Calder v. Calder, 2022 NSSC 146

Supreme Court of Nova Scotia (FAMILY DIVISION) Citation: Calder v. Calder , 2022 NSSC 146 Date: 20220522 Docket: Halifax No. SFH1201-070750 Registry: Halifax Between: Debra Leanne Calder Petitioner v. Troy Richard Calder Respondent Library Heading Judge: The Honourable Justice Pamela J.

MacKeigan Heard: March 22, 23 and 24, 2021; April 16, 2021, and October 14, 2021, in Halifax, Nova Scotia Final Written Submissions: November 22, 2021 Written Decision: May 22, 2022 Subject: Matrimonial assets, business assets, spousal support, imputation of income, child support, property division THIS INFORMATION SHEET DOES NOT FORM PART OF THE COURT'S DECISION. QUOTES MUST BE FROM THE DECISION, NOT THIS LIBRARY SHEET. SUPREME COURT OF Nova Scotia FAMILY DIVISION Citation: Calder v. Calder , 2022 NSSC 146 Date: 20220522 Docket: Halifax No.

SFH1201-070750 Registry: Halifax Between: Debra Leanne Calder Petitioner v. Troy Richard Calder Respondent

Judge: The Honourable Justice Pamela J. MacKeigan Heard: March 22, 23 and 24, 2021; April 16, 2021, and October 14, 2021, in Halifax, Nova Scotia Written Release: May 22, 2022 Counsel: Kim Johnson for the Applicant, Debra Calder Deborah Conrad for the Respondent, Troy Calder By the Court [ 1 ] This is a divorce proceeding. Troy Calder and Debra Calder met in 2002, began living together in 2003, married the 30 th of December 2006, and separated the 30 th of June 2017. There are two children of the marriage, age 14 and 11 years.

An oral decision was rendered on the 14 th of October 2021 dealing with parenting and decision making. [ 2 ] I am satisfied all the jurisdictional requirements of the Divorce Act have been met and there is no possibility of reconciliation. There has been a permanent breakdown in the marriage and the parties have lived separate and apart from one another in excess of one year. Background [ 3 ] Troy Calder is the president of Charm Diamond Centres (“Charm Diamond Group”) which is comprised of 83 retail stores across Canada.

Richard Calder, Troy Calder’s father, is the controlling shareholder for all of the entities that make up the Charm Diamond Group.

Troy Calder began working for the Charm Diamond Group in 1994 in various capacities, working his way up to become President in 2007. [ 4 ] By the time Troy Calder met Debra Calder he had accumulated substantial assets including a mortgage free home in Dartmouth, a property in Lunenburg, RRSP’s, and investments with a total worth of approximately $650,000. [ 5 ] Debra Calder graduated from high school in 1996 and completed a two-year program at the College of Geographical Sciences where she graduated with a diploma in cartography.

Following graduation, she worked at the Nova Scotia Geomatics Centre in Amherst, Nova Scotia. [ 6 ] In 2000, Debra Calder began a four-year honours degree in communication design at the Nova Scotia College of Art and Design (NSCAD). In 2003 Troy Calder and Debra Calder began to cohabit in Troy Calder’s home in Dartmouth. Debra Calder completed her degree in 2004 and began work at Parks Canada completing mapping and design of resource projects for the Conservation Department.

After the parties became engaged in 2006 Troy Calder paid Debra Calder’s student debt of approximately $18,000. [ 7 ] In 2008, the parties’ first child was born. Debra Calder took an extended maternity leave (2 years) from her job at Parks Canada. During this leave she became pregnant with their second child and took a further one-year maternity leave after their son was born. Debra Calder returned to work briefly in 2011 however her position with Parks Canada was terminated.

Debra Calder has been out of the workforce since the birth of their daughter in 2008 with the exception of a small interior design job in 2016. [ 8 ] When the children were born the parties sold the home in Dartmouth and purchased a home on Shore Drive in Bedford. In June 2016, they purchased a new home on Belle Street in Bedford but remained living at the Shore Drive residence. By this time, the marriage was breaking down. The parties separated in November 2016. Troy Calder moved into the Belle Street property.

The parties reconciled in February 2017 and Debra Calder and the children moved into the Belle Street property with Troy Calder. The parties separated for the final time on the 30 th of June 2017. Following separation Troy Calder remained in the Belle Street home which had a mortgage of approximately $450,000.

In September 2017, Debra Calder moved into a mortgage free home at Aspen Hill, bought with the proceeds of the sale from their Shore Drive residence. [ 9 ] The following are the issues for determination: 1) Whether shares of Charm NFLD are properly classified as exempt business assets or are they matrimonial assets. 2) If the assets owned by the family trust are determined to be business assets does Debra Calder have an interest under

section 13 of the Matrimonial Property Act . 3) Division of assets and debts. 4) What is the appropriate amount of child support; 5) What, if any, amount of spousal support should be awarded;

6) What, if any, retroactive support is appropriate; 7) What is the income of each party for the purpose of determining support; 8) Whether a $500,000 payment to Troy Calder should be exempt for divisions as a gift/inheritance under

Section 4 of the Matrimonial Property Act and or in the alternative should the payment or a portion thereof be excluded pursuant to

section 13 of the Matrimonial Property Act . 9) Should support payments be secured with life insurance. Troy Calder Family Trust (2011) - Charm TRC Holding Ltd. - Trod Holdings Ltd. [ 10 ] In September 2001, Troy Calder bought 33.3% of the common shares in Charm Jewelry Newfoundland Limited (Charm NFLD) from a retiring employee shareholder. The shares were purchased at fair market value for $325,838.48 from savings Troy Calder accumulated prior to his relationship with Debra Calder.

The shareholder agreement stipulated should Troy Calder choose to sell the shares his father Richard Calder would have 30 days to exercise the option to purchase the shares for the amount originally paid by Troy Calder. [ 11 ] Richard Calder is the controlling shareholder for all the entities that make up the Charm Diamond Group. Other than the one-third interest in Charm NFLD Limited Troy Calder has no ownership interest in any other companies that are owned by the Charm Diamond Group. [ 12 ] In 2007, Troy Calder became president of the Charm Diamond Group.

His income is comprised of a salary of $85,000 and bonuses paid each February for the preceding year which is based on a percentage (5-7%) of profitability of the stores. As president, Troy Calder is responsible for the day-to-day operations of the Charm Diamond Group including hiring/firing, human resource, merchandising, and marketing. Richard Calder controls leasing and financing. [ 13 ] Charm NFLD Limited has declared dividends based on profitability six times since incorporation in 1980. (Exhibit 5, affidavit of Marguerite Ryan, paragraph 21).

Dividends were paid when Charm NFLD Limited profits increased during the boom in the oil business. Dividends stopped being paid in 2017. [ 14 ] In 2011, Troy Calder set up a corporate structure, the “Troy Calder Family Trust” (Family Trust) to manage risk, diversify investments, income split, more efficiently manage taxes, and assist with estate planning. (Affidavit of Troy Calder, exhibit 9, tab 2) [ 15 ] The income of the Family Trust is not retained rather is paid out to the beneficiaries of the Trust, in this case, Troy Calder, Debra Calder and TROD.

Troy Calder owns 100% of the preferred shares of Charm TRC and TROD and the Family Trust owns 100% of the common shares. [ 16 ] Troy Calder and his trust are shareholders in two holding companies. Charm TRC Holdings Limited (Charm TRC) is an investment holding company which owns a one-third interest in Charm NFLD Limited. The majority of TRC's income is from dividends paid by Charm NFLD. As a minority shareholder in Charm NFLD Troy Calder has no input in deciding when dividends will be declared by Charm NFLD.

This is solely at the discretion of Richard Calder. [ 17 ] TROD holding limited (TROD) is an investment holding company with a business plan to purchase real estate in Dartmouth for an apartment development once enough property is secured. The beginning of this plan started with the purchase of a property located at 19 Alderney Drive in 2015. A second rental property was purchased in 2020 financed by cash in hand and an interest-bearing loan.

TROD’s sources of income include dividend payments from Charm TRC, investment earnings and rental income. [ 18 ] Matrimonial assets are defined in Section 4(1) of the Matrimonial Property Act as: 4

(1) In this Act, "matrimonial assets" means the matrimonial home or homes and all other real and personal property acquired by either or both spouses before or during their marriage, with the exception of: (

a) gifts, inheritances, trusts or settlements received by one spouse from a person other than the other spouse except to the extent to which they are used for the benefit of both spouses or their children; (

b) an award or settlement of damages in court in favour of one spouse; (

c) money paid or payable to one spouse under an insurance policy; (

d) reasonable personal effects of one spouse; (

e) business assets; (

f) property exempted under a marriage contract or separation agreement; (

g) real and personal property acquired after separation unless the spouses resume cohabitation. [ 19 ] Business assets are defined in

Section 2(

a) of the Matrimonial Property Act as: 2 In this Act,

(a) "business assets" means real or personal property primarily used or held for or in connection with a commercial, business,investment or other income-producing or profit-producing purpose, but does not include money in an account with a chartered bank,savings office, loan company, credit union, trust company or similar institution where the account is ordinarily used for shelter ortransportation or for household, educational, recreational, social or aesthetic purposes; [20] Our courts have struggled with the distinction between assets that are matrimonial assets and assets that are business assets.

As aresult, there are many cases that are difficult to reconcile. [21] In Wolfson v.

Wolfson, 2021 NSSC 260, Justice Forgeron conducted a thorough analysis of case law dealing with business assetsand identified four relevant factors when classifying business assets. (paragraph 180) - generation of income in the entrepreneurial sense. - capital gain and the passive nature of the asset, - diversion of family income or property; and - the party’s intention and treatment of the asset. [22] At paragraph 194, of Wolfson, supra, Justice Forgeron states: a. “Because the Matrimonial Property Act is remedial legislation it must be ascribed a liberal and purposeful

interpretation in keepingwith its stated objective. As such, otherwise business assets may be classified as matrimonial depending on the primary purpose of theasset, including whether the asset is generating income in the entrepreneurial sense, whether the asset is a capital asset acting passively,or whether the asset was acquired from funds diverted from the family. Further, the court must examine the party’s intention andtreatment of the asset when considering the classification issues.” [23] In Pirie v.

Pirie, 2020 NSSC 206, Justice Jesudason provided a helpful list of general principles emerging from case law to assistcourts as to where to draw the line in distinguishing between matrimonial and business assets. At paragraph 38 he states: [38] The MPA came into force in 1980. Since then, courts have sometimes struggled as to where to draw the line when distinguishingbetween matrimonial assets (presumptively divisible) and business assets (presumptively exempt from division). The following generalprinciples, however, have emerged: 1.

The burden of proving that an asset is not matrimonial by reason of being a business asset is on the party making thatassertion: Volcko, v. Volcko, 2015 NSCA 11, para. 23 (leave to appeal to SCC refused, [2015] S.C.C.A. No. 141); Cashin, 2010 NSCA51, para 8; 2. The hallmark of business assets is that they have, as their primary purpose, the generation of income in an entrepreneurialsense: Clarke v. Clarke, (SCC), [1990] 2 S.C.R. 795 at p. 814; Volcko, para. 25; 3. Generally, the only assets that should be classified as business assets are ones that are purposely held or used for the production ofincome or profit.

It isn’t enough to say that some gain or benefit may accrue in the future from the asset. Rather, it must be said that theasset is being worked in a commercial, business or investment way for the production of income or profit: Lawrence v.Lawrence, (1981), (NS CA), 47 N.S.R. (2d) 100, [1981] N.S.J. No. 12 (A.D.), para. 24; 4. A business asset is generally one which is used for relatively immediate gain as opposed to one that is merely held for the purpose offuture security or as a “nest egg” or security for retirement: Hebb v. Hebb, (1991), (NS CA), 103 N.S.R. (2d)147, 1991 CarswellNS 49 (A.D.), para. 17; 5.

The parties’ intention is very significant as to whether an asset is a matrimonial or business asset: Hebb, para. 17; 6. While intention is very significant, one can also consider whether an asset is working or being worked in an entrepreneurial way.Two important indicators of entrepreneurial activity are risk and management activity. There is a distinction between assets that are static(i.e. involve little financial risk and insignificant management) versus those that are financially risky to own, and require attention andmanagement to ensure profitability: J.W.L. v. C.B.M, 2008 NSSC 215, para. 17; and 7.

Generally, an asset is more likely to be considered a business asset if it wasn’t acquired from funds diverted from family uses(Tibbets v. Tibbets, (1992), 1992 NSCA 17 , 119 N.S.R. (2d) 26 (A.D.)), wasn’t primarily intended to be used for the parties’retirement (Hebb), or was an asset held for income as opposed to capital gain (Best v. Best, (1991), (NS CA), 102N.S.R. (2d) 61).

Charm TRC Debra Calder’s position: [ 24 ] Debra Calder’s position is that despite any corporate structure in the Family Trust, all assets held in the trust are matrimonial.

Prior to the establishment of the Family Trust in 2011 all dividends paid by Charm NFLD were paid to Troy Calder personally. [ 25 ] After the trust and corporate structure was set up in 2011, rather than disperse the dividends for family purposes Troy Calder paid the dividends to Charm TRC which in turn moved substantial funds into TROD. [ 26 ] In the three years prior to separation Troy Calder’s shares in Charm Diamond NFLD generated significant dividend income and from Debra Calder’s perspective; the shares at the time, appeared to be business assets.

Debra Calder successfully established at an interim hearing that the shares were an income generating business asset and had all of the dividend income paid by the shares attributed to Troy Calder’s income for support purposes. [ 27 ] Debra Calder now argues that the shares are no longer business assets as they have not generated dividend income since 2017 and cannot be relied on to generate income in the future. She relies on the affidavit evidence and testimony of Troy Calder and Richard Calder to support her position.

Debra Calder submits the shares are no longer being worked by Troy Calder in an entrepreneurial sense, are not being held for the primary purpose of generating income, and nothing Troy Calder does can influence the payments of the dividends as this is entirely in the control of Richard Calder, who has the sole discretion to determine when and if dividends will be paid.

Should the Court accept the shareholders agreement still applies, then the shares cannot be said to be held for profit given the restrictions on sale. [ 28 ] As these assets are not currently generating income in an entrepreneurial sense and may never in the future, she argues the shares are properly classified as matrimonial assets subject to division. [ 29 ] In the alternative, should the Court accept the Charm NFLD shares are business assets, Debra Calder argues they must be deemed to be generating income therefore the Court should impute one-third of the pre-tax corporate income of Charm NFLD to Troy Calder valued at $325,540 in 2020 (Jennings report, exhibit 3,

schedule 10). [ 30 ] Debra Calder submits if the full fair market value of the shares are a divisible matrimonial asset then fair market value should not be restricted to the buy out contract between Richard and Troy Calder as Troy Calder transferred the shares to Charm TRC which is owned by the Family Trust.

Therefore, 50% of the shares should be deemed to be held in trust for Debra Calder and she should receive 50% of any dividend or other payment related to the shares. [ 31 ] In the alternative, if the Court finds the shares are an income generating asset, then based on the Wolfson , supra, decision the Court should find the shares are also held equally for long term gain and 50% of the shares should be deemed to be matrimonial and 25% of the shares owned by the Family Trust should be designated to be held in trust for Debra Calder.

TROD [ 32 ] Debra Calder submits TROD exists because Troy Calder diverted his earnings to the company during the marriage. She argues TROD is an investment holding company and as such is no different from other passive investment accounts that the Court has always treated as matrimonial assets ( Murphy v. Murphy , 2015 NSSC 41 ). She submits nothing that was held in TROD at the time of separation was being held for immediate gain in an entrepreneurial sense, rather the bulk of the assets were held for long term gain. [ 33 ] The only potentially different asset is the Alderney building TROD purchased in 2015.

Debra Calder argues at the point of separation this too was a passive asset that generated no income and while Troy Calder may have a plan for future development no further steps were taken toward this goal until years later.

She submits during the marriage and at the point of separation, the apartment building (along with the other investments held by TROD), were passive assets increasing in capital value and passive assets are matrimonial assets. [ 34 ] Debra Calder submits Troy Calder recently (2020) used some of the investments in TROD to purchase another property and now refers to TROD as a real estate development company despite reporting TROD to the Canada Revenue Agency as an investment holding company. [ 35 ] Debra Calder submits there is no authority to support that a party can take what was a matrimonial asset pre-separation and use it for business purposes post-separation and say it was always a business asset as this would open the door for individuals to thwart the principles of s. 4(4) of the Matrimonial Property Act . [ 36 ] Debra Calder submits the Pothier v.

Pothier , ( 2017 NSSC 230 ) decision relied on by Troy Calder to support his position TROD is a business asset supports her position as the holding company PRED was found to be necessary for the running of the corporation, PM, that generated income. Debra Calder submits the interdependency of the companies in Pothier , supra, is absent in their situation as Troy Calder’s income comes from the Diamond companies, not real estate development. [ 37 ] Debra Calder submits the Court must consider the intention of the parties when considering whether an asset is business or matrimonial.

In Wolfson , supra, the Court found the parties intended their rental properties would be used for retirement despite them generating income. The Court found 50% of Mr. Wolfson’s corporate shares were matrimonial as they demonstrated two equal, primary purposes, generation of income in the entrepreneurial sense and a retirement vehicle for the parties. Debra Calder argues that there is clear evidence that the assets of TROD were intended to be used for the benefit of the family, including retirement. She relies on the

following factors; - parties’ affidavit evidence (affidavit of Debra Calder, Exhibit 1, tab 6, paragraph 27; affidavit Troy Calder Exhibit 9, tab 2,paragraph 31-33); - the value of the matrimonial assets was insufficient to fund the parties’ retirement without considering the value of the businessassets; - the business assets were acquired at the expense of the family by diversion of income that could have otherwise benefited thefamily. [38] Debra Calder argues if the assets in TROD were generating income in an entrepreneurial sense, then based on Wolfson, supra, theyhad two equal purposes, however, Troy Calder assets in TROD are not generating income therefore they are 100% matrimonial.

Troy Calder’s position TRC [39] Troy Calder submits the shares in Charm Diamond NFLD were purchased in 2001, before he met Debra Calder, with money heearned working nine years in the jewelry business. He took the money, assumed the risk, and invested in the jewelry retail business.Debra Calder did not make any contribution to the acquisition of the shares. The choice to purchase the shares was his alone. [40] The shares were not acquired from funds diverted from family use, were not intended to be used for the parties’ retirement and areassets held for the generation of income as opposed to capital gain.

He submits the shares are easily distinguishable from those kinds ofassets that in the past have been determined to be matrimonial as opposed to business, such as pensions and investments, where the assetwas passively held. His business asset were like those in Volcko v. Volcko, 2013 NSSC 342, (affirmed in Volcko v. Volcko, 2015 NSCA11) and Bruce v. Ramey, 2016 NSSC 31. [41] In Clarke v.

Clarke, (SCC), [1990] 2 S.C.R 795, (page 22) the Court concluded that the exceptions under section4(1) of the Matrimonial Property Act relate to assets unrelated to the marriage but associated with one spouse to the exclusion of theother. [42] In Wolfson, supra, Justice Forgeron found Mr. Wolfson's assets were related to the marriage and were not associated with Mr.Wolfson to the exclusion of Ms. Wolfson (paragraphs 195, 197 – 200).

Troy Calder submits Charm TRC is unrelated to the marriage andis a business asset associated with him to the exclusion of Debra Calder. [43] Charm TRC’s only asset is a one-third interest in Charm NFLD. Troy Calder submits classifying Charm TRC as a business assetdepends on classifying Charm NFLD as a business asset.

The following factors support Charm NFLD is a business asset: 1) Charm NFLD was acquired pre-marriage. 2) No marital income or property was used to purchase, maintain, or operate Charm NFLD. 3) Matrimonial property was not used as security. 4) Charm NFLD’s growth did not accelerate at the expense of the family. 5) Debra Calder did not contribute premarital assets to the business or matrimonial assets. 6) Troy Calder and Debra Calder did not guarantee business loans. 7) Troy Calder did not intermingle marital benefits with Charm NFLD or borrow money from Charm NFLD for marital use. 8) Charm NFLD was not intended to be a retirement vehicle for the parties, nor did he communicate that to Debra Calder, nor did theparties rely on Charm NFLD to fund their retirement.

TROD [44] Troy Calder submits TROD Holdings Limited is a real estate development company that uses funds from Charm TRC to acquireand develop properties to build an apartment building in Dartmouth. The beginning of this business plan started during the marriage in2015 with TROD’s purchase of a property at 19 Alderney Drive. [45] The investment account of TROD Holdings Limited is the nucleus for this development plan. In May of 2015, he hired aconsulting company to get their expertise and advice on developing the property.

In 2020, he acquired a second property as part of thedevelopment plan. [46] Troy Calder submits the sole purpose of developing properties is to generate income and profit in an entrepreneurial sense. Thedevelopment is in the initial stages. TROD must invest in architects, engineers, planners and other professionals to be a viable company.It must decide which developments to pursue, the location of the development, and the timing of the development. For this reason, thecompany has substantial capital and assets in investments which are necessary to operate the business.

A division of the assets wouldresult in there being no capital to operate the business. [47] TROD generates income and all of the income from TROD was included as income for calculating support in the expert reports ofDan Jennings and Paul Bradley. [48] Troy Calder submits Debra Calder is in error to conclude that a business asset becomes a matrimonial asset on the basis the capitalcould have been used for the family instead. Rather, the hallmark of a business asset is whether ‘capital was employed for the purpose of

generating income in an entrepreneurial sense notwithstanding where the business obtained its capital’. [49] TROD’s primary purpose is to create income and he did not intend to save the money in the TROD investment account or let theinvestments appreciate. The parties were not depending on these investments to maintain their lifestyle or supplement their retirement asthe parties acquired substantial matrimonial assets for retirement prior to his investing in TROD. Decision [50] I find Charm TRC and TROD meet the definition of a business asset under

section 2(

a) of the Matrimonial Property Act and areexcluded from division under section 4(1)(

e) of the Act. In reaching this decision I have considered the following: a. The Matrimonial Property Act is remedial in nature and must be given a broad and liberal

interpretation in keeping with thepurpose of the legislation (Clarke, supra). b. The parties’ assets are presumptively matrimonial and the burden of proving an asset is not matrimonial by reasons of an exceptionfalls on the party making the assertion (Cashin v. Cashin, 2010 NSCA, 5). c. Business assets are assets which have as their purpose the generation of income in an entrepreneurial sense. (Clarke, supra)(Tibbetts v. Tibbetts, (NS CA), 1192 NSCA 17, 112 NSR (2d) 173). d.

It is not enough to say that some gain or benefit may accrue in the future from an asset, but rather it must be said that it is working ina commercial business or investment way for the production of income or profit. (Lawrence v. Lawrence, NSCA). e. Assets held for capital gain (Best v. Best, 1991 120 WSR (2d) 61) and assets of a passive nature (Murphy, supra) are matrimonialassets. f. It is the intention of the parties that governs the determination of whether assets are business or matrimonial under the Act (Hebb v.Hebb, (NS SC), 31 R.F.L (3d) 401). g.

Assets such as pensions, “funds comprising income directed from the date on which it was earned (Clarke, supra) and investments,comprising income diverted from other family uses” (Tibbetts, supra) are matrimonial assets. h. The intention of the parties may transform an otherwise business asset into a matrimonial asset (Eyking v Eyking, 2012 NSSC 409). i. The fact an asset does not make money does not necessarily disqualify it from being a business asset. This is a factor to take intoaccount, each case turns on it’s facts (Best, supra). j.

Business assets may be considered matrimonial where there has been an intermingling of finances and use of company assets forpersonal purposes (Wolfson, supra). [51] In Volcko, supra, Justice Beaton dealt with the issue of distinguishing business assets from matrimonial assets when consideringthe classification of Mr. Volcko’s shares held in his employers company.

At paragraphs 40 and 41 Justice Beaton stated; [40] It is clear the Wife understood the inherent risk associated with ongoing acquisition of the shares, supported by her statementduring cross examination that when she stopped working in 1998 the shares accumulated to that date were an uncertainty and thereforea “very small piece” of the parties’ “financial pie”, but she was “prepared to bet on my husband”.

This notion of “betting” by the Wifeunderscored the point that the value of the shares is subject to risk, in the performance of not just the Husband but also many others inthe company, and the overall yearly success of PCL. In purchasing the shares, the Husband has had to use his knowledge of thecompany’s past and projected performance and that of the construction industry each time he decided to make a purchase.

The choice topurchase shares has been his alone, requiring him to exercise his expertise. [41] The Husband has established and the evidence supports that the shares in question possess the requisite entrepreneurial sensethat makes them business assets. The shares are easily distinguishable by their features from those kinds of assets that have in the pastbeen determined to be matrimonial as opposed to business, such as, for example, pension plans and investment portfolios where the assetwas passively held.

Accepting the definition of “entrepreneur” discussed in Osmond (supra), citing from Tibbetts v.Tibbetts (1992), 1992 NSCA 17 , 119 N.S.R. (2d) 26, as “a ‘person in effective control of commercial undertakings’; onewho ‘undertakes a business or enterprise, with chance of profit or loss’” (paragraph 29), the Husband has not controlled the company, buthe has controlled his decisions about whether to buy shares in it0, and he has borrowed money to do so. This is not a situation where theHusband simply put money in an account, plan or portfolio to let it grow in the nature of, for example, a pension or savings fund.

Theseshares were and are intimately tied to the fortunes of the company, and the Husband has used his expertise and knowledge of thecompany and the industry, but also to some extent “gambled” on the performance of others, in deciding each year whether to accept therisk and purchase shares. [52] I find Troy Calder purchased the shares of Charm NFLD in 2001 prior to meeting Debra Calder. He used his knowledge andexpertise acquired over nine years working in the retail jewelry business in making the decision to buy the shares.

He alone took the riskto invest in the jewelry business which has a host of controllable and uncontrollable variables that can contribute to the success or failureof the company and yearly profits. [53] Debra Calder was not involved in Troy Calder’s decision to purchase the shares. She did not do work for the business, nor did TroyCalder consult with her about investments or business plans. (affidavit of Debra Calder, exhibit 1, Tab 3 par. 29; affidavit of Troy Calderexhibit 9, Tab 2 par. 43). These decisions were Troy Calder’s alone.

The purchase of the shares involved considerable risk with a chanceof profit or loss. [54] There is no evidence matrimonial money was put into the business or that the parties’ lifestyle or standard of living suffered from

the diversion of funds that could have otherwise been available for family use. The Calder’s enjoyed a very affluent lifestyle with trips, private school, tutors, extracurricular activities for the children, luxury homes and recreational toys (boats, quads). This lifestyle was not dependent upon the payment of dividends from Charm NFLD. Troy Calder’s income and yearly bonuses from his role as President of the Charm Diamond Group afforded this lifestyle independent of dividend payments. [ 55 ] In Debra Calder’s own words “Prior to separation we lived a very comfortable lifestyle.

We had our home and cottage and a boat that cost over $40,000. The children attended private schools, we had a cleaning lady weekly and we travelled frequently on vacations together and alone” (affidavit of Debra Calder, exhibit 1, tab 7, paragraph 61). [ 56 ] I find the Calder’s were not relying on Charm TRC or TROD to fund their retirement. In Wolfson , supra, Justice Forgeron found if she excluded the rental properties from division, Ms. Wolfson’s premarital assets formed the bulk of the remaining assets which would not fund the parties retirement.

Justice Forgeron found the business asset grew at the expense of the family and the parties intended the properties would be a retirement vehicle. [ 57 ] During the marriage Troy Calder prioritized accumulating matrimonial assets by maximizing yearly RRSP contributions, and contributing to TFSA’s pensions, and non-registered investments. [ 58 ] Debra Calder did not have premarital assets, rather she came into the marriage with student debt. Troy Calder’s premarital assets created the marital assets and the business assets. [ 59 ] In Wolfson , supra, the value of Mr.

Wolfson’s shares in the rental properties was almost $14 million while the parties matrimonial assets were worth less than $2.5 million. Troy Calder invested significantly in building matrimonial wealth prior to deciding to invest in other businesses to diversify his income stream.

As a result, the parties matrimonial assets (approximately $4.5 million) were almost double the value of the business assets (approximately $2.3 million). [ 60 ] Debra Calder submits the shares she successfully argued were business assets at the interim hearing, have lost their classification as a business asset as they are no longer generating income in an entrepreneurial sense and may never generate income again, therefore are matrimonial assets. [ 61 ] I disagree. As stated in Best , supra, the fact an asset does not make money does not necessarily disqualify it from being a business asset.

This is a factor to take into account and each case turns on its facts. [ 62 ] The affidavits of Richard Calder (exhibit 6), Marguerite Ryan (exhibit 5) and Troy Calder (exhibit 9) address the circumstances which led to Richard Calder’s decision to not pay dividends since 2017.

In 2017, Charm NFLD experienced declining sales and profitability as a result of a number of factors including a challenging economy in Newfoundland and Alberta with the decrease in oil prices, a series of armed robberies in Newfoundland stores with inventory losses, costly renovations with the renewal of leases and the onset of COVID-19 in 2020 which had an unprecedented effect on the retail business sector forcing stores to close. [ 63 ] Richard Calder, as the majority shareholder of Charm NFLD, decides when dividend distributions are made to shareholders.

Richard Calder testified the pandemic of 2020 -2021 presented many challenges in maintaining the business and given the uncertainty caused by the pandemic dividends could not be paid as the business could not risk depleting its capital. [ 64 ] Debra Calder retained Dan Jennings, BDO, to prepare an independent expert report of Troy Calder’s income for support purposes (report: exhibit 3). In response to a hypothetical scenario assuming Charm NFLD dividend distribution would not continue beyond 2017 Mr. Jennings stated: 84. … Furthermore, council’s belief that the Charm NL dividends are nonrecurring is unproven.

Earlier in this report, we discussed the financial ability of Charm NL to pay dividends and the inability to prove management's representation that the larger charm group requires the capital. … 51

b) Clearly, the pandemic of 2020-21 must be negatively impacting a retail business like Charm, given the temporary closures in various parts of the country where the business operates. However, this does not necessarily mean that Charm NL couldn't pay any dividends (rather that Mr Calder chose not to, since 2017), nor that the company will never pay dividends

c) in our view, this does not preclude Troy from receiving dividends from Charm NL in the future. [ 65 ] I accept the decision to not pay dividends since 2017 is reasonable under the circumstances and this does not preclude Troy Calder from receiving dividends in the future. TROD [ 66 ] In Chipman v.

Chipman , 2017 NSSC 297 , Justice Warner had to determine whether two assets were properly categorized as business or matrimonial assets, one being a homestead farm and a second property held for development purposes. [ 67 ] In determining the homestead farm was a matrimonial asset Justice Warner stated at paragraph 75-78: [75] With regards to the homestead farm, the court has no evidence that at any time the farm operation made a profit. The court is satisfied that in the 70s, 80s and 90s it was operated in an entrepreneurial sense. That alone is not enough.

It must be shown, in my view, that the purpose was to generate an income or profit - not the prospect of an income or profit at some point in the future. [76] Each case has to be decided on its own facts. The court does not know if at any time or when the farming operation on that property made money. It might have. I assume there was a better chance that it did before than after 1997, when it was basically wound

down by the evidence of all parties, and barely carried on as a land rental and hay operation on two farms - not just the homestead farm, but on the Chipman farm as well, producing minimal gross receipts and greater gross expenses - mostly related to machinery, equipment and repairs. [77] While any business has ups and downs, the tax returns from 2005 to 2015 clearly demonstrate that this farm was not operated for the purpose of generating income or a profit. The farm operation was on the same property as the home. The onus is on Mr.

Chipman to show that it is exempt as a business asset. [78] Even if it was an active business in the early years, for at least 20 years it has not been operated in an entrepreneurial sense. The evidence does not show how much of the revenue shown on Mr. Chipman’s tax returns comes from that property as opposed to the Chipman farm down the road. I therefore find that the homestead property of 198 acres is a matrimonial asset and not exempt as a business asset. [ 68 ] When determining whether a property bought by Mr.

Chipman for the purpose of development was a matrimonial or business asset Justice Warner stated: [80] The second property in dispute in the Mount Hanley property. [81] Mr. Chipman’s evidence is that $13,800.00 was paid for it in about 1988. It was put in his name alone. His evidence was that it was held for development. It has been 29 years – 29 years and there has been no development.

The evidence of activity on that particular property was the construction of a road way, I presume a dirt road way over a period of about five years and, more recently, the construction of a one-room shanty on the property. … [85] I have to determine whether Mr. Chipman has established on a balance of probabilities that the property is exempt either as a business asset or because he says it was purchased with proceeds of an inherited asset.

When I talk about the proceeds of an inherited asset, I am referring to the definition of an inheritance in s. 4(1), which means an inheritance received by a person, other than the other spouse, except to the extent it is used for the benefit of both spouses or their children. [86] As to whether it is a business asset, there has been not business carried out on that property. To the extent that Mr.

Chipman says it was purchased for development, I note that there has been considerable activity over 40 years with regards to the thousands of acres of inherited lands, but over the 29 years that this property has been held, there has been no activity of a commercial nature. [87] Whatever he meant when he said it was held for development purpose, it is his actions more than his words that count. I am not satisfied it was held for a commercial or business purpose. There is no evidence of that.

In fact, the construction of the one-room shanty would be contra-indicative of development for a commercial business, or a business of an entrepreneurial nature. [ 69 ] Each case turns on its facts. The fact an asset does not produce income does not necessarily mean the asset is not a business asset rather it turns on what the intention of the party is in holding the asset.

A farm that does not produce income or operates at a loss over an extended period (in the case of the homestead farm 20 years) with merely a hope of an income or profit at some point in the future, cannot be said to be working in an entrepreneurial sense. [ 70 ] When determining whether Troy Calder’s plan to develop property is a business asset or matrimonial asset one has to look at his intention in holding the asset, rather than his words.

Troy Calder has not held the property in TROD for 29 years with no action toward development hoping to make a profit at some point in the future. [ 71 ] TROD acquired 19 Alderney Drive in 2015, two years prior to separation, with a plan to develop the property into a larger apartment development, with the intent to generate profit and income. This is a business development plan. The question is how long can an asset be held for development before it is considered passive? TROD’s development plan is in the initial stages.

By their very nature development projects take timing, planning, and capital to bring the plan to completion. [ 72 ] I find Troy Calder did not intend to hold the assets in TROD with the hope of future gain. Rather, the assets in TROD are being worked by Troy Calder in an entrepreneurial sense with a goal to generate income and profit. [ 73 ] TROD requires investment capital to acquire properties and hire a range of professionals to develop a business plan. This requires skill, timing, risk and management skills. Troy Calder is using TROD in an entrepreneurial sense.

Investment accounts : Sage, TruLeaf, Meta Materials and Watts Wind shares [ 74 ] Troy Calder invested $50,000 each into four start-up businesses during the marriage. For each investment he received a $17,500 tax credit. He testified he had to hold each investment for five years before selling the shares as a condition of the tax credit. [ 75 ] Troy Calder submits these shares are business assets as he used his skill and took a significant risk in purchasing the shares.

The shares were purchased from funds held in TROD. [ 76 ] Debra Calder argues the investments are matrimonial assets passively held for a tax credit. The assets are not being worked by Troy Calder in an entrepreneurial sense as he cannot sell the shares for five years and the asset requires no management, rather they are being held with a chance of profit for gain.

I agree the shares are properly classified as matrimonial assets. [ 77 ] In past trial submissions dated the 19 th of November 2021, Troy Calder, despite maintaining the shares are business assets, agreed to share the gains from these investments (net of tax) with Debra Calder. Troy Calder testified he sold the shares in TruLeaf in February

2021 for $350,000 and the shares in Sage in December 2020 for approximately $839,000. He anticipated Meta Materials would sell for profit and the Watts Wind shares would be unsellable and a tax write off. [ 78 ] Troy Calder filed three Statements of Property. The first two referred to the shares as “value unknown”.

The third statement filed the 25 th of February 2021 (after the sale of Sage and most likely TruLeaf) did not reference the value rather described the shares as “investment $50,000”. [ 79 ] Debra Calder submits not only did Troy Calder not provide information in his Statement of Property valuing the shares, he actively mislead the Court as to the value. Had counsel not questioned Troy Calder in cross examination Debra Calder and the Court would never have known the shares he valued at $50,000 had sold for approximately $1,119,000.

When asked about the lack of disclosure in his Statement of Property Troy Calder testified, he was unsure if the sale of the share would be considered income or an asset for division and this would be for the Court to decide. [ 80 ] Debra Calder submits that by not disclosing the true value of the shares she was disadvantaged as she was unable to call evidence addressing the minimization of tax implications or present further evidence regarding the true value of the other shares he claimed are worth little or nothing. [ 81 ] Debra Calder requests an order allowing her to obtain information directly from each of the companies regarding all shares owned by Troy Calder and any company he owns.

She submits she should be entitled to satisfy herself of the true value of the shares given Troy Calder’s lack of disclosure. [ 82 ] The order requested by Debra Calder is granted. Troy Calder knew the value of the Sage shares and most likely the TruLeaf shares when he swore his Statement of Property on the 25th of February 2021. His explanation for not disclosing the value of the shares in his statement of property is not credible. [ 83 ] As the shares are being divided the parties will share the tax consequences. Troy Calder will not pay support on capital gains income derived from his share of the sale.

Section 13 Matrimonial Property Act [ 84 ] Neither party plead an unequal division of assets although both anticipated and dealt with a s. 13 claim by the other in their oral and written submissions to the Court. Debra Calder did not make a claim under s. 18 of the Matrimonial Property Act . [ 85 ] I am satisfied both parties were alive to the claims being made by the other and I have jurisdiction to deal with the s. 13 claim without prejudice to either party ( Slawter v. Bellefontaine , 2012 NSCA 48 ). [ 86 ]

Section 13 of the Matrimonial Property Act states: 13 Upon an application pursuant to

Section 12, the court may make a division of matrimonial assets that is not equal or may make a division of property that is not a matrimonial asset, where the court is satisfied that the division of matrimonial assets in equal shares would be unfair or unconscionable taking into account the following factors: (

a) the unreasonable impoverishment by either spouse of the matrimonial assets; (

b) the amount of the debts and liabilities of each spouse and the circumstances in which they were incurred; (

c) a marriage contract or separation agreement between the spouses; (

d) the length of time that the spouses have cohabited with each other during their marriage; (

e) the date and manner of acquisition of the assets; (

f) the effect of the assumption by one spouse of any housekeeping, child care or other domestic responsibilities for the family on the ability of the other spouse to acquire, manage, maintain, operate or improve a business asset; (

g) the contribution by one spouse to the education or career potential of the other spouse; (

h) the needs of a child who has not attained the age of majority; (

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

j) whether the value of the assets substantially appreciated during the marriage; (

k) the proceeds of an insurance policy, or an award of damages in tort, intended to represent compensation for physical injuries or the cost of future maintenance of the injured spouse; (

l) the value to either spouse of any pension or other benefit which, by reason of the termination of the marriage relationship, that party will lose the chance of acquiring; (

m) all taxation consequences of the division of matrimonial assets. R.S., c. 275, s. 13; revision corrected. [ 87 ] In Cunningham v. Cunningham , 2017 NSSC 244 , (affirmed at 2018 NSCA 63 ) Justice Forgeron reviewed the legal principles that apply to a claim for unequal division at paragraph 27 as follows:

[27] Before giving my decision, I will provide an overview of the law so that Mr. and Ms. Cunningham have a better appreciation ofthe legal foundation upon which my order is based. The legal principles which I considered include the following: • The Matrimonial Property Act must be given a liberal

interpretation in keeping with its remedial purpose: Clarke v. Clarke, (SCC), [1990] S.C.J. No. 97 (S.C.C.). • The Matrimonial Property Act affords significant rights to spouses. Asset division is not based on a strict economic analysis as oftenoccurs in unjust enrichment claims. To the contrary, the Matrimonial Property Act recognizes the intrinsic value of noneconomiccontributions and views marriage as a partnership. In Young v.

Young, supra, at para 15, Bateman, J.A. confirmed that the “predominantconcept under the Act is the recognition of marriage as a partnership with each party contributing in different ways”. Marriage is neithera business nor an economic enterprise. • All real and personal property acquired by either spouse is presumed to be a matrimonial asset, unless falling within certain narrowexceptions, and is subject to a presumptive equal division: Morash v.

Morash, 2004 NSCA 20, para 16, per Bateman, J.A. • Section 4(1) of the Matrimonial Property Act confirms that pre-marriage assets are captured within the definition of matrimonialassets; “… the mere fact of prior acquisition does not remove the asset from prima facie equal division:” Young v. Young, supra, para 20,per Bateman J.A. • The burden of establishing entitlement rests upon the spouse who seeks an unequal division. • An unequal division is only permitted where “there is convincing evidence that an equal division would be unfair or unconscionable”:Young v.

Young, supra, para 15, per Bateman, J.A.; or where there is “strong evidence showing that in all the circumstances an equaldivision would be unfair or unconscionable on a broad view of all relevant factors:” Harwood v. Thomas (1981), (NSCA), 45 N.S.R. (2d) 414 (A.D.) at para 7, per MacKeigan, C.J.N.S. • Although the word “unfair” and “unconscionable” do not have “a precise meaning”, they nonetheless evoke “ethical considerationsand not merely legal ones:” Young v.

Young, supra, para 18, per Bateman, J.A. • Unconscionable has been held to mean "unreasonable", "unscrupulous", "excessive" and "extortionate" and when “coupled with therequirement that "strong evidence" must be produced to support an unequal division, the burden upon the party requesting an unequaldivision of matrimonial assets is somewhat onerous:” Jenkins v.

Jenkins (1991), (NS SC), 107 N.S.R. (2d) 18 (T.D.),at para 10, per Richard, J. • The question to be asked is “whether equality would be clearly unfair – not whether on a precise balancing of credits and debits offactors largely imponderable some unequal division of assets could be justified:” Harwood v. Thomas, supra, para 7, per MacKeigan,C.J.N.S. • Courts are instructed to examine all the circumstances, and not to simply weigh the respective material contributions of the parties,except in unusual circumstances: Young v.

Young, supra, paras 15 and 19, per Bateman, J.A. • When focusing on a claim grounded in s.13 (

e) of the Matrimonial Property Act, the court must examine relevant factors including“the timing of the contribution”, “the parties’ use of the asset”, “the length of the marriage”, “the significance of the asset relative to theentire pool of matrimonial assets”; and “the age and stage of the parties at separation:” Young v. Young, supra, para 20, per Bateman J.A. • When focusing on claims grounded in s. 13 (

d) of the Matrimonial Property Act, the length of cohabitation is a reference to short term,not long term unions: Briggs v. Briggs (1984), (NS SC), 64 N.S.R. (2d) 40 (N.S. T.D.) as affirmed at (1984), (NS CA), 65 N.S.R. (2d) 126 (N.S. C.A.) and Donald v. Donald (1991), (NS CA), 103 N.S.R. (2d) 322(N.S.

C.A.) per Chipman, J.A. • The determination of whether an equal division will produce an unfair or unconscionable result is a fact-based decision, as shown inthe divergent results reported in the various cases relied upon by counsel, which I reviewed. [88] Debra Calder claims an unequal division of assets pursuant to s. 13(a)(e)(f)(g)(i)(j). [89] Should the Court conclude some or all of the corporate assets are business assets then Debra Calder submits a significant paymentshould be awarded to her for reasons similar to those applied in Wolfson, supra. Debra Calder’s position 13

a) Impoverishment of Assets; The business assets were assets purchased from income diverted from the family resulting in the unreasonable impoverishment ofmatrimonial assets. Troy Calder prioritized accumulating equity in the companies at the expense of the family’s financial security. (

e) The date and manner of acquisition of assets; Only the initial shares in Charm NFLD were acquired before the marriage, the bulk of the corporate assets in TRC and TROD wereacquired during the marriage. The value of the shares appreciated significantly during the marriage and if the corporate owned assets arenot divided equally Debra Calder’s loss of their increased value would be unconscionable. (

f) Effect of Domestic Responsibilities on Business Assets; Debra Calder’s assumption of the majority of childcare and domestic responsibilities enabled Troy Calder to devote his time to manage,operate and grow the corporate investments. This is supported by her affidavit evidence which describes her childcare responsibilities

and management of the household. Debra Calder submits her efforts in the home enabled Troy Calder to create the business assets and if these assets are deemed separate this would create an unconscionable result. [ 90 ] Debra Calder submits the facts applicable to a consideration of (

g) and (

i) are similar to those applicable to (

f) and the facts which support (

e) are applicable to (j).

Troy Calder’s position [ 91 ] Troy Calder submits an equal division of matrimonial assets is not unfair or unconscionable to Debra Calder. [ 92 ] Troy Calder submits he invested heavily in building matrimonial assets and prioritized the accumulation of matrimonial assets over business assets. [ 93 ] Troy Calder submits that despite working full time he was an active parent, attended the children’s activities, assisted them with homework and drove them to school and tutoring. [ 94 ] Troy Calder submits Debra Calder came into the marriage with nothing but student debt and will leave the marriage with a mortgage free home, worth over $600,000, and investments worth approximately $1,500,000. [ 95 ] Debra Calder bears the burden to establish that an equal division would be unfair or unconscionable.

In order to succeed in her claim Debra Calder must produce strong evidence showing that in all of the circumstances equal division would be clearly unfair and unconscionable on a broad view of all relevant factors ( Young, supra). [ 96 ] Debora Calder has failed to discharge this burden. [ 97 ] There is no evidence matrimonial assets were impoverished. On the contrary, the parties lived an affluent lifestyle as stated earlier. Matrimonial assets were not diverted to acquire business assets, nor did business assets grow at the expense of matrimonial assets.

The matrimonial assets are double the value of the business assets. Debra Calder will leave the marriage with a significant asset base and will not have to use these funds to support her lifestyle given the support she will receive from Troy Calder. Properly invested these funds will support her retirement. [ 98 ] Both parties were actively involved with the children and running of the household. By the very nature of the roles the parties assumed, Debra Calder, a stay-at-home mother, and Troy Calder, the family breadwinner, Debra Calder assumed more domestic responsibilities.

This does not diminish Troy Calder’s contribution to the children or the welfare of the family. Each party contributed in their own way to the welfare of the family which supports an equal division rather than an unequal division. $500,00 payment to Troy Calder; s. 4 and 13 Matrimonial Property Act [ 99 ] Troy Calder submits a $500,000 payment he received from his parents in 2016 should be exempt from division pursuant to s. 4(1) (

a) of the Matrimonial Property Act . In the alternative he seeks an unequal division for the value of the gift pursuant to s. 13(

e) of the Matrimonial Property Act . [ 100 ] Section 4(1)(

a) of the Matrimonial Property Act states: 4

(1) In this Act, "matrimonial assets" means the matrimonial home or homes and all other real and personal property acquired by either or both spouses before or during their marriage, with the exception of (

a) gifts, inheritances, trusts or settlements received by one spouse from a person other than the other spouse except to the extent to which they are used for the benefit of both spouses or their children; [ 101 ] In 2016, Richard Calder and his wife gifted Troy Calder and his brother $500,000 each as an early inheritance (exhibit 6, affidavit of Richard Calder, paragraph 81).

Troy Calder and Debra Calder used the money to purchase Belle Street in June 2016. [ 102 ] In Tibbetts , supra, Justice Hallett stated at paragraph 38: [38] “…Acquiring investments with funds inherited is very different than putting those funds into the matrimonial home or a motor vehicle or a yacht used by the family, all of which would be matrimonial assets used by the family.

The intention of the Legislature, as expressed in the Section, seems to have been to exclude inheritances from the definition of matrimonial assets except "to the extent to which they are used for the benefit of those spouses or their children". [ 103 ] I find the gift/inheritance should not be excluded under s. 4(1)(

a) or s. 13(

e) of the Matrimonial Property Act as it was used for family purposes and is a matrimonial asset. The parties and children only resided together in the home for 5 months prior to the final separation. However, the home was bought by the parties jointly prior to separation and the intent in reconciling was to remain in the property. [ 104 ] I find Troy Calder has not produced strong evidence showing that in all of the circumstances an equal division would be unfair and unconscionable s. 13(

e) of the Matrimonial Property Act . Income of the party's [ 105 ] Each party retained an expert to provide opinion evidence on calculations of Troy Calder’s income for support purposes in accordance with the Child Support Guidelines. [ 106 ] Debra Calder retained Dan Jennings, BDO (report: exhibit 3) and Troy Calder retained Paul Bradley of Deloitte (report: exhibit 8). Neither expert’s qualifications were challenged. Troy Calder waived cross examination of Mr. Jennings and his report was

entered by consent. Mr. Bradley was cross examined by counsel for Debra Calder. [ 107 ] Counsel for Debra Calder requested Mr. Jennings report determine Troy Calder’s annual income for support for the calendar years 2013 to 2020. [ 108 ] Section 17 (1) of the Child Support Guidelines allows the Court to consider a spouse’s income over the last three years should the Court be of the opinion that a spouse’s annual income under

section 16 would not be the fairest determination of income. [ 109 ] In Wolfson , supra, Justice Forgeron considered the Ontario Court of Appeal decision in Mason v. Mason, ( 2016 ONCA 725 ), in finding a court has jurisdiction to apply a three-year average when considering personal and corporate income. [ 110 ] Therefore, my analysis of Troy Calder’s income for support purposes will be limited to the years 2018 to 2020. [ 111 ] Mr. Bradley did not have access to Troy Calder's 2020 T4, or personal income tax return, therefore based Troy Calder’s income on the years 2017 to 2019. [ 112 ] Mr.

Jennings analysis included Troy Calder’s 2020 T4 income of $610,000. [ 113 ] Mr. Bradley concluded Troy Calder’s Guideline income for support purposes of for the years 2017 to 2019 to be as follows: a. 2017 - $613,669 b. 2018 - $463,541 c. 2019 - $474,713 [ 114 ] Mr. Jennings report for the same time period found Troy Calder’s income to be: a. 2017 - $791,000 b. 2018 - $514,000 c. 2019 - $544,000 d. (2020 - $680,000) [ 115 ] The key differences between the two expert reports are as a result of the treatment of the following: 1.

Life insurance policy paid by TROD [ 116 ] TROD pays approximately $30,000 for a whole life insurance policy that ensures the life of Troy Calder with TROD as the policy holder and beneficiary. [ 117 ] Mr. Jennings added back this expense to Troy Calder’s income on the basis that life insurance policies which ensure the life of the entrepreneur are a form of tax effective wealth planning and is not a business requirement to earn the income in TROD which is the standard to determine expense deductibility under the Guidelines. [ 118 ] Mr.

Bradley's allowed the deduction on the basis that the beneficiary of the life insurance is TROD whose shares are owned by the Troy Calder family trust and as such there is no direct benefit to Troy Calder, making the deduction a business expense. [ 119 ] Section 19 (1) (

g) of the Child Support Guidelines allows a Court to impute income to a spouse who unreasonably deducts expenses for income. When assessing whether business expenses are reasonable different considerations may apply when considering the expense in the context of a deduction permissible by Canada Revenue Agency versus an allowable deduction under the Child Support Guidelines. In the context of the latter the expense must be a illegitimate cost of producing income. [ 120 ] I agree with Mr.

Jennings, the life insurance premiums are not required to earn the corporate income, therefore, must be added back in determining Troy Calder’s guideline income. 2. Dividend assumption [ 121 ] In the Deloitte report Mr. Bradley made an assumption corporate income was earned evenly throughout the year and prorated the income of Charm TRC & TROD to align the fiscal year end of August 31 st with the calendar year of December 31 st used for guideline income purposes. [ 122 ] Mr. Jennings disagrees with Mr.

Bradley's assumption that corporate income is earned evenly throughout the year and instead included corporate year end results in the calendar year in which the fiscal year ends (in this case August 31 st ). Mr. Jennings notes that in this case the corporate income of TROD and Charm TRC is primarily comprised of dividend income that flows from Charm NFLD and typically this income is only earned when declared and in private companies this typically occurs at year end and not through the year as Mr. Bradley assumed. [ 123 ] I accept Mr. Jennings reasoning. 3. Capital cost allowance

[ 124 ] Capital cost allowance with respect to real property consists of a calculation of depreciation on real estate.

Schedule 111 (11) of the Guidelines provides an adjustment to include this deduction in a spouse’s income for support purposes. The purpose of this adjustment is to eliminate any deduction for depreciation as real property usually does not decline in value over the years. [ 125 ] Mr. Jennings included the real property depreciation expense in TROD when calculating Troy Calder’s income. Mr. Bradley did not include this adjustment. [ 126 ] I accept Mr. Jennings reasoning for including this adjustment in the determination of Troy Calder’s guideline income. 4.

Phone, vehicle, pension top up by Charm Jewelry Ltd. [ 127 ] Neither expert included these expenses as personal expenses paid by Troy Calder’s holding companies, rather determined these expenses are paid by the Charm Diamond Group of companies of which Troy Calder is an employee. [ 128 ] I decline to impute these expenses to Troy Calder. I accept Mr.

Bradley's position that Troy Calder's relationship with Charm Diamond Group of companies is as an officer, not a shareholder and the expenses paid by Charm Diamond Group companies arose as a result of Troy Calder's employment and appeared to be reasonable based on his position and responsibilities with the company. [ 129 ] Counsel for Troy Calder included his 2020 income in calculation of child support attached to a pretrial brief dated March 8, 2021 , setting Troy Calder’s income for 2020 at $661,253. [ 130 ] Debra Calder submits, that at a minimum, the Court should accept Troy Calder's current income of $680,000 as determined by Mr.

Jennings as the most appropriate income to determine prospective support. For reasons already stated, I have declined to impute income to Troy Calder based on the pre-tax corporate income of Charm Diamond Newfoundland. [ 131 ] Section 17 (1) of the Child Support guideline states: a. “If the court is of the opinion that the determination of a spouse’s annual income under

section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.” [ 132 ] In analyzing Troy Calder's income for the past three years Mr. Jennings reports the following: a. Three-year simple average; $579,000 b. Three-year weighted average; $607,000 c.

Most recent year; $680,000 [ 133 ] I find the most recent years income of $680,000 is the most appropriate income for calculation of support. Troy Calder's income is trending upward over the past three years and his 2021 income is expected to be similar to 2020 (cross examination of Richard Calder). Debra Calder’s income [ 134 ] Troy Calder submits the Court should impute income of $70,000 to Debra Calder as she is young (38 years old at separation), healthy and well educated.

From 2006 to 2012, Debra Calder was gainfully employed working for Parks Canada earning an average yearly salary of approximately $60,000. [ 135 ] Troy Calder submits Debra Calder has been intentionally under employed for the past four years earning a nominal income from part time employment and has made no effort to become self sufficient preferring to rely on the significant support he has paid over the past four years.

The children are now 14 and 11 years old and have been in school for many years and do not require a stay-at-home parent to meet their daily needs. [ 136 ] Debra Calder submits she has been financially dependent on Troy Carter for years and continues to be dependent.

The parties mutually decided she would stay home to raise the children and manage the household after the birth of their second child. [ 137 ] After years out of workforce and the resulting deterioration of her skills it would take significant time and money for her to re-train to be able to work in her former field and earn the salary that Troy Calder proposed be imputed. [ 138 ] Debra Calder submits that given the choices the parties made and the length of time she has been out of the workforce it would be unrealistic at this time to expect she could earn much more than a full-time minimum wage income of approximately $25,000 per year. [ 139 ] Section 19(1) of the Guidelines allows the Court to impute income to a spouse as the Court considers appropriate in the circumstances, which circumstances include (

a) intentional under employment or unemployment except where required by the needs of a child of the marriage or any child under the age of majority or by the reasonable educational or help needs of the spouse. [ 140 ] The burden of establishing income should be imputed rests on the party making the claim. The discretionary authority found in

section 19 of the Guidelines must be exercised judicially and not arbitrarily, based on a rational and solid evidentiary foundation grounded in fairness and reasonableness ( Codiac v. Codiac , 2005 NSSC 29 ). There is a duty to seek employment in a case where a parent is healthy and there is no reason why they cannot work. When imputing income on the basis of intentional under-employment or unemployment the Court must consider what is reasonable under the circumstances, considering factors such as the age, education, experience, skills, health, and other obligations ( Smith v. Helppi , 2011 NSCA 65 ): ( Parsons v Parsons , 2012 NSSC 239 ).

[141] Debra Calder is educated, healthy and prior to the birth of the children was gainfully employed in her chosen fieldearning approximately $60,000 per year. I find it was a mutual decision Debra Calder would stay home once the children were born,although I accept Troy Calder’s evidence he encouraged her to seek employment once the children reached school age. [142] I agree with Debra Calder that it is unrealistic at present to expect her to earn $70,000 a year after being out of theworkforce since 2008.

On the other hand, it is reasonable to expect after four years she would have made efforts to secure more than apart time job earning a nominal income. The children are in school and while they are involved in activities and tutoring Troy Calder inan active, involved parent and shares the responsibilities to ensure the children get to their appointments and activities. Considering theevidence and circumstances I impute income to Debra Calder of $35,000 per year.

Child support [143] The Calder’s have two children who are in Debra Calder’s primary care. [144] Troy Calder’s income for calculation of child support is $680,000. [145]

Section 15.1(1) of the Divorce Act gives the Court jurisdiction to make an order requiring a spouse to pay child support. [146] The amount of child support payable is determined under the Child Support Guidelines, (“Guidelines”). [147] Section 3(1) of the Guidelines states: Presumptive rule 3

(1) Unless otherwise provided under these Guidelines, the amount of a child support order for children under the age of majority is (

a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the orderrelates and the income of the spouse against whom the order is sought; and (

b) the amount, if any, determined under

section 7. [148]

Section 4 of the Guidelines addresses incomes in excess of $150,000. Incomes over $150,000 4 Where the income of the spouse against whom a child support order is sought is over $150,000, the amount of a child support order is (

a) the amount determined under

section 3; or (

b) if the court considers that amount to be inappropriate, (i)in respect of the first $150,000 of the spouse’s income, the amount set out in the applicable table for the number of children under theage of majority to whom the order relates; (ii) in respect of the balance of the spouse’s income, the amount that the court considers appropriate, having regard to the condition,means, needs and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute tothe support of the children; and (iii) the amount, if any, determined under

section 7. [149] The seminal case on child support for incomes in excess of $150,000 remains the Supreme Court of Canada decision in Francis v. Baker, (SCC), 1999, 50 R.F.L (4th) 228. The Case established that there is a presumption in favour of thetable amount and there must be clear and compelling evidence for the Court to depart from the Guideline figure. There can only be anincrease or decrease in the guideline figure under s. 4 if the party seeking the deviation rebuts the presumption that the table isinappropriate. [150] Table child support for two children based on Troy Calder’s income of $680,000 is $8,348.

Section 7 Expenses [151] A special expense is defined in s. 7(1) of the Guidelines: 7

(1) In a child support order the court may, on either spouse’s request, provide for an amount to cover all or any portion of the followingexpenses, which expenses may be estimated, taking into account the necessity of the expense in relation to the child’s best interests andthe reasonableness of the expense in relation to the means of the spouses and those of the child and to the family’s spending pattern priorto the separation: (

a) child care expenses incurred as a result of the employment, illness, disability or education or training for employment of the spousewho has the majority of parenting time; (

b) that portion of the medical and dental insurance premiums attributable to the child; (

c) health-related expenses that exceed insurance reimbursement by at least $100 annually, including orthodontic treatment, professionalcounselling provided by a psychologist, social worker, psychiatrist or any other person, physiotherapy, occupational therapy, speechtherapy and prescription drugs, hearing aids, glasses and contact lenses;

(

d) extraordinary expenses for primary or secondary school education or for any other educational programs that meet the child’sparticular needs; (

e) expenses for post-secondary education; and (

f) extraordinary expenses for extracurricular activities. [152] An extraordinary expense is further defined in s. 7(1.1):

(1.1) For the purposes of paragraphs (1)(

d) and (f), the term extraordinary expenses means; (

a) expenses that exceed those that the spouse requesting an amount for the extraordinary expenses can reasonably cover, taking intoaccount that spouse’s income and the amount that the spouse would receive under the applicable table or, where the court has determinedthat the table amount is inappropriate, the amount that the court has otherwise determined is appropriate; or (

b) where paragraph (

a) is not applicable, expenses that the court considers are extraordinary taking into account (

i) the amount of the expense in relation to the income of the spouse requesting the amount, including the amount that the spouse wouldreceive under the applicable table or, where the court has determined that the table amount is inappropriate, the amount that the court hasotherwise determined is appropriate, (ii) the nature and number of the educational programs and extracurricular activities, (iii) any special needs and talents of the child or children, (iv) the overall cost of the programs and activities, and (

v) any other similar factor that the court considers relevant. [153] The following s. 7 expenses are to be proportionally shared by the parties after the calculation of spousal support. : private school tuition and any tutoring or educational assessments, : childcare costs including summer camps, : health related expenses after insurance reimbursement, : extracurricular activities including equipment, clothing, and other related expenses [154] Extracurricular activities and summer camps must be agreed upon by the parties. Should a party choose to enroll thechildren in an activity without the consent of the other than they will be responsible for the cost. Spousal Support [155]

Section 15.2(1) of the Divorce Act provides the Court jurisdiction to award spousal support: 15.2

(1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure orpay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for thesupport of the other spouse. [156]

Section 15.2(4) and 15.2(6) of the Divorce Act sets out the factors and objectives I must consider in determining spousalsupport:

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition,means, needs and other circumstances of each spouse, including (

a) the length of time the spouses cohabited; (

b) the functions performed by each spouse during cohabitation; and (

c) any order, agreement or arrangement relating to support of either spouse. …

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (

a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (

b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and aboveany obligation for the support of any child of the marriage; (

c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (

d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. [157] In Bracklow v. Bracklow, (SCC) the Supreme Court of Canada set out three conceptual grounds for

entitlement to support, compensatory, non-compensatory and contractual. : Compensatory support seeks to recognize the doctrine of equitable sharing of the economic consequence of marriage or marriage breakdown and address both the economic disadvantage to one spouse arising from the marriage and the economic advantages confined upon the other spouse. ( Moge , supra) : Non-compensatory support addresses the needs of the spouses and their respective means in the context of the nature and duration of the marriage ( Bracklow , supra). [ 158 ] Debra Calder seeks support on both a compensatory and non-compensatory basis. [ 159 ] In support of her claim for compensatory support Debra Calder submits the marriage was a traditional one where she withdrew from the workforce to care for the children and assume the majority of the household responsibilities.

This was a mutual decision made by the parties. By sacrificing her own career Troy Calder was able to meet the demands of his job and thrive in his career. [ 160 ] Her non-compensatory support is based on a needs-based claim. After years of out of the workforce her own income will not come close to supporting the standard of living the parties enjoyed while together. She submits the parties Statement of Income and Statement of Expenses show her need and Troy Calder’s ability to pay. [ 161 ] Debra Calder seeks spousal support based on the mid-range of the Spousal Support Guidelines (SSAG).

The mid-range is $14,657 per month based on Troy Calder’s income of $680,000 and an imputed income to her of $25,000. [ 162 ] Debra Calder submits she should not have to draw on matrimonial assets to support herself. She relies on cases where the court found that spousal support is not precluded in high asset cases, after analyzing compensatory and non-compensatory support. Troy Calder’s position [ 163 ] Troy Calder submits spousal support should not be ordered as Debra Calder has received significant support to assist her in transitioning to becoming self-sufficient.

Debra Calder has chosen not to work in the years since separation, beyond a parttime job earning a nominal income, and this is her choice.

The children are of an age where they do not a require full-time caregiver. [ 164 ] Troy Calder submits Debra Calder does not need additional support due to the substantial tax-free chid support she will continue to receive, the lack of debt and the impact of the equalization of the matrimonial assets. [ 165 ] Debra Calder is entitled to support on both a compensatory and non-compensatory basis. [ 166 ] The SSAG’s have been described by the Court of Appeal as a useful tool but are advisory rather than legislated or binding ( Strecko v.

Strecko¸ 2014 NSCA 66 ). [ 167 ] The SSAG’s are not helpful when a spouse’s income is far in excess of the $350,000 ceiling provided for in the Guidelines ( Volcko , supra). [ 168 ] I choose not to use the SSAG’s. Troy Calder’s income is approaching double the ceiling amount which limits the usefulness of the SSAG’s. Spousal Support Decision [ 169 ] I have considered the factors and objectives of the Divorce Act in determining the appropriate amount of spousal support. [ 170 ] This is a mid-length marriage spanning 14 years. The parties mutually decided Debra Calder

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