IN THE SUPREME COURT OF NOVA SCOTIA
Citation: J.R. v. C.R., 2005 NSSC 336
Date: 20051208
Docket: 1207-002498
Registry: Truro
Between:
J. R.
Petitioner
v.
C. R.
Respondent
|
Editorial Notice
Identifying information has been removed from this electronic version of the judgment. |
Judge: The Honourable Justice Mona M. Lynch
Heard: March 8 & 9, June 1 & 2, October 17 & 18 and November 1, 2005, in Truro, Nova Scotia
Counsel: Lloyd Berliner, for the Petitioner
Bradford Yuill, for the Respondent
By the Court:
BACKGROUND:
[1] J. R., the Petitioner, and C. R., the Respondent, were married on October [...], 1999. They had started seeing each other in 1995 and began living together in May of 1996 in the matrimonial home at [...], Nova Scotia. J. R. is currently 35 years of age and C. R. is 44. There is one child of the marriage, S.G.R. born November [...], 2000.
[2] J. R.’ work experience has primarily been as a chef. She worked as a chef from 1994 to 1999 and has remained out of the work force since the summer of 1999. She was the primary caregiver for S. after his birth. J. R. has, throughout the relationship, received interest and dividend income from investments which she received from an inheritance. C. R. is self-employed in the [...] industry and has a sole-proprietorship “C. R. [...]”.
[3] The couple separated in July of 2003 when J. R. left the matrimonial home with S.. Since that time she has lived in rental accommodations and C. R. has continued to reside in the matrimonial home.
[4] There have been interim proceedings in this matter. There is currently an interim order dated December 23, 2003 placing S. in the joint custody of the parties with primary care to J. R. and reasonable access to C. R. including alternate weekends, Tuesday evenings and specified Christmas access. The order also requires C. R. to pay the table amount of child support in the amount of $218.00 a month. There is also an order dated April 14, 2005 requiring J. R. to comply with the access provisions of the December 2003 order.
ISSUES:
[5] The issues to be decided include:
(a) Divorce
(b) Custody and Access
(c) Child Support
(i) Determination of income and table amount of child support;
(ii) Section 7 expenses for psychological counselling and child care expenses;
(iii) Retroactive child support.
(d) Spousal Support
(e) Is there an enforceable loan owed by C. R. to J. R.?
(f) Division of Property
(i) Which items are included in and excluded from matrimonial property?
(ii) Should there be an unequal division of matrimonial property and should there be a division of non-matrimonial assets or business assets?
(iii) How should the matrimonial property and matrimonial debts be divided?
(g) Should there be an award of Costs in this matter?
DIVORCE:
[6] I am satisfied that all of the procedural and jurisdictional requirements have been met to grant a divorce. I am satisfied that the grounds for divorce have been established as there has been a breakdown of the marriage in that the parties have been living separate and apart since July 23, 2003, at least one year, and they were living separate and apart at the commencement of this proceeding. I also find that there is no possibility of reconciliation. I would therefore grant the divorce.
CUSTODY AND ACCESS:
[7] J. R. is seeking sole custody of S.. C. R. is seeking joint custody. Under the Divorce Act, s. 16, I am to consider only the best interests of S. as determined by reference to his condition, means, needs and other circumstances. I am not to take into account the past conduct of any person unless relevant to the ability to act as a parent. I am to give effect to the principle that a child of the marriage should have as much contact with each spouse as is consistent with the best interests of the child and, for that purpose, I must take into consideration the willingness of the person for whom custody is sought to facilitate such contact.
[8] J. R.’ position is that joint custody will not work as she is fearful of violence from C. R. and she and C. cannot cooperate or communicate. She says that the parties have different views on how S. should be raised and their different values have led to problems in S.’s toilet training, attendance at preschool and medical care. J. R. has alleged that S. was locked in a closet by his father. Her other complaints about C. R.’ parenting are many, including but not limited to, inappropriate activities, inappropriate clothing and inappropriate food. She was concerned that C. R. used S. to communicate messages to her. Based on the case Rivers v. Rivers (1994), 130 N.S.R. (2d) 219, J. R.’ position is that S. will be put in the middle of the conflict between the parents if joint custody is ordered. They will be unable to make decisions together and joint custody would harm S.’s developmental needs.
[9] J. R.’ most troubling allegation involves a burn discovered on S.’s hand after an access visit with C. R.. The burn apparently happened when S. came into contact with a wood stove. In cross-examination J. R. expressed a belief that C. R. would place S.’s hand on the wood stove as a form of discipline and that C. R. would torture his child by intentionally placing his hand on the wood stove. Equally troubling was her inability to admit that C. R. loved his son. When asked if she agreed that C. R. loved S., her responses included “I would hope so” and “yes and no”. Since separation, there have been a number of complaints made to the R.C.M.P. and to the child welfare authorities about C. R. and his contact with S..
[10] C. R.’ position is that he loves his son and he loves to spend time with S.. Prior to and after the order of December 2003 he was denied access to S. by J. R.. He has had to answer complaints from child welfare and the police. He feels he has been criticised in almost every aspect of his parenting. He agrees that there are communication problems between the parties.
[11] C. R. testified that he did not have S. overnight or in the matrimonial home from the separation in July 2003 until the Interim Order of December 2003. He was allowed to see S. during this time only in J. R.’ presence.
[12] C. R. said he takes S. to tulip festivals, car shows, out to eat, walks and bike rides. He admitted discussing adult matters in front of S. on one occasion. He admitted that he worked 55 to 60 hours a week during the marriage including after S.’s birth. He denied locking S. in a closet or placing his hand on the wood stove. He took S. to a graveyard and they walked around and read names on tombstones; he did not see anything wrong with this although J. R. thought it was inappropriate. He agreed that he refused to sign the passport application for S. in the summer of 2003 as he was concerned that she would move with S. to [...] where she has family. He expressed a willingness to improve the parenting arrangement. C. R. described the cooperation from J. R. as either doing it her way or no way. She will not communicate.
[13] Certainly the relationship between the parties in this case is not ideal for joint parenting. J. R. says the relationship is too bad for the communication and cooperation that are necessary in a joint parenting arrangement.
[14] Granting sole custody to J. R. would not be in S.’s best interests. I have great concern that anything less than joint custody will provide an opportunity for J. R. to cut C. R. out of S.’s life, which I find that she has attempted to do by previous denials of access and reports to authorities. It was apparent during her testimony that she has a great need to be in control. She had to be told repeatedly to answer the question asked and not put forward the point she wanted to make. C. R. was acquitted of the assault charge and I do not find that she has any reasonable grounds for fear of violence from C. R.. I find her allegations to be without foundation and very troubling. She expressed her belief that C. R. would torture S.. She found faults with every aspect of C. R.’ parenting. She could not even admit that C. R. loves S..
[15] I believe that C. R. loves his son very much. His more relaxed parenting style is something that S. will need as he grows up to balance J. R.’ controlling style. J. R. would not encourage a relationship between C. R. and S. if it was left up to her. I find nothing in the conduct of C. R. that would lead me to believe that he does not have the ability to care for S.. J. R. should be aware that her time with S. may be curtailed if her criticisms, allegations and denials of access continue and her behaviour is found not to be in S.’s best interest.
[16] I find that joint custody is in the best interest of S. and I order joint custody. Neither party shall remove S. from the Province of Nova Scotia without the consent of the other party. Neither party shall discuss adult issues in the presence of S.. Neither party shall ask S. to relay messages to the other parent. Neither party shall make negative remarks about the other party nor the other party’s family or friends in S.’s presence. The parties shall consult one another with respect to the education, health, recreational pursuits, religious upbringing and all other major issues and they shall earnestly endeavour to jointly agree upon all such decisions. Each parent shall keep the other informed of all matters touching S.’s welfare. Day to day decisions are to be made by the parent who has care of S. at the time. Each parent has the right to make inquiries and be given information as to the health, education and welfare of S..
[17] S.’s primary residence shall be with J. R.. C. R. will have S. in his care every second weekend from Friday at 4:00 p.m. until Monday at 9:00 a.m. and any such weekend shall be extended to include a Statutory Holiday. The return time of Monday morning will allow C. R. to return S. to preschool or school. C. R. will have S. in his care every Wednesday from 2:00 p.m. until Thursday at 2:00 p.m. Once S. starts school C. R. will deliver S. to school on Thursday morning. C. R. will have parenting time with S. every second Monday (the Monday following the weekend when S. is in the care of his mother) from 3:00 p.m. until 7:00 p.m. C. R. shall have other reasonable parenting time as agreed by the parties.
[18] The parties shall alternate Easter weekends from Thursday at 4:00 p.m. until Easter Monday at 4:00 p.m. beginning with C. R. having S. in even years and J. R. in odd years. The parties shall share the months of July and August with each parent having a total of four weeks with S.. The time in the summer shall be two weeks with one parent and two weeks with the other parent until S. is old enough to handle longer absences from each parent.
[19] Christmas school holidays shall be divided. One parent shall have S. from Christmas Eve at 2:00 p.m. until Christmas Day at 2:00 p.m. and the other parent shall have S. from 2:00 p.m. on Christmas Day until 2:00 p.m. on Boxing Day. The parent who does not have S. on Christmas Eve shall have S. on New Year’s Eve from 2:00 p.m. until New Year’s Day at 2:00 p.m. The remaining time will be divided equally. This schedule shall alternate yearly with C. R. having S. overnight on Christmas Eve in the odd years and J. R. in the even years.
[20] When S. starts school, the March Break shall be split equally between the parents. The parents shall evenly divide the time on S.’s birthday. S. shall spend Mother’s Day with J. R. and Father’s Day with C. R.. Both parties are entitled to reasonable telephone access to S. when he is in the care of the other parent. Both parties are equally responsible for the transporting of S. to and from C. R.’ home.
CHILD SUPPORT:
(I) Determination of income and table amount of child support
[21] The interim order requires C. R. to pay child support in the amount of $218.00 a month based on a salary of $25,500 per year. The Statement of Financial Information filed by C. R. in this proceeding shows that he has income of $432.41 per month and expenses of $4,423.90 per month. He testified that he is making the payments on all of his expenses and not going into debt. That is not possible based on the amount of income shown in his Financial Statement and Income Tax Returns. This would require an income of $53,000.00 per year rather than the $5,188.92 which he indicates in his Financial Statement.
[22] C. R. has claimed capital cost allowance in his income tax returns in each of the years 2001 through to 2004. In 2001 he claimed $7,929.30; 2002 he claimed $43,641.80; 2003 he claimed $41,830.45 and in 2004 he claimed $29,988.66. In his testimony, C. R. said that he did not in any of these years put aside any of the CCA for future capital purchases or make any such purchases. He used this money to pay his personal and business expenses. The evidence before the court is that the equipment used by C. R. in his business is relatively new and he financed the purchase of the equipment by a loan which he has now paid off.
[23] In 2004 he purchased a new Toyota truck for $52,000 with a monthly payment of $898.00. He testified that very little of his income comes from cash sales of [...].
[24] I have no difficulty in finding that C. R.’ income is not accurately reflected in either his income tax return or his Financial Statement. His income is much higher than indicated in those documents. I do not have enough evidence, however, to add to his income for cash sales of [...].
[25] The Federal Child Support Guidelines require that I consider all of the income sources that make up line 150 of the income tax return. I can look at the pattern of income over the last three years if I find that simply looking at one year is not the fairest determination of income and I can determine an amount that is fair and reasonable in light of the pattern. I may impute income if the spouse unreasonably deducts expenses from income and I am not solely governed by whether the deduction is permitted under the Income Tax Act.
[26] As found by Flinn, J.A. at paragraph 22 in Wilcox v. Snow (1999) NSCA 163, there is good reason why the Court must look beyond the bare tax return to determine the self-employed businessman’s income for the purpose of child support. C. R.’ yearly income for the purpose of child support is somewhere between $53,000 to cover his expenses and the income shown on his income tax returns for 2002, 2003 and 2004 plus the capital cost allowance deducted. For 2002 that would be $3,467.96 plus $43,641.80 = $47,109.76; 2003 → $5,020.91 plus $41,830.45 = $46,851.36 and 2004 →$10,257.13 plus $29,988.66 = $40,245.79. I was asked by C. R. to only impute two-thirds of the CCA to determine his income. The evidence before me shows that C. R. has used the entire amount deducted for CCA to pay his expenses and I will impute all to determine his income.
[27] I am satisfied that C. R.’ income is not consistent and I will use the average of the last three years or $44,736 as his income for the purposes of determining child support. Starting December 1, 2005 C. R. shall pay to J. R. $372.00 a month in child support.
(ii) Section 7 expenses for psychological counselling and child care expenses
[28] Section 7 of the Federal Child Support Guidelines allows me to order an amount to cover all or any portion of certain expenses, taking into account the necessity of the expense in relation to the child’s best interests and the reasonableness of the expense in relation to the means of the spouses, those of the child and to the family’s spending pattern prior to the separation. The expenses for which J. R. seeks a contribution from C. R. are expenses in relation to S.’s counselling with [...] and expenses for preschool.
[29] Professional counselling provided by a psychologist is an allowable expense under section 7. The expense is in the amount of $110.00 a session and S. has been attending four sessions a month. J. R. testified that S. started seeing [...] in January 2004 on the recommendation of the child’s doctor after the allegation that S. had been locked in the closet by C. R.. S. has continued to see [...] since that time. [...] has spent time with S. in relation to general anxiety and dealing with the family situation. [...] did not testify at the trial nor did she provide a report. I do not have the evidence to show that the expense is necessary in relation to S.’s best interest. I cannot be satisfied that it is a necessary expense in November 2005. Without some evidence I cannot even find that it was necessary in January 2004. The application for a contribution to psychological expenses is denied.
[30] J. R. also requests a contribution from C. R. for preschool expenses for S.. While preschool may be in S.’s best interest for social development, section 7 allows me to make an order for child care expenses only if they are incurred as a result of the custodial parent’s employment, illness, disability or education or training for employment. As noted above, J. R. is not employed or in an education or training program and I have no evidence that the expenses are necessary because of an illness or disability. The application for child care expenses is denied.
(iii) Retroactive Child Support
[31] J. R. made her application for child support in the Petition for Divorce which was filed on November 19, 2003. The interim order for child support was filed with the court on December 23, 2003 and provides for interim support and acknowledges that C. R. paid support for November and December 2003. The order provides that the interim order for child support would not affect either party’s right to apply for a retroactive variation of support.
[32] The leading case on retroactive child support in Nova Scotia is Rafuse v. Conrad (2002) NSCA 60. Considering the Rafuse factors, I find that there was a need on the part of S. and an ability to pay by C. R.. There was no blameworthy conduct on the part of C. R. by providing misleading financial information, however because he is self-employed his information requires more analysis than someone paid a salary. I do not have evidence that J. R. has had to encroach on capital only for the purpose of child support as she was also supporting herself. There was no delay in bringing forward the application and there was notice to C. R. that child support was being sought. I do not have evidence that ordering retroactive maintenance would cause an unfair or unreasonable burden on C. R. or that it would interfere with his ongoing support obligations. The purpose of a retroactive award would not be to redistribute capital or award spousal support in the guise of child support.
[33] C. R. has paid less child support than he should have and J. R. has shouldered more than her fair share of the expenses for S. since the separation. The interim order contemplated retroactive child support and so both parties were aware that it could be ordered. I will order C. R. to pay retroactive child support from the time of the application, November 2003.
[34] Based on the calculations above, C. R.’ income in 2003 is found to be
$46,830.45 for a table amount of $389.00 a month. His income for 2004 was $40,245.79 for a table amount of $336 a month. I have found his income for 2005 to be $44,736.00 for a table amount of $372.00 a month. C. R. owes retroactive child support in the amount of $342.00 for 2003; $1,416.00 for 2004 and $1,694.00 for 11 months of 2005. The total retroactive child support owing is $3,452.00.
SPOUSAL SUPPORT:
[35] The parties lived together from 1996 to 2003, were married in 1999 and separated in July 2003. Prior to the marriage J. R. attended university, obtained her chef certification from [...] and worked full-time. She worked at [...] in Halifax until 1996 when she left her position to move to [...] to live with C. R.. She worked at Tim Hortons in [...] and a part-time position at [...]. She then worked full-time with [...] until the summer of 1999. At that time she took a leave to get married and has been out of the work force ever since. She intended to go back to work. Since S.’s birth in November 2000 she has been a stay-at-home mother. During her pregnancy she had emergency surgery and was advised not to lift heavy objects. She indicates that she is still unable to lift heavy objects and her former employment as a chef requires heavy lifting. J. R. testified that she and C. agreed that she would stay at home with S. until he went to school. C. R. did not see this as an agreement but a decision made by J. R..
[36] While pregnant, J. R. did apply for a job at [...] but the surgery required her to withdraw her application. She took courses in how to use computer software such as Microsoft Word and Excel.
[37] Since separation she has applied for a position as a library administrative assistant and a job at the hospital – both in 2004. She has applied for courses at the community college. It was clear that J. R. still intends to stay at home with S. until he goes to school in September 2006. J. R. currently supports herself through dividend and interest income from her inheritance.
[38] J. R. has applied for spousal support from C. R.. The Divorce Act, s. 15.2 requires that I consider certain factors. While J. R. asked me to consider that she is seven and one half years behind in her career development, I do not accept that. She worked from 1996 to 1999 when the parties were married and she planned to return to work. She indicates that she has not worked since that time to take care of S., but she stopped working thirteen months before he was born.
[39] The parties were together more than seven years and were married for almost four years of that time. This was not a long-term marriage. During the time they were married she performed most of the domestic chores in the home but she always contributed money to the home. I do not find that J. R. suffered an economic disadvantage arising from the marriage or its breakdown. The parties kept most of their finances separate during the time they were together. While J. R. is the primary caregiver for S., she is staying out of the work force by her choice and not because it is required to look after S.. S. does not have any special needs requiring J. R. to stay at home and care for him. S. is in preschool a number of days a week and childcare could be arranged for J. R. to work. She has chosen not to work.
[40] There is little or no economic hardship to J. R. arising from the marriage or its breakdown. There are hardships from her back problem and the need to seek a new line of work and there are hardships because she has chosen to stay at home with S. until he attends school. J. R. has not made many efforts to promote her self-sufficiency by retraining or seeking employment since the separation in 2003. I find that she could have found employment but has chosen to stay at home with S.. While this is a decision that a couple may well make together, it is not reasonable for her to decide to stay at home and expect spousal support.
[41] Based on the length of the marriage and finding no economic disadvantage by the marriage or its breakdown there will be no order for spousal support.
IS THERE AN ENFORCEABLE LOAN OWED BY C. R. TO J. R.?
[42] Much of the testimony and evidence was put forward to establish that C. R. owed J. R. $63,017.67 as a result of money lent to C. R. during the relationship.
[43] I am urged when considering whether this loan exists and is enforceable to consider the credibility of the parties during the six days of testimony. I am asked to find that C. R. lacked credibility as he gave inconsistent or misleading evidence. Much of the submission in relation to credibility was based on inconsistent testimony in relation to the appraised contents of the home, the cash envelope, loans from family, investing in land, whether items were hidden when J. R. went to retrieve items from the matrimonial home, the sticker program, a camping trip to P.E.I., the letter written to J. R. which acknowledges the debt owed to her and receipts submitted into evidence by C. R.. I find that most of the inconsistencies upon which I am asked to find C. R. not credible are minor in nature and could be explained by misunderstanding of questions. In most cases I would be willing to give C. R. the benefit of the doubt.
[44] However, I do find that he attempted to mislead the court in relation to receipts he submitted to prove expenditures made by him for S.. He was very clearly not telling the truth and misleading the court in relation to the purchase of a stuffed animal and wallet which he testified he purchased in July of 1999 for S.. S. was born on November [...], 2000 and would not even have been conceived in July of 1999. I also believe J. R. when she testified that the wallet was purchased by her for her. J. R. testified that she kept receipts and documents in a filing cabinet in the matrimonial home and those items were not returned to her. I find that the receipts submitted into evidence by C. R. were from the filing cabinet and I have concerns about his credibility.
[45] J. R. was a very difficult witness. She had to be told repeatedly to answer the question that was asked. Her testimony was coloured by her anger at C. R. and I must be cautious in relation to her testimony.
[46] I accept that the finances in the R. house were kept separate for the most part. J. R. paid for groceries and other bills and C. R. paid the mortgage, insurance and taxes.
[47] J. R. put into evidence documents showing payments made by her for various items and to C. R.. The amounts range from $45.89 which she indicates she paid for parts for C. R.’ [...] to $7,500.00 for parts and maintenance for C. R.’ truck. The amounts include payment for house insurance, repairs to equipment and payment of loans on the [...]. She testified that each time she gave this money to C. R. he asked to borrow the money from her and said he would pay it back when the money came in from the [...] he was selling. Sometimes he would indicate that if she did not lend him the money they would lose the house, land and machinery.
[48] Besides all of the cheques, cash advance slips and other documentation to establish this loan, J. R. provided two tally sheets which she testified she showed to C. R. when they were still together. She also provided a written note written by C. R. from August of 2003, after separation, acknowledging the $63,100.00 loan and proposing a repayment plan. C. R. testified that he did write this note but that it was in the matrimonial home and disappeared and showed up again at the trial. I accept the evidence of J. R. that this note was given to her in August of 2003 by C. R..
[49] J. R. testified that just prior to the separation there were discussions about finances. C. R. wanted to borrow $20,000 from her and she refused and there was a disagreement over a home equity loan that C. R. wanted. Following J. R. moving out with S. on July 23, 2003, the parties talked on a regular basis trying to work things out to reconcile. They discussed a marriage contract and finances and the letter from C. R. was given to her during the time of these discussions.
[50] On cross.-examination J. R. acknowledged that she may not have a complete record of the loans made to C. R. and of the payments he made back to her.
[51] C. R. testified that this money given to him or payments made by J. R. were just part of the exchange of money in a marriage. He provided receipts showing payments he said he made on J. R.’ credit card. He testified that he made purchases for items for her car. C. R. also testified that he did pay back some money when he received money for [...], however he had no evidence to support such payments. C. R. testified that this back and forth of money was never an issue in the relationship until May or June of 2003 when J. R. told him that he owed her a lot of money and wanted it paid back or she was moving out. It was in July of 2003 that J. R. moved out of the house.
[52] J. R. bears the onus of showing that this debt is owed by C. R. to J. R.. It is clear from the personalities of the parties that J. R. is a person who keeps extensive records. C. R. is not such a person. J. R. has provided extensive documentation showing payments that she made. However, it is my belief that a detailed look into the finances of any family would show that there has been money paid on bills, loans, etc. by one spouse that is normally the responsibility of the other spouse. These may be paid back, and they may not be but they are part of the ebb and flow of marriage. J. R. has not satisfied me that the payments made by her were enforceable loans. I do not find that the August 2003 letter of C. R. is proof of the loan; it was an attempt by C. R. to appease J. R. in an effort to reconcile.
DIVISION OF PROPERTY:
(I) What items are included in and excluded from matrimonial property?
[53] Under the Matrimonial Property Act, Business Assets are defined as:
"business assets" means real or personal property primarily used or held for or in connection with a commercial, business, investment or other income-producing or profit-producing purpose, but does not include money in an account with a chartered bank, savings office, loan company, credit union, trust company or similar institution where the account is ordinarily used for shelter or transportation or for household, educational, recreational, social or aesthetic purposes.
Matrimonial Assets are defined as:
"matrimonial assets" defined
4 (1) In this Act, "matrimonial assets" means the matrimonial home or homes and all other real and personal property acquired by either or both spouses before or during their marriage, with the exception of
(a) gifts, inheritances, trusts or settlements received by one spouse from a person other than the other spouse except to the extent to which they are used for the benefit of both spouses or their children;
(b) an award or settlement of damages in court in favour of one spouse;
(c) money paid or payable to one spouse under an insurance policy;
(d) reasonable personal effects of one spouse;
(e) business assets;
(f) property exempted under a marriage contract or separation agreement;
(g) real and personal property acquired after separation unless the spouses resume cohabitation.
[54] There are a number of items of property over which there is a dispute as to whether or not they are matrimonial property. They include:
1. Matrimonial Home:
In the late 1980s, early 1990s, C. R. purchased 33 acres of land on the [...] Nova Scotia. He commenced construction of the matrimonial home in 1990 and the foundation was put in in February 1991. An appraisal of the home completed in January of 1997 shows that the home was 95.5% complete at that time. The house was not completed when the couple started dating but the two worked on the house and moved into the house in 1996. The couple lived in the house until separation in July of 2003. The house is appraised at $110,000 but the appraisal shows that the home is on ten acres of land. Based on the evidence, I find that the matrimonial home is on 2.5 acres of land. The remaining 31 acres can be separated from the matrimonial home. I find that the matrimonial home is matrimonial property valued at $110,000 as agreed by the parties.
2. Household Contents:
I find that the contents of the matrimonial home are matrimonial property with the exception of those items which were excluded by agreement as inherited property of J. R..
3. 1997 Honda Civic LX:
I find that it is matrimonial property valued at the date of separation.
4. Savings Account:
The accounts in the Petitioner’s name at the Royal Bank shown on J. R.’ Statement of Property are matrimonial assets and their values at separation were $633.29, $13.06 and $35.48. C. R. shows bank accounts in his Statement of Property both at the Bank of Nova Scotia and Toronto-Dominion. The balances of all those accounts at the date of separation would also be matrimonial property.
5. RRSPs:
J. R. has RRSPs which were purchased prior to the marriage and they are matrimonial property and valued at their present value.
6. 31 Acres of Land – [...]:
According to the Assessment entered into evidence in this proceeding this 31 acres of land is assessed separately from the residential portion containing the matrimonial home. I accept that the land, other than the 2.5 acres for the matrimonial home is a business asset of C. R. [...] as it was used primarily to earn income and not for family purposes.
7. [...] Land:
There was little evidence presented in relation to this parcel of land except that there was a cottage on the land which was vandalized and it is in C. R.’ name only. It appears from the Pre-Trial Memorandum of the Respondent that the parties agree this land is matrimonial and valued between $5,000 and $6,000.
8. Land at [...]– 33.5 Acres, 50 Acres and 85 Acres:
This land was purchased by C. R. prior to the marriage and the debt for the purchase was paid during the marriage. However, I find that this land was used to earn income by [...] for C. R. [...] and not for family purposes and it was therefore a business asset.
9. Land at [...] – 25 Acres:
This land was purchase during the marriage, in 2001. The evidence showed that C. R. worked this land. There was talk of putting in a foundation for the house on the property to use as a camp, however that was not done. J. R. contributed money to pay the legal bill to acquire this property and she visited C. R. while he was working on this land. This is the only property besides the matrimonial home where there is still a debt owing. I find that this property was used to earn income and it is a business asset.
10. [...] Land:
This land was purchased by J. R. prior to the marriage. The family vegetable garden was grown on this land, however the garden comprised about a quarter of an acre of the 66 acres. J. R. said she purchased the land as an investment. C. R. did work on this land which J. R. paid him to complete. She testified that she received proceeds from C. R. for the [...] from the property and there was discussion of planting blueberries on the property. There were roads put on the property by C. R. but it was his practice to build roads [...] on land when the land was owned by another person. J. R. paid for the purchase of the [...] property from her inheritance. She purchased the property from her mother for approximately $11,500.00. J. R. had plans to start a Christmas tree business from [...] but it never really got started. The family use of this property for a garden was trifling and I find it was a business asset as it was purchased as an investment to earn money.
11. J. R.’ Inheritance:
The definition of Matrimonial Assets excludes inheritances except to the extent to which they are used for the benefit of both spouses or their children. J. R. used income and capital from her inheritance during the marriage but the amount remaining is not a matrimonial asset.
12. [...] – 2.5 Acres
This land was purchased by J. R. in 2000 using inherited money. The purpose of the purchase was to ensure that the land would not be sold to someone else for a hunting camp as it is close to the matrimonial home. It also squared up the remaining land at [...]. While the money was from J. R.’ inheritance, the purchase of the land was to benefit the family and the matrimonial home. It was used for the benefit of both parties and the family (Fisher v. Fisher, 2001 NSCA 18) and I find it is a matrimonial asset.
13. Other Assets:
In C. R.’ Statement of Property there are other assets listed as business assets and there was not a dispute over most of the equipment. There was a dispute over whether the 1984 red truck was matrimonial property. This truck was not safety inspected, it was used to plow the driveway of the matrimonial home and J. R. did not want S. driving in that truck. I am satisfied that the primary purpose of this truck was for business purposes and it is a business asset.
There was also discussion regarding the 1998 four-wheeler which C. R. gave to his niece along with the trailer. Again I find the primary purpose of this vehicle was to [...] in the woods, while it was also used [...] for the house that was not its primary purpose. I find the four-wheeler was also a business asset.
There was a list of property which J. R. inherited from her father and there were two items in the matrimonial property list which should have been in the inherited list – the carriage lamps and the Horace Gilbert print. There was no dispute between the parties that these items are not matrimonial property.
J. R.’ engagement ring is personal and not matrimonial property.
SHOULD THERE BE AN UNEQUAL DIVISION OF MATRIMONIAL PROPERTY AND SHOULD THERE BE A DIVISION OF NON-MATRIMONIAL ASSETS OR BUSINESS ASSETS?
[55] J. R. is asking for an unequal division of matrimonial assets or a compensation for her contribution to business assets. Her claim for an unequal division is based on the date and manner of acquisition of the assets; the effect of her assumption of domestic responsibilities on the ability of C. R. to acquire, maintain, operate or improve a business asset; and the contribution she made to the marriage and to the welfare of the family. The presumption in the Matrimonial Property Act is that the division of assets is equal and an unequal division is only to be made if an equal division would be unfair or unconscionable taking into account the factors outlined in section 13.
[56] In Young v. Young (2003) NSCA 63 at paragraph 15, Bateman, J.A. reviews the division scheme under the Matrimonial Property Act:
There is no presumption that business assets be divided equally, or at all. Under s. 18, the division of a business asset is made solely in accordance with the contribution of the non-owning spouse to the business asset, ignoring the relationship of the parties. In contrast, the division of matrimonial assets is prima facie equal, with unequal division permitted on in limited circumstances. The inquiry under s. 13 is broader than a straight forward measuring of contribution. The predominant concept under the Act is the recognition of a marriage as a partnership with each party contributing in different ways. A weighing of the respective contribution of the parties to the acquisition of the matrimonial assets, save in unusual circumstances, is to be avoided. Since the introduction of the Act, it has been repeatedly stressed by this Court, that matrimonial assets will be divided other than equally, only where there is convincing evidence that an equal division would be unfair or unconscionable.
Bateman, J.A. goes on to state that it is not sufficient for an unequal division that one of the factors in s. 13 be present, an equal division must be found to be unfair and unconscionable. She also states that the mere fact that an asset was acquired by either spouse prior to the marriage does not remove that asset from the presumption of equal division. Date of acquisition is something along with all of the other factors in s. 13 that a judge may take into account in deciding whether an equal division is unfair or unconscionable.
[57] In this case, the matrimonial property includes the household contents with the exception of the inherited items, the matrimonial home, the RRSPs, the bank accounts of both parties, the Honda car, the 2.5 acres of land at [...] and the [...] land. The matrimonial home was acquired by C. R. prior to the marriage. The RRSPs were acquired by J. R. prior to the marriage. C. R. worked 50 to 60 hours a week by both parties’ account to earn money. J. R. did not work outside the home during the marriage but contributed to the marriage and family as a homemaker and parent. C. R. contributed his earnings to the family. J. R. contributed income and capital from her inheritance. I do not accept that C. R. poured money into his business to the detriment of the family assets. I do not find convincing evidence that an equal division of matrimonial assets would be unfair or unconscionable.
[58] J. R. also asks for compensation for her contribution to C. R.’ business assets. J. R. has asked that I divide the business assets because they are the equivalent of her RRSPs in that C. R. purchased land instead of RRSPs for retirement. While I accept that C. R. values land much more than RRSPs, all of the evidence presented showed that C. R. works all of the land he owns [...]. I do not find that I can divide the business assets as though they were RRSPs.
[59] J. R. has provided extensive documents showing payments made toward assets which are business assets of C. R. [...]. The series of cancelled cheques and other banking documentation shows numerous payments to C. R. which I accept were for payments on the [...] used in C. R.’ work. The payments made on the [...] where there is documentation to substantiate the payments total $21,303.86 ($2,000.00 + $492.55 + $3,349.37 + $3,500.00 + $45.89 + $126.81 + $66.49 + $2,000.00 + $1,500.00 + $1,222.75 + $3,000.00 + $4,000.00). I have excluded the payments made which are only substantiated by the tally sheet prepared by J. R.. C. R. does not deny that J. R. made these payments for the [...] and he cannot show where they were paid back. I also accept J. R.’ testimony that she paid $7,500.00 and $800.00 for the red truck which I have found is a business asset. I also accept that J. R. paid $1,222.75 for the legal fees to acquire the [...] property. The total contribution to business assets which I find substantiated by cheques and other documents is $30,826.61.
[60] C. R. values the [...] as business assets in his Statement of Property at $50,000.00 and $20,000.00. The loans on those machines have been paid. The red truck is valued at $3,000.00. The land in [...] is listed as a business asset but not valued.
[61] J. R. has contributed money in respect of the acquisition of [...] land, the acquisition and maintenance of the [...] and the maintenance, operation and improvement of the red truck. These are all business assets which C. R. has acquired and maintained due in part to the contribution of J. R.. When considering whether these payments were an enforceable loan, I considered the exchange of money back and forth in a marriage. In determining and assessing the contribution to business assets made by J. R., I am to disregard the relationship of husband and wife. J. R. must be compensated for her contribution to these assets.
[62] C. R. asked me to consider that some of the payments made by J. R. are included in her lines of credit and credit card which are matrimonial debts in the amount of approximately $30,000. J. R. alleges that she made payments for the benefit of C. R. in the amount of more than $63,000; some of which were not directly linked to business assets. The contribution to business assets by J. R. is not included in the matrimonial debt. C. R. must pay one half of the matrimonial debt but he must also compensate J. R. for her contribution to the acquisition, maintenance, operation and improvement of his business assets. C. R. must pay J. R. $30,826.61 as compensation for her contribution to business assets.
HOW SHOULD THE MATRIMONIAL PROPERTY AND DEBT BE DIVIDED?
[63] Having found that the matrimonial property should be divided equally, it is left to determine how that should be achieved.
[64] With regard to the contents of the matrimonial property there has been some division. The appraisals filed with the court show that J. R. has $3,580 of matrimonial property excluding the inherited property and C. R. has $3,345 of the former contents of the matrimonial home. J. R. alleges that there are items missing from the list of items submitted by C. R., such as the plow for the truck and tools. In his testimony C. R. admitted to having these items but they were not included in the appraisal. Other items that J. R. alleges were still in the house and C. R. testified that he does not know where they are include a mountain bike, carving set and champagne flutes, etc. The value of these items is unknown.
[65] J. R. is requesting that various items left in the matrimonial home be returned to her include: a rocking chair, freezer, washer and dryer, some ornaments, coins, S.’s trains, wedding presents given to them by her friends and the family dog. In her testimony, J. R. felt that the division of the contents of the matrimonial home was equal with the exception of the items she requested. J. R. was very adamant that the freezer, washer and dryer and rocking chair were hers and hers alone. The washer, dryer and freezer were hers because she had purchased them. These appliances were used by the family and are matrimonial property. The wedding presents given to the couple by her friends are matrimonial property. The sentimental value of the rocking chair to her does not take it out of the realm of matrimonial property. She has no more right to the dog than C. R.. While she purchased the dog, it was a family pet. S.’s trains are also something that she does not have a greater right to than C. R..
[66] J. R. has the Honda car which is matrimonial property and valued at the date of separation. The only value I have is $5,000.00 from 2004 Statements of Property filed by both parties. Although I do not know the exact value of the plow, tools and other items which C. R. failed to get appraised I am going to assume that they are not worth more than $5,000.00 and the contents of the home and the Honda will remain as they are currently divided. The parties shall work out an agreement to copy the family photos.
[67] The bank account balances will be divided equally valued at the separation date. The after tax value of the RRSPs will be divided equally as of the date of division.
[68] C. R. asked the court to depart from the normal valuation date for the matrimonial home. I do not see anything in this case to take the valuation date out of the normal valuation day of date of trial or present value. The equity in the matrimonial home will be divided using the agreed value of $110,000 and the current amount of the mortgage. The 2.5 acres of land at [...] purchased by J. R. will be divided equally at its current value. The land at [...] will be divided at its current value.
[69] The mortgage is a matrimonial debt. The items that make up the consolidation loan – the loan for the car, lines of credit and J. R.’ credit card – are matrimonial debts valued at the date of separation. C. R.’ credit card balance at the date of separation is also a matrimonial debt.
[70] It is clear that the onus to show that there is a legally enforceable debt owed to his mother and sister is on C. R. as the party who alleges the existence of the debt. C. R. alleges that he borrowed $20,000 from his mother at various times during the marriage to pay bills. He has no documentation to prove this loan and I find that J. R. was unaware of this loan until October 2005 when it was disclosed in C. R.’ testimony. C. R. also alleges an amount of $6,000 owing to his sister, T., at the date of separation. Again this loan was to pay bills. C. R.’ evidence was very vague and unclear with regard to both of these alleged loans and I find that he has not satisfied the onus to show legally enforceable loans. These are not matrimonial debts.
COSTS:
[71] There was mixed success in this proceeding and I find it is an appropriate case for the parties to bear their own costs.
CONCLUSION:
[72] In summary:
(a) The parties shall share joint custody of S. with specified and reasonable parenting time to C. R.;
(b) Starting December 1, 2005, C. R. shall pay to J. R. $372.00 a month in child support. No order is made for s. 7 expenses. C. R. shall pay to J. R. $3,542 in retroactive child support.
(c) There will be no order for spousal support.
(d) There is no enforceable loan owed by C. R. to J. R..
(e) The matrimonial property will be divided equally.
(f) C. R. will compensate J. R. in the amount of $30,826.61
for her contribution to his business assets.
(g) The parties shall bear their own costs.
Lynch, J.