COURT FILE NO.: 17-0649
DATE: 20190918
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
JILL MAUREEN CALVER
Applicant
– and –
MATTHEW JAMES KENNETH CALVER
Respondent
Matthew E. Wright, for the Applicant
G. Edward Lloyd, for the Respondent
HEARD at Brockville: January 14, 15, 16, 17, 18, 23, 24, 25, March 18, 2019
REASONS FOR JUDGMENT
PEDLAR J.
[1] This is a case about the sharing of property between the parties after their marriage had failed. It is a rather unfortunate example of a family law case where the process has taken over, to the detriment of both parties. These parties and these issues have been overburdened by the crushing weight of a 9-day trial in Superior Court, with the accompanied huge risk of costs and the less easily calculated but undeniable expense of the stress on both parties.
[2] In spite of the fact that this was a highly contentious trial, many of the relevant facts are not in dispute. What is clearly in dispute is the interpretation of those facts and the consequences that follow.
[3] The applicant and respondent met in April 2009 in the province of Alberta, where they were both employed at the time. The relationship quickly moved to them living together within approximately one week of them meeting each other. By the time the respondent met the applicant’s mother in May of 2009, they were already engaged to be married. The applicant’s mother was shocked when, at that first meeting, the respondent asked for her, and her husband’s, permission to marry the applicant. The parties separated and reconciled in late 2009 and continued to be a couple together until married in 2013 and eventually separated in the summer of 2017 after having moved to Ontario in 2015.
[4] From 2009 to 2013, they lived as an unmarried couple in Red Deer, Alberta, in the applicant’s house on Assinger Avenue. During this time, the respondent was away working in the oil fields for weeks at a time. The applicant, during this time, was working teaching hairdressing at a high school and doing hairdressing from her home as well.
[5] At the time the parties met in 2009, the respondent had contract earnings from the oil industry that he funneled through his own business of Calver Racing. That business was a chuckwagon racing enterprise, which included him owning 18 horses and a racing wagon and a trailer. He paid $1,000 a month to rent a property where he both lived and kept his horses and horse trailer while he continued to be engaged in chuckwagon racing.
[6] In 2010, the respondent became an employee of Strike Energy rather than a contractor and earned a much-improved income. The records for his Calver Racing business are filed as Exhibit Number 26, Tab 1.
[7] For much of the time the respondent was on the road working in the oil fields and staying in motels and oil company accommodation. He was paid a non-taxable living allowance of between $125 to $250 per day. The cost of the respondent living away from home between January 2010 and February 2012, while staying in hotels and eating at restaurants during his employment in the oil fields, was $32,892.
[8] The arrangement was that the applicant would book the respondent’s accommodation, often at cheaper facilities than the daily allowance would have provided. His evidence is that he was working 24 days on and 4 days off and the above-noted expenses incurred confirm that the respondent’s employment did require him to be away from the applicant’s residence in Red Deer for extended periods of time.
[9] Although not a major fact in dispute between the parties, it is noted by the applicant that the respondent had previously gone bankrupt and been discharged in 2007 before the parties met in 2009. The respondent points out that he filed for bankruptcy in 2003. His evidence is that he thought there were sufficient funds from the sale of a backhoe to pay off the Trustee. When it came to light in 2007 that there were not, he then paid the outstanding sum and was discharged from bankruptcy in 2007. He further explains that he did not understand it was a personal bankruptcy, and that he had been only 19 years of age when he filed for bankruptcy and left school after grade 9 and was relatively unsophisticated about business at that time.
[10] The applicant points out that $38,056.36 was spent by her on IVF treatments before the date of the parties’ marriage on August 16, 2013. The respondent agrees that it was a joint decision for this couple to undergo the IVF treatment process in order to have a child born to them. It appears from the exhibits filed that payments towards that process began in 2011, but only totalled $1,225 throughout 2011. Those numbers appear to be confirmed by Exhibit AA, which is merely an aide-memoire to a number of documented payments by the applicant to fertility clinics and medication, etc., as part of the IVF process. The total of $38,056.36 was paid through the applicant’s visa or power chequing account.
[11] The applicant claims she paid a total of approximately $76,000 for IVF treatment as those treatments continued up until the time of separation. Within three or four months prior to the separation, a payment was made to a donor egg bank in the USA in the amount of $19,075 to continue the process of trying to have a child born to this couple.
[12] The respondent denies the accuracy of the applicant’s claim, both from the point of view of her actual costs prior to marriage and her evidence that he did not contribute. His evidence, and the evidence of his mother, was that he did sell cattle from his cow/calf operation in Ontario and contributed those funds from time to time.
[13] The respondent points out that at page 946 through page 954 of the Applicant’s Request to Admit, Book 4 of 4, dated December 5, 2018, there is evidence that during the period between January 1, 2012 and July 31, 2017, the applicant made claims to the Alberta Employee Benefit Plan with regards to the IVF processes. Someone has highlighted a number of the entries on those nine pages with a note that those were IVF related. If those notations are correct, then all of the charges totalling $21,168.74, would not be IVF related. It also does not appear that any of these payments went directly to the fertility clinics, as set out as Exhibit Number 48 in various pages between 982 and 1,009 that are listed in the exhibit, which is also found in Book 4 of 4 of the Applicant’s Request to Admit. Both parties signed those documents and the signatures appear to begin in September of 2012 with the most recent being February 8, 2014, after the date of marriage.
[14] That last date is important in view of the tragic loss of a newborn child, named Coldyn, by the parties in the summer of 2013.
[15] On February 8, 2014, signatures at pages 982 through 988 indicate a renewed attempt for a successful IVF pregnancy after Coldyn’s tragic death.
[16] I have not gone through the process of sorting out what portion of expenses that were claimed through her insurance coverage from her employer, as set out in pages 946 to 952 referred to above are, according to the note on page 946, IVF related. The total claim for insurance involves an expense of $21,168 spent and the applicant was reimbursed for $15,095. The cost of medication during the course of the treatments is estimated at page 995 of Exhibit Number 48, at between $3,000 and $6,000. It appears from examining the nine pages starting at page 946 related to the cost of medication that a very high percentage of the cost of actual medication is covered by this plan. The costs of the medication are relatively minimal to the applicant. The costs of injection syringes were not substantially covered, but it was difficult when the statements include the same numbers apparently being deleted, and then charged again, so I am not really sure about those and how many syringes were involved. It appears to be only probably three. After that, the cost to the applicant for any of the medication is well covered with only a minimal charge to her. There are some costs for injections that, again, are hard to figure out with the bracketed figures being used and apparently for the same dates so I am not really sure how to deal with those, but they only amount to a few hundred dollars. The main costs seem to be the injection syringes and, again, I find the exact meaning of the bracketed numbers not entirely clear. The main expenses for IVF treatments were paid to the IVF clinics, not for medication covered significantly by insurance.
[17] At Tab 2 of the Respondent’s Written Submissions, there is a letter dated February 25, 2018, from counsel for the respondent directed to counsel for the applicant. That letter relates to documentary disclosure and lists a number of documents in terms of their subject matter that are being disclosed at that time.
[18] At the bottom of the first page of that letter, the second last set of documents that are included are referred to as, “Fertility Clinic Invoices and letters and emails from Donor Egg Bank”.
[19] There was no attempt at trial to introduce any documents specifically related to those topics by the respondent. Some of those documents may have already been in the possession of the applicant and introduced in her material. I have no way of clarifying that issue.
[20] I find that the actions of the applicant from 2011 through to the spring and summer of 2017 did speak powerfully about her interest in having a child born. Even after the devastation of the death in the summer of 2013, of their child who only lived for approximately seven days, she continued the process of IVF treatments through her grieving and depression over the loss of their child.
[21] The applicant’s determination is confirmed by her payment of $19,500 for donor eggs in the spring of 2017. By continuing to make the majority of payments towards the IVF process through six frustrating and, at times, devastating years, she demonstrated an exceptional and determined wish to continue with the process in spite of the frustrations, doubts and fears associated with repeated failures during what is both a very invasive and stressful treatment.
[22] The report from the applicant’s counsellor, referred to at paragraph 14 of the Applicant’s Written Argument at Trial, confirms that the “costs” to both parties is considerable not only financially but also emotional duress and stress. It is also both logical and confirmed clinically that that stress can overflow into areas of employment as well as relationships within the marriage. The respondent in his evidence quite properly recognized that the burden during this process weighed more heavily on the applicant than him. I took his evidence as relating to the invasive nature of the treatment when the fertilized eggs, in the case of repeated failures, are implanted in the female body and if attachment does not occur, there is a repeat of that process over and over.
[23] It does appear that the bulk of financial expense for the IVF was carried by the applicant. The respondent indicates some financial contribution. The respondent states that he was not aware that the applicant was receiving disability payments from shortly after the time of the fire, which destroyed the barn and cattle on the dairy farm, throughout the balance of the time they lived together, which would amount to approximately a two-year length of time. Those IVF expenses were also claimed on her income tax returns and additional expenses for drugs were partially covered by insurance from her employer.
[24] Once a plan was agreed to by the parties to attempt to establish a dairy farm in Ontario, the respondent began working towards that goal. While still resident in Alberta and employed by Strike Energy working in the oil fields, the respondent managed to buy two pieces of property north of Napanee, referred to in these proceedings as the “Napanee properties”. Those purchases took place before any move to Ontario and before the date of the marriage of the parties herein. Those two properties became five properties after the respondent successfully obtained severances. After putting in his own time and effort and money to repairs to the farmhouse and the barn on one of the properties, it was sold to the Whittekers. He also sold off a building lot to a family called vanStraalens during the marriage and he sold off a building lot to his mother during the marriage. By the time of separation, he owned two pieces of vacant land that were not, and had not been, used in the cow/calf operation that he also ran. His evidence is that it took place on a piece of land that he rented through a partnership with another individual. His evidence was that the vacant land (the Napanee properties) was not suitable for the cow/calf operation as it lacked fences, water and barns.
[25] It is acknowledged between the parties that the applicant made no direct contribution towards either the purchase, improvement or upkeep of these two properties. The applicant’s position is that by providing the respondent with a place to reside, when he was home with her in Red Deer, and paying for the IVF treatments, which payments to the treatment facility alone total over $38,000 prior to the date of marriage, she was making it possible for the respondent to successfully run the separate businesses in Ontario of the cow/calf operation and purchasing, severing and selling portions of the two Napanee properties.
[26] It is acknowledged that there was little capital investment in the purchase of these two properties. The first purchase was accomplished with a minimal down-payment and the second purchase was leveraged with a mortgage above the sale price because of the equity in the first property built up through the severance and sales of portions of it. The respondent clearly invested his time, effort and good business judgment in transforming highly financed properties into something of value with a significantly increased equity. There is no question that the title to both of these properties is solely in the name of the respondent. The cow/calf operation was also a business run entirely by him, although there are issues raised about the true ownership of the registered cattle as between his mother and himself and his business partner in the operation. His evidence is that operation was not conducted on the Napanee properties and, for the purpose of this trial, I am making that assumption.
[27] The applicant’s evidence, confirmed by her mother, is that the respondent told her that they jointly owned the Napanee properties. The respondent points out that the applicant’s mother’s evidence is that she was told that by the respondent when they first met in the spring of 2009 and discovered that the parties were already engaged and had put this plan of purchasing a farm in Ontario firmly in their future. The respondent points out that the first purchase of the Napanee properties was made in December of 2009, so he claims that evidence is not reliable.
[28] If the applicant honestly believed that she was a half-owner of the Napanee properties, it would have seemed logical that she would be required to not only participate in signing off on a sale of the three portions that were sold, but also claiming for tax purposes at least one-half of the proceeds received for those sales. There is no evidence that she was involved in the sales of portions of the Napanee property in either way.
[29] The applicant also relies on the contents of Exhibit Number 7, which is an affidavit sworn by Lindsey Nichol of Red Deer, Alberta. She is a management consultant and prepared a business plan for these parties in October of 2014, while they still resided in Alberta, for an application for financial help from the Dairy Farmers of Ontario New Entrant Quota Assistance Program. That application form is attached to the affidavit.
[30] Amongst other things, the business plans states: “The dairy operation will utilize a new 40 stall tie stall barn located in Lennox Addington County on land owned by Matt and Jill Calver.”
[31] The affidavit contains the following paragraphs:
Further, the business plan was to be used to help the Calvers, their lenders and the Dairy Farmers of Ontario assess whether the cash flow and profits from the proposed operation would be sufficient to service the debt required to purchase the quota and cattle and remain a viable long-term operation.
The business plan was never fully completed. The application required a signed letter from the Calvers’ lender(s) indicating that they have reviewed the business plan and agreed to provide financing. Since this requirement was not met the business plan and subsequent application were not completed.
The business plan reflects the progress Matthew Calver and I made to that point at the material time and I believe I was the sole author of the business plan.
The information and representations in the business plan is to the best of my knowledge and recollection based solely on the information I received from Matthew Calver at or about the material time that informed my understanding as to the ownership of assets as between Matthew Calver and Jill Calver and the nature of the partnership proposed between Matthew Calver and Jill Calver. For clarity, the contents of the business plan reflects what my understanding was at that time as to the ownership of assets as between Matthew Calver and Jill Calver, and the ownership of farmland in particular, and the nature of the partnership proposed between Matthew Calver and Jill Calver. I wish to place the following qualification and clarification on the previous statement, as follows:
(a) The financial component of the business plan is a compilation. A compilation is limited to presenting, in the form of a financial projection, information provided by management and does not include evaluating the support for the assumptions, including the hypothesis or other information underlying the projection.
(b) The Projected Net Worth does include property, plan and equipment owned at the time, based on values provided by Matthew Calver. MNP did not verify these values nor did we pull searches to verify how the assets were owned.
(c) The purpose of this document was to determine whether the proposed operations could meet its required financial obligations, not to determine how assets were owned.
(d) The ownership structure outlined in the document discusses the proposed operation but did not outline the ownership structure of any pre-existing assets or property. MNP is not aware of how ownership was structured past this time frame.
I make this affidavit with relation to the evidence I will give at trial in the hope of avoiding the necessity of my attending the trial on January 14, 2018 in Brockville, Ontario, and for no improper purpose.
To the best of my recollection, I have not met Jill Calver (nee Broker) at the material time or before the material time.
[32] It is obvious that this application is a “sales pitch” which would still need to be vetted to clarify the actual value of the Napanee farms and the legitimacy of the other estimates of costs, etc. contained in this document which never was presented to or relied upon by any third party proposed lender. The proposal to use the Napanee properties as the location for the dairy farm was abandoned.
[33] It should also be noted that the only reference in detail is to one of the two Napanee properties located at Lot 3, Concession 3, Geographic Township of Camden East. It does not mention Lot 7, Concession 3.
[34] The respondent’s evidence is that he was willing to put the Napanee properties into joint ownership if this plan had proceeded, which it did not. His evidence is that the dairy farm purchase north of Gananoque was a joint operation, but that the ownership of these two Napanee properties was kept separate. It is acknowledged that the applicant invested a total of $230,000 into that joint project which came following the sale of her matrimonial home when she repaid her mother who had advanced those funds. One hundred and thirty thousand dollars was borrowed to make the actual purchase of the farm possible and then a further $100,000 was later loaned to improve the farmhouse on that property. That was short-term “bridge” funding by her mother that the applicant repaid as indicated in the various documents filed. Her last payment of $100,000 for the home improvements was made in February of 2016 to her mother.
[35] As indicated above, I am not exactly clear on the financial picture regarding the cow/calf operation. It was clear from his oral evidence that the respondent is well informed about the registered and unregistered animals involved in that particular operation. Again, Tab 2 of the Respondent’s Written Submissions refers to disclosure documents on page 2 of that letter under the heading, “Documents relating to Beef Cattle”. For the purposes of this ruling, I do not need to know all those details, however, it is clear that this operation was run at a deficit, at least for CRA purposes. That is not remarkable for a start-up business. It must be noted the applicant was obviously provided with some disclosure about the cow/calf business as she claimed in her 2012 and 2013 tax returns one-half of the “deficit” even though she had no involvement with this Ontario based business.
[36] Leaving aside the legal or ethical issues as to how one accomplishes their goals, it is not uncommon for new businesses, and particularly new farm operations, to show minimal incomes or actual deficits while increasing in capital wealth through the value of their land or breeding stock. Through breeding, trading and selling cattle, they can reinvest in the farm to show little income, but building up capital at the same time.
[37] Over many years of hearing family law cases involving farm families, I have found it is not unusual to see incomes modified, levelled or even overpowered by the huge costs of reinvesting in expenses like milk quotas, breeding stock, farm equipment and additional land purchases or rentals. While the value of equipment generally results in a capital loss, it is hoped, and often the case, that land and good breeding stock will increase in value.
[38] It is accepted by both parties that the dairy farm purchase near Gananoque was a joint venture. The applicant’s contribution to the purchase of the dairy farm was to pay off her mother, Eileen Broker, who had provided the short-term loan referred to above. The respondent’s contribution included putting up his Napanee properties as collateral to provide security for the financing from the bank. As part of that process, those properties had to be free and clear of mortgages and the encumbrances and both of them were paid off in the amount of $205,645.21, according to the trust ledge statement from the solicitors acting for the parties in their purchase of the dairy farm.
[39] That financial package also included the payment of a little over $103,000 of other loans, owed by the parties. A significant portion, of around $60,000, benefited the personal debt of the applicant. This joint financial project of purchasing the dairy farm also included paying off all of the loans of each party except for the respondent’s tractor loan which was not paid off.
[40] With regard to the ownership of the Napanee properties, the respondent also relies upon an email sent from Jill Calver, the applicant, to the Bank of Montreal regarding the purchase of the dairy farm. The email is dated March 6, 2015 and refers to outstanding balances at the Toronto Dominion Bank as being “mortgages/lines of credit Matt has out on his land and tractor”. That document is filed as Exhibit Number 17 in these proceedings.
[41] At the time the parties met, the applicant was employed as a high school teacher. She was a university graduate in her mid-thirties, living at Red Deer, Alberta. She was single and described herself as careful with financial matters. She had a substantial equity in her home as well as investments and the growing pension from her employment.
[42] As mentioned above, within a week from the date of their original meeting, the respondent had moved into the applicant’s home. Within a month they were engaged to be married. As of 2008, the respondent had his own business, Calver Racing, and he funneled his contract earnings from the oil business through that entity. He was engaged in chuckwagon racing and owned 18 horses, was contracting himself out in the oil industry and living in a rental property, as indicated above. The ability to write off expenses against income as a self-employed person kept his 2009, 2008 incomes reported to CRA as fairly modest.
[43] From 2010 on, he became an employee of Strike Energy rather than a contractor and earned a more steady income. He was, as noted above, able to claim losses from his farming operation in Ontario through those years as well. The records from Calver Racing are at Exhibit Number 26, Tab 1.
[44] As also mentioned above, when he was working the 24 days on and 4 days off shift, indicated above, with his non-taxable living allowance between $125 to $250 a day, the respondent’s evidence is that the applicant would book him into the cheapest motel possible on her credit card to earn points. During those times, it is obvious that they were not living together full time. Pages 55 to 59 of Exhibit Number 25 indicate $32,892.81 being spent mostly on accommodation when he was working on the road. When he ended his chuckwagon racing time, he was able to give up the property for which he was paying $1,000 a month rent.
[45] During those first few years of their relationship, the respondent was able to reside with the applicant at her home when he was not on the road for business. There would have been some relief financially from letting the property go with his horses and trailer but the cost of keeping 18 horses and the expenses of travelling around to various competitions as well as being able to write off a major portion of the rental of the property would have meant that his living circumstances, which were modest, would have been mostly written off so his income was claimed as also very modest.
[46] During this time, he also improved his employment by moving to full time employment. He purchased two properties with little or no equity other than his sweat equity increasing their value. He also began a calf operation in Ontario with some help from his family. The applicant made no direct contribution with regard to either the business he ran by severing off lots and also from the cow/calf operation itself.
[47] It is abundantly clear that throughout the IVF years, from 2011 or early 2012 through to the summer of 2017, it was a very difficult time for both parties with the physical involvement and emotional consequence more acute for the applicant.
[48] I do not find that portion of the applicant’s claim for compensation for the emotional and physical cost to be compensable. The loss of her comfort and her mental health issues are part of a very challenging process to which both parents had agreed and through which both parents suffered. If you take the applicant’s case that it was the respondent who wanted this baby so much to fulfill his seemingly overpowering dream of family farming, it is hard to accept that he was not also greatly disappointed when the IVF process continued to fail. Although people grieve very differently, there is nothing in that scenario of the tragic loss of Coldyn to support a claim of detriment as part of a claim for equitable relief. The question of her carrying the full burden of the IVF payments up until the point of marriage does remain relevant however.
[49] The applicant left Red Deer to join the respondent in Ontario in the early summer of 2015. By that time, she was on disability from her employment. She had not resigned permanently from her position as a teacher as evidenced in the letter from the principal of the school. That disability claim came about as a result of the loss of the barn and cattle by fire within a relatively short period after the respondent had taken over full responsibility for operating the dairy farm. That fire was caused by a third party and there is an outstanding piece of litigation which may give the parties some relief, but is not relevant to this hearing as they have agreed to share the results of that litigation equally. The applicant was therefore not present in Ontario when the fire took place, but followed the respondent and arrived sometime in July after he had dealt with the cleanup and was proceeding to get the operation back in place as soon as possible. The loss of the cattle was particularly difficult as the bloodlines that were lost were described by the respondent as almost irreplaceable.
[50] The following year, the applicant kept her position at the high school in Red Deer on an extension for another full year. After the separation, she was offered a fulltime job at that high school with only one-half of that position being directed towards hairdressing and the other half would have required her to teach English. Although she has a Bachelor of Education degree, she did not feel qualified to teach English and, therefore, took the halftime position as a teacher of hairdressing. She had left as a fulltime teacher of that subject. It was probably unrealistic to say the offer of a fulltime teaching job was full restitution to her position that she held prior to her leaving for Ontario.
[51] It seems somewhat odd that it was even offered to her if she is not qualified. She may have grounds to seek relief through her union depending on the terms of her contract she left on disability. It was obviously evidence of her insecurity in her own judgment about leaving that job and moving to Ontario with the respondent and the goal of establishing a dairy farm. There would be no other reason for her attempting to keep her job in Red Deer for as long as possible other than as a fall-back option. She did make it known that she believed it would be a better lifestyle choice in Ontario with the dairy farm and the respondent. This joint venture of the dairy farm was clearly not without its risks to both parties. At the centre of those risks was the relationship between the parties themselves. Had they not separated, it does appear that there was a reasonable chance of that dream becoming a reality for both of them.
[52] With regard to the dairy farm itself, it is clear that the respondent carried the heavier load in terms of the actual work on the farm and of educating himself about dairy farming to the point that he could operate independently. It is common knowledge that the cost of establishing a dairy operation, other than a generational farm being passed through family, is almost prohibitive. The respondent came to Ontario ahead of the applicant to get the farm established and learn the intricacies of that farm from the previous owner.
[53] He dealt with the fire and cleaning up of the property and the dead cattle while the applicant remained in Alberta throughout that process. There is no question that he worked long and hard to re-establish a viable dairy operation with the assistance of $800,000 of insurance money eventually. The respondent acknowledges that the applicant did some work on the dairy farm and is not critical of her contribution, but it is clear that the bulk of the work and knowledge was contained in the respondent himself. That work did allow the property to sell for 2.4 million, when they bought it for 1.8 million two years earlier. Both parties benefited substantially from the efforts of the respondent in that regard.
[54] The loss of the barn and cattle meant a newer, more efficient barn was built. The $100,000 invested by the applicant towards upgrades in the house was, according to the evidence, not as significant as the new barn, good cattle and milk quota to explain the $600,000 increase in sales price after just two years. The respondent was the major catalyst in salvaging the dairy farm business and avoiding financial disaster for both parties.
[55] The different approaches being taken by the parties is clear from their written submissions following trial. The applicant’s first statement in those submissions is: “This case is about unconscionability.” The respondent’s first statement in his written submissions states as follows: “This case is about the equalization of property between the parties after their marriage has failed.”
[56] Any party seeking equitable relief in an action must be open to an examination of their own conduct and ethics throughout the relevant time period and transactions.
[57] There are several aspects of the way these parties conducted themselves in this process that leave one concerned about ethical issues. The respondent, for instance, was dishonest about his formal education requirements to get his fulltime position with his employer in the oil fields. At its highest, the applicant appears to have stretched her disability claim, admittedly with some clinical support, by not telling the full story of her situation. She may not have been in an emotional state to return to teaching and yet she is engaged fulltime in a farming operation on a dairy farm, going through IVF treatments, and renovations of at least $100,000 on the residence at that farm while living there. Without being sure of what her expectations were about rehabilitation it does not seem likely that scenario would fit well with those expectations on behalf of the insurance provider. Both parties split the income tax deductions for the losses associated with the cow/calf operation in Ontario. The applicant had virtually nothing to do with that operation and that claim seems to be income, or loss, splitting and less than legitimate. Although all of these ethical issues would have benefited them financially as a couple, it still leaves one questioning their overall approach to financial matters.
[58] The applicant has attempted to characterize the dairy farm as solely the respondent’s dream of generational farming. She says that he told her she was “ruining his dream” of owning a farm like that, by separating in the summer of 2017. He was reluctant to allow that dream to evaporate until it was inevitable.
[59] Clearly, she had shared that dream to the extent of investing significantly from the sale of her house, moving to Ontario to something she valued more. That “something” was her relationship with the respondent and their future life together. They had been through good and bad times going back to 2009. She was not a teenager. She was an experienced, independent, intelligent, determined woman with life experience. She knew there were no guarantees and she protected herself by preserving her employment the best she could. One wonders how much the timing of the extension of that employment for a period until the school year starting in September 2017 affected her decision to return to Alberta at that particular time.
[60] Family is a major source of wealth in our culture. It is always costly to break up such a partnership, particularly a joint venture of this nature. No one’s dream goes on the same after such a breakup. This risk was not unanticipated by the applicant. She was careful enough to extend her leave from her employment for two years. She was also careful enough to leave just before the two years would end. She was careful enough to soften the fall from the breakup of their marriage if it occurred. It was likely a combination of many factors that led to the marriage breakdown, but financial matters are certainly very important to her, according to her own evidence and her conduct in dealing with them, as set out above.
[61] The applicant’s claims, based on unjust enrichment, constructive trust and proprietary estoppel, I find are not the determining considerations in this action. I agree with the respondent’s submission that they do not apply in the case of married couples for the period of time during their marriage. The case law relied upon by the applicant relates to common-law relationships and extreme fact situations resulting in huge inequities.
[62] In this case, however, the applicant’s claim under Section 5(6)(h) of the Family Law Act does require a more detailed analysis. That section does also require an analysis of many of the same factors as the equitable remedies, which I find only apply to unmarried litigants.
[63] The net family property approach taken by the Family Law Act is not a perfect system. It is, however, our system legislated to be applied under these circumstances. It reflects the values of our culture in a marriage relationship which is one of equal sharing. That equal sharing is only disturbed if that result is “unconscionable”. Only then is the court to deviate from an equal sharing of net family property. It has been interpreted in case law as requiring something more than simply an unfair result. It must be a result that shocks the conscience of the court.
[64] It is also a reflection of our cultural values that marriage is much more than a business arrangement. It is a commitment to another person to work together for mutual benefit and recognizes that at times that will include personal sacrifice by putting the other person’s interests ahead of your own. That sacrifice, in many cases, is much better than “unfair”. It is priceless. The Supreme Court of Canada decision of Kerr v. Baranow, 2011 SCC 10 makes it clear that there is a distinction in which property matters are to be dealt with for married and unmarried parties. Justice Cromwell states as follows at paragraph 1:
In a series of cases spanning 30 years, the Court has wrestled with the financial and property rights of parties on the breakdown of a marriage or domestic relationship. Now, for married spouses, comprehensive matrimonial property statutes enacted in the late 1970s and 1980s provide the applicable legal framework. But for unmarried persons in domestic relationships in most common law provinces, judge-made law was and remains the only option. The main legal mechanisms available to parties and courts have been the resulting trust and the action in unjust enrichment.
[65] Section 5(6) the Family Law Act, R.S.O. 1990, Chapter F.3 reads as follows:
Variation of share
(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,
(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
(c) the part of a spouse’s net family property that consists of gifts made by the other spouse;
(d) a spouse’s intentional or reckless depletion of his or her net family property;
(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
(g) a written agreement between the spouses that is not a domestic contract; or
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. R.S.O. 1990, c. F.3, s. 5(6).
[66] It is clear then from this legislation than an unequal division of net family property is allowed if such a division would be unconscionable having regard to the eight criteria set out and, in our case, particularly, subsection (h). The wording, “any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property”, is very broad. Every family situation must be analyzed, when dealing with the net family property scheme, within that context. It does not require the strict analysis as set out in cases of unmarried parties in rulings on unjust enrichment, constructive trust or proprietary estoppel. Those considerations may have certain similarities, but the Family Law Act paints with a somewhat broader brush stroke than those equitable reliefs.
[67] It should also be noted that the Vanasse and Seguin case, which was part of the Kerr and Baranow decision, also related to common law spouses dealing with extreme factual situations and extreme financial disparity between the parties in acknowledging the equitable relief sought.
[68] As stated by the Ontario Court of Appeal in Serra v. Serra 2009 ONCA 105 at paragraph 47, the standard that needs to be met for unconscionability is very high. The court stated as follows:
In this regard, the threshold of “unconscionability” under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must shock the conscience of the court.
[69] I agree with the respondent’s submissions that it is not appropriate for the applicant to attempt to rely upon doctrine such as unjust enrichment or constructive trust or equitable estoppel in a case about the equalization of family properties of a married couple. I agree with a portion of paragraph 74 of the respondent’s written submissions, which state as follows:
The imposition of the equalization process by legislation was specifically to prevent married couples litigating unjust enrichment and constructive trusts when they separate. The effects of those doctrines are subsumed within the equalization process and cannot be used to set aside the equalization process unless the outcome of the equalization process is itself unconscionable in that it shocks the conscience of the court. It is noteworthy that the law relates to the outcome of the equalization shocking the conscience of the court, not that a party’s behaviour is shocking….
[70] In this case, I do not find that the respondent’s conduct was shocking in any event.
[71] The applicant’s request for judgment in her favour in the amount of $450,000 would be, in my opinion, more shocking than the respondent’s net family property calculations as set out at Tab A of his written submissions.
[72] It also appears that the applicant is seeking to employ the doctrine of unjust enrichment to the period before her marriage in order to increase the value of property she brought into the marriage and reduced the value of the property the respondent brought into the marriage. Her claim on this property issue is fully answered within the context of a net family property adjustment. Any deviation from that must comply with s. 5.6(h) of the Family Law Act, as pleaded. The circumstances that are to be considered relate only to the “acquisition, disposition, preservation, maintenance or improvement of property”.
[73] With regards to those issues, she contributed nothing directly to any of those factors as it relates to the Napanee properties. Her claim that she made indirect contributions through saving the respondent from paying rent while he resided with her prior to marriage is extremely mitigated by the fact that he was not there for the majority of the time and his expenses when he was away from her home were being mitigated by a living allowance from his employment. Other than an increase in the cost of food when he did live there, her ongoing payments on the two mortgages on her residence were continuing and would be somewhat mitigated by the expectation of an increase in net value by the increase of the value of the property. I have no real evidence on which to make findings in that regard and cannot do so.
[74] Her payments on the IVF treatments would indicate that she carried the load on those. That is not an issue that can be tied in any reasonable way to the criteria under s. 5(6)(h) relating to the Napanee properties as the respondent managed those two properties and financed them on his own.
[75] She remained employed through the 2014-2015 school year. She left to go on disability benefit at the end of that school year and returned to her previous employment, admittedly on a part-time basis in the fall of 2017 after the separation. By the time of the marriage, the applicant has presented evidence that she had incurred in excess of $38,000 for those IVF treatments. After selling her home in Red Deer and moving in with the respondent in Ontario, she would no longer be paying the mortgages on that house, obviously, but was living with the respondent on the dairy farm which they had purchased in a joint venture which included her paying $230,000 as indicated above and him putting up the equity in the Napanee properties plus having the balance paid off on any outstanding mortgages so that the entire equity in the Napanee properties was potentially put at risk and presumably that was a requirement of the bank in order to engage in this very large financial commitment by the parties.
[76] The content of Exhibit Number 17 when she was questioning how they could deal with all these debts as part of that financing arrangement presumably resulted in the debt on the tractor being removed from the proposal. It is also clear that the indebtedness of the parties personally were also to be paid off which meant that approximately $60,000 of the applicant’s debts were paid off as part of this financial package.
[77] This was not just an arrangement between the two parties, it was a joint application to a lending party to allow them to obtain the funding to proceed with the purchase of the dairy farm. The fact that they each contributed unequally to a joint venture is presumed to be voluntary and with the full knowledge and implications of their individual investments. It is clear from Exhibit 17 that the applicant was concerned about exactly this issue and was aware of its implications. The intention of the legislation, as indicated above, is clearly to avoid this kind of dispute in the event of a dissolution of the marriage, unless the result of equal sharing is shocking.
[78] Although the applicant takes the position that the respondent could not have purchased the Napanee farms without her financial support, the facts do not clearly demonstrate that. He purchased these properties with minimal financial investment and produced something of value largely with his own management of the properties and sweat equity in improving the house and barn on the sale to Whittfield. They were both purchased and owned by him solely prior to the date of marriage. According to the best evidence available at trial, at the date of marriage the Joyce Road property was valued at $145,000 with a mortgage of $34,366, indicating a rounded off equity of approximately $110,000. The Denridge Road property was valued at $137,000 with a $97,251.58 mortgage, rounded off as a $20,000 equity, for a total of $130,000 in equity.
[79] Both parties also recognize that each brought something of value into the relationship. Clearly, the applicant had not only the equity in her home, but significant savings and investments and her retirement pension from her employment as a teacher. The applicant had whatever value there was in the cow/calf operation on the rented land and then these two Napanee properties. The applicant’s position is that it is unconscionable for the respondent to walk away from the marriage owning these two Napanee properties, with now an appraised value of $314,000, with the mortgages having been paid off as part of the financing of the purchase of the dairy farm. The respondent’s position is that the applicant leaves the marriage with a net worth of $554,642. She came into the marriage with a net worth of $302,212.81. The applicant argues that being $250,000 richer than she was before she married and wealthier than she was before she met the respondent, is more than she possibly could have gained had she not met and married the respondent and joined in the venture to purchase the dairy farm. His contribution was much more in the line of his skills, knowledge and sweat equity, but made a significant contribution to salvage the end of the dairy farm dream for both of them.
[80] The applicant’s claim for loss of future income from her decision to move to Ontario in search of the dream for the dairy farm is without merit, in my view. Not only did she preserve her position with that school board to which she has been able to return, at least on a limited basis. But she has the intelligence, resilience and determination to re-establish herself with reasonable employment, skills and opportunities. She also has considerable liquid assets of just over $200,000 plus her teacher’s retirement fund of over $400,000 in value. To grant this claim of loss of future income would to be in effect grant a lump sum of spousal support. In my view, she is quite capable of supporting herself as she has demonstrated in the past. This failed marriage has not taken away the qualities that made her a successful professional in the past and will continue to enable her to succeed in the future.
[81] The real question relating to the Napanee properties is whether it is unconscionable that the applicant invested $230,000 as part of the financial scheme to purchase the dairy farm, at the same time having a little over $63,600 of her debts paid off while the respondent put up his Napanee properties as collateral but had $205,645.21 of mortgage payouts on those two properties and had a further almost $40,000 paid off on loans at the TD Bank.
[82] In my view, the proper test to be applied in this case, as stated above, is the Family Law Act Section 5(6)(h). This is a marriage of relatively short duration of four years, but the case is to be decided in the context of the eight years of the relationship, which had its challenges and strengths both leading up to and during the course of the marriage.
[83] The key word in deciding this case is whether it would be “unconscionable” to leave matters basically the way they are and apply the net family property statement, as contained at Tab A of the Respondent’s Submissions, or to award the applicant’s claim for a judgment in her favour of $450,000 based on the factors set out in her submissions and referred to above.
[84] The word, “unconscionable”, is a very loaded and high standard to meet. It calls for an exercise of judicial determination based on the criteria set out in Section 5(6) of the Family Law Act. It is clear from the email to the Bank of Montreal from the applicant, filed as Exhibit Number 17 that she was very concerned about the joint financial arrangements regarding the purchase of the dairy farm. It appears that it was worked out to eliminate the debt on the respondent’s tractor from the debts that were to be paid off. It does seem heavily favoured towards the applicant for him to have $205,000 paid off on his two properties, with a balance of debts being paid off relatively equally and with the applicant investing $230,000 being essentially within $40,000 of the entire equity from the sale of her house.
[85] As noted above, at the date of marriage, the equity in the Napanee properties was approximately $130,000. At valuation date, it is agreed that the properties are unencumbered and worth $314,000. It, therefore, appears that the two properties increased in value by $184,000 during the course of the marriage. It is clear that the respondent put an enormous amount of his time and effort over and above his employment in the oil fields and then his development of these properties and managing of them. He then put them up as security for the purchase of the joint venture dairy farm while having the mortgages paid off as compared to the applicant selling her residence, owned solely by her, in Red Deer and putting the majority of that equity into the joint venture. That does pass the test of not only unfairness but takes it to the level of unconscionability with regards to the transaction.
[86] The factors that specifically relate “to the acquisition, disposition, preservation, maintenance or improvement of property” which must be considered in the context of this case include the sharp contrast between one party investing $230,000 and the other having over $205,000 of encumbrances paid off as part of this joint venture. The strength of this joint venture was destroyed when their relationship broke down. Leaving aside any issues of conduct of either party that led to that breakdown, I find that the stark contrast of the proportional loss by the applicant and gain by the respondent leads to an unconscionable result. The requirement of the financing institution that all debts, except the tractor loan, be paid off and consolidated into one secured mortgage led to this financial plan which clearly resulted in the debts of the respondent being paid off in approximately the ratio of four times the amount of debt of the applicant. In addition to that, she also contributed $230,000 from the proceeds of the sale of her house.
[87] Admittedly, the respondent was the main player in the dairy farm operation and improvement and preservation of that asset for both of their benefit. I am not prepared to grant the applicant a one-half interest in the Napanee properties. I feel a more just accounting, given all the circumstances related to above as to the property issues in the context of this marriage relationship entered into under tragic circumstances following the death of a child and all the complexities that led them to where they are, is to grant her a one-half interest in the increase in value of those Napanee properties during the course of the marriage. Based on above noted figures, that would be a one-half interest in the $184,000 difference between the equity of the properties at $130,000 on the date of marriage and their value of $314,000 on valuation date. She is therefore entitled to $92,000.
[88] A deduction from that for the $8,148.60 owed by the applicant to the respondent based on the net family property calculation at Tab A of Respondent’s Written Submissions after trial, which I prefer as opposed to the net family property statement filed at Tab A of the Applicant’s Written Argument after trial. One of the main discrepancies being the treatment of the ownership of the Napanee properties in those two net family property statements.
[89] There were other small issues raised in the submissions by counsel in terms of relief sought. The respondent has sought an order that the value of the other remaining cattle owned by the respondent’s mother through Eastern Breeders as set forth in Exhibit Number 81 should be returned to the respondent’s mother. I think that the parties should discuss that, in order to avoid further litigation by the respondent’s mother. As his mother is not a party to these proceedings, I cannot make that order. The half of the value of the Scotia Gold points received by the applicant should go to the respondent is another claim. That claim would be valid only as to the points spent on his accommodations arranged while he was on the road during his employment in the oil industry. I do note that various credits were given back on those credit card statements from time to time and I assume that is in exchange for redeeming points. I am not prepared to include that in the order given all the factors taken into consideration above.
[90] The draft judgment proposed by the applicant is not acceptable. Title to the Napanee properties stays in the name of the respondent and the award is a monetary award, as indicated above of $92,000 minus $8,148.60, for a total award of $83,851.40 in favour of the applicant.
[91] I have received the bills of costs of the parties. If the issue of costs cannot be resolved between the parties then I will invite any party claiming costs in these proceedings to do so within 30 days from the release of this judgment with the opposing party to have a further 10 days to reply.
[92] I would close by repeating my comments made during the trial and comments that were probably heard from other judges along the way through the various conferences that took place. This appears to me to be a piece of family law litigation that took on a life of its own that was unreasonable and unnecessarily complicated, stressful and expensive for the parties. In matters of this type, it makes much more sense to look at the whole picture and broad stroke the issues and resolve the matter in a principled, practical way rather than litigation of this duration and complexity.
[93] This is an exception to the normal course of family law litigation, which was not warranted given the issues and the amount of money realistically at stake between the parties. With a calm, dispassionate and reasoned view of the total picture, it would have made much more sense to resolve this matter before engaging in what has been litigation for nine days in Superior Court, with thousands of pieces of paper filed and the applicant required to travel back and forth from Alberta to Ontario on more than one occasion.
[94] I can hardly overstate how far from usual this trial has been over these types of issues. Not only is it detrimental to the parties themselves but our system of resolving these property issues would collapse under the weight of this kind of litigation. It is time consuming and counter-productive to litigate at this level.
[95] I did, however, appreciate the written submissions of both counsel. I could not have managed working through the issues without the assistance of references to particular exhibits filed. I thank both counsel for those submissions.
The Honourable Mr. Justice K. E. Pedlar
Released: September 18, 2019
COURT FILE NO.: 17-0649
DATE: September 18, 2019
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
JILL MAUREEN CALVER
Applicant
– and –
MATTHEW JAMES KENNETH CALVER
Respondent
REASONS FOR JUDGMENT
Pedlar, J.
Released: September 18, 2019