Knudson v. Knudson, 2008 SKCA 106

• Judge: Gerwing, Smith and Hunter, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: April 17, 2008
• Jurisdiction: Saskatchewan
• Citations: 2008 SKCA 106;(2008), 311 Sask.R. 266 (CA)

Knudson v. Knudson (2008), 311 Sask.R. 266 (CA);

      428 W.A.C. 266

MLB headnote and full text

Temp. Cite: [2008] Sask.R. TBEd. SE.006

Kirk Harold Knudson (respondent/appellant) v. Raelyn Diane Knudson (petitioner/respondent)

(No. 1461; 2008 SKCA 106)

Indexed As: Knudson v. Knudson

Saskatchewan Court of Appeal

Gerwing, Smith and Hunter, JJ.A.

August 25, 2008.

Summary:

The parties married in July 1999 and divorced in 2006. At issue in the division of matrimonial property was the valuation of the husband's interest in a family farming operation.

The Saskatchewan Court of Queen's Bench, in a decision reported at [2007] Sask.R. Uned. 39, held that the value of the husband's partnership interest that was subject to division was $178,119.80. The husband appealed.

The Saskatchewan Court of Appeal allowed the appeal, finding that the value of the partnership interest that was subject to division was $39,532.40. The husband's equalization payment was adjusted accordingly.

Family Law - Topic 877

Husband and wife - Marital property - Distribution orders - Business, commercial or non-family assets - The parties married in July 1999 and divorced in 2006 - The husband had been one of six partners in a family farming operation for many years before the marriage - One partner left the business during the parties' marriage - At issue was the valuation of the husband's partnership interest - The value of partnership assets was $1,595,126.30 in July 1999 and $1,526,932 in May 2005 (the petition date) - The husband claimed an exemption for his 1/6 interest as of the date of marriage and that, the value of the interest having declined, nothing was left to divide - The trial court rejected that position, holding that each partnership asset had to be considered separately to determine whether it existed at the time of marriage - On this basis, the total partnership equity not subject to exemption was $890,500 - The husband's interest for division was 1/5 of that (one partner having left) or $178,119.80 - The Saskatchewan Court of Appeal allowed the husband's appeal - The trial judge erred in adopting an asset by asset method of valuation - The proper approach was that the entire value of the partnership interest as of the date of marriage was exempt, without consideration of whether the partnership continued, during the marriage, to hold the same assets - Then, the increase in value of the partnership interest during the marriage was subject to division - The husband's partnership interest in May 2005 was 1/5 of $1,526,932 or $305,386 - The exemption allowed was 1/6 of $1,526,932 (the partnership value in July 1999) or $265,854.38 - The increase in value for purposes of distribution was $39,532.40 - The husband's equalization payment was adjusted accordingly.

Family Law - Topic 880.1

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - General - Including pre-marriage acquisitions - [See Family Law - Topic 877 ].

Family Law - Topic 880.36

Husband and wife - Marital property - Distribution orders - Particular property - Active business - [See Family Law - Topic 877 ].

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation (incl. time for) - [See Family Law - Topic 877 ].

Cases Noticed:

Waller v. Waller, [1998] 8 W.W.R. 96; 164 Sask.R. 161 (Q.B.), consd. [para. 12].

Shmyr v. Shmyr (2003), 233 Sask.R. 87; 2003 SKQB 209, refd to. [para. 14].

Counsel:

Mel Annand, Q.C., for the appellant;

Mark R. Carson, for the respondent.

This appeal was heard on April 17, 2008, by Gerwing, Smith and Hunter, JJ.A., of the Saskatchewan Court of Appeal. On August 25, 2008, Smith, J.A., delivered the following reasons for judgment for the court.