McKenzie v. McKenzie, (2014) 362 B.C.A.C. 61 (CA)

• Judge: Bauman, C.J.B.C., Groberman and Garson, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: October 08, 2014
• Jurisdiction: British Columbia
• Citations: (2014), 362 B.C.A.C. 61 (CA);2015 BCCA 42;2014 BCCA 381

McKenzie v. McKenzie (2014), 362 B.C.A.C. 61 (CA);

    622 W.A.C. 61

MLB headnote and full text

Temp. Cite: [2014] B.C.A.C. TBEd. OC.019

James Alexander McKenzie (appellant/claimant) v. Melanie Louise McKenzie (respondent/respondent)

(CA040937; 2014 BCCA 381; 2015 BCCA 42)

Indexed As: McKenzie v. McKenzie

British Columbia Court of Appeal

Bauman, C.J.B.C., Groberman and Garson, JJ.A.

October 8, 2014 and February 4, 2015.

Summary:

This appeal concerned the division of assets between the parties, as well as whether spousal support should be payable to Ms. McKenzie after the breakdown of a 12-year marriage. The claims were made under the Divorce Act and the Family Relations Act (FRA). The trial judge's reasons for judgment are reported at [2013] B.C.T.C. Uned. 749. Mr. McKenzie, the appellant, contended that the trial judge erred: (1) by holding that the McKenzie cottage was a family asset notwithstanding that it was subject to a family trust; (2) in reapportioning family assets 70/30 in his favour; specifically, the judge failed to consider, pursuant to s. 65 of the FRA, that parts of the McKenzie family business were passive real estate assets and acquired before the marriage; (3) in calculating the income Mr. McKenzie earned from his business for the purposes of calculating spousal support as Ms. McKenzie was economically self-sufficient and had no need or entitlement to spousal support.

The British Columbia Court of Appeal allowed the appeal with respect to two issues. "First, I agree that the judge erred in reapportioning the family assets. The judge wrongly applied the s. 65 factors on a global basis without regard to the different character of the operating company assets and the passive real estate assets. Second, I agree the judge erred in disallowing as an ordinary business expenditure principal debt repayments when calculating Mr. McKenzie's income for SSAG [Spousal Support Advisory Guidelines] purposes. However, I would not accede to Mr. McKenzie's argument that the judge erred in finding the cottage to be a family asset. I would allow the appeal in respect to the amount of spousal support based on the reduction in Mr. McKenzie's income, but I do not agree with Mr. McKenzie that because Ms. McKenzie earns a substantial income, she has no entitlement to spousal support given the otherwise significant disparity in their incomes."

Family Law - Topic 875

Husband and wife - Marital property - Distribution orders - Statutes requiring equal division - Exceptions (incl. judicial reapportionment) - See paragraphs 49 to 80.

Family Law - Topic 876

Husband and wife - Marital property - Distribution orders - Family or matrimonial assets - See paragraphs 24 to 48.

Family Law - Topic 4002

Divorce - Corollary relief - Maintenance awards - Conditions precedent to entitlement - See paragraphs 108 to 112.

Family Law - Topic 4011

Divorce - Corollary relief - Maintenance awards - Lump sum - See paragraphs 113 and 114.

Family Law - Topic 4021.4

Divorce - Corollary relief - Maintenance awards - Considerations - Ability to pay (incl. potential to earn income and calculation of income) - See paragraphs 81 to 107.

Cases Noticed:

Toth v. Toth (1995), 64 B.C.A.C. 81; 105 W.A.C. 81; 13 B.C.L.R.(3d) 1 (C.A.), refd to. [para. 24].

Evetts v. Evetts (1996), 85 B.C.A.C. 19; 138 W.A.C. 19 (C.A.), refd to. [para. 45].

D. v. D. (2012), 331 B.C.A.C. 137; 565 W.A.C. 137; 2012 BCCA 509, refd to. [para. 63].

Murchie v. Murchie (1984), 53 B.C.L.R. 157 (C.A.), refd to. [para. 64].

Foster v. Foster (2007), 236 B.C.A.C. 97; 390 W.A.C. 97; 2007 BCCA 83, refd to. [para. 64].

Fong Estate v. Fong (1983), 45 B.C.L.R. 222 (C.A.), refd to. [para. 75].

Hausmann v. Klukas (2009), 265 B.C.A.C. 219; 446 W.A.C. 219; 2009 BCCA 32, refd to. [para. 98].

Bell v. Bell (2009), 272 B.C.A.C. 207; 459 W.A.C. 207; 2009 BCCA 280, refd to. [para. 108].

Chutter v. Chutter et al. (2008), 263 B.C.A.C. 109; 443 W.A.C. 109; 2008 BCCA 507, refd to. [para. 108].

Laxton v. Coglon (2008), 261 B.C.A.C. 142; 440 W.A.C. 142; 2008 BCCA 414, refd to. [para. 115].

Statutes Noticed:

Divorce Act Regulations (Can.), Federal Child Support Guidelines, SOR/97-175, sect. 18(1)(a) [para. 96].

Family Relations Act, R.S.B.C. 1996, c. 128, sect. 58(3) [para. 30]; sect. 65 [para. 67].

Federal Child Support Guidelines - see Divorce Act Regulations (Can.).

Counsel:

R.S. Gill and N.J. Reid, for the appellant;

J.A. Rose, Q.C., for the respondent.

This appeal was heard at Vancouver, British Columbia, on February 5-6, 2014, before Bauman, C.J.B.C., Groberman and Garson, JJ.A., of the British Columbia Court of Appeal. In reasons written by Garson, J.A., the Court delivered the following judgment, dated October 8, 2014. Supplementary reasons of the court were delivered on February 4, 2015.