Linn v Frank,

• Jurisdiction: Saskatchewan
• Judge: Jackson, Ottenbreit and Herauf, JJ.A.
• Neutral Citation: 2014 SKCA 87
• Court: Court of Appeal (Saskatchewan)
• Date: 19 February 2014
• Citation: 2014 SKCA 87,(2014), 442 Sask.R. 126 (CA),[2014] 10 WWR 215,[2014] SJ No 458 (QL),442 Sask R 126,[2014] S.J. No 458 (QL),442 Sask.R. 126,442 SaskR 126,(2014), 442 SaskR 126 (CA)

Frank v. Linn (2014), 442 Sask.R. 126 (CA);

    616 W.A.C. 126

MLB headnote and full text

Temp. Cite: [2014] Sask.R. TBEd. AU.026

Robert Linn (appellant/respondent by cross-appeal) v. Darla Frank (respondent/appellant by cross-appeal)

(CACV2378; 2014 SKCA 87)

Indexed As: Frank v. Linn

Saskatchewan Court of Appeal

Jackson, Ottenbreit and Herauf, JJ.A.

August 22, 2014.

Summary:

The parties cohabitated from September 1992 to September 2008. The wife applied for a division of the parties' family property under the Family Property Act and spousal support under the Family Maintenance Act.

The Saskatchewan Court of Queen's Bench, Family Law Division, in a decision reported at 412 Sask.R. 16, determined the issues. The husband appealed the valuation of his shares in South Country Ag Ltd. and the order granting the wife indefinite spousal support. The wife cross-appealed almost all aspects of the determination of the amount of spousal support.

The Saskatchewan Court of Appeal dismissed the husband's appeal and allowed the wife's cross-appeal in part.

Family Law - Topic 695

Husband and wife - Property rights during and after common law marriage or relationship - Valuation (incl. time for) - The parties cohabitated from September 1992 to September 2008 - The wife applied for a division of the parties' family property under the Family Property Act - At issue, inter alia, was the value of the husband's corporate interests (John Deere dealership) - The trial judge accepted Radcliffe's valuation and concluded that the husband's corporate interests were 59.3% of the shares in South Country Ag Ltd. and were worth $2,846,400 - The husband appealed, asserting that (1) Radcliffe's valuation of the South Country Ag shares was based on an open market and not what would likely occur in an actual transaction; (2) the evidence overall supported the conclusion that an arm's length third party would be unlikely to purchase the husband's shares because the success of South Country Ag depended on the working relationship among the management and staff at eight dealerships; (3) the trial judge erred in principle by relying solely on the hypothetical calculations contained in Radcliffe's report in the face of evidence that a sale to a third party was unlikely, and that no one could buy the husband's shares without "John Deere's blessing - The Saskatchewan Court of Appeal dismissed the appeal - The husband's grounds of appeal and arguments challenging the valuation of the share price, were not accepted - He could not resile from the positions taken at trial - See paragraphs 13 to 43.

Family Law - Topic 695

Husband and wife - Property rights during and after common law marriage or relationship - Valuation (incl. time for) - The parties cohabitated from September 1992 to September 2008 - The wife applied for a division of the parties' family property under the Family Property Act - At issue, inter alia, was the value of the husband's corporate interests (John Deere dealership) - The trial judge accepted Radcliffe's valuation and concluded that the husband's corporate interests were 59.3% of the shares in South Country Ag Ltd. and were worth $2,846,400 - Radcliffe recommended, and the trial judge ordered, a minority discount of 10% - The husband appealed, seeking a higher minority discount - The Saskatchewan Court of Appeal dismissed the appeal - The trial judge accepted Radcliffe's expert opinion - As part of that opinion, Radcliffe opined that a sale to an insider would be the most profitable option, thus making a minority discount of 10% a highly appropriate resolution - See paragraphs 44 to 49.

Family Law - Topic 695

Husband and wife - Property rights during and after common law marriage or relationship - Valuation (incl. time for) - The parties cohabitated from September 1992 to September 2008 - The wife applied for a division of the parties' family property under the Family Property Act - A number of the parties' assets had a "contingent" tax liability associated with them - The husband claimed that the potential tax with respect to the disposition of his corporate interests should be taken into account in valuing those shares for distribution purposes - The trial judge found that a discount of 50% for both the contingent tax relating to the shares and the redundant assets was appropriate - The husband appealed, arguing that the trial judge should not have discounted the amount of tax that would be payable for the following reasons: (i) all his shares would have to be sold in one tax year to comply with the time line set out in the judgment at a 44% marginal tax rate and (ii) in any event, he wanted to retire at age 55, which would see him sell his shares in 2013 - The Saskatchewan Court of Appeal dismissed the appeal - See paragraphs 50 to 62.

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation (incl. time for) - [See all Family Law - Topic 695 ].

Family Law - Topic 2210

Maintenance of spouses and children - General principles - Calculation or attribution of income - [See Family Law - Topic 2327 ].

Family Law - Topic 2211

Maintenance of spouses and children - General principles - Retrospective or retroactive orders - The parties cohabitated from September 1992 to September 2008 - Before the relationship, the wife was employed as a journey person instrumentation mechanic earning $75,000 - The husband was a self-employed business man who earned over $800,000 - Both parties had sons from prior relationships - During the relationship, the wife remained at home to care for the children - At the time of separation, the wife was 52 years old and unemployed (by choice) - The husband was 50 years old and continued to be involved in his business which had expanded considerably - The wife applied for spousal support under the Family Maintenance Act - The trial judge found that the wife was entitled to spousal support on both a compensatory and non-compensatory basis and ordered the husband to pay monthly spousal support of $10,000 for an indefinite period of time - The wife cross-appealed, asserting that the trial judge erred by limiting retroactive spousal support to the period of February to July 2009 - The Saskatchewan Court of Appeal allowed this ground of cross-appeal - It was necessary to adjust support retroactively to achieve the objectives of spousal support - Spousal support had to be adjusted retroactively to August 1, 2009 to $10,000 per month - In making this order, the intention was to make the retroactive support deductible and to reassess and adjust prior years' taxes - See paragraphs 141 to 149.

Family Law - Topic 2326

Maintenance of spouses and children - Maintenance of spouses - Effect of income or potential income of claimant - The parties cohabitated from September 1992 to September 2008 - Before the relationship, the wife was employed as a journey person instrumentation mechanic earning $75,000 - The husband was a self-employed business man who earned over $800,000 - Both parties had sons from prior relationships - During the relationship, the wife remained at home to care for the children - At the time of separation, the wife was 52 years old and unemployed (by choice) - The husband was 50 years old and continued to be involved in his business which had expanded considerably - The wife applied for spousal support under the Family Maintenance Act - The trial judge found that the wife was entitled to spousal support on both a compensatory and non-compensatory basis and ordered the husband to pay monthly spousal support of $10,000 for an indefinite period of time - The wife cross-appealed, asserting that the trial judge erred by imputing income of $30,000 per year as a reflexologist to the wife - The wife asserted that no evidentiary basis existed to support the conclusion that she could earn $30,000 per annum as a reflexologist - The Saskatchewan Court of Appeal rejected this ground of cross-appeal - When a payor or recipient of support had chosen not to work, the trial judge by necessity had to speculate to some extent as to what work the person might be able to perform - If some speculation were not possible, it would mean that by not working, and thereby having no evidence of what work might be performed, a payor or recipient of support would always be able to resist the imputation of income - In this case, the evidence showed that a reflexologist could earn $40 per hour, and no one suggested that such work did not exist - Having regard for the standard of review, there was no basis to set aside the trial judge's conclusion that employment income of $30,000 per year should be attributed to the wife - See paragraphs 91 to 100.

Family Law - Topic 2327

Maintenance of spouses and children - Maintenance of spouses - Time for determination of income of parties - The parties cohabitated from September 1992 to September 2008 - Before the relationship, the wife was employed as a journey person instrumentation mechanic earning $75,000 - The husband was a self-employed business man who earned over $800,000 - Both parties had sons from prior relationships - During the relationship, the wife remained at home to care for the children - At the time of separation, the wife was 52 years old and unemployed (by choice) - The husband was 50 years old and continued to be involved in his business which had expanded considerably - The wife applied for spousal support under the Family Maintenance Act - The trial judge found that the wife was entitled to spousal support on both a compensatory and non-compensatory basis and ordered the husband to pay monthly spousal support of $10,000 for an indefinite period of time - The husband appealed, asserting that the trial judge erred when he fixed the husband's income for the purposes of spousal support at the amount he was earning at the date of application - The Saskatchewan Court of Appeal dismissed the appeal - Case authority confirmed that where one spouse enabled the other to accomplish a career goal, the other spouse was entitled to share in the post-separation increases in income - See paragraphs 107 to 114.

Family Law - Topic 2329

Maintenance of spouses and children - Maintenance of spouses - Considerations (incl. pensions) - The parties cohabitated from September 1992 to September 2008 - Before the relationship, the wife was employed as a journey person instrumentation mechanic earning $75,000 - The husband was a self-employed business man who earned over $800,000 - Both parties had sons from prior relationships - During the relationship, the wife remained at home to care for the children - At the time of separation, the wife was 52 years old and unemployed (by choice) - The husband was 50 years old and continued to be involved in his business which had expanded considerably - The wife applied for spousal support under the Family Maintenance Act - The trial judge found that the wife was entitled to spousal support on both a compensatory and non-compensatory basis and ordered the husband to pay monthly spousal support of $10,000 for an indefinite period of time - The husband appealed, asserting that the trial judge erred by ordering indefinite support - The Saskatchewan Court of Appeal dismissed the appeal - The trial judge considered the high value of the matrimonial property, the employment history and prospects of the wife, and the standard of living experienced by the wife after the marriage - He made specific findings regarding compensatory and non-compensatory entitlement - The trial judge made no errors with respect to the objectives of spousal support - See paragraphs 115 to 123.

Family Law - Topic 2329

Maintenance of spouses and children - Maintenance of spouses - Considerations (incl. pensions) - The parties cohabitated from September 1992 to September 2008 - Before the relationship, the wife was employed as a journey person instrumentation mechanic earning $75,000 - The husband was a self-employed business man who earned over $800,000 - Both parties had sons from prior relationships - During the relationship, the wife remained at home to care for the children - At the time of separation, the wife was 52 years old and unemployed (by choice) - The husband was 50 years old and continued to be involved in his business which had expanded considerably - The wife applied for spousal support under the Family Maintenance Act - The trial judge found that the wife was entitled to spousal support on both a compensatory and non-compensatory basis and ordered the husband to pay monthly spousal support of $10,000 for an indefinite period of time - The wife cross-appealed, challenging the quantum of support - She asserted that the trial judge inappropriately positioned the parties' income within the Spousal Support Guidelines - The Saskatchewan Court of Appeal dismissed this ground of appeal - There was no basis for appellate intervention - See paragraphs 135 to 140.

Family Law - Topic 4018.1

Divorce - Corollary relief - Maintenance awards - Review of maintenance v. variation of maintenance - The parties cohabitated from September 1992 to September 2008 - Before the relationship, the wife was employed as a journey person instrumentation mechanic earning $75,000 - The husband was a self-employed business man who earned over $800,000 - Both parties had sons from prior relationships - During the relationship, the wife remained at home to care for the children - At the time of separation, the wife was 52 years old and unemployed (by choice) - The husband was 50 years old and continued to be involved in his business which had expanded considerably - The wife applied for spousal support under the Family Maintenance Act - The trial judge found that the wife was entitled to spousal support on both a compensatory and non-compensatory basis and ordered the husband to pay monthly spousal support of $10,000 for an indefinite period of time - The wife cross-appealed, asserting that the trial judge erred by ordering a review when the husband retired or sold his shares in his business where the wife would bear the onus to show a continued need and a continued ability for the husband to pay - The Saskatchewan Court of Appeal allowed this ground of appeal - The trial judge's decision to order indefinite support was without error - Further, his decision to require a review for the purposes of reassessing entitlement and/or quantum when the husband retired might be entirely uncontroversial, assuming the husband's retirement was appropriate in all of the circumstances - But by placing the onus on the wife to prove her continued need in light of the retirement, whether reasonable or not, the judge who heard the application would have little choice but to assume the husband's decision to retire was a reasonable one and bring support to a certain end, which might or might not be the correct outcome - Further, the termination of spousal support might be all but inevitable because the wife would not have either the evidence or the knowledge of the husband's continuing ability to pay - Thus, the trial judge erred when he ordered that a review of entitlement and quantum should take place upon the husband's retirement and by placing an onus upon the wife - The husband's desire to "retire" was evident, but what retirement meant for him, the reasonableness, and its effect were best tested with each side bearing its usual onus - See paragraphs 124 to 134.

Family Law - Topic 4021.5

Divorce - Corollary relief - Maintenance awards - Support guidelines (incl. non-divorce cases) - The Saskatchewan Court of Appeal discussed the effect and application of the Spousal Support Guidelines - See paragraphs 75 to 90.

Practice - Topic 9031

Appeals - Evidence on appeal - Admission of "new evidence" or "fresh evidence" - The parties cohabitated from September 1992 to September 2008 - The wife applied for a division of the parties' family property under the Family Property Act and spousal support under the Family Maintenance Act - The trial judge determined the issues - The husband appealed the valuation of his shares in South Country Ag Ltd. and the order granting the wife indefinite spousal support - The wife cross-appealed almost all aspects of the determination of the amount of spousal support - The husband applied to adduce fresh evidence intended to show that: (i) he sold his shares in South Country Ag in 2013 and (ii) he retired in 2013 and was now receiving a salary at a considerably reduced rate - The Saskatchewan Court of Appeal dismissed the application to adduce fresh evidence - The fresh evidence did not indicate the sale price of the shares or to whom they were sold or how he structured his financial affairs in relation to the tax payable when he sold the shares - At least facially, it appeared that the husband might have restructured his corporate affairs with certain assets now being held by his new partner and by a family trust - These gaps in the evidence meant that the court would be unable to act in any way on this evidence - Evidence of this nature was usually better treated in an application to vary - See paragraphs 3 to 6.

Cases Noticed:

Wal-Mart Canada Corp. v. Labour Relations Board (Sask.) et al. (2006), 289 Sask.R. 20; 382 W.A.C. 20; 2006 SKCA 142, refd to. [para. 6].

National Trust Co. v. Bouckhuyt (1987), 23 O.A.C. 40; 61 O.R.(2d) 640 (C.A.), refd to. [para. 33].

Eagle Resources Ltd. v. MacDonald, [2002] A.R. Uned. 5; [2002] 3 W.W.R. 217; 2002 ABCA 1, refd to. [para. 34].

Sinclair Estate v. Hlady (2014), 438 Sask.R. 103; 608 W.A.C. 103; 2014 SKCA 53, refd to. [para. 34].

Halpin v. Halpin, [1997] 2 W.W.R. 745; 83 B.C.A.C. 241; 136 W.A.C. 241 (C.A.), dist. [para. 46].

Ganson v. Ganson (1996), 17 O.T.C. 340 (Gen. Div.), dist. [para. 46].

James v. Belosowsky (2012), 403 Sask.R. 12; 2012 SKQB 316 (Fam. Div.), refd to. [para. 52].

Bilusack v. Bilusack (2012), 395 Sask.R. 129; 2012 SKQB 128 (Fam. Div.), refd to. [para. 55].

Carlson v. Carlson (1984), 34 Sask.R. 287 (C.A.), refd to. [para. 59].

Deyell v. Deyell (1991), 90 Sask.R. 81 (C.A.), refd to. [para. 59].

Seaberly v. Seaberly (1985), 37 Sask.R. 219; 44 R.F.L.(2d) 1 (C.A.), refd to. [para. 59].

Vilcu v. Grams (1999), 172 Sask.R. 201; 185 W.A.C. 201; 43 R.F.L.(4th) 385 (C.A.), refd to. [para. 59].

Vilcu v. Vilcu - see Vilcu v. Grams.

Russell v. Russell (1999), 180 Sask.R. 196; 205 W.A.C. 196; 1 R.F.L.(5th) 235; 179 D.L.R.(4th) 723 (C.A.), refd to. [para. 59].

Beug v. Schmidt (2008), 321 Sask.R. 102; 2008 SKQB 380 (Fam. Div.), refd to. [para. 59].

Chambers v. Chambers (2011), 368 Sask.R. 126; 2011 SKQB 20 (Fam. Div.), refd to. [para. 59].

Ritchie v. Ritchie (1994), 121 Sask.R. 197 (Q.B.), refd to. [para. 59].

Aalbers v. Aalbers (2013), 417 Sask.R. 69; 580 W.A.C. 69; 2013 SKCA 64, refd to. [para. 80, footnote 1].

MacDonald v. MacDonald (2010), 350 Sask.R. 245; 487 W.A.C. 245; 2010 SKCA 60, refd to. [para. 80, footnote 1].

Bergquist v. Bergquist (2014), 433 Sask.R. 173; 602 W.A.C. 173; 39 R.F.L.(7th) 251; 2014 SKCA 20, refd to. [para. 80, footnote 1].

Moge v. Moge, [1992] 3 S.C.R. 813; 145 N.R. 1; 81 Man.R.(2d) 161; 30 W.A.C. 161, refd to. [para. 84].

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. 84].

Sawatzky v. Sawatzky (2008), 440 A.R. 267; 438 W.A.C. 267; 59 R.F.L.(6th) 88; 2008 ABCA 355, refd to. [para. 84].

Deringer v. Hill (2007), 308 Sask.R. 122; 2007 SKQB 206 (Fam. Div.), refd to. [para. 84].

Billett v. Billett (2013), 425 Sask.R. 217; 2013 SKQB 269 (Fam. Div.), refd to. [para. 85].

Verhelst v. Verhelst (2013), 415 Sask.R. 17; 2013 SKQB 12 (Fam. Div.), refd to. [para. 85].

Sangray v. Sangray (2012), 407 Sask.R. 149; 2012 SKQB 455 (Fam. Div.), refd to. [para. 85].

Geransky v. Geransky, [2012] Sask.R. Uned. 79; 2012 SKQB 218 (Fam. Div.), refd to. [para. 85].

Fisher v. Fisher (2008), 232 O.A.C. 213; 288 D.L.R.(4th) 513; 2008 ONCA 11, refd to. [para. 86].

Kynoch v. Kynoch (2013), 294 Man.R.(2d) 250; 581 W.A.C. 250; 2013 MBCA 73, refd to. [para. 87].

De Winter v. De Winter, [2013] A.R. Uned. 371; 2013 ABCA 311, refd to. [para. 87].

Crosman v. Crosman (2006), 299 N.B.R.(2d) 334; 778 A.P.R. 334; 27 R.F.L.(6th) 19; 2006 NBCA 46, leave to appeal refused (2006), 361 N.R. 392; 309 N.B.R.(2d) 400; 799 A.P.R. 1 (S.C.C.) refd to. [para. 88].

S.C. v. J.C. - see Crosman v. Crosman.

Chutter v. Chutter et al. (2008), 263 B.C.A.C. 109; 443 W.A.C. 109; 60 R.F.L.(6th) 263; 2008 BCCA 507, refd to. [para. 92].

McEachern v. McEachern (2006), 232 B.C.A.C. 185; 385 W.A.C. 185; 2006 BCCA 508, refd to. [para. 92].

Drygala v. Pauli (2002), 164 O.A.C. 241; 61 O.R.(3d) 711 (C.A.), refd to. [para. 93].

Scott v. Scott (2006), 401 A.R. 303; 391 W.A.C. 303; 2006 ABCA 296, refd to. [para. 93].

Homsi v. Zaya (2009), 248 O.A.C. 168; 2009 ONCA 322, refd to. [para. 93].

Fraser v. Fraser (2013), 311 O.A.C. 351; 2013 ONCA 715, refd to. [para. 93].

Marquez v. Zapiola (2013), 344 B.C.A.C. 133; 587 W.A.C. 133; 2013 BCCA 433, refd to. [para. 93].

P.R.M. v. B.J.M. (2013), 340 B.C.A.C. 198; 579 W.A.C. 198; 2013 BCCA 327, refd to. [para. 95].

Brandl v. Rolston (2013), 338 B.C.A.C. 141; 577 W.A.C. 141; 362 D.L.R.(4th) 439; 2013 BCCA 235, refd to. [para. 95].

Corbeil v. Corbeil, [2002] 3 W.W.R. 60; 286 A.R. 330; 253 W.A.C. 330; 2001 ABCA 220, refd to. [para. 95].

Myers v. Hawco (2005), 252 Nfld. & P.E.I.R. 121; 756 A.P.R. 121; 262 D.L.R.(4th) 719; 2005 NLCA 74, refd to. [para. 95].

Richards v. Richards (2012), 312 N.S.R.(2d) 282; 987 A.P.R. 282; 346 D.L.R.(4th) 653; 2012 NSCA 7, refd to. [para. 95].

Giguere v. Giguere, [2003] O.T.C. Uned. A37; 46 R.F.L.(5th) 184 (Sup. Ct. Fam. Ct.), refd to. [para. 109].

Marinangeli v. Marinangeli (2003), 174 O.A.C. 76; 66 O.R.(3d) 40 (C.A.), refd to. [para. 109].

Bradley v. Bradley (2005), 262 Sask.R. 215; 347 W.A.C. 215; 2005 SKCA 53, refd to. [para. 116].

Cassidy v. McNeil (2010), 266 O.A.C. 62; 99 O.R.(3d) 81; 2010 ONCA 218, refd to. [para. 116].

Leskun v. Leskun, [2006] 1 S.C.R. 920; 349 N.R. 158; 226 B.C.A.C. 1; 373 W.A.C. 1; 34 R.F.L.(6th) 1; 2006 SCC 25, refd to. [para. 127].

Foss v. Foss (1991), 31 R.F.L.(3d) 367 (Sask. C.A.), refd to. [para. 145].

Hall v. Hall (2011), 375 Sask.R. 126; 525 W.A.C. 126; 2011 SKCA 86, refd to. [para. 145].

J.S.G. v. M.F.G., [2013] Man.R.(2d) Uned. 41; 34 R.F.L.(7th) 15; 2013 MBCA 66, refd to. [para. 145].

Graham v. Graham - see J.S.G. v. M.F.G.

P.M. v. S.M. (2012), 393 Sask.R. 229; 546 W.A.C. 229; 2012 SKCA 55, refd to. [para. 146].

Mehlsen v. Mehlsen - see P.M. v. S.M.

Kerr v. Baranow, [2011] 1 S.C.R. 269; 411 N.R. 200; 300 B.C.A.C. 1; 509 W.A.C. 1; 274 O.A.C. 1; 2011 SCC 10, refd to. [para. 146].

Authors and Works Noticed:

Canada, Department of Justice, Spousal Support Advisory Guidelines: A New and Improved User's Guide to the Final Version - see Rogerson, Carol, and Thompson, Rollie, Spousal Support Advisory Guidelines: The Final Version.

Canada, Department of Justice, Spousal Support Advisory Guidelines: The Final Version - see Rogerson, Carol, and Thompson, Rollie, Spousal Support Advisory Guidelines: The Final Version.

Rogerson, Carol, and Thompson, Rollie, Spousal Support Advisory Guidelines: A New and Improved User's Guide to the Final Version (2010), generally [para. 85]; pp. 20 [para. 122]; 38 [para. 139]; 51 [para. 110].

Rogerson, Carol, and Thompson, Rollie, Spousal Support Advisory Guidelines: The Final Version (2008), generally [para. 74]; pp. 46 [para. 91]; 61, 62 [para. 122]; 137 [para. 91]; 145 [para. 111].

Counsel:

Deidre Aldcorn, for the appellant/respondent, cross-appeal;

Lindsay Wacholtz, for the respondent/appellant, cross-appeal.

This appeal and cross-appeal were heard on February 19, 2014, by Jackson, Ottenbreit and Herauf, JJ.A., of the Saskatchewan Court of Appeal. The following judgment of the Court of Appeal was delivered by Jackson, J.A., on August 22, 2014.