James v. Belosowsky, (2012) 403 Sask.R. 12 (FD)

• Judge: Ryan-Froslie, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: Wednesday August 08, 2012
• Jurisdiction: Saskatchewan
• Citations: (2012), 403 Sask.R. 12 (FD);2012 SKQB 316

James v. Belosowsky (2012), 403 Sask.R. 12 (FD)

MLB headnote and full text

Temp. Cite: [2012] Sask.R. TBEd. AU.042

Danette James (formerly Belosowsky) (petitioner) v. Randy Belosowsky (respondent)

(2008 Div. No. 617; 2012 SKQB 316)

Indexed As: James v. Belosowsky

Saskatchewan Court of Queen's Bench

Family Law Division

Judicial Centre of Saskatoon

Ryan-Froslie, J.

August 8, 2012.

Summary:

The parties married in 1990 and separated in 2008. There were three children of the marriage, born in 1992, 1995 and 1997. Since separation, the parties had shared parenting on an alternating weekly basis. At issue on the wife's petition for divorce was the division of family property, child support and spousal support.

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

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - [See second Family Law - Topic 888].

Family Law - Topic 868.2

Husband and wife - Marital property - Distribution orders - Debts (incl. contingent liabilities) - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was the effect of the family debt - The Saskatchewan Court of Queen's Bench, Family Law Division, stated that "how family debt or its servicing impacts a division of the family property falls within the discretion of the trial judge. There are no hard and fast rules but the goal is to attain an 'equitable' division of the family property. What is equitable will depend on the facts and circumstances of each case." - The court determined the division of family debts, including those of the mortgage on the family home, the parties' lines of credit, an outstanding balance on a loan for a condominium that the parties had sold and other costs related to the condominium, the lease on a vehicle, interest on credit cards, a loan on a vehicle used by the parties' children and cellphone contracts for phones for two of the parties' children - See paragraphs 72 to 100.

Family Law - Topic 868.5

Husband and wife - Marital property - Distribution orders - Contingent tax liability for tax shelters - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was the effect of s. 21(3)(j) of the Family Property Act, which provided that the court "shall have regard to ... a tax liability that may be incurred by a spouse as a result of the transfer or sale of family property..." - The Saskatchewan Court of Queen's Bench, Family Law Division, noted that (i) the court should only consider a tax liability where it would be "unfair or inequitable" to make an equal distribution without considering tax consequences; (ii) there had to be an evidentiary basis to support the tax consequences; (iii) where assets were divided in specie, no tax liability was to be considered; (iv) if there was no order for sale or intention to sell in the near future, then the tax liability had to be discounted for certain contingencies; and (v) the courts generally applied a discount of 50% to the marginal tax rate where the tax liability was contingent - See paragraphs 66 to 70.

Family Law - Topic 868.5

Husband and wife - Marital property - Distribution orders - Contingent tax liability for tax shelters - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was the effect of s. 21(3)(j) of the Family Property Act, which provided that the court "shall have regard to ... a tax liability that may be incurred by a spouse as a result of the transfer or sale of family property..." - The parties agreed that some of their family assets would be subject to income tax if disposed of, including their RRSPs, pensions and stock options - The Saskatchewan Court of Queen's Bench, Family Law Division, held that (i) the value of the RRSPs and shares already disposed of had to be decreased to take into account the actual tax paid by the parties; (ii) the parties' remaining RRSPs and their pensions were to be divided in specie; accordingly no consideration should be given to potential tax liability; and (iii) the tax with respect to the unexercised share options was to be paid "if and when" those options were exercised and the shares cashed in - The amount to be divided by the parties would be decreased by the actual tax paid - See paragraph 71.

Family Law - Topic 872

Husband and wife - Marital property - Distribution orders - Deductions - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was the husband's claim for reimbursement for expenses paid by him, including mediation costs, service costs on the parties' joint accounts, repairs and insurance on a vehicle used by the parties' children, funds removed from a bank account by the wife and insurance policy premiums - The Saskatchewan Court of Queen's Bench, Family Law Division, stated that "what [the husband] is claiming is reimbursement for daily living expenses" - The purpose of the Family Property Act was not to provide a forum for the equalization of expenses during the marriage or following its breakdown - Here, the financial situation of the parties as of December 2008 was such that the wife did not have sufficient income to pay even her basic living expenses - The husband's payment of the wife's expenses prior to a September 2009 support order amounted to no more than an informal shouldering of his support obligations - After the support order was made, given the disparity in the parties' income, it was reasonable and necessary for the husband to continue to shoulder that burden - In order to achieve "equity" as the husband envisioned it, the wife would pay 50% of the expenses while receiving only a fraction of the parties' joint incomes - No reimbursement should be granted to the husband with respect to the expenses claimed - See paragraphs 101 to 105.

Family Law - Topic 880.28

Husband and wife - Marital property - Distribution orders - Particular property - Pensions (incl. bridging benefits and pension annuities) - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was whether any interest should be attributed to the wife regarding the husband's current pension from its agreed upon value at December 31, 2011, being $222,880, to the date when the wife received her share - The Saskatchewan Court of Queen's Bench, Family Law Division, declined to order an adjustment - The husband asserted that the wife should only receive a share of the interest if she was also willing to share in any decrease in the value of the plan since December 31, 2011, due to market forces - However, neither party presented evidence on that issue - Without such evidence, it would not be fair or equitable to order an adjustment - See paragraph 15.

Family Law - Topic 880.47

Husband and wife - Marital property - Distribution orders - Particular property - Company shares, stock options, etc. - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was the division of the husband's stock options, which he received from his employer as part of his remuneration - In December 2011, the husband cashed in his 2004 share options for $47,865 - Half of that amount was taxable and was declared on the husband's 2011 income tax return - The parties agreed that the $47,865 was family property to be divided, but the husband asserted that the amount had to be decreased by the tax and commissions that he paid - He asserted that he had paid a $650 commission, but provided no evidence of that - He calculated the tax paid at a rate of 22% or $10,530 - The Saskatchewan Court of Queen's Bench, Family Law Division, declined to give the husband a credit for the commission and held that the husband's calculation of the tax paid was not supported by the evidence - The portion of the tax paid by the husband for 2011 that was attributable to the stream of income relating to his exercise of the share options was $7,109 - That left him with a net after-tax amount of $40,756 - That was the amount to be shared with the wife - See paragraphs 41 to 47.

Family Law - Topic 880.47

Husband and wife - Marital property - Distribution orders - Particular property - Company shares, stock options, etc. - The parties married in 1990 and separated in 2008 - The wife sought a division of family property - At issue was the division of the husband's unexercised stock options, which he received from his employer as part of his remuneration - The Saskatchewan Court of Queen's Bench, Family Law Division, held that the unexercised options were family property within the meaning of s. 2 of the Family Property Act - They were, in effect, contracts that were capable of being converted into cash - The difficulty lay in how they were to be divided - Sections 21(1) and 26 of the Act allowed courts to divide family property "in specie" rather than valuing it as of one of the dates specified and ordering an equalization payment - Moreover, s. 26 specifically allowed a court to impose a trust with respect to family property - The fairest approach was to impose a trust pursuant to s. 26(3)(h) and adopt the "if and when" method of valuation - If and when the husband exercised the share options in existence at the date of application, then he had to pay to the wife one-half of the gain with respect to those options less any expenses including commissions and/or income tax - The income tax would be calculated by pro-rating the "option income" against the actual tax paid by the husband in the year the option was exercised - See paragraphs 48 to 60.

Family Law - Topic 882

Husband and wife - Marital property - Considerations in making distribution orders - Relevant considerations (incl. income tax) - [See both Family Law - Topic 868.5].

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 2008 - The wife sought a division of family property - At issue was the valuation date for the two vehicles owned by the parties at the date of the wife's application (December 2008), a 2003 Blazer and a 2007 Sea Doo - The Saskatchewan Court of Queen's Bench, Family Law Division, noted that the vehicles had not decreased in value due to market forces - Any decrease was due to depreciation - As the husband had the use of the vehicles, it would be unfair to impose an adjudication date value on the wife - The Blazer and the Sea Doo were valued as of the application date - The value of the Blazer at that time was $12,000 and the value of the Sea Doo was $10,000 - These were the amounts sworn to by the husband in his January 21, 2009, property statement and by the wife in her November 26, 2008, property statement - These values also corresponded to the values the husband put on those assets when negotiating with the wife in July 2008 - Valuing the Sea Doo at $10,000 resulted in a decrease of $4,500 from its purchase price 16 months earlier, which seemed reasonable in the circumstances - See paragraphs 16 to 23.

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 2008 - The wife sought a division of family property - At issue was the valuation of the family home - The wife filed three appraisals, the most current of which (June 2011) valued the home at $530,000 - That appraisal was based on one viewing of the home in November 2008 - The husband filed an appraisal which valued the home at $490,000 as of January 2012, based on a viewing at that time - The Saskatchewan Court of Queen's Bench, Family Law Division, preferred the husband's evidence over the wife's and valued the home at $490,000 - The highest comparable sale used by the wife's appraiser to value the home related to a property located in a more expensive area - The wife's appraiser made no adjustment in her valuation for location - This caused the court to question the validity of her opinion - Further, more than three years had passed since the viewing - The appraisal filed by the husband not only adjusted the comparable sales for location, but also used an average of those sales in valuing the home - See paragraphs 24 to 33.

Family Law - Topic 4021.1

Divorce - Corollary relief - Maintenance and awards - Awards - Considerations - Financial consequences of child care and household responsibilities - [See Family Law - Topic 4021.2].

Family Law - Topic 4021.2

Divorce - Corollary relief - Maintenance and awards - Awards - Considerations - Leaving labour market for family responsibilities - The parties married in 1990 and separated in 2008 - There were three children of the marriage, born in 1992, 1995 and 1997 - Since separation, the parties had shared parenting on an alternating weekly basis - The wife sought spousal support of between $1,700 and $3,100 - The wife's income for child support purposes was $43,733 and the husband's was $192,398 - The husband was ordered to pay child support of $2,444 per month - He opposed the claim for spousal support, asserting that he had supported the wife since the initiation of her court application in December 2008 and that she no longer required support as she was capable of working full-time and earning an estimated income of $50,000 - The Saskatchewan Court of Queen's Bench, Family Law Division, ordered the husband to pay spousal support of $500 per month for a further six years - The wife sacrificed her career to stay at home and care for the parties' children - She had suffered an economic disadvantage and had established an entitlement to spousal support on a compensatory basis - Further, the breakdown of the marriage had resulted in an economic disadvantage to her, particularly initially when she was unable to meet her basic needs - This non-compensatory basis for support would be eliminated as the children gained self-sufficiency - At age 46, the wife had a significant working life ahead of her - Nine years of support was enough time, coupled with the property division, to compensate the wife for her economic disadvantages suffered as a result of her care of the children and the marriage's breakdown - See paragraphs 141 to 167.

Family Law - Topic 4022

Divorce - Corollary relief - Maintenance and awards - Awards - To wife - Considerations - [See Family Law - Topic 4021.2].

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance awards - To spouse - Extent of obligation - [See Family Law - Topic 4021.2].

Family Law - Topic 4027

Divorce - Corollary relief - Maintenance and awards - Effect of income or potential income of claimant - [See Family Law - Topic 4021.2].

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - At issue was the imputation of income for child support purposes under s. 19(1)(a) of the Federal Child Support Guidelines - The Saskatchewan Court of Queen's Bench, Family Law Division, stated, "In applying s. 19(1)(a), a three-step analysis is required. Firstly, the court must determine whether a spouse is 'intentionally' under-employed or unemployed. Secondly, if a spouse is intentionally under-employed or unemployed, the court must then determine whether any of the exceptions set out in s. 19(1)(a) apply. Those exceptions cover situations where the under-employment or unemployment is required by reason of the needs of a child of the marriage, the needs of any child under the age of majority, or the reasonable educational and/or health needs of the payor. Finally, if a court determines a spouse is intentionally under-employed or unemployed and that none of the exceptions set out in s. 19(1)(a) apply, then the court must decide whether to exercise its discretion and impute income." - See paragraph 118.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - The parties married in 1990 and separated in 2008 - There were three children of the marriage, born in 1992, 1995 and 1997 - Since separation, the parties had shared parenting on an alternating weekly basis - The mother sought child support - At issue was the determination of the mother's income for child support purposes - Immediately prior to separation, she had been a stay-at-home mother but also operated a home-based accounting business which earned approximately $600 per month - In March 2009, the mother obtained employment with KPMG - In June 2009, she left that position to take up her current position as an accounting technician with a chartered accountant - Her hours were flexible, but she estimated that she worked close to full-time (85-90%) - Her 2011 income was $43,733 - The father asserted that an income of $50,000 should be imputed to the mother as she was intentionally underemployed - The Saskatchewan Court of Queen's Bench, Family Law Division, declined to impute income to the mother - The mother had made a conscious decision regarding her work hours and, accordingly, her lack of full-time employment was "intentional" within the meaning of s. 19(1)(a) of the Federal Child Support Guidelines - However, her total income was in the range applicable for someone with her experience and training - Her current employment gave her the flexibility that she needed to meet the children's ongoing needs - Her income for child support purposes was $43,733 - See paragraphs 110 to 121.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Calculation or attribution of income - At issue was the determination of the father's income for child support purposes - The father asserted that, because his income fluctuated significantly depending on his bonuses, his income should be averaged over the last three years as provided by s. 17 of the Federal Child Support Guidelines - The Saskatchewan Court of Queen's Bench, Family Law Division, declined to average the father's income - The father's income had increased each year over the last three years - Any fluctuation that might occur in the father's income was better dealt with by a continuing exchange of income tax returns and a corresponding annual adjustment of child support - See paragraphs 122 to 128.

Family Law - Topic 4045.7

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Shared custody (at least 40% of time with each parent) - The parties married in 1990 and separated in 2008 - There were three children of the marriage, born in 1992, 1995 and 1997 - Since separation, the parties had shared parenting on an alternating weekly basis - The mother sought child support - The mother's income for child support purposes was $43,733 and the father's was $192,398 - Based on those incomes, a set off of the Federal Child Support Guidelines amounts of support would result in the father paying child support of $2,444 per month - The father asserted that, under s. 4 of the Guidelines, as his income was over $150,000, the Guidelines amount of support was inappropriate - He asserted that, as the mother's monthly expenses regarding the children were $1,947, this amount would be almost entirely covered if he was paying support based on an income of $150,000, whereas if he paid the full Guidelines amount, he would be paying more in support than the mother was incurring - The Saskatchewan Court of Queen's Bench, Family Law Division, rejected the father's position - The needs to be considered under s. 4 were those of the household, not just of the individual children - Further, children were entitled to enjoy a similar standard of living in each of their parent's households - Using the father's full income to determine his child support obligation was not unsuitable here, especially given the disparity in the parties' incomes and the costs being assumed and paid by the mother - See paragraphs 131 to 140.

Family Law - Topic 4045.12

Divorce - Corollary relief - Maintenance - Child support guidelines (incl. nondivorce cases) - Where income over $150,000 - [See Family Law - Topic 4045.7].

Cases Noticed:

Benson v. Benson (1994), 120 Sask.R. 17; 68 W.A.C. 17; 3 R.F.L.(4th) 291 (C.A.), refd to. [para. 6].

Russell v. Russell (1999), 180 Sask.R. 196; 205 W.A.C. 196; 1 R.F.L.(5th) 235 (C.A.), refd to. [para. 12].

Miller v. Miller (2003), 259 N.B.R.(2d) 132; 681 A.P.R. 132; 36 R.F.L.(5th) 386; 2003 NBCA 37, refd to. [para. 51].

Ross v. Ross (2006), 218 O.A.C. 119; 34 R.F.L.(6th) 229; 83 O.R.(3d) 1 (C.A.), refd to. [para. 52].

Buttrum v. Buttrum, [2001] O.T.C. Uned. 365; 15 R.F.L.(5th) 250 (Sup. Ct.), consd. [para. 52].

Gardiner v. Gardiner (1996), 191 A.R. 139 (Q.B.), refd to. [para. 52].

Roberts v. Roberts (1999), 258 A.R. 392; 3 R.F.L.(5th) 148; 1999 ABQB 944, refd to. [para. 52].

Carlson v. Carlson (1984), 34 Sask.R. 287 (C.A.), refd to. [para. 69].

Dembiczak v. Dembiczak (1985), 42 Sask.R. 314; 48 R.F.L.(2d) 113 (C.A.), refd to. [para. 70].

Deyell v. Deyell (1991), 90 Sask.R. 81 (C.A.), refd to. [para. 70].

Seaberly v. Seaberly (1985), 37 Sask.R. 219; 44 R.F.L.(2d) 1 (C.A.), refd to. [para. 70].

Vilcu v. Grams (1999), 172 Sask.R. 201; 185 W.A.C. 201; 43 R.F.L.(4th) 385 (C.A.), refd to. [para. 70].

Vilcu v. Vilcu - see Vilcu v. Grams.

P.M. v. S.M. (2012), 393 Sask.R. 229; 546 W.A.C. 229; 2012 SKCA 55, refd to. [para. 70].

Donovan v. Donovan (2000), 150 Man.R.(2d) 116; 230 W.A.C. 116; 9 R.F.L.(5th) 306; 2000 MBCA 80, refd to. [para. 119].

Drygala v. Pauli (2002), 164 O.A.C. 241; 29 R.F.L.(5th) 293 (C.A.), refd to. [para. 119].

Mullen v. Mullen, [2004] Sask.R. Uned. 19; 2004 SKQB 65 (Fam. Div.), refd to. [para. 119].

Beaulac v. Beaulac (2005), 256 Sask.R. 243; 2005 SKQB 20 (Fam. Div.), refd to. [para. 126].

Contino v. Leonelli-Contino, [2005] 3 S.C.R. 217; 341 N.R. 1; 204 O.A.C. 311; 2005 SCC 63, refd to. [para. 130].

Francis v. Baker, [1999] 3 S.C.R. 250; 246 N.R. 45; 125 O.A.C. 201; 177 D.L.R.(4th) 1, refd to. [para. 134].

Bracklow v. Bracklow, [1999] 1 S.C.R. 420; 236 N.R. 79; 120 B.C.A.C. 211; 196 W.A.C. 211; 44 R.F.L.(4th) 1, refd to. [para. 152].

Moge v. Moge, [1992] 3 S.C.R. 813; 145 N.R. 1; 81 Man.R.(2d) 161; 30 W.A.C. 161; 43 R.F.L.(3d) 345, refd to. [para. 155].

Halter v. Halter, [2005] Sask.R. Uned. 56; 2005 SKQB 103 (Fam. Div.), dist. [para. 166].

Fleming v. Fleming, [2005] Sask.R. Uned. 86; 2005 SKQB 173 (Fam. Div.), dist. [para. 166].

Authors and Works Noticed:

Rogerson, Carol and Thompson, Rollie, Spousal Support Advisory Guidelines (2008), generally [para. 165].

Counsel:

D.W. McIver and D.M. McBride, for the petitioner;

D.J. Kendall and G.M. Kuse, for the respondent.

This action was heard by Ryan-Froslie, J., of the Saskatchewan Court of Queen's Bench, Family Law Division, Judicial Centre of Saskatoon, who delivered the following judgment on August 8, 2012.