Johnson v. Johnson, (1998) 167 N.S.R.(2d) 201 (SC)

• Judge: Davison, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: March 09, 1998
• Jurisdiction: Nova Scotia
• Citations: (1998), 167 N.S.R.(2d) 201 (SC)

Johnson v. Johnson (1998), 167 N.S.R.(2d) 201 (SC);

    502 A.P.R. 201

MLB headnote and full text

Temp. Cite: [1998] N.S.R.(2d) TBEd. AP.013

Hilda Joy Johnson (petitioner) v. Richard Wayne Johnson (respondent)

(No. 1204-001956)

Indexed As: Johnson v. Johnson

Nova Scotia Supreme Court

Davison, J.

March 9, 1998.

Summary:

A husband and wife separated in 1996 after 28 years' marriage. The wife petitioned for divorce and sought spousal support and a division of marital property. The husband was a lawyer and businessman who con­trolled all family finances and incurred substantial debt, thereby impover­ishing mari­tal assets. The husband was expelled from his law firm and was now in dire financial straits. The 52 year old wife was a registered nurse earning $30,000 per year.

The Nova Scotia Supreme Court granted a divorce. The court declined to award spousal support, where the husband had no present financial ability to pay. The court equally divided all marital assets, but unequally divided marital debts. The hus­band was held responsible for 80% of all marital debts.

Family Law - Topic 868.2

Husband and wife - Marital property - Distribution orders - Debts - A husband and wife separated in 1996 after 28 years' marriage - The husband was a lawyer and businessman who controlled all family finances and incurred substantial debt to sustain a lifestyle he could not afford, thereby impoverishing marital assets - The husband was expelled from his law firm and was now in dire financial straits - The 52 year old wife was a registered nurse earning $30,000 per year - The Nova Scotia Supreme Court ordered an equal division of marital property, but ordered that the husband be solely liable for 80% of the marital debts - The amount of the debt and the circumstances in which it was incurred (Matrimonial Property Act, s. 13(b)) made in unfair to equally divide the marital debt - The wife had no knowledge or say in the husband's business invest­ments which created the substantial debt and the husband spent recklessly and lav­ishly, even after separ­ation and with knowledge of his dire fi­nancial position - See paragraphs 38 to 56.

Family Law - Topic 875

Husband and wife - Marital property - Distribution orders - Statutes requiring equal division - Exceptions - [See Family Law - Topic 868.2 ].

Family Law - Topic 880.30

Husband and wife - Marital property - Distribution orders - Particular property - Professional practice - At issue was whether a husband's interest in a law firm that he was expelled from and his interest in the law firm's holding company were business assets or marital property - The Nova Scotia Supreme Court held that both were marital assets - The husband left the firm and the purpose of the funds was not "to generate income in an entrepre­neurial sense" - That asset was one which the spouses would have intended to use as a family asset when he left the firm - The only purpose of the holding com­pany was to receive income from the law firm for income tax savings - See para­graphs 57 to 68.

Cases Noticed:

Harwood v. Thomas (1981), 45 N.S.R.(2d) 414; 86 A.P.R. 414 (C.A.), refd to. [para. 39].

Bennett v. Bennett (1992), 112 N.S.R.(2d) 79; 307 A.P.R. 79 (C.A.), refd to. [para. 40].

Fisher v. Fisher (1994), 131 N.S.R.(2d) 367; 371 A.P.R. 367 (C.A.), refd to. [para. 41].

Donald v. Donald (1991), 103 N.S.R.(2d) 322; 282 A.P.R. 322 (C.A.), refd to. [para. 41].

Davey v. Davey (1994), 133 N.S.R.(2d) 202; 380 A.P.R. 202 (S.C.), refd to. [para. 43].

Arthur v. Arthur (1985), 67 N.S.R.(2d) 323; 155 A.P.R. 323 (T.D.), refd to. [para. 44].

Moge v. Moge, [1992] 3 S.C.R. 813; 145 N.R. 1; 81 Man.R.(2d) 161; 30 W.A.C. 161; [1993] 1 W.W.R. 481; 99 D.L.R.(4th) 456, refd to. [para. 45].

Curren v. Curren (1987), 81 N.S.R.(2d) 118; 203 A.P.R. 118 (T.D.), refd to. [para. 58].

Clarke v. Clarke, [1990] 2 S.C.R. 795; 113 N.R. 321; 101 N.S.R.(2d) 1; 275 A.P.R. 1; 28 R.F.L.(3d) 113; 73 D.L.R.(4th) 1, refd to. [para. 58].

Best v. Best (1991), 102 N.S.R.(2d) 61; 279 A.P.R. 61 (C.A.), refd to. [para. 58].

Lawrence v. Lawrence (1981), 47 N.S.R.(2d) 100; 90 A.P.R. 100; 25 R.F.L.(2d) 130 (C.A.), refd to. [para. 59].

McNulty v. McNulty (1989), 94 N.S.R.(2d) 387; 247 A.P.R. 387 (T.D.), refd to. [para. 60].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re (1998), 221 N.R. 241; 106 O.A.C. 1 (S.C.C.), refd to. [para. 61].

Durling v. Durling (1988), 86 N.S.R.(2d) 58; 218 A.P.R. 58 (C.A.), refd to. [para. 74].

Statutes Noticed:

Matrimonial Property Act, R.S.N.S. 1989, c. 275, sect. 2(a), sect. 4(1)(e) [para. 57]; sect. 13 [para. 38].

Authors and Works Noticed:

Nova Scotia, Law Reform Commission, Matrimonial Property in Nova Scotia: Suggestions for a New Family Law Act (April 1996), p. 33 [para. 45].

Counsel:

Pamela M. Stewart, for the plaintiff;

Donald B. MacMillan, for the defendant.

This case was heard on December 8-10, 1997, at Halifax, N.S., before Davison, J., of the Nova Scotia Supreme Court, who delivered the following judgment on March 9, 1998.