $1,650.00 PetitionerBMO RRSP 209 * $73,504.00 PetitionerBMO LIRA 384-14 * $64,473.60 PetitionerHolland College pension * $47,538.28 RespondentPre-marital asset Value Owner(s)Artwork (one painting) $650.00 PetitionerHolland College pension * $17,004.18 RespondentHolland College pension * $51,649.86 PetitionerHouse (less mortgage) $32,000.00 PetitionerSilver coins $880.00 Petitioner* Adjusted by 20% to account for income tax liability [54] The value and ownership of the remaining assets and debts of the parties, as adjusted for income tax liability, are summarized asfollows: Asset Value Owner(s)Family home $240,000.00 JointFord CMAX $7,500.00 PetitionerFurniture, tools, and household contents $5,072.00 PetitionerFurniture, tools, and household contents $1,500.00 RespondentAccount receivable $1,976.00 PetitionerBell pension (including savings plan) * $165,320.80 PetitionerPEI pension $110,826.00 RespondentBMO spousal RRSP 392 * $81,896.00 RespondentBell spousal RRSP * $5,315.20 RespondentBMO Investorline spousal RRSP 602-19 * $27,760.00 Respondent Debt Value Owner(

s) Mortgage $41,193.00 Joint HLOC $36,527.20 Joint CIBC Visa $2,820.00 Petitioner Pre-marital asset Value Owner(

s) Toyota Tercel $7,000.00 Petitioner Toyota 4Runner $3,000.00 Respondent Island Tel pension * $5,782.44 Respondent Trimark savings plan account $10,203.65 Respondent RRSP rollover * $8,000.00 Respondent * Adjusted by 20% to account for income tax liability D.

Net family property [ 55 ] Having accepted the facts agreed upon by the parties and resolved the remaining facts in dispute, the net family property of each party is calculated by the court as follows: Asset Petitioner Respondent Family home $120,000.00 $120,000.00 Furniture, tools, and household contents $5,072.00 $1,500.00 Ford CMAX $7,500.00 Account receivable $1,976.00 Bell pension (including savings plan) * $165,320.80 Jewelry (three rings) $4,000.00 Artwork (three paintings) $1,650.00 BMO RRSP 209 * $73,504.00 BMO LIRA 384-14 * $64,473.60 Dodge Caravan $650.00 Deck furniture $250.00 Holland College pension * $47,538.28 PEI pension $110,826.00 BMO spousal RRSP 392 * $81,896.00 Bell spousal RRSP * $5,315.20 BMO Investorline spousal RRSP 602-19 * $27,760.00 Total $443,496.40 $395,735.48 Debt Petitioner Respondent Mortgage $20,596.50 $20,596.50 HLOC $18,263.60 $18,263.60 CIBC Visa $2,820.00 Total $41,680.10 $38,860.10 Pre-marital asset Petitioner Respondent Toyota Tercel $7,000.00 Artwork (one painting) $650.00 Holland College pension * $51,649.86 House (less mortgage) $32,000.00 Silver coins $880.00 Toyota 4Runner $3,000.00 Holland College pension * $17,004.18 Island Tel pension * $5,782.44 Trimark savings plan account $10,203.65 RRSP rollover * $8,000.00 Total $92,179.86 $43,990.27 Asset – Debt – Pre-marital asset = Net Family Property $309,636.44 $312,885.11 * Adjusted by 20% to account for income tax liability [ 56 ] The net family property of the Petitioner is $309,636.44.

The net family property of the Respondent is $312,885.11. E. Calculation of equalization amount

[ 57 ] As directed by s. 6(1) of the Family Law Act , the spouse whose net family property is the lesser of the two net family properties is entitled to one-half of the difference between them. In this case, the difference is $3,248.67. The Petitioner is therefore entitled to $1,624.34 from the Respondent for the purpose of equalization. [ 58 ] After reviewing all of the circumstances, including the financial result flowing from the equalization of family property, the court is not satisfied that an unequal division under s. 6(5) of the Family Law Act is appropriate in this case.

The threshold for an unequal division is exceptionally high, and it requires the court to find that an equal division is unconscionable in the circumstances ( Koughan v. Dow at para. 31 ). An equal division is unconscionable only when it shocks the conscience of the court ( Koughan v. Dow at paras. 37 and 43 ).

When the financial circumstances of the parties are examined as a whole, there is nothing grossly unjust or flagrantly unfair about the equalization ordered by the court. [ 59 ] In the end, it is deeply unfortunate that the parties have lost years disputing what is really a very modest equalization payment. This is to say nothing about the considerable costs incurred by the parties.

After considering the record, hearing the testimony of the parties and reviewing the equalization calculations presented at trial, the court is left to wonder whether some of this time and expense could have been avoided if the parties had simply followed strictly the statutory formula for equalization directed by the Legislature in

Part I of the Family Law Act . F. Achieving equalization by agreement or order [ 60 ] Equalization may be achieved by agreement between the parties or by order of the court. The former is constrained only by the creativity of the parties. The latter is more circumscribed. [ 61 ] The Family Law Act creates a statutory system for the equalization of family property. This is contrasted with the systems of division created in some other jurisdictions.

In Prince Edward Island, the Family Law Act basically authorizes the court to identify the owner of all property as of the date of separation, to value the property of each spouse less any debts and excluded property, and to determine the net family property of each spouse. The court is then left to calculate the amount necessary to equalize the net family property of each party. That equalization may be achieved by the court issuing an order pursuant to s. 9(1) of the Family Law Act or by the parties making an agreement of their own.

See generally Miller at paras. 9-10 . [ 62 ] In this case, the Respondent asked for some time, much like the period extended by the court in Miller , to attempt to negotiate an agreement between the parties following the determinations made by the court in relation to equalization ( Miller at paras. 133-135 ). For sound policy reasons, family law permits and encourages separated spouses to work out their own arrangements. See generally L.M.P. v. L.S. , 2011 SCC 64 at para. 14 .

Agreements are desirable because they give parties an opportunity to order their lives as they wish. [ 63 ] For example, in this particular case, the Respondent may be able to make the equalization payment in cash, or by transferring a portion of a certain asset to the Petitioner, or the equalization payment may be accounted for as part of a refinancing of the family home. The Petitioner, having expressed a desire to remain in the family home, may be able to obtain refinancing for the family home so that she is in a position to pay the Respondent for his one-half interest in the family home.

As part of any refinancing, the parties would likely have to appraise the family home to ascertain its present value and account for the existing debt registered against the home for which the Respondent is jointly responsible. In short, a variety of resolution options are available to the parties.

They would be wise to exhaust efforts to try to reach an agreement about how the equalization amount is paid and how the interest of the Respondent in the family home is compensated. [ 64 ] Having determined the rights of the parties in relation to equalization, and after considering the financial circumstances of the parties as presented at trial, the court is satisfied that there are a number of a reasonable alternatives open to the parties in order to achieve the equalization ordered by the court and to address the outstanding ownership interest in the family home.

For these reasons, the parties shall have until February 9, 2024 to reach an agreement of their own. [ 65 ] If the parties reach an agreement on or before February 9, 2024, the proceeding may be concluded by way of a consent order prepared by the parties and delivered to the court. Given the blunt nature of the authority conferred upon the court by s. 9(1) of the Family Law Act , the parties ought to have a strong incentive to conduct themselves fairly and reasonably in negotiating how they wish to achieve equalization in this case.

If the parties are unable to reach an agreement, the parties shall notify the court in writing no later than February 16, 2024 of the issues they have been able to resolve, if any, and the court will issue its own order pursuant to s. 9(1) of the Family Law Act to conclude this case. V. Spousal support A. Law [ 66 ] The Divorce Act , R.S.C. 1985, c. 3 (2nd Supp ), expressly enables the court to make an order for spousal support, including on an interim basis ( Divorce Act , ss. 15.2(1) and 15.2(2) ). [ 67 ]

Section 15.2(6) of the Divorce Act sets out the objectives of spousal support. Any order should: (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [ 68 ]

Section 15.2(4) of the Divorce Act sets out the factors to be considered before making an order for spousal support. The court must take into consideration the condition, means, needs, and other circumstances of each spouse, including: (

a) the length of time the

spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relatingto the support of either spouse. In this case, there is no order, agreement or arrangement in place so s. 15.2(4)(

c) of the Divorce Act hasno application. [69] The word “condition” includes the age, health, needs, obligations, and the station in life of the parties. The word “means”includes the financial resources, capital assets, employment income or earning capacity, and other sources from which a party receivesgains or benefits. It also encompasses the assets that a party is likely to have in the future.

The word “needs” is considered in relation tothe marital standard of living. [70] Given the absence of any quantitative guidance in the Divorce Act, the Spousal Support Advisory Guidelines (“Guidelines”)were created as a tool to reflect the current law in Canada and to provide some direction about the appropriate range of support. Since2005, the Guidelines have been considered in thousands of decisions by trial and appellate courts. While the Guidelines are incrediblyuseful and help to promote consistency in judgments, they are not binding on the court.

They are only one tool among many otherconsiderations which are used to help the court exercise its discretionary powers. [71] It is also important to emphasize that the Guidelines do not address entitlement to spousal support. Entitlement is a separatethreshold issue.

The court must determine whether a spouse is entitled to spousal support before applying the Guidelines or otherwisedetermining the amount and duration of support. [72] Compensatory support aims to provide compensation for losses or disadvantages experienced by the recipient spouse as a resultof the roles adopted during the marriage or for benefits or advantages experienced by the payor spouse as a result of the recipient’scontributions. Support compensates the recipient spouse for these losses or gains. See generally Moge v.

Moge (SCC),[1992] 3 S.C.R. 813 at paras. 68-70. [73] Compensatory support responds to two objectives under the Divorce Act. First, it recognizes the economic advantages ordisadvantages arising from the marriage or its breakdown (Divorce Act, s. 15.2(6)(a)). Second, when children of the marriage arepresent, it apportions the financial consequences arising from the care of any child over and above any obligation for support (DivorceAct, s. 15.2(6)(b)). [74] Non-compensatory support is sometimes referred to as the “means and needs” approach: it aims to narrow the gap between themeans and needs of the spouses.

The need of the recipient spouse may arise for a number of reasons, including the roles adopted by thespouses during the marriage or because of the fact that a status quo developed over time with a spouse being out of the workforce orworking in limited ways. Support compensates the recipient spouse to alleviate the economic hardships resulting from the marriage or itsbreakdown. [75] Non-compensatory support also responds to statutory objectives and is reflected in ss. 15.2(6)(

c) and 15.2(6)(

d) of the DivorceAct, which relate to economic hardship and self-sufficiency. The court takes into account the standard of living enjoyed by the spouseswhile married as well as their relative standards of living following separation. The analysis of need must also take into consideration theability of recipient spouses to support themselves. [76] Spousal support is not, however, an automatic or “general tool of redistribution” that is activated by the mere fact of marriage orits breakdown (Moge at p. 864). Entitlement must be found.

And, as the Supreme Court of Canada has recognized, there will be caseswhere no spousal support is ordered. In such a case, the spouses may have maximized their earning potential by working outside thehome, pursued opportunities for advancement in similar ways, divided up the duties inside or around the home, or made sacrifices for theeconomic benefit of the other spouse (Moge at pp. 864-865).

In other words, there are spouses who are able to make a relatively cleanbreak from a marriage and to continue forward with their lives in similar economic circumstances. [77] In this case, the main issue for both parties is entitlement to spousal support. B. Analysis [78] Neither party pursued an interim order for spousal support and, as of the date of trial, no spousal support order was in placebetween the parties.

For her part, the Petitioner claimed spousal support in her original petition for divorce filed on November 4, 2019.For his part, the Respondent did not claim spousal support until filing his amended answer and counterpetition on April 5, 2022. By thattime, the Petitioner had amended her original petition to seek an unequal division of family property. [79] With that procedural context in mind, the evidence placed before the court by the parties on the subject of spousal support wasthin.

When the trial record is examined as a whole, spousal support was clearly an issue secondary to the main contest between theparties: equalization. Notwithstanding that treatment by the parties, the court has examined the record fully with a view to determiningwhether either party has demonstrated entitlement to spousal support based on the evidence presented. [80] The Petitioner provided very little testimony in support of her claim for spousal support. She testified that she took parental leavefor one year when each child of the marriage was born.

The Petitioner also disputed that the Respondent was, for the purpose ofcaregiving credits under the Canada Pension Plan, the primary caregiver of the two children. [81] The Respondent, for his part, admitted that the Petitioner took a year off work after each child was born, but he testified that hewas also unemployed or working part-time during those early years. The Respondent testified that he looked after the children for someperiod of time and that, occasionally, the parties sent the children to external childcare so that they would become familiar with thoseenvironments.

No additional or specific details were provided by the Respondent. [82] In

summary, the court received scant evidence in support of the parties’ claims for spousal support and, in particular, on thesubject of entitlement. Testimony alone, however, is not the entirely of the record before the court. The record also reveals the followingrelevant information:

(

a) The parties were married for more than twenty-four years. They had two children. Both of those children were adults at the time of separation. (

b) The Petitioner was 59 years old at the time of separation. She was employed at Holland College until 1998 and at Bell Canada until 2019. The Petitioner had previously been married and entered the marriage with a number of assets, including but not limited to a home, vehicle, and pension. (

c) The Respondent was 60 years old at the date of separation. He was employed at the Government of PEI between 2009 and 2020. The Respondent had also previously been married and entered the marriage with a number of assets, including two pensions, an RRSP rollover, and a vehicle. He had worked previously with Holland College and Island Tel. (

d) The parties operated out of a joint bank account during the marriage. During the marriage, the Petitioner also contributed to three spousal RRSPs in the name of the Respondent. (

e) As of the date of separation, the Petitioner owned her pension from Bell Canada as well as the RRSP and LIRA accounts originating from the lump sum she transferred from her pension at Holland College. For his part, the Respondent owned pensions from Island Tel, Holland College, and the Government of PEI together with three spousal RRSP accounts. All of these income-generating assets are in addition to the family home owned jointly by the parties. There is equity due to both parties from the family home. (

f) Both parties received retiring allowances when their employment ended after the date of separation.

The Petitioner accepted an involuntary severance package, which included payment in lieu of notice, and the Respondent retired voluntarily. [ 83 ] The record before the court also included some evidence about the income history of the parties during and after marriage: Year Total Income Petitioner Total Income Respondent 2016 $55,335.00 2017 $57,394.00 2018 $84,042.00 $57,598.00 2019 $137,104.33 $59,528.00 2020 $58,007.00 $58,134.00 2021 $50,583.00 2022 $52,678.00 [ 84 ] Unfortunately, neither party presented evidence regarding the incomes of the parties during the balance of the marriage.

Drawing reasonable inferences about the marital standard of living from this scarce body of evidence is difficult for the court beyond general findings that the Petitioner likely earned more income than the Respondent on an annual basis during the marriage and that the parties’ incomes after separation have likely become substantially similar. [ 85 ] Also missing from the record was any meaningful evidence about any economic advantages or disadvantages experienced by the parties as a result of the marriage, or about the roles assumed by, or the functions performed by, each of the parties during the marriage, or about any economic hardships experienced by the parties following the breakdown of the marriage.

Having said that, the evidence which was present in the record did demonstrate to the court that, after the date of separation, each party took steps – whether through part-time employment, self-employment, the use of investments, or other adjustments in lifestyle – to become economically self- sufficient within a reasonable period of time. C. Conclusion [ 86 ] Spousal support is grounded in the doctrine of equitable sharing.

The economic consequences of marriage and its breakdown are shared between spouses by recognizing and accounting for both the economic disadvantages suffered by some spouses and the economic advantages enjoyed by other spouses. It seeks to ensure that the consequences of the choices made during the marriage are not shouldered by one spouse, but rather shared fairly between both of them. That is because, during a marriage, spouses generally operate as a financial partnership or joint enterprise.

Each assumes roles or performs functions – whether inside or outside the home – that contribute to the financial benefit of the family as a whole. When that partnership or enterprise breaks apart, this equilibrium is disrupted and the potential for unfairness arises. Absent some compensation, the costs associated with certain sacrifices during the marriage may be borne exclusively by one spouse while the benefits associated with those same sacrifices are enjoyed exclusively by the other. [ 87 ] This doctrine finds expression in s. 15.2(6) of the Divorce Act .

In this particular case where no order or agreement is present, spousal support may arise on compensatory and non-compensatory grounds. However, notwithstanding the length of the marriage, entitlement is not automatic. As explained in Moge , spousal support is not “a general tool of redistribution” that is activated by the mere fact of marriage or its breakdown ( Moge at p. 864). Entitlement is a threshold issue that must be established by the parties with evidence.

And, the court, when faced with competing claims for support, must examine what actually occurred in the particular relationship before it and not what might have happened or what, in theory, could be available to either party. A common-sense assessment of the evidence is required. [ 88 ] The court is not satisfied, after weighing all of the evidence, that either party has established entitlement to spousal support in this case. While the marriage was a long one, both parties shared responsibilities for the children and contributed financially to their partnership.

The Petitioner was on parental leave for one year. The Respondent was unemployed or working part-time around that time, and he too cared for the children. However, the children also attended care outside the family home. Both parties realized their earning potential by working full-time outside the home and seeking opportunities with different employers. The parties operated out of a joint bank account during the marriage and, based on the evidence, contributed jointly to the financial well-being of the family as a whole. For

example, the Petitioner contributed to spousal RRSPs in the name of the Respondent during the marriage. The marriage was also asecond one for both parties and, when it began, each party owned a number of assets of their own, including pensions. When themarriage ended, the parties were approaching retirement age and each of them owned additional assets in their own name, includingincome-generating assets like RRSPs and pensions. Finally, in the years following separation, each party took steps to become self-sufficient.

Absent from the record was any weighty evidence of economic advantages, disadvantages, or hardships experienced by eitherparty as a result of the marriage or its breakdown. [89] Based on the evidence presented to the court, this case is like the one contemplated in Moge where no entitlement to spousalsupport has been established by either party (Moge at pp. 864-865).

The parties maximized their earning potential by working outside thehome, they pursued career opportunities with different employers, they shared childcare responsibilities during the early years, theyoperated as a joint financial enterprise, they each made contributions to the economic benefit of the other party and the family as a whole,and they have taken steps to become self-sufficient after the date of separation.

In short, the Petitioner and the Respondent have beenable to make a relatively clean break from the marriage from a financial perspective and to continue on with their respective lives insimilar economic circumstances. And while the parties have obviously been unable to agree about how their joint financial enterpriseought to be shared, the court has ended that disagreement by calculating the equalization amount in this decision. No spousal support istherefore ordered. VI. Occupational rent [90] The Respondent seeks occupational rent from the Petitioner.

The Petitioner has occupied the family home since separation onFebruary 18, 2018. The Respondent has had to pay rent elsewhere, or make other personal arrangements, since that time. No interimorders were in place at the time of trial. A. Law [91] This court has previously held that occupational rent is a remedy which may be available in certain cases where one spouse hasexclusive possession of a jointly-owned family home (Enman v. Enman, 2000 PESCTD 37 at para. 35).[24] The equities may beparticularly compelling in cases where the family home is free of any mortgage or other encumbrance (Enman at para. 35).

Generallyspeaking, any such remedy takes account of the fact that the interest in the family home is equally divided as well as the reality that theoccupying spouse also has expenses related to maintaining the family home and its value (Enman at para. 35). However, it is fair to saythat this court has noted the absence of any clear local direction as to when the remedy of occupational rent ought to be granted (Miller atpara. 38). [92] Outside of this jurisdiction, the case law is more developed on the subject of occupational rent.

At the risk of oversimplifying theboundaries of the discretion available to the court, an award of occupational rent may be made when it is reasonable and equitable to doso (Griffiths v. Zambosco, at para. 49 (ON CA); Goeldner v. Goeldner, (ON CA); and Chhom v.Green, 2023 ONCA 692 at para. 9). However, the court must also be cautious about these types of awards becoming a strategic deviceused to counter legitimate claims for support or equalization of family property. For this reason, a case-by-case assessment, which takesaccount of the entire financial circumstances of the parties, is necessary.

It is not relief to be considered or granted in isolation. In theend, the search is for a financial result that is fair and just in the circumstances. And occupational rent is one remedy among many whichmay be used by the court to achieve this objective. [93] A number of relevant factors may be distilled from the case law. While the list is not exhaustive, common considerationsinclude: (

a) the timing of the claim for occupational rent; (

b) the circumstances surrounding occupation of the family home; (

c) the duration of the occupancy; (

d) any request to sell the family home; (

e) any financial hardship resulting from a spouse being unable to access their equity in the family home; (

f) the conduct of the parties, including any failure to pay support or any conduct that increased or decreased the value of thefamily home; (

g) the living arrangements of any children; and (

h) any reasonable credits to set off against the claim for occupational rent. The weight to be given to these factors and any others is a matter for determination by the trial judge. It is an exercise of discretionentitled to deference upon review. See generally Griffiths at para. 49; and Goeldner at para. 4. B. Analysis [94] The claim by the Respondent for occupational rent may be traced to the original answer and counterpetition that he filed onNovember 28, 2019. Since at least that time, the Petitioner had notice of the claim for occupational rent.

However, there was also a delayof approximately 22 months between the separation of the parties and the claim for rent by the Respondent. [95] With the consent of the parties, the court was presented with evidence that the monthly rent expected for the family home wouldbe in the range of $2,000.00 to $2,400.00 per month. The family home is a fine home in an established neighbourhood and close to anelementary school. However, the interest seeking to be valued in this analysis is a one-half interest in the occupation of the family home.

It is not exclusive possession of the home. In the circumstances, the court finds that the one-half interest of the Respondent in the family home would likely rent for $1,000.00 per month. That amount is fair and reasonable for the purpose of assessing the claim for occupational rent. [ 96 ] The parties separated on February 18, 2018. At the date of separation, the family home was not free from encumbrances. It was subject to a mortgage and security for a home equity line of credit.

The Petitioner remained in the family home, and the Respondent lived briefly with one of the adult children before finding an apartment of his own. The Petitioner assumed responsibility for paying the expenses related to the family home, including the mortgage and the interest on the line of credit. The Petitioner has remained in the family home since the date of separation – a period of approximately 63 months as of the date of trial.

For his part, the Respondent has remained outside the family home. [ 97 ] The Respondent wishes to sell the family home, pay out the mortgage and the home equity line of credit, and divide the proceeds of sale equally with the Petitioner. The Petitioner does not share that view and, if the parties could finalize the equalization of their family property, she would like to explore refinancing the family home so that she remains in the home and is capable of paying out the one-half interest of the Respondent.

As of the date of trial, the parties could not reach any agreement about the sale or refinancing of the family home. The parties have only made arrangements to extend the mortgage and the home equity line of credit. [ 98 ] While the separation certainly resulted in disruption and inconvenience for the Respondent as he had to secure alternate living arrangements, the Respondent was able to do so within a short period of time.

Upon review of the record as a whole, the court is not satisfied that the Respondent suffered any financial hardship because he was unable to access his share of the equity in the family home. The Respondent continued working until deciding to retire, or to end his employment voluntarily, on or about January 11, 2020. Hardship was therefore not a weighty factor for the court in this case. [ 99 ] Neither party failed to satisfy any legal obligation in relation to support. No interim orders related to support or possession of the family home were in place.

Again, this was not a weighty factor for the court. [ 100 ] On the date of separation, the two children of the marriage were adults. Both live independently. This was also not a weighty factor for the court. [ 101 ] The Petitioner has taken a number of steps to maintain the value of the family home, including payment for a new driveway, a limited basement renovation, updated interior doors, and some new carpeting.

None of these contributions by the Petitioner were disputed by the Respondent in any material way; however, there was some disagreement between the parties about who paid for redressing the edges of the new driveway and the new sod. After reviewing all of the evidence, the court finds that each party contributed to the cost of this particular outdoor project and, as the appraisal stated when it was prepared on January 30, 2019, the family home was – and continues to be – well-maintained to the mutual benefit of the parties.

The value of the family home has not been diminished by the conduct of either party. [ 102 ] In addition to these efforts to maintain the family home, there are a number of other credits available to the Petitioner. As part of the equalization calculation presented by the lawyer for the Respondent, the Respondent recognized a number of credits as being reasonable to set off against the claim for occupational rent, including monthly payments for the mortgage ($693.00), interest on the home equity line of credit ($110.00), property taxes ($219.00), water and sewer service ($47.00), and heating ($234.00).

According to the Respondent, these credits added to $1,303.00 on a monthly basis. [ 103 ] Missing from the reasonable credits acknowledged by the Respondent are other necessary costs incurred by the Petitioner, including fire insurance ($66.00) [25] and electricity ($215.00) [26] . Also, no account was taken by the Respondent for one-half of the work completed by the Petitioner on the family home, including the driveway ($1,408.50) [27] , the basement ($977.88) [28] , the interior doors ($375.60), [29] and the new carpet ($267.11) [30] .

Based on the evidence before the court, the Petitioner would also be able to set off these amounts against any potential claim for occupational rent.

However, for the avoidance of any doubt, these credits do not include the costs associated with two heat pumps installed in the family home by the Petitioner because no evidence was presented at trial about those particular costs. [ 104 ] When taken together, the reasonable credits available to the Petitioner for the purpose of setting off the claim for occupational rent total at least $1,584.00 on a monthly basis: Credit Amount Mortgage $693.00 Home equity line of credit $110.00 Property taxes $219.00 Water and sewer service $47.00 Heating $234.00 Fire insurance $66.00 Electricity $215.00 Total $1,584.00 One-half of these monthly credits is $792.00.

In addition to these recurring credits, the Petitioner is entitled to other credits for work done to maintain the value of the family home. Based on the evidence, one-half of the work completed on the family home totals $3,029.09. [ 105 ] For the purpose of analysing the claim by the Respondent for occupational rent, the court has excluded other costs related to the family home. Those costs, such as the expenses for telephone, cable and internet service, are more properly characterized as living expenses.

Both parties would likely incur similar expenses associated with their living arrangements after the date of separation. This is

contrasted, however, with the account for electricity. In this case, without electricity, the furnace in the family home does not fire and, in order to maintain the value of the home, it had to be properly heated. Finally, for the reasons stated above, the court did not include credits for the heat pumps installed in the family home. While the court accepts that those pumps were installed by the Petitioner and that the costs to install them would likely constitute credits in the context of a claim for occupational rent, no evidence about those specific costs was presented to the court. C.

Conclusion [ 106 ] After considering all of the factors relevant to occupational rent in this particular case, together with the entire financial circumstances of the parties, including the equalization amount payable by the Respondent to the Petitioner, as well as the quantitative analysis of the occupational rent being claimed by the Respondent, the court is not satisfied that an order for the payment of occupational rent is a remedy which is needed in this case in order to achieve a financial result that is fair and just to both parties. [ 107 ] After taking account of its own findings as well as the credits acknowledged by the Respondent, the court is left with competing claims for occupational rent ($63,000.00) [31] and credits ($52,925.09) [32] that are substantially similar when considered in the context of the length of time which has passed since separation (63 months).

It represents a difference of approximately $159.92 per month. In the end, there are factors weighing for and against an order for occupational rent. And it is not relief that is considered or granted by the court in isolation. At the end of the day, the court is searching for an overall financial outcome that is fair and just in the circumstances. [ 108 ] When the whole financial picture is examined in this case, the circumstances of the Petitioner and the Respondent are substantially similar. Since separation, each party has taken steps to become self-sufficient.

Each party has an annual income that is substantially similar to the income earned by the other party. And each party has, in addition to the equity in the family home, a number of other assets that are capable of generating income during retirement. For these reasons, the court exercises its discretion to decline to award occupational rent to the Respondent. It is not a remedy that is required in order to achieve a fair and just result in this particular case. VII. Costs [ 109 ] The success of the parties after trial has been divided.

The parties are strongly encouraged to resolve the issue of costs in light of this outcome. If the parties cannot reach an agreement about the costs of this proceeding before February 9, 2024 so that this matter can finally be concluded, the Petitioner shall serve and file a submission in writing not exceeding five pages (excluding authorities) on or before February 16, 2024. The Respondent shall serve and file a submission in writing not exceeding five pages (excluding attachments) on or before February 23, 2024.

Any submissions made by the parties ought to focus on the factors in Rule 57 and any other matter relevant to costs. [ 110 ] If the parties are able to resolve the matter of costs, then they may communicate that agreement to the court in the form of a consent order. ____________________________ J. January 3, 2024