Eyking v. Eyking, (2012) 323 N.S.R.(2d) 213 (SC)

• Judge: Wilson, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: February 06, 2012
• Jurisdiction: Nova Scotia
• Citations: (2012), 323 N.S.R.(2d) 213 (SC);2012 NSSC 409

Eyking v. Eyking (2012), 323 N.S.R.(2d) 213 (SC);

    1025 A.P.R. 213

MLB headnote and full text

Temp. Cite: [2012] N.S.R.(2d) TBEd. DE.004

Karen Ann Eyking (petitioner) v. Christopher Luke Eyking (respondent)

(1206-005979; 2012 NSSC 409)

Indexed As: Eyking v. Eyking

Nova Scotia Supreme Court

Family Division

Wilson, J.

November 28, 2012.

Summary:

The parties married in 1987 and separated in March 2006. At issue on the mother's petition for divorce was the father's child and spousal support obligation, both ongoing and retroactive, and the division of matrimonial property.

The Nova Scotia Supreme Court, Family Division, determined the issues.

Family Law - Topic 875

Husband and wife - Marital property - Distribution orders - Statutes requiring equal division - Exceptions (incl. judicial reapportionment) - The parties married in 1987 and separated in March 2006 - The husband was an employee and shareholder of two family businesses - At issue in the division of property was the division of the husband's shareholder loans and equity interest in the businesses - The wife claimed an unequal division of the husband's equity interest in the businesses in the form of a lump sum payment equal to 40% of the value of the husband's shares (under s. 13 of the Matrimonial Property Act) or, alternatively, based on the wife's contribution to the businesses (s. 18) - The value of the claim would exceed $1.5 million, based on a business valuation before the court - The Nova Scotia Supreme Court, Family Division, declined to order a division of the equity interest under either s. 13 or 18 - The wife had not made any significant or direct contribution to the businesses that warranted compensation under s. 18 - Further, the wife had not satisfied the court that a division was warranted under s. 13 - The husband's equity interest was a business asset and, thus, excluded from the definition of matrimonial assets by s. 4(1)(a) of the Act - The court had already ordered a division of matrimonial assets and shareholder loans - The total value of those assets was $1,525,000 - The wife's spousal support award included compensation based on the husband's business ownership - The wife had not established that a division of matrimonial assets in equal shares would be unfair or unconscionable - See paragraphs 100, 123 to 125.

Family Law - Topic 875

Husband and wife - Marital property - Distribution orders - Statutes requiring equal division - Exceptions (incl. judicial reapportionment) - [See Family Law - Topic 876 ].

Family Law - Topic 876

Husband and wife - Marital property - Distribution orders - Family or matrimonial assets - The parties married in 1987 and separated in March 2006 - The husband was an employee and shareholder of two family businesses - At issue in the division of property was the division of the husband's shareholder loans and equity interest in the businesses - The wife asserted that shareholder loans of $861,503 were matrimonial assets that had to be divided equally - The husband asserted that they were business assets, the purpose of which was to ensure the continued operation of the business - The Nova Scotia Supreme Court, Family Division, held that the shareholder loans were matrimonial assets and were subject to an equal division - The issue was whether the loans were primarily used or held for an income producing purpose within the meaning of the definition of "business asset" in the Matrimonial Property Act - The husband had not provided convincing evidence of a good business reason to retain the loans by the corporation aside from generalities about future capital needs and the desire to maintain a healthy balance - Therefore, the loans were not "primarily held for an income producing purpose as contemplated by the Act" - Even if the loans were not matrimonial assets, the court would have divided them under s. 13 of the Act as an equal division of matrimonial assets would have been unfair or unconscionable - The wife was entitled to a division of the shareholder loans equal to 50% of their value at the date of separation - See paragraphs 101 to 122.

Family Law - Topic 877

Husband and wife - Marital property - Distribution orders - Business, commercial or non- family assets - [See first Family Law - Topic 875 and Family Law - Topic 876 ].

Family Law - Topic 880

Husband and wife - Marital property - Distribution orders - Contribution to business asset - [See first Family Law - Topic 875 ].

Family Law - Topic 880.47

Husband and wife - Marital property - Distribution orders - Particular property - Company shares, stock options, etc. - [See first Family Law - Topic 875 ].

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance and awards - Retroactive awards - The parties married in 1987 and separated in March 2006 - At issue was the father's child support obligation, both ongoing and retroactive - Under a 2007 interim consent order, the father paid child support for three children, based on an estimated annual income of $150,000 - The Nova Scotia Supreme Court, Family Division, having imputed an income of $309,726 to the father for child support purposes, held that it was appropriate to order retroactive child support, effective April 1, 2006, when the father left the home - This was nine months prior to the mother's application for child support - The father had the capacity to pay and the order would not cause him undue hardship - The children did not have the benefit of an appropriate level of support during this time - The mother's financial resources were limited and she had assumed a disproportionate share of child-related expenses - While the retroactive order would result in a transfer of wealth to the mother, this was because the father had not paid the appropriate level of support in a timely manner - Further, the mother was not responsible for the delayed hearing - After allowing credit for child support paid and other reductions, the total owing in retroactive child support was $224,500 - The court also ordered ongoing support, as requested by the mother, of $500 per month per adult child while attending university away from home and $1,000 per month per child while residing with the mother - These amounts, which were only 27% and 54% of the table amounts, were reasonable - See paragraphs 41 to 64.

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance and awards - Retroactive awards - The parties married in 1987 and separated in March 2006 - Under a 2007 interim consent order, the husband paid spousal support of $1,400 per month based on an annual income of $150,000 - The wife sought ongoing spousal support of $5,000 per month and retroactive spousal support of $172,800, based on an imputed annual income of $309,000 - The Nova Scotia Supreme Court, Family Division, having ordered ongoing spousal support of $4,000 per month based on an earning capacity of $300,000 per year, also found that the husband had not paid an adequate amount of spousal support from July 2007 (five years previously) and onward, when he had the ability to pay more - The court ordered the husband to make a single lump sum payment of $70,000 to the wife in spousal support for the period from July 2007 to November 2012 - The lump sum would not be tax deductible to the husband nor included in the taxable income of the wife - See paragraphs 89 to 92.

Family Law - Topic 4021.1

Divorce - Corollary relief - Maintenance and awards - Considerations - Financial consequences of child care and household responsibilities - [See Family Law - Topic 4022 ].

Family Law - Topic 4021.4

Divorce - Corollary relief - Maintenance and awards - Considerations - Ability to pay (incl. potential to earn income and calculation of income) - [See Family Law - Topic 4022 ].

Family Law - Topic 4022

Divorce - Corollary relief - Maintenance and awards - Awards - To wife - Considerations - The parties married in 1987 and separated in March 2006 - Under a 2007 interim consent order, the husband paid spousal support of $1,400 per month based on an annual income of $150,000 - The wife sought ongoing spousal support of $5,000 per month, based on an imputed annual income of $309,000 - The Nova Scotia Supreme Court, Family Division, ordered ongoing spousal support of $4,000 per month - The husband had an earning capacity of $300,000 per year for the purposes of determining spousal support - The wife's earning capacity was $80,000 per year - The wife was entitled to support on a compensatory and non-compensatory basis - She assumed primary responsibility for the parties' three children - She gave up a career and benefits - Her economic loss or disadvantage was a direct result of the role she had assumed in the marriage - Her standard of living was dependent on the husband's financial resources - In ordering the amount, the court took into account the wife's new relationship which, while not a common law relationship, had to be considered because the wife's standard of living benefited from it - The amount ordered was slightly below the low end of the Spousal Support Advisory Guidelines range - This reflected both the benefit of the wife's new relationship and the fact that the children's university expenses were paid without any contribution by the wife - See paragraphs 65 to 88.

Family Law - Topic 4030

Divorce - Corollary relief - Maintenance and awards - Effect of contribution or conduct or relationships of claimant - [See Family Law - Topic 4022 ].

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines - Calculation or attribution of income - The parties married in 1987 and separated in March 2006 - At issue was the father's child support obligation, both ongoing and retroactive - The father was an employee and shareholder of two family businesses - Under a 2007 interim consent order, he paid child support for three children, based on an estimated annual income of $150,000 - The father's income as reported on his tax returns for the years 2006 to 2011 varied from $364,596 in 2008 to $175,000 in 2010 - His 2011 income was $225,000 - The father requested that his child support obligation be calculated on the basis of an annual income of $150,000 - The Nova Scotia Supreme Court, Family Division, agreed with the mother that the father's income for child support purposes was to be based on his income as reported in his tax returns - The court acknowledged the father's evidence of the existence of an agreement among the shareholders to annually return part of their year-end bonuses to the corporation as shareholder loans - However, this practice did not justify a reduction in the income amount used for the calculation of child support - See paragraphs 25 and 26.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines - Calculation or attribution of income - The parties married in 1987 and separated in March 2006 - At issue was the father's child support obligation, both ongoing and retroactive - The father was an employee and shareholder of two family businesses - Under a 2007 interim consent order, he paid child support for three children, based on an estimated annual income of $150,000 - The father's income as reported on his tax returns for the years 2006 to 2011 varied from $364,596 in 2008 to $175,000 in 2010 - His 2011 income was $225,000 - Asserting that his income had declined for health reasons, the father requested that his child support obligation be calculated on the basis of an annual income of $150,000 - The mother requested an imputed income of at least $309,726, based on his 2009 income - The Nova Scotia Supreme Court, Family Division, imputed an income of $309,726 to the father for child support purposes - The father's assertions regarding his health were not supported by medical evidence - Further, his shareholder status had the ability to influence his income - The mother's suggested income was reasonable - See paragraphs 21 to 40.

Cases Noticed:

MacDonald v. Pink (2011), 311 N.S.R.(2d) 31; 985 A.P.R. 31; 2011 NSSC 421, refd to. [para. 36].

Smith v. Helppi (2011), 306 N.S.R.(2d) 1; 968 A.P.R. 1; 2011 NSCA 65, refd to. [para. 38].

Lu v. Sun (2005), 235 N.S.R.(2d) 353; 747 A.P.R. 353; 2005 NSCA 112, refd to. [para. 45].

Baker v. Baker (2003), 218 N.S.R.(2d) 221; 687 A.P.R. 221; 2003 NSSC 203, refd to. [para. 68].

Fisher v. Fisher (2001), 190 N.S.R.(2d) 144; 594 A.P.R. 144; 2001 NSCA 18, refd to. [para. 78].

Richards v. Richards (2012), 312 N.S.R.(2d) 282; 987 A.P.R. 282; 2012 NSCA 7, refd to. [para. 83].

Ryan v. Ryan, [2009] N.S.R.(2d) Uned. 18; 2009 NSSC 61 (Fam. Div.), affd. (2010), 286 N.S.R.(2d) 371; 909 A.P.R. 371; 2010 NSCA 2, refd to. [para. 96].

Tynes v. Tynes, 2011 NSSC 18, refd to. [para. 99].

Best v. Best (1991), 102 N.S.R.(2d) 61; 279 A.P.R. 61 (C.A.), refd to. [para. 104].

Clarke v. Clarke, [1990] 2 S.C.R. 795; 113 N.R. 321; 101 N.S.R.(2d) 1; 275 A.P.R. 1, refd to. [para. 105].

Tibbetts v. Tibbetts (1992), 119 N.S.R.(2d) 26; 330 A.P.R. 26; 44 R.F.L.(3d) 281 (C.A.), refd to. [para. 106].

Hebb v. Hebb (1991), 103 N.S.R.(2d) 147; 282 A.P.R. 147 (C.A.), refd to. [para. 109].

Johnson v. Johnson (1998), 167 N.S.R.(2d) 201; 502 A.P.R. 201 (S.C.), refd to. [para. 110].

Harwood v. Thomas (1981), 45 N.S.R.(2d) 414; 86 A.P.R. 414 (C.A.), refd to. [para. 122].

Statutes Noticed:

Matrimonial Property Act, R.S.N.S. 1989, c. 275, sect. 2(a), sect. 13, sect. 18 [para. 95].

Counsel:

Lisa Fraser-Hill, for the petitioner;

William L. Ryan, Q.C., for the respondent.

This action was heard at Sydney, Nova Scotia, on August 29-31, 2011, and February 6, 2012, by Wilson, J., of the Nova Scotia Supreme Court, Family Division, who delivered the following judgment on November 28, 2012.