Tyacke v Tyacke, 2021 SKCA 80

Court of Appeal for Saskatchewan Docket: CACV3524 Citation: Tyacke v Tyacke , 2021 SKCA 80 Date: 2021-05-20 Between: James Douglas Tyacke Appellant/Respondent on Cross-Appeal (Respondent) And Carla Carine Tyacke Respondent/Appellant on Cross-Appeal (Petitioner) Before: Caldwell, Schwann and Leurer JJ.A. Disposition: Appeal and cross-appeal allowed, each in part Written reasons by: The Honourable Madam Justice Schwann In concurrence: The Honourable Mr. Justice Caldwell The Honourable Mr.

Justice Leurer On appeal from: 2019 SKQB 271 , Melfort Appeal heard: February 8, 2021 Counsel: Ronald Parchomchuk for the Appellant Darcy Neufeld for the Respondent Schwann J.A. I. INTRODUCTION [ 1 ] James Douglas Tyacke appeals against a judgment rendered by a Court of Queen’s Bench judge pertaining to the division of family property and the award of spousal support: Tyacke v Tyacke , 2019 SKQB 271 [ Trial Decision ]. Carla Carine Tyacke cross-appeals from that same decision.

Both parties advance numerous grounds of appeal and assert various errors in relation to how the trial judge dealt with the division of their family property and the determination of spousal support. [ 2 ] For the reasons expressed below, I would allow Jim’s appeal from the Trial Decision in relation to the trial judge’s decision to exclude property that is jointly owned by Carla and her mother from distribution but dismiss his remaining grounds of appeal.

I would allow Carla’s cross-appeal with respect to spousal support and the order granting Shirley Tyacke, Jim’s mother, a 25% interest in the value of the grain on hand. Her remaining grounds of appeal are dismissed. [ 3 ] My reasons follow. II. BACKGROUND [ 4 ] Jim and Carla met in high school and wed several years later. By the time of their separation in March of 2015, they had been married for 34 years. They have three adult children. [ 5 ] Several years after their marriage, Jim and Carla moved into a farmhouse next to the home that was occupied by Jim’s parents, Dave and Shirley Tyacke.

Both houses were located on a quarter

section of farmland that had been in Jim’s family for multiple generations. [ 6 ] Although Jim and Carla had each pursued post-secondary education, they quickly immersed themselves in farming and over the years built a thriving mixed-farm operation. By 2015, they were farming 14 quarter sections of land and raising in excess of 200 head of cattle. Historically speaking, Shirley had allowed Jim and Carla to use her land and equipment without remuneration. [ 7 ] Carla was the primary caregiver for the couple’s three children.

Over time, however, she assumed responsibility for the farm books and finances and Jim handled the labour component of their farming operation. Although the parties struggled at times, Jim and Carla enjoyed a modest standard of living from the farm and were never wanting. [ 8 ] In 2009, Carla obtained a permanent part-time position at a local liquor store and in February of 2015, just prior to their separation, she assumed a full-time administrative position with a local grain elevator operation.

In spite of their separation, Carla remained responsible for the books and farm finances until some point in the fall of 2015 when Shirley took over those responsibilities. [ 9 ] Jim and Carla had begun to transition from mixed farming to a strictly organic grain operation shortly before their separation, with 2015 being the first year they were certified to market their grain as organic. Because of this transition, Jim sold the cattle herd in November of 2015. [ 10 ] Carla left the family home in March of 2015, in large measure because of Jim’s alleged excessive use of alcohol.

Jim did not handle their separation particularly well and began to harass Carla. In due course, his actions led to police involvement. Around this same time, Jim began to experience other health issues, notably some mental health concerns and advanced stage colon cancer. After Jim’s release from the hospital following cancer treatment, he moved in with his mother where he has resided ever since.

[11] As mentioned, Carla handed over the farm finances and bookkeeping to Shirley in the late fall of 2015. After Carla relinquishedthose responsibilities, Shirley began to take a more active role in the farming operation and took measures to secure her own financialposition. This led to the incorporation of the farming operation in late October of 2015, with Jim holding a 75% stake in the newly formedcorporation and Shirley a 25% stake.

Jim and his mother did not consult Carla about the reorganization nor did they allot her any shares.Around this same time, Shirley was given power of attorney over Jim’s financial affairs and his interest in the farming operation. [12] Carla commenced family law proceedings on December 18, 2015, in which she sought a divorce, spousal support and adivision of the family property. Jim filed an answer to Carla’s petition on March 5, 2016.

In it, he opposed spousal support and sought anunequal division of the family property for the following reasons: The home quarter and farm buildings are owned jointly with James’ mother Shirley Tyacke. That has to be considered, and it was nottaken into account on Carla’s property statement. There is considerable debt associated with the family property and that also has to beaccounted for. The land is an integral part of the farming operation and should remain with James who is a farmer and makes his livingoff the land.

Carla’s share can be in the form of a monetary settlement. [13] Unable to settle their differences, the matter proceeded to trial with judgment rendered on October 25, 2019. Jim did not attendnor did he participate in the trial. His evidence was presented through the viva voce testimony of Shirley as his mother and power ofattorney and an agreed statement of facts. III.

STANDARD OF REVIEW [14] The standard of appellate review in relation to property division was expressed in these terms in A.L. v M.L., 2019 SKCA 61,29 RFL (8th) 89: [53] … The valuation of assets for division of family property purposes and determinations of what constitutes a fair and equitabledivision of family property is a decision that attracts a deferential standard of review (see: Jones v Jones, 2017 SKCA 46 at para 21, 95RFL (7th) 43 [Jones]).

Findings of fact are assessed on the standard of palpable and overriding error (Jones at paras 22–23; see also:Ackerman v Ackerman, 2014 SKCA 137 at paras 22–24, 451 Sask R 132; Aalbers v Aalbers, 2013 SKCA 64 at para 9, 417 Sask R 69;Riley v Riley, 2011 SKCA 5 at para 5, 366 Sask R 110 [Riley]).

In Salomon v Matte-Thompson, 2019 SCC 14 [Salomon], Gascon J.,speaking for the majority of the Supreme Court, explained the palpable and overriding error standard in these terms: [33] Where the deferential standard of palpable and overriding error applies, an appellate court can intervene only if there is an obviouserror in the trial decision that is determinative of the outcome of the case (Benhaim, at para. 38, quoting South Yukon Forest Corp. v. R.,2012 FCA 165, 4 B.L.R. (5th) 31, at para. 46; see also H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1 S.C.R. 401, at paras. 56and 69–70).

Morissette J.A. explained this metaphorically as follows in J.G. v. Nadeau, 2016 QCCA 167, at para. 77 :[TRANSLATION] “a palpable and overriding error is in the nature not of a needle in a haystack, but of a beam in the eye. And it isimpossible to confuse these last two notions” (quoted in Benhaim, at para. 39). The fact that an alternative factual finding could be reachedbased on a different ascription of weight does not mean that a palpable and overriding error has been made (Nelson (City) v.

Mowatt, 2017SCC 8, [2017] 1 S.C.R. 138, at para. 38). [15] Since a trial judge exercises considerable discretionary authority under The Family Property Act, SS 1997, c F-6.3 [FPA], whenit comes to determining the value of assets and deciding what constitutes a fair and equitable division of the family property, this Court hashistorically taken a deferential approach to the review of such matters.

This means that “[a]n appeal court should only interfere if the trialjudge has abused his or her discretion by erring in principle, disregarding a material matter of fact, or failing to act judicially, or if theresult is so plainly wrong as to amount to an injustice” (Ackerman v Ackerman, 2014 SKCA 137 at para 23, 451 Sask R 132 [Ackerman]).Also see D.B.B. v D.M.B., 2017 SKCA 59 at para 172 [D.B.B.], and Carruthers v Caruthers, 2021 SKCA 52 at para 38 [Caruthers]. [16] Even though appellate intervention is permissible in the face of an error of law, a palpable and overriding error of fact or abuseof discretion, as this Court cautioned in Riley v Riley, 2011 SKCA 5, 366 Sask R 110 [Riley], “disturbing one of a trial judge’s manydecisions as to entitlement to family property, or its valuation, may disturb the overall equities that have been achieved in arriving at whatconstitutes a fair and equitable distribution” (at para 5). [17] A deferential stance is also taken with respect to spousal support decisions.

In D.B.B. this Court stated as follows: [48] Under family law legislation, a trial judge’s exercise of discretion in making spousal and child support orders is entitled toconsiderable deference. As a result, “appeal courts should not overturn support orders unless the reasons disclose an error in principle, asignificant misapprehension of the evidence, or unless the award is clearly wrong” (Hickey v Hickey, (SCC), [1999] 2SCR 518 at 525 [Hickey]). IV. JIM’S APPEAL A.

Farmland jointly owned by Carla and her mother [18] At the time of trial, Carla jointly owned two quarter sections of farmland in southeastern Saskatchewan [SE property] with hermother, Eva Drake. Ms. Drake had inherited this property from her late father when he passed away in 1997. In spite of legal advice to thecontrary, Ms. Drake transferred title into both of their names such that she and Carla held title jointly, with a right of survivorship.Ms.

Drake testified that her motivation in placing Carla on title was for estate planning purposes and that, as between the two of them,there was a “verbal agreement based on love and trust”. The land has been farmed continuously by Ms. Drake’s husband and son sincemaking her gratuitous transfer to Carla. Carla has earned no income from the SE property; but, by the same token, she has incurred noexpenses in relation to it.

[ 19 ] At trial, Carla argued the SE property was not family property, and that, in the alternative, she held it in trust for her mother. The trial judge had no difficulty concluding it was family property within the meaning of s. 2(1) of the FPA . She next turned to the question of whether the voluntary transfer of land from Ms. Drake to Carla constituted an inter vivos gift or if Carla held title in trust for her mother.

The trial judge instructed herself on this Court’s jurisprudence in Dunnison Estate v Dunnison , 2017 SKCA 40 , [2017] 8 WWR 18, and Hilmoe v Hilmoe , 2018 SKCA 92 , [2019] 1 WWR 118, stating as follows: “Here, the analysis begins from the presumption that Ms. Drake’s gratuitous transfer of the farmland into joint names with Carla, along with a right of survivorship, gives rise to a rebuttable presumption that it was intended to be a gift” ( Trial Decision at para 39). [ 20 ] Ms.

Drake testified that, in placing title in their joint names, her intention was to avoid the cost and delay of probate at some future point in time. Her testimony on this point was uncontroverted; and, in the absence of any documentation or evidence to support a viable alternate arrangement, the trial judge concluded that “at the time of Ms. Drake’s voluntary transfer of the farmland into joint names with right of survivorship, the transfer constituted an inter vivos gift to her daughter” (at para 46).

She found the SE property had a fair market value of $295,000 and that Carla’s share was equal to one half of that value. [ 21 ] Those findings of fact have not been appealed. [ 22 ] The trial judge next considered whether it would be unfair or inequitable to distribute Carla’s share of the SE property equally. She began her analysis with the presumption that gifted property is to be shared equally under the FPA and that Carla bore the burden of persuading her otherwise. The trial judge made the following pertinent findings of fact in relation to this issue: (

a) the gift of land was made eight years after Carla and Jim were married and at a time when their marriage was stable and they were building their farm business; (

b) Ms. Drake exhibited no intention to exclude Jim from the gift nor was any effort taken to ensure that he did not benefit from it; (

c) there was no evidence of a strained relationship between Jim and Ms. Drake; (

d) neither Jim nor Carla viewed the gift as being under their control or for their benefit while Ms. Drake remained alive; (

e) Ms. Drake retained full control over the SE property and neither Carla nor Jim were responsible for any of the expenses associated with farming that land nor did they benefit from it; and (

f) the land never formed part of Jim and Carla’s family farm operation. [ 23 ] Having regard to those findings, the trial judge concluded that it would be unfair and inequitable to divide Carla’s share of the SE property equally and therefore declined to include it in the parties’ property distribution. In reaching this conclusion, the trial judge was heavily influenced by two factors. The first was the absence of Jim and Carla’s involvement or connection with the SE property: [54] By its very nature, this gift could not have easily been comingled with other funds.

Jim and Carla never participated in a shared farming or business operation with Ms. Drake who, along with her spouse and son, operated their own large farming operation in southeast Saskatchewan. Ms. Drake retained full control of the land, and neither Carla nor her family unit were responsible for any of the expenses associated with the property nor did they benefit from any of the income it generated.

The land never formed an integral part of their family life – it formed no part at all. [ 24 ] The second part of her reasoning, which she said was a significant distinguishing factor, was the differential treatment of inter vivos and testamentary gifts Jim and Carla had received from his parents compared to how they approached the SE property: [55] In balancing fairness and equity as between spouses, the court recognizes that both parties have enjoyed the shared benefit of a gift (inheritance) from Jim’s father as well as a gift of a portion of the equity in the farm quarter from Jim’s parents.

While to some extent these gifts, both inter vivos and testamentary, form part of the family property subject to division, it cannot be overlooked that Jim and Carla pooled their efforts and resources for years with his parents in an intertwined farming operation, a significant distinguishing factor.

Not only were the gifts specifically made to both Jim and Carla, they chose to utilize the assets for the benefit of the entire family. [ 25 ] Given these two factors, the trial judge was satisfied that Carla had discharged the persuasive burden of establishing that it would be unfair to divide the SE property equally, concluding that “the value of [Carla’s] interest will not be factored into the property distribution” (at para 56). Jim argues that finding is not sustainable in law. [ 26 ] The law is clear.

Unless family property is otherwise exempt pursuant to s. 23 of the FPA , s. 21 requires a judge to divide it equally, except where the court is satisfied that it would be unfair and inequitable to do so. Subsection 21(3) (

e) is applicable to this issue: Distribution of family property 21

(3) For the purposes of subsection (2), the court shall have regard to the following: … (

e) the contribution, whether financial or in some other form, made directly or indirectly by a third party on behalf of a spouse to the acquisition, disposition, operation, management or use of the family property … . [ 27 ] I begin with the proposition that nothing in the FPA confers an exemption for an inheritance received by a spouse during the course of their marriage: Thomas v Thomas , 2016 SKCA 53 at para 51 , [2016] 9 WWR 1 [ Thomas ].

The trial judge was obliged to conceptually treat the SE property as a third party inter vivos gift divisible equally between the spouses, subject to the equitable considerations in s. 21. As this Court pointed out in Thomas , “Property acquired after the marriage, by gift or otherwise, is deemed to be a shareable asset, to be shareable equally unless there is something in all of the circumstances that makes an equal sharing unfair and

inequitable” (at para 53). See also Seaberly v Seaberly (1985), (SK CA), 37 Sask R 219 (CA) at para 16 [Seaberly]. [28] The onus of establishing that an unequal distribution should be made is on the spouse asserting that proposition: Wilson vWilson (1994), (SK KB), 119 Sask R 1 (QB), varied (1995), (SK CA), 131 Sask R 231 (CA)[Wilson]. A third party contribution conferred on one spouse to the exclusion of the other does not, on its own, result in unequal division:Olson v Olson (1988), (SK CA), 67 Sask R 257 (CA) at para 27 [Olson], and Seaberly at para 15. The focus mustremain on what is fair and equitable to the spouses. [29] The overarching framework for the application of s. 21(3)(

e) involves two questions: “First, the court must determine whether athird party made a contribution on behalf of the claiming spouse. Second, the court must determine whether it would be unfair orinequitable to distribute the property equally, having regard to all the circumstances” (Thomas at para 52). Wilson set out four factors toguide the exercise of discretion under that provision.

Those factors have been adopted in numerous Queen’s Bench decisions followingWilson, including Frank v Linn, 2013 SKQB 28, [2013] 7 WWR 542, varied 2014 SKCA 87, 10 WWR 215, which the trial judge repeatedas follows in the Trial Decision: [50] In Frank v Linn, 2013 SKQB 28, [2013] 7 WWR 542, Foley J. cited the following additional factors to be considered under s. 21(3)(

e) of the [FPA]: [127] In Wilson v. Wilson (1994), (SK KB), 119 Sask. R. 1, [1994] S.J. No. 131 (QL) (Q.B.), Justice Gunn of thisCourt enumerated some of the factors to be considered in determining whether an equal distribution would be unfair or inequitable in lightof a gift or inheritance pursuant to s. 21(3)(e). At para. 52 she stated: [52] Other circumstances to be taken into account by the court in determining whether there ought to be an unequal sharing of the propertyinclude:

(1) The timing of the third party contribution with respect to the time when the person received the gift or inheritance relative to the spanof the marriage: (Olson, supra, at p. 264)

(2) How the parties viewed the third party contribution: (Burant v. Burant, (SK KB), [1982] 4 W.W.R. 64 (Sask. Q.B.)at p. 68)

(3) Where no contrary intention of the donor is shown there is a presumption of an intention to benefit both parties: (Billo v. Billo (1982), (SK UFC), 27 R.F.L. (2d) 150 (Sask. Q.B.) at p. 155)

(4) Regardless of the intention of the donor, the court must focus on the fairness and equity as between the spouses rather than a fair resultas between spouses and third parties: (Bye v. Bye (1986), (SK KB), 50 R.F.L. (2d) 442 (Sask. Q.B.) at 447; Fraser v.Fraser (1991), (SK KB), 94 Sask. R. 253; 34 R.F.L. (3d) 284 (Sask. Q.B.)). [30] The trial judge commented on how Jim and Carla had viewed Ms. Drake’s contribution and whether she had expressed acontrary intention. While the trial judge took note of the timing of Ms.

Drake’s contribution relative to their marriage – stating that it wasmade at a time when it was stable and well before separation was even contemplated – she did not go on to analyze the significance of thisfactor nor did it appear to weigh in the overall balancing of the relevant considerations. [31] In Olson, this Court expanded on the timing issue by emphasizing the need to focus on the point in time when the gift wasreceived relative to the span of the marriage. While the testator’s intention is relevant, it is not conclusive: [28] In Seaberly’s case and in Ross v. Ross (1986), (SK CA), 49 Sask.

R. 52, we indicated that among thecircumstances to be taken into account in determining whether an inheritance ought to be distributed unequally, (having regard for thecourt’s power to do so under s. 21(2)(

e) of the statute) was the timing of the inheritance. When, relative to the span of the marriage, did thebeneficiary become entitled to the gift?

We held, as well, that the intention of the testator, while relevant, is certainly not conclusive. [32] The timing of the gift was a critical factor in Rouatt v Rouatt, 2009 SKQB 161, 333 Sask R 145, where the Court observed,“This is not a case where an inheritance was received after separation but before petition or even at a time when the parties wereundergoing marital distress and, as such, is not a factor that would lead to anything other than an equal distribution of family assets” (atpara 62).

Importantly, the court went on to state that an early contribution “would normally point toward an equal division” (at para 65). [33] Respectfully, in exercising her discretion, I find the trial judge failed to explore the significance of when Ms. Drake had giftedthe land to Carla and how that factored into the root question of fairness and equity between the parties. [34] I also have difficulty with other lines of reasoning employed by the trial judge.

While the trial judge found it significant that theparties had never considered the SE property to be under their control or “an integral part of their family life” (Trial Decision at para 54),she appears to have excluded the value of this land from distribution because Carla and Jim had never made use of it nor asserted anycontrol over it. While this might reveal something about how Jim and Carla viewed the gift, I do not interpret the trial judge as havingmade that inference.

As I read her decision, their failure to assert any form of control over the SE property appears to have been a decisiveconsideration that tipped the balance in favour of an unequal distribution. Respectfully, as discussed below, this conclusion was premisedon a mistaken understanding of the facts. The mere fact that the parties did not utilize the SE property should not have inexorably led tothe inference that they did not view it as family property. [35] Moreover, the simple fact of the matter is that because of distance, the parties could not commingle the SE property withintheir farming operation.

As Jim points out in his factum, it would have been impractical for them to assert control over this land or to assistCarla’s family in their farming operation because of the great distance separating the two farms. To the extent the trial judge assignedweight to the fact that the SE property was not commingled, she failed to take into consideration the practical realities of that proposition.The fact that the SE property was not integrated into the couple’s faming operation said nothing, in and of itself, as to whether an equalsharing of the property would be unfair or inequitable.

For this reason, it is my conclusion that she focussed on a consideration that was, inthe context of these facts, unrelated to the appropriate exercise of her statutory discretion.

[36] The second basis for the trial judge’s decision was the difference in how Jim and Carla treated the farmland they had receivedfrom their respective parents through inter vivos gifts. On the one hand, the SE property had never formed an integral part of their ongoingfarming operation; yet, on the other hand, they had pooled their efforts with Jim’s parents to form an intertwined farming business.

Thetrial judge found this fact to be “a significant distinguishing factor” (at para 55). [37] Once again, the trial judge’s reasoning ignores the considerable distance separating Jim and Carla’s farm from the SE propertythat, logistically speaking, prevented them from commingling Ms. Drake’s inter vivos gift with their farm. In other words, it wassomething they were prevented from achieving on a practical level.

For this reason, how the parties treated farmland they had receivedfrom Jim’s parents said nothing about whether they viewed the SE property as a joint gift. [38] Respectfully, the trial judge too easily displaced the presumption of equal sharing. She did so by considering facts that wereunrelated to the proper exercise of discretion under s. 21(3)(

e) as a basis to exclude the SE property from an equal division of the familyproperty. In this way, I find she erred in principle. [39] For the above reasons, this part of the trial judge’s order must be set aside. The value of Carla’s one-half interest in the SEproperty ($147,500) is family property that must be shared equally with Jim. B. In specie division of land [40] At trial, Carla pressed for an in specie transfer of some of the farmland. Her plan was to use it to supplement her income andfor retirement planning. Jim adamantly opposed Carla’s request.

He maintained that it was impractical to divide the farmland and that areduction in size would make the remaining operation unprofitable.

He favoured an equalization payment to Carla, which she could use topurchase other land, if she chose to do so. [41] The trial judge said that she wrestled with Carla’s request but ultimately chose to divide the farmland in specie to “give Carlathe opportunity to directly benefit from land ownership after decades of devotion to the family farm business” (at para 114). [42] Jim makes three arguments on appeal as to why this aspect of the Trial Decision should be set aside. [43] First, he submits the trial judge’s decision amounts to an error of law because an order for in specie property division is onlymade where there is a lack of evidence concerning the value of that asset.

Since land values were agreed upon at trial, Jim says there wasno debate or uncertainty about its value. Jim relies on Logan v Logan (1986), (SK UFC), 6 RFL (3d) 152 (Sask QB);Benson v Benson (1994), (SK CA), 120 Sask R 17 (CA) [Benson]; and Thomas v Thomas, 2014 SKQB 153, 447 SaskR 50, rev’d in part, 2016 SKCA 53, 476 Sask R 288, in support of his position. [44] With respect, Jim’s argument does not reflect the law.

For purposes of effecting a distribution of family property, s. 26(2) of theFPA empowers the court to “make any order that it considers fit in the circumstances whether or not it affects title to family property”.Without limiting the generality of that provision, a court may “order the vesting of family property in one spouse or in both spouses incommon” (s. 26(3)(g)). [45] A decision ordering an in specie division of family property is discretionary in nature and, as such, attracts appellate deference.As this Court noted in Hlynski v Hlynski (1999), (SK CA), 180 Sask R 1 (CA), s. 26(2) confers broad discretionarypower on a judge that, “unlike the discretion found elsewhere in the [FPA] – is unbounded by expressly prescribed considerations and maytherefore be exercised free of such constraints, though not free of such considerations as might fairly be implied” (at para 28).

I see nothingin the FPA or the jurisprudence that limits a trial judge’s ability to make an order for in specie division to situations involving a lack ofevidence of value. [46] By way of a second argument, Jim suggests the trial judge failed to consider the evidence relevant to this issue. He submits thatthe loss of four quarter sections of farmland from the overall farming operation will seriously erode its viability and his ability to servicethe existing farm debt. The difficulty with Jim’s argument is that it is speculative and not grounded in an evidentiary foundation.

Therewas no evidence led at trial about Jim’s expected farm income if four quarter sections of land were removed from the equation. Neitherwas there evidence about how many quarter sections of land are needed to make the new organic grain operation viable, or whether theland transferred to Carla is prime cultivated land or the former grazing land. [47] Third, Jim says that during the course of their marriage, he was primarily responsible for the hands-on running of the farm, thatthe nature of the farming operation has evolved since Carla left and that she lacks the ability to manage it.

With respect, this argumentoverlooks Carla’s evidence about her contribution to their farming efforts over the years and her various farm-based skills. Even if Carla’sskills as a farm operator was a relevant consideration, it ignores Carla’s evidence that she would likely rent the land to their son. Finally,while Russell v Russell (1999), (SK CA), 180 Sask R 196 (CA) [Russell], recognizes that the roles played by theparties in a farming operation is not irrelevant, the Court did not say that it is a decisive consideration or that it must be taken into account. [48] I would not give effect to this argument. C.

Jim’s remaining issues [49] Jim’s legal counsel in this appeal, who did not act for him at trial or file his notice of appeal, declined to make any oralarguments on his remaining grounds of appeal; albeit, he did not abandon them outright. In light of Jim’s position, I will briefly addresseach ground in turn. 1. Tax implications and expenses associated with the sale of cattle [50] Jim sold the cattle herd in 2015 for $216,517 after the parties had separated. The trial judge attributed this value to Jim.

Jimargues that, because this was a liquidation scenario and not a sale in the ordinary course of business, the sale figure had to be adjusted

downward to account for taxes, expenses and inputs. By dividing the sale proceeds equally, he argues, Carla got the benefit of one half ofthe gross profits, yet he will bear the burden of both the taxes and expenses associated with the cattle. Jim says his tax returns disclosedirect cattle-related expenses of $11,014 as well as the overall expenses for the mixed-farm operation.

He suggests 50% of the generaloperational expenses ($65,126) should be used for a total deduction for expenses of $76,140. [51] Jim concedes no evidence was presented at trial with regard to the matter of cattle expenses or when they were incurred, andthat his proposal was constructed after the fact from his tax returns. He urges this Court to critically examine the trial evidence forpurposes of making an appropriate deduction. [52] The FPA permits a court to depart from the presumption of equal distribution where – having regard to the factors listed ins. 21(3) – it would be unfair or inequitable to do so.

The factors relevant to Jim’s argument are these: (a) “a tax liability that may be incurred by a spouse as a result of the transfer or sale of family property or any order made by thecourt” (s. 21(3)(j)); (b) “any debts or liabilities of a spouse, including debts paid during the course of the spousal relationship” (s. 21(3)(o)); and (c) “any other relevant fact or circumstance” (s. 21(3)(q)). [53] As discussed above, a determination of whether to apply an equitable consideration under s. 21(2) is a discretionary decisionthat attracts appellate deference on appeal. [54] The tax liability that may be incurred by a spouse as a result of the sale of family property is a factor that may be taken intoaccount by a trial judge.

It is established law that a party asserting that property division should be adjusted to account for a potential taxliability bears the burden of adducing the supporting evidence. Speculation is not enough and evidence must be adduced “with somedegree of precision” (Ackerman at para 35). See also Kassian v Kassian, 2019 SKCA 101 para 82, 33 RFL (8th) 333, and Frondall vFrondall, 2020 SKCA 135 at para 116, 49 RFL (8th) 293. [55] At trial, Jim did not adduce any evidence of the projected tax liability arising from the sale of the cattle.

While the trial judgeacknowledged that Jim had asked the Court to be alert to the tax consequences, as she properly recognized in the Trial Decision, “noevidence was tendered to support an adjustment for taxes, capital gains or recapture. Likewise, no evidence was tendered with respect tocosts of disposal for inventory or otherwise” (at para 109). [56] With regard to Jim’s argument for a deduction to account for the cattle expenses, there are a number of reasons why thisargument cannot succeed. First, this appears to be a new issue on appeal.

The issue at trial was not with respect to a deduction forexpenses per se; it was about whether the trial judge should treat the cattle proceeds as income or property. As a matter of generalprinciple, appellate courts discourage new arguments on appeal that were not raised in the court below where it might have been necessaryto adduce evidence at trial: Silzer v Saskatchewan Government Insurance, 2021 SKCA 59 at para 36, and R v Perka, (SCC), [1984] 2 SCR 232 at 240 [Silzer]. Jim’s argument obviously required evidence and an opportunity for Carla to respond.

Since Jimfailed to adduce any evidence about the cattle expenses, it is difficult to see how the trial judge erred. [57] In any event, Jim misinterprets the Trial Decision; the trial judge did make a deduction from the gross sale price to account forthe cost of sale. Sales slips showed proceeds of $238,000, but the trial judge valued the cattle at $216,517, representing the traceableproceeds from the sale (at para 93). I take this to be the sale price net of the associated sales costs. [58] I would not give effect to Jim’s arguments. 2.

Interest on Farm Credit Canada debt [59] The parties owed money to Farm Credit Canada [FCC] that was secured by four mortgages against their farmland. At the timeof petition, the outstanding debt was $584,723; but, by the time of adjudication, the overall debt had dropped to $510,203. Since Jim hadretired $74,520 of the FCC debt between those two dates, he submits Carla received a benefit.

At trial, Carla advanced the position thatthe difference in the FCC debt ($74,520) could notionally be offset by her claim for retroactive spousal support and occupational rent. [60] On appeal, Jim argues the trial judge erred by using the date of adjudication because it meant Carla benefitted twice: first, as aset-off from retroactive spousal support and second because it increased the shareable value of the farmland.

Jim goes on to argue that inthe absence of any analysis of his income, there was no way for the trial judge to have known if the difference in the FCC debt betweenthe two valuation dates was roughly equivalent to any unpaid spousal support. [61] The FPA does not direct a division of family debts per se. Generally speaking, debt is an equitable consideration that may betaken into account in determining whether family property should be divided unequally (s. 21(3)(o)).

Where the debt is secured againstfamily property, as it was in this case, it may be seen to affect the value of the property to which it is attached. Adjustment for debt is adiscretionary decision left to the trial judge (Russell): [110] Like many other considerations under [the FPA], adjusting a matrimonial property division for debts incurred during the marriage isa matter left solely to the discretion of the trial judge. Obviously, that discretion must be exercised in a fair and just fashion. There are,however, few additional constraints. [62] In my view, Jim misunderstands the trial judge’s decision.

She provided a reasoned basis for using the date of adjudication asthe appropriate time to determine the FCC debt. First, in the context of addressing the overall fairness, the trial judge found it significantthat, after Carla had relinquished control over the farm account in 2015, Jim utilized the shareable assets to generate farm income forwhich Carla received no benefit. Over that three-year period, apart from a nominal amount of interim spousal support, Carla received noincome from the farm.

The trial judge observed that a precise calculation of the difference between the amount Jim had paid down on theFCC debt and what was owing for retroactive spousal support was “daunting”, but she nonetheless found that Carla was entitled to some

benefit from income that had been generated from the family property prior to trial. Second, contrary to Jim’s submission, the trial judge was able to do a rough calculation of the value of Jim’s use of the land over that time span. Based on the information available to her, the trial judge found Carla’s proposed set-off modest compared to the income that was likely generated from the farm.

Third, as the trial judge alluded to in paragraph 111 of her decision, Carla was prepared to forgo a claim for occupation rent if the date of adjudication was used for the FCC debt. [ 63 ] All three of those considerations factored into how the trial judge approached the FCC debt and whether it merited an unequal distribution of the family property. In light of the deferential standard of review in relation to what constitutes a fair and equitable division of family property, I see no basis to intervene. 3.

Costs and labour in connection with the wheat [ 64 ] After the parties separated in March of 2015, Jim seeded the farmland with organic wheat and harvested 13,400 bushels later that fall. At the time of trial, neither of the parties were familiar with the price for such wheat or how to market organic wheat. Carla expressed the view that it could be sold for between $18 to $22 per bushel. Based on her research and limited experience, along with the actual sale she had engineered, Shirley suggested a value of $14 per bushel.

The trial judge accepted Shirley’s evidence and valued the 2015 crop at $14 per bushel by reasoning as follows: [87] … It is not disputed that 2015 was the first year the parties were certified to market their grain as organic.

While a more sophisticated producer may have been able to obtain a higher value, in the circumstances this was within a reasonable price given the risks and costs of marketing the product and the fact that they decided to sell it all at once to one buyer in order to quickly generate some income and free up storage space. [ 65 ] On this basis, the trial judge found the gross value of the crop in storage as of the date of petition was $187,600. [ 66 ] As well, the parties disagreed on the value of the round alfalfa bales that remained in inventory as of the date of application.

Carla valued the bales at $75 each based on her familiarity with the farming operation, the cost of feed for horses and some online research. Shirley relied on the value Jim had assigned to the bales in his property statement. The trial judge accepted Carla’s evidence and valued the bales at $22,500. [ 67 ] In a similar fashion to his argument about the cattle, Jim argues the trial judge failed to adjust for the cost of labour and expenses incurred in relation to the 2015 wheat crop and existing bales.

The result of this alleged error, Jim says, meant that Carla received the full value of her share of the sale proceeds yet he bears the burden of all of the associated expenses. Relying on the input costs and expenses incurred in the overall farming operation (as set out in his 2015 income tax return), Jim suggests that roughly $82,000 should be deducted from the value of the wheat and bales. Jim relies on Russell in support of his argument. [ 68 ] There is no indication from the record that Jim advanced this argument at trial; and, therefore, like the cattle issue, this presents as a new argument on appeal.

Even if Jim had raised this argument at trial, I see no basis for appellate intervention. While courts may adjust the gross value of a standing crop for labour, expenses, input costs and taxes (see, for example, Ostrowski v Haas , 2005 SKQB 347 , 268 Sask R 200; Maier v Zaremba , 2012 SKQB 54 ; and M.L. v A.L. , 2017 SKQB 166 , aff’d 2019 SKCA 61 , 29 RFL (8th) 89 [ M.L. ]), this was not a standing crop as of the date of application. By that point in time, it had been harvested and was in the bin. The same was true for the hay – it had been cut and baled.

It is for this reason that a distinction is often drawn between grain on hand and standing crops for valuation purposes: see M.L . at paras 284 and 289 . Jim adduced no evidence at trial beyond filing his income tax returns en masse . There was no evidence led of any unpaid inputs or expenses in relation to the wheat and bales nor any evidence that would otherwise justify the deduction of expenses that might be associated with marketing the grain that was in storage. [ 69 ] I would not give effect to this argument. 4.

Debt allegedly owed to Shirley [ 70 ] Shirley testified that she was owed $150,000 from a land transfer arrangement that she had orchestrated with Jim. According to Shirley, when her former husband passed away intestate in 2007, she advanced a claim over some of his then land holdings based on the wording of their prior separation agreement.

To protect her asserted interest, she registered an interest against the land in question and became embroiled in a dispute with her former spouse’s estate. [ 71 ] Shirley testified that she took these measures to ensure that Jim would receive the land from his father’s estate. According to her, she and Jim had an understanding that once the land was registered in his name, he would sell it and give her one half of the sale proceeds that she, in turn, would use to purchase a retirement home in Arizona. None of the alleged arrangement was reduced to writing.

Carla testified that she was unaware of the debt claimed by Shirley. [ 72 ] As things turned out, a settlement was reached with the former husband’s estate, the land was transferred into Jim and Carla’s names and it was subsequently sold by them for $300,000. [ 73 ] The trial judge rejected Jim’s argument.

Relying on the dicta in Russell , she found the alleged debt to Shirley was not legally enforceable: “Even if [Shirley’s] evidence was accepted, at most it creates a moral obligation between Jim and his mother that she was cautioned by her lawyer may be problematic and unenforceable” (at para 107). [ 74 ] Jim does not appeal from that finding. As I understand Jim’s position on appeal, he says that even if it was not a legally enforceable debt, Ruskin v Dewar , 2005 SKCA 89 , 256 DLR (4th) 70 [ Ruskin ], obliged the trial judge to go on and consider the matter within the context of s. 21(3) (

e) of the FPA , i.e., whether the property should be divided unequally because Shirley had made a contribution “on behalf of a spouse to the acquisition, disposition, operation, management or use of the family property”. Failure to undertake that analysis, Jim argues, constitutes an error of law. [ 75 ] There are several reasons why this argument cannot succeed. First, much like Jim’s argument about the cattle, this is a new

argument on appeal. As discussed above, appellate courts discourage new arguments on appeal, especially those that require an evidentiary foundation. Second, since Jim and Carla had sold the land long before Carla’s application, it was no longer family property that would otherwise be subject to the equitable considerations enumerated in s. 21(3) . Further, there was no evidence that the proceeds from the sale of the land had been traced. [ 76 ] Third, Jim’s argument regarding the application of s. 21(3) (

e) could not have prevailed on the facts. The analytical framework established in Thomas required Jim to establish, firstly, that Shirley had made a contribution on his behalf as the claiming spouse. Contribution within the meaning of s. 21(3) (

e) can be either financial in nature or “some other form made directly or indirectly by a third party on behalf of a spouse”. Although the evidence at trial was a bit muddled as to what had transpired, it was sufficiently clear to establish that Shirley did not make a direct financial contribution to Jim. [ 77 ] That leaves the question of whether her efforts in relation to her former husband’s estate land constituted “some other form” of direct or indirect contribution.

The Shorter Oxford English Dictionary (6th ed) defines contribution as “something paid or given (voluntarily) to a common fund or stock; an action etc. which helps to bring about a result; the action of contributing”. Taking a liberal approach to the

interpretation of this provision, s. 21(3)(

e) could be construed to embrace a situation where a third party takes an action – whether direct or indirect – that substantially brings about the acquisition of family property for the benefit of a spouse. However, the evidentiary record in support of Jim’s argument is thin, at best. Shirley did not own the estate land. Prior to his passing, it was owned by Jim’s father as part of his outfitting business. After the father’s death, Shirley became embroiled in a dispute with his estate and registered a lis pendens against that land to protect her alleged interest.

No evidence was led at trial about the nature of her asserted interest, the strength of her claim, or why the estate eventually settled the matter. At best, Shirley had an alleged interest in the land. Based on this limited evidence, I struggle to understand how her actions constituted an indirect contribution of some tangible form that led to the acquisition of this land.

Simply put, there was no compelling evidence that Shirley had made a contribution for Jim’s benefit. [ 78 ] The trial judge was well aware of the unsatisfactory evidentiary record and the rather undeveloped argument that had been advanced by Shirley, on Jim’s behalf. In light of this, its hard to see how she erred by not considering s. 21(3) (

e) or, if it did apply, that an equal sharing between Carla and Jim would be unfair or inequitable. I see no error here. V. CARLA’S CROSS-APPEAL [ 79 ] Like Jim, Carla advances numerous grounds and sub-grounds of appeal in her notice of cross-appeal. Her issues were refined somewhat in oral argument such that I would reframe them as follows: (

a) Did the trial judge err in finding that Carla was not entitled to spousal support? Did the trial judge err by failing to determine the parties’ incomes? (

b) Did the trial judge err by reducing the value of the grain on hand by 25% to Shirley’s benefit? (

c) Did the trial judge err in determining the value of the wheat inventory by accepting evidence from the sales slips and preferring Shirley’s evidence over Carla’s? A. Spousal Support [ 80 ] Carla argues the trial judge erred on the issue of her entitlement to spousal support. She had sought a lump sum support award by way of transfer of two quarter sections of unencumbered farmland into her sole name in lieu of periodic spousal support. The land she had identified was appraised at $268,000.

Carla theorized that, if Jim’s income was fixed at $161,204 and with her income at $50,012, the recommended range under Carol Rogerson and Rollie Thompson, Spousal Support Advisory Guidelines (Ottawa: Ministry of Justice, 2008), was $3,475 to $4,054 per month for an indefinite duration.

Over a period of 20 years, the amount Jim paid for spousal support would roughly equal the value of the land in question. [ 81 ] The trial judge found the parties’ respective positions at trial unhelpful, characterizing them as largely focused on “what they want, what they could live with or what they think might be fair” (at para 124). That said, the trial judge knew she had to begin her analysis by addressing threshold entitlement and that only if entitlement were established could she go on to assess the appropriate remedy.

The trial judge understood that entitlement to and quantum of spousal support were distinct from property division. However, she also appreciated that those issues “are informed by the impact of the division of property” and that “[a] trial judge being called upon to determine entitlement to spousal support must also consider whether the property division addresses compensatory goals and/or directly impacts upon the relative conditions, means and needs of one or both of the parties …” (at para 128).

The trial judge knew she had to be cautious when considering an award of spousal support in a situation where the parties’ income is derived from income-generating assets that have been divided through property division. [ 82 ] Those comments made, the trial judge turned to Carla’s claim for support on a compensatory basis. After reviewing the evidence, she concluded as follows: [132] In this instance, the parties had a lengthy marriage of nearly three decades. They met young and started with very little.

Over the years, they worked as a team to advance their education, build a family and acquire a substantial asset base as the foundation for their successful farming business. The wife did not play a purely traditional role in this endeavour. She farmed alongside the husband, engaging in decision-making, physical labour and primary management over the finances. Over time, they built a thriving farming operation and, by the date of separation, enjoyed a modest but comfortable lifestyle. The wife is clearly entitled to share in that success, but doing so does not automatically entitle her to spousal support.

The analysis must go further . (Emphasis added) [ 83 ] The trial judge went on to consider whether Carla remained disadvantaged by the dissolution of the marriage or whether Jim

was correspondingly advantaged on a go-forward basis. In assessing the objectives of spousal support, she emphasized the impact of theproperty settlement on each party’s financial situation and then took the following specific factors into account: (

a) Jim would beresponsible for the accumulated debt and for making a sizeable equalization payment to Carla, (

b) the farming operation had evolved,(

c) Carla would earn income from the four quarter sections of farmland she would receive through an in specie property division, and (d)Jim’s land base and income-earning potential would decrease while at the same time his mother would expect to be compensated for hercontributions to the farming operation. [84] All things considered, the trial judge concluded that she must reject Carla’s claim for compensatory support: [138] In

summary, it is necessary and appropriate to have regard to the impact of the property settlement on both spouses’ financialsituations when assessing the objectives of spousal support and Carla’s entitlement to ongoing support. Having done so, I am unable tofind that Carla will remain entitled to spousal support once the income-generating property has been divided as contemplated by thisjudgment.

Upon the land being transferred and the equalization payment being made, the interim spousal support order shall terminate,and no further support shall be payable. (Emphasis added) [85] In broad terms, Carla argues the trial judge erred in finding that she was not entitled to spousal support on a compensatorybasis, even though she had been in a long-term, fairly traditional marriage and was negatively affected by the marriage and its breakdown.As Carla put it, she went from the financial security of a well-established farm to having to work two jobs to earn an income of $50,000.Second, Carla argues that the trial judge erred by failing to make the necessary findings of fact and undertake the required analysis inorder to determine whether she was entitled to spousal support on non-compensatory grounds.

In particular, she asserts that the trial judgeerred by failing to make any findings of fact about the parties’ needs and means, and, most glaringly, Jim’s income. 1. Compensatory spousal support [86] It is accepted law that an analysis and determination of entitlement to spousal support is the crucial, threshold step beforequantum and duration can be determined: Wongstedt v Wongstedt, 2017 SKCA 100, [2018] 4 WWR 82, and Halliwell v Halliwell, 2017ONCA 349 at para 110, 90 RFL (7th) 253 [Halliwell].

Case law recognizes three bases of entitlement: compensatory, non-compensatoryand contractual (Bracklow v Bracklow, (SCC), [1999] 1 SCR 420 at para 49).

Even if entitlement is established, theanalysis and basis on which it is grounded are important and necessary considerations that inform quantum and duration. [87] It is also settled law that a large property award does not automatically preclude entitlement on either compensatory or non-compensatory grounds: Chutter v Chutter, 2008 BCCA 507 at para 75, 301 DLR (4th) 297, leave to appeal to SCC refused, [2009] 1 SCRvi [Chutter]. [88] In very broad terms, the purpose of compensatory spousal support is to provide compensation when the earning capacity of onespouse has increased at the expense of the other.

Entitlement to compensatory support is rooted in the independent model of marriagewherein each spouse conceptually retains economic autonomy in their marriage. It requires a court to consider whether the recipientspouse suffered loss due to the marriage or its breakdown that would not have been suffered but for the marriage and to also take intoaccount “any economic advantages enjoyed by the other spouse as a result of the recipient spouse’s efforts” (D.B.B. at para 78). See alsoChutter at para 50–51. This purpose animates the objectives of a spousal support orders set out in s. 15.2(6)(

a) and s. 15.2(6)(

b) of theDivorce Act, RSC 1985, c 3 (2d Supp): Objectives of spousal support order 15.2

(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 above anyobligation for the support of any child of the marriage … . [89] In this case, the trial judge made several crucial findings of fact germane to Carla’s claim for compensatory support, namely (a)the marriage, though long-term, was not a traditional one in that Carla had “farmed alongside the husband, engaging in decision-making,physical labour and primary management over the finances” (at para 132), (

b) both parties had advanced their education during themarriage, (

c) Carla and Jim had worked as a team to build a family and acquire a substantial asset base, and (

d) they had built a thrivingfarming operation. The evidence adduced at trial supports these findings. [90] To understand the trial judge’s reasoning, it is important to know that, under an interim spousal support order dated March 19,2018, a Queen’s Bench Chambers judge had ordered Jim to pay Carla $1,500 per month commencing April 1, 2018, and to make a$50,000 interim distribution of family property. At the time of the trial judgment, the quantum of interim spousal support would havetotaled $27,000.

From this basis, the trial judge went on to consider whether Carla remained disadvantaged or, correspondingly, whetherJim would be advantaged going forward, having full regard for the division of their income-generating assets. The trial judge found itreasonable to expect that Carla’s future earning capacity would improve as the sole owner of four quarter sections of land.

Looking at theissue from the other side of the ledger, the trial judge surmised that Jim’s ability to earn farm income would decrease because of hismother’s 25% interest in the newly formed corporation, operating the farm on a reduced land base, his responsibility for the FCC debt anda sizeable equalization payment to Carla. Having regard to all of those factors, as I read her decision, the trial judge concluded that shewas “unable to find that Carla will remain entitled to spousal support once the income-generating property has been divided ascontemplated by this judgment” (at para 138).

This is, in effect, a finding that Carla would not be further entitled to spousal supportfollowing the date of judgment. [91] Carla asserts the trial judge erred in both law and fact in a number of respects. I will address each in turn.

[92] First, Carla argues that Jim had conceded entitlement at trial. I disagree. Although he was agreeable to periodic support, hisconcession was contingent on three things: (

a) a review clause being included in the spousal support order, (

b) he retain sole ownership ofall ten quarter sections of farmland, and (

c) the grain on hand and cattle sale proceeds not be included as shareable property. The recordbears out Jim’s position. [93] Second, Carla submits that the trial judge failed to consider the objectives of spousal support as set out in the Divorce Act andover-emphasized self-sufficiency. The trial judge devoted 22 pages of her reasons to spousal support, most of which focussed on Carla’scompensatory claim.

The trial judge correctly identified that the analytical framework called for her to assess whether the recipient spouse(Carla) had suffered a loss due to the marriage or its breakup and the economic advantages, if any, enjoyed by the payor spouse (Jim). Thetrial judge recognized that she was not required to quantify every loss and every gain over the course of the parties’ entire marriage, but tofocus on “how the relationship impacted the standing of each of the spouses’ present and future prospects” (at para 126). [94] I see no legal error with how the trial judge framed her analysis.

Nor do I find, as Carla asserts, that the trial judge over-emphasized self-sufficiency. The analysis of Carla’s claim for compensatory support required the trial judge to consider whether she hadbeen disadvantaged. In the circumstances of this case, the impact of the income-generating assets Carla received through property divisionwas relevant to that issue. The trial judge said no more than that. [95] Carla goes on to argue that the trial judge erred by failing to consider that she only received 1/3 of the real property, but none ofthe agricultural assets, and that Jim had free use of Shirley’s land.

Contrary to Carla’s position, the trial judge did consider these matters.She said it was reasonable to expect that Carla could either use her land as collateral to finance the purchase of equipment to start her ownfarming operation or to rent it out. The trial judge further understood that Jim was responsible for the farm debts. The trial judge alsorecognized Shirley’s 25% interest in the faming operation and that she would no longer allow free use of her land. As mentioned, thesefindings are supported by the evidence.

Finally, while the trial judge did not specifically comment on these matters, she was aware thatCarla’s land was unencumbered and that she was to receive an equalization payment from Jim. [96] In conclusion, Carla’s argument that the trial judge’s finding on entitlement “is clearly wrong, unreasonable and unsupported bythe evidence” is little more than a disagreement with how the trial judge weighed the evidence in determining how the division of familyproperty would affect the question of compensatory support.

For the reasons expressed above, I am not persuaded the trial judge erred inprinciple or made a palpable and overriding error of fact. Furthermore, Carla’s argument ignores the deferential standard of review forspousal support that limits appellate intervention to where “the reasons disclose an error in principle, a significant misapprehension of theevidence, or unless the award is clearly wrong” (Hickey at para 11). 2.

Non-compensatory spousal support [97] Non-compensatory support reflects an economic interdependence model that would have developed over the course of themarriage: “Non-compensatory support aims to narrow the gap between the needs and means of the spouses upon marital breakdown, andas such, it is often referred to as the ‘means and needs’ approach to spousal support” (Chutter at para 54). It responds to the objectivesfound in s. 15.2(6)(

c) and s. 15.2(6)(

d) of the Divorce Act: namely “relieve any economic hardship of the spouses arising from thebreakdown of the marriage” (s. 15.2(6)(c)) and “in so far as practicable, promote the economic self-sufficiency of each spouse within areasonable period of time” (s. 15.2(6)(d)). [98] The concept of need encompasses both basic needs and any significant decline in a spouse’s standard of living from thestandard enjoyed during the marriage. As noted by this Court in D.B.B., the assessment of quantum and duration for support on a non-compensatory basis obliges a court to evaluate the economic effects of marriage breakdown on the parties: [83] When a relationship breaks down, ss. 15.2(6)(

c) and (

d) dictate that the economic effects on the parties must be evaluated. Todetermine if spousal support is warranted under a non-compensatory basis, “a court must consider all factors including the standard ofliving of the spouses before and after divorce, their means to satisfy living expenses and their ability to become self-sufficient after thebreakup of the marriage” (Russell v Russell (1999), (SK CA), 179 DLR (4th) 723 (Sask CA) at para 126).Additionally, case law shows that the standard of living pre- and post-separation is relevant to non-compensatory support entitlement.

Forexample, the Supreme Court’s decision in Moge [ (SCC), [1992] 3 SCR 813] indicates that “great disparities in thestandard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economicdisadvantages inherent in the role assumed by one party” (at 870). [99] To similar effect, as Carol Rogerson and Rollie Thompson, Spousal Support Advisory Guidelines: The Revised User’s Guide(Ottawa: Minister of Justice and Attorney General of Canada, 2016), note, “Common markers of non-compensatory claims include: thelength of the relationship, the drop in standard of living for the claimant after separation, and economic hardship experienced by theclaimant” (emphasis in original, at 6). [100] The trial judge was alert to the relevant case law.

Referencing this Court’s decision in D.B.B., she said, “When looking at non-compensatory grounds, the focus is upon the means, needs and circumstances of each of the parties with a view to placing the primaryburden of meeting the needs of a disadvantaged spouse upon a former partner who has the means to do so” (at para 127).

The trial judgewent on to comment on how property division can play a role in addressing the relative conditions, means and needs of the parties.Finally, she said that when assessing the means of each spouse, she may look to their employment income, along with their earningcapacity and any other available source of benefits. [101] I turn first to Carla’s means and needs. As a matter of law, the trial judge did not err in considering the in specie transfer ofincome-generating property to Carla.

It was reasonable for the judge to assume that it would have some impact on satisfying Carla’sneeds, perhaps relieving any economic hardship she may suffer from the breakdown of the marriage. As I see it, the degree of financialbenefit Carla might be able to derive from that land is somewhat contingent, but that is to be expected. She received no farming equipmentthrough property division that would allow her to commence operations. There is an obvious cost associated with entering that business,even if she could leverage the land as security to purchase farm implements.

While Carla had testified that she could possibly rent the landfor $50 to $60 per cultivated acre, she also testified that she would likely rent the land to her son.

[ 102 ] As to Carla’s needs, while the trial judge commented on the fact the parties had enjoyed a modest lifestyle prior to separation, there was no analysis of what that standard of living had entailed or a comparison to Carla’s situation following separation. Non- compensatory support speaks to the narrowing of the gap between the needs and means of the spouses upon marital breakdown.

Case law establishes that the standard of living pre- and post-separation is relevant to the issue of whether there is any economic hardship arising from the breakdown of the marriage that ought to be relieved through an award of non-compensatory spousal support. [ 103 ] The trial judge was obliged to also assess Jim’s means and needs. At the time of trial, the farm was shifting its focus from a mixed-farming operation to organic grain.

Because this transition took place at the same time as their separation, the profitability of the farm on a go-forward basis was understandably contingent and also somewhat unclear. There was limited, if any, information led at trial upon which to gauge how successful the transition would be or the effect the corporate business model would have on the profitability of Jim’s farming operation. Moreover, what information was available did not take into account the division of family property that was ordered by the trial judge.

Nonetheless, based on the limited evidence at trial, corporate earnings after the date of application suggested some room for optimism. [ 104 ] Given the limited and contingent nature of the evidence, the trial judge did not make a finding of fact about Jim’s income. However, that issue, in my view, was crucial to her analysis of Carla’s claim for non-compensatory spousal support. This is particularly so because, while Jim’s reported line 150 income in 2017 was $12,168, Carla had suggested at trial a more realistic picture of his average income for 2015 to 2017 would be $161,204 per year.

As I see it, the question of whether there was or would be any economic hardship arising from the breakdown of this marriage required a finding on the evidence, regardless of its limited nature, as to Jim’s means. [ 105 ] Taking everything into account, the trial judge did not make the necessary findings of fact to be able to conclude that no further support was payable “once the income-generating property has been divided” (at para 138).

The trial judge’s bottom-line conclusion ignores the fact that the division of the income-earning assets was not equalized and was no more than a rough estimate or best guess of how the property equalization would affect the parties’ respective financial situation going forward. [ 106 ] Respectfully, in the face of these unresolved issues, the trial judge was not in a position to confidently conclude that the property equalization award had satisfied the objectives of spousal support on a non-compensatory basis.

The exercise of judicial discretion required the trial judge to consider all of the objectives in the Divorce Act in order to properly assess the economic consequences of marriage or its breakdown. While I do not discount that the transfer of income-earning assets to Carla could generate a source of revenue sufficient to satisfy those objectives, the problem here is that the trial judge did not make the findings of fact necessary to support that conclusion. Further analysis and fact-finding was required.

Therefore, for the reasons given, and with the greatest of respect to the trial judge, I find her decision on Carla’s claim for non-compensatory spousal support incomplete and that it must be sent back. [ 107 ] Carla urges this Court to make its own findings of fact concerning Jim’s income pursuant to s. 12(1) of The Court of Appeal Act, 2000 , SS 2000, c C-42.1 .

However, the complexity of that issue is not one that lends itself readily to that process, given the contingent nature of the evidence and the nuances of incorporation, Carla’s challenge to the cash method of accounting, and her position that additional income should have been imputed to Jim for inventory adjustments, capital cost allowance, and a variety of other reasons. As mentioned, Jim’s reported income in 2017 was $12,168, but Carla submits, after making the adjustments she suggests, analysis should find his income to be $161,204.

Given this wide gap, resolving Jim’s income will involve a measure of fact-finding and the exercise of discretion that is best left in the hands of the trial judge. [ 108 ] For all of these reasons, the issue of spousal support on a non-compensatory basis is remitted to the trial judge for determination. My conclusion should not be taken as a signal that spousal support will necessarily change after the required analysis is undertaken. It is entirely possible that with a better understanding of the variables at play, and a grasp of Jim’s income, that the trial judge will come to the same conclusion.

That possibility cannot be foreclosed. B. Reduction in value of grain by 25% to compensate Shirley [ 109 ] Shortly after the parties’ separation, the farmland was seeded with organic wheat, which yielded roughly 13,400 bushels later that fall. Both seeding and harvest occurred prior to the date of Carla’s application. As discussed above, the parties disagreed on the value of that harvested grain.

The trial judge preferred Shirley’s evidence on this issue, valuing it at $14 per bushel for a gross value of $187,600 as of the date of application. [ 110 ] Jim argued that his mother should receive a portion of the crop’s value because she owned four of the fourteen quarter sections of land that had been farmed in 2015 from which 60% of the harvested crop was produced. Of course, with Jim not testifying at trial, this argument and the evidence to support it was presented by Shirley, ostensibly in her capacity as his power of attorney.

The trial judge agreed with Jim and deducted 25% of the sale value of the 2015 grain, representing Shirley’s share of that asset and because she was “being faced with a number of uncertainties, it is reasonable for [Shirley] to expect some benefit from the use of her land despite her previous generosity” (at para 91). [ 111 ] The trial judge’s decision was grounded on two lines of reasoning. First, she alluded to the dramatic change in Shirley’s situation in 2015. She had retired on the same day as the parties separated, it was the first year for organic farming and Jim was struggling emotionally and physically.

The second basis for her decision was because (according to Shirley) she had been in a partnership with Carla and Jim throughout the better part of their marriage as evidenced by how she had allowed them to use her land and equipment free of charge, put up her land as collateral for their loans, and paid the crop insurance on her land. [ 112 ] Carla says the trial judge erred in awarding Shirley a 25% interest in the value of the grain.

She contends that since the grain was family property, the trial judge was obliged to divide its value equally, subject only to any applicable exception, exemption or equitable consideration. Furthermore, she argues that since it was non-exempt family property, there was no obvious legal basis under the FPA for the trial judge to have allocated 25% of its value to Shirley. Moreover, Carla points to the trial evidence that demonstrates how the parties had historically used Shirley’s land on a rent-free basis.

Carla also highlights the fact that the 2015 crop was harvested prior to the date of petition and that Shirley did not become actively involved in the farming operation until late in 2015, when she took steps to incorporate and solidify her 25% interest in the farming operation.

[ 113 ] In my view, Carla’s position is conceptually consistent with the FPA . The cornerstone of this legislation is equity ( s. 20 ). To achieve that purpose, what constitutes family property has been interpreted generously: see Carruthers at para 58 . Subject to any exception, exemption and equitable considerations mentioned in the FPA , a trial judge is obliged to distribute family property or its value equally between the spouses ( s. 21(1) ).

Although the trial judge’s reasons do not reveal the legal basis for her decision to award Shirley a 25% interest in the value of the 2015 grain, two possible routes come to mind. [ 114 ] First, read as a whole, it appears as though the trial judge reduced the value of the grain on hand to achieve equity between the spouses on the one hand and Shirley, as a third party, on the other.

The trial judge commented on the difficulties and uncertainties Shirley faced, which appeared to drive her to the conclusion that it was, as mentioned, “reasonable for [Shirley] to expect some benefit from the use of her land despite her previous generosity” (at para 91). [ 115 ] The problem with that approach is that, under the FPA , the question is not whether an unequal distribution is necessary to remedy an inequity or injustice to a third party but whether discretion should be exercised to effect an unequal distribution between the parties.

With the greatest of respect, by focusing on the equity arguments of a third party – who is effectively a stranger to family law proceedings – the trial judge misapplied s. 21(3) (

e) of the FPA . The uncertainties Shirley may have been facing, along with her unmet expectations, are irrelevant to a determination of whether there should be an unequal distribution as between Jim and Carla . Although a decision as to how to value and divide family property is discretionary in nature and attracts appellate deference, I find the trial judge misinterpreted the FPA by taking an irrelevant consideration into account in making her decision.

This was an error that requires appellate intervention in the circumstances of this case. [ 116 ] The other possible legal foundation for the trial judge’s decision is an implicit finding that 25% of the 2015 crop was not family property. Assigning a value of $140,700 to the grain on hand in the property equalization calculation (Appendix A to the Trial Decision ) suggests this legal pathway may have been the one adopted by the trial judge. [ 117 ] There are several problems with this approach. First, the 2015 crop was both seeded and harvested before Carla commenced family property proceedings.

As such, it was family property that was subject to equal division ( M.L . at para 284 ). [ 118 ] Second, historically speaking, Shirley had never claimed any income in connection with the parties’ use of her land. There is nothing to suggest that the nature of her contributions changed from being gifts to investments when she and Jim incorporated the farm in late October of 2015.

In any event, the historical evidence before the trial judge established that, although Shirley had made significant contributions to Carla and Jim’s farming operation over the year, she was not involved in its day-to-day operations prior to October of 2015 and had allowed Carla and Jim to use her land on a rent-free basis because, as she put it at trial, “I let it build up again, equity in the farm, thinking it would be there for me someday when I retired”. However, Carla understood their arrangement in these terms: Q Okay. What was the farming arrangement you had with Shirley? A When?

Q When you were farming her land - A There -- there -- Q -- prior -- after [a former spouse] was out of the picture? A It was -- we just farmed it. Like, there was no -- there was no arrangement. There was nothing expected. There was no rent. It was just there. Jim was her only child, and she just never asked, never said. It was never mentioned. It was just-- that’s just the arrangement they had. Q Was it a -- did you guys ever ask or talk about it with her? A No, not to my knowledge. Not that I was ever included in. Q Did she ever speak of money? A Never. She would speak -- well, never expecting any.

She would speak as though she was -- you know, that she was well-to-do, you know, that we never needed to worry about money. There had been times where she would say: Oh, you never -- you don’t have to worry about saving. There is lots for retirement. You know, it was -- there -- there was lots. Like, she would talk about her retirement and how she had lots, and didn’t expect anything. [ 119 ] Shirley did not materially disagree with Carla’s evidence, albeit she saw the three of them being in some form of loose partnership.

Therefore, her position at trial stood in contrast to the evidence of the parties’ historical relationship. Shirley acknowledged that she had multiple interests in the outcome of Jim and Carla’s trial and described her motivation behind the shift in her approach as follows: Q And so because the set-up was not satisfactory, how did you proceed?

A I was quite concerned at that time because over the years I had contributed a lot to the farm, so I met with our lawyer, our family lawyer at that time, and to keep track of what I was going to do in future for the farm I didn’t want to continue as what I had been doing because there was no paper trail. I had given money and I had paid bills and -- building up equity in the farm, but really the only thing I had my name on was if there was an insurance claim on the machinery, the insurance was in our three names. So in consultation I -- I decided to form a company.

It was suggested that we go 50 percent because in 2015, at that time, 62 percent of the wheat had been grown on my land. Most of the cultivated acres were on my land, and it had been a cattle operation. A lot of the joint land was in hay. Thinking of it for future years, I didn’t think that was maybe fair. I owned four parcels of land outright in my name. Jim and Carla had ten, and the home quarter is joint. So I went 25 and 75. [ 120 ] Finally, there was no evidence nor any suggestion that Shirley had advanced any sort of legal claim to the grain on hand or any of the farm proceeds prior to incorporation.

Rather, as noted above, the evidence reveals that 100% of the proceeds had historically been plowed back into the farm voluntarily by Shirley without any expectation of compensation. In short, the parties and Shirley had treated 100% of the profit as family property. [ 121 ] There is no doubt that Shirley saw herself in a precarious position following Carla and Jim’s separation and that she took steps to

protect her interests. But such measures were taken after the crop had been planted and harvested. As I see it, rolling the parties’ farming operation (i.e., family property) into a corporate structure did not enhance Shirley’s claim to that grain.

Carla had no input into this decision nor was she allocated any legal or beneficial interest in the newly formed corporation even though the corporate assets were largely family property. [ 122 ] On a go-forward, post-petition basis, Jim was entitled to arrange his affairs as he saw fit; however, the corporate arrangement that was structured by his mother does not operate to reach backwards to alter the historical patterns of how the parties had arranged their affairs with Shirley nor did it alter the fact that the 2015 crop was family property and had to be divided in accordance with the FPA . [ 123 ] If Shirley wanted to assert a claim to the 2015 crop, such as for unjust enrichment, it was open to her to have pursued it against Carla and Jim outside of the four corners of the FPA .

She did not do so and cannot transform the family property action into a multi-party action to serve her personal interests. [ 124 ] In

summary, I find the trial judge erred by taking an irrelevant matter into consideration and by misunderstanding the evidence. This part of her order is there

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