This Month in Nova Scotia Family Law – August 2023

October 4, 2023

L. v. T. H., 2023 NSSC 250

Judge: Justice Lee Anne MacLeod-Archer

Subject: Interim parenting; interim child support; inputting income

Summary:

This decision originated from an interim motion by the father, Mr. H, seeking an interim shared parenting arrangement for the parties’ three children. The mother, Ms. L, sought primary care of the children and supervised parenting for the father. The parties have an extensive history of conflict, including drug use. The parties are both re-partnered, and their new partners have also been involved in the conflict, through claims and charges of child abuse.

On the issue of parenting, the test was identified as, on an interim basis, what would be the least disruptive, and the most protective and supportive for the children. The court was also to consider the best interests of the children. The court awarded the mother with primary care and decision-making responsibility. This was based on the father’s history of violent conduct and family violence.

The court found that the father had previously displayed aggressive and threatening behaviour, struck one of the children, had anger issues, and encouraged the children to abuse the mother’s new partner. The court also found that the father did not appear to regret these actions or made any progress in addressing them. The court also ordered that if the father wanted unsupervised parenting time in the future, he must complete individual anger management and respectful relationships counseling.

The court imputed the father’s income as $50,000, which was based on his hourly rate of income for the time he works, plus it was inferred through his earlier pattern of income that he collects Employment Insurance benefits for the month’s he is not employed.

 

Wolfson v. Wolfson, 2023 NSCA 57

Judge: Justice Lester Jesudason

Subject: Matrimonial Property Act; classification; business assets; matrimonial assets; division; unequal division; costs

Summary:

The Appellant, Mr. Wolfson, sought an appeal to overturn provisions of a Corollary Relief Order and the costs award made against him. At trial, the parties disputed the classification of certain assets. These assets were shares in businesses, which owned various real estate properties. The Respondent, Ms. Wolfson, had claimed at trial that the disputed assets were matrimonial and should be divided equally (under s. 18 of the Matrimonial Property Act, hereinafter the MPA), or in the alternative, there should be an unequal division of property (under s. 13 of the MPA). The Appellant argued that the disputed assets were business assets and should be excluded from the division of property. The trial judge concluded that the disputed assets were held for “two primary but equal purposes”— an income producing vehicle (business asset) and a retirement vehicle (matrimonial asset). This meant the Respondent failed in her s. 18 claim but was successful on her s. 13 claim.

The Appellant argued on appeal that the trial judge erred because (1) the MPA does not permit an asset to have two primary purposes, (2) the evidence was insufficient to ground a finding that the disputed assets were primarily intended as a retirement vehicle, and (3) the s. 13 analysis is materially flawed.

The issues before the Court of Appeal were:

  1. Did the judge err in her classification of the disputed assets?
  2. Did the judge err in her s. 13 analysis?
  3. Did judge err in her costs award?
  4. Should the proposed fresh evidence be admitted?

Did the Judge err in her classification of the disputed assets?

The Appellant asserted that the trial judge’s classification and resulting division of shares must be set aside because the MPA does not permit the hybrid classification and because the judge made a palpable and overriding error in finding the other primary and equal purpose of the rental properties was for the creation of a retirement vehicle for both parties. The Court of Appeal agreed with the Appellant.

The Court of Appeal conducted a review and interpretation of various provisions of the MPA. They began by identifying that s.4(1)(e) provides that all assets are presumed to be matrimonial assets under the MPA unless it can be demonstrated, on a balance of probabilities, that the assets are business assets. They continued to confirm that the Appellant, at trial, had the evidentiary burden of establishing that, on a balance of probabilities, the primary purpose of the disputed shares was the generation of income or profit in an entrepreneurial sense.

Reviewing the trial decision, the Court of Appeal noted that the trial judge appeared to have understood this task of ascertaining the primary purpose and that the concept of dual primary purposes was not proposed by either party. The classification of these assets was a question of law, and a finding of dual primary purposes is not permitted by the MPA.

The Court of Appeal relied heavily upon the wording of section 16 of the MPA, mainly s.16(2)(b), which relates to the powers of the court:

(b)        make a declaration as to whether the property is a matrimonial asset or a business asset

It was concluded that the use of the term “or”, which is a disjunctive term, meaning to link mutually exclusive alternatives, demonstrated the legislature’s intent. Had the legislature wished to allow a hybrid classification, they would not have used the term “or” in this section. The Court of Appeal also relied upon the existence of section 18 of the MPA, which permits relief to one spouse where the other spouse owns business assets, those assets not being divisible matrimonial property. They found that parties would have no use for section 18 of the MPA if hybrid classifications were permitted, as judges could simply determine which percentage of the business assets was a joint contribution and the split it accordingly. Based upon these reasons, and various other factors, the Court of Appeal concluded that the clear legislative intent was for assets to be classified as either matrimonial or business assets.

Having concluded the assets cannot be classified as having dual primary purposes, the Court of Appeal conducted their own review of the evidence to determine the primary purpose. It was determined that the trial judge conflated the concepts of legacy and retirement, when they are two distinct concepts, and found that too much weight was put on the discussion between the parties to one day use one of the units of the owned residential properties as a retirement home. The assets were deemed to be owned, operated and managed for the primary purpose of generating income or profit in an entrepreneurial sense. This conclusion was based on the fact that the business assets were operated to produce a consistent cash flow which was reinvested in the company and used by the parties to support their family.

Did the judge err in her s. 13 analysis?

Section 13 of the MPA allows for the unequal division of matrimonial assets, where the court is satisfied that an equal division would be unfair or unconscionable. The section proceeds to list the factors to be taken into consideration. The trial judge relied upon subsections s. 13(a), (e), (f), (g), (i) and (j), finding that the respondent had established a claim under section 13. The Court of Appeal discussed only the trial judge’s decision in relation to subsections 13(a) and 13(e). For subsection 13(a), the Court of Appeal found the trial judge made an error in law, as she misinterpreted this factor. This subsection requires the court to consider “the unreasonable impoverishment by either spouse of the matrimonial assets”. The trial judge understood this to mean a comparison between the growth of the matrimonial assets and business assets, where the actual consideration is an objective one solely focused on whether the matrimonial assets were unreasonably impoverished. The Court of Appeal found that simply because business assets accumulated equity, it does not mean the matrimonial assets were impoverished. There was no additional evidence which could establish the matrimonial assets were impoverished or were impoverished unreasonably. As for subsection 13(e), which says to consider “the date and manner of acquisition of the assets”, the Court of Appeal found that the trial judge’s conclusion was based on the earlier conclusion that the disputed assets were both business and matrimonial. As such, this part of the trial judge’s analysis was deemed to be an error.

Finally, the trial judge failed to complete the entire section 13 analysis. The Court of Appeal confirmed that as per Donald v. Donald, (1991) 1991 CanLII 8267 (NS SC), 103 N.S.R. (2d) 322 (C.A.), there is a two-step test. First, which the trial judge completed, a court must determine if it would be unfair or unconscionable to divide the matrimonial assets equally. The second step, which the trial judge did not complete, asks what division would be fair and conscionable. Rather, the trial judge relied upon the quantum she set out in relation to the issue of classification of the assets. The Court of Appeal was satisfied that the trial judge erred in several aspects of her section 13 analysis and those errors had a material impact on the award, as such, this part of the decision was not subject to deference.

The Court of Appeal concluded that an appropriate award under section 13 would be $1,500,000, down from the trial judge’s award of $4,477,165. The determination was to be made with a goal of bringing the division of assets into a range which would be fair and conscionable and no further. This quantum was arrived at after considering the trial judge’s analytical errors, the strength of the remaining section factors, including the respondent’s disproportionate assumption of child care and other responsibilities (which allowed the appellant to acquire and develop the business assets).

Did the judge err in her costs award?

The trial judge awarded the respondent $422,567 in costs of which $168,117 related to expert fees incurred in the process of valuing the disputed assets. The Court of Appeal concluded that after the appellant was successful on appeal, the overall success of the parties was divided, meaning the parties should bear their own costs at trial and on appeal. As for the expert fees, the Court of Appeal agreed with the trial judge’s assessment, as the costs incurred by the respondent resulted largely from the appellants disclosure deficits.

The appellant put forward a motion for fresh evidence, which was comprised of communications between trial counsel and transcripts of pre-trial conferences with Justice Forgeron. The appellant argued that this evidence would “remove any evidentiary basis for the trial judge’s finding regarding non-disclosure which was used to underpin her costs award”. The Court of Appeal disagreed, as they felt that this evidence could have been adduced at trial with due diligence and it was insufficient to overturn the trial judge’s reasoning in relation to the respondent’s expert fees.

 

MacDonald v. Daley, 2023 NSSC 224

Judge: Justice Ingersoll

Subject: Child support; Income

Summary:

The parties, Mr. D and Ms. M, are parents of a 17-year-old daughter. The parties agree that Mr. D must pay child support and contribute to appropriate special and extraordinary expenses but disagree on the amounts of this support. The parties had previously consented to a Corollary Relief Order in 2013, which required Mr. D pay support on his then income. There were various issues to be decided by the judge, including whether a material change occurred, determining Mr. D’s income, and determining child support obligations and special expenses.

Upon review, the judge concluded that there was a material change in circumstances. The relevant factors were that Mr. D’s income increased significantly since 2013, he unilaterally increased child support payments, stopped paying for childcare, started paying for dance instructions for their child, and he relocated to Iqaluit.

One of the main points of dispute was around compensation previously received by Mr. D, which he would no longer receive in 2023. Those were “Northern Benefits” (for working in an “isolated post”), Vacation Travel Assistance, and Overtime. Mr. D no longer received Northern Benefits, as his wife, a fellow RCMP officer, began claiming them, as only one spouse can claim this benefit and her doing so would limit his income tax consequences. The judge decided to apportion these benefits and added half of their estimated value to Mr. D’s imputed income.

The Vacation Travel Assistance benefit is also only able to be claimed by one spouse. Mr. D’s wife is expected to claim this going forward. The judge found that it should be included as income, because it relates to non-work-related-travel. The judge similarly apportioned half of this expected benefit to Mr. D.

Finally, the judge determined that Mr. D will reasonably not earn income from working overtime and no income should be imputed in respect to his past overtime income. Mr. D no longer earns overtime because he has moved and been promoted, resulting in less overtime opportunities, his wife returned to work full time, which reduced the burden on him, and he and his wife have three small children, making it difficult for both parents to be engaged in overtime work.

Mr. D claimed his income should be reduced, as he incurs greater costs from living in Iqaluit, which is partly the reasoning for the Northern Benefit. He also claimed that the VTA is required for their mental and physical well being from the impacts of living in Iqaluit, resulting from the exposure to months of complete darkness, harsh weather, and isolation. The judge was not satisfied by these arguments. In part, because he lacked evidence which would substantiate some of these claims, such as the additional expenses around food and personal items. Mr. D is also able to claim a Residency deduction on his annual tax returns. Finally, a claim for the reduction in income because the VTA is necessary for their physical and emotional well being is not a basis on which taxable payments made to a party should be reduced or excluded.

The judge determined that expenses for counseling, orthodontics, optometry, a driver education program, and a camp for children with congenital heart defects, all were valid section 7 special expenses. It was also found that expenses for competitive volleyball, a volleyball camp, a YMCA membership, and a swim instructor course, were all extraordinary expenses. These were important for their daughter’s health, as she has a heart issue, or they were important for he to build her skill set for employment opportunities. The judge however did not find that a leadership camp was necessary, and thus did not classify it as an extraordinary expense.

Mr. D finally claimed that Ms. MacDonald was intentionally underemployed given her education level and because she had not made a claim for spousal support. The judge dismissed this, as she was receiving a CPP disability pension and a small amount of additional income. The judge found he lacked sufficient evidence to find she was underemployed.

 

Rashid v. Nisar, 2023 NSSC 254

Judge: Justice Ingersoll

Subject: Relocation; Travel

Summary:

The parties were parents of a 6-year-old child. A consent Corollary Relief Order, from November 2022, granted the mother primary care of the parties’ child, while the father had parenting time three times a week. Both parties lived in Halifax. The mother accepted an offer of employment which would see her in Prince Edward Island for training and then in New Brunswick afterwards. The father consented to the relocation and variation of parenting time, but the parties could not agree on transportation to facilitate the father’s parenting time.

The mother’s position was that the parties share the transportation responsibility, and they meet halfway to facilitate parenting time. The father’s position was that the mother should bare the full responsibility of transporting their child. For the mother to drive their child from PEI to Halifax, it would take 13 hours of driving every second weekend by the mother. When the mother moves to New Brunswick, it would take 18 hours every second weekend.

The judge noted there was no evidence that the father was unable to drive halfway to PEI or New Brunswick. It was found that it would not be in the best interests of the child for the mother to drive 13 hours or 18 hours every second weekend. This amount of driving would be expensive, potentially dangerous, impact her ability to work, and would disrupt her life. The relocation was said to be in the best interests of the child and the increased burden of driving should be shared between parties. Sharing the transportation of the child is fair, appropriate, and reasonable.

 

Salloum v. Salloum, 2023 NSSC 233

Judge: Justice Ingersoll

Subject: Divorce; child support; division of property

Summary:

The parties have two sons, one 19 years old and the other 17 years old. Ms. S sought a divorce, primary care of their youngest son and sole decision making, retroactive child support from 2015, and division of property. Mr. S agreed to the divorce, primary care, decision making, and equal division of property. He claimed however that between 2015 and 2022, his father paid the mortgage, property taxes, heating costs, and insurance on the matrimonial home. He sought to have those payments satisfy his child support obligations during that period.

The parties separated in 2012. Mr. S paid expenses related to the matrimonial home from separation until 2015. Then his father paid through 2022. The court calculated that between 2012 and 2015, Mr. S overpaid child support and matrimonial property related expenses by $9,723.92. Combining this value with Mr. S’ unpaid child support from 2015 through 2023, Mr. S owed $57,212.08.

Mr. S claimed Ms. S asked his father to make matrimonial property payments on his behalf and that payments made were going to be deducted out of Mr. S’ inheritance. Both were proven to be untrue. The judge concluded that these payments should not offset child support payments, as they are not considered income for the purposes of child support, there was no agreement or contract in place, Mr. S had the means to pay child support, and Mr. S’ father also paid expenses directly to his grandchildren and daughter in law.

 

Bose v. Bose, 2023 NSSC 257

Judge: Justice Elizabeth Jollimore

Subject: Contempt of parenting order

Summary:

The mother was found in contempt of certain terms of a Corollary Relief Order granted in 2022. The mother denied various instances of the father’s parenting time throughout the year. The father asked that the mother be imprisoned and that it be suspended provided she complies with the Corollary Relief Order. The mother asks that she be ordered to pay a $500 fine and order imprisonment if she defaults.

The court stated that the focus of a contempt proceeding is far greater than the denial of parenting time, because obeying the law and following court orders are foundations of social order. The mother’s penalty is both to secure her compliance with the order and protect the administration of justice.

The mother argued there were several mitigating factors. She claimed she made efforts to provide parenting time. While she had improved, she still denied the father’s parenting time without justification. She also claimed she denied parenting time previously because she received documents in the mail which caused her to fear for the child’s safety, but these were not provided to the court, the Department of Community Services, or the police. She also apologized and claimed she did not understand she had no authority for what she did, but the judge countered by stating that the Corollary Relief Order was clear and unequivocal.

There were three aggravating factors, which were her not apologizing for breaching the order or denying parenting time, the breaches began on the first day parenting time was ordered to start, and because she continued to deny parenting time five months after a contempt motion was filed. The judge ordered a month of imprisonment, which was suspended on the condition that the mother met various conditions. Those included complying with the order, attending parental education classes, therapeutic counselling for their son with the father, and costs of $1,000.

 

Friesen v. Friesen, 2023 NSSC 256

Judge: Justice Elizabeth Jollimore

Subject: Costs

Summary:

This is a cost decision from a divorce trial. Ms. F incurred costs of $19,341.71. Ms. F was more successful at trial, as Mr. F was offered to settle on terms which were more favourable than the results achieved at trial.

Mr. F argued that Ms. F was not successful, as she did not receive what she had asked for. But she received more than she had asked for. He further argued that Ms. F could afford her fees, as she could afford a lawyer. Costs are not denied to someone who can afford a lawyer. Costs are intended to motivate rational behaviour and to promote settlements. The judge dismissed claims that Mr. F had too many other expenses, as tuition fees can be paid by a RESP for their son and Ms. F pays child support. Mr. F was ordered to pay a substantial contribution to reasonable fees, which was found to be $12,250.

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