Kuzuchar v Kuzuchar, 2023 ABKB 135

Court of King’s Bench of Alberta Citation: Kuzuchar v Kuzuchar, 2023 ABKB 135 Date: 20230308 Docket: 4801 162341 Registry: Calgary Between: Collette Margaret Ann Kuzuchar Plaintiff - and - Kevin William Kuzuchar Defendant _______________________________________________________ Reasons for Judgment of the Honourable Justice M.A. Marion _______________________________________________________ Table of Contents I. ... Introduction . 2 II. . Procedural Background . 2 III. The Record and Non-Disclosure of Records . 4 IV. Issues . 5 V. . Analysis . 5 A.

What is an Appropriate Final Distribution of Matrimonial Property in this Matter? . 5 1. Property Owned by the Parties at Trial 5 2. Sections 7(2) and 7(3) of the MPA .. 6 3. Considerations under Sections 7(4) and 8 of the MPA .. 6 4. Factual Findings to Inform

Section 7 and 8 Considerations . 8

5. Assessment of the Parties’ Property and Arguments . 16 6. Conclusion re Matrimonial Property Division . 29 B.

Section 7 Expenses . 29 1. Ms. Kuzuchar’s

Section 7 Expense Claim .. 31 2. Mr. Kuzuchar’s

Section 7 Expenses Claim .. 33 3. Conclusion re

Section 7 Expenses . 35 C. What, if any Order Should be Made respecting

Section 9 Child Support? . 35 VI. Conclusion . 37 I. Introduction [ 1 ] These reasons follow a 2-day trial in this divorce action, which took place over 8 years after the parties separated. The parties were married in 2003, separated in July 2013, and divorced in 2021. By the time of trial, the only remaining issues between the parties were: (1) final matrimonial property distribution; (2) finalization of

section 7 expenses under the Federal Child Support Guidelines SOR/97-175 ( Guidelines ); and (3) a recalculation of child support effective July 2022. II. Procedural Background [ 2 ] The parties began cohabiting and were married on May 31, 2003. Around that time, they purchased and began living in the matrimonial home ( Home ). They had two children: a daughter born in March 2004 and a son born in June 2006. The marriage broke down and the parties separated in July 2013. After separation, Mr. Kuzuchar continued to live in the Home, Ms.

Kuzuchar rented accommodations, and the parties began shared parenting on a week-on, week-off basis. [ 3 ] In September 2014, Ms. Kuzuchar commenced divorce and matrimonial property proceedings ( Action ), seeking a division of matrimonial property and occupation rent related to Mr. Kuzuchar’s continued occupation of the matrimonial home. Mr. Kuzuchar defended and counterclaimed for an unequal property division, including due to alleged gambling debts incurred by Ms. Kuzuchar during the marriage. [ 4 ] In March 2015, Ms. Kuzuchar filed an application for partition and sale of the Home. Mr.

Kuzuchar opposed the application as he wanted to continue living there. On July 9, 2015, Justice McCarthy granted a “Without Prejudice Order” ( 2015 Order ), which gave Mr. Kuzuchar an opportunity to refinance the Home so he could continue to live there. He did not obtain refinancing. The Home was listed for sale but did not sell, and Mr. Kuzuchar continued living there. [ 5 ] The matter did not come back to court until November 2019, when Ms. Kuzuchar filed a Notice to Disclose/Application returnable on December 20, 2019. On December 19, 2019, Mr. Kuzuchar filed his own Notice to Disclose/Application.

On December 20, 2019, Justice Hollins set the parties’ 2018 Line 150 incomes and granted Ms. Kuzuchar leave to apply for divorce pursuant to rule 12.50 of the Alberta Rules of Court , Alta Reg 124/2010 ( Rules ). [ 6 ] In January 2020, Ms. Kuzuchar filed a desk divorce application pursuant to rule 12.50(3). In February 2020, Ms. Kuzuchar filed her Disclosure Statement, which Mr. Kuzuchar acknowledged he was satisfied with at the time. There is no evidence that Mr. Kuzuchar has ever filed a Disclosure Statement. [ 7 ] In April 2020, Justice Kenny rejected Ms. Kuzuchar’s desk application for divorce because Ms.

Kuzuchar had not obtained Mr. Kuzuchar’s consent and Justice Kenny was of the view that Justice Hollins had not dispensed with the need for his consent. [ 8 ] In June 2021, Ms. Kuzuchar applied in Family Docket Court for her divorce judgment, and to sell the Home. [ 9 ] On July 16, 2021, Justice McCarthy ordered the sale of the Home and provided which real estate agent would be used as well as directions to ready it for sale. He also granted Ms. Kuzuchar leave to apply for divorce pursuant to rule 12.50 without Mr. Kuzuchar’s consent. [ 10 ] On August 5, 2021, Ms.

Kuzuchar filed a Notice to Attend Docket Court, seeking the court’s assistance in enforcing Justice McCarthy’s Order for the sale of the Home. The parties attended Family Docket Court on August 12, 2021 and Justice Kachur granted a Consent Order which required Mr. Kuzuchar to sign the listing agreement with the realtor, and provided that if he did not, Ms. Kuzuchar would have sole discretion and power to dispose of the Home without further consent or consultation.

The sale of the Home closed in October 2021. [ 11 ] On August 13, 2021, Justice Kenny granted a Divorce Judgment and Corollary Relief Order ( Divorce Judgment ), which provided for 50/50 shared parenting and incorporated by reference a parenting agreement ( Parenting Agreement ). This Order noted the parties’ guideline incomes to be almost equal, but reserved child support. [ 12 ] In October 2021, Mr. Kuzuchar filed a Notice to Disclose (Desk Application), and in November 2021, Ms. Kuzuchar filed her

Disclosure Statement in response. [ 13 ] On November 23, 2021, the parties attended a Pre-Trial Conference with Justice Kenny, following which the matter was set down for trial and confirmed by the parties on August 17, 2022. III. The Record and Non-Disclosure of Records [ 14 ] The trial was on November 8 and 9, 2022. The parties each presented and marked a number of exhibits.

Further, the parties agreed to adopt their evidence from several of their affidavits that had been filed in the Action on the basis that those affidavits would be part of the evidence at the trial upon which they could each be cross-examined, and that each party would reserve the right to challenge the use or weight of that evidence. The evidence provided was incomplete in many respects, and at times involved significant hearsay evidence (none of which was objected to). [ 15 ] It also became obvious at trial that the parties have not fully honoured their disclosure obligations.

For example, there was no response of Mr. Kuzuchar on the court file to the November 2019 Notice to Disclose/Application returnable on December 20, 2019. At the same time, he pressed Ms. Kuzuchar for more records. There is some evidence he may have provided some disclosure to Ms. Kuzuchar around the time of the November 2021 Pre-Trial Conference, but what he provided is not clear.

Neither party filed a pre-trial application to obtain the court’s assistance to ensure proper disclosure before the trial in November 2022. [ 16 ] It also appears that neither party followed the August 2021 Divorce Judgment that required the parties to exchange their income tax information before June 2022 and required Mr. Kuzuchar to provide information about his corporation, 1265504 Alberta Ltd ( Corporation ), as required by the Guidelines . [ 17 ] The result of all of this is that the Court has a shortage of up-to-date or complete tax information from the parties, back-up documentation respecting Mr.

Kuzuchar’s assets and income, or appropriate information about the Corporation. While courts must take into account the limitations of self-represented parties, they are still expected to familiarize themselves with relevant legal practices and procedures in preparing their case: Aski Construction Ltd v Markos , 2017 ABCA 423 at para 17 ; V v V , 2022 ABKB 678 at para 10 . [ 18 ] I raised the lack of documentation with the parties.

Neither applied to adjourn the trial, and indicated expressly, or implicitly by continuing the trial without objection, that they were prepared to proceed notwithstanding the imperfect information. They both seek closure of matters so they can move on. [ 19 ] It is not uncommon for courts to have imperfect or incomplete information in matrimonial property matters, particularly where the parties are self-represented or where there has been a lengthy separation before final property distribution.

As a matter of practicality, efficient use of judicial and court resources, and to support the principle of finality, courts may decide to “do the best they can” with the evidence they have: Stalzer (Estate) v Stalzer , 2019 ABQB 658 at para 61 ; Ross v Ross , 2007 ABQB 167 at paras 60-61 ; Van Oirschot v Van Oirschot , 2010 ABQB 211 at paras 88-89 ; White v White , 2022 ABQB 322 at para 85 . [ 20 ] Further, courts have numerous tools to deal with non-disclosure, including without limitation exercising a discretion to draw an adverse inference against the non-disclosing parties, or imputing income: Samimi v Esfahani , 2022 ABKB 795 at para 137 ; Wolf v Wolf , 2019 ABQB 200 at para 52 ; Bentley v Bentley , 2017 ABQB 53 at para 69 ; Heuft v Bramwell , 2021 ABQB 642 at paras 48 and 52 ; Stockall v Stockall , 2020 ABQB 229 at para 53 ; McPherson v McPherson , 2012 ABQB 581 at para 99 ; Budd v Anest , 2002 ABQB 295 at para 37 ; Guidelines , sections 19(1) (

f) and 23 . IV. Issues [ 21 ] Based on the pleadings, the Pre-Trial Conference Report, and the evidence and positions of the parties expressed during the trial, the issues to be determined in this trial are as follows: (

a) What is an appropriate final distribution of matrimonial property in this matter? (

b) What expenses are each party entitled to claim as retroactive

section 7 expenses pursuant to

section 7 of the Guidelines ? (

c) What, if any, order should be made respecting child support under

section 9 of the Guidelines ? V. Analysis A. What is an Appropriate Final Distribution of Matrimonial Property in this Matter? [ 22 ]

Section 39 of the Family Property Act , RSA 2000 c F-4.7 , as amended, provides that the Matrimonial Property Act , RSA 2000 c M-8 ( MPA ) continues to apply to parties who were living separate and apart immediately before January 1, 2020. In this case, the parties have been living separate and apart since 2013 and the MPA applies to the distribution of their matrimonial property. [ 23 ] The Court of Appeal set out a four-step approach for dividing matrimonial property in Hodgson v Hodgson , 2005 ABCA 13 at paras 19-21 ; Stalzer at para 18 ; O’Kane v Lillqvist-O’Kane , 2022 ABKB 661 at para 19 .

Effectively, this involves the following steps: (1) determining all the property owned by the parties at trial; (2) discerning the property that is exempt from distribution under section 7(2) of the MPA or that can be traced to section 7(2) property, and excluding its value at the time of acquisition from the

distribution; (3) determining what, if any, property falls under section 7(3) of the MPA and determining how it should be justly andequitably shared; and (4) dividing the balance of the remaining assets equally, unless it would be unjust and inequitable considering thefactors in

section 8 of the MPA. [24] Absent agreement of the parties, matrimonial property is divided as of the date of trial: Stuve v Stuve, 2019 ABCA 142 at para10. 1.

Property Owned by the Parties at Trial [25] When there is a lengthy delay between separation and divorce, and then between divorce and matrimonial propertydistribution, by the time of trial the connection of the parties’ assets owned at trial to the marriage can become quite tenuous or there canbe very little left to divide: Stuve at paras 1 and 7; White at para 73; Sochowski v Sochowski, 2020 ABCA 59 at paras 20-23. [26] In this case, the assets owned by the parties at trial included the proceeds of sale of the Home, bank accounts, vehicles,RRSPs, and Mr. Kuzuchar’s shares of the Corporation. [27] Ms.

Kuzuchar holds Registered Education Savings Plans (RESPs) for the children. Mr. Kuzuchar does not seek to divide theRESPs or otherwise factor them into the matrimonial property distribution. RESPs are generally not considered matrimonial property butrather an asset being held in trust for children: VLG v WAJ, 2020 ABQB 105 at paras 34-37; Sorken v Sorken, 2010 CarswellAlta 2736(Alta QB), affirmed 2011 ABCA 296. The RESPs will not be valued or shared by the parties in the matrimonial property distribution. 2.

Sections 7(2) and 7(3) of the MPA [28] Neither party claimed or gave evidence of any exemptions under section 7(2) of the MPA, which also means that sections 7(3)(

a) and (

b) are not engaged. There is no evidence of any property acquired in this case by a gift from the other spouse, so section 7(3)(d)is not engaged. [29] However, as will often be the case where there is a delay from divorce to property division, section 7(3)(

c) of the MPA isrelevant here. It provides that: The Court shall, after taking into the matters in

section 8 into consideration, distribute the following in a manner it considers just andequitable: (

c) property acquired by a spouse after a decree nisi of divorce, a declaration of nullify of the marriage, a judgment of judicialseparation or a declaration of irreconcilability under the Family Law Act is made in respect of the spouses; [30] Further, in appropriate cases, what a party purchases with his or her income after separation should not be open to furtherdistribution: White at para 76; MPA,

section 8(f). [31] There is no formula for applying the

section 8 factors: Jensen v Jensen, 2009 ABCA 272 at para 8. In this case, anappropriate approach is to consider the third and fourth steps outlined in Hodgson together. Accordingly, I will review the considerationsunder sections 7(4) and 8 of the MPA, I will set out my factual findings which provide context for those considerations, and then I willaddress the appropriate property distribution in light of those considerations, the evidence, and the parties’ positions. 3.

Considerations under Sections 7(4) and 8 of the MPA [32] Section 7(4) of the MPA provides that if property being distributed is property acquired during the marriage and is notproperty referred to in subsections (2) and (3), the court shall distribute that property equally between the spouses unless it appears that itwould not be just and equitable to do so, taking into account the considerations in

section 8 of the MPA. That is, the presumption of equaldivision does not end the analysis; the

section 8 factors must be considered: Stuve at para 11; Jensen at para 18. [33] Displacing the presumption of equal distribution through the court’s discretionary function is not reached lightly and shouldonly be rebutted in the “clearest of cases”.

There must be some real imbalance in each party’s contribution or as found in the factorslisted, or a clear case of inequity because unequal distribution is the exception not the rule: Stuve at para 13; Jensen at paras 18-23;Mazurenko v Mazurenko, 1981 ABCA 104 at para 20; LeBlanc v LeBlanc, (SCC), [1988] 1 S.C.R. 217, 47 D.L.R.(4th) 1 at 222-223. [34] As per Stuve at para 11, the factors include the contribution made by each spouse financially or to the welfare of the family.Other factors are more discrete and include whether property was acquired after separation, any agreements reached by the parties,previous distributions of property, and any dissipation of property to the detriment of the other spouse. [35]

Section 8 provides: 8. The matters to be taken into consideration in making a distribution under

section 7 are the following: (

a) the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as ahomemaker or parent; (

b) the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition,conservation, improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or bothspouses or by one or both spouses and any other person; (

c) the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to the

acquisition, conservation or improvement of the property; (

d) the income, earning capacity, liabilities, obligations, property and other financial resources (

i) that each spouse had at the time of marriage, and (ii) that each spouse has at the time of the trial; (

e) the duration of the marriage; (

f) whether the property was acquired when the spouses were living separate and apart; (

g) the terms of an oral or written agreement between the spouses; (

h) that a spouse has made (

i) a substantial gift of property to a third party, or (ii) a transfer of property to a third party other than a bona fide purchaser for value; (

i) a previous distribution of property between the spouses by gift, agreement or matrimonial property order; (

j) a prior order made by a court; (

k) a tax liability that may be incurred by a spouse as a result of the transfer or sale of property; (

l) that a spouse has dissipated property to the detriment of the other spouse; (

m) any fact or circumstance that is relevant. 4. Factual Findings to Inform

Section 7 and 8 Considerations [ 36 ] To assess the parties’ positions and determine whether the presumption of equal sharing is rebutted, I need to review the evidence and make some factual findings. a. Marriage, Acquisition of the Home, and the Early Years [ 37 ] The parties were married on May 31, 2003. At that time, and throughout the marriage, Mr. Kuzuchar worked as a land surveyor either personally or through his Corporation. When they were first married, Ms.

Kuzuchar worked at a pub. [ 38 ] They started the house acquisition process in mid-May before they were married when they made a down-payment or deposit on the Home. Ms. Kuzuchar says that she put more money down than Mr. Kuzuchar. He says they each put $10,000 down. The evidence before me confirms Ms. Kuzuchar’s $10,000 payment, but only $6,380 from Mr. Kuzuchar. I find it is more likely they each contributed the same amount and accept Mr. Kuzuchar’s evidence that they each paid $10,000 toward purchasing the Home.

The Home was financed with a mortgage. [ 39 ] Throughout the marriage, the parties maintained separate finances, other than a joint account into which they each contributed money. Some discrepancy exists in the evidence as to the time periods and the amounts they each contributed, but I find that they generally each contributed between $1,500 to $2,000 per month to pay for household expenses during the marriage. This may have fluctuated somewhat over time during periods when Ms. Kuzuchar was not working. [ 40 ] Their first child was born in 2004. Around this time, Ms.

Kuzuchar stopped working full time to raise children. Unfortunately, the parties lived beyond their means, with only Mr. Kuzuchar’s income. Ms. Kuzuchar funded her share of the household expenses using income generated from some part-time work, and debt. b. The First Refinancing [ 41 ] In June 2005, the parties refinanced the mortgage with a TD Canada Trust line of credit. They increased the mortgage to approximately $235,000 to pay off debts. After paying off the first mortgage ($173,785), they paid off Mr. Kuzuchar’s vehicle loan ($4,889), Mr. Kuzuchar’s RBC line of credit ($35,000), Mr.

Kuzuchar’s CIBC Visa ($7,407), Mr. Kuzuchar’s TD Loan ($3,591), and Mr. Kuzuchar’s CIBC line of credit ($4,828). Effectively, the refinancing covered all or most of the debts that were in Mr. Kuzuchar’s name, but not the debts in Ms. Kuzuchar’s name. [ 42 ] In 2006, their second child was born. c. Ms. Kuzuchar Goes Back to School, a New Career, Nanny and Gambling [ 43 ] Starting sometime around 2007 to 2008, Ms.

Kuzuchar went back to school to attend a Life Licence Qualification Program and to take the Canadian Securities Course so she could become an insurance broker, insurance salesperson, and/or financial advisor. She funded at least part of her educational costs using debt, transferring withdrawals from a credit account to an operating account she held. She completed those studies in 2008 and began her own business, which took a few years to earn material net income. [ 44 ] Around the time she was training for or starting her new career, the parties agreed to hire a nanny, at a cost of between $1,800

to $2,000 per month, which lasted for a year or two. There was some dispute in the evidence about who proposed the nanny idea, and whether the nanny was hired only for Ms. Kuzuchar’s benefit or was for the benefit of the marriage. I find that the parties jointly agreed to hire the nanny for their mutual benefit, and for the benefit of the family, to allow both parents to work and pay for matrimonial expenses and debt. [ 45 ] Unfortunately, the parties were unable to afford the nanny. I find on the balance of the evidence that Ms.

Kuzuchar primarily paid the nanny out of her side of the finances, and incurred significant debt in her name in doing so. In the Action, Ms. Kuzuchar asserted in affidavits and her financial disclosure that her debt included $10,000 she borrowed from a family friend, to help pay for the nanny. This latter debt was not reflected in any paper and was not discussed at trial by either party. The family friend did not testify at trial. [ 46 ] In this Action, and at trial, Mr. Kuzuchar took the position that the debt in Ms. Kuzuchar’s name was at least partly caused by Ms. Kuzuchar’s gambling. He adduced some of Ms.

Kuzuchar’s financial records from the 2007-2008 timeframe which illustrate $3,741.62 was charged by Ms. Kuzuchar to a website called worldwidewinner.com. He also points to $14,110.00 in cash ATM withdrawals from her CIBC line of credit. Ms. Kuzuchar does not deny that she gambled before, during and after the marriage. She testified that Mr. Kuzuchar was aware that she played online games that cost money and that she played VLTs at the casino. She testified that Mr.

Kuzuchar was failing to factor in that these charges were paid off, that they did not contribute to the matrimonial debt over time, and that the cash withdrawals were to pay for her education and the nanny. She described her gambling as a form of entertainment and that Mr. Kuzuchar never complained about her spending until they separated. d. The Second Refinancing of the Home [ 47 ] In 2008, the parties refinanced the Home again, with a home equity line of credit with FirstLine Mortgages ( First Mortgage ).

The First Mortgage increased the debt secured by the property mortgage to $294,000, generating net cash proceeds of $37,178.72. Approximately $12,000 of the proceeds were used to pay matrimonial debt. e. The TD Investment and the TD Investment Loan [ 48 ] The remaining $25,000 from the First Mortgage refinancing was used to invest in an investment in Toronto Dominion ( TD ) mutual funds in August 2008 ( TD Investment ). The TD Investment involved the parties investing $25,000 of their own funds, and then borrowing $75,000 and investing those additional proceeds into the TD Investment.

The $100,000 total investment was then invested in a TD dividend portfolio mutual fund. Accordingly, the equity component was leveraged by the $75,000 which was subject to the loan ( TD Investment Loan ). The $75,000 TD Investment Loan eventually appears to have been held by and owed to B2B Bank although it is unclear whether this was the case initially or was something that happened later. Ms. Kuzuchar advised she was not aware of B2B Bank’s role.

The TD Investment Loan documentation was not adduced at trial and it is unknown whether the loan was secured against the TD mutual fund within the TD Investment. [ 49 ] Ms. Kuzuchar was listed as the agent or broker for the TD Investment, but it was held in Mr. Kuzuchar’s name. It generated a positive net monthly income to the parties because the amount received in monthly distribution payments from the investment exceeded the interest paid on the $75,000 loan. The parties did not provide complete information about the TD Investment. Ms. Kuzuchar says this is because it was in Mr.

Kuzuchar’s name and he did not provide full disclosure. Mr. Kuzuchar produced one 2010 statement and a bundle of records from 2017 when the TD Investment was liquidated, the latter of which Ms. Kuzuchar testified (and I accept) was only provided to her in 2022 despite her earlier requests. [ 50 ] The scant TD Investment records illustrate that in 2010 the investment was generating $620.38 in monthly cash distributions, and in 2017 it was generating $536.23 per month in cash distributions.

Based on the limited evidence before me, I find that the TD Investment generated $620 per month in monthly distributions until 2017, when it started generating $536 per month in monthly cash distributions. [ 51 ] There is also not much information about the amounts that were paid to service the TD Investment Loan. Mr. Kuzuchar adduced one sheet of paper from B2B Bank from November 2017 related to the liquidation of the TD Investment Loan. This document illustrated that only interest was being paid on the TD Investment Loan because it continued to have a balance in 2017 of approximately $75,000.

The interest rate was B2B Bank’s prime rate, which at November 2017 was 3.2%, and the monthly interest payment was $168.90. Approximately $177 in interest per month had been charged in 2017, but the monthly amounts are not disclosed. I have no other information.

Based on the limited information I have, I find that the monthly interest charged and paid on the TD Investment Loan was $170 per month for the life of the TD Investment. [ 52 ] This means the TD Investment, less then TD Investment Loan generated a positive monthly cash flow of approximately $450 (before taxes) until 2017, when it generated a positive monthly cash flow of approximately $365 (before taxes). Mr. Kuzuchar did not provide clear evidence what he did with these monthly funds. He baldly stated that they were used for child expenses and to pay some interest on other debt.

He provided no bank statements to support what was done with these funds, or where they went, post-separation. Given the lack of documentation or other reliable evidence, I cannot conclude that these funds were put toward reasonable expenditures on behalf of the family. Accordingly, I find that they were most likely used for general matrimonial and family expenses up to the time of separation, but for his personal expenses following separation until the TD Investment was liquidated. f. The Third Refinancing of the Home [ 53 ] In 2009, to pay down Ms.

Kuzuchar’s growing debt in her name, the parties granted a second mortgage ( Second Mortgage ) to Citi Financial, which generated $25,000 in cash proceeds that were used to pay-off Ms. Kuzuchar’s consumer debt. She testified this debt was due to the nanny costs. [ 54 ] Around this time, it appears the parties agreed that Ms. Kuzuchar would pay the Second Mortgage and Mr. Kuzuchar would start paying the household utilities out of his funds on hand.

g. The Parties Separate [ 55 ] On July 1, 2013, Ms. Kuzuchar moved out of the home and the parties separated. There is no clear evidence before the Court of the assets and liabilities in each of the parties’ name as of the date of separation. [ 56 ] Upon separation, the parties shared parenting 50%, on a week-on, week-off basis. [ 57 ] Mr. Kuzuchar remained in the Home after separation. Post-separation, he paid all the property taxes, insurance and maintenance costs for the Home. He also paid the interest on the First Mortgage. Mr.

Kuzuchar did not provide evidence of the interest he paid on the First Mortgage post-separation, but based on a statement that was in evidence I find he paid approximately $750 per month from separation until the Home was sold. [ 58 ] Mr. Kuzuchar did not complete any renovations and he testified the Home was in roughly the same condition when it sold as it was at the time of separation. He stated that he replaced the appliances and a hot-water heater, without contribution from Ms. Kuzuchar. Ms. Kuzuchar’s evidence is that Mr. Kuzuchar did not properly maintain the Home and allowed it to deteriorate.

At one point in 2019, the roof suffered hail damage and Mr. Kuzuchar accepted a cheque from the insurance company but did not actually perform the repair. Based on the evidence, including in documents from real estate agents that were not objected to at trial, I accept Ms. Kuzuchar’s evidence that Mr. Kuzuchar allowed the Home to deteriorate to some degree while he resided there post-separation, or at least did not keep it clean or attractive for sale.

However, there is no expert or admissible opinion evidence as to how or whether the deterioration of the Home affected its saleability or sale price. [ 59 ] On separation, Ms. Kuzuchar could not afford to buy a home of her own, so she rented accommodations for her and the children to live when they were with her. Details of her rental arrangements were not provided at the trial. There is a documented text message from September 2014 that indicates she was paying rent of $1,600 per month. Ms.

Kuzuchar did not provide more details about her monthly accommodation costs, and I find that she paid $1,600 per month to rent a residence from separation until the Home was sold. [ 60 ] In May 2014, Mr. Kuzuchar transferred Ms. Kuzuchar a 2015 family minivan for $1.00. The vehicle was in his name and he implied in his evidence that she was getting speeding or parking tickets that he was tired of paying. h. Ms. Kuzuchar Stops Paying the Second Mortgage [ 61 ] Ms.

Kuzuchar continued to pay the Second Mortgage after separation for the 18 months from July 2013 to end of October 2014, when she stopped because she could not afford to continue paying it, she believed the Home should be sold, and that, if Mr. Kuzuchar wanted to continue living in the Home, he should be responsible for the Second Mortgage. [ 62 ] After Ms. Kuzuchar stopped paying the Second Mortgage, it briefly went into arrears. In December 2014, Ms. Kuzuchar proposed that the TD Investment be collapsed with the remaining funds used to pay off the Second Mortgage.

This did not happen. [ 63 ] The parties have not provided detailed evidence of the terms of the Second Mortgage, including the interest rate, the payments that were made post-separation, and how much of the payments went to interest versus paying down the principal. I have had to deduce them using the scant evidence available. [ 64 ] The balance of the Second Mortgage was $22,007.87 as of February 2013, $21,449.42 as February 2014, and $20,896 as of October 2014.

During this period, the incomplete evidence suggests approximately $465 per month was required to cover interest, with any excess amounts paying down the principal. Therefore, I find that from July 2013 to October 2014, Ms. Kuzuchar paid $6,975 toward interest on the Second Mortgage. In the 21 months from February 2013 to October 2014 the principal of the Second Mortgage was reduced by $1,111.87, or approximately $52.95 per month. Therefore, I find that Ms. Kuzuchar reduced the principal on the Second Mortgage by $794.25 (15 x $52.95) in the 15 months between separation to October 2014. [ 65 ] I find Mr.

Kuzuchar began paying the Second Mortgage sometime after October 2014, and it was paid out in November 2017 when its balance was $14,761.58. Accordingly, I find that, prior to it being paid out by the TD Investment liquidation proceeds, Mr. Kuzuchar had reduced the principal on the Second Mortgage by $6,225.42 from November 2014 to December 2017 (or about $168.25 per month on average). There is no evidence as to how much he paid on interest during this period. Ms. Kuzuchar was previously paying $465 per month to cover the interest, but the interest amount would have been less as the principal balance was reduced.

By December 2017 the monthly interest amount was $225.67. To roughly estimate the interest Mr. Kuzuchar paid from November 2014 to December 2017, I use the mid-point average of $465 and $225 (i.e. $345 per month). I find that Mr. Kuzuchar paid, on average, $345 per month in interest from November 2014 to December 2017, or about $12,765 in total. i. Initial Efforts to Sell the Home [ 66 ] Commencing around October 2014, Ms. Kuzuchar’s lawyer was working with Mr.

Kuzuchar’s lawyer to reach an agreement to sell the Home, to resolve several outstanding matters related to the parties’ matrimonial property, and to get disclosure from Mr. Kuzuchar. I do not have a complete record of the correspondence between the parties during this period. [ 67 ] Ms. Kuzuchar wanted to sell the Home because she could not afford to continue to service the debt she was carrying and pay the Second Mortgage. She did not believe that either party would be able to refinance the Home to keep it and pay the other the equity in the Home.

At that time, she had information from a realtor that the likely sell range for the Home was between $425,000 to $435,000. An appraisal from September 2014 appraised the Home at $398,000. [ 68 ] Mr. Kuzuchar opposed selling the Home because he wanted to remain there to give the children some continuity after marriage breakdown. He indicated that he was willing to pay Ms. Kuzuchar her fair share of the equity in the Home but could not do so without refinancing the Home.

His evidence was that he could likely obtain a mortgage on the Home but he was advised by a mortgage broker that there were too many unknown variables, including a lack of a final divorce agreement and matrimonial property agreement in

place. His position was that he was not willing to agree to a final distribution of matrimonial property until he had a full accounting as to how much of the parties’ debt related to Ms. Kuzuchar’s alleged gambling, as it was his position that this was not proper matrimonial debt. [ 69 ] By March 2015, the parties had not reached an agreement for the sale of the Home, and Ms. Kuzuchar filed an application to sell it. Her evidence was that the Home was worth $415,000, that its tax assessment was $417,000, but a realtor had suggested listing the home for $424,900 with a probable sell range of $410,000 to $420,000.

The Home was professionally appraised effective March 2015 at $408,000. [ 70 ] In April 2015, Ms. Kuzuchar’s application to sell the Home was set to be heard by way of a one-hour domestic special application in July 2015. The parties filed several affidavits in relation to this application, and there was a clear dispute between the parties respecting which of the parties’ debts were proper matrimonial debt. [ 71 ] On July 9, 2015, Justice McCarthy heard Ms. Kuzuchar’s application. He granted the “Without Prejudice” 2015 Order, which provided in its entirety: 1.

This Order shall be without prejudice to either party’s rights or any subsequent accounting regarding matrimonial property. 2. The Defendant shall be given 45 days to refinance the Home and pay $46,000 to the Plaintiff, $11,000 of which shall be held in trust pending resolution of matrimonial property. 3. The mortgages/lines of credit registered against the Home shall be paid out from the Defendant’s refinancing. 4. The Plaintiff shall complete any documentation necessary to effect the transfer and facilitate the Defendant’s new financing, including a transfer of Land and resignation from [the Corporation]. 5.

If the Defendant is unsuccessful in obtaining refinancing, the Plaintiff has leave to return the matter to court to consider the sale of the Home. 6. No costs shall be payable by either party. [ 72 ] Following the 2015 Order, I find that Mr. Kuzuchar was unable to or did not refinance the Home as contemplated by the Order. Ms. Kuzuchar asserts that he did not use reasonable efforts to refinance, and that it was a delay tactic. At trial, Mr. Kuzuchar adduced a March 2015 email that indicated the difficulties he was going to have to refinance the Home. There is some evidence from August 2015 that Mr.

Kuzuchar believed he could obtain approval for refinancing, but would be required to liquidate the TD Investment to do so. Eventually, while he believed he could refinance, he “softened” his position on selling the Home and agreed to list it for sale. [ 73 ] On October 15, 2015, the parties agreed to list the Home with a realtor for $439,900. By October 26, 2015, the realtor advised the parties that the overall condition of the property was a challenge and recommended dropping the list price.

By November 10, 2015, the Home had no showing requests in the previous 10 days and the realtor recommended that the Home list price be reduced below $425,000 to attract serious buyers. It is unclear whether the parties dropped the list price. At some point, they agreed to take the Home off the market until the market came back. [ 74 ] In October 2016, Ms. Kuzuchar again asked a realtor about selling the Home. At that time, the realtor recommended a selling price between $360,000 to $380,000. There is evidence that Mr.

Kuzuchar was not cooperative or interested in selling at that time and that the Home required some work to maximize the sale price, including new flooring, fixing the stairs to the basement, interior paint, de-cluttering and clean-up, installing a shower in the basement, painting the deck, and clearing the backyard. However, there is no evidence Ms. Kuzuchar pushed the sale at that time. j. Liquidation of the TD Investment [ 75 ] In December 2017, Mr. Kuzuchar liquidated the TD Investment, without the consent or involvement of Ms. Kuzuchar.

At trial, he did not explain his rationale for doing so, and was not asked why he did it. The TD mutual fund component of the TD Investment generated $93,185.10 in proceeds, $75,454.98 of which was used to pay out the TD Investment Loan. The remaining $17,730.12 was used to pay out the Second Mortgage balance of $14,761.58. [ 76 ] Mr. Kuzuchar testified that he put the remaining proceeds toward paying his personal taxes that were triggered by the sale of the mutual fund.

He testified that he had to add $17,000 to his income for tax purposes, however, he did not adduce his tax returns to confirm what exactly the tax implications were of the sale of the TD Investment. Without more evidence, and given his lack of disclosure, I draw an adverse inference against him respecting the tax implications in the form of a matrimonial debt: Wolf at para 52 . I find that the remaining balance of $2,968.54 amply covered any tax liability he incurred. k. Mr. Kuzuchar Changes his Employment [ 77 ] Prior to January 2019, Mr. Kuzuchar worked full time through his Corporation.

In January 2019, he started working full time as an employee with Arch Surveys. He said he did this to provide job security and he kept the Corporation alive to pay off a debt owed to the government. He provided no documentary evidence to support that alleged debt. l. The Divorce Judgment and the Parenting Agreement [ 78 ] As noted earlier, in December 2019 Ms. Kuzuchar was given leave to apply for a desk divorce pursuant to rule 12.50 , and she did so in January 2020. Her proposed form of Divorce Judgment and Corollary Relief Order did not incorporate the Parenting Agreement or any parenting plan.

In April 2020, Justice Kenny rejected the application because Ms. Kuzuchar did not have Mr. Kuzuchar’s consent.

[ 79 ] In June 2021, Ms. Kuzuchar filed a Notice to Attend Family Docket Court seeking, among other things, an order to finalize the divorce. She attached a form of Divorce Judgment and Corollary Relief Order similar to what she had included in her January 2020 application, which again did not attach or incorporate the Parenting Agreement or any parenting plan. On July 20, 2021, Justice McCarthy granted Ms. Kuzuchar leave to apply for a divorce pursuant rule 12.50 without the consent of Mr. Kuzuchar. The form of Divorce Judgment and Corollary Relief Order Ms. Kuzuchar filed in July 2021 was different than the previous ones she had submitted. It now indicated in the

preamble “there is an agreed upon parenting plan, a copy of which is attached as

Schedule “A” to this Order, relating to the parenting time, decision-making responsibility or contact with the children of the marriage.” It also included more specific terms about parenting, including a paragraph in the Order that the parties were bound by the terms of the attached parenting plan. [ 80 ] The court file indicates that the proposed Divorce Judgment and Corollary Relief Order Ms. Kuzuchar filed did not have the referenced parenting plan attached and, on August 9, 2021, the Court Clerk’s office emailed her to provide it and she provided the Parenting Agreement that day. [ 81 ] At trial, Ms.

Kuzuchar adduced in evidence a document that she referred to as the Parenting Agreement attached to the Divorce Judgment (Exhibit 16). She indicated in her evidence that the parties had agreed to a parenting plan shortly after separation. However, the Parenting Agreement is dated in 2019. Further, I have compared trial Exhibit 16 to the Parenting Agreement she provided the Clerk in 2021 and they are not the same document. Exhibit 16 appears to be an earlier draft of the Parenting Agreement on which Mr. Kuzuchar had provided comments at some point in time. Neither is signed. At trial, Mr.

Kuzuchar testified that he was not aware of the Parenting Agreement that was attached to the Divorce Judgment and Corollary Relief Order and had only been advised of it for the first time at the trial. [ 82 ] Based on the evidence, I find that the Parenting Agreement that Ms. Kuzuchar represented to the Clerk in 2021 as being a parenting plan agreed to by the parties was never signed or agreed to by Mr. Kuzuchar. I find that Ms. Kuzuchar only had authorization to apply for a divorce judgment without Mr.

Kuzuchar’s consent, not to apply for a corollary relief order, or to apply for a final or interim parenting order without Mr. Kuzuchar’s consent. But that is what she did. [ 83 ] I also find that Mr. Kuzuchar never agreed to all the terms of Exhibit 16 either. [ 84 ] I will address the implications of these findings on the Divorce Judgment and Corollary Relief Order at the conclusion of these Reasons. m. 2021 Sale of the Home and Use of its Proceeds [ 85 ] In mid-2021, the parties agreed to sell the Home. However, Ms.

Kuzuchar had to attend court twice to effect the sale. [ 86 ] The sale closed in October 2021 and generated proceeds of $385,039.49. The following were paid out of the proceeds: (a) $295,567.66 to pay out the First Mortgage; (b) $11,485 for the real estate commission; (c) $778.95 for legal fees associated with the sale of the Home; (d) $6,000 to pay a writ registered against the Home by an entity called “Affinity Global”. This writ related to Ms. Kuzuchar’s CIBC credit card, toward which she testified she had been making payments for years. Ms.

Kuzuchar testified that the law firm that had been assisting CIBC was no longer involved, that she did not have contact information, that she did not receive notice of it because Mr. Kuzuchar failed to give her mail that arrived at the Home, that it ballooned to over $40,000 due to accrued interest, and that she negotiated it down to $6,000. She testified that Mr. Kuzuchar agreed in 2021 that it was matrimonial debt to be paid out of the proceeds. Mr. Kuzuchar did not deny this agreement, and so I accept it; and (e) $12,020 to Ms. Kuzuchar’s former lawyer, Tammy Nicholson, who had assisted Ms.

Kuzuchar earlier in the Action. Ms. Kuzuchar testified that she had granted a promissory note to her lawyer for $11,000 in legal fees as of 2015, that as of 2021 the outstanding balance was $20,693, and she negotiated it down to $12,000. It is unclear on the evidence whether Ms. Nicholson had registered a charge against the Home for her fees. Ms. Nicholson’s October 19, 2021 account summarizing the bills reflects that the total of $20,639.87 was comprised of $7,954.82 for legal services provided primarily in 2015 and 2016, and $13,571.05 was interest charged at 18% per annum. 5.

Assessment of the Parties’ Property and Arguments [ 87 ] Within the context of those facts and my findings, I now turn to the property held by the parties at trial and their positions and arguments, having regard to sections 7(4) and 8 of the MPA . a. Proceeds from the Sale of the Home [ 88 ] I am satisfied that the Home was joint matrimonial property, and that the First Mortgage was a matrimonial debt properly paid out of the proceeds. I am also satisfied that the real estate commission and legal fees related to the transaction were appropriately deducted and shared. I have accepted Ms.

Kuzuchar’s unchallenged evidence that the $6,000 writ was accepted as matrimonial debt; it has been acceptably deducted from the proceeds of sale of the Home. [ 89 ] Ms. Kuzuchar’s post-separation legal bills, in the amount of $12,020 are another matter. The onus is on the party incurring debt after separation to demonstrate that the debt was used for the benefit of the family unit and not solely for the debtor’s own purposes. If that cannot be established,

section 8 of the MPA permits unequal distribution of the debt, including sole responsibility for the debt

falling to the party that incurred it: White at paras 76 and 81 ; Stuve at para 34 ; Busenius v Busenius , 2006 ABQB 162 at paras 2 , 27, 29; Esquirol v Esquirol , 2018 ABQB 487 at para 39 . [ 90 ] In my view, Ms. Kuzuchar’s post-separation legal bills for litigation with Mr. Kuzuchar are not divisible matrimonial property and were a matter of costs. It would not be just and equitable for Mr. Kuzuchar to share half of these debts. Ms. Kuzuchar must account for the $12,020 matrimonial property already received that was used to pay her lawyer’s accounts. b.

Bank Accounts at Trial [ 91 ] The parties had been separated for over 9 years, and divorced for 15 months, by the date of trial. It is a reasonable inference that their personal bank accounts at trial reflected monies that were not generated from matrimonial property but from their own personal income post-separation and post-divorce. Neither party takes the position that their bank accounts, as at the date of trial, should be shared, and there is no evidence about them in any event. Having regard to sections 7(3) (

c) and 8(1) (

f) of the MPA , and White at para 76 , I find it is not just and equitable that they are shared. The parties’ bank accounts at trial are excluded from distribution. [ 92 ] Mr. Kuzuchar also had a modest TFSA account with Rothenberg Capital Management. Ms. Kuzuchar makes no claim to it. I am satisfied that it was funded out of Mr. Kuzuchar’s personal income post-separation and, for the same reasons, is excluded from the property division. c. The Shares of the Corporation [ 93 ] Mr. Kuzuchar’s position is that the Corporation shares have no value, based on the liabilities being greater than the assets.

As noted earlier, he did not provide appropriate disclosure of the Corporation’s assets and liabilities, producing only two unaudited and incomplete financial statements which provide some limited information for 2017-2020. He attempted to attach an opinion letter from his accountant when he filed his written argument, which I have ignored as it was not presented in evidence and did not comply with expert opinion disclosure requirements under rules 5.34 and 5.35. [ 94 ] Ms.

Kuzuchar requests that the Court assign a value of the Corporation of $50,000, based on the incomplete Corporation financial statement evidence which she asserts shows that, for some years, Mr. Kuzuchar received significant dividends from the Corporation. Alternatively, she asks the Court to direct a valuation of the Corporation upon full disclosure. At trial, when faced with the late disclosure of records, including related to the Corporation, I asked Ms. Kuzuchar if she wished to adjourn the trial to deal with the records.

She advised the Court that she wanted to proceed with the trial to have matters resolved. [ 95 ] Ms. Kuzuchar’s position ignores the reality that, in 2019, Mr. Kuzuchar stopped using the Corporation full-time as he began full time employment with Arch Surveys. This meant that the Corporation had significantly reduced revenue but continued to have similar expenses as before. Her position also ignores the reality that the Corporation was simply a vehicle through which Mr.

Kuzuchar earned income from his own personal efforts, and that by the time of trial any value in the Corporation was from those efforts post- separation. In all the circumstances, and based on the limited evidence of the Corporation’s assets and liabilities, I accept Mr. Kuzuchar’s position, and find that the shares had no value as of 2020, or likely by trial. [ 96 ] In all the circumstances, I find that it is not just and equitable for the Corporation shares to be divided. In the alterative, if it is just and equitable to divide the shares in the Corporation, I find that they have zero value.

Either way the end result is the same. Mr. Kuzuchar keeps the shares and no adjustment is made in the distribution. d. Vehicles [ 97 ] At the time of trial, there were three remaining vehicles held by the parties: a 2004 Lexus, a Toyota Highlander, and a Ford F- 150. [ 98 ] Ms. Kuzuchar purchased the 2004 Lexus in November 2021 for $6,300, after the divorce judgment in August 2021. Ms. Kuzuchar agreed to it being included in the property distribution. She shall keep it and it is included in the property distribution. [ 99 ] The evidence is that Mr. Kuzuchar is leasing the Toyota Highlander.

Considering sections 7(3)(

c) and 8(1)(

f) of the MPA , it would not be just and equitable for Ms. Kuzuchar to have a share in the Highlander. Therefore, it is not included in the property distribution. [ 100 ] The parties both agree that Mr. Kuzuchar continues to own a Ford F-150, which was acquired in 2012 prior to separation. They disagree on its value. Mr. Kuzuchar provided a “Kelley Blue Book” printout which indicated a vehicle with similar mileage would have a trade in value of $4,265-$5,236. Ms. Kuzuchar’s evidence is that it is worth $15,784. I prefer Mr.

Kuzuchar’s evidence given the mileage and age of the vehicle and I set the value at the mid-range of his evidence, or $4,751. [ 101 ] Mr. Kuzuchar noted that the family minivan was transferred to Ms. Kuzuchar in 2014 and that she did not account for it when she disposed of it. In 2015, Ms. Kuzuchar swore an affidavit estimating its value at $2,000. There is no evidence before me as to what happened to the minivan or whether Ms. Kuzuchar obtained any proceeds when she disposed of it. As mentioned above, the minivan was transferred from Mr. Kuzuchar to Ms. Kuzuchar for an agreed value of $1.00.

There is not enough evidence to convince me that it is just and equitable to take the minivan into account in the property distribution. e. RRSPs [ 102 ] In her 2015 affidavit, Ms. Kuzuchar swore she had no RRSPs. At trial, Ms. Kuzuchar provided a 2021 statement which showed a modest RRSP, which she testified were funded entirely from her post-separation employment income. By the time of trial, she had cashed them in and so there was nothing remaining. Mr. Kuzuchar does not make any claim in respect of Ms. Kuzuchar’s RRSPs and no

adjustment is required. [ 103 ] Mr. Kuzuchar presented evidence of a small number of existing RRSPs as of July 2021. There is no evidence that he continued to hold any RRSPs of any substance, and Ms. Kuzuchar confirmed at trial that she does not want his current RRSPs. [ 104 ] However, Ms. Kuzuchar is claiming for Mr. Kuzuchar’s RRSPs based on a $32,352 amount that was included in a Statement of Income, Assets and Liabilities he swore in October 2014. At that time, Mr. Kuzuchar swore that he had a Royal Bank Direct Investing RRSP worth $7,352.84, and a TD RSP worth $25,000. Mr.

Kuzuchar’s other evidence and position confirmed that the reference to a TD RSP was an erroneous reference to the TD mutual fund that was part of the TD Investment (and which was not a RSP). This error was repeated in his June 2015 affidavit, but it is clear from that affidavit that the “TD RRSP” is in fact the mutual fund component of the TD Investment. This investment is addressed separately as part of the TD Investment elsewhere in these Reasons and need not be accounted for again as a lost RRSP. [ 105 ] However, the $7,352.84 RRSP is another matter. At trial, Mr.

Kuzuchar asserted that the $7,352.84 RRSP pre-dated the marriage. However, there is no evidence he ever claimed it as an exemption, and his 2015 Counterclaim expressly pleads he does not claim any exemptions. When asked at trial, he was unable to produce any supporting documentation of the exemption. Further, his October 2014 Statement of Income, Assets and Liabilities states that he had the investment for 10 years, which would be sometime in 2004. The parties were married in 2003.

Therefore, I find that the $7,352.84 was a matrimonial asset at the time of separation, still in existence as of October 2014. [ 106 ] In his June 26, 2015 affidavit, Mr. Kuzuchar did not include this RRSP in his list of assets. At trial, I asked Mr. Kuzuchar what happened to this RRSP and his evidence was simply that he lost those funds in the past 5 years (which is not consistent with his June 2015 affidavit which no longer included them some 7+ years before trial). Mr. Kuzuchar did not provide any other information, or any statements to show what happened to those funds. [ 107 ] In effect, Ms.

Kuzuchar’s position to include this RRSP is effectively arguing that Mr. Kuzuchar dissipated these RRSPs which were matrimonial assets as contemplated under section 8(1) of the MPA . [ 108 ] In Dobrovolsky v Dobrovolsky , 2021 ABQB 62 , Justice Kiss recently summarized the law of dissipation in Alberta as follows at paras 89-93: [89] Paperny J, as she then was, summarized the general principles relating to dissipation in Cox v Cox , 1998 ABQB 987 , at para 46 , as follows: 1.

Section 7(4) creates a presumption of an equal distribution of non-exempt matrimonial property, unless it would not be just or equitable to do so.

Section 8(

l) provides one of the factors that can lead to an unequal distribution where one spouse dissipates assets to the detriment of the other. 3. Dissipation does not necessarily result where an asset is worth less at trial than it was at separation. Dissipation requires a degree of intent although that intent does not necessarily have to extend to intentionally depriving the other spouse of a fair distribution of matrimonial property. It is sufficient if one spouse intends to dissipate assets (usually for their own enjoyment), and that dissipation arises in detriment to the other spouse. 4.

There must be actual detriment to the other spouse. 5. The law generally does not find dissipation if the reduction in assets was due to reasonable expenditures made on behalf of the family or to maintain existing matrimonial assets. However, the court will look to see if the spouse could have paid those expenses out of income rather than by depleting assets. Purely personal expenses which do not benefit the other party that are paid out of the matrimonial property may also be considered dissipation (even though prior to separation they might have been matrimonial expenses). 6.

If an asset is sold or otherwise reduced, the courts will not consider this dissipation if the proceeds can be traced to another asset. The replacement assets form part of the assets available for distribution. 7. If assets are sold for less than fair market value, the court may determine whether the sale was done improvidently, hastily or fraudulently in deciding whether it was dissipation. If the sale is effected in accordance with pre-separation negotiations it may not be considered dissipation. 8.

The total amount actually dissipated “to the detriment” of the spouse is one-half of the amount by which the asset was reduced. 9.

Ultimately it is in the discretion of the trial judge, based on consideration of all the facts, to determine whether or not dissipation exists. [90] More recent cases have provided additional clarification as to how dissipation may be demonstrated, who bears the burden of proof, and what remedies are available once dissipation has been established. [91] In Fleming v Fleming , 2016 ABCA 88 , at para 30 , the Court of Appeal confirmed that the party arguing for an unequal distribution must prove the other spouse dissipated matrimonial assets. [92] In SLT v AKT , 2007 ABQB 701 , at para 58 , Justice Veit noted that any consideration of dissipation must begin with an assessment of what the situation was prior to separation.

Dissipation, in matrimonial property litigation, is a relative term. It is usually used to describe an imprudent pattern of spending after separation that is different from the spending pattern prior to separation. It would

be arbitrary and unfair for the Court to punish a spouse after separation for a spending pattern that was historically accepted, evencondoned, during the marriage: McAdam v McAdam, 2009 ABQB 109 at para 34. [93] The degree to which the dissipating spouse must be found to have acted in bad faith is less well-defined and will vary accordingto the facts. In Metz v Metz, 2004 ABQB 528, at para 37, dissipation was held to be another word for “waste” and that to showdissipation, there had to be an element of bad faith or neglect.

However, in Bakken v Bakken (1992), 132 AR 356, (QB), dissipation was used in a much broader sense in relation to funds used by the wife largely to pay for her personal debts (includinglegal fees, income tax, and credit cards) and for other miscellaneous expenses, none of which benefitted the husband, directly orindirectly, or discharged any financial obligation of his. [109] In Shaw v Shaw, 2014 ABQB 82, aff’d 2015 ABCA 11, Justice Schultz at para 155 discusses dissipation: Dissipation requires a degree of intent although the intent does not necessarily have to extend to intentionally depriving the other spouseof a fair distribution of matrimonial property.

It is sufficient if one spouse intends to dissipate the assets... and that dissipation arises indetriment to the other spouse. The law generally does not find dissipation if the reduction in assets was due to reasonable expendituresmade on behalf of the family or to maintain existing matrimonial assets....The total amount actually dissipated ‘to the detriment’ of thespouse is one-half of the amount by which the asset was reduced.

Ultimately it is in the discretion of the trial judge, based on theconsideration of all the facts, to determine whether or not dissipation exists. [110] In this case, the lost RRSPs present a quandary for the Court. Ms. Kuzuchar has the onus to establish that Mr. Kuzuchardissipated the RRSPs and should have to account for them as matrimonial property he has already received: Fleming v Fleming, 2016ABCA 88 at para 30. [111] However, her ability to discharge her onus was hampered by Mr. Kuzuchar’s lack of disclosure and his inadequate explanationof what he did with these funds.

He is the only one that could enlighten the Court, about what happened with these funds, yet he has notprovided any of the statements, or even his tax returns which would assist the Court. He was well aware that RRSPs were an issue to bedealt with at the trial. [112] After careful consideration, in the circumstances before me, I draw an adverse inference against Mr. Kuzuchar, and find thatMr. Kuzuchar wasted this RRSP to the detriment of Ms. Kuzuchar.

A court may draw an adverse inference from a party’s failure toprovide some evidence where the party himself or his opponent claims that the facts would thereby be elucidated: Bentley at para 69. Hemust account for that as an asset he solely received because it would not be just and equitable otherwise. The common practice is toadjust RRSP amounts by a factor of 25% to account for taxes: Stalzer at para 64; Beaudry v Beaudry, 2010 ABQB 119 at para 98. I findthis appropriate in this case and find that it is just and equitable that Mr. Kuzuchar be required to account for $5,514.63 (75% of$7,352.84). f.

The TD Investment [113] As noted above, Mr. Kuzuchar liquidated the TD Investment in December 2017 and used the proceeds to pay off the TDInvestment Loan (a matrimonial debt) and the Second Mortgage (a matrimonial debt), with the $2,968.54 remaining used to pay any taxliability he incurred in the liquidation. [114] Ms. Kuzuchar claims half of the original $25,000 investment which she says Mr. Kuzuchar “sold at a loss”.

She also claims halfof the distribution from the TD Investment in the amount of $620 / month less $185 per month interest, for 60 months (5 years), for atotal of $26,100 (of which she claims 50%). [115] I reject Ms. Kuzuchar’s argument that she should be entitled to half of the $25,000 initial investment. That investment wasliquidated and used to pay off a matrimonial debt. [116] I also reject her argument that Mr. Kuzuchar sold it at a loss. Ms. Kuzuchar had suggested to Mr. Kuzuchar in 2014 that the TDInvestment should be liquidated with the proceeds used to pay down the Second Mortgage.

That is precisely what he later did. Further,there is no evidence as to what the components of the mutual fund asset were to establish it was sold at a loss. In June 2015, Mr.Kuzuchar’s sworn evidence was that it was worth $92,700.84, and it was later liquidated for more than this. There is evidence that therewas a capital gain, not a loss, on the liquidation. [117] However, I agree with Ms. Kuzuchar that, based on my findings, Mr.

Kuzuchar obtained a personal benefit of net income fromthe TD Investment every month, which I have found to be $450 per month (before tax) until end of 2016, and then $365 per month in(before tax) 2017. This income was matrimonial property and was not shared with Ms. Kuzuchar. Mr. Kuzuchar says Ms. Kuzuchar hasnot proven the correct dividend amounts, but Mr. Kuzuchar cannot reasonably make that argument when he failed to adduce evidence ofthe correct amounts or to provide Ms. Kuzuchar disclosure of information about this investment for years, despite several requests andhis obligations.

As noted earlier, given his lack of disclosure, and his incomplete evidence respecting the use of these funds, or whathappened to them, I have found that these funds were likely used for his personal benefit. [118] Even if some of these funds were used to pay the vaguely described expenses of the children while they were living with himpost-separation, he could reasonably have paid those expenses out of his personal funds rather than depleting matrimonial propertywithout sharing with Ms. Kuzuchar – this deprived Ms. Kuzuchar of her fair distribution of that property.

I therefore find that he wastedor dissipated this matrimonial property, or otherwise spent it in a way that allows me to take it into account: Hennesey v Hennesey, 2005AQB 883 at para 110; Kazmierczak v Kazmierczak, 2003 ABCA 227 at para 111-112; Nand v Nand, 2011 ABQB 324 at paras 51-52. [119] Having regard to sections 7(4), 8(f), 8(1) and 8(

m) of the MPA, I find that it would not be just and equitable for him to share inthe matrimonial property distribution without accounting to Ms. Kuzuchar for his use of this matrimonial property he received (net oftax) for the period July 2013 to December 2017. The total amount is $17,460 after factoring in a 25% tax adjustment on the total benefitof $450 for 42 months (July 2013 to December 2016) and $365 for 12 months (January to December 2017).

g. Ms. Kuzuchar’s Alleged Gambling [ 120 ] Mr. Kuzuchar’s position is that Ms. Kuzuchar should have to account back to him for $17,851.62 in funds discussed earlier ($3,741.62 for the worldwidewinner.com website and $14,110.00 in cash ATM withdrawals), which he asserts she spent on gambling during 2007-2008. Mr. Kuzuchar says those are not proper matrimonial debt, however in my view they were matrimonial spending and debt because it was part of the matrimonial lifestyle: HRMT v SNS , 2018 ABQB 843 at para 77 , citing Carmichael v Carmichael , 2007 ABCA 3 at para 23 .

No matrimonial debt relating to any gambling remained as of the date of trial. [ 121 ] Mr. Kuzuchar’s claim is effectively that Ms. Kuzuchar dissipated assets through gambling. I have earlier set out the legal principles related to dissipation. Gambling can be a form of dissipation, especially when agreed by the parties as such: Hogue v Johnston (Estate) , 2021 ABQB 913 at paras 100-105 .

However, in the context of a dissipation claim for alleged gambling expenses, in Sochowski , the Court of Appeal said this at para 22: When dividing matrimonial property, the court will look at whether one spouse or the other has unreasonably dissipated matrimonial assets. Ordinary expenditures and consumptions are not considered, and a matrimonial property division is not intended to be a detailed autopsy of the finances of the family from the date of marriage. For example, any family funds used for gambling prior to separation can be considered as too remote to be considered.

In this case expenses and debts were paid, but if they had not been paid they would have had to have been subtracted or paid at the time of property division. [Emphasis added] [ 122 ] In my view, Mr. Kuzuchar is attempting to go back about 15 years before trial, and about 5-6 years before separation, to pinpoint certain expenses he says are dissipation. I accept Ms. Kuzuchar’s evidence that a significant amount of the $14,110 related to cash withdrawals was used for nanny or other matrimonial expenses.

Whatever is left, together with the funds she spent on the online game site, is consistent with gambling as entertainment. Ms. Kuzuchar was frank and open about the fact she gambled for entertainment. I also accept Ms. Kuzuchar’s evidence that Mr. Kuzuchar was well aware of Ms. Kuzuchar’s spending habits during the marriage and did not complain until after separation.

As this Court has held previously, it would be arbitrary and unfair for a court to punish a spouse for a spending pattern that was historically accepted, even condoned, during the marriage: McAdam v McAdam , 2009 ABQB 109 at para 34 ; Dobrovolsky at paras 92-93 ; Hogue at paras 98 and 106 . [ 123 ] In the circumstances, I do not find Ms. Kuzuchar dissipated matrimonial property through gambling, or that any related adjustment to the property distribution is just and equitable. h.

The Effect of the July 2015 Order [ 124 ] Before I address issues related to the sale of the Home and the matrimonial debt, I address the effect of the 2015 Order of Justice McCarthy. [ 125 ] Ms. Kuzuchar in her evidence and argument appears to believe that the 2015 Order had a much greater effect on the parties’ rights than it did. She asked this Court to “enforce” the 2015 Order, which she characterized as an order for Mr. Kuzuchar to refinance, as the division of the matrimonial property or debt, as directing Mr.

Kuzuchar to personally assume the Second Mortgage, as entitling her to $46,000, and as resolving the allegations relating to her alleged gambling debts. None of these characterizations is correct. [ 126 ] The 2015 Order was granted in response to Ms. Kuzuchar’s application for the partition and sale of the Home and payment of matrimonial debt from the sale proceeds. Justice McCarthy did not grant that request, instead providing Mr. Kuzuchar time to refinance, failing which Ms. Kuzuchar was given leave apply for the order of the sale of the property.

The $46,000 in the 2015 Order was an estimate at that time of Ms. Kuzuchar’s equity in the home that she was hoping to get access to, not a resolution of the matrimonial debt. It is clear Justice McCarthy was making an interim without prejudice order, not resolving disputed matrimonial debt. This is confirmed in the text of the 2015 Order which states: “This order shall be without prejudice to either party’s rights or any subsequent accounting regarding matrimonial property”.

Interim, without prejudice orders are often granted in family proceedings, and are not binding at a final determination of the issues, especially in property distribution: Wolf at paras 45-49 ; Fleming at para 22 . [ 127 ] Even if Mr. Kuzuchar had refinanced and paid Ms. Kuzuchar the $46,000, this was not a final decision that she was entitled to $46,000 without any further accounting – it was subject to a final accounting and trial, and the positions of the parties including Mr. Kuzuchar’s allegation that some of the debts were not matrimonial debts. But all of that is academic in any event as Mr.

Kuzuchar did not obtain refinancing and paragraph 2 of the Order never became effective. i. The Delayed Sale of the Home [ 128 ] Ms. Kuzuchar claims that Mr. Kuzuchar dissipated the Home by delaying its sale and failing to keep it in good repair, which reduced its sale price. However, she has not articulated nor proven what the Home could have sold for had he not dissipated it or had it sold earlier.

Dissipation allegations that a party has not sold at the right time require clear evidence of a direct line between the conduct and the property loss: IMD v RAD , 2019 ABQB 963 at para 82 (13). [ 129 ] The reality is that the parties listed the Home too high to attract offers in 2015, then jointly decided to take it off the market. Under the 2015 Order, Ms. Kuzuchar was expressly provided the right to apply to sell the Home, but she did not do so for 6 years. In these circumstances, it is not appropriate for her to lay the blame for the delay in selling the Home only at the feet of Mr. Kuzuchar. While Mr.

Kuzuchar was reluctant to sell, Ms. Kuzuchar had remedies available to her that she did not use. She has not satisfied me that Mr. Kuzuchar dissipated the Home in a quantifiable way that would warrant an adjustment in the property division. [ 130 ] Ms. Kuzuchar also claims $50,000 for “legal costs”, part of which relates to the alleged delay in being able to sell the Home. She states that she appeared in chambers 11 times to effect the sale of the Home, but has not detailed when those appearances were. I find that her claim is exaggerated.

She incurred $6,333 in legal fees relating to the 2015 Order, which expressly provided that there would be no costs arising out of that application. She did have to attend court three times in 2021 (two Family Docket Court appearances

and one chambers appearance), but she was not assisted by counsel and incurred no legal costs. One of those appearances was resolved by consent and none of the orders provided for costs in her favour. [ 131 ] I reject Ms. Kuzuchar’s position that unequal division of proceeds from the House would be just and equitable due to delay in its sale. j. Use and Maintenance of the Home Post Separation [ 132 ] Ms. Kuzuchar claims $89,600 against Mr. Kuzuchar for what she describes as occupation rent, arising out of the fact that Mr. Kuzuchar remained in the Home post-separation and did not pay any rent to Ms. Kuzuchar.

However, during Ms. Kuzuchar’s parenting time, the children sometimes stayed at the Home after school until Ms. Kuzuchar could pick them up. [ 133 ] Post-separation, Mr. Kuzuchar paid the insurance, property taxes, maintenance costs, the interest on the First Mortgage, and principal and interest payments on the Second Mortgage (post October 2014). [ 134 ] Occupation rent is in the discretion of the court: Hantel v Hilscher , 2000 ABCA 84 at para 26 .

Our courts have made it clear that claims for occupation rent should be considered with caution: Kazmierczak v Kazmierczak , 2001 ABQB 610 at para 90 [ Kazmierczak (QB) ], affirmed 2003 ABCA 227 ; Vestby v Galloway , 2020 ABQB 361 at para 247 .

Occupation rent claims are best considered along with and as part of distribution of the matrimonial property: Hamani v Hamani , 2022 ABQB 441 at para 56 ; Harbaugh v Harbaugh , 2018 ABQB 922 at para 76 , affirmed 2020 ABCA 280 . [ 135 ] Rarely, if ever, should a spouse be allowed to bank a claim for occupation rent and present that claim in capitalized form years later as part of a matrimonial property action, because a long delay and banked claim may lull the spouse who possesses the property into not advancing a cross-claim for contribution toward the expenses incurred in maintaining the property: Vestby at para 247 , citing Kazmierczak (QB) at paras 90 and 95.

Claims for occupation rent may be defeated where the co-owner in possession has undertaken the maintenance of the property, resulting in common benefit to the parties: Vestby at para 248 ; Beaudry . [ 136 ] A proper assessment of whether it would not be just and equitable for equal sharing of a home (or sale proceeds from one) where, post-separation, one spouse remains in the home and the other does not, will be highly fact specific and will depend on a number of factors, including where any children reside, the carrying costs of the matrimonial home, the costs of accommodation incurred by the other party, the timing of sale of the home, and the parties’ contributions to its maintenance and repair: IMD at paras 66-83 ; Martin v Martin , 2019 ABQB 590 at paras 11-27 ; Julien D.

Payne & Marilyn A. Payne, Irvin Law Inc. (2017), 7 th ed at 762-3. [ 137 ] In this case, I am satisfied that Ms. Kuzuchar pleaded occupation rent and made it known to Mr. Kuzuchar early in the separation that she wanted the Home sold and that he should be paying some kind of rent to stay in the Home. I am not satisfied Mr. Kuzuchar was deceived about her intention. If he felt that he was at risk, he could have approached Ms. Kuzuchar to sell the Home. Mr. Kuzuchar has not formally made a claim for contribution to the Home, but he has raised it in defence to her claim.

In my view, any unfairness to him can be avoided by ensuring his contributions to the Home, including paying the property taxes, mortgages, and insurance, are also taken into account. [ 138 ] I further factor in and accept the evidence that Mr. Kuzuchar was actively discouraging her from selling the Home in 2016 when she had a realtor look at selling the Home. [ 139 ] However, Ms. Kuzuchar did not adduce reliable evidence as to what a rental amount for the Home would have been had it been rented from 2013 to 2021.

Further, a claim for occupation rent ignores the financial and other contributions to the Home made by Mr. Kuzuchar, including making payments on their joint matrimonial debts associated with the Home, as well as property taxes and insurance, all of which maintained the Home as their matrimonial asset. It also ignores the shared parenting and that the Home was used by Ms. Kuzuchar as an after-school care location during her parenting time. It is not as simple as charging Mr. Kuzuchar rent for 8 years. [ 140 ] In my view, a straight-forward occupation rent calculation is not appropriate in this case.

However, in my view, this case has some similarities to Martin . In that case, one party remained in the home, the home had decreased in value during separation, but there was an increase in equity. The parties had approximately equal earning capacities and equal parenting responsibilities. They did not have extravagant accommodations post-separation. Justice Grosse considered the overall cost of housing the two sides of the family: “in other words, the housing of the family unit, albeit fractured, is treated as a joint expense until trial.

Whether this is equal division with an adjustment or unequal division does not matter”: Martin at para 20 . She calculated the costs as best she could on the evidence and provided for an adjustment to one of the parties. [ 141 ] In my view, rather than an occupation rent calculation, it is just and equitable in this case to apply the Martin methodology, including because Ms. Kuzuchar could have, but did not, apply to have the Home sold earlier. I use the below inputs based on my earlier findings and additional findings: (

a) Ms. Kuzuchar paid approximately $1,600 per month in rent from July 2013 to October 2021 (99 months, or 8.25 years), for a total of $158,400; (

b) Ms. Kuzuchar paid approximately $6,975 in interest and $794.25 in principal on the Second Mortgage from July 2013 to October 2014; (

c) Mr. Kuzuchar paid approximately $750 per month in interest on the First Mortgage for 99 months, for a total of $74,250; (

d) Mr. Kuzuchar paid approximately $6,225.42 in principal and $12,765 in interest on the Second Mortgage; (

e) Based on his Corporation’s financial statements, Mr. Kuzuchar claimed a rental amount for use of the Home, which discloses some of the Home costs. For example in 2018 he paid $2,975 for insurance. If this is extrapolated over 8.25 years, it is

$24,543; (

f) Property taxes for the Home were $2,267 in 2014 and $2,556 in 2018. Total property taxes paid can be calculated using 50% of the 2014 amount for 2013, the average for 2015-2017 ($2,411.50 per year), and the $2,556 2018 amount for 2019-2021 as the best evidence available. This results in total property taxes paid by Mr. Kuzuchar in the amount of $20,576; (

g) Mr. Kuzuchar’s Corporation was deducting a rent expense based on its use of the Home during the relevant period, which included 10% of the mortgage interest, insurance, property tax, and utilities. The only evidence I have suggests this amount was approximately $1,945 per year, which I find gave Mr. Kuzuchar’s Corporation, and therefore him as director, officer, employee and shareholder, a personal benefit through less overall taxes. I do not have sufficient information from Mr.

Kuzuchar to calculate this benefit, so use a 25% tax adjustment factor and arrive at a $486.25 per year benefit in reduced overall taxes, which is deducted from the amount he has paid (or $4,011.56 over 8.25 years); and (

h) I do not have evidence of Ms. Kuzuchar’s utility costs. Given the shared parenting regime, the best evidence I have is that they would likely be the same for both families and so they are not factored into the calculation. [ 142 ] These findings are summarized below: [ 143 ] This reflects that Ms. Kuzuchar paid $31,822 more than Mr. Kuzuchar toward the family accommodations, which is a benefit he received. Put another way, she paid $166,169 when her 50% share of the total cost was $150,258. Based on all of the facts, and having regard to

section 8 (

c) and (

m) of the MPA , I find it would not be just and equitable for Mr. Kuzuchar to have an equal share of the matrimonial property without an adjusting equalization payment to reflect the benefit he enjoyed. k. Matrimonial Debt [ 144 ] Matrimonial debt is included in the division of matrimonial property: Kretschmer v Terringo , 2012 ABCA 345 at para 20 . However, this is calculated at the time of trial, and both parties testified they had no matrimonial debt left. [ 145 ] Where matrimonial debt no longer exists by the time of trial, it should still be considered under sections 7(4) and

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