(FAMILY DIVISION)
Citation: Brandon v. Brandon, 2010 NSSC 394
Date: 20101028
Docket: 1201-061257
Registry: Halifax
Between:
Patricia Angela Brandon
Petitioner
v.
Gary Keith Brandon
Respondent
Judge: The Honourable Justice Elizabeth Jollimore
Heard: October 13, 2010
(Oral Decision: October 25, 2010)
Written Decision: October 28, 2010
Counsel: Deborah I. Conrad, for the petitioner
Angela Walker, for the respondent
By the Court:
Introduction
[1] Patricia and Gary Brandon separated after twenty‑four years of marriage, during which they raised five children. The time has come for them to resolve the legal issues that arise from their marriage: the division of their property, claims for a retroactive variation of child support and for prospective child and spousal support, and claims for costs.
Preliminary matters of evidence
[2] Ms. Brandon agreed that certain paragraphs in her reply affidavit dated September 13, 2010 should be struck because they didn't respond to Mr. Brandon's affidavit, but were new evidence that she should have offered in her initial affidavit. The paragraphs that were struck are paragraphs 6 ‑ 20, 21 and 37. Mr. Brandon withdrew the exhibit which had been tendered at Tab 9 of Exhibit 1.
Approach to issues
[3] Where there are multiple issues, they must be approached in a sequence which places them in the appropriate and logical order. If there is a custody issue, this is addressed first because the parenting arrangement may be relevant to the division of assets, pursuant to section 13(h) of the Matrimonial Property Act, R.S.N.S. 1989, c. 275. In some cases, a property division may obviate a spousal support claim, as Justice Morrison noted in Harwood v. Thomas (1980), 43 N.S.R. (2d) 292 (T.D.), affirmed at Harwood v. Thomas, (1981) 45 N.S.R. (2d) 414 (A.D.). Alternately, the division of property may play a part in increasing or decreasing expenses that are relevant to spousal support. So, the division of property must precede support claims. In dealing with support applications under the Divorce Act, R.S.C. 1985 (2nd Supp.), c. 3, s. 15.3(1), child support must be addressed before spousal support. Finally, there may be the issue of costs.
Initial issues
[4] I heard evidence from Ms. Brandon relating to her request for a divorce. All the jurisdictional bases for divorce are met and there is no prospect of reconciliation, so I grant her request for a divorce.
[5] Typically, the next usual issue is the custody of children. The Brandons are the parents of five children. Ms. Brandon was already the mother of two children when she and Mr. Brandon married. He adopted those children and raised them as his own, along with the three children born to them. At the moment, all the children, even their youngest two, have completed their education, if only momentarily. The three oldest children live independent of their parents. The two youngest are aged 18 and almost 22. Like many their ages, they continue to live in a parent's home though both are employed. Neither parent makes a specific claim for custody of either of these young men.
Property division
[6] Under the Matrimonial Property Act, R.S.N.S. 1989, c, 275, I must first identify the assets and then classify them as matrimonial or non matrimonial. Identifying assets is no more complicated than listing them. Classifying assets requires determining whether they are excluded under section 4(1) of the Act. Once items are identified and classified, they must be valued. The Matrimonial Property Act provides that matrimonial assets are to be divided equally. In limited circumstances the Act allows for an unequal division of matrimonial assets and a division of non matrimonial assets. This case involves the application of section 4(4) of the Act, a section which seldom arises.
[7] Overall, the assets identified are the matrimonial home, its contents, a 2006 Hyundai Accent, a 1978 Viking travel trailer, a Suburban motor vehicle, three Registered Retirement Savings Plan accounts, two bank accounts, Mr. Brandon's employment pension and common shares that Mr. Brandon owns in an Ontario company. Formally, this company is 1641959 Ontario Limited. I'll refer to it as the Ontario company. The parties agree that all of these assets are matrimonial assets, except for Mr. Brandon's common shares in the Ontario company: Ms. Brandon says the shares are a matrimonial asset and Mr. Brandon says they are not.
[8] Ms. Brandon claimed exclusive possession of the matrimonial home in her petition. In closing submissions, I was told that she'd like to keep the home. However, in her evidence she agreed the home would be sold and she offered no evidence that would permit me to make an order pursuant to section 11 of the Matrimonial Property Act. The home, which is currently occupied by Ms. Brandon, is to be sold, so I am not required to determine its value.
[9] Each of the parties provided me with a balance sheet listing the assets and the values he or she placed on them. The parties agree the Suburban motor vehicle is worth $1,500.00. It remains in Mr. Brandon's possession. They have also agreed that the entire amount in each of the three RRSP accounts shall be divided equally at source. This will be done by a tax‑free inter‑spousal roll‑over pursuant to section 146(16) of the Income Tax Act, R.S.C. 1985, (5th Supp.), c. 1. This may be documented by a discrete order addressing only the RRSP division, so that no more information about the parties' circumstances is revealed to the plan administrators than is necessary. The parties have agreed that Mr. Brandon's pension will be equally divided. Pursuant to the Court of Appeal's decision in Morash, 2004 NSCA 20, I order that Mr. Brandon's pension be divided from date of commencement of his employment to the date he retired. Again, a separate order detailing this will preserve some of the parties' privacy.
[10] I need to determine whether Mr. Brandon's common shares in the Ontario company are a matrimonial asset and I need to determine values for the household contents, the 2006 Hyundai Accent, the 1978 Viking travel trailer and Mr. Brandon's bank account. The balance sheets make clear that the parties do not agree on the value of these items.
The Ontario property
[11] On her balance sheet and on her Statement of Property, Ms. Brandon lists a house and acreage in Ontario. She says that when they married, she and her husband were given a gift by his parents. The gift, she says, was land in Bayfield, Ontario and that she and Mr. Brandon planned to build a house there when he retired. Mr. Brandon's evidence is that his parents were more equivocal in their generosity: he says when he and Ms. Brandon married, his parents offered them a lot on their land in Ontario, if he and Ms. Brandon had the lot surveyed and actually built a home on it. He explained that his parents weren't interested in giving lots which wouldn't be used. He said that his parents had made identical offers to his siblings. Ultimately, neither Gary Brandon and his wife nor any of his siblings took advantage of the offers.
[12] Aside from the talk at the time of Patricia and Gary Brandon's wedding, there was no evidence of any other discussions with Gary Brandon's parents about this offer. Mr. Brandon's parents' home was located on the Bayfield property, along with a campground they operated. Certainly, Patricia and Gary Brandon talked about retiring to Ontario. While he was eligible to retire in 2002, Mr. Brandon extended his employment. In the final years of Mr. Brandon's employment, the marriage was failing and by the time he retired from the Navy, the marriage had ended. Ms. Brandon testified that she returned to work in 2003 or so: the relationship had started to sour and she said that was why she decided she should get a job.
[13] For much of the marriage, the Brandons and their children visited Bayfield each year. They visited Bayfield during the summer and at Christmas. Mr. Brandon says the summer vacations were two weeks, Ms. Brandon says they were three weeks, including travel time. Ms. Brandon's recollection was not certain, but she believed that she last visited Ontario in 2003. She dates her recollection from the time of the purchase of the travel trailer and a family wedding. She says they stopped making their Christmas trip to Ontario in 1992 after their youngest child was born. At that point the family's size made travel too difficult. During the visits, they stayed with Gary Brandon's parents in their home. According to the evidence, this is the only house on the Bayfield acreage.
[14] The offer of a gift of land was never realized. Gary Brandon’s parents never gave a lot of land to Patricia and Gary Brandon. There is no documentation, as required by section 4 of the Statute of Frauds, R.S.N.S. 1989, c. 442 to support a grant of land from Alice Brandon and her husband to Patricia Brandon and hers. The offer of a gift is not a matrimonial asset.
Shares in the Ontario company
[15] In 2004 ‑ 2005, Gary Brandon's mother, Alice Brandon, was planning her estate. She met with her lawyer, John Ottewell, in 2004 and she gave instructions for the incorporation of a company. Mr. Ottewell is a lawyer in Goderich, Ontario. He gave evidence via videolink about his work for Alice Brandon.
[16] The Ontario company was incorporated in late 2004. Effective early January 2005, two pieces of real estate were transferred to the Ontario company and Alice Brandon received back three interest‑free demand promissory notes and a number of preferred and common shares in the Ontario company. (There was some effort by Mr. Brandon to raise money to pay his mother for the land and business. This couldn't be arranged and, ultimately, the transaction was structured so that Alice Brandon retained her interest in the Ontario company and received the promissory notes.) The land transferred to the Ontario company is comprised of the entire acreage owned by Alice Brandon. Her home and the campground business are located on this land. John Ottewell explained that Alice Brandon owns the preferred shares in this numbered company. She originally owned the common shares in the Ontario company and she gave these to her son, Gary Brandon, in early 2005. He paid no consideration for these shares. While he does not own the company, he does control it. The transfer was, according to John Ottewell, an estate freeze: Alice Brandon retained the value of the Ontario company's assets at the date the incorporation occurred. Gary Brandon received any growth in the value of the company.
[17] At issue is the nature of these shares. In Clarke [1990] 2 S.C.R. 795 at paragraph 46, the Supreme Court of Canada, quoting the decision of Justice Davison in Curren, 1987 CanLII 131 (NS S.C.) with approval, told us that all assets acquired before and during a marriage are matrimonial assets and it is incumbent on the party who asserts that a particular asset is not a matrimonial asset to prove the asset falls within an enumerated exception. Accordingly, I start from the position that the shares given to Mr. Brandon are a matrimonial asset.
[18] It is for Mr. Brandon to prove on a balance of probabilities that the shares are an enumerated exclusion.
[19] Section 4(1)(a) of the Act excludes gifts from the definition of matrimonial assets. Specifically, it excludes gifts which one spouse receives from someone other than the other spouse, except to the extent that the gift is used for the benefit of both spouses or the children. Here, the shares represent control of the Ontario company. The gift was given in early January 2005.
[20] During the summer of 2005, Gary Brandon took a leave from his employment by the Department of National Defence. He spent approximately four months in Bayfield. This was not the annual vacation he'd previously enjoyed in Bayfield. This was work. The campground's part‑time employee was aging. Summer is the busy season for the campground and Gary Brandon worked there. He returned to Nova Scotia and his Navy employment in the fall of 2005. He was again absent from Nova Scotia some time prior to May 9, 2006 because that's the date he said he returned to Nova Scotia to prepare for his release from the Navy. He was back and forth between Nova Scotia and Ontario in the next few months until he and the couple's youngest child left Nova Scotia early in the morning on July 18, 2006 to return to Ontario. Mr. Brandon says they arrived in Ontario on July 19, 2006.
[21] The date of separation is July 19, 2006, according to Ms. Brandon's divorce petition. In his answer and counter‑petition, Mr. Brandon agrees with the facts and allegations in his wife's petition, so he adopts this separation date. I do note that each spouse second‑guessed the separation date in his or her affidavits. Ms. Brandon decided the date was May 1, 2006 and Mr. Brandon also chose this date. Neither amended their pleadings and Ms. Brandon confirmed the information in her petition was true, when asked about it. Accordingly, I am left with July 19, 2006 as the separation date. At that date and from the time Mr. Brandon received the common shares in the Ontario company, the couple's children were not present on the property. There is no evidence that the children visited Ontario during the summer of 2005. When he was in Ontario, Mr. Brandon lived in the travel trailer and worked at the campground. Patricia Brandon didn't visit Ontario during this period and, in fact, hadn't visited since 2003. As a gift, the shares and what they represent were not used for the benefit of the Brandons or their children.
[22] Both parties have referred me to Justice Dellapinna's decision in Ryan, 2009 NSSC 61 upheld at Ryan, 2010 NSCA 2: the circumstances in that case are significantly different from this case. Mr. Ryan had been deeded real estate, as a gift from his father. He claimed he used the real estate for a business. These facts bring sections 4(1)(a) and (e) of the Matrimonial Property Act into consideration. Here, the gift was one of shares, which brings section 4(4) into focus.
[23] I am cognizant that the gift was one of shares and this requires greater mention. Corporate shares receive particular mention in section 4(4) of the Matrimonial Property Act. This section of the Act has the effect of making a spouse's shares in a corporation a matrimonial asset in certain circumstances. The circumstances arise where the corporation owns property that would be a matrimonial asset if the property was owned by the spouse. When this situation arises, then shares in the corporation, which have a market value equal to the value of the benefit the spouse derives from the property, are matrimonial assets. In McNulty (1989), 94 N.S.R. (2d) 387 (T.D.) at paragraph 20, Justice Davison described section 4(4) of the Matrimonial Property Act as indicative of the legislature's intention to "prohibit assets being retained by a corporation for the purpose of thwarting the objectives of the Act."
[24] The best example of this is found in Osmond, 1990 CanLII 2405 (NS S.C.(A.D.). Justice Hart wrote the majority decision. Justice Jones concurred and while Justice Chipman dissented, his disagreement was not with the application of section 4(4). In brief, the Osmonds were building a home. Mr. Osmond was a real estate developer and the home was always owned by one of his companies. It had never been occupied as a matrimonial home prior to the separation. As a result, the home remained a business asset. There was another home which was occupied by Mr. Osmond and his family. This home, too, was owned by a company which Mr. Osmond controlled. Justice Hart directed that matrimonial assets as found by the trial judge be increased to include the total value of the benefit of living in this home.
[25] Returning to McNulty (1989), 94 N.S.R. (2d) 387 (T.D.), in that case Ms. McNulty claimed that the cash retained by the company was property owned by the corporation which, if owned by her husband, would be a matrimonial asset. She argued this was the equivalent of a savings account and shouldn't be considered a business asset because her husband chose to leave the money in the company. Ms. McNulty had not offered evidence of the benefit Mr. McNulty had, in respect of the corporate property. Justice Davison declined to divide shares in the company based on the evidence before him, saying at paragraph 24, "[i]t may be that a portion of the cash retained by the corporation should have been injected into the family budget and made available for the benefit of both spouses but, without evidence, I cannot make that finding and, without evidence, I cannot quantitate it." Justice Davison made a similar finding with regard to retained earnings in Mr. Sangster's incorporated garage business in Sangster (1990), 100 N.S.R. (2d) 248 (T.D.).
[26] The Ontario company's year ends on December 31. The couple separated in July 2006. There's no financial information about the company which dates to the separation. Rather, each financial statement is six months out of sync with the separation date. Each of these financial statements contains a balance sheet showing the Ontario company had liabilities which were slightly in excess of its assets and it operated at a net loss in each of the 2005 and 2006 years. There is no factual basis for a claim, like these advanced in McNulty (1989), 94 N.S.R. (2d) 387 (T.D.) and Sangster (1990), 100 N.S.R. (2d) 248 (T.D.), that retained earnings in the company are a matrimonial asset.
[27] Claims under section 4(4) of the Matrimonial Property Act have been more successful in cases where property owned by the corporation was a tangible asset that was used for the family. In Green (1989), 23 R.F.L. (3d) 386 (T.D.), the business owned a car which was used by Ms. Green for work and personal travel. Justice Rogers concluded that shares in the company in the amount of the value of the car were matrimonial assets. He valued these shares at $500.00. (Ms. Green appealed the unequal division of matrimonial assets in her husband's favour and her appeal was dismissed at Green (1989), 23 R.F.L. (3d) 398 (A.D.).) A similar decision with regard to a corporate owned Jeep was made in Jovcic, 2005 NSSC 183 (at paragraphs 42 ‑ 44), which valued corporate shares representing the market value of the Jeep at $9,000.00 and treated those as a matrimonial asset.
[28] The Ontario company's property includes land, the home once occupied by Mr. Brandon's parents, a shed, a computer, a tractor and a truck, according to the notes to its financial statements. The land is used for the campground business. The home is rented to tenants. Prior to and for some period after the separation, the tenants were at arm's length, but they are now Mr. Brandon's cousin and his family. Mr. Brandon has derived no benefit from any of the company's property. There's no evidence he uses the home, shed, computer, tractor or truck. The shed, computer, tractor and truck were not mentioned in the evidence. I know about them only from reading the financial statements.
[29] Mr. Brandon lives in the 1978 Viking travel trailer on the campground and he has done this year round since leaving Nova Scotia. Mr. Brandon is not paid for the work he does for the campground. I heard evidence that the part‑time employee he replaced earned $4,000.00 annually. The only recompense Mr. Brandon receives for his work is the Ontario company's current payment of his propane, lot rent, and cell phone bills. In their current amounts, these payments are modest: $289.00 for propane, $600.00 for the lot rent and $863.00 for his cell phone. The Ontario company pays the transportation costs that arise from his work for it. Mr. Brandon doesn't plan to continue to live in the trailer this winter and he says that once he moves, the Ontario company will no longer pay his expenses. These expenses are less than $1,800.00 per year.
[30] The Ontario company's payment of these expenses is not a benefit derived from property owned by the company, rather it was a less than market value rate of compensation for his services.
[31] I conclude there is no property owned by the Ontario company which would, if owned by Mr. Brandon, be a matrimonial asset.
[32] I am left to determine the value of the household contents, the 1978 Viking travel trailer and the 2006 Hyundai Accent. Ms. Brandon said that an appraisal of the household contents would cost more than the contents are worth. Appraisals typically cost $500.00 or so. I've not been provided with a list of the household contents, though I know the house contains some newer items (a washer, a dryer and a couch) which cost approximately $2,350.00 in 2006. The appraisal of the house tells me it is a three bedroom home which includes a usable basement. I am not persuaded that a three bedroom home containing some newer items has contents worth less than $500.00. Mr. Brandon has valued the household contents at $10,000.00. Without so much as a list of contents, I cannot assess this estimate. In his affidavit, Mr. Brandon says he has taken virtually nothing from the matrimonial home and he "simply seek[s] half of the contents".
[33] Accordingly, when the house is listed for sale, the parties shall agree which, if any, items will be sold with the house. Any contents which are not being sold with the house shall be divided equally. The division must be accomplished before the sale of the house closes so that purchasers may take possession of an empty house. Both Mr. Brandon and Ms. Brandon shall prepare a complete list of household contents and provide it to the other by the end of November, 2010. If either does not prepare a list, she or he will be taken to have agreed with the list prepared by the other. As petitioner, I am giving Ms. Brandon first choice of which item she wants from the home. Mr. Brandon will have the second choice. The parties will continue making alternate selections of items from the home, one by one, until all have been divided.
[34] According to Mr. Brandon, the 1978 Viking travel trailer was purchased in 2003 for $3,000.00. While Ms. Brandon cannot place a date on the purchase of the travel trailer, she recalled it cost $6,300.00 and felt the couple overpaid for it. Regardless, she maintains the purchase price is the value I should give to the trailer for the purpose of the asset division. Mr. Brandon says the trailer is now worth $1,000.00.
[35] In Simmons, 2001 CanLII 4617 (NS S.F.) at paragraph 34, Justice Campbell outlined general principles for determining the date on which to value an asset: use separation date values for assets which "tend to be consumed by actual usage or whose value has been earned or accrued by reference to the passage of time" and value other assets when the spouses do their accounting. While a trial decision, Simmons, 2001 CanLII 4617 (NS S.F.) has twice been lauded by the Court of Appeal: in Moore, 2003 NSCA 116 at paragraph 24, Justice Hamilton described the decision as "[a] good review of the rationale behind the choice of valuation date" and in Morash, 2004 NSCA 20 at paragraph 21, Justice Bateman said it provided "a comprehensive discussion of 'valuation date' ". Justice Campbell's general principles fit well within the context of the Court of Appeal's statement that there is "no requirement in Nova Scotia to assign a single valuation date for all matrimonial assets" in Reardon (Smith) v. Smith, 1999 NSCA 147 at paragraph 38.
[36] The trailer is a depreciating asset and I accept that its value should be fixed at the date of separation. I was provided with a photograph of the trailer. Its appearance belies the fact that Mr. Brandon has lived in the trailer year round since leaving Nova Scotia. In his submissions, Mr. Brandon argued that in no circumstance was the trailer worth more than $3,000.00 and I accept this as the trailer's value at the time the couple separated.
[37] Similarly, the 2006 Hyundai Accent is a depreciating asset. Mr. Brandon accepted the value his wife placed on it at the date of separation. In her Statement of Property prepared in November 2006, Ms. Brandon did not state a specific value for the car; rather, she provided a photocopy of a page from the Canadian Black Book, showing the low value of $10,900.00 and a high value of $12,400.00 for a 2006 Hyundai Accent GLS four door sedan with 1,800 kilometres, automatic transmission and power steering. I wasn't told whether the Brandons' car matched the car valued by the Black Book. In his Statements of Property, Mr. Brandon has repeatedly placed a value of $10,000.00 on the car. I accept this value. It is slightly lower than the range of book values provided by Ms. Brandon, but she accepts it.
[38] Justice Campbell discussed the division of bank accounts in Simmons, 2001 CanLII 4617 (NS S.F.) saying, at paragraph 21, that an operating bank account should be valued at the point when the spouses separate their finances. Both parties identified two bank accounts at the time of separation. They agree on the amount in Ms. Brandon's account. In her written submissions, Ms. Brandon lists three possible amounts for her husband's account, but she offered evidence through her December 2006 Statement of Property of only one amount and Mr. Brandon accepts this amount, so this is the amount I adopt.
[39] Combining the results of my analysis with the parties' agreements means that the matrimonial assets have preliminary values shown in the following table. Values are preliminary because I haven't yet considered any encumbering debts. There are no notional disposition costs to be considered, since any disposition costs will actually be incurred.
|
Item |
Patricia Brandon |
Gary Brandon |
|
Matrimonial home |
To be sold |
|
|
RRSP accounts |
To be equalized by s. 146(16) roll‑over |
|
|
DND pension |
To be equally divided at source |
|
|
Household contents |
To be divided, item‑by‑item |
|
|
2006 Hyundai Accent |
10,000.00 |
|
|
Suburban |
|
1,500.00 |
|
Bank accounts |
30.00 |
542.74 |
|
1978 Viking travel trailer |
|
3,000.00 |
|
Total of assets |
10,030.00 |
5,042.74 |
Debts
[40] A similar process must be undertaken when dealing with debts: they, too, must be identified, classified and their amounts determined. It is acknowledged that the loan which encumbered the 2006 Hyundai Accent was a family debt. There is no disagreement that there was $19,746.00 outstanding on this loan when the Brandons separated.
[41] For the Brandons, the classification of debts relates to the Sears credit card, the Canadian Tire credit card, the Leon's debt and a portion of the credit line which is secured by the matrimonial home. The amount of indebtedness needs to be determined for the credit line.
[42] According to Justice Roscoe in Bailey, 1990 CanLII 4116 (NS S.C.) at paragraph 23, when determining if a debt is "matrimonial", I must decide whether it was incurred for the family's benefit, whether it is an ordinary household debt, and, if it arose after the couple separated, whether it was necessary to meet basic living needs or to preserve matrimonial assets. This decision was approved by the Court of Appeal in Ellis, 1999 CanLII 4274 (NS C.A.). In Cameron, 1995 CanLII 4433 (NS S.C.) at paragraph 24, affirmed at Cameron, 1996 CanLII 5598 (NS C.A.), Justice Goodfellow said that indebtedness incurred after separation and for the debtor's sole benefit is generally not "matrimonial", but personal.
[43] In her Statement of Property filed on December 1, 2006, Ms. Brandon listed the Sears credit card debt. She noted that she owed $1,751.49 for the purchase of a new washer and dryer on November 20, 2006 and she provided a receipt for this purchase. Until June 2010, at least two of the children remained at home with Ms. Brandon for most of each year. Mr. Brandon remained at the home until April, 2007. All benefit from these appliances. The washer and dryer are among the household contents that are being divided. I conclude that the debt for their purchase is matrimonial.
[44] The Canadian Tire credit card debt was listed on Ms. Brandon's December 2006 Statement of Property in the amount of $2,724.58. She did not explain when or how this balance was incurred. There is simply no evidence that this debt relates in any way to the family.
[45] The Leon's debt of $601.00 was also listed on Ms. Brandon's December 2006 Statement of Property. She explained that this debt was incurred to purchase a couch. After the couple separated in July 2006, Mr. Brandon worked in Bayfield for the summer. He returned to Nova Scotia in the fall and remained at the matrimonial home and did not leave it finally until Ms. Brandon obtained an order granting her exclusive possession of the home starting on April 10, 2007. During this period, Mr. Brandon slept on the couch his wife had purchased for this purpose. The couch is among the household contents that are being divided and I conclude the debt for its purchase is matrimonial.
[46] A credit line was secured against the matrimonial home. The credit line was initially used for a number of family purposes: the roof was replaced on the home; the living room was redone; new siding was installed; some new windows were installed. As well, Ms. Brandon hadn't maximized her RRSP contributions, so money was contributed to her RRSP. Lastly, a small down payment was made on the 2006 Hyundai Accent.
[47] I was provided with balances on the credit line at various dates. On March 31, 2006 its outstanding balance was $45,376.99. On April 28, 2009 the balance on the credit line was $39,858.16. In April, 2010 the credit line balance had increased to $44,172.41.
[48] In cross‑examination, Ms. Brandon explained this change saying that she repaid the Sears and Canadian Tire credit card debts, along with the Leon's debt by writing cheques for approximately $11,000.00 against the credit line. She says she did this because the credit card and Leon's debts had high interest rates and she wanted to avoid these charges continuing to accumulate. From Ms. Brandon's December 2006 Statement of Property, I know the amounts of the Sears, MasterCard and Leon's debts, if not in their original amounts, in amounts that were likely close to the original amounts. However, I have no evidence about whether Ms. Brandon made any payments on these debts or what interest had accrued before she paid them using the credit line. In her cross‑examination, she said these were the only debts that she paid from the credit line, yet she used a far greater amount from the credit line than would be required to pay those debts alone in their original amounts.
[49] Ms. Brandon maintains that she had her husband's permission to repay these debts from the credit line. She said she called Mr. Brandon and asked him whether he thought she could write a cheque from the credit line and he told her he didn't think she could do that. Mr. Brandon says he didn't know she was making a withdrawal from the credit line until after the deed was done. He denies that his wife called him before she accessed the credit line, saying that she called him afterward ‑ after, in fact, he terminated her access to the credit line.
[50] The evidence about the amount of debts is not exact. It is for Ms. Brandon to prove the amount of the debts. The evidence I have is that the debts which I have found to be matrimonial (the Sears and Leon's debts) total $2,352.49.
[51] The only evidence I have about their amounts places them at $1,751.49 and $601.00, respectively. I have no evidence of their amount when they were repaid, only Ms. Brandon's evidence that she took $11,000.00 from the credit line. The lack of evidence means that it isn't possible to determine how much of that $11,000.00 related to the repayment of matrimonial debt and how much related to the repayment of Ms. Brandon's sole debt (the MasterCard). The burden is on Ms. Brandon to prove the amount she repaid for the matrimonial debts. When the home is sold, the credit line must be repaid. To recognize the payments Mr. Brandon has made on the credit line and to recognize Ms. Brandon's payment of matrimonial and non‑matrimonial debts using the credit line, I order that when the credit line is retired from the house sale proceeds, $8,647.51 of the balance paid toward the credit line shall be accounted for as coming from Ms. Brandon's share of the house sale proceeds.
[52] Section 12(1) of the Matrimonial Property Act provides that matrimonial assets are divided equally notwithstanding the ownership of the assets. There is no similar treatment of debts. In Cameron, 1995 CanLII 4433 (NS S.C.), affirmed by Cameron, 1996 CanLII 5598 (NS C.A.), Justice Goodfellow noted, at paragraph 26, that a debt is not automatically shared simply because the debt may be labeled as matrimonial indebtedness. Whether the debt will be shared depends on whether the division of matrimonial assets in equal shares would be unfair or unconscionable. His Lordship did comment, again at paragraph 26, that "In most conceivable situations fairness and conscience dictate a sharing of matrimonial indebtedness."
[53] Here, if matrimonial assets were divided equally, each spouse would receive approximately $7,500.00 from the assets other than the house and the net proceeds from the sale of the house would be divided equally (after Ms. Brandon accounted for her use of $8,647.51 from the credit line). This arrangement would leave Ms. Brandon entirely and solely responsible for the debts that I have found relate to the family: the car loan, the Sears credit card debt and the Leon's debt.
[54] Ms. Brandon asks me to order an unequal division of property such that matrimonial assets and matrimonial debts would be equally divided between the spouses. The statutory basis for such a claim is found in section 13(b) of the Matrimonial Property Act which allows me to divide matrimonial assets unequally where I am satisfied that the equal division of matrimonial assets would be unfair or unconscionable taking into account the amount of the debts and liabilities of each spouse and the circumstances in which they were incurred.
[55] I am satisfied that this is an appropriate case for such a division. Both spouses and the family enjoyed the benefit of the assets and which resulted from the debts I have found to be matrimonial and they should be shared in equal amounts between the spouses.
[56] Consequently, when the matrimonial home is sold, the costs of the sale will be paid (the real estate commission, legal fees and the applicable taxes). The credit line will be retired, so the house can be sold. The funds that remain must be divided so as to equalize the allocation of debts and assets and Ms. Brandon's payment of non‑matrimonial debt from the credit line. Ms. Brandon is keeping the car and her bank account. These have a total value of $10,030.00. She alone has paid the car loan of $19,746.00. She has $9,716.00 more in debt than she has in assets. Mr. Brandon is keeping the 1978 Viking travel trailer, the Suburban and his bank account. These assets have a total value of $5,042.74. To equalize these two positions, Ms. Brandon would have to receive $7,379.37. However, in effect she has paid herself an "advance" by using the credit line to pay non‑matrimonial debt of $8,647.51. By my math, which I encourage counsel to confirm, she's been overpaid by $1,268.14. So, after the costs of selling the house have been paid and the credit line retired, the first $1,268.14 shall be paid to Mr. Brandon. Paying this first to Mr. Brandon ensures he gets equal benefit of the sale proceeds.
Prospective child support
[57] Initially, it appeared that Ms. Brandon was seeking support for the two youngest children, Joey and Ryan. As the evidence developed, both sons have, if only temporarily, completed their education and are working, though at not terribly remunerative employment. Ms. Brandon confirmed that she is not seeking support for either child.
Retroactive child support variation
[58] Mr. Brandon claims he should be reimbursed for the child support he paid to his wife in July to October, 2010, saying the children for whom he made the payments ceased to be entitled to child support when they moved to Ontario in July, 2010. The law relating to retroactive child support was stated by the Supreme Court of Canada in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37. A "retroactive" award is one which addresses a historic period when there was no prior agreement or order or which varies the terms of a prior agreement or order after the fact, rather than on a prospective basis. My task is first to determine whether it's appropriate to make a retroactive award and, if it is, to determine what that award would be.
[59] According to paragraph 99 of D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37, when determining whether it is appropriate to make an award retroactively, I am to consider: the reason for the recipient's delay in making the claim, the payor's conduct; the children's past and present circumstances; and whether an award made retroactively would result in hardship. All of these factors must be considered and none is dispositive on its own.
[60] In Murphy v. Bert, 2007 NSSC 376, at paragraph 54, Justice Forgeron said that "The factors identified [in D.B.S.] are equally relevant to an application made by a non‑custodial parent to retroactively reduce the quantum of maintenance payable." When this is done, the considerations are adjusted accordingly: I consider the payor's delay and the recipient's conduct. Since Mr. Brandon is advancing the claim for a retroactive variation, he bears the burden of proof.
[61] Mr. Brandon has not delayed in bringing his claim to vary child support retroactively. There is no evidence with regard to Ms. Brandon's conduct and whether it was blameworthy. He has offered no evidence that the children, in their past or present circumstances, have suffered from his diversion of income to pay support to Ms. Brandon or that they have experienced any sort of impact from it. There is no evidence from Mr. Brandon that there would be any hardship from a failure to order Ms. Brandon to pay a retroactive award.
[62] The determination that there should be a retroactive variation of support is made after considering the four factors identified by the Supreme Court of Canada in D.B.S. v. S.R.G.; L.J.W. v. T.A.R.; Henry v. Henry; Hiemstra v. Hiemstra, 2006 SCC 37 and I have no evidence about three of those considerations. Accordingly, I cannot exercise the discretion as I am directed to and I dismiss this claim.
Spousal support
[63] Ms. Brandon works at Canex. She works part‑time, as do all employees except the supervisor. She's paid approximately $11.30 per hour and earns approximately $18,100.00 annually. The parties have agreed Mr. Brandon's Department of National Defence pension will be equally divided. Mr. Brandon's 2009 tax return shows that he received $37,703.64 from his pension that year. Mr. Brandon tells me that his wife's share of his pension should be one‑half of his total pension. I acknowledge it may be less if she is paid directly by the Department of National Defence's pension administrators and her pension is adjusted for the actuarial assumption that she will have greater longevity than Mr. Brandon.
[64] Mr. Brandon works no more than two days each week in the Naval Reserves. I've reviewed the tax returns and tax summaries that Mr. Brandon provided. It appears from these documents that he began his employment in the Naval Reserves in 2008, when he earned $13,282.16. In 2009, he earned $17,156.91 from this employment.
[65] Mr. Brandon does not dispute that his wife is entitled to receive spousal support. The Brandons had a long marriage during which Ms. Brandon was primarily responsible for raising five children. Mr. Brandon's employment by the Department of National Defence meant that he was deployed offshore during the marriage at various times and for significant periods of time, leaving Ms. Brandon alone to manage the household and family with only his financial support.
[66] Historically, Mr. Brandon has derived some modest financial benefit from the Ontario company: it paid the modest expenses of his lot rent, propane and cell phone. He says that the Ontario company will only pay his expenses if he lives in the trailer and he has no intention of continuing to live in the trailer.
[67] Mr. Brandon argues that when his pension is divided he will have no ability to pay spousal support and the division will leave Ms. Brandon with no need. I accept that equalizing Mr. Brandon's pension will, in light of spouses' current employment circumstances, leave them in circumstances of approximately equal income. However, Mr. Brandon is involved with the campground business. Historically, a part‑time labourer earned $4,000.00 working for the campground. Mr. Brandon isn't paid. The common shares given to Mr. Brandon, according to John Ottewell, were structured to give him the future growth of the Ontario company. This may create income for him in the future. As well, Mr. Brandon says that planning approval has been given for the campground to expand. There is potential for Mr. Brandon to earn income with which he could afford to pay spousal support. At present that potential hasn't been realized.
[68] Ms. Brandon is entitled to spousal support. I order Mr. Brandon pay spousal support of $1.00 each year to maintain Ms. Brandon's entitlement. On or before August first of each year, Mr. Brandon shall provide Ms. Brandon with: his personal tax return (including all schedules and all attachments), whether his tax return is filed or not; his personal Notice of Assessment; the financial statement for 1641959 Ontario Limited, the corporate tax return for 1641959 Ontario Limited; and the Notice of Assessment for 1641959 Ontario Limited. I have specified the name of the company Mr. Brandon controls. To be clear, if he comes to control any other company, the disclosure obligations will apply to that company as well. Ms. Brandon will similarly provide Mr. Brandon with her personal tax return (including all schedules and all attachments), whether her tax return is filed or not; and her personal Notice of Assessment. The same deadline of August first will apply to Ms. Brandon.
[69] I was told that it will be approximately three months before the pension division is effected and Ms. Brandon receives her share. Until the pension division is effected, the terms of Justice MacDonald's interim order shall continue: requiring that Mr. Brandon shall continue to pay the line of credit in respect of the matrimonial home in the amount of $700.00 per month and spousal support in the amount of $235.00 per month, payable on the 15th of each month.
Costs
[70] Both parties have claimed costs. If they wish to be heard, contact the scheduling office before November 5, 2010 to arrange a time to appear. If the scheduling office is not contacted by November 5, 2010, I will assume you do not need or wish to make submissions on costs. If submissions are to be made, appreciate that I require evidence of the costs incurred, the after tax amount (having regard to Ms. Brandon's income and her ability to deduct some of her fees and disbursements) and any offers exchanged. This information should come in by affidavit prior to submissions.
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Elizabeth Jollimore, J.S.C. (F.D.)
Halifax, Nova Scotia