Mullins v. Mullins, 2012 NSSC 143

SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Mullins v. Mullins, 2012 NSSC 143 Date: 20120412 Docket: SFSND1206 – 006010 Registry: Sydney, N.S. Between: Kenneth Mullins Petitioner v. Margaret Mullins Respondent LIBRARY HEADING Judge: The Honourable Justice Darryl W.

Wilson Heard: April 18, 19, 20, 2011 and January 3, 2012, in Sydney, Nova Scotia Written Decision: April 12, 2012 Subject: Spousal support - pension viewed as maintenance asset - imputed income - reasonable needs and ability to pay - Matrimonial Property Act - RRSPs - severance - vehicles and vehicle loans - contents - classification of debt - occupation rent and household expenditures - monies held in trust. Result: Wife granted $8,000.00 lump sum spousal support from date of separation to date of Interim Order and ongoing spousal support of $600.00 a month, effective January 1, 2011.

Wife's RRSPs exempt from division, while husband's RRSPs were classified as matrimonial. Wife entitled to judgment for 50% of the net value of the severance package, plus pre-judgment interest. Occupation rent and household expenditures offset. Equal division of Canada Savings Bonds redemption, income tax refund and DEVCO surplus distribution. Payment of $1,000.00 by husband to equalize the value of household contents. Husband retained two motor vehicles, as well as responsibility for loan associated with motor vehicles. Sawdust lot to be listed for sale and proceeds subject to equal division.

Matrimonial debts fixed at $3,700.00 to be divided equally. Husband to pay out funds held in trust regarding costs incurred by wife during his occupation of matrimonial home. THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE

DECISION, NOT THIS LIBRARY SHEET . SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Mullins v. Mullins, 2012 NSSC 143 Date: 20120412 Docket: SFSND1206 – 006010 Registry: Sydney, N.S. Between: Kenneth Mullins Petitioner v. Margaret Mullins Respondent Judge: The Honourable Justice Darryl W.

Wilson Heard: April 18, 19, 20, 2011 and January 3, 2012, in Sydney, Nova Scotia Written Decision: April 12, 2012 Counsel: Ralph Ripley, Counsel for Kenneth Mullins Elaine Gibney, Counsel for Margaret Mullins By the Court: [ 1 ] The parties were married on January 21, 1971 and separated April 8, 2007 after a thirty-six (36) year relationship. They raised three (3) children who are now adults, living on their own. The Petition for Divorce was filed by the husband on March 11, 2010

but proceedings between the parties were initiated by the wife filing Applications on June 7, 2007, pursuant to the Maintenance and Custody Act and the Matrimonial Property Act seeking spousal support, exclusive possession of the matrimonial home and division of property. The wife alleged she was forced to vacate the home because of the husband ’ s conduct. [ 2 ] An Interim Order required the husband to pay the wife spousal support of $1,500.00 a month, beginning December 1, 2007.

The husband ’ s pension, which was in pay, was to be divided equally and the interim spousal support payment reduced when the pension division was effected.

The issue of spousal support for the period April to December, 2007 was to be dealt with at a future hearing, along with any claims for occupation rent. [ 3 ] The husband was given exclusive possession of the matrimonial home, subject to several conditions including arranging insurance coverage for the home and contents, payment of all household expenses, including property taxes, during the period of his exclusive possession and payment of the heating costs and basic monthly telephone service of the wife, while she was residing at a relative ’ s cottage. [ 4 ] By subsequent Order, the husband ’ s interest in the matrimonial home and an adjacent lot was conveyed to the wife in December, 2008.

The parties agreed on a value for each of the properties and the wife paid the husband an equalization amount of $114,522.14. [ 5 ] The amount of $2,979.46 was withheld from the husband ’ s share pending resolution of the wife ’ s claim for heating costs and telephone service for her accommodations while the husband had exclusive possession of the matrimonial home, pursuant to an earlier Order of the court. [ 6 ] The husband ’ s pension was divided and his spousal support obligation reduced to $950.00 per month, effective January 1, 2009.

The husband ’ s monthly pension was reduced by $547.00 from $1,664.00 to $1,117.00. The wife received a lump sum of $90,880.31, which she invested in a RRIF. She has not been able to generate the same monthly income as the husband from her equal share of the pension. ISSUES [ 7 ] The issues pursuant to the Divorce Act are:

(1) The quantum and duration of prospective spousal support;

(2) Should there be an Order for spousal support for the period, April, 2007 until December, 2007;

(3) Should spousal support include an amount for payment of medical and life insurance coverage. [ 8 ] The issues pursuant to the Matrimonial Property Act are: Division of Assets, including: (

a) RRSPs; (

b) Severance package; (

c) Income Tax Refund received by husband post-separation; (

d) Canada Savings Bonds redeemed by husband post-separation; (

e) Distribution of DEVCO surplus funds (

f) Vehicle; (

g) Classification of the “ sawdust lot ” and/or whether it is exempt from division or subject to unequal division; (

h) Payment of funds held in trust, re heating costs and telephone account;

(

i) Contents; (

j) Division of debts. BACKGROUND [9] Throughout most of the marriage, the husband was employed as a payroll supervisor with the Cape Breton DevelopmentCorporation. This employment ended when DEVCO ceased operations. He was employed for a brief time with TESMA until theydownsized and closed their payroll department. He then obtained employment with Spiegal Brand Telemarking Group, where he wasworking at the time of separation. Spiegal also ceased operations. In January, 2009, he was hired as a casual employee by the CapeBreton Regional Hospital.

Initially, he worked full-time as a casual due to an employee’s prolonged absence from work. He has notworked since November, 2010. Future employment with the hospital is on an on-call basis. All of his employment has been within apayroll department, either as an employee or supervisor. [10] The wife is a licensed hairdresser and was employed in that field during the marriage. For many years prior to separation, sheoperated a hair salon at the Cove Guest Home. Prior to that, she operated her own hairdressing business from the matrimonial home.

Recently, she obtained employment as a casual with the Nova Scotia Liquor Commission. She has equipment and space to operate a hairsalon in her home, but does not use it. She does allow a friend to use the space on a limited basis without charging a fee. The parties are61 years of age. SPOUSAL SUPPORT [11] The husband submits that if spousal support is ordered, it should be limited to $300.00 or $400.00 per month to age 65, while thewife submits that spousal support should be in the vicinity of $1,400.00 per month without a termination date. [12] Entitlement to spousal support does not appear to be an issue.

Counsel for the husband submitted that the wife has notestablished a compensatory basis for support since her career was not interrupted by the role she assumed in the marriage and thechildren are adults living on their own. However, by suggesting that the amount and duration of spousal support should be fixed at$300.00 until age 65, there seems to be an acknowledgment of the wife’s need for support. [13] To be clear, the wife has established entitlement to spousal support pursuant to

Section 15 of the Divorce Act and the decisionsof the Supreme Court of Canada in Moge v. Moge , [1992] S.C.R. 813 and Bracklow v. Bracklow, (SCC), [1999] 1S.C.R. 420. This was a long-term marriage. The family structure throughout was that the husband was the family’s primary wage-earner and the wife a secondary wage-earner. On the breakdown of the marriage, the wife was clearly disadvantaged economically. Thehusband remained in the home. He had full access to his employment income and pension income, which he did not share with the wifeafter separation until the court issued an Interim Order.

He removed the wife from his medical plan when he knew she was prescribedmedication and had limited means to purchase it. The wife’s standard of living was significantly reduced in comparison to the husband’son the breakdown of the marriage and the standard of living enjoyed by the parties during their marriage. [14] The wife’s limited income and resources after separation did not provide the means necessary to adequately support herself. The husband had the ability to pay support.

He had employment income of approximately $40,000.00 and pension income ofapproximately $20,000.00 in 2007, while the wife’s income was in the vicinity of $14,000.00 per year. [15] Throughout the marriage, the husband paid all the household bills, except groceries and, in later years, a telephone account. He benefited greatly from the largess of his wife’s family. He controlled access to credit cards, which were solely in his name.

Themarriage relationship was one in which the wife was clearly dependent on the husband’s means for her personal support. [16] Interim spousal support of $1,500.00 was ordered effective December 1, 2007. The wife is entitled to support for the seven (7)month period prior to December 1, 2007. The wife needed support during this period of time, the husband was aware of her need and hehad the ability to pay. The husband is ordered to pay the wife lump sum spousal support of $8,000.00 for this period.

The lump sumamount was calculated by determining a gross amount of $10,500.00 (7 months @ $1,500.00) and reducing that amount by notionalincome tax payable by the wife of 24% (or $2,500.00).

[ 17 ] I have reviewed the parties ’ circumstances since their separation in 2007, including their means and needs. The husband ’ s income since separation was: (a) 2008 - $57,364.00, consisting of $32,364.00 employment income; $19,974.00 pension income; $4,479.00 Employment Insurance; and $547.00 other. (b) 2009 - $61,495.00, consisting of $19,246.00 employment income; $13,746.00 pension income; $12,538.00 EI benefits; and $15,965.00 withdrawn from RRSPs. (c) 2010 - $56,743.00, consisting of $28,088.00 employment income; $13,815.00 pension income; $8,898.00 EI benefits; $619.00 from Canada Pension Plan and $5,324.00 withdrawn from an RRSP. (

d) The pension income reported by the husband for income tax purposes is $3,024.00 greater than the amount he actually receives. The husband took out a loan prior to separation to purchase pensionable years, which both parties benefit by way of the pension division. The husband ’ s pension is reduced by $252.48 per month, which reflects the loan payment. However, the husband receives a T4 for the total amount of pensionable earnings including the amount deducted for the loan and pays income tax on the full amount. (

e) The husband ’ s basic pension entitlement will be reduced at age 65, when he begins receiving Canada Pension benefits. It is unclear if his employment pension will be reduced prior to age 65 now that he is receiving Canada Pension benefits. (

f) The husband has been paying spousal support of $950.00 per month since January, 2009. [ 18 ] The husband redeemed $21,000.00 in RRSPs after separation and he sold his interest in two (2) properties to the wife for approximately $114,500.00. He purchased a more modest home with his partner. [ 19 ] The husband has been in receipt of Employment Insurance benefits in the amount of $457.00 per week since November, 2010. He was unemployed at the time of the April court hearing. He expects to earn considerably less income in the future because the employee he was replacing has returned to work.

In addition to receiving EI benefits, he is receiving pension income from DEVCO and retirement benefits from the Canada Pension Plan. He is also sharing expenses with a partner. [ 20 ] The husband ’ s total household expenses were listed at $4,500.00. His share after deducting his partner ’ s contributions was fixed at $3,548.00. The monthly expenses includes $800.00 for repayment of debt, $252.00 for the pension loan and $680.00 for a vehicle loan, which is almost paid off. His income was fixed at $3,626.00. There was no breakdown showing the sources of this income.

This left him a surplus of $78.00 before income tax and a deficit of $292.00 after provision for income taxes. There was no provision for spousal support in his budget. [ 21 ] The wife submits that, in determining the husband ’ s ability to pay support, the court should impute employment income of $30,000.00 a year in addition to his pension income.

According to counsel for the wife, the husband ’ s evidence that he is not able to earn a comparable income in the future is not credible because he has shown a total disregard for the wife ’ s need for support, an unwillingness to pay court ordered spousal support and he has shown an ability to find work earning $30,000.00 a year. [ 22 ] The wife ’ s income since separation was: (a) 2008 - $7,944.00 consisting of $6,972.00 from an RRSP; $229.00 in other income; and $743.00 from Social Assistance.

She also received $18,000.00 in spousal support payments, although most of this was paid in a lump sum late in the year, resulting in hardship to her.

(b) 2009 - $21,716.00 consisting of $288.00 in employment income; $11,745.00 from a RRIF and $9,683.00 in Social Assistance payments. She also received spousal support payments of $6,819.00. The husband was $6,118.20 in arrears in his spousal support obligation by December 31, 2009. The husband terminated the wife ’ s access to his medical plan, which added significantly to her basic financial needs. (c) 2010 - 20,081.00 consisting of employment income of $7,726.00 and $12,363.00 in payments from her RRIF. The withdrawals from her RRIF included an excess withdrawal of $9,722.00.

She also received spousal support payments of $10,610.45 in 2010. [ 23 ] At the time of the hearing, she was working as a casual employee with the Nova Scotia Liquor Commission. She was also receiving a small monthly amount from her RRIF and spousal support payments. She will be applying for a division of the husband ’ s Canada Pension Plan credits. [ 24 ] The wife ’ s monthly income of $670.79 included employment income of $469.00 and income from a RRIF of $201.79. Her monthly expenses totalled $2,488.72, leaving a monthly deficit of $1,817.93.

A significant amount of her monthly budget related to accommodation expenses. She is residing by herself in the former matrimonial home, which is a three-bedroom house. Her transportation costs are minimal. She owns a 1997 vehicle, which is in need of substantial repair. [ 25 ] Just prior to the date of the parties ’ separation in 2007, the wife received an inheritance of $30,000.00. Approximately $10,000.00 was placed in a RRSP registered in her name. The contribution was deducted for income tax purposes by the husband in order to receive an income tax refund.

The RRSP was redeemed by the wife after separation. [ 26 ] The husband ’ s interest in the lot adjacent to the matrimonial home which was purchased by the wife based on an appraised value of $25,000.00 was subsequently sold by her for $70,000.00. [ 27 ] The wife was able to purchase the husband ’ s interest in the matrimonial home for approximately $114,500.00.

Although there is no mortgage on the property, the wife borrowed funds from a friend, which will have to be repaid at some time in the future. [ 28 ] Counsel for the husband submits the wife could easily reduce her monthly accommodation expenses by selling the home and relocating to smaller accommodations. He submits it is not reasonable for her to expect to maintain the same lifestyle that the parties had prior to separation given their current limited resources or for the husband to contribute to that lifestyle when he can only afford less modest accommodations.

Counsel for the husband also submits that the wife has the ability to earn additional income by working full- time at minimum wage jobs if she does not want to continue her hairdressing business. Therefore, the court should impute income of $20,000.00 a year when determining her income earning capacity. [ 29 ] The wife received approximately $90,000.00 as her equal share of the husband ’ s pension, which was invested in a RRIF. The income received from this RRIF is minimal when compared with the monthly pension received by the husband from his share of the pension.

She has withdrawn approximately $20,000.00 from the RRIF in order to support herself, which reduces the monthly income she is able to generate from the RRIF. [ 30 ] Both counsel referred the court to the judgment of the Supreme Court of Canada in Boston v. Boston (2001), S.C.C. 43, which considered the issue of spousal support when there has been a division of pension. In Boston (supra) , the court determined the payor was able to reduce the spousal support payments on the basis that a pension now in pay was previously dealt with in the division of matrimonial property.

Boston (supra) is a recognized exception under the Spousal Support Advisory Guidelines in the sense that some or all of the pension income may be excluded from the formulas. [ 31 ] Counsel for the husband submits a determination of the amount of spousal support should be based on income and assets that were not equalized or divided previously since the wife would be getting the benefit of a share of the husband ’ s pension plan and also receive income from his divided share of the pension plan. [ 32 ] Boston (supra) also recognized that previously divided pensions can be viewed as a maintenance asset when a payee made reasonable efforts to use the equalized asset and the payor has the ability to pay support.

Counsel for the wife submits that she continues

to suffer economic hardship from their marriage breakdown. As a result, a husband ’ s pension income should be taken into account in fixing the amount of spousal support. [ 33 ] I have considered the condition of the spouses, their means, needs and other circumstances and the functions performed during their marriage, as required by

Section 15 of the Divorce Act . [ 34 ] Both counsel have requested the court impute income to the other party when determining the amount of spousal support. A spouse ’ s means includes not only their income and capital, but also their capacity to earn an income. In Saunders v.

Saunders , 2011 NSCA 81 , the court held that failing to impute income to a spouse in keeping with his/her capacities and abilities was an err in law. [ 35 ] While the husband may not like paying spousal support in the amount ordered by the court previously, there is no evidence that he is avoiding employment or that he is working at less than his capacity or ability. He has been fortunate to obtain full-time work in the past and the wife has shared the benefit of that income through an Interim Order. He is employed on a casual basis. He has not received any calls to work in approximately five (5) months.

I am satisfied his future employment income and EI benefits will be less than what he has earned in the last several years. His current EI benefits indicate an annual income of $23,000.00 per year. He would not receive EI benefits when called out for work. Future EI benefits would also be reduced because he is working fewer hours. I believe it is reasonable to impute income of $23,000.00 a year, over and above his pension income, for purposes of determining spousal support. [ 36 ] The wife is not working to her capacity or abilities.

She reports an annual income from her clerk position at the Nova Scotia Liquor Commission of $7,000.00 to $8,000.00 per year. She is capable of earning income from hairdressing. She chooses not to use her equipment or the space in her home, nor charge rent to her friend, who uses the space on occasion. She has not satisfied the court on a balance of probabilities there are any physical or mental issues that would prevent her from working as a hairdresser at least part-time. She was earning approximately $14,000.00 a year prior to separation.

Therefore, I impute income of $15,000.00 per year for purposes of determining the amount of spousal support. [ 37 ] I reviewed the budgets prepared by each of the parties. In a sense, the wife is asset-rich and income-poor. Her accommodation expenses are not reasonable given her circumstances. Her transportation costs are minimal because she is not able to purchase a motor vehicle. I am satisfied she could reduce her monthly expenses by $200.00 by moving to smaller accommodations.

Selling the matrimonial home would also free up additional capital for her to purchase a motor vehicle and meet some of her other needs. I understand her attachment to the ancestral lands and matrimonial home but unfortunately it comes with a cost. [ 38 ] At the same time, I am satisfied the husband ’ s monthly budget is over-stated. It could be reduced by the amount of the motor vehicle loan which is almost paid out; the debt payment amount could be reduced and his income tax expense will be less due to the deduction he will receive for spousal support payments.

In addition, his partner can contribute more than what he is reporting. The deduction for the pension loan will be accounted for through a reduction in his pension income when considering his means. [ 39 ] In my opinion, this is an appropriate case in which to include the husband ’ s pension income when determining spousal support, even though it has previously been divided as a matrimonial asset. The pension income that the husband receives from his share of the pension is significantly greatly than the income the wife is able to generate from her equal share of the pension.

The wife has made reasonable efforts to use the pension funds received, and the husband has the ability to pay support without impacting his needs. It is also appropriate, given the length of their marriage and with both approaching retirement age that they should enjoy a comparable standard of living on the dissolution of their marriage. The husband ’ s gross pension is approximately $13,800.00 a year. He is required to pay approximately $3,000.00 a year on a loan which was used to purchase additional pension benefits shared by both.

Therefore, the husband ’ s pension income to be used in determining the amount of spousal support is set at $10,800.00 a year. [ 40 ] The husband ’ s Canada Pension benefits will be shared equally. The wife ’ s share will assist in meeting her monthly needs. [ 41 ] I have considered the Spousal Support Advisory Guidelines . I have fixed the husband ’ s income at $33,800.00, including employment income of $23,000.00 and pension income of $10,800.00 and the wife ’ s income at $17,400.00, including employment income of $15,000.00 and income from her RRIF of $2,400.00 for purposes of determining the range of support.

Canada Pension Plan benefits were excluded. The suggested range is $512.50 to $683.00 per month.

[42] I am not including additional payments for medical and life insurance coverage. The wife’s budget includes medication costs,which were considered in fixing her reasonable needs and the husband’s reasonable contribution to her needs. There was no evidence asto the amount of life insurance coverage required. [43] I grant the wife spousal support of $600.00 per month, effective January 1, 2011. [44] I am not prepared to fix a termination date. This was a lengthy marriage and the husband has not indicated any intention toretire from work in the near future.

However, it may be appropriate that there be a review of the spousal support order at age sixty-five(65) since there will be a reduction in the husband’s pension at that time and other pensions will become available to the parties. Eitherparty may bring an Application to Vary prior to age 65 on proof of a material change in circumstances. MATRIMONIAL PROPERTY ACT ISSUES RRSPs [45] At the time of separation, both the husband and wife owned RRSPs. Both parties redeemed their RRSP funds after separation.

The wife’s position is that her RRSPs were purchased from inherited funds and, therefore, are exempt assets pursuant to Section 4(1)(a)of the Matrimonial Property Act, while the husband’s RRSPs were accumulated during the marriage and should be divided equally. Thehusband’s position is that the RRSP registered in the wife’s name, although purchased from inherited funds, were converted to amatrimonial asset and their value should be divided equally between the parties. [46] The husband’s RRSPs were acquired during the marriage and are subject to an equal division.

It would have been preferable ifthere had been an equal division by way of tax free rollover. However, the husband incurred a tax liability on the redemption and Iwould discount the value of the RRSPs by 30% for purposes of equalization. Neither party provided the court with a suggested discountrate. The husband is required to pay the wife ½ of the discounted value of the RRSPs. [47] I find the wife’s RRSPs are exempt from division pursuant to Section 4(1)(

a) of the Matrimonial Property Act. It is clear theRRSP was purchased from inherited funds just months before the date of separation. They were registered in the wife’s name only. Theminimum extent to which these funds were used for the families benefit does not deprive them of their exempt status. The income taxbenefit received by allowing the husband to claim the contribution to the wife’s RRSPs is a matrimonial asset but, in my opinion, theRRSP is not. [48] However, if I am incorrect in concluding the RRSPs are excluded from division, I am satisfied there should be an unequaldivision of this asset in favour of the wife pursuant to

Section 13(e). In MacIsaac v. MacIsaac, 1996 NSCA 128 , 1996Carswell NS, 177 at paragraphs 32-35 the court stated: 32 It is reasonable to infer that both the amount of the contribution and the fact that it was made so close to the time ofseparation, when considered in the context of the length of the marriage, moved the trial judge to make the unequal division. 33 In Lawrence v. Lawrence (1981), (NS CA), 47 N.S.R. (2d) 100 (N.S.C.A.), Hart, J.A., for the court, wrote atp. 115: There are thirteen statutory reasons given in this

section to guide the judge in exercising his discretion and he may act upon anyone of these. (emphasis added) 34 This statement was recently approved by this court in Mosher v. Mosher (1995), 1995 NSCA 65 , 140 N.S.R. (2d) 40(C.A.), per Pugsley, J.A. at p. 60. 35 While s. 13(

e) is more commonly engaged in marriages of short duration, where one spouse has brought significantly moreassets than the other into the marriage, it is not expressly restricted to those circumstances. Where there are contributionsoutside the normal scope of a marriage, either in terms of time or amount, the court is invited to consider whether such warrants

a departure from equal division. The starting point is equal division but the statute clearly contemplates otherwise in certain circumstances. The court is invited, in those limited circumstances to redress the unfairness through an unequal division. [ 49 ] The RRSP was purchased from inherited funds received shortly before separation. In these circumstances a division of this asset in equal shares would be unfair or unconscionable taking into account the date and manner of their acquisition. SEVERANCE PACKAGE [ 50 ] The husband is entitled to a severance package from DEVCO.

It has not been paid because there has been no agreement on the amount of severance. The husband acknowledged that the severance funds are matrimonial assets and, when paid, are divisible on an equal basis between the parties. The amount, when received, would be taxable income to the husband. He submits the net amount after tax implications should be the amount divisible.

The last amount offered by DEVCO was $87,092.97 (gross) less income tax estimated at $26,128.19 for a net amount payable of $60,965.78. [ 51 ] The wife ’ s position is that the court should order ½ of the gross amount payable to her and she would assume responsibility for the taxes associated with her ½ share. The husband has commenced a law suit with respect to the severance payment but has not actively pursued the law suit for several years. The wife submits that the court should order the husband to pay her ½ of the net proceeds proposed by DEVCO.

The husband would be entitled to keep anything he receives over and above that amount in any final settlement with DEVCO. [ 52 ] The wife was not an employee of DEVCO and, therefore, the court is not aware of any authority it has to order DEVCO to pay her ½ of the gross amount of the husband ’ s severance package. No authority was advanced by the wife to support this proposal. [ 53 ] There is evidence from DEVCO that they are prepared to pay a gross severance payment of $87,092.97, which would be reduced by an income tax liability of $26,128.19 resulting in a net payment of $60,965.78.

The husband has retained separate legal counsel to contest this payment but several years have passed without the matter being pursued. I ’ m prepared to order that the wife is entitled to a judgment in the amount of $30,482.89 representing her share of the net amount payable plus prejudgment interest on her share from today's date until the date of payment. The amount is due and payable when the husband receives the severance package payment. INCOME TAX REFUND/CANADA SAVINGS BONDS/DEVCO SURPLUS [ 54 ] The income tax refund of $1,233.04 and Canada Savings Bonds redemption of $950.00 are matrimonial assets.

The husband shall pay the wife $1,091.00 as her equal share of the value of these assets. The DEVCO surplus funds distribution, although received after separation, relates to a benefit earned prior to separation and, therefore, is a matrimonial asset. However, the gross amount of the payment is subject to income tax payable by the husband and, therefore, the wife is entitled to ½ of the net amount after provision for income tax payable by the husband.

Since there was no evidence of the actual tax rate applicable to the surplus funds, I fix a notional tax rate of 30% for purposes of determining the net amount to be divided equally between the parties. VEHICLE [ 55 ] The parties purchased a Honda motor vehicle in 2006. At the time, they owned a Chevrolet Impala. There was a loan balance of approximately $13,000.00 outstanding with respect to the Impala which was rolled into the loan taken out to purchase the Honda, resulting in a new loan balance of $40,042.13 as of July 4, 2006.

The balance owing on the car loan was reduced to $29,253.48 at the date of separation. After separation, the husband sold the Impala for approximately $6,000.00. According to the husband, the funds received from the sale of the Impala were used to pay down the existing vehicle loan. The husband kept possession of the Honda after separation. He also assumed responsibility for payment of the debt related to the vehicle.

However, he submits that $7,000.00 of the loan should be considered matrimonial debt to be divided between the parties since it related to the Impala - the motor vehicle the parties ’ used prior to separation. [ 56 ] The wife ’ s position is that at the time of separation, the value of the Honda motor vehicle equals the value of the outstanding loan, given the reduction in the loan and, therefore, there should be no division of this debt.

The wife ’ s position is that the husband did not provide proof of the value of the Honda at the date of separation or any documentary evidence to confirm the price received by him

from the sale of the Impala. The wife is agreeable to the husband keeping possession of the motor vehicle without division of its ’ value, provided he assumes sole responsibility for the full amount of the New Waterford Credit Union loan. [ 57 ] I have no evidence of the values of the Honda or Impala at the time of separation. However, there is evidence from the husband the Impala was sold for $6,000.00 one year after separation. There was no documentation provided to support the sales price.

I was not able to determine if the value of the Honda and Impala together equals, is more than, or less than the balance of the outstanding vehicle loan at the time of separation. Both vehicles and responsibility for the loan were retained by the husband. The husband has not satisfied the court on a balance of probabilities that the value of the vehicles retained by him were $7,000.00 less than the loan balance at date of separation.

DEBTS [ 58 ] The husband claims the following additional debts are matrimonial debts: Citibank Mastercard $2,571.17 CIBC Classic Visa $1,808.73 Capital One Visa $1,822.95 CIBC Platinum Visa $3,451.61 Royal Bank Line of Credit $2,500.00 TOTAL $12,154.46 [ 59 ] The Royal Bank Line of Credit of $2,500.00 relates to a Line of Credit taken out to pay outstanding property taxes for a period prior to the date of separation. This Line of Credit balance is a matrimonial debt. [ 60 ] In October, 2007, the husband used the existing Line of Credit to pay off credit card debt to reduce the interest rate on that debt.

The husband has been making interest payments on this debt since the date of separation. The total amount of interest paid on the Line of Credit since paying off the credit card debt is $2,783.23, which he claims is a matrimonial debt to be divided equally between the parties. [ 61 ] The husband is also seeking an equal division of expenditures he paid while maintaining the home prior to it being conveyed to the wife.

These expenditures, which amounted to $5,213.87, included furnace repairs, environmental services, replacement of glass and front door, chimney inspection and property taxes of $4,036.55 from date of separation until date of transfer of property to the wife. The wife is seeking a contribution from the husband for occupation rent representing his exclusive possession of the property for eighteen (18) months.

In my opinion, these claims off-set one another and the court declines to order a division of the expenditures claimed by the husband or award an amount for occupation rent as claimed by the wife. [ 62 ] The wife is aware the husband incurred debt related to the purchase of a bedroom set, which he kept after separation. She believes the Capital One Visa balance represents the pay-out of this account owing to Fast Furniture where the bedroom set was purchased.

She has no knowledge whatsoever of the remainder of the credit card debt held by the husband and disputes the characterization of this debt as matrimonial debt. Further, she says that the actual balances as of the date of separation for the Citibank Mastercard and the Capital One Visa are less than the amounts claimed by the husband.

[ 63 ] The wife ’ s submission is that the husband should be responsible for the payment of all of the debt because he has a higher income and, therefore, greater ability to service the debt than her. Further, the wife ’ s submission is that there ’ s been an unequal division of the household contents in favour of the husband, which should offset any obligation she may have respecting the debt. [ 64 ] The husband filed credit card statements covering the period that included the date of separation which I determine to be April 29, 2007.

This is the date of separation in the husband ’ s Petition for Divorce and accepted by the wife in her Answer. Aside from the Capital One Visa statement, there was no identification of the nature and amount of the charges that make up the credit card balances. The Capital One Visa balance was $377.30 as of April 10, 2007 and $1,822.95 on May 10, 2007. Some of the charges incurred after April 10 th were restaurant charges for a family dinner in Moncton and fuel delivery charges for the matrimonial home. Other charges were not satisfactorily explained as matrimonial debt.

Also, $230.00 in charges were added after the date of separation. [ 65 ] The husband claims all charges included in the credit card balances were incurred to support the families ’ lifestyle, which included many trips abroad, as well as several cruises. The wife claims she was required to contribute part of her income in cash to the husband to cover her share of the costs of these vacations and trips. The husband had complete control of all the credit cards. She had no access to them.

She was not shown the credit card statements or the charges that appeared on these statements. [ 66 ] The onus is on the husband to satisfy the court on a balance of probabilities that the credit card debt is matrimonial debt. He has not done so. Likewise, the interest charges he claims as matrimonial debt relate mainly to the credit card balances which he transferred to a Line of Credit. While a small portion of the Line of Credit includes matrimonial debt, most of the balance relates to credit card debt which the court determined was not matrimonial.

Therefore, the court declines to order a division of the interest charges claimed by the husband. [ 67 ] I fix the amount of matrimonial debt at $3,700.00, consisting of a Line of Credit of $2,500.00 and the Capital One Visa at $1,200.00. I have reduced the Capital One Visa by $200.00 for post-separation charges and two other charges of $199.00 each, which I did not consider to be matrimonial. SAWDUST LOT [ 68 ] The only real property remaining to be divided is the sawdust lot. This land is adjacent to the matrimonial home property.

A saw mill was operated on the land in question and there ’ s an issue as to whether it has any marketable value. The wife submits that there is little or no value to the land, half of which is covered by sawdust deposits. The land was received from her family approximately three (3) years prior to separation. Title to the land was registered in both the husband ’ s name and the wife ’ s name.

The wife submits that the land should be exempt from division as an inherited property or subject to an unequal division in her favour based on the date and manner it was acquired, given the minimal value of the property. [ 69 ] Further, counsel for the wife submits that the husband has benefited greatly from the generosity of her parents as a result of gifts/inheritances made to her over the years. The wife stated that the parties lived in a home owned by her father for seventeen (17) years without payment of any rent. In addition, her parents gifted them the land on which they constructed the matrimonial home.

The home was constructed with mortgage financing which was paid out over twenty (20) years while the parties were living together as a family. [ 70 ] Mr. Walter Sawlor is a real estate appraiser. He provided an appraisal of the matrimonial home property and a second lot when the husband conveyed his interest to the wife. He could not put a value on the sawdust lot given the need to clean up the property. The cost of an environmental assessment would add significantly to the cost of the appraisal. However, he did not indicate it was without value.

The husband is prepared to pay the wife $5,000.00 for the lot. [ 71 ] The sawdust lot was gifted to both parties by the wife ’ s parents, along with two adjacent lots which have already been divided. I am satisfied that this lot is also a matrimonial asset. The value of the property cannot be determined based on the evidence presented. I am not prepared to order an unequal division as requested by the wife. However, I am satisfied the wife should have the first opportunity to purchase the husband ’ s interest in the property for $5,000.00, which is the price he offered to pay for her interest in the property.

If this is not acceptable, the property is to be listed for sale and the wife given first opportunity to match any reasonable offer received for the property.

MONIES HELD IN TRUST [ 72 ] The wife submitted receipts showing she incurred heating costs and telephone service costs of $2,979.46 while residing in a relative ’ s cottage, during the time the husband had exclusive possession of the matrimonial home. I am satisfied those costs were incurred and are reasonable. Pursuant to the Interim Order issued by this court in December, 2007, this amount is to be paid to the wife to reimburse her for the costs incurred. CONTENTS [ 73 ] When the husband vacated possession of the matrimonial home, he removed some of the contents, without the wife ’ s consent.

The parties had been attempting to arrive at a division of the contents in specie but were unable to agree on someone to assist in them with the division. The husband said he removed some items from the home to help furnish his new accommodations. His position is that the value of the items left behind were greater than the value of the items taken by him. [ 74 ] The wife disagrees. She said that many of the items left behind were broken, including a bed and some kitchen appliances.

She disagrees with the way in which the way the husband took the items from the home, leaving her no choice, contrary to previous court directions that he not remove any contents from the home. Counsel for the wife submits that the unequal division of the household contents in favour of the husband should be offset by any obligation she may have respecting matrimonial debt. [ 75 ] It is now not practical to order the parties to divide the contents of the home in species .

I accept the wife ’ s evidence that on her moving into the home, a number of items left behind were not in working order and had to be replaced by her. The husband should have sought direction from the court when the parties were unable to agree on the division of contents. The parties are to retain the household contents that each currently have in their position and the husband is to pay the wife $1,000.00 to equalize the value of those contents. CONCLUSION [ 76 ] I am not able to fix an exact equalization amount because further calculations are required for some of the matrimonial assets.

Counsel are to prepare an equalization chart in accordance with the decision. If they are unable to agree on the amount, they are to obtain a Chambers ’ date and the court will determine the amount of the equalization payment. [ 77 ] Counsel may make submissions on costs within thirty (30) days; otherwise each party will be responsible for their own costs. [ 78 ] Pursuant to the Divorce Act , the court has determined that the grounds have been proven, there is no possibility of reconciliation and all jurisdictional and procedural requirements have been met. A Divorce Order shall issue, accordingly. J.