Conway v. Simpson, (2011) 264 Man.R.(2d) 224 (QBM)

• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: May 06, 2011
• Jurisdiction: Manitoba
• Citations: (2011), 264 Man.R.(2d) 224 (QBM);2011 MBQB 101

Conway v. Simpson (2011), 264 Man.R.(2d) 224 (QBM)

MLB headnote and full text

Temp. Cite: [2011] Man.R.(2d) TBEd. MY.031

Lori Lynn Conway (petitioner) v. William Grant Simpson (respondent)

(FD 06-02-03075; 2011 MBQB 101)

Indexed As: Conway v. Simpson

Manitoba Court of Queen's Bench

Brandon Centre

Harrison, Master

May 6, 2011.

Summary:

A reference order set both the opening and closing dates in this accounting to coincide with the date of marriage (July 9, 1988) and the parties' separation (March 18, 2006). The husband was a farmer, cultivating land and running cattle. There were numerous property issues, of varying degrees of complexity and value.

A Master of the Manitoba Court of Queen's Bench determined the issues.

Choses in Action - Topic 22

General - Definitions - Chose in action - What constitutes - [See fourth Family Law - Topic 880.55 ].

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The opening and closing dates in this accounting coincided with the date of marriage (July 9, 1988) and the parties' separation (March 18, 2006) - Upon their marriage, the parties chose the wife's house as their marital home - The wife's position was that as the marital home still remained registered in her name alone at separation, she should receive some $6,300 worth of equity which she submitted she had acquired prior to marriage - A Master of the Manitoba Court of Queen's Bench directed that the wife receive the credit - The use and consequent classification of the property as the family home did not override the statutory exemption in favour of the wife, set forth in s. 4(1)(c) of the Family Property Act: "This Act does not apply to any asset acquired by a spouse while unmarried" - See paragraphs 7 to 11.

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The opening and closing dates in this accounting coincided with the date of marriage (July 9, 1988) and the parties' separation (March 18, 2006) - Upon their marriage, the parties chose the wife's house as their marital home - The home's ultimate sale took place pursuant to a 2007 court order under the Homesteads Act - The purchase price was $50,000 - An appraisal had valued the marital home at separation at $49,000 - A Master of the Manitoba Court of Queen's Bench accepted the value as being that of a bona fide sale ($50,000), given the difficulty with precision in appraisal circumstances - Also, the sale proceeds were, after an equity deduction in favour of the wife, shared equally - That equal division arose by virtue of the husband's judicially enforced exercise of his veto right to any market sale - "It is virtually impossible for any expert or court of law to determine the fair market value of land for accounting purposes which is subject to such a vending impediment. The provisions of the Family Property Act (ss. 44 and 45) remain 'in addition to and not in substitution for or in derogation of the rights given under The Homesteads Act' " - See paragraphs 12 and 13.

Family Law - Topic 876

Husband and wife - Marital property - Distribution orders - Family or matrimonial assets - [See second, third and fifth Family Law - Topic 880.55 ].

Family Law - Topic 877

Husband and wife - Marital property - Distribution orders - Business, commercial or non- family assets - [See fourth Family Law - Topic 880.55 ].

Family Law - Topic 880.1

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - General (incl. pre-marriage acquisitions) - [See first Family Law - Topic 865 ].

Family Law - Topic 880.8

Husband and wife - Marital property - Distribution orders - Evidence - [See first Family Law - Topic 880.55 ].

Family Law - Topic 880.18

Husband and wife - Marital property - Distribution orders - Tracing - [See first Family Law - Topic 880.55 ].

Family Law - Topic 880.55

Husband and wife - Marital property - Distribution orders - Particular property - Livestock, crops, inventory, quotas, subsidies, etc. - The husband, at separation, was operating a mixed farm - One of his profit centres was the production of grain - There was no real effort made on his part to actually trace the sales of the grain to the generic totals shown in his annual tax returns - A Master of the Manitoba Court of Queen's Bench stated that, in order to accurately divide and ascertain the wife's entitlement under the legislation, some effort had to be made by the husband to follow the cash generated from the crop through to sale and even beyond, as the crop involved a trifurcation of the sale process - Attached to each of the three payments would have been full particulars as to, inter alia, quantum and consideration - "These initial, interim and final payment documents are vital account documents" that were not produced by the husband - See paragraph 35.

Family Law - Topic 880.55

Husband and wife - Marital property - Distribution orders - Particular property - Livestock, crops, inventory, quotas, subsidies, etc. - The husband, at separation, was operating a mixed farm - One of his profit centres was the production of grain - A Master of the Manitoba Court of Queen's Bench stated that "[B]y looking at the tax returns, the [Canadian Wheat Board] documentation and the [Manitoba Agricultural Services Corporation] reports, a complete and thus accurate position of grain production and storage at nearly any point in time during the calendar year can be ascertained" - Such a tracing paper trail was not fully produced by the husband in a format complete enough to provide reliability - In the end result, the court held that the wife had an entitlement at the date of separation to a portion of the grain in store on the farm, and to interim and final payments not yet received at the date of separation - Section 6(6) of the Family Property Act provided that: "Where this Act applies to an asset, it applies as well to the proceeds of sale of the asset  ..." - Given the husband's failure to account in a proper evidentiary fashion, the court accepted the wife's value for grain ($62,345) and entered that sum under the husband's column of marital assets at separation - See paragraphs 36 and 37.

Family Law - Topic 880.55

Husband and wife - Marital property - Distribution orders - Particular property - Livestock, crops, inventory, quotas, subsidies, etc. - An issue on this accounting concerned a Canadian Agricultural Income Stabilization (CAIS) payment received by the husband from the Government of Canada - The cheque was issued within two weeks after the parties separated - The husband's position was that the payment was not a marital asset under the Family Property Act (FPA) - A Master of the Manitoba Court of Queen's Bench disagreed - "If, as determined by Ronald [(Bankrupt), Re], a CAIS payment is property which must devolve to a trustee in bankruptcy or the secured creditors, this court cannot find a reason why a spouse and full partner should not have a 50% entitlement as to its value within an accounting under the FPA" - There were certain similarities between the definition of "property" in the Bankruptcy and Insolvency Act and the definition of "asset" under the FPA - The husband became entitled to the payment well before the date of separation - The court therefore relied on the inclusion of non-marketable assets under s. 15(3) of the FPA - See paragraphs 38 to 40.

Family Law - Topic 880.55

Husband and wife - Marital property - Distribution orders - Particular property - Livestock, crops, inventory, quotas, subsidies, etc. - An issue was whether or not the monies paid to the husband, after separation, under the Grains and Oilseeds Payment Program, were assets within the definition contained in the Family Property Act or proceeds therefrom - The funds did not flow to the husband as a result of any interest in real or personal property nor a related legal/equitable right - Similarly, at separation, the husband did not have the money/cheque in his possession - A Master of the Manitoba Court of Queen's Bench stated that the issue distilled down to whether the husband possessed at separation a right or chose in action in the monies; i.e., could he successfully compel, in a court of law, payment of the monies he ultimately did receive - Looking at the policies and federal legislation, the court held that the husband could not have, at or before separation, sued the federal government to receive the funding he did ultimately receive - Thus, the funds were not included within the husband's column of separation date assets - See paragraphs 46 to 60.

Family Law - Topic 880.55

Husband and wife - Marital property - Distribution orders - Particular property - Livestock, crops, inventory, quotas, subsidies, etc. - The husband farmed on a full-time basis at the time of his marriage - He then owned a herd of 20 cow/calf pairs - The herd was built up from within itself - At the time of the parties' separation, the herd had more than doubled - In this accounting, his position was that as the "separation" herd could be traced directly back to the original, the herd should be a total or partially exempt asset - A Master of the Manitoba Court of Queen's Bench disagreed - A cattle herd had economic characteristics of both a capital asset and an inventory asset - Also, upon sale, whether periodic or an entire herd liquidation, the calves and/or mature animals generated cash - In addition, there was no evidentiary foundation to divide the asset to create an exemption for a separation date fair market value - Thus, the court included in the husband's column of assets the fair market value of the entire herd at separation - See paragraphs 78 and 79.

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation (incl. time for) - [See second Family Law - Topic 865 ].

Family Law - Topic 948.1

Husband and wife - Marital property - Distribution orders - Practice - Delayed or instalment payments - [See first Family Law - Topic 880.55 ].

Cases Noticed:

Williams v. Kruger (2008), 229 Man.R.(2d) 133; 54 R.F.L.(6th) 371; 2008 MBQB 150, folld. [para. 8].

Galarneau v. Galarneau (2006), 202 Man.R.(2d) 301; 2006 MBQB 69 (Master), refd to. [para. 32].

English v. English, [2007] Man.R.(2d) Uned. 23; 2007 MBQB 104, refd to. [para. 33].

Ronald (Bankrupt), Re, [2008] 11 W.W.R. 592; 231 Man.R.(2d) 87; 437 W.A.C. 87; 2008 MBCA 104, appld. [para. 39].

Cargill Ltd. v. Ronald (Trustee of) - see Ronald (Bankrupt), Re.

Saulnier (Bankrupt), Re (2006), 246 N.S.R.(2d) 239; 780 A.P.R. 239; 2006 NSCA 91, consd. [para. 55].

Dashevsky v. Dashevsky (1986), 40 Man.R.(2d) 58; 49 R.F.L.(2d) 404; 39 R.P.R. 211 (Q.B. Fam. Div.), refd to. [para. 68].

Kowaluk v. Kowaluk (1996), 110 Man.R.(2d) 184; 118 W.A.C. 184 (C.A.), refd to. [para. 79].

Authors and Works Noticed:

Ziff, Bruce H., Principles of Property Law (3rd Ed. 2000), p. 2 [para. 47].

Counsel:

Jack D. Cram, for the petitioner;

Robert H. Johnston, Q.C., for the respondent.

This accounting was heard before Harrison, Master, of the Manitoba Court of Queen's Bench, Brandon Centre, who delivered the following judgment, with reasons, on May 6, 2011.