Ball v Sizeland et al, 2018 MBCA 85

Citation: Ball v Sizeland et al, 2018 MBCA 85 Date: 20180910 Docket: AI17-30-08923 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Holly C. Beard Mr. Justice Marc M. Monnin Madam Justice Diana M. Cameron BETWEEN : CHRISTINE MARJORIE MARQUIS BALL, ) as Litigation Guardian for MARJORIE ) T. P. Harwood-Jones MARQUIS DRUMMOND SIZELAND ) for the Appellant ) (Applicant) Appellant ) ) K. L.

Desjardine - and - ) for the Respondents ) ALAN GEOFFREY SIZELAND, as Executor ) and Beneficiary of the Estate of ROBERT ) Appeal heard: GEOFFREY SIZELAND and MORGAN ) March 7, 2018 FONTAINE (formerly known as PATRICIA ) ANNE FONTAINE) as Beneficiary of the ) Estate of ROBERT GEOFFREY SIZELAND ) Judgment delivered: ) September 10, 2018 (Respondents) Respondents ) On appeal from 2017 MBQB 66 Monnin JA [ 1 ] Marjorie Sizeland (Marjorie), through her litigation guardian and daughter, Christine Ball (Christine) (collectively, the applicant), appeals from the dismissal of her application for an accounting and equalization under

Part IV of The Family Property Act , CCSM c F25 (the Act ), as well as other relief relating to the conduct of Alan Sizeland and Morgan Fontaine (the respondents), the children of Marjorie’s late husband Robert Sizeland (Robert), in their capacity as executors and beneficiaries of his estate, as well as in their capacity as attorney for him over the last number of years before his death. In this appeal, the applicant seeks to have this Court order that an accounting and equalization proceed before a Master of the Court of Queen’s Bench. For the reasons that follow, I would dismiss the appeal.

Background [ 2 ] Robert and Marjorie married in 1975. This was a second marriage for both of them. Robert had two children from his first marriage, Alan and Morgan, while Marjorie had a daughter, Christine, from her first marriage. When the couple were first married, they sold the properties they were residing in to purchase one together using the proceeds from the sale of their respective homes. It became a source of contention at a later time as to whether Marjorie’s contribution to the purchase of the new property was substantially more than Robert’s.

In 1988, the new property was sold in order to purchase a condominium with each of them taking an undivided one-half interest. [ 3 ] The couple remained in that condominium together until Robert suffered a stroke in 2010. Thereafter, he moved to the Deer Lodge Centre where he remained until his death in April 2012. While residing in the condominium and after he moved out, Robert paid most of the expenses associated with maintaining it. Marjorie’s daughter, Christine, moved into the condominium with the couple around 1994. While she was never responsible for the rent, she did contribute to household expenses.

Furthermore, she was a caregiver for Marjorie who suffered from failing health for many years and now suffers from dementia as a result of which Christine acts as her litigation guardian. [ 4 ] In September 2002, at Robert’s request, the couple met with his then legal counsel, Winston Smith, Q.C. (Mr.

Smith), to discuss family property and estate issues. Mr. Smith recommended that the parties attempt to reach an agreement on equalization of assets with a small contribution from Robert to Marjorie. Marjorie did not agree with the proposal and consulted her own counsel. Nothing came of the discussions. [ 5 ] In 2004, Mr. Smith received instructions from Robert to prepare a last will and testament, which he did.

In the will, Robert left nothing to Marjorie other than a life estate in his share of the condominium, explaining that they had each made an equal contribution to the purchase of the marital home, now transferred to their undivided one-half interest in their permanent residence at the condominium and that, for the last five years or more, he had supported his wife and her daughter. [ 6 ] In 2009, Mr. Smith prepared a power of attorney for Robert, making the respondents his attorneys.

In June 2011, he assisted Robert in preparing a direction regarding monetary gifts, whereby the respondents, as his attorneys, were authorized to make gifts to his grandchildren for educational purposes and confer gifts onto themselves directly. [ 7 ] The application judge found that, from 2009 to Robert’s death, gifts were given to the respondents in the approximate sum of $32,000, as well as gifts to his grandchildren (excluding Christmas gifts) of approximately $12,000. Proceedings [ 8 ] There was an initial tussle between the respondents and Marjorie as to who would administer his estate.

The respondents applied as executors pursuant to the will but were stopped by a caveat filed by Marjorie. The matter was resolved by allowing the respondents to probate the will and Marjorie proceeding with an application seeking, amongst other relief:

a) a declaration that assets were wrongly taken, transferred and conferred by Robert by means of fraud, duress, pressure, compulsion, threats, demands and coercion;

b) an accounting of the assets and debts of the estate; and

c) an accounting and equalization under

Part IV of the Act . [ 9 ] The litigation, being a probate matter coupled with a family proceeding, ended up in the General Division of the Court of Queen’s Bench. By consent of the parties, the matter was sent to case management. The case management was conducted by the same judge who heard the application. [ 10 ] Five case management conference memoranda were filed as part of the appeal book. They show that the respondents agreed to provide an affidavit similar to one filed on the passing of accounts for the purposes of the accounting for their time as attorneys.

Counsel for the applicant agreed to provide financial disclosure relative to her claim under the Act . [ 11 ] Numerous affidavits were filed by each of the parties including an affidavit from Mr. Smith. A significant amount of financial information was provided by the respondents voluntarily, as well as in response to requests from the applicant’s counsel. The applicant filed two financial statements in support of her application for an accounting and equalization under the Act . [ 12 ] The matter proceeded to a hearing before the application judge on October 5, 2016.

The parties were given an opportunity to file further material and a further hearing took place on February 23, 2017. [ 13 ] The application judge issued his reasons in April 2017. After confirming that he had reviewed and considered the numerous affidavits filed in connection with the application and that no cross-examinations had been conducted, he set out the issues that were still before him, namely:

a) an accounting and equalization pursuant to

Part IV of the Act ;

b) an order that the accounting include amounts (estimated by the applicant totalling $522,472) that the applicant argued should be included in the estate and form part of the accounting and equalization; and

c) the return to the estate of assets or gifts made by Robert during his lifetime on a variety of equitable grounds or pursuant to subsections 6(7) and 6(8) of the Act , the dissipation and excessive gift sections. [ 14 ] Although asked by the respondents, the application judge chose not to strike or expunge certain portions of the affidavits of the applicant but found them to be of little or no evidentiary value. As a result, he disregarded that evidence and did not take it into account in making a determination of the application.

This included a portion of an affidavit which he found inadmissible as it failed to comply with Manitoba, Court of Queen’s Bench Rules , Man Reg 553/88 (the QB Rules ), r 39.01(5) containing facts that were contentious and an opinion expressed by an expert which was not attached to an affidavit of the expert himself. [ 15 ] As to the numerous claims for the return of assets or gifts under the Act , he noted that, while the entire application was not statute-barred, the applicant was not entitled to challenge transactions that occurred outside of the two-year limitation set out in the respective sections of the Act .

He then dealt with each of the claims and dismissed them for reasons particular to each. Those reasons included that these transactions had been properly accounted for, that there was no evidence to support the applicant’s contention that they involved family assets, that they were not relevant to an accounting and equalization, or that they occurred more than two years before the application. In

summary, none of these claims were found to have merit. [ 16 ] The application judge then dealt with the position of the applicant that gifts made by Robert to his children and grandchildren during his lifetime contravened subsections 6(7) and 6(8) of the Act as either being a dissipation of family assets or excessive gifts. After reviewing the statute and the case law with respect to those sections, he concluded that the gifts did not jeopardize the financial security of the household and therefore, would not meet the definition of being dissipatory.

As to the allegation that the gifts made to his children and grandchildren were excessive, he concluded that, while they were done with the intent to deprive Marjorie

of a share of the value of the family assets, they were made as part of his financial planning and desire to make gifts to his grandchildrenfor their education or to his children to equalize payments that had been made for the benefit of his wife and her daughter during hislifetime. He was not satisfied that they were excessive as defined in the Act. [17] Having made those findings, he was not satisfied that a reference to the Master for an accounting was required as thematters in dispute had been canvassed and decisions made by him.

In his view, any further proceedings “would not be proportionate tothe nature of the proceedings, the amount at issue and likely expense of further litigation” (at para 49). [18] Finally, he was not satisfied that the applicant had provided evidence on which to base allegations of “fraud, duress,pressure, compulsion, threats, demands and coercion” (at para 51) as set out in her application and dismissed those as well. Issues on Appeal [19] The applicant raises the following five issues on appeal:

a) Did the application judge err by failing to order an accounting and equalization under the Act?

b) Did the application judge err by characterizing the respondents’ financial disclosure as complete?

c) Did the application judge err by failing to recognize that Robert engaged in excessive gifting of family assets to therespondents and others?

d) Did the application judge err by characterizing certain of the applicant’s evidence as opinions on facts alleged to becontentious in violation of r 39.01(5) of the QB Rules? and

e) Did the application judge expose the applicant to bias or reasonable apprehension of bias by presiding at the casemanagement sessions and then presiding at the hearing of the application and disposing of the contested and substantive issues in theapplication?

Standard of Review [20] The respondents argue that the standard of review for all the grounds of appeal should be that stated by this Court inHorch v Horch, 2017 MBCA 97, namely, one of “considerable deference” (at para 50) and should be reviewed only for a “material”error (ibid). [21] As to the first three grounds of appeal, which relate to the application judge’s discretionary decision regarding theapplication for an accounting and equalization under the Act, I agree.

However, in my view, the fourth ground relates to the applicationof a legal test to the facts, namely the application of r 39.01(5) and is a question of mixed fact and law deserving of a standard of palpableand overriding error (see Housen v Nikolaisen, 2002 SCC 33). [22] As to the last ground of appeal, it was never raised before the application judge so that a particular standard of review isnot applicable.

However, the test for determining whether there is a reasonable apprehension of bias derives from Committee for Justiceand Liberty et al v National Energy Board et al, (SCC), [1978] 1 SCR 369, and is whether, on the facts, a reasonable andright-minded person would have a reasonable apprehension of bias. More recently, see Yukon Francophone School Board, EducationArea #23 v Yukon (Attorney General), 2015 SCC 25 at paras 20-21. First and Second Grounds of Appeal—Failing to Order a Reference [23] The applicant argues that the application judge erred in not referring the proceedings to a Master for a

Part IVaccounting and equalization pursuant to the Act because she was entitled to such a reference by virtue of sections 13 and 28(1) of theAct. She also says that the application judge mischaracterized the financial disclosure given by the respondents as being complete, afactor he considered in reaching the conclusion that a reference to the Master was not necessary. I will deal with both of these groundstogether as I agree that the financial disclosure was a significant factor in the application judge’s determination not to make a reference tothe Master. [24] The applicant’s position is that the surviving spouse, pursuant to

section 13 of the Act, is entitled to an accounting as ofright and not as a matter of discretion. She argues that the procedure followed in the Family Division of the Court with respect to anapplication under

Part IV is to have the matter referred to a Master under r 54 of the QB Rules, which is what the application judgeshould have done in the circumstances. [25] She contends that significant information was not available to the application judge with respect to the total inventory ofassets in order to make a determination of a proper equalization payment.

A Master would receive further evidence and make a reportfrom which the application judge would then have sufficient information to reach a proper conclusion. [26] In her view, she had demonstrated that over $500,000 of family assets had been unshared and a further investigationwas warranted. Given the fact that the Master had not yet made any investigation, it was premature to make any definitive declaration asto the completeness of the respondents’ financial disclosure.

She argued that significant deficiencies had been shown with respect to thefinancial disclosure of the respondents, both in the period of time of their exercise of the power of attorney and beyond. [27] In the respondents’ submission, the application judge did, in fact, conduct an accounting by reviewing the allegations ofthe applicant contained in the material. Having done so, he concluded that it would not be necessary to submit the matter to a Master asit was unlikely that much more information relevant to the issues would be available in view of the passage of time.

As well, a numberof the allegations related to events which were no longer within the two-year limitations set out in the Act. In their view, the centralreason for not ordering an equalization was due to the failure of the applicant to place sufficient evidence before the Court of her own

financial position to permit a determination of whether an equalization was warranted. While acknowledging that the application judge commenced the proceeding with the intention of directing the reference, they say that he ultimately decided it would not be necessary, which he was entitled to do. [ 28 ] From the respondents’ perspective, part of the consideration was the extent of the financial disclosure that had already occurred by the respondents providing an accounting of their conduct with respect to the personal finances of Robert from April 2009 to April 2012.

In addition, there was an accounting for monies disbursed from that period onward to the date of death. In their submission, the respondents say that a reference to a Master was not mandatory and would not have resulted in a better accounting than was possible to be conducted by the application judge given the information which was available at that stage. Analysis [ 29 ] I believe it is helpful to place the application judge’s decision in context.

That context includes the fact that what was before him was a request for an accounting of the respondents’ conduct of the deceased’s affairs for a significant period of time when they were acting under a power of attorney.

Most, if not all, of the information available with respect to such an accounting was placed before the Court such that the application judge was in as good a position to review it as the Master would have been. [ 30 ] The other part of the equation before the application judge was the difficulty of appreciating exactly what relief the applicant was seeking and the complaints that were being raised.

At the first hearing on October 5, 2016, the application judge stated: Well, I’ve read the material and I certainly feel this case, while there’s a lot of material, boils down to a Family Property Act accounting . . . my plan is to hear the submissions.

I’ll deal with the parameters of that family Act -- Family Property Act accounting, and then the matter will be referred to the master to complete the, the accounting. [ 31 ] After hearing from counsel for the applicant, who argued that there was insufficient evidence before the Court upon which to do an equalization, the application judge then said: But what the master needs is direction from the court on what that accounting will be. . . . And some things may or may not be included in that accounting, is what I’m saying. . . . So I want to know what you’re saying should be included.

And your position is everything on this . . . spreadsheet. [ 32 ] In his final comments at the second hearing on February 23, 2017, he stated: I think this really boils down to whether I have enough information on the basis of all the material that has been filed to deal with the issues that have been addressed during the submissions or whether the matter should go to a Family Property Act accounting.

My intention is to thoroughly review this, all of the material one more time, and then I will reserve and give you my reasons for decision in due course. [ 33 ] It is in that context that the decision should be reviewed, namely, the application judge’s stated intention that his decision would include whether there was a need to have a reference to a Master. [ 34 ] I disagree with the applicant’s contention that she was entitled as of right to an accounting before a Master. She was entitled to an accounting in this case, which occurred before the application judge.

While r 54 of the QB Rules gives jurisdiction for a reference, there is nothing which prevents a judge (who has the jurisdiction of a Master) to do so him or herself. In this case, the application judge reviewed the copious evidence with respect to the allegations of assets having been misappropriated or improperly gifted and found, for the reasons set out in his decision and which are not being challenged directly, that there was no merit to the claims advanced by the applicant.

I see no reason to set aside that conclusion. [ 35 ] I am also of the view that, while the application judge was satisfied as to the extent of information he received from the respondents, he did not conclude that it was full disclosure. He simply concluded that it was sufficient, in the circumstances, to allow him to make the determinations that were required. I see no error in the application judge’s decision not to refer the matter to the Master for an accounting and equalization in the circumstances before him.

The Third Ground of Appeal—Excessive Gifting [ 36 ] The Act is premised on an equal sharing of family assets between spouses on dissolution or death.

To help achieve that goal, certain sections provide remedies to spouses who feel aggrieved by their spouse having transferred assets to third parties, whether by gift, sale or dissipation. [ 37 ] The relevant provisions of the Act are included as an appendix to these reasons. [ 38 ] Subsection 6(7) applies in the case of the dissipation of assets, defined in the Act as the “jeopardizing of the financial security of a household by the gross and irresponsible squandering of an asset” (at section 1(1) ).

Subsection 6(8) deals with the situation where a spouse has engaged in excessive gifting although what is “excessive” is not defined. Subsection 6(9) deals with the sale or transfer of an asset for inadequate consideration.

[ 39 ] In each of those situations, the Act allows the aggrieved spouse to have the value of the asset squandered, gifted or transferred added to the inventory of assets in the accounting between the spouses.

In the case of excessive gifting and transfers, there is a provision for further recovery from the recipient under certain circumstances. [ 40 ] In all of these cases, there is an ability of the aggrieved spouse to apply to the Court to make an order under these sections. [ 41 ] In the proceedings before the application judge, the applicant relied on the dissipation and excessive gift provisions, subsections 6(7) and 6(8) of the Act .

She argued that the respondents’ course of conduct with respect to Robert’s financial assets during the time of their administration under the power of attorney amounted to dissipation and included a number of excessive gifts to them and the grandchildren. [ 42 ] The application judge, with respect to subsection 6(7) and the dissipation of assets, was not satisfied that the gifts made by Robert during his lifetime jeopardized the financial security of the couple or that the financial planning and directions taken by him amounted to any irresponsible squandering of an asset.

As such, it did not meet the definition of dissipation set out in the Act . That finding has not been challenged on appeal and it is not necessary to review the application of subsection 6(7) . [ 43 ] The issue on this appeal is whether the gifts totalling approximately $44,306.50 made between 2009 and 2012 by Robert to the respondents and his grandchildren qualified as “excessive” under subsection 6(8) of the Act . [ 44 ] Whether that issue should be determined based on the test associated with the dissipation of assets has been raised in this Court in the past but never decided.

In Korchinski v Korchinski , 2006 MBCA 149 , it was noted that the concept of excessive gifting is akin to the concept of dissipation and the two types of cases are often spoken of interchangeably (see para 48).

However, that case related to the dissipation of assets which required an intention by the party disposing of the assets and an understanding that the activities could jeopardize the financial security of the household, which evidence was not available. [ 45 ] In Faurschou v Faurschou , 2013 MBCA 85 , where the issue was excessive gifting under subsection 6(8), this Court agreed with the trial judge’s conclusion that it was an excessive gift for a husband to divest himself of all of the “shareable shares” by a series of gifts, leaving nothing in his hands to share with the wife on separation.

It was not ready to confirm the trial judge’s definition of the test for an excessive gift as one embodying “an irresponsible squandering of an asset so as to place the household’s financial security in jeopardy” (see 2011 MBQB 8 at para 25 ). [ 46 ] An earlier case in which there was a similar melding of the two concepts of dissipation and excessive gifting was GM v WM , 2001 MBQB 219 , where Yard J found that the husband had embarked on a scheme “to alienate as many of his assets as possible with a view to minimizing or eliminating any required Marital Property Act [CCSM c M45] equalization payment he might be required to pay to his wife” (at para 58).

In finding the husband’s gifts to be excessive, Yard J focussed on their forming part of a scheme to “defeat the wife’s legitimate interests” (at para 69(iii)) and that (at para 94): [T]he husband’s conduct in alienating or attempting to alienate assets amounts to dissipation of assets within the meaning of The Marital Property Act .

The husband has without question jeopardized the financial security of the household by the gross and irresponsible squandering of assets both individually and as a whole. [ 47 ] The legislation provides a statutory definition for what dissipation means, but it leaves the definition of what is “an excessive gift” to the courts.

The fact that the Legislature chose to give dissipation, excessive gifts and transfers for inadequate consideration each their own subsections would suggest that it intended for each of those concepts to be distinct and capture different types of transactions (see Ruth Sullivan, Sullivan on the Construction of Statutes , 6th ed (Markham: LexisNexis, 2014) at para 8.23). [ 48 ] In my view, the excessive gifts analysis under subsection 6(8) must remain contextual, having regard to the nature and extent of the gifts in question as well as the overall financial situation of the family.

It need not be and should not be equated with the concept of dissipation, which is aimed at a course of conduct, not necessarily involving gift giving, which jeopardizes the financial security of a household through gross and irresponsible squandering. [ 49 ] Transfers for inadequate consideration are different from gifts as a gift is something given for no consideration. The three subsections are intended to work together to capture all types of transactions where one spouse is unreasonably transferring or squandering family property.

It may be that excessive gifts and transfers for inadequate consideration are a form of dissipation, however that falls to be determined on the facts of each case. [ 50 ] It would be appropriate in a subsection 6(8) excessive gift analysis to consider a number of factors, including:

a) the history of gift giving by the party;

b) the family’s usual spending patterns (see Schmidt v Schmidt , 1985 CarswellMan 490 (QB) );

c) the amount of the gift as a portion of the family’s assets (see Hamm v Hamm (Estate of) , 2014 MBQB 14 ; and LCR v RCM , 2006 MBQB 74 );

d) the motivation for the gift; and

e) the intended recipient.

[ 51 ] For example, a gift to a child or grandchild for the purposes of education or to assist in setting up a new household may be viewed differently than an unexplained gift to an unrelated third party. [ 52 ] In reaching his determination as to whether the gifts made to the respondents and grandchildren were excessive, the application judge indicated that he considered all of the evidence, including the explanation given in Robert’s will with respect to his support and maintenance of Marjorie and Christine over a number of years, which continued during the time that the challenged gifts were being given.

He concluded that, on a prima facie basis, the gifts were done with the intent to deprive the applicant of her share of the value of the family asset. However, in examining all of the evidence, he concluded that they were made as part of his financial planning and desire to make gifts to his grandchildren for their education and to his son and daughter to equalize the payments made for the benefit of Marjorie and Christine during his lifetime. He was not satisfied that the gifts were excessive within the meaning of subsection 6(8) of the Act .

Burden of Proof [ 53 ] For our purposes, the Act contains two burden of proof provisions which are particular to the legislation of this province. [ 54 ]

Section 22 of the Act states that the spouse claiming that the Act does not apply to an asset has the onus of so proving, while

section 23 states that the spouse who alleges a dissipation has the burden of proof. There is no specific onus provision in the Act with respect to excessive gifts. [ 55 ] This Court has not yet ruled on which of the Act ’s onus provisions applies in cases involving allegations of excessive gifts. [ 56 ] In CVD v ID and Swain , 2005 MBQB 215 , Clearwater J had to rule on the issue of whether the purchase by a husband of a McDonald’s franchise from his father for what was alleged to be an excessive purchase price amounted to an excessive gift or dissipation of assets.

He noted that (at para 9): “The onus of proving that the payment by the petitioner [husband] of a purchase price that was in excess of the then fair market value of the businesses is dissipation or an ‘excessive gift’ is on the respondent [wife].” [ 57 ] While the application judge did not comment on the onus of proof provisions of the Act , he took the position that the allegation of excessive gifting lay upon the applicant.

He was satisfied that the applicant had met that onus on a prima facie basis by showing that there was an intent by Robert to deprive the applicant of her share of the value of the family asset. He was then of the view that the onus shifted to the respondents to establish the intent of the gifts and whether they were excessive or not.

He concluded that the intent was to benefit his children and grandchildren in accordance with their best interests and to equalize payments that had been made for the benefit of Marjorie and Christine during his lifetime and which, in his view, were not excessive. [ 58 ] I agree that the onus for proving an excessive gift should be on the person alleging that it is excessive.

However, I find no error in the particular facts of the case for the application judge to have reversed the onus upon the respondents given his findings of a prima facie intent to deprive the applicant. [ 59 ] In the circumstances, the applicant has not established that the application judge misdirected himself as to the principles to be applied or misapprehended the evidence with respect to the gifts. Under the standard of review set out in Horch , there is no basis for appellate intervention on this issue.

Fourth Ground of Appeal—Rule 39.01(5) of the QB Rules and Contentious Facts [ 60 ] Rule 39.01(5) of the QB Rules allows an affidavit to be filed containing statements within the deponent’s information and belief with respect to facts that are not contentious. [ 61 ] In his reasons, the application judge indicated that he disregarded evidence contained in para 36(

a) of Christine’s supplementary affidavit of October 26, 2016 and did not take it into account in making his determination. That paragraph refers to a spreadsheet from the applicant’s accountant which is attached as an exhibit.

In the spreadsheet, which is attached to a covering email from the accountant to counsel for the applicant, he expresses the view that he has been “unable to trace a majority of the funds between bank accounts and it appears that we are missing banking information to complete the necessary work.” The spreadsheet refers frequently to “unexplained” withdrawals. [ 62 ] The application judge reasoned that, while the source of the information was specified in the affidavit, the facts alleged were contentious and that as the exhibit included an opinion expressed by the accountant, the evidence would only be admissible if attached to an affidavit sworn by the accountant. [ 63 ] At the last case conference, the application judge had noted that the financial records were being reviewed by an accountant retained by the applicant and the applicant was advised that, if she intended to rely upon a report from an expert, it had to be provided by a certain date and was not admissible unless filed and served by that date. [ 64 ] The applicant takes the position that the information was not contentious, but was merely a statement of fact provided by the accountant which was then contained in an affidavit by the applicant.

The applicant relies upon Fawley et al v Moslenko , 2017 MBCA 47 , a decision of Mainella JA who reviewed r 39.01(5) of the QB Rules . He summarized the purpose and scope of that rule, in part, as follows (at para 76, point 3): A fact is contentious only if the evidence makes it likely to cause an argument, be disputed or raise a controversy. The mere objection of counsel to a fact does not make it contentious.

Unless a fact is obviously contentious from the affidavit material filed by the party wishing to rely on the fact, the other side will have to establish the fact is contentious through either cross-examination on the affidavit

or filing his or her own affidavit if the particular application permits such practice. [ 65 ] The affidavit was filed after the first hearing at which the issue of financial disclosure and sufficient information had been argued. In other words, by that time, the applicant had to have been aware of the respondents’ position that they had provided all necessary financial disclosure for an accounting to occur.

It would therefore have been obvious to counsel for the applicant that material in an affidavit suggesting that insufficient explanations had been given with respect to financial disclosure provided by the respondents was a matter of contention. [ 66 ] In my view, there is no palpable and overriding error on the part of the application judge in concluding that the facts contained in the affidavit were, in the circumstances of the allegations in dispute, contentious and therefore unable to be filed under r 39.01(5) of the QB Rules .

Fifth Ground of Appeal—Bias [ 67 ] The applicant’s position on this ground of appeal is that the application judge, who was the case management judge, could not, except with the consent of the parties, preside at the hearing of the application and could not decide substantial issues in the application. [ 68 ] In my view, this ground of appeal has no merit. [ 69 ] As pointed out by the respondents, the applicant is conflating the roles of pre-trial judge, case conference judge and case management judge.

The parties consented to case management which, at the time, did not fall under any specific rule of the Queen’s Bench, but was a practice which has been adopted informally over a number of years (now see r 50.1 of the QB Rules ). [ 70 ] This was not a pre-trial proceeding pursuant to r 50, nor a case conference proceeding pursuant to r 20A or a case management under r 70 relating to family proceedings. Those rules provide a specific scheme and format which preclude the judge presiding over those proceedings to be the judge ruling in the dispute except with the consent of the parties.

That may be because, under some of those procedures, the judge becomes involved with the parties in actively seeking settlement or a resolution to the dispute, thereby sometimes “involving them in the fray”. [ 71 ] In this case, the procedure before the application judge was merely that of trial organization whereby the parties advised of their state of readiness and received direction as to deadlines for the filing of material.

It is noteworthy that on two occasions, as set out in the case management conference memoranda, the application judge indicated that he would be the judge who would preside at the hearing of these matters. There is no indication that any party objected to that occurring. [ 72 ] There is no evidence provided by the applicant that information was given to the application judge during the case management process which would not have been given if the parties were aware that he would be presiding, or that the applicant was somehow prejudiced by having him preside over the hearing.

As mentioned earlier, the test for a finding of reasonable apprehension of bias is to be found in the Supreme Court of Canada’s seminal decision of Committee for Justice and Liberty et al . The test as to whether there was a reasonable apprehension of bias with respect to the application judge presiding over the hearing has not been met.

Conclusion [ 73 ] For the reasons set out above, I am of the view that the appeal should be dismissed with costs of the appeal in favour of the respondents. [ 74 ] It is my understanding from a review of the material that costs remain to be spoken to in the Court below and those costs are reserved for the application judge to determine if the parties cannot agree. JA I agree: JA I agree: JA APPENDIX

Relevant provisions of The Family Property Act , CCSM c F25:

Definitions 1(1) In this Act , . . . “dissipation” means the jeopardizing of the financial security of a household by the gross and irresponsible squandering of an asset; . . . Dissipation of asset by spouse 6(7) Where (

a) a spouse, before or after the coming into force of this Act but after May 6, 1977, dissipates an asset in whole or in part; and (

b) the other spouse, before the expiry of two years from the date of the dissipation referred to in clause (

a) or from the date of the discovery thereof, makes application to the court under this Act for an accounting and division of assets; the value of the dissipated asset or the dissipated portion thereof, as the case may be, shall be added to the inventory of assets of the spouse in the accounting. . . . Excessive gift by spouse 6(8) Where (

a) a spouse, before or after the coming into force of this Act but after May 6, 1977, transfers an asset to a third person by way of gift, and the gift is excessive in whole or in part; and (

b) the other spouse, before the expiry of two years from the date of the transfer referred to in clause (

a) or from the date of the discovery thereof, applies to the court under this Act for an accounting and division of assets; the value of the asset or the excessive portion thereof, as the case may be, shall be added to the inventory of assets of the spouse in the accounting. . . . Transfer by spouse for inadequate consideration 6(9) Where

(

a) a spouse, before or after the coming into force of this Act but after May 6, 1977, transfers an asset to a third person for inadequate consideration; (

b) the transfer referred to in clause (

a) is effected by the spouse with the intention of defeating the rights of the other spouse under this Act ; and (

c) the other spouse, before the expiry of two years from the date of the transfer referred to in clause (

a) or from the date of the discovery thereof, applies to the court under this Act for an accounting and division of assets; the amount of the inadequacy in the consideration shall be added to the inventory of assets of the spouse in the accounting. . . .

Recovery from recipient 6(10) In the circumstances described in subsection (8), (8.1), (9) or (9.1), where the spouse or common-law partner effecting the transfer is unable to satisfy any amount payable to the other spouse or common-law partner upon an equalization of assets under this Act , recovery of the value of the excessive gift or excessive portion of the gift or of the amount of the inadequacy in consideration, up to the total of the unsatisfied amount or unsatisfied portion of the amount payable upon the equalization, may be made from the transferee of the asset by application to the court.

Application of subsection (10) 6(11) In the circumstances described in subsection (9) or (9.1), subsection (10) does not apply if the court is satisfied that the transferee acted bona fide and without knowledge that the transfer was effected with the intention described in clause (9)(

b) or (9.1)(b). . . . Applications to court 18(1) In any question or dispute arising under this Act or where there is a breach of a provision of this Act, the spouses or common-law partners affected or either of them may apply to the Court of Queen's Bench and the court may make such order or give such judgment with respect to the application and the costs thereof as it thinks fit, or may direct the application to stand over from time to time and an inquiry or issue touching the matters raised in the application to be made or tried in such manner as it thinks fit. . . . Burden of proof 22 In any proceeding under

section 18, the spouse or common-law partner claiming that this Act or a provision thereof does not apply to an asset has the onus of so proving. Onus of proof in dissipation proceeding 23 In any proceeding under

section 18, the onus of proof that a spouse or common-law partner has committed

an act amounting to dissipation is upon the spouse or common-law partner alleging it. . . .

Application of Parts I to III 26 Subject to this Part, Parts I to III apply with necessary modifications in respect of an accounting and equalization of assets after the death of a spouse or common-law partner. . . . Application to court to settle question 42 An application to the court under subsection 18(1) may be made by the surviving spouse or common-law partner, the personal representative of the estate of the deceased spouse or common-law partner, or a person who is or might be a beneficiary of the estate.

Manitoba, Court of Queen’s Bench Rules , Man Reg 553/88: Contents — applications 39.01(5) An affidavit for use on an application may contain statements of the deponent’s information and belief with respect to facts that are not contentious, if the source of the information and the fact of the belief are specified in the affidavit. . . . WHERE REFERENCE MAY BE DIRECTED Reference of whole proceeding or issue 54.02(1) Subject to any right to have an issue tried by a jury, a judge may at any time in a proceeding direct a reference of the whole proceeding or a reference to determine an issue where, (

a) all affected parties consent; (

b) a prolonged examination of documents or an investigation is required that, in the opinion of the judge, cannot conveniently be made at trial; or (

c) a substantial issue in dispute requires the taking of accounts. Reference of issue 54.02(2) Subject to any right to have an issue tried by a jury, a judge may at any time in a proceeding direct a reference to determine an issue relating to, (

a) the taking of accounts; (

b) the conduct of a sale;

(

c) the conduct of a committeeship, guardianship or receivership; or (

d) the enforcement of an order. REFERENCE DIRECTED TO MASTER 54.03 A reference shall be directed to a master.