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MARITAL PROPERTY - Equalization or division - Valuation of assets

Monday, June 10, 2019 @ 10:36 AM  

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Appeal by the husband from trial judgment respecting division of assets and from the cost award ordering the parties to bear their own costs without giving them an opportunity to be heard. Appeal by the wife from the spousal support award, the trial judge’s valuation of a camp property, and prospective child support. The parties separated in 2015. They accumulated considerable debt. A year after separation, the husband filed for bankruptcy. An inheritance the husband received after separation was paid directly to his Trustee in Bankruptcy. The money was then applied to pay off creditors, wiping out most of the matrimonial debt. The trial judge recognized the inheritance to be an exempt asset but provided the husband with no credit for the relief it afforded the wife from responsibility for the joint matrimonial debt. The parties disputed the valuation of a camp property owned by a corporation in which the husband owned shares. The shares were found to be a matrimonial asset, but the trial judge permitted the husband to retain the shares after considering the vehicle and household contents the wife retained. At the time of separation, the parties’ two children attended post-secondary institutions. The son lived with the husband full-time. The daughter lived with the wife during the summer. By off-setting the amount to be paid by the wife against the amount she would receive from the husband for the daughter, the trial judge calculated a net amount to be paid by the husband, provided the daughter returned home to live full-time with her mother. The trial judge also determined that the wife should contribute toward the son’s university education costs but made no order directing any payments by the husband for the daughter’s ongoing educational expenses. The trial judge ordered spousal support of $1,338 per month. When the wife left work in 2001 as an investment advisor, she was earning $150,000 per year. In 2017, the wife began working full-time as a Financial Advisor Trainee. Her base salary was $49,000 per year. She had the opportunity to earn additional incentive pay based on performance. The husband’s income was $126,687 per year working as a pharmacist in his family’s pharmacy business.

HELD: Appeal allowed. Wife’s appeal allowed in part. A new trial was ordered on the division of property, costs and child support issues. The trial judge erred by failing to make any provision for the application of the husband’s inheritance, an exempt asset, to the jointly owned matrimonial debts. This was a clear legal error and one that could only be corrected by returning the issue to another judge for a determination of the appropriate equalization payment, if any, by the wife. The trial judge also erred by never giving the parties the promised opportunity to be heard on costs. Submissions by counsel also indicated there might have been developments after the divorce trial relating to the deficiency judgment, the children, and the husband’s bankruptcy that the new trial judge might want to consider. Although the wife was ordered to contribute to the son’s university expenses pursuant to s. 7 of the Guidelines, the trial judge made no mention of the husband having a comparable support obligation in relation to the daughter. Whether any such obligation might still exist was not something the court could determine on the record. There was no basis for interfering with the spousal support awarded.  The trial judge applied the correct law in exercising his discretion and considering the relevant facts, making no palpable and overriding error. The spousal support award did not constitute a patent injustice.

MacQuarrie v. MacQuarrie, [2019] N.S.J. No. 208, Nova Scotia Court of Appeal, P. Bryson, C.A. Bourgeois and A.S. Derrick JJ.A., May 15, 2019. Digest No. TLD-June102019003