Cunningham v. Cunningham, 2018 NSCA 63

Nova Scotia Court of Appeal Citation: Cunningham v. Cunningham , 2018 NSCA 63 Date: 20180720 Docket: CA 469623 Registry: Halifax Between: Darryl Cunningham Appellant v. Claudia Cunningham Respondent Judge: The Honourable Justice Anne S. Derrick Appeal Heard: June 12, 2018, in Halifax, Nova Scotia Subject: The Matrimonial Property Act , R.S.N.S. 1989, c. 275, as amended 1995-96, c. 13, s. 83, ss. 4(1) and 13. Division of assets. Equal division of the appellant’s RRSPs.

Summary: The appellant had acquired RRSPs prior to his marriage to the respondent. He did not dispute that they were matrimonial assets. He wanted them excluded from division on divorce. He argued that an equal division would be “unfair or unconscionable”. The trial judge ordered an equal division of the RRSPs at source. Issue: Was the trial judge correct in finding that the RRSPs should be divided equally on the divorce of the parties? Result: Appeal dismissed with costs.

The trial judge was correct in finding the appellant had failed to establish that an equal division of the RRSPs would be unfair or unconscionable. The cases relied on by the appellant were all distinguishable. The trial judge’s decision to divide the RRSPs equally was entitled to significant deference. She undertook a thorough analysis under

section 13 of the Act and correctly applied the law. She took a contextualized approach to the case and considered all the circumstances of the parties and the marriage. This information sheet does not form part of the court’s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 12 pages. Nova Scotia Court of Appeal Citation: Cunningham v. Cunningham , 2018 NSCA 63 Date: 20180720 Docket: CA 469623 Registry: Halifax Between: Darryl Cunningham Appellant v. Claudia Cunningham Respondent Judges: MacDonald, C.J.N.S.; Saunders and Derrick, JJ.A.

Appeal Heard: June 12, 2018, in Halifax, Nova Scotia Held: Appeal dismissed per reasons for judgment of Derrick, J.A.; MacDonald, C.J.N.S. and Saunders, J.A. concurring. Counsel: Alan Stanwick, for the appellant Gregory Englehutt, for the respondent Reasons for judgment: Introduction [ 1 ] This appeal concerns a single issue arising from the divorce of the parties – whether the trial judge was wrong to have decided that the RRSPs Mr. Cunningham had acquired before marriage should be equally divided with Ms. Cunningham.

None of the other issues that were litigated in the court below is being appealed. [ 2 ] As the reasons that follow explain, I have found no error in how the trial judge dealt with Mr. Cunningham’s RRSPs and would dismiss the appeal with costs. The Parties’ Relationship [ 3 ] Darryl and Claudia Cunningham were married for eight years after cohabiting for two. When they got married, Mr. Cunningham, who was in his thirties and a long-haul truck driver, had already invested in RRSPs and penny stock as savings for his retirement. He spent considerable time on the road while Ms.

Cunningham looked after the household. [ 4 ] The household included three of Ms. Cunningham’s four children from an earlier relationship. Mr. Cunningham provided financial support for the children and was an active part of their lives when he was home. [ 5 ] During their cohabitation and marriage, Ms. Cunningham worked in retail. At the time of the divorce she was a “keyholder” at the Dollarama store, a position she described as being “between a cashier and the manager.” Her minimum-wage income was always significantly less than Mr. Cunningham’s.

The Trial Judge’s Division of the Matrimonial Assets [ 6 ] Justice Theresa Forgeron of the Nova Scotia Supreme Court, Family Division heard the Cunningham divorce trial and resolved the issues of property division and spousal support ( Cunningham v. Cunningham , 2017 NSSC 244 ). As I will discuss in more detail shortly, she dismissed Mr. Cunningham’s claim that his RRSPs and penny stock should be excluded from the division of assets. [ 7 ] In the division of assets and debt, Mr. Cunningham received the matrimonial home, as the parties had agreed, and assumed full responsibility for the mortgage and other loans.

After sorting through some additional smaller assets, the trial judge concluded that Mr. Cunningham owed Ms. Cunningham an equalization payment of $18,179.03, less some adjustments relating to the water account. [ 8 ] The trial judge factored Mr. Cunningham’s penny stocks into her equal division of the matrimonial assets, a determination that has not been appealed. The RRSPs [ 9 ] The trial judge found that Mr. Cunningham’s RRSPs had a value of $72,217.27 at the time of trial.

She ordered an equal division at source and directed the parties to sign all the documentation required to effect the tax-free rollover to Ms. Cunningham. She indicated the amount to be divided would not include the post-separation contributions and the interest that had accrued on them. [ 10 ] Mr. Cunningham had wanted his RRSPs and stocks excluded from the division of matrimonial assets. He relied on

section 13 of the Matrimonial Property Act , R.S.N.S.1989, c. 275, as amended 1995-96, c. 13, s. 83 which allows for the unequal division of matrimonial assets, if after consideration of certain factors, the court is satisfied that an equal division would be “unfair or unconscionable.” Mr.

Cunningham identified in particular, sections 13 (d) – the length of the marriage, and (e) – the date and manner of acquisition of the assets, as supporting his claim. [ 11 ] The presumption under the Matrimonial Property Act is for an equal division of the parties’ assets, whether acquired before or during the marriage, with only “certain narrow exceptions” ( Morash v. Morash , 2004 NSCA 20 , at para. 16 ). Mr. Cunningham’s RRSPs did not come within such exceptions. The trial judge correctly recognized it was his burden to establish that an unequal division of the RRSPs was warranted.

She inventoried the factors that, in Mr. Cunningham’s submission, supported his claim: • It was not a lengthy marriage; • Mr. Cunningham had acquired the RRSPs and stocks before he and Ms. Cunningham started to cohabit; • Any increase in the value of the RRSPs and stocks occurred because of the market, not Ms. Cunningham; • Ms. Cunningham and her children benefitted from Mr. Cunningham’s financial support;

• The Cunningham marriage produced no biological children; • Ms. Cunningham’s financial circumstances improved once she married Mr. Cunningham. She had been on social assistance, became employed at the time she and Mr. Cunningham started cohabiting, and remained employed throughout the marriage; • Mr. Cunningham characterized the relationship as “non-traditional” and said that Ms. Cunningham did not make sacrifices for his benefit. [ 12 ] Mr. Cunningham’s arguments failed to persuade the trial judge that the statutory presumption of equal division had been displaced. She made the following factual findings: • The marriage was “mid-length”.

Section 13 (

d) of the Matrimonial Property Act was not applicable. • The “no biological children” argument did not assist Mr. Cunningham’s claim. The Cunningham family consisted of the parties “and their children”, even if a biological connection was missing. Mr. Cunningham enjoyed his role “as a father” and was “emotionally and financially responsible” for the children while they all lived together. • Ms. Cunningham’s non-economic contribution to the marriage through her care of the home and children was “no less valuable” than Mr.

Cunningham’s greater financial contribution. • The after-tax value of the RRSPs (about $50,000) and the value of the stocks ($5,376.92) represented approximately 45 percent of the “net matrimonial assets”. Excluding them would cause financial hardship to Ms. Cunningham. • Ms. Cunningham’s age at separation (48), and the fact that she had only a modest income and an “almost negligible” pension, meant she would “likely have little opportunity to save for her future retirement…” Mr.

Cunningham had a greater ability to save “given his income and circumstances” (at para. 28). [ 13 ] In her reasoning, the trial judge placed considerable emphasis on the principles she extracted from Young v.

Young , 2003 NSCA 63 including that: • The “predominant concept” under the Matrimonial Property Act “is the recognition of marriage as a partnership with each party contributing in different ways”. • The “mere fact” of an asset being acquired prior to marriage does not remove it from being presumptively subject to equal division. • “Convincing evidence” is required to establish that an equal division would be unfair or unconscionable. • The words “unfair” or “unconscionable” which have no “precise meaning”, evoke “ethical considerations and not merely legal ones.” • The court is to consider all the circumstances and not merely the material contributions of each party. • In assessing an unequal division claim, the court must look at “the timing of the contribution”, “the parties’ use of the asset”, “the length of the marriage”, “the significance of the asset relative to the entire pool of matrimonial assets” and “the age and stage of the parties at separation.” [ 14 ] The trial judge found that “…Ms.

Cunningham was a capable and industrious wife and mother who did her best for her husband and children”, someone who had contributed “all that she had to the marriage” (at para. 28). She recognized the Cunningham marriage as a “partnership” and not a “business nor an economic enterprise…”.

She viewed the Cunninghams as having been engaged in a joint venture, making “tangible and intangible contributions” in the best interests of their family unit and concluded that: … When the evidence is viewed from this perspective, and given the totality of the evidence, I find that an equal division would not produce an unfair or unconscionable result.

To the contrary, an equal division is both fair and conscionable. (at para. 29) Standard of Review [ 15 ] A trial judge’s discretionary determination of how matrimonial assets should be divided is entitled to significant deference on appeal: This Court is entitled to intervene only where it is demonstrated that the trial judge has erred at law; applied incorrect principles; made a palpable and overriding error of fact or the result is so clearly wrong as to amount to an injustice… ( Young v.

Young , at para. 6 ) [ 16 ] An error of law is committed if the trial judge exercised her discretion on “…wrong considerations or wrong grounds, or ignoring the right considerations…” ( Young v. Young , at para. 7 ). Mr. Cunningham’s Arguments on Appeal [ 17 ] Mr. Stanwick, on appeal, challenged the trial judge’s equal division of Mr. Cunningham’s RRSPs on two fronts: he characterized her decision as an outlier, and relied on what he said are similar cases where an unequal division was ordered; and, he invoked a “reasonable person” test for determining fairness.

I will explain why I see no merit in either submission. The “Reasonable Person” Argument

[18] Mr. Stanwick advanced the notion that “…a fair and reasonable person in Nova Scotia would consider an equal division of theRRSPs acquired by the Appellant prior to cohabitation to be “unfair”.” He said unfairness must be viewed through the lens of a fair andreasonable person “whose values reflect those held in contemporary Nova Scotia”. Unfairness, he said, operates where there is “amarked departure from current community values”. [19] This language is found in the dissenting judgment from the British Columbia Court of Appeal’s decision in Girard v. Girard, (BC CA), [1983] B.C.J. No. 4, at para.14.

It is of no relevance to the task faced by the trial judge dealing with Mr.Cunningham’s RRSPs. [20] The majority in Girard decided the case on the basis of British Columbia’s matrimonial property legislation, emphasizing thatthe question of whether assets should be divided equally or not must be determined through the application of the governing statutoryprovisions. This is the approach that Justice Forgeron took to the division of the RRSPs. It was legally correct. [21] Mr.

Stanwick developed his “reasonable person” argument by contrasting the RRSP’s acquired before the marriage with giftsand inheritances which are excluded from division under the Matrimonial Property Act. He said there was no justification in treatingsuch assets differently as there is no “practical” difference between them. I understand his argument to be that the “reasonable” NovaScotian would regard the equal division of Mr.

Cunningham’s RRSPs to be unfair given that, had they been inherited or a gift, theywould not be classified as matrimonial assets and therefore, not subject to division. [22] These submissions completely overlook or ignore how the Legislature has determined what are and are not, matrimonialassets.

RRSPs, including those acquired before marriage, are matrimonial assets under section 4(1) of the Matrimonial Property Act.Gifts and inheritances are not. (Matrimonial Property Act, s. 4(1)) [23] As I indicated earlier, the standard for assessing whether a trial judge’s division of assets is unfair or unconscionable is adeferential one. The trial judge does have to apply correct legal principles.

I am amply satisfied the trial judge here did so. [24] And as an aside, I will note that a “reasonable” Nova Scotian is a Nova Scotian who is well informed about the law, and thevalues that underpin the Matrimonial Property Act. The Unequal Division Cases [25] Mr. Stanwick argued that Mr. Cunningham’s claim for an unequal division of his RRSPs is supported by precedent. Hepointed to such cases as Adie v. Adie, [1994] N.S.J. No. 395 (S.C.); Dort v. Dort, [1994] N.S.J. No. 155 (S.C.); Frost v. Frost, [1996]N.S.J. No. 411 (S.C.); and Connolly v. Connolly, [1999] N.S.J. No. 3 (C.A.).

I will explain why these cases are all distinguishable. Adie v. Adie [26] The pension in issue in Adie was earned by Mr. Adie in the United Kingdom during a lengthy first marriage. The second Ms.Adie made no contribution to it. In the divorce it was determined to be a matrimonial asset but Mr. Adie was permitted to retain itwithout division. [27] Goodfellow, J. found there was no evidence before him as to whether the pension was divisible under U.K. legislation. Henoted that Ms. Adie had made no contribution to Mr. Adie’s career; he was retired when they became a couple.

Having decided that itwould be “unfair and also unconscionable” to include the pension in the division of assets, he took into account the income Mr. Adiereceived from it in assessing his spousal maintenance obligation. [28] Prior to the divorce hearing, the parties had agreed to a division of the undisputed matrimonial assets with Ms. Adie receiving$81,240 and Mr. Adie receiving $124,760. [29] In contrast, a division of the Cunningham matrimonial assets that excluded the RRSPs would have provided Ms. Cunninghamwith $18,214 and Mr. Cunningham with $54,572.

As Justice Forgeron noted, such a division would have subjected Ms. Cunningham tofinancial hardship. The Cunningham’s were both working throughout their marriage and, as I have noted, contributing through variousmeans to the household. Dort v. Dort [30] On divorce, Mr. Dort, who was 56, sought an unequal division of his Armed Forces pension. It had been fully paid up beforethe Dorts began to cohabitate. Ms. Dort, aged 37, was also employed by the federal government and her pension was going to beprimarily earned and vested after the marriage. As a result of the divorce, Mr.

Dort was losing the opportunity to acquire an interest inthe pension Ms. Dort would eventually receive. Stewart, J. found that it would be unfair to give Ms. Dort an interest in her husband’spension earned prior to marriage in circumstances where Mr. Dort would not share her ultimate pension. [31] Ms. Cunningham was in a very different position than Ms. Dort. The trial judge pointed out that, Ms. Cunningham was 48 years old at separation. She earns a modest income. Her pension is almost negligible. She will likely have littleopportunity to save for her future retirement given her circumstances and life-stage.

Conversely, Mr. Cunningham has a greater ability tosave given his income and circumstances. (at para. 28) [32] Ms. Cunningham was found to have contributed more to the care of the home and children than Mr. Cunningham, who wasregularly absent due to his work. There is no indication in Dort of Ms. Dort having made a comparable contribution. Frost v. Frost

[ 33 ] Mr. Frost contributed to his pension as a member of the Canadian military from 1958 to 1990 when he stopped working, six months after his marriage to Ms. Frost. It was a second marriage for each of the Frosts, and a short one: the parties were married in August 1989 and separated in September 1994. [ 34 ] On divorce, Mr. Frost sought to retain his entire pension. MacDonald, J. (as he then was) agreed that he should, finding it would be “unconscionable” for Ms. Frost to share in an asset she had not contributed to. He found that Mr.

Frost’s final contributions during the first six months’ of the marriage “would have been very insignificant in the circumstances.” (at para. 12) [ 35 ] The Frost marriage bears no resemblance to the Cunningham marriage. It was a short second marriage for each of the parties and there was no comparable “household”. When they got married, Mr. and Mrs. Frost each had adult children who were independent. Connolly v. Connolly [ 36 ] The Connolly’s started living together in 1978 and separated in 1988. Mr. Connolly’s federal government pension was the only significant matrimonial asset.

He had retired after contributing to his pension for 33 years in total, including 16 years before he and Ms. Connolly began to live together and seven years after they separated. Ms. Connolly wanted an equal division of the pension benefits acquired up to the separation, a period of 26 years. [ 37 ] Ms. Connolly resigned from her employment in 1987 and her cashed-in employment pension was converted to the joint use of the parties when they purchased the matrimonial home. [ 38 ] This Court upheld the trial judge’s decision to award Ms.

Connolly fifty percent of her husband’s pension benefits earned during the parties’ cohabitation of almost ten years. In deciding that it would be unfair or unconscionable to effect an equal division of Mr. Connolly’s pension, the trial judge took into account the following factors under

section 13 of the Matrimonial Property Act : the length of the parties’ cohabitation (s. 13(d)); the date and manner of the acquisition of the assets (s. 13(e)); and the contribution, including as a homemaker or parent, of each spouse to the marriage and welfare of the family (s. 13(i)). She noted that it was a second marriage for the parties and they did not have any children together. [ 39 ] It was also relevant to the trial judge in Connolly that Ms. Connolly was an alcoholic whose drinking “by 1983…was out of control” (at para. 7).

She did not succeed in maintaining sobriety for the balance of the marriage and was found to have made less of a financial contribution to the marriage than Mr. Connolly, and otherwise, less “than would normally be anticipated.” (at para. 8) The Court of Appeal observed there was: …an abundance of evidence in the affidavits and in the viva voce evidence which if accepted, would support a finding that the appellant's continuing difficulties with alcohol negatively affected the family, the running of the household and her own employment.

The conclusion reached is therefore one supported by the evidence. (at para. 19) [ 40 ] These facts in Connolly are to be contrasted with Justice Forgeron’s assessment of the Cunningham marriage and her conclusion that nothing suggested Ms. Cunningham had failed to contribute “all that she had to the marriage” (at para. 28). [ 41 ] The circumstances in Adie, Dort, Frost , and Connolly were all significantly different than the facts in this case and offer no assistance to Mr. Cunningham’s claim that the RRSPs should not have been subject to an equal division. Dividing RRSPs Equally [ 42 ] As Ms.

Cunningham points out, the case that more closely resembles the facts in this case is MacNeil v. MacNeil , 2007 NSSC 321 . The MacNeil marriage lasted eight years. Mr. MacNeil sought an unequal division of matrimonial assets by excluding RRSPs he had acquired prior to marriage. Justice Darryl Wilson considered the factors in

section 13 and concluded that an equal division was neither unfair nor unconscionable. He took into account evidence that Ms. MacNeil, relying on Mr. MacNeil’s “promise of future financial security”, had not made a contribution toward past pensionable service with her employer and had incurred debt to support the household instead of saving for her future (at para. 29). [ 43 ] Justice Forgeron viewed the Cunningham marriage through a comparable lens, seeing it as a partnership endeavour where all contributions are valued. [ 44 ] Justice Forgeron’s decision on the RRSPs reflects this Court’s approach in Morash v.

Morash , 2004 NSCA 20 to the division of matrimonial assets: 23 The presumed equal division of matrimonial assets recognizes marriage as a partnership with each spouse contributing in different ways. A measuring of the respective contributions of the parties to the acquisition of the matrimonial assets, save in unusual circumstances, is to be avoided. Matrimonial assets may be divided other than equally, only where there is convincing evidence that an equal division would be unfair or unconscionable. ( Young v. Young , supra ).

In applying s. 13 , the question is not whether an unequal division would be fair or fairer, but whether the usual equal division dictated by the Matrimonial Property Act , would be unfair or unconscionable…Absent a factual context supporting unequal division, the court is not free to exclude from division assets acquired by one party prior to marriage… [ 45 ] In Morash , the trial judge did not engage in the

section 13 analysis and was found to be in error for failing to include “as a matrimonial asset subject to equal division, the pension benefits earned prior to marriage” (at para. 15). Conclusion [ 46 ] The trial judge dealt with Mr. Cunningham’s RRSPs just as she should have, by taking a contextualized approach to the case and considering all the circumstances. Mr. Cunningham’s focus is essentially a singular one - the date of acquisition. It is a focus that does not accord with the requirements of the law governing the division of matrimonial assets.

[ 47 ] I would dismiss the appeal and, in accordance with this Court’s comments in Mosher v. Gosby , 2016 NSCA 10 , at para. 17 , award costs of $3000 payable to the Nova Scotia Legal Aid Commission. Derrick, J.A. Concurred in: MacDonald, C.J.N.S. Saunders, J.A.