Stephen v. Stephen, (1999) 183 Sask.R. 161 (FD)

• Judge: McIntyre, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: June 30, 1999
• Jurisdiction: Saskatchewan
• Citations: (1999), 183 Sask.R. 161 (FD)

Stephen v. Stephen (1999), 183 Sask.R. 161 (FD)

MLB headnote and full text

Temp. Cite: [1999] Sask.R. TBEd. JL.042

Peggy Lynn Stephen (petitioner) v. Reginald Kelly Stephen (respondent)

(1996 D.I.V. No. 675)

Indexed As: Stephen v. Stephen

Saskatchewan Court of Queen's Bench

Family Law Division

Judicial Centre of Regina

McIntyre, J.

June 30, 1999.

Summary:

The parties married in 1985 and separated in 1996. At issue was the division of matri­monial property, custody of the two children of the marriage, child support, spousal sup­port and costs.

The Saskatchewan Court of Queen's Bench, Family Law Division, ordered the husband to make an equalization payment to the wife of $529,337.65 to be secured by a charge against the husband's company. The children's primary residence would remain with the wife and the husband would have liberal parenting time provided reasonable notice was given. The husband was ordered to pay child support of $3,302.22 per month. He was also ordered to pay spousal support of $2,500 per month for three years. The wife was awarded costs of the action.

Evidence - Topic 7004.1

Opinion evidence - Expert evidence - General - Participation of counsel in prep­aration of expert opinion - The Saskatchewan Court of Queen's Bench, Family Law Division, discussed the limits on the participation of counsel in the prep­aration of an expert opinion - See para­graphs 21 to 26.

Family Law - Topic 880.1

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - General, including pre-marriage acqui­si­tions - The parties married in 1985 and separated in 1996 - The husband had pur­chased his father's interest in a company (EMS) in 1984 for $150,000, to be paid in monthly instalments with no interest - He was now the sole shareholder of EMS - The husband sought to adjust the value of EMS, claiming an exemption for the value of his interest in EMS as of the date of the marriage (he had paid $29,687.50 by that date) - He also characterized the interest free loan as exempt property, or alterna­tively, as a third party contribution which justified an unequal distribution - The Saskatchewan Court of Queen's Bench, Family Law Division, held that in the circumstances an exemption would be unfair and unequitable - It was also not appropriate to characterize the interest free loan as a third party contribution which might justify an unequal distribution - See paragraphs 47 to 55.

Family Law - Topic 880.36

Husband and wife - Marital property - Distribution orders - Particular property - Active business - [See Family Law - Topic 888 ].

Family Law - Topic 882

Husband and wife - Marital property - Considerations in making distribution orders - Relevant considerations (incl. income tax) - Spouses separated - The husband was the sole shareholder of a company (EMS) - The husband sought to adjust the value of EMS, arguing that an adjustment must be made for tax purposes - The Saskatchewan Court of Queen's Bench, Family Law Division, held that it was an appropriate situation to make an adjustment for tax consequences - While it was not likely that a sale would occur, it was an appropriate starting point to calcu­late the tax as if a sale occurred - It was also appropriate to use the capital gains exemp­tion in the calculation - As no sale was likely to occur at this time, an allow­ance had to be made for contingencies and the tax should be discounted by about 50 percent - The husband was credited with a notional tax liability of $100,000 - See paragraphs 56 to 70.

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation (incl. time for) - Spouses separated - The husband was the sole shareholder of EMS, an oilfield ser­vice company - The wife argued that the valuation date with respect to EMS should be the date of adjudication - She sub­mitted that the husband's income was understated when interim support orders were made and if the company was not valued as of the date of adjudication the husband would reap the benefit of his greater income - Further, 1997 was the company's best year ever - The Saskatchewan Court of Queen's Bench, Family Law Division, held that the date for valuing an active business was prima facie the date of the application and there were no circumstances in this case which would make that date unfair - The increase in profit in 1997 could not be divorced from the husband's efforts - Even if the husband underpaid support prior to trial, that was not an appropriate factor to consider in determining the valuation date - See paragraphs 3 to 19.

Family Law - Topic 890.1

Husband and wife - Marital property - Considerations in making distribution orders - Contribution by third party - [See Family Law - Topic 880.1 ].

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance and awards - Retroactive awards - A wife sought $63,000 in retroactive lump sum child support - She argued that interim support orders were made based upon an income attributed to the husband which was substantially less that what his income was found to be at trial - The Saskatchewan Court of Queen's Bench, Family Law Division, stated that the fact that the final support order was different did not make the interim order inappropri­ate such that there should automatically be a retroactive adjustment - In this case the interim support order was substantial and there was no evidence that it created any hardship or unfairness for the wife - Any retroactive adjustment was not appropriate in the circumstances - See paragraphs 123 to 126.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Calculation of income - Section 18 of the Federal Child Support Guidelines provided that where a spouse was a share­holder, director or officer of a corporation and the amount of the spouse's annual income as determined under s. 16 did not fairly reflect all the money available to the spouse for the payment of child support, the court could determine the spouse's annual income to include: (a) all or part of the pre-tax income of the corporation, or any related corporation; or (b) an amount commensurate with the services that the spouse provided to the corporation - The Saskatchewan Court of Queen's Bench, Family Law Division, stated that the oper­ation of s. 18 was not limited to circum­stances where the payor had structured compensation to defeat the Guidelines or subsidize personal and living expenses - Section 18 could be used where a person's income as determined under s. 16 "does not fairly reflect all the money available to the spouse for the payment of child sup­port" - See paragraph 107.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Calculation of income - Spouses separ­ated - The husband was the sole share­holder of a company (EMS) - With respect to calculating the husband's income for purposes of determining child support under the Federal Child Support Guidelines, the wife sought to add the pre-tax income of EMS to the husband's income as reported on his tax return - The Saskatchewan Court of Queen's Bench, Family Law Division, held that the com­pensation which the husband chose to draw from EMS did not fairly reflect all the money available to him for the payment of child support and that it was appropriate to include in the husband's income approxi­mately one half of EMS's 1997 pre-tax earnings - It was not appropriate to add in the entire pre-tax earnings as the company had legitimate business reasons to retain some of its profits - See paragraphs 103 to 111.

Family Law - Topic 4045.12

Divorce - Corollary relief - Maintenance - Support guidelines (incl. nondivorce cases) - Where income over $150,000 - A hus­band was found to have income of $303,000 for the purposes of the Federal Child Support Guidelines - The Saskatchewan Court of Queen's Bench, Family Law Division, addressed s. 4 of the Guidelines and, having regard to the needs of the children and the means of the parties, concluded that it was appropriate to calculate the husband's child support obligation on the basis of the full table amount - The husband was ordered to pay child support of $3,302.22 per month for the two children of the marriage - See paragraphs 112 to 121.

Family Law - Topic 4077.1

Divorce - Corollary relief - Interim main­tenance - Adjustment of interim award at trial - [See Family Law - Topic 4001.1 ].

Family Law - Topic 4175

Divorce - Practice - Costs - The Saskatchewan Court of Queen's Bench, Family Law Division, determined issues dealing with matrimonial property, custody and child and spousal support - The court ordered that the wife have her costs of the action, stating that the husband's conduct unnecessarily protracted the litigation and should not be condoned - There was a substantial asset at issue (the husband's oilfield service company) and there was no excuse for the husband not having an appraisal prepared in accordance with the time frames contemplated by the Queen's Bench Rules - See paragraphs 145 to 149.

Cases Noticed:

Benson v. Benson (1994), 120 Sask.R. 17; 68 W.A.C. 17 (C.A.), consd. [para. 10].

Ritchie v. Ritchie (1994), 121 Sask.R. 197 (Q.B.), consd. [para. 11].

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

Gresham v. Gresham (1987), 8 R.F.L.(3d) 102 (Sask. Q.B.), varied (1988), 72 Sask.R. 9 (C.A.), consd. [para. 13].

Vancouver Community College v. Phillips Barratt (1988), 26 B.C.L.R.(2d) 296 (S.C.), refd to. [para. 23].

Surrey Credit Union v. Willson (1990), 45 B.C.L.R.(2d) 310 (S.C.), refd to. [para. 24].

Electronic Superstore Ltd. v. Geransky Brothers Construction Ltd. et al. (1990), 87 Sask.R. 194 (Q.B.), refd to. [para. 30].

Seaberly v. Seaberly (1985), 37 Sask.R. 219 (C.A.), refd to. [para. 50].

Smith v. Smith (1997), 160 Sask.R. 161 (Q.B. Fam. Div.), refd to. [para. 62].

Carlson v. Carlson (1984), 34 Sask.R. 287 (C.A.), consd. [para. 63].

Shockey v. Shockey (1985), 38 Sask.R. 47 (C.A.), consd. [para. 64].

Gresham v. Gresham (1988), 72 Sask.R. 9 (C.A.), consd. [para. 64].

Raczynski v. Raczynski (1998), 171 Sask.R. 1 (Q.B. Fam. Div.), refd to. [para. 65].

Blanchette v. Cline, [1992] S.J. No. 679 (U.F.C.), refd to. [para. 89].

C.R.L. v. R.E.L., [1998] Sask.R. Uned. 5 (Q.B. Fam. Div.), refd to. [para. 96].

L.S. v. E.P., [1997] B.C.T.C. Uned. D93; 32 R.F.L.(4th) 75 (S.C.), consd. [para. 106].

Beeching v. Beeching (1998), 169 Sask.R. 18 (Q.B. Fam. Div.), consd. [para. 108].

Morley v. Morley (1999), 176 Sask.R. 287 (Q.B. Fam. Div.), consd. [para. 109].

Francis v. Baker (1998), 107 O.A.C. 161; 34 R.F.L.(4th) 317 (C.A.), refd to. [para. 113].

Dergousoff v. Dergousoff (1999), 177 Sask.R. 64; 199 W.A.C. 64 (C.A.), consd. [para. 113].

Bracklow v. Bracklow (1999), 236 N.R. 79; 120 B.C.A.C. 211; 196 W.A.C. 211; 169 D.L.R.(4th) 577 (S.C.C.), consd. [para. 133].

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; 43 R.F.L.(3d) 345, refd to. [para. 141].

Statutes Noticed:

Divorce Act Regulations (Can.), Federal Child Support Guidelines, SOR/97-175, sect. 18 [para. 100].

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

Counsel:

E.F. Anthony Merchant, Q.C., for the petitioner;

Sherri A. Cybulski, for the respondent.

This action was heard before McIntyre, J., of the Saskatchewan Court of Queen's Bench, Family Law Division, Judicial Centre of Regina, who delivered the following judgment on June 30, 1999.