Citation: Thomas v. Thomas, 2012 NSSC 440
Date: 20121109
Docket: Yar. No. 1208-002766 (SYD 061489)
Registry: Yarmouth
Between:
Derek Earl Thomas
Petitioner
v.
Lynda Catherine Thomas
Respondent
Judge: The Honourable Justice A. David MacAdam
Heard: October 18, November 7 and 9, 2012, in Yarmouth, Nova Scotia
Final Written
Submissions: September 13, 2012
Written Decision: December 19, 2012
Counsel: Andrew S. Nickerson, Q.C., for the Petitioner
Thomas R. MacEwan, for the Respondent
By the Court:
Background
[1] The parties were married on February 11, 1994, and separated in May 2007. Before their marriage, they resided in a common‑law relationship. There are two children of the marriage, both daughters: B, born June 3, 1993, and C, born May 27, 1995. By order dated April 21, 2010, the parties were granted joint custody of B and C, with the respondent having primary care. The petitioner was ordered to pay $1220.00 per month in child support, commencing June 1, 2009, as well as $900.00 per month in spousal support, commencing April 1, 2009.
[2] The petitioner is a geologist by trade and education, but has worked in fishing in Yarmouth. N.S., since 1994. He began fishing with a fisherman who offered to sell him the fishing business. The petitioner approached his mother with the suggestion of securing part of the purchase price on her home. The parties were planning their wedding at the time, and the petitioner's mother offered to give them her home as a wedding present, rather than the petitioner borrowing from the bank and using as security the home in her name. As a consequence, the home, then in their names, was used as security for a line of credit in the amount of $100,000.00, which was also secured by a $50,000.00 GIC owned by the vendor. The petitioner later incorporated Derek E. Thomas Inc., of which he was the sole shareholder, to operate the fishing business. He transferred the boat and certain other assets of the business to the company (though not the fishing licenses, which were required to remain in his name).
[3] The respondent worked until marriage, then, after moving to Yarmouth, she stopped working outside the home for a period of approximately five years. She started a restaurant, which apparently failed. The respondent also assisted in the fishing business by providing payroll, bookkeeping and administrative services. She was not reimbursed for these services. This went on for some time; the respondent suggests it was a period of five years.
Duration of the common-law relationship
[4] The respondent says the common‑law relationship lasted about seven years prior to the marriage. The petitioner says there were periods of separation, with the respondent residing in one location and him residing in another. These absences were primarily on account of his work. Otherwise, there is no evidence that he established a separate residence for any substantial period of time. On the evidence I am satisfied that notwithstanding that the parties did not live together for the entire seven‑year period preceding the marriage, they were in a common‑law relationship throughout. Although there was disagreement as to when cohabitation began, I am satisfied that the combined period of cohabitation began in October 1987 and continued until May 2007, when the parties separated. The respondent did not move out of the home until November 2007, although the parties agree the separation was in May 2007.
Does B remain a child of the marriage?
[5] The Divorce Act, R.S.C. 1985, c. 3 (2d Supp.) defines "child of the marriage" as:
a child of two spouses or former spouses who, at the material time,
(a) is under the age of majority and who has not withdrawn from their charge, or
(b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life...
[6] The presumptive rule governing the quantum of child support is found at s. 3(1) of the Federal Child Support Guidelines, SOR/97‑175, which provides:
3. (1) Unless otherwise provided under these Guidelines, the amount of a child support order for children under the age of majority is
(a) the amount set out in the applicable table, according to the number of children under the age of majority to whom the order relates and the income of the spouse against whom the order is sought; and
(b) the amount, if any, determined under section 7.
[7] The parties agree that C remains a child of the marriage. They also agree that as of her birthday in July 2012, B was no longer a child of the marriage. Their dispute relates to whether B was a child of the marriage between the time she graduated from high school and when she reached the age of majority.
[8] B graduated from high school in June 2011, but was under the age of majority until June 2012. In July 2011 the petitioner unilaterally stopped paying child support for B, taking the view that she was no longer a child of the marriage. He says B was working and, while residing at home, she was making sufficient income to support herself and provide herself with the necessaries of life. He argues that she had, in effect, withdrawn from her parents' charge. Between July 2011 and July 2012, when she reached the age of majority, B continued to reside at home with her mother, and did not pay rent. She provided for some of her personal expenses, such as buying a car and funding her horseback riding lessons. The petitioner testified that he had contributed to the purchase of B's vehicle. The respondent says, notwithstanding B was working, she remained under her parental charge during this period.
[9] The respondent says that while a child is a minor, the only consideration in determining whether she remains a child of the marriage is whether she is under parental charge. MacLeod and Mamo, in the Annual Review of Family Law 2010, (Carswell, 2010) at 248, state that "[w]here a child is under the age of majority, unless otherwise provided in the Guidelines, the amount of child support is the amount set out in the applicable Table and the amount, if any, determined under s. 7." The respondent seeks to recover arrears of child support, namely the difference between the amount the petitioner paid in respect to C between July 2011 and July 2012, and the amount that he should have paid for the two children of the marriage.
[10] The petitioner has not met the onus of establishing that B was no longer a child of the marriage between July 2011 and June 2012. I would add that the court is not sympathetic with the petitioner's unilateral termination of child support. His proper avenues were to obtain agreement with the other parent or, absent agreement, to apply to court and provide the necessary information supporting the termination of child support. Having done neither, and the evidence not establishing that B had withdrawn from her mother's charge, I order payment of arrears of child support as requested by the respondent.
[11] As of July 2012 the petitioner is only responsible for paying child support for one child.
Income for child support purposes
[12] The petitioner's income is in the form of dividends from his company. The before‑tax profits of the company since 2007 have been $71,591.00 (2007), $6524.00 (2008), $106,352.00 (2009), $102,662.00 (2010), and $123,703.00 (2011). For the period between 2004 and 2011 the actual dividends received and the grossed up or taxable dividends were as follows:
|
Year |
Actual |
Taxable |
|
2004 |
$100,398 |
$125,498 |
|
2005 |
$113,296 |
$141,620 |
|
2006 |
$104,978 |
$131,223 |
|
2007 |
$87,452 |
$98,065 |
|
2008 |
$84,905 |
$106,131 |
|
2009 |
$83,775 |
$104,719 |
|
2010 |
$67,929 |
$84,911 |
|
2011 |
$141,926 |
$177,407 |
[13] In pre‑hearing submissions the respondent took the position that since the petitioner is the sole shareholder of his company, his reported income should not be the sole basis for determining his income for support purposes. She relied on the provisions governing the determination and imputation of income at ss. 15‑19 of the Divorce Act. The parties have subsequently agreed to calculate the petitioner's income according to the annual profits of the company. I accept this approach on the basis that the parties agreed to it, with the benefit of legal advice.
[14] If amortization is not included as a company expense then the petitioner=s income, for support purposes, will be increased. The respondent submits that amortization is not an out‑of‑pocket expense, and argues that a portion of it should be added back into corporate income and included in the petitioner's income. She agrees that part of that expense relates to principal payments on the company's long‑term debt, which she recognizes as legitimate business expenses. She therefore submits that the amount claimed for amortization of capital assets, less the amount paid on the principal of the long‑term debt, should be added back into corporate income. She agrees that payments on long‑term debt for a Fisheries Board loan (an annual payment of $24,900.00) and a vehicle loan (an annual payment of $5232.00) are deductible. She disagrees with the deduction claimed for amortization of a fishing license, however, which was claimed in the amount of $1281.00 in 2010. She says all of this amount should be added back into corporate income. As a result, she submits that the company's net income before corporate income tax should include the reported amortization costs of $54,285.00, resulting in a total net income of $156,947.00. (The company's financial statement reports an amount of $97,529.00.) Adjusting this amount to reflect actual payments of long‑term debt related to capital assets (as described above), she says the adjusted net income before corporate income tax should be $126,815.00. The petitioner, on the other hand, testified that it was necessary to retain funds in the company to meet future capital expenses.
[15] I am not satisfied that the deduction of the amortization expense nor the cash reserve for future capital expenses should be allowed. There was no evidence that amortization had only started to be claimed by the company following the separation. Amortization is an accounting mechanism for providing for future capital asset replacements. Therefore there is also no need for a special allowance to retain additional money in the company for such future capital expenditures. The petitioner's income will therefore be the profits of the company as determined by the financial statements. The fact that the income is paid to him by way of dividend is irrelevant in view of the agreement that it is the profits of the company rather than the amount received by Mr. Thomas that is to be determinative in deciding his income each year.
Spousal support
[16] The considerations relevant to spousal support have been referenced in various decisions, including Moge v. Moge, [1992] 3 S.C.R. 813, and Bracklow v. Bracklow, [1999] 1 SCR 420, where McLachlin J. (as she then was) said, for the court, at paras. 35‑36:
Moge ... sets out the method to be followed in determining a support dispute. The starting point is the objectives which the Divorce Act stipulates the support order should serve: (1) recognition of economic advantage or disadvantage arising from the marriage or its breakdown; (2) apportionment of the financial burden of child care; (3) relief of economic hardship arising from the breakdown of the marriage, and (4) promotion of the economic self‑sufficiency of the spouses: s. 15.2(6). No single objective is paramount; all must be borne in mind. The objectives reflect the diverse dynamics of the many unique marital relationships.
Against the background of these objectives the court must consider the factors set out in s. 15.2(4) of the Divorce Act. Generally, the court must look at the "condition, means, needs and other circumstances of each spouse". This balancing includes, but is not limited to, the length of cohabitation, the functions each spouse performed, and any order, agreement or arrangement relating to support. Depending on the circumstances, some factors may loom larger than others. In cases where the extent of the economic loss can be determined, compensatory factors may be paramount. On the other hand, "in cases where it is not possible to determine the extent of the economic loss of a disadvantaged spouse . . . the court will consider need and standard of living as the primary criteria together with the ability to pay of the other party": Ross v. Ross (1995), 168 N.B.R. (2d) 147 (C.A.), at p. 156, per Bastarache J.A. (as he then was). There is no hard and fast rule. The judge must look at all the factors in the light of the stipulated objectives of support, and exercise his or her discretion in a manner that equitably alleviates the adverse consequences of the marriage breakdown.
[17] The Moge, supra., and Bracklow, supra., considerations were further discussed by B. MacDonald J. in T. L. S v. D. J. M., 2009 NSSC 79. She said, at paras. 64‑66:
McLachlan, J. in Bracklow, supra., indicated that the basis for a spouse's support entitlement also affects the form, duration, and amount of any support awarded.
Examples of circumstances that may lead to a decision that a spouse is entitled to compensatory support are:
a) a spouse's education, career development or earning potential has been impeded as a result of the marriage because, for example:
‑ a spouse has withdrawn from the workforce, delays entry into the workforce, or otherwise defers pursuing a career or economic independence to provide care for children and/or a spouse;
‑ a spouse's education or career development has been negatively affected by frequent moves to permit the other spouse to pursue these opportunities;
‑ a spouse has an actual loss of seniority, promotion, training, or pension benefits resulting from an absence from the workforce for family reasons;
b) a spouse has contributed financially either directly or indirectly to assist the other spouse in his or her education or career development.
Non‑compensatory support incorporates an analysis based upon need and ability to pay. If spouses have lived fully integrated lives, so that the marriage creates a pattern of dependence, the higher‑income spouse is to be considered to have assumed financial responsibility for the lower‑income spouse. In such cases a court may award support to reflect the pattern of dependence created by the marriage and to prevent hardship arising from marriage breakdown. L'Heureux‑Dubé, J. wrote in Moge v. Moge, supra., at p. 390:
Although the doctrine of spousal support which focuses on equitable sharing does not guarantee to either party the standard of living enjoyed during the marriage, this standard is far from irrelevant to support entitlement... Furthermore, great disparities in the standard of living that would be experienced by spouses in the absence of support are often a revealing indication of the economic disadvantages inherent in the role assumed by one party. As marriage should be regarded as a joint endeavour, the longer the relationship endures, the closer the economic union, the greater will be the presumptive claim to equal standards of living upon its dissolution (see Rogerson, "Judicial Interpretation of the Spousal and Child Support Provisions of the Divorce Act, 1985 (Part I)", supra, at pp. 174‑75). (emphasis by B. MacDonald J.)
[18] The respondent submits that her career development and earning potential were impeded by the marriage because of her withdrawal from the workforce in 1993. She says the parties lived fully integrated lives and the marriage left her financially dependent on the petitioner. At the time of separation in May 2007, she was not employed. She found employment by the autumn of that year, working at an auto dealership, but was terminated in June or July 2012. She earned a base salary of $20,000.00, plus commissions, for a total income of $35,980.00 in 2009, $47,886.00 in 2010, and $58,121.00 in 2011. She received a severance package of $17,500.00, which taken together with the number of months she worked, indicates that she earned more than $25,000.00 in 2012. At the time of trial she was receiving Employment Insurance benefits of $838.00 every two weeks. She expected the severance package she received will result in termination of her Employment Insurance benefits, although she had not yet received a ruling.
[19] The respondent agreed to be imputed an income of $25,000.00 for spousal support purposes. She seeks spousal support in accordance with the Spousal Support Advisory Guidelines, calculated with a single dependant child. This results in a range of between $1534.00 and $2075.00 per month, and she requests a minimum of ten years. This amount would be subject to review if the respondent secured employment and earned more than $25,000.00. She also proposes that the court set an amount of spousal support to take effect when there are no longer any children of the marriage, in the amount of $3000.00 per month.
[20] The petitioner's primary position is that spousal support should be terminated immediately; alternatively, he says it should be continued at $900.00 per month for a further three years. He says there is no claim for spousal support on a compensatory basis. He says the respondent was not fully occupied with child care throughout the marriage. She started a restaurant and participated in horse shows and other horse activities. He submits that nothing prevented her from pursuing a career or a business. He argues that any claim for spousal support must be on a non‑compensatory basis. Setting the petitioner's income at $82,166.00 or $90,000.00, and the respondent's at $34,167.00 or $40,000.00, he submits that $900.00 in spousal support, which he has been paying, was within the range of an appropriate award under the Spousal Support Guidelines over the last five years. He argues that this figure was accepted as fair by the respondent.
[21] The incomes suggested by the respondent for both parties are artificial. The petitioner's income would be set at an amount higher than he received in any year save 2011, while the respondent's own income would be set at approximately half of what she received annually between 2009 and 2011. At the same time, for the purpose of calculating child and spousal support, the petitioner is not entitled to have his company create or increase its retained earnings, thereby reducing his level of income.
[22] The respondent is obliged to seek employment commensurate with the employment she had between 2009 and 2011. She gave evidence of attempts to obtain new employment, which had been unsuccessful apart from occasionally delivering pizzas. She had no other source of income in the event her Employment Insurance is terminated.
[23] I conclude that there has been insufficient time since the respondent's termination for the court to assess whether she was making reasonable efforts to obtain new employment. As a consequence, I award her spousal support of $1,400.00 per month until July 2013, at which time there will be a review, taking into consideration her then employment circumstances and whether there should be a termination date. If she is not employed, the court will consider whether she has made reasonable attempts to find employment, or what income should be imputed to her, if any. The court will be prepared to receive further evidence from the petitioner as to his then current income, which, in view of the agreement of the parties, would be the profits of the company. The petitioner's income could be adjusted having regard to the company's performance during 2012 and 2013. The review may also be relevant in the event either of the parties' daughters decides to pursue post-secondary education.
[24] I am not prepared to order the petitioner to pay any arrears of spousal support. The evidence was that the petitioner has paid spousal support in accordance with the order of Warner J. The respondent has not shown that there is any justifiable basis to award arrears.
Property division
[25] The Matrimonial Property Act, R.S.N.S. 1989, c. 275, presumes an equal division of matrimonial property. An unequal division, or a division of property that is not matrimonial property, requires special considerations: see ss. 12‑13.
[26] The matrimonial assets include the matrimonial home, a 1999 Ford Windstar (sold by the respondent in 2008), a 1998 Ford F150 (sold by the respondent in 2007), a horse trailer (sold by the respondent in 2007), the petitioner's RRSP (in the amount of $21,500.00) and two horses. The parties agree that the petitioner should retain the matrimonial home.
[27] The parties have agreed on the division and valuation of both assets and liabilities assumed by each of them. In addition to the matrimonial home, the petitioner will retain his RRSPs, which have an agreed value of $21,500.00. He will assume all of the matrimonial debts, which he says will exceed the value of the assets remaining in his hands. The respondent will retain the remainder of the matrimonial assets. The division of assets as proposed by the petitioner results in a $10,000.00 equalization payment by the respondent to the petitioner.
[28] However, the mortgage indebtedness on the matrimonial home was included as of the date of separation on the basis that the subsequent payments made by the petitioner, who continued to reside in the home, were to be offset by any claim by the respondent in the nature of occupation rent. On the evidence, the mortgage was reduced by approximately $24,000.00 following separation. This was set off against the petitioner's occupation of the matrimonial home. He is not entitled to also claim it as a matrimonial debt he has assumed following separation. Therefore the amount of the indebtedness assumed by him and for which he is entitled to receive a credit is the balance as at the date of the hearing rather than the date of separation. The equalization payment will therefore be recalculated to take into account the amount of the outstanding mortgage for which the petitioner is entitled to a credit. The result will be an equalization payment by the petitioner to the respondent.
Application to divide the business
[29] The remaining controversial issue with respect to property division is the respondent's claim to a division of a business asset of the petitioner, being his company, Derek E Thomas Inc., on the basis that she made contributions to the acquisition and growth of the asset. Section 18 of the Matrimonial Property Act provides:
Where one spouse has contributed work, money or moneys worth in respect of the acquisition, management, maintenance, operation or improvement of a business asset of the other spouse, the contributing spouse may apply to the court and the court shall by order
(a) direct the other spouse to pay such an amount on such terms and conditions as the court orders to compensate the contributing spouse therefor; or
(b) award a share of the interest of the other spouse in the business asset to the contributing spouse in accordance with the contribution,
and the court shall determine and assess the contribution without regard to the relationship of husband and wife or the fact that the acts constituting the contribution are those of a reasonable spouse of that sex in the circumstances.
[30] The fishing licenses, boat, and gear cost approximately $150,000.00 in 1994. According to the respondent, the petitioner could only secure financing through a collateral mortgage of $100,000.00 on the matrimonial home. The respondent says the proceeds of the collateral mortgage was a matrimonial asset, and she says the payments on the mortgage were made by the parties from after‑tax income. Moreover, she says, when the petitioner created the company in 1999, he transferred the assets B the boat, gear and use of the licenses B to the company, but not the outstanding collateral mortgage debt. The collateral mortgage was released in 2004 when the parties re‑mortgaged for $46,000.00. The respondent says that without her consent, the petitioner could not have raised the financing to acquire the fishing assets; she also emphasizes the fact that the liability for the debt remained a personal one, even after the assets were transferred to the company. She also says she contributed unpaid payroll, bookkeeping, and administrative services to the business.
[31] The analysis required by section 18 of the Matrimonial Property Act was reviewed in Marshall v. Marshall, 2008 NSSC 11, where Forgeron J. said, at paras. 63‑65 (some citations omitted):
Courts have denied claims for contribution for two reasons. First, where a spouse has already been paid for her/his contribution, then an award pursuant to section 18 in usually denied... Second, claims are also denied where the contribution has been minimal... However, where the wife was paid an insufficient amount for her work, a further award of $15,000 was deemed appropriate: Mason v. Mason (1981), 47 N.S.R. (2d) 435 (CA).
Some courts have preferred an unequal division as a method of achieving justice where there are business assets, rather than making an award pursuant to section 18 of the Act... The Court of Appeal appears to have acknowledged the impact that unequal division awards have upon sec. 18 claims. In Sproule v. Sproule (1986), 73 N.S.R. (2d) 131 (CA), the Court of Appeal affirmed a $20,000 s. 18 claim to a wife for her extensive contributions to the business, given that an unequal division had also been awarded in the wife's favour.
In other cases, a cash payment is provided to the non‑owning spouse, the amount of which varies for the services provided. In Lynk v. Lynk, supra, the wife was awarded a one‑third interest in the business because of the financial exposure she had accepted. In MacDougall v. MacDougall, 2005 NSSF 23, (2005), 231 N.S.R.(2d) 270 (SC), the wife was awarded $10,000 for her contribution to the business. In Reid v. Reid (1989), 99 N.S.R. (2d) 207 (SC), the wife was awarded one‑fourth of the value of the fishing operation for her contribution which consisted of painting the boat, acquiring and transporting bait, and bookkeeping. In Campbell v. Campbell (1986), 74 N.S.R. (2d) 25 (SC), Nathanson, J., awarded the wife a 10% interest in the value of the business as she cosigned business loans.
[32] In Mood v. Mood, [1997] N. S. J. No. 531 (S.C.), varied on other grounds at 47 R.F.L. (4th) 358, [1999] N.S.J. No. 114 (C.A.), the wife had been involved in managing assets and running errands for the husband's fishing business. Virtually all of the matrimonial assets had been pledged to finance the business. Goodfellow J. allowed five per cent for the wife's personal efforts and 7.5 per cent for the exposure. The petitioner argues that the degree of contribution in Mood, supra., exceeded that made by the respondent in the present instance, and that the pledge of the matrimonial assets by the respondent was to a much lesser extent and only remained outstanding for a short period of time. In Crosby v.Crosby, 2002 NSSC 201, the court declined to apportion the husband's business, in view of what appeared to be "a very minor contribution to a small one‑man enterprise having net assets of low value," although the court did direct the husband to protect the wife from liability with respect to her guarantee of his truck loan (para. 16). In MacDougall v. MacDougall, 2005 NSSF 23, the wife received a $10,000.00 interest in the husband's business where she had made contributions to the management of the business without adequate remuneration. In Reid v. Reid, 1989 CanLii 1474 (S.C.T.D.), the wife was awarded a one‑quarter share in the husband's fishing business on account of unpaid services. In Lynk v. Lynk (1989), 21 R.F.L. (3d) 337 (S.C.A.D.), the wife was entitled to a one‑third interest in the business by virtue of a guarantee on the matrimonial seasonal home. In Bailey v. Bailey, 1990 CanLii 4116 (S.C.T.D.), the wife was entitled to a 30 per cent share on account of her contribution to the business during a six‑year marriage. In Whitty v. Whitty, 2008 NSSC 243, the wife received 7.5 percent of the fishing business (amounting to $15,000.00) on account of her contribution by doing office work, as well as cosigning a business loan, which enabled the husband to obtain a lobster license. In Robinson v. Robinson (1993), 122 N.S.R. (2d) 181 (S.C.A.D.), the wife was awarded a 20 percent interest in the husband's business assets, on account of her performing the role of bookkeeper for seven years, including making payroll deductions, writing some checks and making bank deposits. In addition to these unpaid services, she also signed a guarantee for $150,000.00. Other cases show a similar range of awards for spouses who contributed to business assets, as well as for signing guarantees on behalf of a business.
[33] In this case, the respondent's contribution to the fishing business does not appear to have exceeded the contributions of the spouses in Mood, supra., or Robinson, supra. The risk associated with the mortgage on the matrimonial home was no greater than the apparent risk in those cases. That said, the respondent is entitled to a share of the business.
[34] The factors underlying the respondent's section 18 claim are her contribution to the fishing business, before and after incorporation, and the risk to matrimonial assets, specifically the matrimonial home, as a result of her signing the collateral mortgage for $100,000.00.
[35] I award the respondent a seventeen percent interest in the business, ten percent due to her contributions and seven percent on account of the risk to the matrimonial assets. I would add that during oral argument in respect to section 18, the respondent's counsel advised she was no longer seeking an unequal division pursuant to section 13.
[36] The parties agree that whether the relevant valuation date was the date of separation, the date of the valuation or the date of the hearing, the value of the business was between $609,250.00 and $659,250.00. This is based on a valuation made by TFC. Inc., dated July 2010, which valued the license package at between $335,000.00 and $360,000.00, the vessel at between $250,000.00 and $275,000.00, and the gear at $24,250.00. The respondent sought to differentiate between assets that were encumberedB the boat and gear B and those that were free and clear of any encumberance, namely the licenses. The licenses were required to remain in the petitioner's name, although the fishing licenses were operated by the company. I do not accept the suggestion that the assets of the business should be differentiated between those that were in the name of the company, which were encumbered, and the licenses, which were in the petitioner's name and were not encumbered. I consider the claim to be one for an interest in the business as a whole, which includes all of the assets, whether subject to any charges or encumbrances against them.
[37] I conclude that the appropriate valuation date is the separation date. I therefore accept the long‑term debt included in the financial statements for the year ending August 31, 2007, which closely approximates the date of separation. The only evidence as to the indebtedness was that contained in the financial statements. This will serve as the basis for determining the net equity for calculating the respondents entitlement.
[38] There is one further difficulty respecting the valuation of the business. One of the debts of the company was a truck loan in the amount of $21,028.00. This truck was not included in the valuation. The respondent suggests valuing the truck by book value. However, the other assets are not valued on the basis of book value, but on an appraisal basis. It would be inconsistent to apply the book value for one asset and an appraised value for the others. Instead, I will remove from the debts the amount owing on the truck and not include the truck for purposes of valuing the business.
[39] In view of the range provided by the valuators I set the value at $630,000.00, less the long‑term indebtedness shown on the company financial statements for August 31, 2007 (not including the truck loan.) This results in a valuation of $630,000.00, less long‑term debt of $381,500.00, for a net equity of $248,500.00. The respondent is entitled to 17 percent of this amount pursuant to section 18 of the Matrimonial Property Act.
Conclusion
[40] The petitioner's income for child support purposes will be determined in accordance with the profits of the business, without any adjustment for the amortization expense or including a cash reserve for future capital expenditures. The respondent is entitled to spousal support of $1400.00 per month until July 2013, at which time there will be a review, taking into consideration her employment circumstances, and also including whether there should be a termination date. Property division shall be as agreed by the parties, with the exception that the respondent is entitled to a seventeen percent share in the net equity of the business.
[41] Judgment accordingly.
MacAdam, J.