Williams v. Kruger, 2008 MBQB 150

• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: May 21, 2008
• Jurisdiction: Manitoba
• Citations: 2008 MBQB 150;(2008), 229 Man.R.(2d) 133 (QBM)

Williams v. Kruger (2008), 229 Man.R.(2d) 133 (QBM)

MLB headnote and full text

Temp. Cite: [2008] Man.R.(2d) TBEd. JN.014

Kimberley Irene Martha Williams (petitioner) v. Trevor Scott Kruger (respondent)

(FD 05-02-02694; 2008 MBQB 150)

Indexed As: Williams v. Kruger

Manitoba Court of Queen's Bench

Brandon Centre

Harrison, Master

May 21, 2008.

Summary:

Spouses commenced cohabitation in July 1998, married in January 1999 and separated in March 2005. Each spouse owned separate parcels of farmland registered in their own names and the husband held a homestead or dower interest in the marital home purchased and registered in the wife's name only. The husband was a farmer. The wife worked as a professional at a health centre. At issue on this reference for an accounting and valuation of assets was: (1) the value of improvements to inherited real property; (2) the shareability of the acquisition costs of the marital home, including consideration of homestead interests; (3) the applicability of the "specific contemplation of marriage" provision of s. 4(2) of the Family Property Act; (4) the impact on fair market value of "mad cow disease"; (5) the valuation of rapidly depreciating encumbered pre-acquired assets; and (6) the issue of RRSP exemption.

A Master of the Manitoba Court of Queen's Bench determined the issues accordingly.

Family Law - Topic 880.1

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - General (incl. pre-marriage acquisitions) - Section 4(2) of the Family Property Act provided that the Act applied to assets acquired before marriage if the asset was acquired before, but in "specific contemplated of ... cohabitation ... or ... marriage" - The wife purchased land and a mobile home one year before she began cohabiting with her husband for six months (they then married) - The husband provided advice in the purchase (inspected property) - A Master of the Manitoba Court of Queen's Bench held that the asset was not purchased in "contemplation" of cohabitation or marriage - The wife purchased the property for her and her two children from a prior marriage and not in contemplation of cohabiting with her eventual husband - There was no "mutual specific thought process and conclusion" between the spouses prior to the acquisition of the asset - The wife established that she would have purchased the property regardless of whether she ever cohabited with the husband - See paragraphs 20 to 31.

Family Law - Topic 880.2

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - Increments - Spouses commenced cohabitation in July 1998, married in January 1999 and separated in March 2005 - Each spouse owned separate parcels of farmland registered in their own names - A contract between the spouses permitted the husband to use the wife's farmland to pasture his cattle - The husband claimed that the time and materials he expended (fences and dugout improvements) bettered the property and the valuation should be increased accordingly - A Master of the Manitoba Court of Queen's Bench held that the improvements bettered the property and constituted "assets" under the Family Property Act - However, there was no evidence of the increased value attributable to the improvements and the husband's motivation was not to improve his wife's land, but to generate a significant cash flow by using the property to pasture his cattle - The Master stated that "this court cannot, on the evidentiary foundation presented, or within the governing statutory framework, make any entry in this accounting increasing the fair market separation value of the wife's subject parcel of land. Even in the event that such a fair market value increase was established, attributable to the husband's improvements, said value is only one part of the contract. The wife ... appears to have received no consideration for the husband's use of her real property over the contractual years. There are no provisions within the Family Property Act to judge and adjust intra-family personal business transactions which have taken place during the course of the relationship" - See paragraphs 7 to 19.

Family Law - Topic 880.12

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - Post-marital exchange of pre-marital exempt assets - Prior to cohabiting with and marrying her husband, the wife was the sole registered owner of an inherited parcel of land from which she received compensation for surface rights - The compensation was deposited into the wife's bank accounts and a portion of the funds was used to purchase her RRSP's - A Master of the Manitoba Court of Queen's Bench held that the RRSP's were not "family property" - The Master rejected the husband's argument that by placing exempt property into her bank accounts, the wife had converted the funds to family property, because some family expenses were payable out of the account - The account was never joint - The spouses maintained their finances separately - The Master stated that "this court specifically rejects the husband's assertion that by virtue of the exempt 'oil' income passing through an account partially used to support him that he is therefore entitled to a share of the wife's RRSP assets" - See paragraphs 66 to 73.

Family Law - Topic 888

Husband and wife - Marital property - Considerations in making distribution orders - Valuation - [See Family Law - Topic 880.2 ].

Cases Noticed:

Wilkinson v. Wilkinson, [1997] Man.R.(2d) Uned. 114; [1998] 3 W.W.R. 77 (Q.B. Master), refd to. [para. 13].

Rotzetter v. Rotzetter (1985), 35 Man.R.(2d) 212 (C.A.), refd to. [para. 27].

Smith v. Smith, [1980] 6 W.W.R. 289; 3 Man.R.(2d) 206; 18 R.F.L.(2d) 38 (C.A.), refd to. [para. 35].

Simkin v. Simkin (1979), 1 Man.R.(2d) 44 (Q.B.), affd. (1980), 3 Man.R.(2d) 205 (C.A.), refd to. [para. 36].

Halwas v. Halwas (2001), 160 Man.R.(2d) 96; 262 W.A.C. 96; 2001 MBCA 169, refd to. [para. 36].

Voth v. Voth (2003), 174 Man.R.(2d) 17; 2003 MBQB 44, refd to. [para. 55].

Counsel:

Trent B. Sholdice, for the petitioner;

Robert H. Johnston, Q.C., for the respondent.

This matter was heard before Master Harrison of the Manitoba Court of Queen's Bench, Brandon Centre, who delivered the following judgment on May 21, 2008.