2024 MBKB 21, 2024 MBKB 21

Date: 20240130 Docket: FD 20-02-09128 (Brandon Centre) Indexed as: Lowes v. Lowes Cited as: 2024 MBKB 21 COURT OF KING’S BENCH OF MANITOBA B E T W E E N: ) JOLENE GRACE LOWES, ) Rhea P. Majewski ) for the petitioner petitioner, ) ) -and- ) ) JUSTIN KENT LOWES, ) Jodi L.

Wyman ) ) for the respondent respondent. ) Report Issued: ) January 30, 2024 ) ) Deemed Confirmation Date: March 5, 2024 ASSOCIATE JUDGE PATTERSON ASSOCIATE JUDGE’S REPORT ON FAMILY PROPERTY ACT REFERENCE INTRODUCTION [ 1 ] This is a case which involves disputed issues including but not limited to establishing the value of a cattle herd, and determining whether a beneficial interest exists in a family farm corporation. [ 2 ] While the Court appreciates the efforts of counsel and the parties, unfortunately, there was no expert testimony presented to assist with certain of the contested aspects associated with this Reference.

BACKGROUND [ 3 ] The Petitioner, Jolene Grace Lowes (the “Wife”), and the Respondent, Justin Kent Lowes (the “Husband”), commenced cohabitating together on July 17, 2011 (they were married on June 15, 2013). [ 4 ] September 18, 2020 is the agreed date of the parties’ separation (the “valuation” or “closing date”). [ 5 ] There is one child of the parties’ marriage, Jazlynn Lowes (“Jazlynn”), born May 13, 2014.

The Husband has two other children from former relationships (Alexis, age 19 and Leyton, age 12), while the Wife was expecting at the time of this hearing. [ 6 ] The Wife presently lives in the Rural Municipality of Elkhorn, Manitoba, and is employed as registered nurse. [ 7 ] The Husband currently resides in the Rural Municipality of Ellice-Archie, Manitoba, and works as a farm labourer with Ja-Lyn Farms Ltd. (“Ja-Lyn”).

REFERENCE ORDER [ 8 ] Pursuant to the order pronounced by the Honourable Justice Menzies on November 7, 2022 (the “Reference Order”), an accounting and valuation with respect to the assets and liabilities of the Wife and the Husband (the “Reference”) was to be held in

accordance with The Family Property Act , C.C.S.M., c. F25 (the “ FPA ”). [ 9 ] A further order was pronounced by the Honourable Justice Abel on October 2, 2023 (the “Amended Reference Order”), wherein it was confirmed that the Reference was to also address the following issues:

a) The Wife's claim that her student loan (the “Student Loan”), which was incurred prior to commencement of the parties’ relationship but outstanding at the date of separation, is a shareable debt; and

b) The Wife's claim that the Husband had a beneficial interest in Ja-Lyn as of the date of separation. [ 10 ] The parties have reached consensus with respect to the following issues set forth within the Reference Order: a). The value of the assets and liabilities, as well as shareability, in relation to all items listed at paragraph 4.5 of the Reference Order, save and except in relation to Ja-Lyn and the Husband’s cattle herd; b). The value of the jointly owned assets contained within paragraph 4.6 of the Reference Order; and c).

The value of the liabilities set forth at paragraph 4.7 of the Reference Order. [ 11 ] In addition, the following issues contained within the Reference Order were resolved prior to commencement of the hearing for this Reference:

a) Inclusion of the Student Loan as a shareable debt (pursuant to the loan statements produced by the Wife for Account Nos. 5-58-5955 and 4-4227726, the sums owing at separation were $11,353.63 and $6,208.64 respectively); and

b) Withdrawal of the Husband's prior claim that his cattle herd should be determined to be a pre-acquired asset (such that only the appreciation in value of the cattle herd during the course of the parties’ relationship, if any, should be shareable with the Wife). [ 12 ] As a result, the contested issues to be determined pursuant to the Reference are as follows:

a) Value of the Husband’s cattle herd as of the date of separation;

b) Whether the Husband had a beneficial interest in Ja-Lyn as of the date of separation;

c) Accounting for payments made by each party with respect to joint liabilities post-separation; and

d) Costs. REFERENCE HEARING [ 13 ] The direct evidence of the Wife and the Husband was provided pursuant to affidavit, with both parties being cross-examined before the Court. [ 14 ] The only other witness was Barry Lowes (“Mr. Lowes”), who is the Husband's Father. [ 15 ] There were three exhibits entered into evidence at the hearing for the Reference:

a) Exhibit 1: the Agreed Book of Documents;

b) Exhibit 2: the affidavit of the Wife sworn October 17, 2023 (the “Wife’s Affidavit”); and

c) Exhibit 3: the affidavit of the Husband sworn October 13, 2023 (the “Husband's Affidavit”). [ 16 ] Counsel for the Wife read-in certain questions and answers from the transcript of the examination of Mr. Lowes held on September 15, 2023 (with no opposition from counsel for the Husband). Upon later reflection, however, the Court notes that in accordance with The Court of King's Bench Rules , M.R. 553/88 (the “ Rules ”), and in particular, Rule 31.10(3) , the evidence from an examination of a non-party such as Mr. Lowes may not be read into evidence pursuant to Rule 31.11(1).

Accordingly, the read-ins will be disregarded and not form part of the evidence considered for the Reference.

PRELIMINARY MOTION [ 17 ] At the commencement of this hearing, counsel for the Wife made a motion seeking to strike the Husband's Affidavit, or at a minimum, limit what evidence could be relied upon by the Husband. [ 18 ] Counsel for the Wife cited various grounds, including but not limited to Rule 30.02(1) (a party has a duty to disclose every relevant document that is or has been in their possession or control), as well as Rule 30.08(1)(which sets forth available remedies where a party fails to disclose a document or does not produce a document for inspection). [ 19 ] As an illustration of the issues raised, counsel for the Wife acknowledged that while the Husband had disclosed copies of his 2017 through 2020 income tax returns (as he had undertaken to do pursuant to a prior examination), no documentation was provided in relation to any purchases or sales of the Husband's cattle herd (involving Ja-Lyn), which he claims had occurred as far back as 2014 and onwards. [ 20 ] Further concern was expressed by counsel for the Wife because the Husband had decided not to call Marla Lesaichuk (“Lesaichuk”) of MNP LLP as a witness (she is the accountant for Ja-Lyn), but was intending to have Mr.

Lowes testify (when counsel

for the Wife had been unable to effectively serve a subpoena, and elected not to have Mr. Lowes attend as a witness). It was also asserted by counsel for the Wife that Mr. Lowes should not be permitted to testify as he had not complied with all of his undertakings given at the recent examination. [ 21 ] In response, counsel for the Husband advanced arguments such as but not limited to emphasizing that any documentation concerning cattle purchases and sales involving the Husband and Ja-Lyn was in the possession or control of Ja-Lyn (Mr.

Lowes), a non- party, and that examinations were not scheduled by counsel for the Wife as early as had been anticipated. It was also submitted that this motion should have been brought well before the morning of this hearing. [ 22 ] Ultimately, I decided to dismiss the Wife’s motion. My reasons are on the record, although the primary grounds for this decision can be summarized as follows: a) “Trial by ambush” is not to be condoned, and is inconsistent with disclosure duties and proportionality;

b) The latest version of the practice direction entitled “Practice Before the Masters” (now Associate Judges) confirms the obligation upon a party to present evidence to establish the value of their assets and liabilities which are in dispute, with it being the responsibility of the other party to produce their own evidence if the valuation presented is not accepted; and

c) The parties w ould only be entitled to rely upon the documentation which has been disclosed, with no new documents to be entered into evidence unless by consent or with leave of the Court. [ 23 ] T he Wife’s motion, and the time devoted to it, was not expected by the Court. There had been multiple Hearings for Directions convened, the last of which resulted in a lengthy memorandum, specifying what was to be accomplished, and by when, i n connection with preparation for this hearing. CONTESTED ISSUES

a) Value of the Husband's cattle herd

Summary of Husband's evidence [ 24 ] As described by the Husband, Ja-Lyn operates a large farming business, which includes purchasing, raising and selling purebred and commercial cattle, as well as grain farming. [ 25 ] The Shareholder’s Register for Ja-Lyn (a copy of which is attached as Exhibit “A” to the Husband’s Affidavit) confirms that Mr. Lowes and his brother, Glenn Lowes (“Glenn”), are equal shareholders of Ja-Lyn. In particular:

a) Mr. Lowes has been issued 404,650 F Preference Shares, as well as 200 C Common Shares, 100 A Common Shares and 100 B Common Shares; and

b) Glenn has been issued 404,650 E Preference Shares, as well as 200 D Common Shares, 100 A Common Shares and 100 B Common Shares. [ 26 ] According to the Husband, he does not have any ownership interest in Ja-Lyn whatsoever. The Husband does not hold any shares, nor is he a director or officer of Ja-Lyn. [ 27 ] The Husband commenced his own cattle herd by initially acquiring some cattle from Ja-Lyn (through Mr. Lowes). In May of 2009, the Husband purchased cattle from his cousin's business.

As explained by the Husband (at paragraph 11 of the Husband's Affidavit), “I borrowed money from Sunrise Credit Union, and with my father as a co-signer, I paid $91,000 to DJR Holdings for 112 bred cows”. [ 28 ] A lease agreement was subsequently entered into between the Husband and Ja-Lyn dated April 30, 2010 (the “Lease”), a copy of which is attached as Exhibit “C” to the Husband’s Affidavit. [ 29 ] The Husband provided a general overview of the Lease and its terms at paragraphs 16 and 17 of the Husband’s Affidavit: 16.

My father and I agreed that Ja-Lyn Farms would ensure I maintained the cattle herd of 130 head. As cows were born and either sold young, fed and sold after a year of growth or capped and bred, we knew that managing the distinction between the cattle herds could be a challenge. The lease confirmed that I would still own my 130 head of cattle each year. 17. Ja-Lyn Farms retained the calves from my cows and the sale proceeds were used to pay the loan and pay Ja-Lyn Farms for the feed and care of the cows. I did not have any out-of-pocket expenses for caring for my cattle herd during these years.

I did not receive any revenue from the calf sales until after the loan was paid off. My father looked after all of the bookkeeping for this. [ 30 ] It was explained by the Husband that Mr.

Lowes calculated the cattle loan for the Husband's cattle herd had been paid in full by 2014. [ 31 ] The Husband advised that Ja-Lyn continued to feed and pay the expenses for caring for the Husband's cattle, which included but was not limited to medications, veterinary bills, moving the cattle in the fields, costs associated with calving and the actual sale process. [ 32 ] Despite Ja-Lyn covering the costs for the feed and care of the Husband's cattle herd, the Husband admitted that these

arrangements were a topic of disagreement between the parties (the Wife believed that the Husband should be receiving his portion of the calf revenue annually). [ 33 ] On or about 2014 and until on or about 2017, the Husband ceased working as a farm labourer with Ja-Lyn, and was employed as a farm hand for a grain farming operation near Elkhorn. [ 34 ] The Husband confirmed that in 2014, he discussed sale of part of his cattle herd with Mr. Lowes. Ja-Lyn purchased 46 head, leaving him with 84 cows.

He stated that an amount of $15,000.00 was provided by Ja-Lyn, which was used for the down payment on purchase of a new vehicle for the Wife. [ 35 ] In conjunction with returning to work as a farm labourer for Ja-Lyn on or about 2017, the Husband advised that he negotiated and confirmed certain terms with Mr. Lowes. In particular:

a) It was agreed between the Husband with Mr. Lowes that the Husband would work full time for Ja-Lyn and receive a bi-monthly draw;

b) The Husband would be entitled to use a farm truck, the payments for which as well as any gas and insurance would be paid by Ja- Lyn; and

c) The Husband would have access to as much beef and butter as his family needed. [ 36 ] According to the Husband, Ja-Lyn provided materials and equipment which were used for landscaping of the new home purchased by the parties. Materials for building a deck at the new home of the parties were also paid for by Ja-Lyn. [ 37 ] The Husband’s evidence is that the Lease was not renewed beyond the stated expiry date of December 31, 2017. At paragraph 38 of the Husband’s Affidavit, it was explained as follows: 38.

Once I began work with my father we decided not to renew the cattle lease and instead sell off the 84 cattle that were owned personally by me. Jolene and I needed the money. With the increasing cost of feed it simply made no financial sense. We wound up my cattle herd by selling off calves and cows between 2017 and the end of 2020/beginning of 2021. [ 38 ] When the parties decided to purchase a new camper, financing was arranged. After speaking with Mr. Lowes, it was agreed that Mr.

Lowes (Ja-Lyn) would “add money to my monthly pay for the cattle sale proceeds and I would then have money for the loan payments” (paragraph 39 of the Husband’s Affidavit). [ 39 ] The Husband confirmed at paragraphs 40 and 41 of the Husband's Affidavit that Ja-Lyn also did the following insofar as the Husband receiving funds concerning sale of his cattle herd:

a) Ja-Lyn paid the lease payments for a new vehicle for the Wife (a Jeep), commencing in 2017 (the payments were $667.00 monthly, over a three year term, totaling $24,012.00); and

b) Ja-Lyn also paid the annual property taxes for the family home of the parties (which was over a period of four years, totaling $14,400.00). [ 40 ] It is the Husband’s position that he had approximately 30 head of cattle remaining in his herd as of the date of separation. A s clarified at paragraph 65 of the Husband’s Affidavit, the Husband stated within an affidavit, which responded to Questions on Interrogatories dated March 17, 2022, that he owned approximately 30 head of cattle by the date of separation (he did not retain any calves for greater than one year).

In addition, during an examination for discovery on May 11, 2023, the Husband answered twice that he owned approximately 30 head of cattle at separation. [ 41 ] With respect to valuation of his cattle herd, the Husband confirmed the following at paragraph 74 of the Husband’s Affidavit: 74. For the cattle owned by me at the date of separation, approximately 30 head, they were older and likely below market value because of their age. However I noticed on the CCBC contracts at the farm that cattle were sold on September 18, 2020 and the sale price works out to $1,400 per head.

These cows would have been at peak value but I am not opposed to using that as a figure for the value of my cows. [ 42 ] Separate and apart from his own cattle herd, the Husband described his knowledge of and involvement with Canadian Cattle Buyer’s Credit (the “CCBC”), commencing at paragraphs 18 and 19 of the Husband’s Affidavit: 18.

In approximately 2004, well before Jolene and I were together, and shortly after I became an adult, Ja-Lyn Farms began borrowing money from Canadian Cattle Buyer’s Credit, allowing the farm to access capital to purchase new cattle, care for them to increase their value and then sell them for more than the purchase value. The farm would care for the cattle and would be paid for the care of this cattle. From the sale, the CCBC loan would be paid and the farm reimbursed for its expenses. 19.

These stocker loans were initiated by my father to not only to raise capital for the farm, but as well, to create and build a credit rating for me.

[ 43 ] Within paragraphs 22 through 26 of the Husband’s Affidavit, the Husband provided further details concerning the CCBC program: 22. Each year with the CCBC stocker loan, Barry and Glenn handled the purchase of the cattle, the care of the cattle, the sale of the cattle and then the reimbursement for their expenses. 23. I have no accounting experience and have never done any bookkeeping, even of my own financial records. In fact I do not recall my father explaining CCBC loans to me but in May 2023 I was made aware of the loans and so later reviewed the documents provided to me by my father. 24.

I do recall signing documents annually for my father but as I was not paying money for the cattle nor receiving money for the cattle, I paid very little attention. I was however always aware of my 130 head of cattle, stemming from the original purchase I made in 2009, through to the start of my relationship with Jolene. 25. In the entire time I have had CCBC loans in my name, I have never paid a down payment toward the cattle out of my own personal funds. I have never repaid the loan from my own personal funds. I have never been involved in the purchase or sale of the cattle.

I have never paid for the feed or care of the cattle from my own money. I have never pocketed money from the sale of the CCBC cattle. 26. Each year I am asked to go to MNP and sign my income tax return with Marla Lesaichuk, the accountant for Ja-Lyn Farms. Income tax is not an area with which I am very familiar and I do not ask questions about the various notations for income and expenses in my income tax return. I trust Marla completely. [ 44 ] The Husband says he never had any documentation relating to the CCBC cattle in his possession.

All records were maintained by Ja-Lyn. [ 45 ] Under “Contract A”, “Contract B” and “Contract C” with the CCBC program, the Husband made no payments, did not incur expenses and did not receive any profits (as reviewed by the Husband within paragraphs 69 to 73 of the Husband’s Affidavit).

Summary of Wife’s evidence [ 46 ] The Wife described that she understood the Husband had initially purchased 25 cows from Ja-Lyn, for a purchase price of approximately $30,000.00. The Wife also remembered that the Husband had purchased cattle from his cousin.

It is on this basis that the Wife believed the Husband acquired and owned a cattle herd consisting of 130 head (as confirmed pursuant to the Lease with Ja-Lyn). [ 47 ] It was admitted by the Wife on cross-examination that she did not do an inspection or count to determine the number of head remaining within the Husband's cattle herd on or around the date of separation. The only document that the Wife had in relation to the Husband's cattle herd was a copy of the Lease.

She stated “I'm a nurse”, acknowledging that she had limited knowledge of the cattle industry and Ja-Lyn’s business operation. [ 48 ] During her testimony, the Wife confirmed that she did not understand how the Husband’s income tax returns were prepared, although she was aware that Ja-Lyn arranged for and paid to have his annual income tax return completed by the accounting firm retained by Ja-Lyn. [ 49 ] The Wife advised that she understood the Husband returned to work for Ja-Lyn (after leaving for approximately three years and taking up employment at another area grain farm) because the Husband was interested in taking over the farm.

She also understood that Mr. Lowes was wishing to train the Husband as he (Mr.

Lowes) “had a lot of information in his head”, and was encountering some health issues. [ 50 ] While it was explained by the Wife that she believed the Husband was receiving lesser income working with Ja-Lyn (so as to build ownership equity in the farm), she acknowledged upon cross examination that the Husband was reasonably compensated (she contended that the Husband put in more hours with Ja-Lyn than when he was employed at the other farm, where she advised that he had been well paid). [ 51 ] The Wife confirmed that she had raised concerns with Mr.

Lowes in 2018 (around the time of the Husband's return to work for Ja-Lyn) in relation to her belief that the Husband should be receiving more profits from his cattle herd. It was admitted by the Wife during cross-examination that Mr. Lowes discussed with her and did arrange for Ja-Lyn to pay expenses such as lease payments for her new vehicle and property taxes for their family home.

The Wife advised, however, that the landscaping work for their family home was a wedding gift to her and the Husband. [ 52 ] At paragraph 17 of the Wife’s Affidavit, it is acknowledged by the Wife that she was also aware of there being cattle purchased and sold in accordance with the CCBC program. The Wife admitted on cross-examination that she had no idea how the process worked with CCBC, but understood there was debt involved. [ 53 ] The Wife takes the position that the CCBC contracts are supportive of her claim that the Husband had a beneficial ownership interest in Ja-Lyn at the date of separation.

[ 54 ] Regardless of whether the Court finds that the Husband had a beneficial interest in Ja-Lyn, however, the Wife is of the view that the Husband was the owner of one third of the CCBC cattle, such that the Husband must account for the value at separation accordingly.

Summary of Mr. Lowes’ evidence [ 55 ] Mr. Lowes resides in the Rural Municipality of Ellice-Archie, near McAuley, Manitoba. He advised that he acquired his first cattle herd upon completing high school (in the mid-1970s), and has been actively involved in the cattle industry ever since. [ 56 ] As confirmed earlier herein, Mr. Lowes is one of the two shareholders in Ja-Lyn. The other principal and equal shareholder is Glenn (his brother). The business of Ja-Lyn involves purchase and sale of purebred and commercial livestock, as well as grain farming. [ 57 ] Ja-Lyn was incorporated in 1991.

Initially, there were four shareholders (Mr. Lowes and Glenn, as well as their father, and their brother James). [ 58 ] When their father and brother passed away, Mr. Lowes and Glenn acquired all of the shares in Ja-Lyn. [ 59 ] Mr. Lowes confirmed that in 2020, Ja-Lyn owned approximately 400 head of purebred or “papered” cattle, plus calves, as well as approximately 1000 head of commercial cattle. He indicated that the business of buying and selling cattle became a large business venture for Ja-Lyn as of on or about 1995. [ 60 ] According to Mr.

Lowes, Ja-Lyn owns or leases numerous quarter sections of land (some of these properties used to grow feed for Ja-Lyn’s livestock). [ 61 ] Mr. Lowes described his work on behalf of Ja-Lyn as including but not limited to banking, arranging financing and the purchase and sale of cattle, as well as the sale and purchase of grain and feed. He commented that “I do whatever is needed” but admitted “I’m not a fixer” (in reference to maintenance and repair of farm equipment). [ 62 ] The Husband commenced working with Ja-Lyn upon completing high school, although Mr.

Lowes did acknowledge there was a period of time from on or about 2014 to until 2017 when the Husband worked elsewhere (for another farming operation near Elkhorn). [ 63 ] Sheena and Nevin are the two other children of Mr. Lowes, both of whom are not involved with Ja-Lyn. [ 64 ] Brooke Canart (“Brooke”) and Stacy Lowes (“Stacy”) are Glenn's daughters. Brooke works for Ja-Lyn by assisting Mr. Lowes and Glenn with office administration duties, such as but not limited to record keeping as well as preparing invoices and receipts. [ 65 ] Mr.

Lowes recalled the Husband arranging for a loan, and purchasing the cattle herd of the Husband’s cousin on or about 2009. He remembered that there were approximately 90 head of cattle involved with the purchase (the cattle in question were being cared for at the time upon Ja-Lyn's property). When this purchase occurred, Mr. Lowes believed that the Husband already had a small herd of approximately 30 head of cattle. [ 66 ] Consistent with the Lease (which Mr. Lowes acknowledged was entered into between the Husband and Ja-Lyn in 2010), the Husband owned 130 head of cattle at that time. [ 67 ] Mr.

Lowes confirmed that the Husband's loan for purchase of cattle was paid fully in 2014. [ 68 ] According to Mr. Lowes, from on or about 2014 to 2020, and thereafter, the Husband did not add to or replace his cattle herd. When the term of the Lease expired in 2017, Mr. Lowes was adamant that the Lease was not renewed. He explained that the Husband had actually commenced “selling down” his cattle herd. Mr.

Lowes advised that Ja-Lyn purchased some of the Husband’s cattle, and that by on or around the date of separation, he believed there would have been approximately 25 to 30 head remaining in the Husband’s cattle herd. [ 69 ] Instead of paying the Husband directly for his share of the calves pursuant to the Lease, or for purchase of cattle when the Husband was “selling down” his cattle herd, Mr.

Lowes described that other compensation or benefits were provided by Ja-Lyn, such as but not limited to the monies that were utilized by the parties as a down payment on a vehicle for the Wife, making lease payments on a subsequent new vehicle for the Wife and paying the annual property taxes for the parties’ home. [ 70 ] As Mr. Lowes explained, if Ja-Lyn had just given funds directly to the Husband, he would have had to claim these monies and remit any applicable tax (this method “skips the tax man”). [ 71 ] With respect to the Wife questioning Mr.

Lowes about the Husband’s portion of the profits from calves, he remembered the conversation (which included the Wife mentioning that Alexis was needing braces). Mr. Lowes advised the Wife that there would be financial compensation or benefits provided to the Husband, in lieu of receiving a percentage of the calf crop profits, as the cattle loan was paid (but this did not include an ownership interest in Ja-Lyn). [ 72 ] It was also clarified by Mr.

Lowes that the use of a skid steer as well as gravel and other materials or supplies by the Husband was not a wedding gift, but instead was made available to the Husband because of his work for Ja-Lyn. [ 73 ] With respect to CCBC, Mr. Lowes explained that it is an entity which serves as a source of funding for those involved within the cattle industry. In

summary, the following details were reviewed by Mr. Lowes:

a) Any loans applied for and received from CCBC were arranged by Mr. Lowes, with the financing placed into the names of the Husband, Brooke and Stacy. He explained that there is a standard form to fill out, sign and submit to CCBC (it was usually Mr. Lowes or Brooke who completed this documentation).

b) Financing the purchase of cattle through CCBC would, from Mr. Lowes’ perspective, assist with building the respective credit ratings of the Husband, Brooke and Stacy.

c) Mr. Lowes explained that Ja-Lyn would sell a certain number of cattle to a large cattle buyer, who would turn around and sell these same cattle to the Husband, Brooke and Stacy. The loan proceeds from CCBC were utilized to complete purchase of the cattle, with Ja- Lyn ultimately receiving these funds (for cattle which “stayed on the farm”).

d) According to Mr. Lowes, these arrangements resulted in “a cash advance” for Ja-Lyn (which he stated was completely acceptable, and frequently done by others within the cattle industry).

e) Ja-Lyn would give the CCBC cattle a brand of “L-11”, so that these cattle could be distinguished from the other cattle owned by Ja- Lyn.

f) When the CCBC cattle were later sold, all monies received were initially applied to paying the CCBC loan in full, with the remaining sale proceeds payable to Ja-Lyn. Mr. Lowes explained that this was because the required down payment for purposes of the CCBC loan and purchase of cattle was provided solely by Ja-Lyn. In addition, Ja-Lyn attended to care of the CCBC cattle, and incurred all of the associated expenses, such as but not limited to feed, medications and veterinary costs, as well as maintaining the stalls, fencing, pasture and transporting the cattle. The Husband, Brooke and Stacy did not contribute any funds whatsoever.

g) As a result, the net sale proceeds, and any remaining cattle, became the entitlement of Ja-Lyn pursuant to what Mr. Lowes called a “gentlemen’s agreement” between himself (on behalf of Ja-Lyn) and the Husband, Brooke and Stacy. He stated that “right or wrong, that it is how we did it”.

h) There was no agreement in writing between Ja-Lyn and the Husband, Brooke and Stacy in relation to any of the CCBC cattle that had been purchased, financed and then later sold. [ 74 ] Mr. Lowes acknowledged that a copy of Contract A with CCBC is located at Tab 13 of the Agreed Book of Documents (which describes the purchase of 303 head of cattle on March 12, 2019). All of the cattle purchased and sold in accordance with Contract A had been completed in advance of the date of separation. [ 75 ] A copy of Contract B with CCBC was identified by Mr. Lowes and is included as Tab 15 within the Agreed Book of Documents, the primary details of which are as follows:

a) Pursuant to Contract B, there was a purchase by the Husband, Brooke and Stacy of 200 head of bred and feeder heifers, for a total price of $300,500.00, on May 19, 2020;

b) The price per head was $1,502.50;

c) The substantial down payment required was paid by Ja-Lyn ($103,192.11); d) 129 of these cattle were sold, following separation, for a total of $274,006.55;

e) The CCBC loan was paid in full, as well as the feed and other related expenses of Ja-Lyn; and

f) All net proceeds, and the cattle not sold upon completion of Contract B, were retained by Ja-Lyn exclusively. [ 76 ] At Tab 17 to the Agreed Book of Documents is a copy of Contract C, the key provisions of which are as follows:

a) There were 375 feeder heifers purchased by the Husband, Brooke and Stacy on April 2, 2020 for a total price of $262,500.00;

b) The price per head was $1,198.75;

c) Ja-Lyn supplied the down payment in an amount of $44,625.00 (no monies were contributed by the Husband, Brooke or Stacy); d) 127 head were eventually sold to Whitewood Livestock Auction on September 20, 2018 for a price of $178,909.84 (or an average of $1,408.74 per head);

e) A further 40 head were sold to Cargill on November 5, 2020;

f) There were 42 head recorded as being sold to Ja-Lyn on February 8, 2021;

g) Another 60 head were sold to Naylen Farms on February 8, 2021; h) 46 more head were sold to Whitewood Livestock Auction on March 18, 2021;

i) The CCBC loan was paid in full, as well as the feed and other related expenses of Ja-Lyn;

j) Mr. Lowes advised that the average weight of the cattle purchased in April of 2020 was approximately 700 pounds, whereas the average weight of the same cattle was approximately 830 pounds by September 18, 2020 (he stated that from April 2, 2020 to September 18, 2020, it worked out to the each cow gaining approximately 1 pound daily); and

k) Similar to Contract B, any net proceeds and cattle remaining pursuant to Contract C were retained by Ja-Lyn exclusively. [ 77 ] With respect to the costs involved for care of the CCBC cattle, Mr. Lowes confirmed the following:

a) Mr. Lowes indicated that a 400 pound calf would typically eat an amount of 2.5% to 3% of its body weight on a daily basis, whereas a 1,200 pound cow may eat 3% to 3.5% of her body weight daily (equivalent to at least 25 lbs. of feed and be as much as 35 lbs. of feed);

b) As a result, Mr. Lowes stated that it can cost as much as $1.80 daily in feed for a calf, and as much as $4.00 to $6.00 daily in feed for a cow, plus all other related expenses, such as but not limited to costs for stalls, fencing and pasture as well as medications, veterinary services and transport;

c) When Ja-Lyn sent 44 head of cattle to Alberta, the transport expense was over $4,000.00, while shipping a load of cattle to Guelph, Ontario resulted in costs that worked out to approximately $160.00 a head; and

d) There are no documents in evidence which confirm or tracked how much feed costs were incurred by Ja-Lyn for the CCBC cattle until issuance of an invoice (various feed invoices are detailed within the CCBC contracts). [ 78 ] Mr. Lowes indicated that the only involvement of the Husband with purchase of cattle by on or around 2020 would have been through CCBC, even if the Husband’s income tax returns disclosed otherwise (within the 2021 income tax return of the Husband, which is at Tab 8 of the Agreed Book of Documents, there are purchases and sales of cattle recorded). Mr. Lowes advised that any such purchases and sales were just “paper cattle”.

Summary of Wife’s position [ 79 ] Counsel for the Wife made a detailed submission, which commenced with the following review of the Husband's income tax returns:

a) The earliest income tax return disclosed by the Husband was his 2017 income tax return (located at Tab 4 of the Agreed Book of Documents). For 2017, the Husband declared net farming income of $19,685.16, which included $9,300.00 in cattle sales and livestock purchases of $26,000.00;

b) As to the Husband’s income tax return for 2018 (Tab 5 of the Agreed Book of Documents), the Husband's net farming income was declared to be $28,306.67, which included cattle sales of $12,011.00 and livestock purchases in an amount of $22,600.00;

c) For the 2019 income tax return of the Husband (at Tab 6 within the Agreed Book of Documents), net farming income was reported as $22,176.83, with cattle sales of $8,501.00 and livestock purchases in an amount of $153,870.00;

d) Counsel for the Wife submits that the evidence of cattle purchases recorded within the 2019 income tax return of the Husband is not at all consistent with his claim of reducing his herd to approximately 30 head of cattle by the following year (2020);

e) Within the 2020 income tax return of the Husband (at Tab 7 of the Agreed Book of Documents), the Husband’s net farming income was stated as being $27,499.17, with $66,700 in sales and no livestock purchases;

f) The Husband’s 2021 income tax return is at Tab 8 of the Agreed Book of Documents, and as earlier reviewed, confirmed there were sales and purchases of livestock; and

g) Similarly, the Husband’s 2022 income tax return (at Tab 9 of the Agreed Book of Documents) confirms the Husband continued to report cattle sales that year. [ 80 ] According to the counsel for the Wife, analysis of the above noted income tax returns of the Husband should reasonably result in a conclusion that the Husband had more cattle in his herd at separation than he is prepared to admit. [ 81 ] Based upon the foregoing, as well as other evidence such as the Lease, counsel for the Wife submits that the Court should determine that the Husband had 130 head in his cattle herd as of the date of separation. In

summary, it was argued as follows:

a) Despite the Husband’s claims, he has been unable to demonstrate with receipts, invoices or other documentation that he reduced his cattle herd from 130 head to 84 head, and then to approximately 30 head prior to separation.

b) While the term of the Lease expired as of December 31, 2017, it was submitted by counsel for the Wife that this could be interpreted to be only in relation to the calf crop sharing agreement, such that it could also be concluded that the Husband continued to operate under the Lease up to the date of separation.

c) The Husband's cattle herd consisted of some bred cows, not just feeders. If Contract A values are utilized, with the sale to Naylen Farms being at $1,935.00 per head, a cattle herd of 130 head would have a value of $251,550.00. [ 82 ] It was further argued by counsel for the Wife that Mr. Lowes had stated in his evidence words to the effect that one has calves “to make money from them, not just to feed them”. It was pointed out that the Husband advised there should be approximately one calf per cow, although there is an applicable mortality rate, as well as a certain percentage of cows that are not bred.

According to counsel for the Wife, if there were 100 calves in the Husband’s cattle herd, 25% of those calves would be the Husband’s, and 75% would be owned by Ja-Lyn, in accordance with the Lease. [ 83 ] Using Contract C values, where there were 375 calves weighing 700 pounds purchased for $1,198.75 each, counsel for the Wife suggests that the resulting value attributable to the Husband’ cattle herd should be in an amount of $29,968.75 for calves at separation. [ 84 ] For purposes of the CCBC cattle, counsel for the Wife submitted as follows:

a) Pursuant to Contract A, the cattle were purchased and sold prior to separation.

b) In accordance with Contract B, there were 200 cattle purchased by the Husband (along with Brooke and Stacy). There were both bred and feeder cattle, although it is not known how many calves were born to these cows. The CCBC loan was in an amount of $199,929.52, for which the Husband had a one-third responsibility. With a corresponding one third ownership interest, or 67 cows, at a price of $1,502.50 per head, the result is a net value for the Husband of $34,024.33 as of the date of separation. Even if there were some calves, it was acknowledged that there would have been expenditures incurred by Ja-Lyn, so no further amount is being sought by the Wife.

c) Concerning Contract C, there were 375 cows purchased (the Husband would have had an ownership interest to 125 head, or one third). Only 127 head were sold by separation, such that out of the remaining 248 head, the Husband would own one third (or 83 head). The debt outstanding with CCBC was $233,545.85, with the Husband’s responsibility on a one-third basis being $77,848.61. The sale price of the cattle in accordance with Contract C was $1,480.74 per head, which would result in a value for the Husband’s 83 cows at separation of $116,925.42.

After deducting his one-third responsibility for the CCBC loan, a value in an amount of $39,076.81 should be attributable to the Husband as of the date of separation. [ 85 ] In view of the above noted details, counsel for the Wife contends that pursuant to the Lease, the Husband would have owned 130 full grown cows at separation, which should be valued at $1,935.00 per head, for a total value of $251,550.00 (there should not be any debt as the cattle loan had been paid by on or about 2014).

In addition, and if there were 25 calves, valued at $1,198.75 each, the result is a further sum for which the Husband must account totaling $29,968.75. [ 86 ] There is then the Husband’s one-third interest in the Contract B cattle, which was calculated by counsel for the Wife to have a value of $34,024.33.

As to the Contract C cattle, counsel for the Wife submits that the one-third interest of the Husband should be valued in an amount of $39,076.81. [ 87 ] From the Wife's standpoint, the grand total and shareable value of the Husband's cattle herd (his own cattle, and the CCBC cattle) should be determined to be in an amount of $354,619.89 as of the date of separation. [ 88 ] Counsel for the Wife submits that it was the responsibility of the Husband to value his cattle herd.

It was argued that he did not do so sufficiently, such that the Wife has been left to construct a position as best as possible from the evidence available. [ 89 ] It was also noted by counsel for the Wife that reference by the counsel for the Husband in closing submissions to a resulting trust being applicable for the CCBC cattle (in favour of Ja-Lyn) was the first time this argument was mentioned (a claim which the Wife disputes).

Summary of Husband’s Submission [ 90 ] Counsel for the Husband made an equally thorough submission, which commenced with focus upon the Wife’s challenges to the credibility of the Husband's evidence. In

summary, it was articulated as follows:

a) The Wife and her counsel are inappropriately attempting to depict the Husband’s conduct as being representative of bad faith, so as to impugn the credibility of the Husband, as well as Mr. Lowes.

b) There was adequate disclosure provided on by the Husband, and this is a case where the Wife was not satisfied with what was supplied, and proceeded to seek “more and more information”. In the alternative, it was asserted that if it is determined there was incomplete disclosure on the part of the Husband in relation to his cattle herd, it does not necessarily mean that the Court should be skeptical of what evidence has been presented by the Husband.

c) It was noted that Mr. Lowes attended for an examination as a non-party. There was no attendance cheque provided, and no listing of documents to be produced within the notice of examination received by Mr. Lowes. If it was the intention of the Wife to have Mr. Lowes testify (which it was submitted made it all the more puzzling when there was opposition to the Husband calling Mr. Lowes as a witness, after the Wife had decided not to do so), the only conclusion which can be reasonably reached is that the Wife did not want to have evidence from Mr.

Lowes before the Court. [ 91 ] As to the Wife's knowledge of the number of cattle which remained in the Husband's herd at separation, counsel for the Husband advanced the following argument:

a) The Husband had acquired his own cattle herd, and entered into the Lease, prior to commencement of the parties’ relationship.

b) At paragraph 17 of the Wife’s Affidavit, she admitted that “I do not know how many cows Justin owned at our date of separation”.

c) Within her own financial statement completed in December of 2020, the Wife noted that the Husband had a cattle herd of between 100 to 130 head at separation.

d) The Wife did not complete a visual inspection or count of the Husband's cattle herd on or around the date of separation.

e) It was acknowledged by the Wife that there were no records maintained within the family home concerning the number of head in the Husband’s cattle herd (the only document that she had a copy of was the Lease).

f) As much as the Wife is requesting the Court to follow the Lease, and determine that there would have been 130 head within the Husband’s cattle herd at separation, the Husband’s evidence confirms that the Lease was not entirely followed. For instance, once the Husband’s cattle loan was paid in full by on or about 2014, the Husband did not receive an annual payment in relation to his 25% share of the calves. Instead, the Husband received other financial compensation from Ja-Lyn (such as but not limited to the sum of $15,000.00 that was used as a down payment on purchase of a vehicle for the Wife, which the Wife does not dispute).

g) When Ja-Lyn purchased cattle from the Husband, there were financial benefits provided by Ja-Lyn (the Wife does not deny that there were lease payments made for her new vehicle or that there was payment of property taxes for the parties’ family home).

h) The evidence demonstrates that Ja-Lyn essentially assumed the risk and paid all of the expenses in connection with the Husband’s cattle herd, although there was no year-end or periodic accounting provided by Ja-Lyn and Mr. Lowes to the Husband.

i) Separate and apart from the CCBC cattle, there were no other purchases or financing arranged by the Husband for his cattle herd for a considerable period of time leading up to the date of separation.

j) Within paragraph 13 of the Wife’s Affidavit, the Wife admitted that “Barry told Justin much of the business of the farm is not in writing and was just in his head…”(meaning Mr. Lowes).

k) As a result, it was submitted by counsel for the Husband that there is credibility to what both the Husband and Mr. Lowes have advised the Court (that there would have been about 30 head of cattle left in the Husband’s herd at separation, with this position being consistent with prior responses provided by the Husband, such as during examinations). [ 92 ] With respect to valuation of the Husband's cattle herd, counsel for the Husband provided the

summary:

a) In order to value the 30 head of cattle of the Husband at separation, there can be reasonable reliance upon Contract C for the CCBC cattle. On September 18, 2020, 127 head of cattle were sold to Whitewood Livestock Auction Mart, at a price of $178,909.84 (or $1,408.73 per head). At $1,400.00 per head, for the 30 remaining cattle in the Husband’s herd at separation, the result is a shareable value of $42,000.00.

b) While there may be certain costs or tax consequences associated, counsel for the Husband confirmed that the Husband is prepared to establish the value of his cattle herd at separation in an amount of $42,000.00. [ 93 ] Concerning the Husband’s income tax returns, counsel for the Husband articulated as follows:

a) The evidence demonstrates that the Husband, and the Wife, essentially showed up at the office of the accounting firm retained by Ja- Lyn and Mr. Lowes, at which time they would sign the documentation prepared, without having input into the facts and figures utilized as it concerns the Husband’s cattle herd.

b) Even if the income tax returns of the Husband reveal purchases and sales of cattle (at times when the Husband claims that he was “selling down” his herd), these returns do not provide an entirely accurate picture of the Husband’s circumstances. For example, it was not clarified if the Husband’s returns were completed on a cash or accrual basis. In addition, it was argued that certain expenses incurred should properly be matched to the specific cattle purchased, and that there are inventory adjustments which could be applicable.

c) It was also submitted that even if the evidence of the Husband, or Mr. Lowes, does not entirely match the details set forth within the Husband’s income tax returns, the Court should not immediately draw any adverse inferences against the Husband, as the planning undertaken by Ja-Lyn and Mr. Lowes was based upon professional accounting and taxation advice. [ 94 ] As to the CCBC cattle, counsel for the Husband made the following submissions:

a) While there may have been purchases of cattle in the name of the Husband, Brooke and Stacy, with loans through CCBC arranged in their respective names, Mr. Lowes was adamant that all arrangements, payments and expenses were attended to by Ja-Lyn, with Ja-Lyn retaining any profit and remaining cattle, not the Husband, Brooke and Stacy;

b) There was no equity in the CCBC cattle at separation, and even if the Husband could be viewed as having an ownership interest of value, any such interest was arguably held in trust for Ja-Lyn (on a resulting trust basis); and

c) The expenses involved for feed and care of the CCBC cattle were significant and should not be ignored. Ja-Lyn, not the Husband, was incurring these costs. [ 95 ] Based upon the foregoing, counsel for the Husband provided the following calculations and

summary in support of the Husband’s position concerning valuation of the CCBC cattle:

a) Contract A was completed prior to separation.

b) Contract B: i) 200 head of cattle were purchased for $200,570.00 on May 19, 2020 and fed from May to September in 2020; ii) A value per cow of $1,400.00 totals $280,000.00; iii) CCBC debt as of the date of separation was $200,578.00; iv) $5.00 per day for feed per cow, over 120 days, equals $120,000.00;

v) Shipping costs of $1,000.00; and vi) $12.00 per head for medication equals $2,400.00. Total value is minus $43,970.00 (the Husband’s one-third share at separation equals minus $14,659.00).

c) Contract C: i) 375 head of cattle were purchased on April 20, 2020; ii) 127 head were sold on September 18, 2020; iii) 248 head of cattle were remaining at separation, which if valued at $1,400.00.00 each, totals $347,200.00; iv) The applicable CCBC debt was $233,545.00 as of the date of separation; v) $5.00 per day for feed per cow, over for 120 days, amounts to $148,800.00; vi) Shipping costs of $1,000.00; vii) $12.00 per head for medication equals $2,976.00; and Total value is minus $39,121.00 (the Husband’s one-third share at separation equals minus $13,040.00). [ 96 ] Counsel for the Husband submits that even if the Court was to conclude the Husband did have an interest in the CCBC cattle, there was no shareable value as of the date of separation in accordance with the foregoing calculations.

ANALYSIS [ 97 ] The Court has been tasked with assessing the voluminous evidence and determining if the Husband’s cattle herd consisted of 130 head and some calves, or whether the Husband had significantly reduced his herd to only 30 head of cattle as of the date of separation. [ 98 ] At the outset, and recognizing the Husband bears the onus to establish the extent and value of his cattle herd at separation, on a balance of probabilities, I make the following observations insofar as what is not in evidence before the Court:

a) The Husband did not produce any invoices, receipts or other documentation to substantiate his position that he had sold 46 head of cattle to Ja-Lyn on or about 2014 (which reduced the size of his herd to 84 head);

b) Similarly, there are no invoices, receipts or other documentation in evidence to support the Husband’s position that he proceeded to further reduce his herd through sales with Ja-Lyn (from on or about 2017 onwards), leaving him with only approximately 30 head of cattle by separation;

c) No documentary disclosure was provided by Ja-Lyn or Mr. Lowes in connection with purchase of cattle from the Husband (when the Husband was “selling down his herd”);

d) The Husband did not disclose his 2014, 2015 or 2016 income tax returns (in furtherance of his position that his cattle herd was reduced from 130 head to 84 head, from on or about 2014 to 2017); and

e) While Ja-Lyn cared for and incurred expenses in connection with the Husband’s cattle herd (such as for feed), there was no year-end or periodic accounting provided by Ja-Lyn (Mr. Lowes) to the Husband. [ 99 ] Interestingly, there was no issue or difficulty with disclosure of documentary evidence concerning the CCBC cattle contracts. [ 100 ] Ja-Lyn operates a large cattle and grain farming venture, and it has retained Lesaichuk with MNP LLP to provide professional accounting advice. Mr.

Lowes also confirmed that Brooke assists with administrative duties for Ja-Lyn, such as preparing invoices and receipts. [ 101 ] For a business that owned well over 1,400 head of cattle in 2020 , and farm ed multiple parcels of land, it is not unreasonable to expect there to have been some documentation prepared or maintained by Ja-Lyn that could be of relevance to the Husband’s contention (supported by Mr. Lowes) that Ja-Lyn purchased a portion of the Husband’s cattle herd. [ 102 ] T he Court appreciates that the Husband is not a principal of Ja-Lyn . That being stated, Mr.

Lowes is the Husband ’s father, and testified in support of the Husband’s position concerning his cattle herd. While the Husband has confirmed that any documentation concerning purchase of a portion of his cattle herd would be in the possession and control of Ja-Lyn, I am not satisfied that the Husband, or Mr.

Lowes, have demonstrated that reasonable best efforts were undertaken to locate or search for such documentation, or in the alternative, to thoroughly explain why it is the case that no records of relevance could be made available and disclosed for purposes of this proceeding. [ 103 ] What has been presented as evidence, however, is the Husband’s income tax returns for 2017, 2018, 2019 and 2020 (as well as for 2021 and 2022). [ 104 ] Even though sales of livestock in an amount of $66,700, with no livestock purchases, was reported within the 2020 income tax return of the Husband (which is consistent with Husband’s position), there were purchases of livestock for the sum of $153,870.00 reported within the Husband’s 2019 income tax return, which is at odds with the Husband’s position that he was “selling down his herd”.

Purchase of livestock was also reported within the Husband’s 2017, 2018 and 2021 income tax returns. [ 105 ] Counsel for the Husband has offered an explanation, which as reviewed earlier herein, is premised primarily upon the following:

a) The income tax returns of the Husband do not provide an entirely accurate depiction of the circumstances surrounding the Husband’s cattle herd;

b) The Husband professed to have limited to no knowledge of the basis upon which his income tax returns were prepared (he trustedLesaichuk implicitly, and did not ask questions);

c) Mr. Lowes advised that the only purchase of cattle involving the Husband by on or around 2020 would be in connection with theCCBC cattle, such that if the income tax returns of the Husband disclosed otherwise, all that was being reported for the Husband was“paper cattle”. [106] Lesaichuk did not testify on behalf of the Husband (as was expected from discussions during the previous Hearings forDirections). From the perspective of the Court, evidence from Lesaichuk could have been informative and of valuable assistance inreconciling the Husband’s position, as well as the evidence of Mr.

Lowes, with the details reported within the Husband’s income taxreturns from 2017 through 2020 (as well as 2021 and 2022). [107] With respect to the issue of reporting transactions for income tax purposes in the context of family property disputes, I hadpreviously reviewed the relevant case law within the rather recent decision that I issued in Desrochers v. Desrochers, 2020 MBQB 140 (“Desrochers”), commencing at paragraph 109: [109] In the circumstances, I am guided by the comments of the Honourable Justice Allen in Faurschou v.

Farschou, 2016MBQB 12, wherein at paragraph 40, she referred to the often cited decision of Dashevsky v. Dashevsky, (MB QB), 40Man R. (2d) 58, and approvingly stated that: In Dashevsky, Carr J. had held that a transaction between parents and a child, expressly arranged to be considered as a sale ratherthan a gift for tax purposes, could not be later characterized as a gift so as to exempt the property from The Marital Property Act,even if though the payments for the property were never made. [110] Justice Allen proceeded to mention another well recognized decision, Fehr v.

Fehr, 2003 MBCA 68, wherein the issuewas whether or not a transaction structured to be a sale for income tax purposes could be determined to be a gift (for purposes of divisionof family property). She summarized, at paragraph 39, that: The Court of Appeal agreed that the transaction had the legal effect of a sale by the father and a purchase by the husband.

Theparties must be presumed to have intended the consequences of the words they used. … [111] In Dillon v Dillon, 2017 MBQB 154, the Honourable Justice Cummings noted within paragraph 19 of his decision that: … The decisions in those cases [Dashevsky and Fehr] are summed up by Hatch J in Kalawarny Estate v.

Fife, [2016] M.J. 221 atparagraph 24: “how property was portrayed by a party for tax purposes was relevant to its characterization for subsequent familyproperty proceedings.” All of these cases are dealing not with values of assets in financial statements but instead the conduct of parties indeclaring a certain situation for income tax purposes and then recanting that declaration when it suits him or her for the characterizationof assets under the Family Property Act. … [108] Based upon the foregoing case law, the Husband cannot simply argue that his position, and the evidence of Mr.

Lowes, should bepreferred wherever there is a discrepancy with what has been reported within the Husband’s income tax returns, which wereprofessionally prepared by an accountant, and filed annually with Canada Revenue Agency (“CRA”). [109] Purchase and sale of livestock reported by the Husband for income tax purposes may, or may not, be linked to the CCBC cattle(to be reviewed within the balance of this decision), but there was no accounting testimony presented for clarification. [110] There is, however, certain other evidence for the Court to contemplate as part and parcel of determining the extent and value ofthe Husband’s cattle herd at separation. [111] Concerning the period of on or about 2014 to 2017, I have considered the following details:

a) According to the Husband, it was on or about 2014 when he asked Mr. Lowes to purchase a portion of his cattle herd, which resultedin purchase of 46 head by Ja-Lyn. The Husband has confirmed that an amount of $15,000.00 was received from Ja-Lyn, which wasutilized as a down payment on a vehicle for the Wife (the amount of funds provided, and the use of these monies, is not contested by theWife).

b) The Court is struggling, however, to find that an amount of $15,000.00 is reflective of a reasonable purchase price for 46 head ofcattle. There has been no specific evidence presented in relation to fair market value of cattle on or around 2014. For illustrationpurposes, and at even $1,000.00 per head, the result would be that the Husband received payment from Ja-Lyn for 15 head.Alternatively, if a value of $1,400.00 a head was utilized (the Husband’s suggested value for his herd at separation), the outcome wouldbe that the Husband received payment for only 11 head, nowhere near the total of 46 head which the Husband says were purchased byJa-Lyn.

[ 112 ] Pursuant to the above noted evidence, I find that a more plausible conclusion or

interpretation is what had been suggested by counsel for the Wife, namely, that the funds in an amount of $15,000.00 received from Ja-Lyn was in lieu of the Husband’s 25% share of the annual calf crop in accordance with the Lease, which the Husband did not receive even though the cattle loan had been fully paid by 2014. [ 113 ] Moving forward to the period of on or about 2017 until the date of separation, I have considered the following further details:

a) The Husband advised that the Lease was not renewed upon expiry of its term in December of 2017. The Husband’s evidence is that he continued thereafter to reduce his herd (to approximately 30 head by separation, a position fully supported by Mr. Lowes).

b) When the Husband returned to work as a farm labourer with Ja-Lyn on or about 2017, he negotiated and agreed upon terms with Mr. Lowes, which included regular bi-monthly pay and additional benefits (such as use of a vehicle, with fuel and insurance paid by Ja-Lyn).

c) Lease payments for a new vehicle for the Wife, payment of annual property taxes for the parties’ family home, and provision of monies to assist with parties’ loan payments for their new camper was considered by the Husband, and Mr. Lowes, as payment by Ja- Lyn towards purchase of cattle from the Husband’s herd.

d) The lease payments made by Ja-Lyn amounted to $24,012.67 over three years. The sum paid by Ja-Lyn for property taxes was $14,400.04 covering four years. These two amounts total $38,412.71.

e) While recognizing that the Husband was prepared to utilize a value of $1,400.00 per head for 2020 or date of separation purposes, if this value is used in connection with the above noted expenses incurred by Ja-Lyn for benefit of the parties (lease payments and property taxes totaling $38,412.71), the result would be that the Husband received payment for approximately 27 head.

f) In contrast to the $15,000.00 payment by Ja-Lyn (which was on or around 2014, when the cattle loan had been paid and the Lease stipulated that the Husband was receive a 25% share of the annual calf crop), the distinction is that the term of the Lease expired in December of 2017.

g) The Wife has acknowledged that she did not conduct an inventory count, and was not certain how many head remained in the Husband’s cattle herd at separation.

As reviewed earlier herein, the Wife perhaps summed it up best by commenting during her testimony that “I am a nurse” (acknowledging that she was not well versed with the cattle industry and Ja-Lyn’s business). [ 114 ] Based upon the foregoing, and as an initial determination, I am prepared to find that the expenses incurred by Ja-Lyn in an amount of $38,412.71 represented payment by Ja-Lyn for purchase of a portion of the Husband’s cattle herd. [ 115 ] Ja-Lyn’s payments for the vehicle lease and property taxes was of direct benefit to the parties, without the Husband and the Wife having to claim receipt of these monies for income tax purposes. [ 116 ] On this basis, it is my further determination that some measure of gross up to the amount of expenditures incurred by Ja-Lyn for purchase of a portion of the Husband’s cattle herd would be warranted. [ 117 ] While I would have admittedly preferred to have the benefit of accounting evidence in an effort to achieve more precision, I have decided to exercise my discretion, and gross up the sum of $38,412.71 by an amount of thirty-five (35%), resulting in a total of $51,857.15. [ 118 ] The next step is to establish a value for the portion of the Husband's cattle herd that I have determined were purchased by virtue of Ja-Lyn incurring the above described expenses on behalf of the parties. [ 119 ] Pursuant to the evidence presented, I am prepared to utilize a value of $1,400.00 a head as proposed by the Husband for separation date purposes (as reviewed earlier herein, 127 head of CCBC cows were sold on September 18, 2020 in accordance with Contract C, for an average price per head of $1,408.74). [ 120 ] I acknowledge that the cattle purchased pursuant to Contract B (at a price of $1,502.00 per head) included bred and feeder cows, whereas the cattle purchased and sold pursuant to Contract C were described as being feeder cows.

The Husband’s proposal to utilize a value of $1,400.00 per head, however, was described to be net of any tax or other applicable costs that may be incurred upon sale of these cattle.

In addition, I prefer the value of $1,400.00 per head suggested on behalf of the Husband to what has been recommended by counsel for the Wife ($1,935.00 per head), as this latter figure is derived from a sale of CCBC cattle in accordance with Contract A (the purchases and sales pursuant to Contract A were all completed prior to separation). [ 121 ] The result is that the expenses incurred by Ja-Lyn in an amount of $38,412.71, grossed up to an amount of $51,587.15, represents payment by Ja-Lyn for 37 head from the Husband’s cattle herd, reducing the Husband's herd for separation date valuation purposes from 130 head to 93 head. [ 122 ] At this juncture, I confirm that I was also considering whether there ought to be a further reduction made insofar as the number of cattle within the Husband’s herd as of the date of separation, based upon the following evidence:

a) The reality that Ja-Lyn incurred ongoing expenses for the Husband’s cattle herd, with the cattle being fed and cared for upon property of Ja-Lyn; and

b) The agreement reached between the Husband and Ja-Lyn (Mr. Lowes) whereby Ja-Lyn would increase the Husband’s monthly pay from cattle sale proceeds in order that the Husband would have sufficient funds to make the loan payments associated with the parties’ new camper.

[ 123 ] The Husband and Mr. Lowes did not, however, present a detailed explanation with respect to how or in what manner it was calculated and determined that Ja-Lyn had purchased a certain number of cattle from the Husband’s herd in direct correlation with the ongoing expenses that were being incurred for these cattle by Ja-Lyn. [ 124 ] As to the camper loan, Exhibit “J” to the Husband’s Affidavit is a

summary prepared on behalf of the Husband, detailing his payments towards various joint liabilities of the parties post-separation. While this

summary describes that the camper payments made by the Husband were in an amount of $268.42 monthly, there is no evidence to confirm that the Husband actually received these funds from Ja-Lyn, in addition to his bi-monthly pay, prior to separation.

If monies were provided by Ja-Lyn, no total was confirmed in evidence (unlike what was calculated with the lease payments and property taxes paid by Ja-Lyn for the benefit of the parties). [ 125 ] Based upon the foregoing, I am not persuaded from the evidence before the Court that the Husband has met his onus to establish, on a balance of probabilities, that there was a greater reduction in the extent of his cattle herd (from 93 to approximately 30 head). [ 126 ] Accordingly, it is my finding that the value of the Husband’s cattle herd shall be determined to be in an amount of $130,200.00 as of the date of separation (93 head valued at $1,400.00 each). [ 127 ] For clarification, I am not prepared to include or add a further value to the Husband’s cattle herd in relation to any calves.

I have reached this decision in consideration of the following:

a) The Husband’s position was that his cattle herd consisted of 30 head at separation (there was no evidence presented by the Husband that there were calves in addition to the 30 head within his herd);

b) At paragraph 65 of the Husband’s Affidavit, he stated that he did not keep any calves for greater than one year;

c) The Wife did not do a visual inspection or inventory count on or around the date of separation, and has no knowledge with respect to the number of calves that there may have been within the Husband’s herd;

d) The calculations prepared by counsel for the Wife are premised upon the assumption that there would have been at least 25 calves, which is based upon the Lease, which expired almost three years earlier in December of 2017; and

e) As already mentioned, I am mindful the evidence has established that Ja-Lyn incurred ongoing expenses for the Husband’s herd, with the cattle being fed and cared for upon property of Ja-Lyn. [ 128 ] There is also the CCBC cattle which must be considered. [ 129 ] Despite the detailed evidence provided by Mr.

Lowes with respect to all that was involved with purchase and sale of the CCBC cattle, and the submission of counsel for the Husband to the effect that a resulting trust arguably is applicable (pursuant to evidence such as but not limited to the significant down payments required pursuant to Contract A, Contract B and Contract C, with Ja-Lyn incurring all expenses), it is without question that the CCBC cattle were purchased in the name of the Husband along with Brooke and Stacy.

In addition, the reporting of purchases and sales of livestock within the Husband’s applicable income tax returns cannot be overlooked in recognition of the relevant case law. [ 130 ] All of this being stated, it is a moot point from the Court’s perspective. [ 131 ] While Mr. Lowes is not at “arm’s length” from the Husband, he has been involved in the cattle industry for a considerable period of time, acquiring his first herd in the mid-1970s. He is one of the two recorded shareholders in Ja-Lyn, a large farming operation.

In the absence of competing evidence on behalf of the Wife, and recognizing that he was not successfully challenged on cross-examination in connection with his evidence about the expenses reasonably expected with cattle herds, I am prepared to place reliance upon his testimony concerning costs associated with feed and care of cattle. [ 132 ] When discussing the CCBC cattle, the following can be taken from Mr. Lowes’ evidence and summarized as follows (as previously reviewed herein):

a) The cost of feed for a calf is as much as $1.80 a day, and the cost of feed for a cow is between $4.00 and $6.00 a day (these are feed costs, and does not include other expenses such the stalls, pasture, fencing, medications, veterinary services, trucking charges and other necessary expenditures);

b) On this basis, and to feed a herd of 130 cows, at $5.00 a day per head, the result is an expense of $650.00 daily or $19,500.00 monthly (30 days), without considering the other expenses cited by Mr. Lowes; and

c) For even a herd of just 30 cows, the outcome when using a feed cost of $5.00 per head each day is $150.00 daily or $4,500.00 monthly (30 days). [ 133 ] As a result, I accept the calculations presented by counsel on behalf of the Husband, which incorporated Mr.

Lowes’ evidence with respect to expenses for feed and care of the CCBC cattle, and also included the applicable CCBC loans. [ 134 ] On this basis, and even if the Court was to find that the CCBC cattle were in fact owned by the Husband equally with Brooke and Stacy, the calculations compiled by counsel for the Husband confirm that as of the date of separation, there was a negative value for the CCBC cattle pursuant to Contract B and Contract C. Accordingly, for purposes of this Reference, the result is a value of zero for the CCBC cattle. (

b) Beneficial Interest in Ja-Lyn

Summary of Wife’s evidence and position

[ 135 ] The Wife takes the position that the Husband had a beneficial interest in Ja-Lyn as of the date of separation, the value of which is not an issue before the Court at this time in accordance with the Reference Order (should this foundational issue be established in favour of the Wife, valuation can be determined at a later date as directed by the Court). Nonetheless, counsel for the Wife submits that the evidence supports a finding that the Husband has a one-fifth beneficial interest in Ja-Lyn, along Mr.

Lowes, Glenn, Brooke and Stacy. [ 136 ] In the alternative, and at a minimum (as reviewed earlier within this decision), the Wife asserts that the Husband was an owner or had a beneficial interest in the CCBC cattle at separation (along with Brooke and Stacy). [ 137 ] The Wife explained that when the Husband left Ja-Lyn to work with another area grain farm, the Husband had more regular hours (9:00 am to 5:00 pm), with longer hours from April until September during seeding and harvest (paragraph 9 of the Wife’s Affidavit).

She recalled the Husband’s gross pay to be approximately $3,000.00 each cheque, and that he had an annual income of $80,000.00 (as well as some bonuses). [ 138 ] At paragraph 13 of the Wife’s Affidavit, she stated the Husband informed her that he wanted to return to work for Ja-Lyn, as Mr. Lowes wanted the Husband to take over for him. She advised that the Husband told her Mr. Lowes wanted the Husband to learn the business of the farm, especially when much of the business is not in writing and was in Mr. Lowes’ head. [ 139 ] The Wife’s evidence is that when she talked to Mr.

Lowes, he told the Wife that the Husband was returning to be a partner at the farm (paragraph 14 of the Wife’s Affidavit). When the parties were renewing the mortgage on their home, and a question was raised as to whether the Husband was a shareholder in Ja-Lyn, the Wife says that she texted Mr. Lowes to inquire, with his response via text being “no shares yet”. The Wife indicated that she interpreted the reply of Mr. Lowes to mean that the Husband would own shares in Ja-Lyn at some point in the future. [ 140 ] According to the Wife, the Husband received $2,000.00, twice monthly, as pay from Ja-Lyn.

She stated that the Husband worked long hours (sometimes as many as 16 to 18 hours daily during harvest and seeding season). The Wife expressed at paragraph 15 of the Wife’s Affidavit that “Justin’s pay on paper was low because he was continuing to build equity in the cattle and in the farm itself”. [ 141 ] The evidence of the Wife is that in July of 2018, she had a conversation with Mr. Lowes (paragraph 16 of the Wife’s Affidavit). She expressed that if the Husband had 130 head of cattle, and the cattle loan had been paid in full, the Husband should be receiving his portion of profits from sale of calves.

The Wife also commented that Alexis required braces, and that she needed a new vehicle. [ 142 ] The Wife claims that Mr. Lowes indicated to her during this conversation that he had a plan, and that she should do what is best for the farm, because the Husband would be taking over. The Wife stated that Mr. Lowes advised her that rather than pay the Husband cash for the Husband’s calves, Ja-Lyn could pay the loan for a vehicle for the Wife, as well as provide the parties with monies for their camper loan.

From the Wife’s perspective, she understood that any such benefits would be in relation to the Husband’s share of profits from sale of calves, and would still leave the Husband with 130 head in his cattle herd. [ 143 ] At paragraph 10 of the Wife’s Affidavit, the Wife explained that the landscaping at the parties’ home in Elkhorn was a wedding gift from Ja-Lyn, noting that it was not uncommon for Ja-Lyn to make gifts of this nature (as it is a tax-deductible expense). [ 144 ] In addition to reliance upon the decision of the Supreme Court of Canada in Kerr v.

Baranow , 2011 SCC 10 , [2011] 1 S.C.R. (“ Kerr ”), counsel for the Wife has referred the Court to the decision of the British Columbia Supreme Court in Sohi v. Sohi , [2022] B.C.J. No. 472 (“ Sohi ”) as support for the relief sought by the Wife. [ 145 ] Counsel for the Wife also submitted that it is not uncommon and or unique for a party to assert that there is an asset for which a beneficial interest is held in trust for their spouse, the value of which should be shareable.

Summary of Husband’s evidence and position [ 146 ] The Husband adamantly contests the Wife's claim that he held a beneficial interest in Ja-Lyn as of the date of separation (or at a minimum, a beneficial interest to the CCBC cattle at separation). [ 147 ] At paragraph 8 of the Husband's Affidavit, the Husband explained that: “I hope to be a shareholder someday but my father and uncle and I do not have any sort of agreement or understanding about the specifics of that”. [ 148 ] When the Husband returned to work for Ja-Lyn on or about 2017, he stated that there was no agreement reached or terms discussed between the Husband and Mr.

Lowes, whether verbally or in writing, concerning a plan for the Husband to become involved in an ownership capacity with Ja-Lyn. [ 149 ] Mr. Lowes denied saying that the Husband would become a partner in Ja-Lyn as has been alleged by the Wife. Mr. Lowes did acknowledge though that he did want the Husband to learn the business as it involved “training the next generation”. [ 150 ] When the Wife texted Mr. Lowes to ask whether the Husband was a shareholder in Ja-Lyn, and his response was that no shares had been issued yet, Mr.

Lowes explained that there had not been any agreement made with respect to the Husband becoming a shareholder (expressly or otherwise). [ 151 ] According to Mr. Lowes, there might be a conversation about the Husband acquiring an interest in Ja-Lyn, but that was to be considered in due course, without there being any guarantee in favour of the Husband. [ 152 ] Mr. Lowes acknowledged that Ja-Lyn has a life insurance policy in relation to the Husband (with the policy providing coverage for $1,000,000.00). He clarified, however, that life insurance policies are also held by Ja-Lyn for other family members.

There are no life insurance policies involving employees (only for shareholders and their children who work with the farm).

[153] It was confirmed by Mr. Lowes in his evidence that none of his children, nor any of Glenn’s children, have an interest in Ja-Lyn.That being stated, he was candid by indicating that it “might” happen someday, but not yet. [154] Payment of annual property taxes for the home of the parties was not an isolated expenditure according to Mr. Lowes, as propertytaxes for Brooke’s home were also being paid by Ja-Lyn. [155] When it was suggested to Mr. Lowes during cross-examination that the overall intent was for the Husband to work together withhim and Glenn, akin to a partnership, Mr.

Lowes was prompt to clarify that there was no partnership involving the Husband, and thatthere was no entitlement to the profits of Ja-Lyn for the Husband, Brooke or Stacy. [156] While the Wife claims (at paragraph 15 of the Wife's Affidavit) that the pay received by the Husband from Ja-Lyn was lowbecause he was building equity in Ja-Lyn, it was pointed out by counsel for the Husband that his income was determined to be$80,000.00 for child support purposes (when the Husband was working for Ja-Lyn). [157] Counsel for the Husband has advised that the bi-monthly sum of $2,000.00 received by the Husband from Ja-Lyn was not T4income, such that this draw (if calculated to an annual wage) could reasonably be grossed up to an amount in excess of $60,000.00. [158] According to counsel for the Husband, the foregoing level of income earned by the Husband from Ja-Lyn commenced upon hisreturn to the farm, and as such, the Wife’s suggestion that income at this rate over two or three years gave rise to a beneficial interest inJa-Lyn is not a reasonable argument. [159] In addition to bi-monthly pay received by the Husband, counsel for the Husband emphasized that the Wife has admitted therewere a number of other benefits made available to the Husband by Ja-Lyn, such as not limited to the Husband having a vehicle to use(with the fuel and insurance paid by Ja-Lyn), as well as access to as much beef and butter as their family wanted. [160] As to the Wife's evidence that “there was an express understanding Justin would own shares in the future” (paragraph 14 of theWife’s Affidavit), it was submitted by counsel for the Husband that comments of this nature are often made between a parent and thechild (words to the effect that “this will be yours” in the future).

It does not, however, amount to evidence of a constructive trust,beneficial interest or any guarantee of entitlement. [161] Counsel for the Husband also articulated that the comments made by Mr.

Lowes in reply to an inquiry of the Wife (“no sharesyet”) does not mean that there was ever any agreement that shares would be issued to the Husband in Ja-Lyn. [162] In order for it to be determined that there was an unjust enrichment or that the Husband had a beneficial interest in Ja-Lyn as ofthe date of separation (following the test enunciated in Kerr), counsel for the Husband reiterated that there must be evidence of a benefitand a corresponding a deprivation, with the benefit and deprivation occurring without a juristic reason. [163] From the perspective of the Husband, the arrangements with Ja-Lyn resulted in benefits to both (to the Husband and his family,as well as Ja-Lyn), without detriment or deprivation to the Husband, such that no unjust enrichment or beneficial interest was establishedin favour of the Husband. [164] Counsel for the Husband submits that a similar conclusion should be reached in connection with the CCBC cattle (that there wasno unjust enrichment or beneficial interest held by the Husband at separation, when considering the test set forth in Kerr). [165] In the event this Court was to find that the CCBC cattle were actually owned by the Husband, Brooke and Stacy (or that the threeof them had a beneficial interest, a finding that the Husband would dispute), counsel for the Husband argues that this Court shouldfurther determine that there was a resulting trust in favour of Ja-Lyn.

In this regard, it was highlighted once again that the down paymentin accordance with each contract was provided entirely by Ja-Lyn (and were not of insignificant amounts). [166] Concerning the Sohi decision relied upon by the Wife, counsel for the Husb

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