Enns v. Enns, 2010 SKQB 126

• Judge: M-E. Wright, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: March 30, 2010
• Jurisdiction: Saskatchewan
• Citations: 2010 SKQB 126;(2010), 353 Sask.R. 158 (FD)

Enns v. Enns (2010), 353 Sask.R. 158 (FD)

MLB headnote and full text

Temp. Cite: [2010] Sask.R. TBEd. AP.017

Marni Lynn Enns (petitioner) v. Norman Edward Enns (respondent)

(2005 Div. No. 661; 2010 SKQB 126)

Indexed As: Enns v. Enns

Saskatchewan Court of Queen's Bench

Family Law Division

Judicial Centre of Saskatoon

M-E. Wright, J.

March 30, 2010.

Summary:

The parties married in 1990, when the wife was 19 and the husband was 32. They separated in 2005. There were two children of the marriage. The husband farmed. The wife had helped on the farm until the children were born, when she became a full-time parent. At issue on the wife's petition was the determination of the husband's income, the valuation of property and exemptions from distribution and the husband's child and spousal support obligations.

The Saskatchewan Court of Queen's Bench, Family Law Division, determined the issues.

Family Law - Topic 877

Husband and wife - Marital property - Distribution orders - Business, commercial or non- family assets - [See first Family Law - Topic 882 ].

Family Law - Topic 880.1

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - General (incl. pre-marriage acquisitions) - The parties married in 1990 - At that time, the husband owned 11 quarter sections of land - One quarter section was sold - In 1993, the parties had incorporated their farm and the land and equipment was transferred to the company - The parties separated in 2005 - The wife petitioned for, inter alia, a division of family property - The husband claimed that certain property, including the 10 quarter sections owned at the time of marriage, was exempt from distribution - The Saskatchewan Court of Queen's Bench, Family Law Division, determined the exemptions - The 10 quarter sections remained in existence - The husband's equity was $51,889 and was exempt from distribution - Regarding pre-marriage assets that no longer existed, the husband had to demonstrate that there was a current asset in existence as a result of an exchange of the asset that existed prior to the marriage - The court rejected the husband's assertion that the grain inventory and livestock that he held at marriage were traceable in the value of preferred shares that the husband had received for them when the company was incorporated - The exchange occurred more than three years after the marriage - The husband was entitled to an exemption for certain machinery and vehicles where he was able to provide "reasonably cogent evidence" that an existing asset could be linked, through sales or trades, to the asset held at marriage - The husband's claim regarding certain equities and investments failed - See paragraphs 96 to 118.

Family Law - Topic 880.12

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - Post-marital exchange of pre-marital exempt assets - [See Family Law - Topic 880.1 ].

Family Law - Topic 880.18

Husband and wife - Marital property - Distribution orders - Tracing - [See Family Law - Topic 880.1 ].

Family Law - Topic 880.32

Husband and wife - Marital property - Distribution orders - Particular property - Registered Retirement Savings Plans, R.E.S.P.'s, Income Funds, unregistered investments, etc. - [See second Family Law - Topic 882 and second Family Law - Topic 888 ].

Family Law - Topic 880.36

Husband and wife - Marital property - Distribution orders - Particular property - Active business - [See first Family Law - Topic 882 ].

Family Law - Topic 882

Husband and wife - Marital property - Considerations in making distribution orders - Relevant considerations (incl. income tax) - The parties married in 1990 and separated in 2005 - The wife petitioned for, inter alia, a division of family property - At issue was the value of the family farm, which had been incorporated in 1993 with the husband (51%) and the wife (49%) holding shares - Thomson (the wife's expert) estimated the value of the shares of the company to be $1,616,933 - Thibodeau (the husband's expert) determined the value to be $1,597,204 - The Saskatchewan Court of Queen's Bench, Family Law Division, preferred the valuation provided by Thibodeau over that of Thomson - Thibodeau appropriately included reasonable liquidation costs for livestock and inventory, a consideration not taken into account by Thomson - Further, Thibodeau's estimate of the tax consequences to the company on liquidation was more realistic than that of Thomson, who based his estimate on a hypothetical disposition spanning several years - That would not be the case - Therefore, the net after tax value of the shares of the company was $1,597,204 - The court also accepted Thibodeau's evidence that the personal tax consequences to the shareholders resulting from a liquidation would be $443,200 - Thomson had not provided any such concrete estimate, assuming instead that a structured settlement could be achieved by the parties resulting in an equalization of any tax implications - That had not occurred and would not occur - Failing such a settlement, Thomson's estimate of the range of resultant tax liability that would be occasioned by the shareholders encompassed the value provided by Thibodeau - Therefore, the final value of the shares, net of tax, was $1,154,000 - See paragraphs 57 to 78.

Family Law - Topic 882

Husband and wife - Marital property - Considerations in making distribution orders - Relevant considerations (incl. income tax) - The parties married in 1990 and separated in 2005 - The wife petitioned for, inter alia, a division of family property - At issue in the valuation of family property for division was the tax discount, if any, that was to be deducted from the value of the parties' investments occasioned by any future disposition - The husband asserted that the value of the registered investments should be reduced by 30% to reflect the inherent tax consequences that would arise on disposition - Regarding non-registered investments, the husband asserted that a disposition would incur tax ramifications of 50% - The Saskatchewan Court of Queen's Bench, Family Law Division, held that the appropriate discount rate for the registered and non-registered investments was 25% - The problematic issue here was the appropriate discount that was to be used where no immediate sale was pending or contemplated - While the court had to try to work justice and consider all contingencies, it had been recognized that a spouse who was in possession of property with an inherent tax liability could potentially have the ability to minimize or reduce the tax consequences of a future disposition - That was the situation here - In certain circumstances, the husband might incur a tax liability of up to 50% - However, he had never paid taxes in that range - As he had been able to minimize tax consequences in the past, it was likely that he would do so in the future - See paragraphs 91 to 94.

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation (incl. time for) - [See both Family Law - Topic 882 ].

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation (incl. time for) - The parties married in 1990 and separated in 2005 - The wife petitioned for, inter alia, a division of family property - At trial in 2010, the parties disagreed regarding the valuation date for the parties' registered retirement savings plans (RRSPs), which had increased in value solely due to market influences - The Saskatchewan Court of Queen's Bench, Family Law Division, held that the appropriate date of valuation was the date of the application (December 2005) - The fact that the increase in value was solely due to market influences weighed heavily in favour of using the date of adjudication, as the wife suggested - However, that was only one factor - The husband had produced statements verifying the value of his RRSPs both at the time of application and at the time of trial - The wife had produced evidence of the value of her RRSPs only at the time of application - She stated that she had redeemed more than $30,000, but provided limited documentation in support of that assertion - She did not provide statements showing the value of the investments that remained in existence - This left the court to speculate whether the funds had been redeemed and whether they existed in some other form of investment - In those circumstances, it would be unfair to value the husband's RRSPs at the time of adjudication and the wife's at the time of application - See paragraphs 54 and 55.

Family Law - Topic 1900

Custody and access - Considerations in awarding custody - Maximum contact with each parent - [See Family Law - Topic 2073 ].

Family Law - Topic 2073

Custody and access - Joint custody - Considerations - The parties married in 1990 and separated in 2005 - There were two children of the marriage - The father farmed - The mother had helped on the farm until the children were born, when she became a full-time parent - At issue was the appropriate parenting arrangement - Under an interim order, the parties shared joint custody - The children and the mother lived in Saskatoon, while the father lived on the farm and had specified access - The mother sought sole custody with access for the father every second weekend and half of all holidays - The father was not opposed to joint custody, but wanted the children to live with him on the farm - The Saskatchewan Court of Queen's Bench, Family Law Division, held that the parties were to continue to retain joint custody - The mother had demonstrated a reluctance to share important information with the father or to be forthcoming about matters relating to the children - To grant her sole custody would exacerbate that undesirable quality - However, the children were to remain in the primary care of the mother as she had been their primary caregiver since birth - The court rejected the mother's assertion that the father's access should be limited and, instead, in specifying the father's access periods gave effect to the principle of maximum contact with each parent as this was in the children's long term best interests - See paragraphs 21 to 31.

Family Law - Topic 4021.4

Divorce - Corollary relief - Maintenance and awards - Awards - Considerations - Ability to pay (incl. potential to earn income and calculation of income) - The parties married in 1990 and separated in 2005 - There were two children of the marriage - The father farmed - The mother was a full-time parent - In 1993, the parties had incorporated their farm and the land and equipment was transferred to the company - The mother and father became shareholders - Their personal expenses were paid by the company and then allocated to them each year as either salary or dividends - Following separation, under interim orders, the father paid child support of $900 per month, subsequently increased to $1,276 per month and spousal support of $2,350 per month - No determination was made regarding his level of income - At issue on the mother's petition was the father's level of income - Both parties retained experts who estimated the cash flow available for distribution from the company - The mother's expert asserted that a minimum of $186,675 was available to the shareholders annually, representing the three year average of the company's income before taxes plus all salaries and benefits paid to shareholders - The father's expert asserted that the most that could be withdrawn annually from the company was $131,795, representing a 10 year average of the withdrawals attributed to the parties together with the 10 year average positive cash flow in the company of $1,703 - The father asserted that after adjustment to reflect the actual amount of dividends and capital gains, his total income in the most recent taxation year was $92,463 and that this figure should be used for determining his child and spousal support obligations - The Saskatchewan Court of Queen's Bench, Family Law Division, after indicating that it was not possible to determine the father's income on an ongoing basis with any degree of scientific precision, held that a reasonable amount that he would be able to withdraw from the company in the future would be $100,000 annually - See paragraphs 32 to 44.

Family Law - Topic 4021.5

Divorce - Corollary relief - Maintenance and awards - Awards - Support guidelines (incl. non-divorce cases) - [See Family Law - Topic 4022 ].

Family Law - Topic 4022

Divorce - Corollary relief - Maintenance and awards - Awards - To wife - Considerations - The parties married in 1990, when the wife was 19 and the husband was 32 - They separated in 2005 - There were two children of the marriage - The husband farmed - The wife had helped on the farm until the children were born, when she became a full-time parent - Following separation, under interim orders, the father paid child support of $900 per month, subsequently increased to $1,276 per month and spousal support of $2,350 per month - The wife petitioned for, inter alia, spousal support of $5,000 per month, retroactively to the date of her application (2005) and indefinitely into the future - The Saskatchewan Court of Queen's Bench, Family Law Division, awarded the wife spousal support of $2,000 per month for a period of eight years from the time of separation - The wife was entitled to compensatory and non-compensatory support - The Spousal Support Advisory Guidelines suggested a range of $1,627 to $2,102 per month, based on the husband's income, with a suggested duration of 7.5 to 15 years from separation - The amount of $2,000 per month gave the wife approximately 57% of the monthly cash flow - The wife's expectation of indefinite support was based on a physical inability to obtain or retain employment - At the time of trial, she was not working or seeking employment and had taken no steps to upgrade her education or training - Her evidence with respect to her health was not credible - She had received support since separation - Continuing that support for another 3.5 years would allow her to seek training to assist her in becoming self-sufficient - It was not necessary to make any order for retroactive support - See paragraphs 122 to 140.

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance and awards - Awards - To spouse - Extent of obligation - [See Family Law - Topic 4022 ].

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - [See Family Law - Topic 4021.4 ].

Cases Noticed:

Young v. Young et al., [1993] 4 S.C.R. 3; 160 N.R. 1; 34 B.C.A.C. 161; 56 W.A.C. 161, refd to. [para. 26].

C.G.H. v. D.M.H. (2002), 222 Sask.R. 141; 2002 SKQB 319 (Fam. Div.), refd to. [para. 26].

Benson v. Benson (1994), 120 Sask.R. 17; 68 W.A.C. 17, additional reasons (1994), 123 Sask.R. 122; 74 W.A.C. 122 (C.A.), refd to. [para. 51].

Russell v. Russell (1999), 180 Sask.R. 196; 205 W.A.C. 196 (C.A.), refd to. [para. 54].

Carlson v. Carlson (1984), 34 Sask.R. 287 (C.A.), refd to. [para. 93].

Deyell v. Deyell (1991), 90 Sask.R. 81 (C.A.), refd to. [para. 98].

Vilcu v. Grams (1999), 172 Sask.R. 201; 185 W.A.C. 201 (C.A.), refd to. [para. 105].

Vilcu v. Vilcu - see Vilcu v. Grams.

Bracklow v. Bracklow, [1999] 1 S.C.R. 420; 236 N.R. 79; 120 B.C.A.C. 211; 196 W.A.C. 211, refd to. [para. 128].

Authors and Works Noticed:

Canada, Department of Justice, Spousal Support Advisory Guidelines: A Draft Proposal - see Rogerson, Carol, and Thompson, Rollie, Spousal Support Advisory Guidelines: A Draft Proposal.

Rogerson, Carol, and Thompson, Rollie, Spousal Support Advisory Guidelines: A Draft Proposal (2005), generally [para. 131].

Counsel:

L. Greenhorn and J. Kwok, for the petitioner;

G. Walen, Q.C., and L. Tallis, for the respondent.

This action was heard by M-E. Wright, J., of the Saskatchewan Court of Queen's Bench, Family Law Division, Judicial Centre of Saskatoon, who delivered the following judgment on March 30, 2010.