Dixon v. Dixon, 2012 NSSC 242

IN THE SUPREME COURT OF NOVA SCOTIA (FAMILY DIVISION) Citation: Dixon v. Dixon, 2012 NSSC 242 Date: 20120627 Docket: 1201-064590 Registry: Halifax Between: William John Dixon Applicant and Kimberlie Heather Dixon Respondent Judge: The Honourable Associate Chief Justice Lawrence I. O ’ Neil Date of Hearing: September 6, 2011 Counsel: Janet Stevenson, for the Applicant Gordon R. Kelly, for the Respondent By the Court : Background [ 1 ] The parties reached a settlement of the issues in their matrimonial litigation on September 6, 2011. I was the settlement conference Justice. As part of that settlement, Mr.

Dixon agreed to a RRSP "spousal roll over" to Ms. Dixon. The quantum of the roll over is now a matter of disagreement. [ 2 ] Mr. Dixon says the issued Corollary Relief Order ( ‘ CRO ’ ) correctly says the roll over is $19,500 representing $15,000 + 30% of $15,000. Ms. Dixon argues the issued ‘ CRO ’ is in error and should require the roll over of $21,428.27, this being the quantum when taxed at a rate of 30% would yield $15,000.

[ 3 ] The transcript of the September 6, 2011 settlement conference records my description of the settlement on this issue as follows: On the issue of arrears of child support because of a global settlement involving property issues, the parties agree that no arrears of child support are payable by Mr. Dixon and the parties agree that all property issues are settled . . . . . will be deemed settled by Mr. Dixon, paying Ms.

Dixon by way of spousal roll over, fifteen thousand dollars ($15,000) grossed up at a rate of 30 percent and that shall be deemed to be full and final settlement of all property issues outstanding between the parties. [ 4 ] The ‘ CRO ’ was issued February 13, 2012. The order was consented to by both counsel. Clause 40 provides as follows: Equalization 40. The parties shall effect an equalization of the family property through a spousal roll over of RRSP funds from William Dixon to Kimberlie Dixon in the sum of $19,500.00. The parties acknowledge that $19,500.00 is $15,000.00 grossed up for taxes at a rate of 30%.

William Dixon shall complete the spousal roll over of RRSP funds within two weeks of the issuance of this Corollary Relief Order. [ 5 ] An application is now being made on behalf of Ms. Dixon to change the figure $19,500 in clause 40 to $21,428.27. The basis of the application is that the order was consented to in error, issued in error and should now be corrected as provided by R.78.08 and 82.02. Mr. Dixon says the order is correct as written. Conclusion [ 6 ] I am satisfied that the ‘ CRO ’ at clause 40 accurately reflects the agreement of the parties.

The wording of this clause and the agreement must be put in context. [ 7 ] When parties agree on a spousal roll over of RRSP funds as part of an equalization of their assets and debts, they routinely discuss and agree upon an additional amount to cover taxes payable by a recipient of a roll over when funds received in this way are eventually withdrawn. Determining what that additional amount will be is a matter of negotiation and an imperfect process. Parties frequently resort to speculation, guess work and rough estimates because anything more is often not possible or practicable.

For a number or reasons taxes may never really be paid on funds to be withdrawn from an RRSP gained through a roll over or in other ways or the amount of taxes paid may exceed the value of the gross up. [ 8 ] Parties often just estimate the taxes and settle on a number. That is what happened here. [ 9 ] I am satisfied that in this case the parties agreed to add 30% of $15,000 to the roll over to reflect any taxes that Ms. Dixon might have to pay when the funds were withdrawn and which taxes might not be returned to her at year end.

The ‘ CRO ’ issued February 13, 2012 is therefore correct as presented, as consented to by both parties and as issued.

ACJ