Khoury v. Khoury, (1994) 149 N.B.R.(2d) 1 (FD)

• Judge: Guerette, J.
• Court: Court of Queen's Bench of New Brunswick (Canada)
• Case Date: May 28, 1993
• Jurisdiction: New Brunswick
• Citations: (1994), 149 N.B.R.(2d) 1 (FD)

Khoury v. Khoury (1994), 149 N.B.R.(2d) 1 (FD);

    149 R.N.-B.(2e) 1; 381 A.P.R. 1

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Clara Bernice Khoury (petitioner) v. Charles Joseph Khoury (respondent)

Indexed As: Khoury v. Khoury

New Brunswick Court of Queen's Bench

Family Division

Judicial District of Fredericton

Guerette, J.

May 2, 1994.

Summary:

A wife petitioned for divorce after 20 years of marriage. The wife sought, inter alia, spousal support, an equal division of marital property, a share of nonmarital prop­erty and damages for assault and battery.

The New Brunswick Court of Queen's Bench, Family Division, granted the divorce and equally divided the marital property, requiring the husband to make an equaliza­tion payment of $532,000. The court also ordered a division of the husband's business assets, requiring the husband to transfer 25% of the value of these assets to the wife (i.e., $2.5 million). The court dismissed the wife's damages claim on the basis of spousal im­munity for torts committed during marriage.

Family Law - Topic 637

Husband and wife - Marital property - Constructive trusts - In a marital property dispute, the wife invoked resulting and constructive trust principles to assist her claim in the event that the Marital Property Act (N.B.) did not provide full compensa­tion for her role and efforts in the marriage - The New Brunswick Court of Queen's Bench, Family Division, did not resort to trust principles where the Act gave the court inherent powers to consider post separation factors (e.g., the increased value of assets after the valuation date) - See paragraphs 138 to 141.

Family Law - Topic 638

Husband and wife - Marital property - Resulting trusts - Inferred or presumed intent - [See Family Law - Topic 637 ].

Family Law - Topic 787

Husband and wife - Actions between - Torts - For torts during marriage - A couple divorced after a 20 year marriage - The wife sued the husband for damages for assault and battery, arising out of incidents during the marriage - The New Brunswick Court of Queen's Bench, Family Division, dismissed the wife's claim - The court interpreted s. 6 of the Married Woman's Property Act (N.B.) and s. 4(3) of the Charter Compliance Act (N.B.) and held that spousal immunity for torts committed during the marriage has not been removed in New Brunswick by the Charter Compli­ance Act - See paragraphs 49 to 59.

Family Law - Topic 867

Husband and wife - Marital property - Distribution orders - Interest on awards - A couple divorced after a 20 year marriage - The husband was ordered to make an equalization payment to the wife of $532,000 for marital property and $2.5 million for nonmarital property - The New Brunswick Court of Queen's Bench, Fami­ly Division, allowed the wife's claim for prejudgment interest - See paragraphs 182 to 187.

Family Law - Topic 875

Husband and wife - Marital property - Distribution orders - Statutes requiring equal division - Exceptions - A couple married when they were in their early 20's - The husband was in second year at law school - The wife had just started teaching - The wife gave up her career and stayed home to raise their four children and man­age the household - During their 20 year marriage, the husband became a prominent businessman with net worth of over $8 million - The New Brunswick Court of Queen's Bench, Family Division, held that the division of marital property was in­equitable, listing several reasons for this conclusion - The court held that a division of business assets was necessary to address the inequity and ordered the husband to transfer 25% of the value of his business assets to the wife (i.e., $2.5 million) - See paragraphs 60 to 171.

Family Law - Topic 877

Husband and wife - Marital property - Distribution orders - Business assets - [See Family Law - Topic 875 ].

Family Law - Topic 882

Husband and wife - Marital property - Distribution orders - Considerations - Taxes - The Marital Property Act (N.B.), s. 9, provided that in dividing property, the court "shall effect a fair and equitable division of marital debts and shall take into account any tax consequences that may arise from the division of property by court order" - The New Brunswick Court of Queen's Bench, Family Division, per Guerette, J., stated that "while the section appears to cover only marital property, I would read it to mean that in arriving at fair market value, it may be necessary to consider notional costs, including tax implications as debt inherent in the value of the property" - See paragraphs 142, 143.

Family Law - Topic 888

Husband and wife - Marital property - Distribution orders - Considerations - Valuation - [See Family Law - Topic 882 ].

Family Law - Topic 888

Husband and wife - Marital property - Distribution orders - Considerations - Valuation - A husband and wife were involved in a marital property dispute - The husband, who had extensive real estate holdings, claimed that his net worth was approximately $4,000,000 while his wife claimed that his net worth was $17,000,000 - The wife used the "going concern" basis for valuing the assets - The husband used the "liquidation" basis for valuation, assuming a disposition of the assets with full deductions for notional costs - The New Brunswick Court of Queen's Bench, Family Division, held that the assumptions and deductions made by the husband's expert witness were general­ly consistent with current accounting prac­tices - See paragraphs 78 to 105.

Family Law - Topic 888

Husband and wife - Marital property - Distribution orders - Considerations - Valuation - The New Brunswick Court of Queen's Bench, Family Division, stated that "... unless counsel agree otherwise, nonmarital property should be valued as at the date of separation and thereafter, if necessary, an adjustment may be made to reflect a change in economic conditions. The valuation date may be altered, ... to take into account an increase or decrease due to the efforts of one spouse alone, but generally speaking, the date of separation affords the best starting point to value nonmarital property" - See paragraph 113.

Family Law - Topic 888

Husband and wife - Marital property - Distribution orders - Considerations - Valuation - A husband, involved in a marital property dispute, was a minority shareholder in three limited partnership properties - The New Brunswick Court of Queen's Bench, Family Division, discussed whether the concept of minority discount should be applied in valuing the husband's interests in the properties - See paragraphs 118 to 122.

Family Law - Topic 955

Husband and wife - Marital property - Distribution orders - Practice - Costs - A couple divorced after a 20 year marriage - The husband was ordered to make an equalization payment to the wife of $532,000 for marital property and $2.5 million for nonmarital property - The trial took 12 weeks, involving 331 exhibits (758 documents), 15 experts, 7 days of testi­mony from the wife and 11 days from the husband - Legal fees and disbursements to trial totalled $2.5 million, split equally - The New Brunswick Court of Queen's Bench, Family Division, examined the conduct of both parties and determined that "the overall responsibility for puffing up this tragic case rests with the husband" - The court allowed the wife party and party costs of $500,000 plus disbursements - See paragraphs 195 to 222.

Family Law - Topic 3998

Divorce - Corollary relief - Children's post-secondary education - A couple with four children between the ages of 17 and 23 divorced in 1994 - In 1985, the hus­band established an irrevocable trust for the children's benefit, which had assets of $1.3 million by 1994 - The husband paid the education expenses of the three younger children from the trust, but re­fused to pay for the oldest child's expenses - The New Brunswick Court of Queen's Bench, Family Division, held that the oldest child was a "child of the marriage" (Divorce Act, s. 2), and was entitled to the assistance of his father with education expenses, whether or not the money came from the trust fund - The trust was an "agreement or arrangement" under the Divorce Act, s. 15(5)(c), which could be considered in determining corollary relief - See paragraphs 33 to 45.

Family Law - Topic 4006.1

Divorce - Corollary relief - Maintenance and awards - Awards - To children - Effect of agreements - [See Family Law - Topic 3998 ].

Family Law - Topic 4014

Divorce - Corollary relief - Maintenance and awards - Awards - To children and children defined - [See Family Law - Topic 3998 ].

Family Law - Topic 4022

Divorce - Corollary relief - Maintenance and awards - Awards - To wife - Con­siderations - A couple divorced after a 20 year marriage - The husband was ordered to make an equalization payment to the wife of $532,000 for marital property and $2.5 million for nonmarital property - The New Brunswick Court of Queen's Bench, Family Division, continued interim support to the wife of $6,000 per month until the equalization payments were made - Thereafter, the wife would have sufficient assets to provide her with an income to meet her reasonable needs and not require further support - See paragraphs 172 to 181.

Family Law - Topic 4034

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of marital property award - [See Family Law - Topic 4022 ].

Family Law - Topic 4176

Divorce - Practice - Costs - Party and party costs - [See Family Law - Topic 955 ].

Torts - Topic 6993

Defences - Spousal immunity - [See Family Law - Topic 787 ].

Trusts - Topic 4563

Administration - Directions from court - Jurisdiction - A couple with four children between the ages of 17 and 23 divorced in 1994 - In 1985, the husband established an irrevocable trust for the children's ben­efit, which had assets of $1.3 million by 1994 - In the divorce and marital property action, the wife, although she did not seek a division of the trust property, requested the court to issue directions to the trustee regarding the payment of all education expenses, clothing, health and dental ex­penses etc. and that the trustee treat all children equally - The New Brunswick Court of Queen's Bench, Family Division, refused the wife's request, stating that the court does not have jurisdiction to issue directions to a separate legal entity - See paragraphs 46 to 48.

Cases Noticed:

Picard v. Picard (1991), 119 N.B.R.(2d) 251; 300 A.P.R. 251 (C.A.), refd to. [para. 8].

Wilson v. Wilson (1990), 104 N.B.R.(2d) 261; 261 A.P.R. 261 (Fam. Div.), refd to. [para. 36].

Barry v. Wilson (1991), 110 N.B.R.(2d) 323; 276 A.P.R. 323; 29 R.F.L.(3d) 42 (Fam. Div.), refd to. [para. 36].

Stites v. Stites (1990), 105 N.B.R.(2d) 98; 264 A.P.R. 98 (Fam. Div.), refd to. [para. 36].

Jackson v. Jackson, [1973] S.C.R. 205; 8 R.F.L. 172 (S.C.C.), refd to. [para. 37].

Irvine v. Fitzgerald (1989), 95 N.B.R.(2d) 358; 241 A.P.R. 358 (Fam. Div.), refd to. [para. 39].

Richardson v. Richardson (1993), 137 N.B.R.(2d) 161; 351 A.P.R. 161 (Fam. Div.), refd to. [para. 40].

Stacey v. Hacking (1994), 142 N.B.R.(2d) 99; 364 A.P.R. 99 (Fam. Div.), refd to. [para. 40].

Belyea v. Belyea (1990), 111 N.B.R.(2d) 300; 277 A.P.R. 300; 30 R.F.L.(3d) 407 (Fam. Div.), refd to. [para. 42].

Angus v. Hart et al., [1988] 2 S.C.R. 256; 87 N.R. 200; 30 O.A.C. 210; 52 D.L.R. (4th) 193, refd to. [para. 58].

LeBouthillier v. LeBouthillier (1982), 39 N.B.R(2d) 20; 103 A.P.R. 20 (C.A.), refd to. [para. 65].

McPherson v. McPherson (1988), 27 O.A.C. 167; 13 R.F.L.(3d) 1 (C.A.), refd to. [para. 90].

Starkman v. Starkman (1990), 43 O.A.C. 85; 28 R.F.L.(3d) 208 (C.A.), refd to. [para. 90].

Gomez-Morales v. Gomez-Morales (1991), 100 N.S.R.(2d) 137; 272 A.P.R. 137; 30 R.F.L.(3d) 426 (C.A.), refd to. [para. 91].

Lev v. Lev (No. 6) (1992), 78 Man.R.(2d) 186; 40 R.F.L.(3d) 404 (C.A.), refd to. [paras. 92, 122, 218].

Vasilopoulos v. Vasilopoulos (1991), 113 N.B.R.(2d) 181; 285 A.P.R. 181 (Fam. Div.), refd to. [para. 93].

Fraser v. Fraser (1983), 47 N.B.R.(2d) 364; 124 A.P.R. 364; 35 R.F.L.(2d) 45 (C.A.), refd to. [para. 107].

Reite v. Reite, [1994] W.D.F.L. 537 (B.C.S.C.), refd to. [para. 111].

L'Aventure v. L'Aventure (1994), 145 N.B.R.(2d) 348; 372 A.P.R. 348 (Fam. Div.), refd to. [para. 117].

Rawluk v. Rawluk, [1990] 1 S.C.R. 70; 103 N.R. 321; 38 O.A.C. 81; 23 R.F.L.(3d) 337; 65 D.L.R.(4th) 161; 36 E.T.R. 1; 71 O.R.(2d) 480, refd to. [para. 139].

Leatherdale v. Leatherdale, [1982] 2 S.C.R. 743; 45 N.R. 40; 30 R.F.L.(2d) 225, refd to. [para. 141].

Sarchfield v. Sarchfield (1990), 109 N.B.R.(2d) 335; 273 A.P.R. 335 (C.A.), refd to. [para. 158].

Bregman v. Bregman (1979), 91 D.L.R.(3d) 470; 7 R.F.L.(2d) 210 (Ont. H.C.), refd to. [para. 168].

Elliott v. Elliott (1993), 42 R.F.L.(3d) 7 (Ont. U.F.C.), revd. (1993), 65 O.A.C. 241; 48 R.F.L.(3d) 237 (C.A.), refd to. [paras. 179, 180].

McQuay v. McQuay (1992), 54 O.A.C. 302; 39 R.F.L.(3d) 184 (Div. Ct.), refd to. [para. 183].

Heon v. Heon (1989), 22 R.F.L.(3d) 273 (Ont. H.C.), refd to. [para. 184].

Christian v. Christian (1991), 37 R.F.L.(3d) 26 (Ont. Gen. Div.), refd to. [para. 184].

Larter v. Freightliner of Canada Ltd. et al. (No. 1) (1991), 113 N.B.R.(2d) 11; 285 A.P.R. 11 (C.A.), refd to. [para. 216].

Daigle and Workers' Compensation Board (N.B.) v. Cape Breton Crane Rentals Ltd. et al. (1987), 91 N.B.R.(2d) 189; 232 A.P.R. 189 (C.A.), refd to. [para. 216].

Williams et al. v. Saint John (City), New Brunswick and Chubb Industries Ltd. (1985), 66 N.B.R.(2d) 10; 169 A.P.R. 10 (C.A.), refd to. [para. 216].

Gold v. Gold (No. 2) (1994), 32 B.C.A.C. 287; 53 W.A.C. 287; 49 R.F.L.(3d) 56 (C.A.), refd to. [para. 217].

Berdette v. Berdette (1991), 47 O.A.C. 345; 33 R.F.L.(3d) 113 (C.A.), refd to. [para. 218].

Statutes Noticed:

Charter Compliance Act, S.N.B. 1985, c. 41, sect. 4 [para. 51 et seq.].

Divorce Act, R.S.C. 1985 (2nd Supp.), c. 3, sect. 2(1) [para. 36]; sect. 15(5)(c) [para. 38].

Marital Property Act, S.N.B. 1980, c. M-1.1, sect. 1 [para. 63]; sect. 7 [para. 110]; sect. 7(f) [para. 156]; sect. 8 [paras. 6, 110, 155]; sect. 9 [para. 142].

Married Woman's Property Act, R.S.N.B. 1973, c. M-4, sect. 2(d) [para. 54]; sect. 6 [para. 50].

Rules of Court (N.B.), rule 59.02 [para. 215].

Authors and Works Noticed:

Campbell, Ian R., and Murrant, Nora, The Valuation and Pricing of Privately-Held Business Interests, generally [paras. 98, 120].

McLeod, James G., Annotation to Best v. Best (1994), 50 R.F.L.(3d) 120, p. 126 [para. 182].

McLeod, James G., Annotation to Elsom v. Elsom (1988), 13 R.F.L.(3d) 231, p. 234 [para. 168].

McLeod, James G., Article prepared for the National Family Law Program (1988), generally [para. 168].

McLeod, James G., Case Comment to Leatherdale v. Leatherdale (1980), 30 R.F.L.(2d) 251, p. 255 [para. 112].

Whitfield, Charles L., Co-Dependence - Healing the Human Condition (1991), pp. 10, 11 [para. 26].

Woititz, Janet Geringer, Adult Children of Alcoholics (1983), pp. xviii, xix [para. 27].

Counsel:

Robert G. Vincent, Q.C., and Alyson J. Townsend, for the petitioner;

E.J. Mockler, Q.C., and Maia Lushington-Deveau, for the respondent.

This case was heard on February 1-5, 8-11, 15-18, 23-26, March 1-4, 11, 12, 16-19, 22-26, 29-31, April 1, 2, 5-8, 13-16, 19, 20, 26, 27 and May 28, 1993, before Guerette, J., of the New Brunswick Court of Queen's Bench, Family Division, who filed the following decision on May 2, 1994.