Docket: CACV1987 Mackenzie Malcolm Stelter Appellant (Petitioner) - v. -, 2012 SKCA 117

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2012 SKCA 117 Date: 2012-12-06 Between: Docket: CACV1987 Mackenzie Malcolm Stelter Appellant (Petitioner) - and - Kathleen Carol Stelter Respondent (Respondent) Between: Docket: CACV2061 Mackenzie Malcolm Stelter Appellant (Petitioner) - and - Kathleen Carol Stelter Respondent (Respondent) Coram: Richards, Ottenbreit and Herauf JJ.A. Counsel: Timothy Stodalka for the appellant Mark Hawkins for the respondent Appeal:

From: 2010 SKQB 273, 2010 SKQB 303 - CACV1987 2011 SKQB 48 - CACV2061 Heard: June 27, 2012 Disposition: Appeals dismissed Written Reasons: December 6, 2012 By: The Honourable Mr. Justice Ottenbreit In Concurrence: The Honourable Mr. Justice Herauf Dissenting in Part: The Honourable Mr. Justice Richards Ottenbreit J.A. [1] Mackenzie Malcolm Stelter (the “husband”) appeals the trial decision which divided family property and determined parenting andchild maintenance issues.

He also separately appeals the award of costs made by the trial judge in favour of Kathleen Carol Stelter (the“wife”) six months after the trial decision. For the reasons hereinafter set forth both of the appeals are dismissed. I. Background and Facts [2] The trial judge’s decision is found at 2010 SKQB 273. The specific facts and determinations of particular relevance to thehusband’s grounds of appeal will be addressed in greater detail in conjunction with the analysis which follows. However, some generalbackground is helpful. [3] The parties started living together in September of 1997.

They were married in October of 2002. They have two children, Chasewho is 13 and Drayden who is 9 (the “boys”). They separated in August of 2008 when the husband moved from the family home. Thehusband owns and operates C.D. Mac Sales & Solutions (“C.D. Mac”) which sells non-exclusive product lines of industrial chemicalsand related equipment in Regina and throughout the Province. The wife is a provincial civil servant. [4] An interim application by the wife (the “interim application”) resulted in an order giving the husband and wife joint custody of theboys. Their principal residence was with the wife.

The husband received parenting time on alternating weekends, one weekday overnightstay and half the summer vacation. Pursuant to the interim order the husband’s income was imputed to be $90,688 and he was ordered topay both on-going and three months retroactive maintenance for the children. The husband was also ordered to continue makingpayments on a 2008 Dodge Sebring (the “car”), owned by the company but in the possession of the wife. [5] The matter of costs was left to be spoken to because there was an offer to settle.

After further submissions on costs, the trial judgeawarded the wife a $35,000 lump sum instead of assessing costs pursuant to Rule 545(3)b of the Queen’s Bench Rules. The costsdecision can be found at 2011 SKQB 48. II. Standard of Review [6] The standard of review applied in appeals involving family law issues including custody, access and child support matters is set outin Van de Perre v.

Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014: [11] In reviewing the decisions of trial judges in all cases, including family law cases involving custody, it is important that theappellate court remind itself of the narrow scope of appellate review. L'Heureux-Dubé J. stated in Hickey v. Hickey, (SCC), [1999] 2 S.C.R. 518, at paras. 10 and 12: [Trial judges] must balance the objectives and factors set out in the Divorce Act or in provincial support statutes with an appreciation ofthe particular facts of the case.

It is a difficult but important determination, which is critical to the lives of the parties and to theirchildren. Because of its fact-based and discretionary nature, trial judges must be given considerable deference by appellate courts whensuch decisions are reviewed. . . . There are strong reasons for the significant deference that must be given to trial judges in relation to support orders. This standard ofappellate review recognizes that the discretion involved in making a support order is best exercised by the judge who has heard the

parties directly. It avoids giving parties an incentive to appeal judgments and incur added expenses in the hope that the appeal court willhave a different appreciation of the relevant factors and evidence. This approach promotes finality in family law litigation and recognizesthe importance of the appreciation of the facts by the trial judge.

Though an appeal court must intervene when there is a material error, aserious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply because it would havemade a different decision or balanced the factors differently. [emphasis added by SCC] Also see: D.G. v. C.R.H., 2010 SKCA 127, 362 Sask. R. 261 and King v. Stavric, 2009 SKCA 6, 320 Sask. R. 37. [7] In Riley v. Riley, 2011 SKCA 5, 366 Sask.

R. 110, Jackson J.A. at para. 5 makes the following observation about the standard ofreview applicable in family property appeals: 5 … When the decision under review divides family property, … there is an overarching consideration. Given the provisions of TheFamily Property Act, with its emphasis on a "fair and equitable" distribution of property, considerable deference is owed to the trialjudge's overall decision as to entitlement and valuation (see: The Family Property Act, ss. 21(2), 22(1) and 23(4); Russell at paras. 19 and71; and Muranetz-Dubelt v. Dubelt, 2010 SKCA 5 at para. 12, 343 Sask. R. 215).

While the standard of appellate review permits a courtof appeal to intervene in the face of an error of law, a palpable and overriding error of fact, or an abuse of discretion, the court must beaware that disturbing one of a trial judge's many decisions as to entitlement to family property, or its valuation, may disturb the overallequities that have been achieved in arriving at what constitutes a fair and equitable distribution.

The standard of appellate review infamily law matters reflects this deference to the trial judge's overall distribution of family property. [8] The standard of review respecting costs is set forth by Cameron J.A. in Benson v. Benson (1994), (SK CA), 120Sask. R. 17 at paras. 89 and 90: 89 To begin with, the order was made in the exercise by the trial judge of judicial discretion.

Section 56 of the Matrimonial PropertyAct provides that "the court may make any order as to costs of and consequent on an application under this Act as it sees fit". Other thanwhat is implied by the context in which this power is granted, there is little to distinguish it from the general power over costs. In generalcosts are in the discretion of the court with full power to determine by whom and to what extent they are to be paid. The exercise of thatdiscretion has been taken to be limited only by the need to act judicially on the facts of the case.

Its exercise is otherwise "unfettered anduntrammelled": Smigarowski v. Mugliston (1951), (SK CA), 2 W.W.R. (N.S.) 108; Mildenberger v. Rural Municipalityof Francis (1954), (SK CA), 13 W.W.R. (N.S.) 528 (Sask. C.A.). 90 That, combined with the nature of our function in relation to appeals concerning the exercise of judicial discretion, serves tosignificantly narrow the scope for appeal. The discretion is vested in the trial judge, not us. And our function, at least at the outset, is oneof review only, review for error vitiating the exercise by the judge of that discretion.

The obvious aside, vitiating error is to be foundeither in misapplication of some governing principle or rule or in disregard of some critical fact or other consideration. Either that or it isto be assumed in the case of an order so obviously unjust as to invite intervention. But in the absence of something of that sort we are notto wade in, substituting our discretion for that of the trial judge: See generally McKinnon Industries v. Walker, (UKJCPC), [1951] 3 D.L.R. 577 (P.C.) at p. 579; Hadmor Productions Ltd. v. Hamilton, [1983] 1 A.C. 191 (H.L.); Manitoba (AttorneyGeneral) v.

Metropolitan Stores Ltd., (SCC), [1987] 1 S.C.R. 110 at p. 155; and Saskatchewan Power Corp. v. Doe, (SK CA), [1988] 6 W.W.R. 634 (Sask. C.A.). III. Issues [9] The husband appeals primarily the trial judge’s determinations on parenting, child maintenance and the valuation of C.D. Macalthough other aspects of the division of property are challenged. The grounds and sub-grounds of appeal particularized in the husband’sNotices of Appeal can be distilled into the following: 1.

Did the trial judge err in determining that the primary residence of the boys should be with the mother and in ordering theparenting scheme he did? 2. Did the trial judge err in his application of ss. 17 and 18 of the Federal Child Support Guidelines, SOR/97-175, and inattributing income to the husband? 3. Did the trial judge err in his determination of the value of C.D. Mac? 4. Did the trial judge err in valuing the 2006 Ski-doo and 2007 Suzuki motorcycle? 5. Did the trial judge err in failing to recognize the Visa and American Express debts as family debts?

6. Did the trial judge err in valuing the car as a separate asset when at all times it was owned by C.D. Mac or alternatively by valuing it at the trial date rather than at the petition date? 7. Did the trial judge err (

a) in valuing the mortgage on the family home at the petition date rather than at the trial date, and (

b) in his treatment of the car payments made pursuant to the interim order and other payments made by the husband respecting the car? 8. Did the trial judge err in fixing the costs as he did? IV. Analysis 1.

Did the trial judge err in determining that the primary residence of the boys should be with the mother and in ordering the parenting scheme he did? [ 10 ] The trial judge’s decision in respect of primary residence and the father’s claim for shared parenting is found at paras. 35 and 36: [35] In my view of the evidence, the mother has had primary residence of the children throughout the separation of the parents. The father left the family home and the mother and children in August of 2008. The mother continued to be the primary caregiver for the children after separation and after the interim order.

Although times of access may have changed, the status quo has remained constant -- the mother has always had primary residence of the children with her at the family home. The school agenda of the oldest child does show that the mother had the children with her for the vast amount of time. As well, I accept the corroborative evidence of Barbara Dunn, who saw the children grow up and spent a great deal of time with the family. While she is the mother's best friend, she was also a friend of the father. Ms. Dunn gave direct, clear and unequivocal testimony and she is an honest and reliable witness.

I accept that the father was away a lot and the mother did everything for the children and their household during his absences. [36] I do not accept the father's contentions that the parenting regime changed by the interim order or that the interim order was improperly obtained by the mother. Certainly, the mother should have been more clear and unequivocal regarding the matter of the father's participation in parent-teacher interviews but, taken as a whole, the evidence in support of the interim order does not show that it was improperly obtained.

Nor did the interim order change the status quo of the principal residency of the children. [ 11 ] The husband, who strongly argued for shared parenting, makes a number of sub-arguments under this ground which I will address in turn. The father disputes the mother’s claim that during the relationship she was the primary caregiver for the boys.

He also argues that the judge should not have accepted the evidence of the witness Dunn, who testified that the father was away from the home 70 to 80 per cent of the time during the marriage and that the trial judge placed too much weight on school agendas which showed that the boys were with the mother the majority of the time. [ 12 ] The actual past parenting arrangement the parties had is a question of fact to be determined by the trial judge. Consequently, the threshold for appellate intervention on this issue is very high.

The trial judge had before him varied evidence as to what the parenting situation, past and present, was. After seeing the witnesses, hearing their testimony and after reviewing the evidence as a whole he was entitled to accept the evidence of Ms. Dunn, the school agendas which showed the boys with the wife the majority of the time before the interim order, and the testimonial evidence of the wife on these points.

He obviously found this evidence cogent and reliable in determining the past parenting arrangement and it was evidence upon which he could conclude that the wife was the primary caregiver of the boys before and after separation. [ 13 ] The husband also argues that at the interim application the wife clearly misled the judge about the actual parenting plan in place between September 2008 and July 2009 and this resulted in the boys’ primary residence being with the wife going forward and the creation of a new status quo parenting arrangement to the wife’s improper benefit at trial.

He bases this on the wife’s apparent agreement in cross-examination that prior to the interim order, the parenting arrangement was that the boys would spend two days with her, two days with the husband, two days with the husband and three days with her. However, on all the evidence, including the school agendas, the trial judge was not satisfied that the wife had misled the court despite her answers in cross-examination and her other testimony which the judge acknowledged could have been clearer and more unequivocal. This determination is a question of fact as well.

I can find no error on the part of the trial judge with respect to this part of the husband’s grounds. The trial judge had regard to all the evidence before him and made appropriate findings as to weight and credibility. [ 14 ] The husband submits that the trial judge also wrongly used a status quo analysis rather than a prospective analysis of the parent’s plans to determine the appropriate parenting scheme. In addition to references to the status quo in the paragraphs set out above, the trial judge also refers to the status quo at para. 34 of his decision:

[34] The children are thriving under the current parenting regime. The evidence is overwhelming that the children are compassionate, considerate, attentive, tactful and thoughtful, without any display of problems or issues academically or otherwise. They have been consistently described as good kids, well adjusted, grounded, well groomed and cared for. The children have an excellent relationship with their parents and love them unconditionally, as their love is requited. In my view, the court should not interfere with the stable, secure and happy lives of the children by ordering shared parenting.

It is not in the best interests of the children to risk their development by disrupting their stability and continuity at their family home under the current parenting regime. The home environment of the mother at the family home, where each child has his own bedroom, is adequate and suitable for the physical, psychological and educational needs of the children. Indeed, the whole of the evidence as to the living accommodations of the mother is clear and uncontradicted and shows stability and certainty in the future of the children.

On the other hand, I am not satisfied that the home environment which the father could provide to the children is adequate or suitable to satisfy their needs. In fact, there is a dirth of evidence as to the living accommodations of the father and others in his new relationship. [ 15 ] I do not read this paragraph, or indeed his references to the status quo as a whole, as merely endorsing the status quo and abdicating his duty to determine what is in the best interests of the children prospectively.

He reviews the classic factors which go into determining what is in the boys’ best interests respecting their future living arrangements, the personality of the boys, their attitudes, their relationship with both parents, the suitability of their home environment, the home environment that the husband can provide and whether, as a whole, the present parenting arrangement works.

He made no errors in this respect. [ 16 ] Regarding the husband’s argument that the trial judge placed no weight on his testimony that the boys preferred shared parenting, it is trite that the boys’ wishes are just one consideration to be taken into account in determining what is in their best interests.

The trial judge was alive to the issue of shared parenting and there is no indication that he misapprehended the evidence adduced by the husband as a whole to justify his claim for such an arrangement. [ 17 ] The husband also argues that the trial judge ignored the maximum contact principle by reducing the access he had under the interim order by one overnight stay. The trial judge is not bound to give the husband at least the access offered by the wife or that set out in any previous orders. Moreover, the maximum contact principle is not by itself determinative of what is in the boys’ best interests.

A trial judge determining custody and access must look at all the evidence in the context of the overriding principle of the best interests of the children. It may be inferred that the trial judge’s slight reduction in the husband’s parenting time is not inconsistent with his assessment of the best interests of the boys. [ 18 ] Lastly, the father argues the trial judge made various factual errors respecting discrete issues related to the parents, the children and their relationship.

I cannot say that any of these are substantial or in any way hampered the trial judge’s ability to determine what was in the best interests of the children. [ 19 ] As stated by Wilkinson J.A. in Gilles v. Gilles, 2008 SKCA 97 , [2008] 10 W.W.R. 610 at para. 9 where the “best interest of the child” is the governing consideration, the inquiry is heavily fact-dependant, the decision ultimately discretionary. This is the case here. In

summary, on the whole, I can see no material error, serious misapprehension of the evidence or error of law in the trial judge’s determination of primary residence and the parenting arrangement. 2. Did the trial judge err in his application of ss. 17 and 18 of the Federal Child Support Guidelines , SOR/97-175, and in attributing income to the husband? [ 20 ] The trial judge’s decision respecting this issue is as follows: [39] I determine the annual income of the father to be $80,000, having regard to his income as well as the situations described in ss. 17 and 18 of the Guidelines .

The father's income from CDMac in 2008 was $60,000 (as shown in his 2008 T4 statement), a decrease from his 2007 income of $90,688. The company bears the cost of the father's vehicle as well as his living expenses while he travels on business throughout Saskatchewan.

I determine the annual income of the mother to be $72,353 (line 150 of her 2009 income tax return), the fairest method of determination of her income. [ 21 ] The relevant sections of the Guidelines read as follows: Calculation of annual income 16 Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with

Schedule III. Pattern of income

17.1(1) 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. Non-recurring losses

(2) Where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under

section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of

Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate. Shareholder, director or officer 18(1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under

section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in

section 17 and determine the spouse’s annual income to include (

a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or (

b) an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income. Adjustment to corporation’s pre-tax income

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances. [ 22 ] The husband argues that the trial judge erred in determining the husband’s income as he did because C. D.

Mac lost money in 2006 and 2007, its net earnings in 2009 were less than the amount of income determined and the company had a retained deficit. He argues that ss. 17 and 18 of the Guidelines do not authorize the kind of order made by the trial judge and that the trial judge did not do a s. 19 analysis by which he could attribute income. I conclude that the trial judge was entitled to make the order he did pursuant to ss. 17 and 18 of the Guidelines . [ 23 ] Under s. 16 of the Guidelines , the line 150 income shown on the payor’s return normally becomes income for Guideline purposes.

However, when a spouse is self-employed, as Mr. Stelter is in this case, the amount of income on line 150 under s. 16 may not be the best indicator of how much income is available for support. [ 24 ] In the case of Kardash v. Kardash , 2008 SKQB 338 , McIntyre J. provides a good overview of the interplay of ss. 16 - 19 of the Guidelines and cites Kowalewich v. Kowalewich , 2001 BCCA 450 , [2001] 9 W.W.R. 626, as part of his analysis.

In that case, the British Columbia Court of Appeal commented on the difficulty of assessing income in these types of situations: 28 Despite the implementation of the Guidelines , the process of determining child support in the case of a self-employed businessman in the position of Mr. Kowalewich continues to be problematic for the parties and for a court. This is because child support is based on annual income as determined by the income determination provisions of the Guidelines and they rely on the sources of income in a spouse's T1 General Form, adjusted for

Schedule III. For many, if not most small businessmen, Total Income on that form bears no relationship to the money available for child support. Both ss. 17 and 18 of the Guidelines give a discretion to the judge in situations such as these to determine an income different than the line 150 income. [ 25 ]

Section 17 confers a discretion to attribute a fair and reasonable income based on the payor’s last three years’ income where income fluctuates. With respect to s. 18, the court in Kowalewich gave some guidance on when the discretion to attribute income should be used and also illustrated the two methods available under s. 18 to arrive at a fair and reasonable income:

43 In this regard, I find helpful the view Justice Martinson expressed in Baum v. Baum (1999), (BC SC), 182D.L.R. (4th) 715 (B.C. S.C.) at para. 28: Valid corporate objectives may differ from valid child support objectives. The purpose of s. 18 is to allow the court to “lift the corporateveil” to ensure that the money received as income by the paying parent fairly reflects all of the money available for the payment of childsupport. This is particularly important in the case of a sole shareholder as that shareholder has the ability to control the income of thecorporation. See Bhopal v. Bhopal, [1997] B.C.J.

No. 1746 (S.C.), Blackburn v. Elmitt (1997), (BC SC), 34 R.F.L.(4th) 183 (B.C.S.C.) and McCrea v. McCrea (1999), (BC SC), 1 R.F.L. (5th) 320 (B.C.S.C.). ... 47 The Guidelines give no explicit guidance as to how a parent or a court might go about choosing whether to use the corporateincome method or the personal services method in determining annual income.

However, s. 18 suggests two considerations in thepreconditions for its application: (1) which method produces an annual income that more fairly reflects “all the money available to thespouse for the payment of child support”; and (2) which method does the nature of the spouse's relationship with the corporation support.Section 18 also permits reference to the “situations described in s. 17”, and thus to the spouse's income pattern over the previous threeyears. [26] The trial judge had before him tax returns for the years 2005 - 2009 setting out the husband’s line 150 income.

His income hadfluctuated in the three years prior to trial from $90,000 to $60,000. Additionally, the trial judge had the 2007 and 2008 tax returns forC.D. Mac and the C.D. Mac financial statements from 2005 - 2009. Although C.D. Mac’s pre-tax income was negative for 2005 and2006, it was positive for 2008 and 2009 for the purpose of any s. 18 adjustments. The husband received some benefits from thecompany which would bear on the money available to pay child support; the explicitly stated focus of a s. 18 determination.

In both2008 and 2009 the husband’s personal use of company assets had a value of approximately $21,000 and $22,000 respectively. Additionally, the evidence from the wife’s expert corporate valuator was that a fair income for the husband was $80,000. The husband’sexpert corporate valuator used $95,000 as a reasonable salary. In this case, the trial judge had substantial evidence before him that thecurrent line 150 income of the husband was not appropriate for determining income. [27] It was open to the trial judge to use either s. 17.1(1) or s. 18 to determine a fair and reasonable income.

The trial judge mentionsboth income fluctuations and benefits received by the husband from his company as a justification for his determination of income. Given the husband’s income fluctuations, the figure of $80,000 is appropriate and justifiable under s. 17.1(1). Under s. 18(2) when anadjustment is made by adding back all of the husband’s salary, wages and benefits to the most recent pre-tax income of C.D. Mac being$5,864 (not the net earnings as argued by the husband), the $80,000 income attributed to the husband fits comfortably within s. 18(1)(a)as well.

The fact that the company had a retained deficit is not a factor included in the pre-tax income adjustment allowed under s.18(2). [28] Given that the determination of maintenance is a discretionary decision, a deferential standard of review applies. I find no error inprinciple, a significant misapprehension of the evidence or a clearly wrong determination respecting child maintenance on the part of thetrial judge. 3. Did the trial judge err in his determination of the value of C.D. Mac? [29] The trial judge accepted the methodology used by the wife’s expert valuator and his value of $77,538 for C.D.

Mac. [30] On this issue the husband argues that the judge erred in preferring the evidence of the wife’s valuator despite that his expert hadbetter relative qualifications and experience, provided a more detailed and justified analysis, and that there was no basis for the valuationmethodology used by the wife’s expert. He argues that the value determined by the trial judge failed to recognize that C.D. Mac’sliabilities exceeded its assets. [31] This Court has held that the scope of appellate review of the findings of fact by a trial court apply to the review of findings of a trialcourt based on expert testimony.

In Kolibab v. Tenneco Canada Inc., (SK CA), [2000] 1 W.W.R. 590 (Sask. C.A.),Tallis J.A. at para. 8 stated: 8 Given the trial judge's acceptance of the expert testimony of Mr. Purton and Mr. Hamm, the principle articulated by the SupremeCourt of Canada in Lapointe v. Hôpital Le Gardeur, (SCC), [1992] 1 S.C.R. 351 is relevant. In that case the Court heldthat the privileged position of the trier of fact and the applicable standard of review extends to expert witnesses. This is made clear in thefollowing passages at pp. 358 - 9:

The Role of an Appellate Court That an appellate court should not interfere with the findings and conclusions of fact of a trial judge, failing a manifest error, is a well-established principle. As Fauteux J. wrote for the Court in Dorval v.

Bouvier, (CSC), [1968] S.C.R. 288, at p. 293: [TRANSLATION] Because of the privileged position of the judge who presides at the trial, who sees and hears the parties and witnessesand who assesses their evidence, it is an established principle that his opinion is to be treated with the utmost deference by the appellatecourt, whose duty is not to retry the case nor to interfere by substituting its assessment of the evidence for that of the trial judge, exceptin the case of a clear error on the face of the reasons or conclusions of the judgment appealed from.

The privileged position of the trier of fact extends not only to the testimony of ordinary witnesses, but of expert witnesses. In this respect,Spence J. wrote in Joseph Brant Memorial Hospital v.

Koziol, (SCC), [1978] 1 S.C.R. 491, at 504: I am strongly of the view that it is not the function of an appellate court to reconsider that evidence whether it be upon facts or a matterof professional opinion and come to a different conclusion, unless it could be shown that the evidence reasonably could not result injustifying the conclusion made by the trial judge. [emphasis added] Based on the foregoing, the standard of review applicable is palpable and overriding error.

The decision of the trial judge, both as tochoice of expert and methodology used, must therefore be approached deferentially. [32] The trial judge heard substantial evidence before him regarding the qualifications of both witnesses proffered as experts. Hereviewed the husband’s expert’s qualifications at para. 44 of the decision and his methodology at paras. 45 and 46. A

summary of thequalifications of the wife’s valuator and the reasons for his approach to value are set out at para. 47: [47] The mother's evidence as to the value of the CDMac shares was given by Darren Schaan, CA, an expert in the field of businessvaluations. Although he is not a chartered business evaluator, Mr. Schaan has conducted more than 50 business valuations.

In hisopinion, the company should be valued as a going concern for the following reasons: the company has had significant increases in salesvolume; there is no indicator to show any reason to value the company on a liquidation basis; the company continues to operate,purchasing vehicles and employing staff; and, no reason has been shown that the company will not continue to operate in the future.

Hewould not advise the company to be wound up since the company provides a salary to the father and produces sufficient income tofinance its debt. [33] Although the trial judge did not explicitly state why he preferred the evidence and approach of Mr. Schaan over Mr. Schofield,there is nothing in the evidence which would lead to the conclusion that Mr. Schann did not have the requisite experience to actuallyprovide an opinion of value or that his experience in valuing businesses made him inferior to Mr. Schofield as an expert.

It appears thatthe trial judge’s choice of expert was, in part, driven by his conclusion that the company should be valued as a going concern and thatthe company had provided Mr. Stelter significant annual income. The following excerpt makes it clear that the trial judge accepted Mr.Schaan’s characterization of the company: [53] I determine the fair market value of the CDMac shares to be $77,538. In my view, the company should be valued on an ongoingbasis rather than on a liquidation basis.

The company has been operating over the last six years and has provided the father withsignificant annual income and some additional benefits. In his report, Mr. Schaan presents logical, reasoned justification for hismethodology. I accept his fourth methodology of averaging net income over three years ($82,836) as the basis for calculating goodwillrather than employing his fifth methodology of averaging net income over two years ($107,656) since the latter averaging excludes thethird year, 2006, before the significant sales increases of the following two subsequent years.

The fourth methodology results incalculation of the lowest valuation of goodwill (of the five methodologies) and incorporates the increase in sales as well as fluctuationsof income which are not caught by the two year average. Based on his extensive experience, I accept Mr. Schaan's opinion that themultiplication factor of two accords with normal business practice (even though no specific textbook authority was offered to support theuse of such factor although Mr. Schaan did testify that he had seen such factor used in a textbook at university). There was no contraryevidence before the court.

The product $165,672 ($82,836 x 2) must be reduced by $88,134 (the 2008 accumulated deficit) resulting inthe difference of $77,538, the value of the shares. [34] The evidence supports the trial judge’s choice of such a characterization. Although both experts valued the company as a goingconcern there was a major difference in the underlying assumptions used by them in doing the necessary calculations for this purpose. Itwas their treatment of the salary of Mr. Stelter.

The husband’s expert took the view that in arriving at the necessary income calculation,which formed the basis for his opinion, that the company had no value, that salary must be included as an expense of the company andtherefore deducted from income because on any sale there would be a cost to replace Mr. Stelter and hire a new manager. The wife’sexpert deducted it as an expense of the company thereby increasing corporate income.

The wife’s expert justified this approach at T641,T642 and T655 stating that the assumption that someone would buy the company as an investor and hire a manager is not necessarilycorrect and that someone may buy it to be an owner/manager. In that case, the management salary should not be deducted from income. He gave an example that someone may buy the business and run it if they could earn $80,000 per year, with the prospect of repaying theloan for the purchase price over 5 years, and enjoy the excess thereafter. [35] There was evidence that the company was a going concern.

The company had an employee and a second employee was being

hired. The company was growing; sales doubled from $285,250 in 2005 to $577,457 in 2009. It may be inferred that C.D Mac sold products that were in demand. Based only on the 2008 aged receivable list, the company had at least 47 commercial and industrial customers. Based on the state of the company, the refinancing activities of the husband were not the actions of an individual about to liquidate the assets of his business. [ 36 ] There is substantial support for the trial judge’s decision to use the wife’s expert’s rule of thumb methodology.

Although he questioned the numbers the wife’s expert used in his analysis, the expert of the husband acknowledged that the methodology of the wife’s expert was legitimate. More specifically, with respect to argument about the lack of any basis for Mr. Schaan’s rule of thumb methodology, the husband’s expert did not, as argued by the husband’s counsel, testify that rule of thumb multipliers are inappropriate. In fact, he testified at T601 that rules of thumb in particular industries are something that is considered but he was not able to find a rule of thumb for the business of the husband.

At T612 he testified that there are, in fact, general rules of thumb employed for the selling prices of businesses generally. Moreover, although the written report of the husband’s expert at p. 1133a observes that the wife’s expert has not provided any source for his rule of thumb calculation of goodwill, he does not say that it is inappropriate. It was, therefore, open on the evidence as a whole on this issue for the trial judge to accept Mr. Schaan’s methodology which he found logical, reasoned and justified. [ 37 ] Lastly, the husband argues that the liability of C.D.

Mac exceeded its assets thereby requiring a liquidation approach to value. This, in itself, would not demand a liquidation approach or the husband’s expert’s methodology be employed in view of the evidence that the business was a going concern.

The negative balance sheet was, in fact, known to both experts and was obviously taken into account by both of them and subsumed in the final opinion of value of each. [ 38 ] Given the evidence before him, and more pointedly in the circumstances of this case, the trial judge was correct to value the company as a going concern and accept the methodology of the wife’s expert and his underlying assumptions for that purpose. I can find no palpable or overriding error by the trial judge in respect of this ground of appeal. 4.

Did the trial judge err in valuing the 2006 Ski-doo and 2007 Suzuki motorcycle? [ 39 ] The trial judge’s decision on this issue is as follows: [61] The parties disagree as to the value of other family property. I have established values of such property as of the time of application, the fit date having regard to factors relating to control, use, depreciation, sworn values of the parties and appraisal opinions. Father 1) 2006 Ski-doo: $10,000 Mr. McDougall valued the ski-doo at $5,000 on January 13, 2010. The father valued it at $10,000 in his property statement sworn January 10, 2009.

I accept the father's valuation as of the time of application. 2) 2007 Suzuki motorcycle: $10,000 The motorcycle was valued by Mr. McDougall at $7,500 on January 13, 2010. The father valued it at $10,000 in his property statement. The motorcycle had been purchased for $10,161.42 (including taxes and financing costs) by the father within a few weeks following the separation of the parties in August of 2008. The father financed the purchase with a loan from Citifinancial, the outstanding balance of which is $9,500.

I determine the father's equity in the motorcycle to be $500. … [ 40 ] The husband argues that the trial judge should have preferred the valuation of these items provided by the professional valuator two years after the agreed valuation date. As it was, the trial judge accepted the testimony of the parties as to value. Given the comments of Jackson J.A. in Riley , it was open to him to choose to use the values he did. I see no error in this regard. 5.

Did the trial judge err in failing to recognize the Visa and American Express debts as family debts? [ 41 ] The trial judge’s decision respecting this issue is as follows: [64] The evidence is not persuasive that the father's Visa and American Express indebtedness or his claims of personal guarantee to the bank of the CDMac indebtedness and payroll tax are debts which should be taken into account between the parties. The personal guarantee arose after the time of the application and was not stated by the father in his property statement filed February 1, 2009.

The Visa and American Express accounts as well as any liability for payroll tax are company debt which is accounted for between the parties in valuation of its shares.

… [ 42 ] The husband admits that this argument depends on this Court accepting his argument that his company has a negative value and that as a director he would be personally liable to pay these debts. This ground of appeal fails given my decision on the value of C.D. Mac. However, I agree with the reasons given by the trial judge respecting this issue. This debt was accumulated by C.D. Mac and referred to and put in the financial statements of the company and included by the experts when they valued the company.

The trial judge was not satisfied, in any event, that despite this these debts should receive special treatment as personal debts. I see no error in this regard. 6. Did the trial judge err in valuing the car as a separate asset when at all times it was owned by C.D. Mac or alternatively by valuing it at the trial date rather than at the petition date? [ 43 ] The trial judge dealt with this issue at para. 64(2) of his decision: [64] … 2) 2008 Sebring automobile: $10,000 The parties have always treated this car as being the property of the mother who has operated it since the summer of 2008.

It was registered to the company, which ceased paying registration fees; the father then complained to the police that the mother was driving an unregistered vehicle. The car replaced a trade-in acquired in substitution for the 2005 Grand Prix (registered to the mother and operated by her) the value of which, in part, was credited towards the father's truck. According to the company accountant, the book value of the car is $8,000. The $10,000 value was sworn to by the mother in her property statement of May 5, 2010. [ 44 ] The husband argues that C.D.

Mac has continued to make monthly loan payments of $456.98 since December of 2008 and continues to make the payments at the present time. He argues that there has been no accounting of these on-going monthly payments by C.D. Mac. [ 45 ] The mother’s expert, in his valuation of the business, testified that the Sebring vehicle had no business use at all because it was actually being driven by the wife and he backed it out of the calculation of the value of the company. The trial judge was aware that the company continued to make the payments.

It was open for him, as part of the balancing of equities, to determine that the company should continue making the payments given the factual background respecting the purchase of the Sebring and its use by the wife. I see no error regarding this issue. 7. Did the trial judge err (

a) in valuing the mortgage on the family home at the petition date rather than at the trial date, and (

b) in his treatment of the car payments made pursuant to the interim order and other payments made by the husband respecting the car? [ 46 ] The trial judge’s decision on this issue is as follows: [58] The parties disagree as to the amount of the mortgage liability respecting the family home. The father asserts that the amount should be determined at $217,523.14 (the mortgage indebtedness as of the date of adjudication) whereas the mother asserts it should be determined at $227,337 (the indebtedness as of the date of the petition). [59] I determine the mortgage liability to be $227,337.

The reduction in the mortgage indebtedness after the commencement of the proceeding was due mainly to the payments made by the mother over the course of 15 months after that time until the time of adjudication whereas the father made payments for only two months (December of 2008 and January of 2009) during the same period. As well, the mother has had the responsibility for the primary care of the children and their primary residence has always been at the family home with her.

Furthermore, the father did not pay child support from February, 2009 until the interim order required him to pay retroactive interim child support to May 1, 2009 and ongoing support in the amount of $1,253 monthly.

The arrears of interim child support of $3,759 (for the months of May, June and July, 2009) were not paid until the first day of the trial. [ 47 ] The husband’s argument on the mortgage issue is that because the parties really had a shared parenting agreement prior to the interim order and because the husband was ordered to make 3 retroactive child support payments because of the wife’s alleged misrepresentation at the interim application, the husband should get the benefit of the lower mortgage balance as at the date of trial.

The basis for this argument, i.e. the wife’s alleged misrepresentation of the parenting arrangement, has been dealt with previously and is found to have no merit. It was open to the trial judge to give her credit for the payments she made on the mortgage up to trial. I see no error in this respect. [ 48 ] After the trial decision was issued, the husband asked the trial judge to further determine whether approximately $6,240 paid by the

husband and C.D. Mac towards payments for the car and car insurance were spousal maintenance or interim distribution of property and also who was to be responsible for future car payments. The trial judge, in an addendum to the trial decision, determined that those future payments were to be made by the company but declined to make any further characterization of the payments on the basis that it had been dealt with by his trial decision. [ 49 ] I cannot disagree with the trial judge’s approach on this matter. The trial judge was tasked with equitably determining the issues and did so.

Although he may have been in error in stating in his addendum judgment dated August 26, 2010 that the husband did not argue the characterization of the past car payments, it was open to him to determine that these payments and future payments were subsumed into the value of C.D. Mac and to make no further order characterizing them one way or the other. This approach is justified given the wide discretion and balancing of factors in determining a fair and equitable distribution of property as described in Riley . 8.

Did the trial judge err in fixing the costs as he did? [ 50 ] The trial judge’s decision respecting costs is as follows: [9] The petitioner acknowledges that the respondent's offer to settle exceeded the judgment respecting family property. It is now clear, indeed, that the respondent had offered to pay $75,034.53 to the petitioner to settle family property but the judgment only required payment of $59,924.39 to equalize family property.

As to child support, the respondent offered to determine the income of the petitioner at $90,688.00 with support of $1,253.00 monthly whereas the judgment set $1,112.00 monthly as the child support obligation of the petitioner based on determination of his annual income at $80,000.00.

As to the primary residence of the children, there is no issue that the respondent was successful - the petitioner had always maintained that equal shared parenting of one week rotation should be put in place. [10] I have considered the submissions of counsel and all of the facts and circumstances including the written offer to settle by the respondent, its rejection by the petitioner, his failure to counter-offer, the result, the complexity of valuing the business of the petitioner, the nature of part of the proceeding - respecting primary residence of the children, the absence (until taxation) of particulars regarding the accounts of the respondent's expert witness and the nature of his services, the appropriate column (four), the necessity and appropriateness of second counsel (in part), and the appropriateness of double costs (in part).

In the result, I exercise my discretion by awarding $35,000.00 to the respondent as an appropriate lump sum of costs instead of assessed costs, pursuant to Rule 545 of the Queen's Bench Rules. This award is inclusive of all fees and disbursements, costs of this taxation and costs of $500.00 awarded to the respondent by the interim order of July 24, 2009. [ 51 ] Respecting costs, the husband argues that the trial judge erred because: (

a) he failed to reduce the bill of costs to 21 hours of court time from the stated 35; (

b) he only discounted the wife’s bill of costs by 23% despite the offer to settle having been made only 4 days before trial; (

c) double costs should not be awarded on a custody matter and neither party was successful on the claim for child support; (

d) the bill of costs should have been taxed on column 3, not column 4; (

e) second counsel was unnecessary; (

f) no particulars were given with respect to the wife’s expert witness invoices; (

g) the wife’s offer consisted of three parts and obliged the husband to accept all three; and (

h) he determined that the husband had failed to serve an offer to settle. [ 52 ] All of the husband’s arguments on this issue can be dealt with on the basis that given the standard of review as set forth in Benson it was open to the trial judge to exercise his discretion respecting a lump sum cost award as he did. He was alive to the details of the process of the trial and the factors which normally go into a costs award. Looking at the costs judgment as a whole, I can find no

misapplication of any governing principle or rule or a disregard of any critical fact or consideration. Moreover, the award is not so obviously unjust so as to invite appellate intervention. [ 53 ] The husband also raises the issue of the status of Riley v. Riley , 2010 SKCA 88 , 359 Sask. R. 128. On April 27, 2012 this Court allowed the husband to file and serve his notice of appeal respecting costs nunc pro tunc , with the consent of the wife, so that the appeal on the merits and the costs appeal could be heard simultaneously and to allow argument on all issues. The wife, therefore, accepts the jurisdiction of this Court to hear this appeal respecting costs as a separate appeal. V.

Summary [ 54 ] Both the appeal on the merits of the case and on costs are dismissed with costs to the wife. DATED at the City of Regina, in the Province of Saskatchewan, this 6 th day of December, 2012. “Ottenbreit J.A.” ___________________ Ottenbreit J.A. I concur “Herauf J.A.” _______________________ Herauf J.A. Richards J.A. (dissenting in part) [ 55 ] I have had the benefit of reading the reasons for decision prepared in this appeal by Ottenbreit J.A. and agree with his conclusions with respect to all of Mr. Stelter’s grounds of appeal save one.

Specifically, I am unable to accept that there is no problem with the trial judge’s valuation of the shares of C.D. Mac Sales and Solutions (“CD Mac”). In my opinion, the judge failed to address or consider key aspects of the evidence on this point and, as a result, made a reviewable error in deciding to adopt the work of Ms. Stelter’s expert, Darren Schaan. Let me explain. [ 56 ] CD Mac is a small company which sells pumps and industrial chemicals. Mr. Stelter founded it in 2003 with a $15,000 line of credit.

He has been able to draw a good salary from the company, a salary apparently in line with market rates of compensation. However, in general terms, this has come at a price. In 2004 to 2008, the company had net earnings (losses) of $13,698, ($9,442), ($50,729), ($63,655), $25,883 and $5,864 respectively. In those same years, its assets exceeded (or were lower than) its liabilities by $617, $10,059, ($50,112), ($113,817) and ($88,084). Nonetheless, I also note that CD Mac had hired a first employee six months before the trial and a second, an office worker, just days before the trial. [ 57 ] Ms.

Stelter retained Mr. Schaan, an accountant with Dudley and Company, to provide an opinion as to the value of the CD Mac shares. Mr. Schaan had received a C.A. designation in 1998 and, according to a letter setting out his qualifications, had taken “various internal PD [Professional Development] topics presented at Dudley and Co. annual PD and monthly PD sessions on Business Valuations, etc.” He also testified that he had taken some CA Institute courses “involving business valuations and obviously a wide range of other things …”. Mr.

Schaan said that he had performed approximately 60 business valuations during his career as a chartered accountant. [ 58 ] Mr. Schaan prepared a four-page written opinion in which, by way of a

summary commentary, he valued the shares of CD Mac on the basis that it was a “going concern”. He started by analyzing information from the company’s financial statements for the years 2004 to 2009, inclusive. For each of those years he began with the company’s gross sales and then deducted the cost of sales and expenses to arrive at a “net income” (or loss) figure. Mr. Schaan then subtracted out various expenses that had no business purpose (for example, costs relating to the personal use of vehicles) to arrive at what he called the “revised income” for each year. Mr.

Schaan continued his analysis by next backing out the wages and benefits that CD Mac had paid to Mr. Stelter. That calculation led him to a figure for each year which he labeled “income available for shareholder”. The key point here is that the “income available for shareholder” numbers took no account of the cost of hiring Mr. Stelter, or a replacement for him, to run the company.

[ 59 ] Mr. Schaan then proceeded to value the shares of CD Mac (determining what he referred to as “good will”) by way of five alternative formulae. Each formula involved a rule of thumb “multiplier”. Mr.

Schaan’s calculations are set out below: CD Mac Sales & Solutions Goodwill Valuation (based on financial statements and records up to December 31, 2008) Amount rate total (1) 80% of average of last 3 years fees 581167.3 0.8 484949.9 (2) 80% of current year fees 683584 0.8 546867.2 (3) 2 times current year income 117347 2 234694 (4) 2 times 3 year net income average 82836 2 165672 (5) 2 times 2 year net income average 107656 2 215312 [ 60 ] In reviewing this table, it is immediately apparent that there were problems with the terminology used by Mr. Schaan.

First, the “fees” in calculations (1) and (2) were in fact what he had referred to as “sales” earlier in his report. Second, the “current year income” mentioned in calculation (3) was what he had previously called “income available for shareholder”. Third, what he labelled as “net income” in calculations (4) and (5) was also a reference to the “income available to shareholder” figures. [ 61 ] Mr. Schaan’s opinion, as expressed in his report, was that the result of calculation (5) -- $215,312 -- yielded the best estimate of corporate value.

He then deducted $88,134, representing cumulative company debt, from that figure to arrive at a bottom line valuation of $126,866 for CD Mac’s shares. [ 62 ] Mr. Stelter also retained an expert to value CD Mac. He was Ian Schofield, a partner and vice-president at Meyers Norris Penny. Mr. Schofield had obtained his C.A. designation in 1979 and had held senior positions with Clarkson Gordon and KPMG before joining Meyers Norris Penny.

He had secured a Chartered Business Valuator designation in 1990, had testified numerous times as an expert witness on business valuation matters and had done many valuations for various purposes. [ 63 ] Mr. Schofield prepared a 24 page written report. In valuing CD Mac, he began by discussing the two basic approaches to valuation: liquidation and “going concern”. He explained that the liquidation approach is used where a business is non-viable or where the return on assets as a going concern is not adequate.

He also explained that, if the going concern approach is used, it is based on one of three techniques: one dependent on earnings/cash flow, one grounded on asset values and one based on market comparisons. That said, he indicated that the earnings/cash flow approach is applicable for most valuations. [ 64 ] Against this background, Mr. Schofield indicated that a liquidation approach to valuation was appropriate for CD Mac because it had an inadequate rate of return and its liabilities exceeded its assets.

He calculated the fair market value of CD Mac’s shares to be nil using either a liquidation or a going concern approach. [ 65 ] In his report, Mr. Schofield also offered a rather telling critique of various aspects of Mr. Schaan’s valuation. For present purposes, I will content myself with quoting what he had to say about Mr. Schaan’s treatment of Mr. Stelter’s salary: The Dudley & Company Report shows the “income available to shareholder” as the income that should be used to calculate the “value” of the Company. This income significantly overstates the actual income of the business.

To calculate fair market value of the Company a deduction must be made for the fair market value compensation that would be otherwise payable to a third party performing the duties that are performed by the shareholder (president and general manager and sales manager). [ 66 ] The problem with Mr. Schaan’s approach to salary expenses became even more apparent when he testified. In cross-examination, Mr. Schaan offered the view that Mr. Stelter’s client list was CD Mac’s “key asset”. He also acknowledged that, while valuing CD Mac as if Mr. Stelter was part of it, and thereby building Mr.

Stelter’s importance into the worth of the company, he had taken no account of the cost to the company of retaining Mr. Stelter’s services. This central contradiction in his analysis is clearly revealed, among other places, in the following passage from the transcript: Q Mac Stelter. A -- we’ve got to look at what is the value of the business and he is part of the business.

Q Well, he -- he’s not part of the business, sir, with all due respect, you’re not getting Mac Stelter as an -- as an employee. The onlyway to get him using your concept, is if you agree to pay him $95,000 a year. But that -- that won’t work because your prospectivepurchaser is paying money to buy his -- buy Mac’s salary; isn’t -- isn’t that the flaw in your -- in your whole analysis? A Well, no, because we are valuing the business, the business includes him. You would have to look at what -- what this is worth ona go forward basis. Q Well I -- I -- the business includes him. Well, why -- why does it include him?

Are -- are -- and if he says, forget it, I don’t want to-- I’m -- I’m basically -- I’m tired of selling supplies; I’m tired of being on the road; I want to join a rock band. Okay. Now, that’s whathe does, why -- why would you think that somehow, some way, he is going to be forced to go ahead and continue to work for C.D. Mac? A Well, he’s not going to be forced to do it, but -- Q Well, yes -- yes he is in order -- in order to make the goodwill numbers that you have used. It is necessary for him to work forC.D. Mac because he’s the one with the personal connection with the customer; correct? A Yes.

And that has value and so we have accounted for that value. Q But if -- if C.D. Mac does not work for -- like, you -- you value the business as of November 28, 2008, okay? That’s the date ofthe issuance of the petition. You value -- take a snapshot. You say, okay, going concern. Why -- why do you think it is appropriate to goahead and -- and include him as an asset in -- in C.D. Mac? A Well, why -- why would you take him out. He is an asset. Q Would you agree that -- okay let’s -- let’s ask you this question: If he says, okay, I’m not working for C.D. Mac. I’m basicallycalling it quits. I’m giving you the keys.

Would you still pay $127,000 for the -- the business? A Well, no, it’s not worth that much at that point. Q Right. But it -- he says I’m not going to go ahead; I’m not going to continue to work for C.D. Mac. So -- A The typical sales of small businesses are based on, I will buy your business, but you will work for me for another year or twoyears, whatever. [67] This was the nature of the evidence before the trial judge. In light of it, Mr. Stelter expressed particular concern about Mr. Schaan’suse of a rule of thumb multiplier approach to valuation and about his failure to account for salaries.

For his part, the trial judge decidedto use the fourth of Mr. Schaan’s goodwill valuations (rather than the fifth as recommended by Mr. Schaan) in determining the fairmarket value of the CD Mac shares. He explained his reasoning with respect to his valuation decision by writing as follows: 53 … The fourth methodology results in calculation of the lowest valuation of goodwill (of the five methodologies) and incorporatesthe increase in sales as well as fluctuations of income which are not caught by the two year average. Based on his extensive experience, Iaccept Mr.

Schaan's opinion that the multiplication factor of two accords with normal business practice (even though no specifictextbook authority was offered to support the use of such factor although Mr. Schaan did testify that he had seen such factor used in atextbook at university). There was no contrary evidence before the court.

The product $165,672 ($82,836 x 2) must be reduced by$88,134 (the 2008 accumulated deficit) resulting in the difference of $77,538, the value of the shares. [68] I appreciate, of course, that considerable deference is and should be owed by this Court to a trial judge’s decision to choose theopinion of one expert witness over that of another. As Spence J. said in Joseph Brant Memorial Hospital v.

Koziol, (SCC),[1978] 1 S.C.R. 491, at 504: I am strongly of the view that it is not the function of an appellate court to reconsider that evidence whether it be upon facts or a matterof professional opinion and come to a different conclusion, unless it could be shown that the evidence reasonably could not result injustifying the conclusion made by the trial judge. See also: Kolibab v. Tenneco Canada Inc., (SK CA), [2000] 1 W.W.R. 590 (Sask. C.A.) at para. 8. [69] However, there will be occasions when it is both the duty and the responsibility of this Court to intervene in these matters.

In myopinion, this is such a case. [70] The evidence as a whole compellingly made the point that it was an error to overlook the cost of Mr. Stelter’s salary, or the salaryof a replacement for him, in the valuation of the CD Mac shares. That evidence, in my view, corresponded with the most basic sort ofcommon sense notions. Simply put, how could the shares of the company be valued without taking account of the labour costs necessaryfor its operation?

Ignoring labour costs in this context made no more conceptual sense than ignoring costs such as those relating to rawmaterials, financing, marketing and the like. [71] The trial judge made no attempt to address or deal with the fundamental contradiction in Mr. Schaan’s analysis and he took noaccount of the critique of Mr. Schaan’s approach which had been provided by Mr. Schofield. Perhaps even more importantly, the trial

judge did not deal with or consider Mr. Schaan’s own testimony in which he had revealed an inability to reconcile counting Mr. Stelter’s contributions to CD Mac into the valuation of the company while, at the same time, ignoring the cost of securing those contributions. [ 72 ] The trial judge was free to choose between Mr. Schaan’s and Mr. Schofield’s opinions. Indeed, speaking generally, he was free to reject both of them if he had so chosen.

However, in drawing conclusions in this regard, the trial judge was obliged to have regard to the whole of the relevant evidence and to exercise his decision-making authority in light of that evidence. In my respectful view, he failed to do this in deciding on the valuation of CD Mac. [ 73 ] As a result, and unlike my colleagues, I would allow Mr. Stelter’s appeal in so far as it concerns the valuation of the CD Mac shares. I would value the shares at nil, as per Mr. Schofield’s analysis, and make the necessary adjustments to the property division calculations.

DATED at the City of Regina, in the Province of Saskatchewan, this 6 th day of December, 2012. “Richards J.A.” __________________ Richards J.A.