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MARITAL PROPERTY - Exempt acquisitions and deductions - Award or settlement of damages

Monday, August 31, 2020 @ 5:52 AM  


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Appeal by the wife from the trial judgment dividing funds in two jointly-held investment accounts in favour of the husband. The accounts were established after the husband received a substantial settlement of a personal injury claim. At trial, the husband conceded that the investments were matrimonial assets but claimed an unequal division in his favour. The wife argued the funds were not subject to the asset-sharing provisions of the Family Law Act since the settlement funds were excluded as a matrimonial asset and were not therefore subject to division under either s. 21 or 22 of the Act. She argued they were exempt assets and that the subsequent placement of the exempt assets in the jointly-owned investment accounts resulted, by virtue of s. 31(2), in her becoming entitled to a one-half beneficial interest in the funds because there was no evidence to the contrary within the meaning of s. 31(2). The trial judge agreed with the husband. He concluded that the accounts had in fact acquired the character of matrimonial assets because the use that were made of the assets since their creation had been for family purposes. He awarded him 90 per cent of the funds, finding that both the husband’s current and future income and earning capacity and his physical disability were particularly relevant because his injuries were serious and had lessened his opportunity to obtain employment.

HELD: Appeal dismissed. The trial judge erred in failing to consider each of the necessary steps in the statutory framework and in not addressing all relevant factors respecting the wife’s submissions on ss. 27 and 31 but did not err in concluding that the investments were matrimonial assets. The evidence was sufficient to rebut the modified presumption of a gift of a one-half interest to the wife and supported the conclusion that it was never intended that, on severance, half of the funds would be owned by her and half by the husband. The established intention of a lifetime replacement source of income for the husband was inconsistent with the presumption of a gift of a half interest to the wife. It was not necessary for the husband to make application under s. 27 to resolve ownership of the joint investment accounts as ss. 27 and 31 were not intertwined. No palpable or overriding error was demonstrated in the trial judge’s conclusion that the joint investment accounts were matrimonial assets. The apportionment of the funds in the joint investment accounts based on the trial judge’s findings that the husband’s injuries had been severe, prolonged, ongoing and devastating in terms of his quality of life and would continue to be was entitled to deference.

Quigley-McKay v. McKay, [2020] N.J. No. 154, Newfoundland and Labrador Court of Appeal, D.E. Fry C.J.N.L., J.D. Green and G.D. Butler JJ.A., July 24, 2020. Digest No. TLD-August312020001