Phillips v. Phillips, 2010 SKCA 117

• Jurisdiction: Saskatchewan
• Judge: Klebuc, C.J.S., Sherstobitoff and Richards, JJ.A.
• Neutral Citation: 2010 SKCA 117
• Court: Court of Appeal (Saskatchewan)
• Date: 08 October 2009
• Citation: 2010 SKCA 117,(2010), 362 Sask.R. 124 (CA),324 DLR (4th) 534,[2010] SJ No 548 (QL),362 Sask R 124,(2010), 362 SaskR 124 (CA),362 Sask.R. 124,324 D.L.R. (4th) 534,362 SaskR 124,[2010] S.J. No 548 (QL)

Phillips v. Phillips (2010), 362 Sask.R. 124 (CA);

    500 W.A.C. 124

MLB headnote and full text

Temp. Cite: [2010] Sask.R. TBEd. SE.071

Trent Lawrence Phillips (petitioner/appellant) v. Cheryl Ann Phillips (respondent/respondent)

(No. 1663; 2010 SKCA 117)

Indexed As: Phillips v. Phillips

Saskatchewan Court of Appeal

Klebuc, C.J.S., Sherstobitoff and Richards, JJ.A.

September 23, 2010.

Summary:

The husband sought a divorce, an equal division of matrimonial property and occupation rent from the date of separation. The wife opposed the claim for occupation rent and sought an unequal division under s. 25 of the Family Property Act.

The Saskatchewan Court of Queen's Bench, Family Law Division, in a decision reported at (2008), 321 Sask.R. 267, held that the wife had met the onus of proving that an equal distribution would be unfair and inequitable. The court granted the divorce and ordered an unequal distribution of the family home. The court held that an order for occupation rent was not appropriate. The husband appealed.

The Saskatchewan Court of Appeal allowed the appeal in part.

Family Law - Topic 627

Husband and wife - Marital property - Matrimonial home - Occupation by one spouse - Claim for occupation rent - The husband sought an equal division of matrimonial property and occupation rent from the date of separation - The wife opposed the claim for occupation rent and sought an unequal division under s. 25 of the Family Property Act - The trial judge held that the husband's gambling over the years was improper conduct that was dissipation as defined in the Family Property Act - The gambling qualified as an extraordinary circumstance under s. 22 of the Act, allowing an unequal distribution of the family home - The appropriate remedy was to treat the $156,000 gambled away by the husband as part of his share - The gambling money was set off against the value of the house - An order for occupation rent was not appropriate - The husband's rental expenses had been almost equal to the wife's home maintenance expenses - Occupation rent would upset that balance - Further, occupation rent was not fair where the husband had contributed little to the upkeep and maintenance of the home over the years - The Saskatchewan Court of Appeal dismissed the husband's appeal from the refusal to order occupation rent - The trial judge had not erred in dismissing this claim - See paragraph 41.

Family Law - Topic 629.2

Husband and wife - Marital property - Marital property legislation - Interpretation of - [See first Family Law - Topic 865 and second Family Law - Topic 880.22 ].

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The Saskatchewan Court of Appeal discussed the application and effect of ss. 21, 22 and 25 in the Family Property Act - Section 21(1) empowered a court to distribute family property or its value equally between the spouses, subject to certain exceptions, exemptions and equitable considerations - Section 21(2) empowered a court to make, amongst other things, an unequal distribution of family property if satisfied, having regard to the factors raised in s. 21(3), that it would be unfair and inequitable to make an equal distribution - Section 21(3)(k) confirmed that dissipation of family property was one of the factors to be considered - All three subsections were subject to the provisions of s. 22 when the division of a family home was under consideration - Each of them was silent on whether the two year limitation in s. 28 (return of gift of property when insufficient consideration) applied - Section 22 specifically dealt with the distribution of a family home - Thus, the maxims of expressio unius est exclusio alterius (to express one thing is to exclude another) and generalia specialibus non derogant (a general statement cannot override a specific statement) contemplated the specific provisions of s. 22 overriding the provisions of s. 21 whenever a conflict or ambiguity arose between the two sections - Of particular significance was s. 22(1) which directed the court to distribute the family home equally between the spouses, except if it would be "unfair and inequitable to do so, having regard only to any extraordinary circumstance" - In doing so, the legislature created a distinct procedure with a narrower and more onerous threshold to be met by a spouse seeking an unequal distribution of the family home than the one applicable to an unequal distribution of other family property pursuant to ss. 21(1) and 21(2) - See paragraphs 22 and 23.

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The trial judge held that the husband's gambling over the years was improper conduct that was dissipation as defined in the Family Property Act - The gambling qualified as an extraordinary circumstance under s. 22 of the Act, allowing an unequal distribution of the family home - The appropriate remedy was to treat the $156,000 gambled away by the husband as part of his share - Although this was a remedy under s. 28 of the Act (regarding dissipation), it was also available under ss. 21 and 22 - The gambling money was set off against the value of the house - At issue on the husband's appeal was whether his gambling losses constituted an extraordinary circumstance under s. 22 - The Saskatchewan Court of Appeal determined that a spouse seeking an unequal distribution of the family home was required to meet a more onerous threshold than the fairness and equity threshold that applied to unequal distributions of other family property under ss. 21(1) and 21(2) - An unequal distribution of the family home was not to be made based merely on a s. 21 fairness analysis - Here, the magnitude of the husband's gambling losses relative to his income, his inability to meaningfully contribute to the costs of maintaining the family home and the resulting long term financial jeopardy flowing from his gambling collectively amounted to an extraordinary circumstance within the meaning of s. 22(1) - Further, s. 25 clearly contemplated that improper conduct of the kind exhibited by the husband might constitute an extraordinary circumstance under s. 22(1) - See paragraphs 19 to 29.

Family Law - Topic 865

Husband and wife - Marital property - Distribution orders - Matrimonial home - The trial judge held that the husband's gambling over the years was improper conduct that was dissipation as defined in the Family Property Act - The gambling qualified as an extraordinary circumstance under s. 22 of the Act, allowing an unequal distribution of the family home - The appropriate remedy was to treat the $156,000 gambled away by the husband as part of his share - Although this was a remedy under s. 28 of the Act (regarding dissipation), it was also available under ss. 21 and 22 - The gambling money was set off against the value of the house - The husband appealed, asserting, inter alia, that the trial judge had erred in (a) finding that the husband had gambled and lost $15,600 per year in each of the 10 years prior to the parties' property division applications and (b) defining the whole of the husband's gambling losses as family property that would have been saved and available for distribution - The Saskatchewan Court of Appeal allowed the appeal in part - Having found that the two year limitation period in s. 28 applied here, it was only necessary to consider the amounts dissipated in the two years prior to the applications - The husband's first argument failed as there was evidence on which the trial judge could find that the husband spent $31,200 on gambling in those two years - However, in defining the entire $31,200 as family property, the trial judge implicitly held that, but for his gambling problem, the husband would have saved between 60% and 70% of his after tax income - This implicit rate was not supported by any evidence - Further, gambling was an acceptable form of entertainment if conducted lawfully and the amount spent was reasonable - Therefore, part of the sums spent on gambling did not constitute dissipation - The trial judge had erred in holding that the whole of the losses constituted dissipation - The court set aside the distribution order as it turned on that issue and referred the matter back to the trial judge for a redetermination - See paragraphs 35 to 42.

Family Law - Topic 875

Husband and wife - Marital property - Distribution orders - Statutes requiring equal division - Exceptions (incl. judicial reapportionment) - [See all Family Law - Topic 865 and second Family Law - Topic 880.22 ].

Family Law - Topic 880.22

Husband and wife - Marital property - Distribution orders - Compensation for dissipation of assets - The trial judge held that the husband's gambling over the years was improper conduct that was dissipation as defined in the Family Property Act - The gambling qualified as an extraordinary circumstance under s. 22 of the Act, allowing an unequal distribution of the family home - The appropriate remedy was to treat the $156,000 gambled away by the husband as part of his share - Although this was a remedy under s. 28 of the Act (regarding dissipation), it was also available under ss. 21 and 22 - The gambling money was set off against the value of the house - The husband appealed, asserting, inter alia, that his gambling did not constitute dissipation as no family property was ever sold or pledged to pay his gambling losses - The Saskatchewan Court of Appeal rejected this argument - For dissipation to exist, a spouse must have "squandered" a significant portion of the family property and the squandering must have jeopardized the financial security of the family unit - Here, clear evidence of squandering existed - The husband's gambling activities consumed 60% to 70% of his taxable earnings, all of his modest retirement savings plans (other than his modest Union-sponsored pension plan), his security investments, and loans he had obtained - This jeopardized the financial security of the household - The husband chose to dissipate his earnings and liquid assets, rather than to contribute to the short or long term needs of the family unit - The money spent on gambling constituted dissipation within the meaning of the Act - See paragraphs 12 to 18.

Family Law - Topic 880.22

Husband and wife - Marital property - Distribution orders - Compensation for dissipation of assets - The trial judge held that the husband's gambling over the years was improper conduct that was dissipation as defined in the Family Property Act - The gambling qualified as an extraordinary circumstance under s. 22 of the Act, allowing an unequal distribution of the family home - The appropriate remedy was to treat the $156,000 gambled away by the husband as part of his share - Although this was a remedy under s. 28 of the Act (regarding dissipation), it was also available under ss. 21 and 22 - The gambling money was set off against the value of the house - The husband appealed, asserting, inter alia, that the trial judge had erred in failing to comply with the two year limitation period in s. 28(1)(b) of the Act by not limiting the husband's alleged dissipation to the two year period prior to the parties' property division applications - The Saskatchewan Court of Appeal agreed with the husband that s. 28 applied in this case - Sections 21 and 28 overlapped to the extent that both empowered a court to make an unequal distribution based on dissipation - They differed to the extent that s. 28 limited an unequal distribution based on dissipation to the amount dissipated within the previous two years, while s. 21 imposed no time limit - Therefore, the sections were in conflict unless s. 21 was interpreted as being subject to the two year rule - A plain reading of s. 28 led to the conclusion that the legislature intended it to apply to distributions of family property under ss. 21 and 22 - The purpose of s. 28 was to curtail wasteful litigation based on acts of dissipation or inappropriate gifting of family property that occurred more than two years prior - The trial judge erred in concluding that s. 28 did not apply to this matter - See paragraphs 30 to 34.

Family Law - Topic 880.24

Husband and wife - Marital property - Distribution orders - Compensation for excessive gifts - [See second Family Law - Topic 880.22 ].

Family Law - Topic 890.5

Husband and wife - Marital property - Considerations in making distribution orders - Dissipation or disposal of assets - [See second and third Family Law - Topic 865 and both Family Law - Topic 880.22 ].

Statutes - Topic 1554

Interpretation - Construction where meaning is not plain - Implied meaning - Stating one thing implies exclusion of another (expressio unius est exclusio alterius) - [See first Family Law - Topic 865 ].

Statutes - Topic 2605

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Intention from related provisions - [See second Family Law - Topic 880.22 ].

Statutes - Topic 2607

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Special provision versus general provision - [See first Family Law - Topic 865 ].

Statutes - Topic 2613

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Generalia specialibus non derogant - [See first Family Law - Topic 865 ].

Cases Noticed:

Gallop v. Mulatz - see Gallop v. Abdoulah et al.

Gallop v. Abdoulah et al., [2008] 5 W.W.R. 231; 311 Sask.R. 123; 428 W.A.C. 123; 2008 SKCA 29, refd to. [para. 9].

Rimmer v. Adshead, [2002] 4 W.W.R. 119; 217 Sask.R. 94; 265 W.A.C. 94; 2002 SKCA 12, refd to. [para. 10].

Gaetz v. Gaetz (1996), 144 Sask.R. 268; 124 W.A.C. 268 (C.A.), refd to. [para. 13].

Zovko v. Zovko (2005), 261 Sask.R. 71; 2005 SKQB 60 (Fam. Div.), refd to. [para. 13].

Perkowitsch v. Perkowitsch (1995), 138 Sask.R. 175 (Q.B. Fam. Div.), refd to. [para. 13].

Hansen v. Hansen (2003), 230 Sask.R. 293; 2003 SKQB 62 (Fam. Div.), refd to. [para. 17].

Hewitt v. Hewitt (2002), 215 Sask.R. 149; 2002 SKQB 35 (Fam. Div.), refd to. [para. 17].

Rudy v. Rudy (1983), 22 Sask.R. 261 (Q.B.), refd to. [para. 24].

Haughn v. Haughn (1983), 25 Sask.R. 33 (C.A.), refd to. [para. 24].

Dembiczak v. Dembiczak (1985), 42 Sask.R. 314 (C.A.), refd to. [para. 25].

Wolff v. Wolff (1985), 37 Sask.R. 19 (C.A.), refd to. [para. 25].

Nedilenko v. Nedilenko Estate, [1989] 4 W.W.R. 281; 74 Sask.R. 213 (C.A.), refd to. [para. 25].

Penteluk v. Penteluk Estate (1992), 100 Sask.R. 178; 18 W.A.C. 178 (C.A.), refd to. [para. 25].

Guderyan v. Meyers (2006), 290 Sask.R. 280; 2006 SKQB 535 (Fam. Div.), refd to. [para. 27].

Muranetz-Dubelt v. Dubelt (2008), 313 Sask.R. 183; 2008 SKQB 97 (Fam. Div.), refd to. [para. 31].

Lamb v. Lamb (1998), 166 Sask.R. 170 (Q.B. Fam. Div.), refd to. [para. 31].

Crowe v. Crowe (2001), 205 Sask.R. 241; 2001 SKQB 202 (Fam. Div.), refd to. [para. 31].

Gabel v. Gabel Estate (1995), 127 Sask.R. 275 (Q.B.), refd to. [para. 31].

Sigurdson v. Sigurdson (1980), 7 Sask.R. 422 (U.F.C.), refd to. [para. 31].

Gallagher v. Gallagher, [2000] Sask.R. Uned. 233; 2000 SKQB 397 (Fam. Div.), refd to. [para. 32].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 32].

Statutes Noticed:

Family Property Act, S.S. 1997, c. F-6.3, sect. 21, sect. 22, sect. 25, sect. 28 [para. 8].

Counsel:

W. Timothy Stodalka, for the appellant;

Michael T. Megaw, for the respondent.

This appeal was heard on October 8, 2009, by Klebuc, C.J.S., Sherstobitoff and Richards, JJ.A., of the Saskatchewan Court of Appeal. On September 23, 2010, Klebuc, C.J.S., delivered the following written reasons for judgment for the court.