Bourcier v. Martens

2024 BCSC 2191 Bourcier v. Martens

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Bourcier v. Martens, 2024 BCSC 2191 Date: 20241204 Docket: E128470 Registry: Kelowna Between: Sheri Angela Bourcier Claimant And Lars Martens Respondent Before: The Honourable Mr. Justice Hori Reasons for Judgment Counsel for the Claimant: J.T. Van Allen Counsel for the Respondent: C.G. Johnson Place and Date of Trial: Kelowna, B.C. May 13-17, 2024 Place and Date of Judgment: Kelowna, B.C. December 4, 2024 Introduction.. 3 Background.. 4 Claimant's Assets Before Cohabitation. 4 Respondent's Assets Before Cohabitation. 4 Assets Acquired During the Relationship. 5 The Parties' Use of their Real Property after Cohabitation. 5 Property Division.. 6 Date of Valuation. 6 Excluded Property. 8 Claimant's Personal Injury Settlement 9 Vehicles. 10 Claimant's Investment Accounts. 10 Respondent's Investment Accounts. 12 Respondent's Accounts in Germany. 12 Respondent's Account in Singapore. 14 Respondent's German Pension Plan. 14 Respondent's RBC TFSA Account 14 Respondent's Investment Values. 15 The Sonora Property. 15 The Westpoint Property. 16 The Westside Road Property. 18 Holdco. 21 Valuation of Moveable Spaces. 27 Spousal Support. 27 Entitlement 27 Duration of Spousal Support 29 Incomes under the Federal Child Support Guidelines. 29 Summary. 33 Costs. 34 Introduction [1] The parties in this family law action began living together in

a marriage-like relationship on July 1, 2014. They lived together until they separated on March 9, 2020. [2] At the time of the trial, the claimant was 54 years of age and the respondent was 55 years old. They do not have any children together. [3] When the parties began living together, they each had assets that they accumulated before the relationship began. Those assets included bank accounts, investment accounts, and real property. [4] In addition, by the time the parties began their relationship, the respondent held an interest in 485509 B.C. Ltd. which is an operating company carrying on business as Nufloors Kelowna ("Nufloors"). The respondent holds his interest in Nufloors through a holding company, 0812691 B.C. Ltd., ("Holdco"). The respondent is the sole shareholder of Holdco. [5] During the relationship, the parties acquired real property located at 9 - 4215 Westside Road in Kelowna, British Columbia (the "Westside Road Property"). The parties are the registered owners of the Westside Road Property as joint tenants. [6] Throughout the relationship, the respondent worked in the Nufloors business. [7] At the start of the relationship the claimant had a job working for a division of Johnson & Johnson ("J&J"). However, in 2016 the claimant lost her job. As a result, the parties incorporated Moveable Spaces Inc. ("Moveable Spaces") as equal shareholders. Moveable Spaces

was a company through which the claimant intended to operate a business after her job loss. [8] In this action, the parties seek an order dividing the family property and the claimant seeks an order for spousal support. Background Claimant's Assets Before Cohabitation [9] Before the parties began living together, the claimant was employed by a division of J&J. During her time working for J&J, the claimant made contributions to: a) a J&J Group RRSP; b) the J&J Group Defined Contribution Pension Plan; c) the J&J Optional Contributions Pension Plan; and d) a J&J affiliated plan (collectively, the "J&J Assets"). [10] Before the parties began living together, the claimant also held the following assets: a) a chequing account with the Royal Bank of Canada ("RBC") b) a TFSA account with Investors Group ("IG"); c) an RSP account with IG; d) a Spousal RSP account with IG; and e) a property located at 1709 Sonora Drive in Kelowna, British Columbia (the "Sonora Property"). Respondent's Assets Before Cohabitation [11] Before the parties began residing together, the respondent owned all the shares of Holdco. Holdco controls 55% of the shares of Nufloors. [12] In addition, before the parties began living together, the respondent had: a) an RBC chequing account; b) an RBC RRSP; c) a pension plan in Germany; and d) various other financial accounts in Germany and an account in Singapore. [13]

When the parties' relationship began, the respondent was also the owner of property at 667 Westpoint Court in Kelowna, British Columbia (the "Westpoint Property"). Assets Acquired During the Relationship [14] During the relationship, the parties acquired the Westside Road Property as joint tenants. The parties purchased this property on October 29, 2015. [15] When the claimant lost her job with J&J, she unsuccessfully looked for alternative employment. Eventually, the parties incorporated Moveable Spaces. The intention in incorporating Moveable Spaces was to allow the claimant to build a business producing and selling automated television lift systems. The parties each hold 50% of the shares in Moveable Spaces. The Parties' Use of their Real Property after Cohabitation [16] When the parties began living together, they lived at the Westpoint Property. The parties used the Sonora Property as a rental property once the claimant moved to the Westpoint Property. The Sonora Property remained registered in the claimant's sole name during the relationship and the respondent remained the sole registered owner of the Westpoint Property throughout the relationship. [17] After the parties separated on March 9, 2020, the respondent continued to live at the Westpoint Property and continues to reside there as of the trial date. [18] After the separation, the claimant moved into the Westside

Road Property. She remained there until November 2020. On November 6, 2020, the claimant sold the Sonora Property and purchased her current residence located at 2335 Aberdeen Street, Kelowna, British Columbia. Property Division Date of Valuation [19] Section 87 of the Family Law Act, S.B.C. 2011, c. 25 [FLA] provides that for the purposes of dividing family property and family debt, unless an agreement or order provides otherwise, the value of family property and family debt must be determined as of the date of the hearing before the court. However, the parties in this case have approached the evidence and their submissions as though the valuation date was the date of separation, rather than the trial date. [20] Our Court of Appeal, in Kumagai v. Campbell Estate, 2018 BCCA 24, held, at paras. 75-76, that pursuant to s. 87 of the FLA, the presumptive date for valuing family property and family debt is the date of an agreement between the parties or the date of the trial or hearing. The Court held further that a departure from the presumptive date for valuation is effectively a reapportionment or unequal division of family property, which can only be accomplished under s. 95 of the FLA. [21] Section 95(1) of the FLA provides for the unequal division of family property and/or family debt if an equal division would be significantly unfair. Section 95(2) of the FLA delineates a

number of factors that the court may consider in deciding whether an equal division would be significantly unfair. The factors that are relevant to this action are: a) the duration of the relationship; b) a spouse's contribution to the career or career potential of the other spouse; c) whether family debt was incurred in the normal course of the relationship; d) if the amount of the family debt exceeds the value of the family property, the ability of each spouse to pay a share of the debt; e) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of the family property or family debt beyond market trends; f) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order; and g) any other factor that may lead to a significant unfairness. [22] I assume that the parties in this case have approached the evidence and their submissions as though the valuation date was the date of separation, rather than the trial date due to the following factors: a) The duration of the relationship between the parties was a relatively short period of five years and nine months; b) Because of the relationship's short duration, the relative contribution of each spouse to the other's career was for a short period of time; c) The parties essentially maintained the assets they brought into the

relationship separate from each other and, after the separation, they maintained their individual assets on their own in order to preserve their value. [23] Since the parties have approached this case as though the valuation date is the date of separation, they have effectively accepted that an equal division of family property would be significantly unfair. [24] Based upon the foregoing factors and the parties' approach to the valuation date, I am prepared to accept that an equal division of family property and family debt would be significantly unfair to the extent that the valuation date should be the date of separation. Accordingly, I accept that in this case, it is generally appropriate to value the family property and family debt as of the date of separation. However, depending on the circumstances applicable to individual assets, there may be a need to adjust the valuation date with respect to specific assets. Excluded Property [25] The value of the assets and the outstanding debts brought into the relationship by each of the parties when they began living together are excluded from division between the parties. However, the parties are entitled to share in the increase in value of those assets from the date of cohabitation to the date of separation. [26] To the extent that the parties' pre-relationship assets were not co-mingled or incorporated into a joint family

property, they remain excluded property and their value as of the cohabitation date is not subject to division. However, where the parties used any of those assets to purchase joint family assets, they may lose their excluded status and become family property unless there is clear and cogent evidence that, notwithstanding the co-mingling of the assets, the parties intended to keep their contributions separate. [27] Section 85(1) of the FLA defines excluded property. Sections 85(1)(a) and (g) provide that excluded property is property acquired by a spouse before the relationship between the spouses began, and property that is derived from property or from the disposition of property acquired before the relationship began. [28] The key in determining whether property transferred from one spouse to another remains excluded property or becomes family property is the intention of the parties. [29] In Venables v. Venables, 2019 BCCA 281, the Court of Appeal held: [95] What emerges from these authorities, of relevance to the current appeal, is that the intention of the spouse transferring ownership is key in determining whether the property transferred from one spouse to the other remains excluded property or becomes family property. If it is found that the spouse who transferred the property intended that the property be a gift to the other spouse, and there is no agreement that it

is to remain excluded property, then it will become family property: V.J.F. at paras. 74-79; Namdarpour at para. 46. [30] The onus is on the party claiming the exclusion to establish the exclusion on a balance of probabilities but with clear and cogent evidence: Pisarski v. Piesik, 2019 BCCA 129 at para. 24. [31] Unless there is clear and cogent evidence to the contrary, it is logical to conclude that when a spouse combines excluded assets with the excluded assets of the other spouse to purchase an asset in joint tenancy, both spouses intended to purchase the asset together as a family asset. Claimant's Personal Injury Settlement [32] The claimant received payment for the settlement of her personal injury claim from a motor vehicle accident. The claimant received the payment on or around July 27, 2018. There is no evidence to establish the date of the motor vehicle accident. There is also no evidence about the details of the settlement. In particular, the claimant could not say whether the settlement compensated her for the loss of income. [33] The net settlement proceeds received by the claimant were $31,576.63. The claimant's evidence is that when she received her settlement funds, she deposited those funds into her personal bank account and then paid those funds into her investment accounts at IG. [34] On the basis that these funds were the proceeds of a settlement related

to an injury claim, the claimant seeks to have those funds excluded from family property pursuant to s. 85(1)(c) of the FLA. Section 85(1)(c) of the FLA provides that a settlement received by a spouse as compensation for injury or loss is excluded property unless the settlement represents compensation for lost income. [35] Pursuant to s. 85(2) of the FLA, the onus is on the claimant to prove the necessary elements of the exclusion. In my view, she has failed to do so by not tendering evidence about the details of the settlement. The claimant has failed to establish that the settlement did not include compensation for lost income. Accordingly, the claimant has failed to establish that the settlement funds from the Insurance Corporation of British Columbia qualify as excluded property pursuant to s. 85(1)(c): P.(A.A.) v. F.(G.T.), 2015 BCSC 662 at paras. 68-69. Vehicles [36] The claimant seeks an order relating to the division of the vehicles that the parties had during the relationship. Unfortunately, I do not have very much evidence upon which to make reasonably informed decisions relating to the vehicles. However, there does not seem to be much dispute about the division of the vehicles. [37] Therefore, I will make the following orders with respect to the vehicles: a) The claimant will retain the 2013 Audi Q5 upon repaying the loan from Moveable Spaces to purchase this

vehicle; b) The 1998 Porshe Boxster that the parties purchased during the relationship will be sold and the net proceeds divided equally between the parties; c) The respondent will retain the 2010 Mercedes 250 sedan; and d) The claimant will retain the 2011 Mercedes ML350. Claimant's Investment Accounts [38] The respondent will share in the increase in value of the accounts held by the claimant when the parties began residing together. The respondent will also share in the accounts that the claimant established during the relationship. [39] A summary of the accounts held by the claimant as of July 1, 2014, the date of cohabitation, is in Table 1: Table 1 Claimant's Accounts as of July 1, 2014 Account Value RBC account '7667 $22,951.00 IG TFSA account '5835 $128.15 IG RSP account '7928 $88,552.70 IG Spousal RSP account '7399 $1,803.37 J&J Assets (RRSP) $95,837.44 J&J Assets (Pensions) $129,710.18 [40] During the time that the parties lived together, the accounts held by the claimant as of the date of cohabitation increased in value. In addition, during the relationship, the claimant established additional accounts in her name and in joint names with the respondent. [41] In May and June 2017, after the claimant's employment with J&J ended, she transferred her J&J Assets to accounts in her sole name at IG. The claimant transferred the registered J&J Assets to registered accounts

at IG that were already in the claimant's name. The claimant transferred the pension benefits in the J&J Assets to a locked-in retirement account ("Lira") with IG. [42] In my view, the J&J Assets that the claimant transferred to IG accounts as a result of her dismissal did not change the nature of those assets from excluded property to family property. However, as I discuss below, the increase in value of the IG accounts should be considered family property. [43] I have listed the claimant's accounts as of March 9, 2020, and the change in value of those accounts from July 1, 2014, in Table 2: Table 2 Claimant's accounts as of March 9, 2020 and changes in value Account Value as of July 1, 2014 Value as of March 9, 2020 Change in Value RBC account '7667 $22,951.00 $63,626.00 $40,675.00 RBC account '8620 $0.00 $41,303.00 $41,303.00 RBC TFSA account '9861 $0.00 $11,272.74 $11,272.74 RBC TFSA account '7814 $0.00 $4,680.23 $4,680.23 RBC USD account '9469 $0.00 $402.19 $402.19 RBC Chequing '7814 (joint) $0.00 $2,476.60 $2,476.60 RBC Savings '3964 (joint) $0.00 $7,031.02 $7,031.02 IG TFSA account $128.15 $33,660.00 $33,531.85 IG Registered accounts - including accounts '7928; '7399; J&J Assets (RRSP) $186,193.51 $306,028.47 $119,834.96 IG LIRA Account - from J&J Assets (Pensions) $129,710.18 $175,357.52 $45,647.34 Total Increase in value $306,854.93 [44] I see no reason not to divide

the increase in value of the claimant's accounts during the relationship equally. Therefore, the respondent is entitled to 50% of the increase in the value of the claimant's accounts. Accordingly, there will be an equalization payment made by the claimant with respect to her accounts in the amount of $153,427.47. When the equalization is complete, the claimant will be entitled to retain the RBC joint accounts (accounts '7814 and '3964) in her sole name. Respondent's Investment Accounts [45] The claimant will share in the increase in value of the accounts held by the respondent when the parties began residing together. The claimant will also share in the accounts that the respondent established during the relationship. Respondent's Accounts in Germany [46] When the parties began residing together, the respondent held a stock portfolio in Germany, as well as various German bank accounts. The state of the evidence with respect to these German assets is less than ideal. The respondent has presented documents written in German that he says establish the value of his German accounts as of the date of cohabitation. However, those documents state the values in Euros and neither party presented evidence as to the appropriate conversion rate to convert Euros to Canadian dollars. [47] Most of the respondent's German assets are in accounts at Consorsbank. With the exception of the

Consorsbank stock portfolio, the claimant concedes that the Consorsbank accounts did not increase in value between the date of cohabitation and the date of separation. [48] With respect to the Consorsbank stock portfolio, the parties have agreed that the value of that stock portfolio, as of March 9, 2020, was $22,811.31. The evidence presented by the respondent is that the value of the stock portfolio, as of the date of cohabitation, was 49,187.29€. As I have indicated earlier, there is no evidence by which I can establish the appropriate conversion rate to apply to this value. [49] However, if the value of this stock portfolio at the date of cohabitation was 49,187.29€ and the value of the portfolio at the date of separation was only $22,811.31, it is fair to conclude that the portfolio did not increase in value because it is commonly known that the value of the Euro is higher than the value of the Canadian dollar. Accordingly, I cannot attribute any increase in value to the Consorsbank stock portfolio. [50] The respondent also has assets held in Targobank, Germany. There is no evidence as to when the respondent established that account or what value it had at the date of cohabitation. On the other hand, the parties have submitted an agreed statement of facts in which the parties agree that the value of the Targobank account as of the date of separation was $2,022.62. [51] The

onus is upon the respondent to establish if all, or part, of the Targobank account from Germany is excluded from the division of property. The respondent has failed to do so. Therefore, the entirety of the Targobank account, as of March 9, 2020, will be subject to division. [52] Based on this analysis, $2,022.62 of the respondent's German accounts are available for division as family property. Respondent's Account in Singapore [53] The respondent also has an account in Singapore. The respondent presented no evidence with respect to the value of that account at the relevant times. However, the claimant concedes that the Singapore account did not increase in value. Therefore, there is no value to divide in the Singapore account. Respondent's German Pension Plan [54] The respondent also has the benefit of a pension plan in Germany. The parties presented little or no evidence with respect to the details of this pension plan. Therefore, the best I can do with respect to dividing the pension plan is to order that the respondent's German pension plan be divided pursuant to the provisions of Part 6 of the FLA, and I so order. Respondent's RBC TFSA Account [55] The respondent suggests that he held a TFSA account ending in 2312 at RBC before the parties began living together. He says that this TFSA account had a value of $9,112.60 when the parties started living together and that it had

the same value when they separated. The respondent submits that since this account had no growth during the parties' relationship, there is no value to divide between them. [56] I cannot accept the respondent's submission with respect to the TFSA. The respondent tendered no evidence with respect to when he established that TFSA account or the value of that account at the time of cohabitation. The respondent has the burden to establish that the TFSA, or any part of it, is excluded from division. He has failed to do so. Accordingly, I find that the entire $9,112.60 is family property and subject to division in this action. [57] In their agreed statement of facts, the parties agree that the value of the TFSA account as of the date of separation was $9,112.60. Respondent's Investment Values [58] I summarize the changes in the value of the respondent's accounts during the parties' relationship in Table 3: Table 3 Respondent's accounts as of March 9, 2020 and changes in value Account Value as of July 1, 2014 Value as of March 9, 2020 Change in Value RBC chequing '6745 $3,191.20 $9,595.36 $6,404.16 RBC TFSA '2312 $0.00 $9,112.60 $9,112.60 Targobank $0.00 $2,022.62 $2,022.62 RBC RRSP '2515 $22,389.91 $141,389.00 $118,999.09 Total Increase in Value $136,538.47 [59] I have not accounted for the joint accounts held by the parties at RBC in my analysis of the respondent's accounts because

I have accounted for those joint accounts in the division of the claimant's investments. [60] The claimant is entitled to 50% of the increase in the value of the respondent's accounts. As a result, the respondent will make an equalization payment to the claimant in the amount of $68,269.24. [61] It should go without saying that the accounts that are currently in the sole name of either of the parties will remain in their sole name. The Sonora Property [62] The claimant was the sole registered owner of the Sonora Property throughout the parties' relationship. An appraisal of the Sonora Property establishes a fair market value of $475,000 as of July 1, 2014. At that time, the claimant had an outstanding debt associated with the Sonora Property in the amount of $154,350. [63] The claimant sold the Sonora Property on November 6, 2020, for a gross sale price of $705,000. The claimant's statement of adjustments for the sale of the Sonora Property does not record the payout of any mortgages. However, the evidence suggests that the mortgage on the Sonora Property may have been transferred to another property purchased by the claimant after the separation. [64] Since the sale of the Sonora Property was not unreasonably remote in time from the separation date, the sale price is an appropriate measure of the fair market value of the property as of March 9, 2020. [65] Therefore, I find

that the gross sale price of the Sonora Property is its fair market value as of the separation date for the purposes of this property division. [66] The increase in the fair market value of the Sonora Property from July 1, 2014, to March 9, 2020, is $230,000. The claimant will receive the first $154,350 from the sale in order to payout the mortgage debt against the property as of July 1, 2014. The balance remaining of $75,650 will be divided equally between the parties so that each of them will receive $37,825. [67] Since the claimant received all the sale proceeds from the sale of the Sonora Property, she will pay $37,825 to the respondent. The Westpoint Property [68] The respondent was the sole registered owner of the Westpoint Property when the parties began living together. He continued to be the sole registered owner of that property throughout the parties' relationship. [69] An appraisal of the Westpoint Property as of July 1, 2014, establishes a fair market value of $785,000 on the date of cohabitation. However, the B.C. Assessment Authority ("B.C.A.A.") value for the Westpoint Property as of July 1, 2014 is $714,000. [70] With respect to the value of the Westpoint Property as of the date of separation, there is a formal appraisal of the Westpoint Property establishing a market value of $1,280,000 as of September 13, 2021. However, this appraised value has no

relationship to the March 9, 2020 separation date. The value for the Westpoint Property closest to the date of separation is the value of $1,024,000 set by the B.C.A.A. for July 1, 2020. [71] In my view, it is not appropriate to establish the fair market value for the Westpoint Property as of the date of cohabitation by reference to a formal appraisal and compare that value to a formal appraisal conducted as of September 13, 2021, because the September 13, 2021 appraisal is more than one year after the date of separation. [72] It is also not appropriate to compare the fair market value for the Westpoint Property, as established by the formal appraisal of July 1, 2014, with the B.C.A.A. valuation for July 1, 2020, because there may be different criteria and different considerations used to establish value in those two assessments. [73] The appropriate comparison for the Westpoint Property valuation is to compare the B.C.A.A. values as of July 1, 2014 and July 1, 2020. The B.C.A.A. valuation for the Westpoint Property as of July 1, 2014, is $714,000. The B.C.A.A. valuation for the property as of July 1, 2020, is $1,024,000. Therefore, the increase in value of the Westpoint Property during the parties' relationship is $310,000. [74] When the parties began living together, the respondent had a mortgage on the Westpoint Property with an outstanding balance of $257,350. Since this

debt is not a family debt, the respondent will receive credit for the full amount of the outstanding mortgage on the division of this property. [75] The respondent will receive compensation for $257,350 out of the increased value of the Westpoint Property before the division of the property. After deducting $257,350 from the increased value, the remaining balance is $52,650. This remaining balance will be divided equally between the parties so that each will receive $26,325. [76] Since the respondent intends to retain the Westpoint Property, he will make an equalization payment to the claimant in the amount of $26,325. The Westside Road Property [77] The parties purchased the Westside Road Property in November 2015. When they purchased the property, they each contributed $208,000 and they both became registered owners of the property in joint tenancy. The parties continue to be joint tenant owners of the Westside Road Property as of the trial date. [78] The B.C.A.A. valuation for the Westside Road Property as of July 1, 2020, is $499,000. The claimant submits that, for the purposes of property division, the value of the Westside Road Property should be its 2020 B.C.A.A. value of $499,000. She seeks to have this property transferred to her at the value of $499,000. [79] The B.C.A.A value for the Westside Road Property as of July 1, 2023, is $785,000. [80] The claimant submits

that she is entitled to the property at the 2020 valuation because she incurred the cost of managing and maintaining the property. The claimant has submitted a number of spreadsheets which she did not fully explain in the evidence. The spreadsheets appear to be a listing of expenses related to the Westside Road Property paid by the claimant. The claimant submits that due to her efforts to preserve the Westside Road Property, she is entitled to the Westside Road Property at the value of $499,000. [81] However, it appears that while she was managing and incurring costs to maintain the property, the claimant was also the sole recipient of the rental income. [82] The respondent seeks an order for the sale of the Westside Road Property and the distribution of the net sale proceeds as follows: a) The claimant to receive the first $64,897.46 which the respondent submits is the increase in the claimant's mortgage on the Sonora Property between the cohabitation date and the date of separation; b) The respondent to receive the next $248,000 comprised of $208,000 that the respondent claims as excluded property brought from Germany and $40,000 in renovation costs that he paid; and c) The remaining net sale proceeds shared equally. [83] In my view, the disposition of the Westside Road Property proposed by the respondent is also not appropriate. The respondent makes this submission on the

basis that his $208,000 contribution to the purchase of the Westside Road Property was excluded property that he brought from Germany. I am not prepared to accept the respondent's submission on this issue for the following reasons: a) The respondent has not presented clear and cogent evidence that the $208,000 contributed by the respondent was excluded property. The respondent testified that his contribution to the purchase came from his assets in Germany. He tendered an email that he sent to his accountant on April 18, 2017, which refers to the respondent having transferred most of his money from Germany to Canada in December 2015. The respondent provided this information to his accountant to satisfy the respondent's foreign investment reporting requirements. It does not specifically establish that those funds or any part of them came from Germany for the purposes of purchasing the Westside Road Property; b) Even if the $208,000 contribution to the Westside Road Property were from excluded funds in Germany, the respondent lost that exclusion when he contributed those funds to purchase the Westside Road Property as a jointly owned family property. By putting those funds together with the equivalent amount contributed by the claimant, the respondent has shown his intention to purchase a family asset. [84] Even if I were to consider the $208,000 contributed by the respondent as

being excluded property, the same can be said for the $208,000 contributed by the claimant. The claimant made her contribution by refinancing the Sonora Property which she brought into the relationship when the parties began to reside together. If the $208,000 contributed by the respondent is excluded property, then so too must be the $208,000 contributed by the claimant. [85] The respondent appears not to have any interest in retaining the Westside Road Property as evident from his position that the property be sold. Therefore, if the claimant wishes to retain the Westside Road Property as hers, the question is whether it is appropriate to value the property at its 2020 valuation. [86] I recognize that I have already set the valuation date as the date of separation. However, the Westside Road Property is different from the other properties in this relationship. Unlike most of the other assets in this relationship, the parties purchased the Westside Road Property together during the relationship. This is in contrast to the other assets that were brought into the relationship by each party when they began cohabiting. While they were together, the parties used the Westside Road Property as a recreational property and as a short-term rental unit. [87] In my view, the Westside Road Property was a family investment that the parties used partly for personal use and partly to generate

income. I am not satisfied that the efforts made by the claimant after the date of separation increased the value of this property beyond market trends as there is no evidence to support such a finding. [88] In these circumstances, where the property in question has an investment component to it, I find that fairness and equity require that I extend the valuation date to the date of trial. In this way, both parties will have the benefit of the increase in value of the property due to market forces. [89] Accordingly, the claimant will retain the Westside Road Property in her sole name at the 2023 value of $785,000. In order to do so, the claimant will make an equalization payment to the respondent of $392,500. Holdco [90] The respondent is the sole shareholder of Holdco. Holdco is a holding company that owns various assets including a 55% interest in Nufloors. An unrelated third party owns the remaining 45% interest in Nufloors. The respondent personally has no ownership interest in Nufloors, but he earns income from Nufloors as an employee. [91] The business of Nufloors, the interest of Holdco in that business, and the interest of the respondent in Holdco existed at the time the parties began living together. [92] The parties tendered a joint expert report on the value of Holdco. The report, dated January 31, 2022, was prepared by a business valuator, Derek Sanders. [93] In

arriving at a value for Holdco, Mr. Sanders first assessed the value of Nufloors. Mr. Sanders then incorporated his valuation of Nufloors into his assessment of the value of Holdco. It is the valuation of Holdco that is relevant to my assessment for property division purposes. [94] Mr. Sanders assessed the value of Holdco as of July 1, 2014 and March 1, 2020. These dates generally correspond to the date of cohabitation and the date of separation. [95] The opinion of Mr. Sanders provides a high and low valuation for Holdco for each of the two relevant valuation dates. I have summarized the high and low values and the mid-range of those values in Table 4: Table 4 Holdco Values by Derek Sanders Valuation Date Low High Mid Range July 1, 2014 $1,200,000 $1,320,000 $1,260,000 March 1, 2020 $3,600,000 $3,850,000 $3,725,000 [96] Using the mid-range figures from Mr. Sanders, the increase in value of Holdco during the period of cohabitation is $2,465,000. [97] After receiving the opinion of Mr. Sanders, the respondent was not satisfied with the results. Therefore, the respondent commissioned his own report on the valuation of Holdco. The respondent secured a report from Scott Amano dated March 5, 2024. [98] Mr. Amano describes his report as a "muted critique report" of the opinions of Mr. Sanders. Mr. Amano specifically states that the adjusted figures in his report are not intended to

be a conclusion on the fair market value of Holdco. However, Mr. Amano specifically criticizes the opinions of Mr. Sanders for various reasons and adjusts Mr. Sanders' valuation figures to address those criticisms. [99] Mr. Amano is critical of the valuations presented by Mr. Sanders because: a) Mr. Sanders did not acknowledge that Holdco purchased 55% of the shares in Nufloors in 2008 (the "Transaction"). However, Mr. Amano does not explain how the failure to acknowledge the Transaction would affect the valuation. With respect to this criticism, Mr. Amano writes: We understand that that information provided by the Transaction is six years old at the time of the 2014 Valuation Date, however, we believe it should have at least been acknowledged and its exclusion explained in the SVG [Sanders] Report (e.g. if they believed the information was outdated and therefore irrelevant). b) Mr. Sanders did not consider the actual financial statements for Nufloors for the year-ending January 31, 2022, when they had become available. While being critical of Mr. Sanders' failure in this regard, Mr. Amano acknowledges that Mr. Sanders did not receive instructions from the parties to update his report to include the new financial information. In order to make up for the missing financial information for the year ending in 2022, Mr. Sanders used a figure that he calls the "trailing 12 months".

Mr. Sanders explained that the "trailing 12 months" is an attempt to create a financial statement for a period where the financial statement is not prepared. c) Mr. Sanders treats the advances made by Nufloors to Moveable Spaces as fully collectable. Mr. Amano's opinion is that given the financial circumstances of Moveable Spaces, the debt it owes to Nufloors is not fully collectable and that Mr. Sanders should have recognized the risk that Moveable Spaces would not repay the loan. However, Mr. Sanders' instructions were that the valuation of Moveable Spaces was beyond the scope of his retainer and that he received no instructions with respect to the collectability of the Moveable Spaces debt. [100] Based on his analysis, Mr. Amano provides adjusted valuation figures for Holdco at the relevant valuation dates. He also provides a low and high value for each of those dates. I have summarized Mr. Amano's valuation figures and the mid-point of his values in Table 5: Table 5 Holdco Values by Scott Amano Valuation Date Low High Mid Range July 1, 2014 $1,092,000 $1,212,000 $1,152,000 March 1, 2020 $3,334,000 $3,584,000 $3,459,000 [101] Based on the mid-range figures provided by Mr. Amano, the increase in value of Holdco during the parties' cohabitation is $2,307,000. [102] In my view, the shortcomings in Mr. Sanders' report raised by Mr. Amano are matters of professional judgment

exercised by the business valuators or they are the result of instructions received from the parties. [103] Notwithstanding Mr. Amano's specific criticisms of Mr. Sanders' report, Mr. Amano agrees that Mr. Sanders' report "follows generally accepted valuation approaches and methodologies" in its analysis. He states that Mr. Sanders' report "appears to be a comprehensive scope of review and makes assumptions that appear to be reasonable". Mr. Amano further states that he believes Mr. Sanders' report is "well-prepared and detailed". [104] As is always the case with matters of business valuation, there cannot be a single precise answer to the question of how much a company is worth. That should be obvious from the fact that both Mr. Sanders and Mr. Amano provide a range of values. [105] Accordingly, the appropriate and most equitable way to resolve the differences of opinion between Mr. Amano and Mr. Sanders is to take the mid-point between the increase in value of Holdco based on the mid-range of each of their respective valuations. [106] The change in value of Holdco using Mr. Sanders' mid-range figures is $2,465,000. The change in value using Mr. Amano's mid-range figures is $2,307,000. The mid-point between these two figures is $2,386,000. [107] Accordingly, I find that the increase in value of Holdco during the parties' relationship was $2,386,000. [108] The respondent

submits that I should allocate 80% of the increase in value of Holdco to him and 20% to the claimant. The respondent justifies this further unequal division of family property on the basis that an equal division of the increase is significantly unfair under s. 95(1) of the FLA. With respect to the factors set out in s. 95(2), the respondent submits that: a) the short duration of the parties' relationship makes it significantly unfair for the claimant to receive a substantial interest in a business that the respondent established years before they started to live together; b) the claimant had nothing to do with the financial success of Nufloors or Holdco in that she never invested financially in the companies, she never took an interest in the operations or profitability of Nufloors and she was never financially exposed by the operations of Nufloors; c) all of the financial success of Nufloors was the result of the respondent's business acumen; and d) the tax consequences of having to transfer or equalize the parties' interests in Holdco will have significant tax consequences for the respondent. [109] It is true that the relationship between the parties was relatively short. However, when the parties began living together, the business of Nufloors was on the decline financially according to the financial records for the company. It was after the parties started to live together

that the financial performance of Nufloors began to increase. The evidence does not explain the reason for the increase in company performance. Therefore, I cannot reach any conclusion based on the short duration of the relationship alone. However, it is apparent that the increase in profitability of Nufloors occurred, for the most part, during the relationship. [110] While my impression from the evidence is that the claimant was not heavily involved in the operations of Nufloors or Holdco, there is evidence from which I can conclude that the claimant made some contribution to the success of the companies. The claimant's evidence was that she promoted the Nufloors business in her dealings in the community and with the customers of Moveable Spaces. She introduced some contacts to Nufloors and supported the respondent in his business as his spouse. [111] The respondent seeks to have me accept that the financial success of Nufloors was the result solely of his business acumen. He does not accept or acknowledge that the claimant had any part in the business of Nufloors or its success. I am not convinced by the testimony of the respondent that the claimant had no part in the success of Nufloors. However, the relative contributions of the spouses to a family property has limited application in determining whether an equal division is significantly unfair. [112] In Jaszczewska v.

Kostanski, 2016 BCCA 286, Justice Harris held: [43] The determination of whether an equal division would be significantly unfair is also guided by a more precise identification of relevant factors than was found in the FRA. Importantly, the Legislature did not include in s. 95(2) the principle of relative contribution found in s. 65(1)(f) of the FRA. Under s. 65(1)(f), a court could consider circumstances relating to the acquisition, preservation, maintenance, improvement or use of property. Section 95(2), by comparison, refers rather narrowly to career contributions (95(2)(c)) and to post-separation increases in value beyond market trends caused by one spouse (95(2)(f)). I agree with the judge's view that if relative contribution to the acquisition, preservation, maintenance or improvement of family property during the relationship was intended to be a significant factor or one frequently relied on in justifying the conclusion that the equal division of family property is significantly unfair, the Legislature would have said so. Allowing relative contribution to become a regular consideration in the context of s. 95 would likely create uncertainty and complexity. This would be contrary to the legislative objectives discussed earlier that underlie the FLA division of property regime. [44] Having said that, in enacting s. 95(2)(i) the Legislature recognized that there may be

factors other than those listed that could ground significant unfairness. Hence, while the Legislature intended to limit and constrain the exercise of judicial discretion to depart from equal division, it did not provide a closed list of factors and it did not eliminate the discretion. Accordingly, in my view, one cannot read the FLA as abolishing unequal contribution as a factor that may be relevant to reapportionment, although the circumstances in which it may be considered and relied on are intended to be much constrained. [113] While I am prepared to find that the direct involvement of the claimant in the business of Nufloors was limited in comparison to the respondent's involvement, I find that the claimant did contribute to that business indirectly during the parties' relationship. However, this finding has limited application in my determination of whether the respondent is entitled to 80% of the increase in the value of Holdco. [114] The only factor that has persuasive value on the respondent's claim for 80% of the increased value of Holdco is the potential tax consequences of the division. Unfortunately, the respondent did not tender any evidence from a tax expert to establish any specific tax consequences on the division of the Holdco value. I am left only with unverified and speculative submissions of counsel. [115] However, it should be apparent that whenever funds

are distributed from a company, there will be tax consequences. Therefore, I am prepared to make an adjustment to the division of Holdco to recognize the potential for negative tax consequences to the respondent. [116] After considering all of the circumstances related to the properties owned by the parties and in particular the circumstances related to Nufloors and Holdco, I find that the respondent should retain 60% of the increased value of Holdco and the claimant should receive 40% of that value. [117] The increase in value of Holdco is $2,386,000. Therefore, the respondent will retain $1,431,600 and the claimant will receive $954,400. Valuation of Moveable Spaces [118] Moveable Spaces is a company incorporated by the parties during their relationship. Each of the parties holds a 50% interest in the company. [119] The company was not a financial success. Therefore, it has little, if any, value. As a result, neither party claims any division of this corporate entity. [120] However, Moveable Spaces is indebted to Nufloors. The Moveable Spaces debt to Nufloors is considered and incorporated into the valuation of Holdco by both Mr. Sanders and Mr. Amano, although they treated that debt differently in their assessments. [121] Since the debt has been considered in the valuation of Holdco and since the debt is to a company essentially controlled by the respondent, I need not deal

with that family debt in this analysis. [122] Therefore, there will be no division of the assets or debt associated with Moveable Spaces. Spousal Support Entitlement [123] Section 160 of the FLA provides that entitlement to spousal support is determined after considering the objectives set out in s. 161 of the FLA. The objectives of spousal support set out in s. 161 of the FLA are as follows: 161 In determining entitlement to spousal support, the parties to an agreement or the court must consider the following objectives: (a) to recognize any economic advantages or disadvantages to the spouses arising from the relationship between the spouses or the breakdown of that relationship; (b) to apportion between the spouses any financial consequences arising from the care of their child, beyond the duty to provide support for the child; (c) to relieve any economic hardship of the spouses arising from the breakdown of the relationship between the spouses; (d) as far as practicable, to promote the economic self-sufficiency of each spouse within a reasonable period of time. [124] The "compensatory support principle" considers the economic advantages and disadvantages arising from the relationship or the breakdown of that relationship. The compensatory support principle includes a consideration of the withdrawal of one spouse from the workforce to facilitate and support the relationship.

Compensatory support acknowledges that withdrawing from the workforce often results in an impairment of that spouse's economic opportunities. [125] The "non-compensatory support principle" considers the economic hardship experienced by a spouse arising from the breakdown of the relationship. This principle allows the court to assess the level of entitlement required to meet a spouse's needs after separation. The needs of a spouse are not limited to providing the basic necessities. The measure of a spouse's needs must consider the standard of living enjoyed by the parties during the relationship. [126] In this case, the claimant's claim for spousal support is based primarily on the economic hardship that she suffered as a result of the breakdown of the relationship. At the time the parties began living together, the claimant had a well-paying position with J&J. However, during the relationship, in 2016, the claimant lost that position. [127] Upon the termination of her employment from J&J, the claimant received a severance package and received employment insurance benefits for a period of time. Initially, the claimant sought alternative employment, but found that any potential employment for which she was suited, required her to move from Kelowna to a bigger centre. In order to maintain the relationship without having the claimant move from Kelowna, the respondent began

distributing income to her from his corporate interests. He commenced paying the claimant after her severance and employment insurance benefits were exhausted, and continued to pay her through his corporate entities until December 2020. [128] During the time that the claimant received income from the respondent's corporate entities, she attempted to establish a business through Moveable Spaces. However, her efforts were not successful. As a result, after December 2020, the claimant was unemployed and had no source of income. [129] In these circumstances, I find that the claimant has established her entitlement to spousal support on the non-compensatory principle having regard to the economic hardship arising from the breakdown of her relationship with the respondent. Duration of Spousal Support [130] The parties began living together on July 1, 2014. They separated on March 9, 2020. Both parties submit that, due to the short period of cohabitation, the duration of spousal support should be three years. In addition, the parties seek an order for the payment of spousal support in a lump sum. [131] In accordance with the submissions of the parties, I order that the duration of the spousal support be for a period of three years from the date of separation. Incomes under the Federal Child Support Guidelines [132] In order to establish the appropriate level of spousal support, I must

establish the parties' income pursuant to the provisions of the Federal Child Support Guidelines, SOR/97-175 [Guidelines]. The relevant years to consider for the Guidelines income are 2020 to 2022, inclusive. [133] Based upon the income tax information in the claimant's financial statement, her Guidelines income for the years 2020 to 2022, net of interim spousal support payments, are set out in Table 6: Table 6 Claimant's Guidelines Income 2020 $86,000.00 2021 $34,000.00 2022 $20,000.00 [134] In order to assess the lump sum award of spousal support, I have averaged the claimant's income over the three relevant years and concluded that the appropriate income to attribute to the claimant over those three years is $47,000 per year. [135] The Guidelines income for the respondent involves a consideration of the salary he receives from Nufloors, the income generated by Nufloors, and the monies transferred by Nufloors to Holdco. [136] As a result of the respondent's involvement with these closely held corporations, the parties jointly retained Mr. Sanders to prepare a Guidelines income report (the "Guidelines Income Report"). The date of the Guidelines Income Report is January 31, 2022, and it sets out Mr. Sanders' opinions with respect to the respondent's Guidelines income for the years 2018, 2019 and 2020. Unfortunately, only the Guidelines income amount established by Mr. Sanders

for 2020 is useful in my analysis. [137] Mr. Sanders' Guidelines Income Report assesses the respondent's 2020 Guidelines income at $761,000. [138] The respondent criticizes Mr. Sanders' income assessment on the basis that it provides an artificial assessment of the monies available to him for the following reasons: a) The assessment assumes that all profit before taxes was cash available to the shareholders; b) The assessment assumes that all available cash would be withdrawn rather than left or re-invested in the company; c) The assessment leaves no contingency cash available as a cash reserve; d) The assessment adds back the amortization amounts and deducts the cost of capital asset purchases, which, the respondent submits, would prevent the company from ever replacing its depreciating assets; and e) The respondent's personal income has never reached the levels set out in the Guidelines Income Report. [139] I am not satisfied that the concerns raised by the respondent about the Guidelines Income Report have merit. In my view, adding back the amortization expense is a reasonable adjustment to the pre-tax income figures as amortization is a non-cash entry on the financial statements. In other words, Nufloors did not dispose of cash or income to realize this expense. Similarly, the deduction of the cost of the capital assets purchased by Nufloors is a reasonable deduction on the

basis that Nufloors paid for the capital assets from income. [140] The other concerns raised by the respondent have no merit when considered in the context of the purpose for the Guidelines income. The Guidelines establish a spouse's income by accounting for the income available to a spouse from all sources. It prevents spouses from generating income through a corporate entity and leaving that income in the company to the detriment of a child or a spouse. The intention of the Guidelines is to prevent spouses from limiting their support obligations by holding income in a corporate entity until their support obligations have ended. [141] The assumptions made in the Guidelines Income Report that: a) all profit before taxes is available to the shareholders; b) all available cash is withdrawn from the companies; and c) there is no cash available as a cash reserve; are consistent with the Guidelines. Therefore, even though the respondent may not have ever received the levels of income set out in the Guidelines Report, the income is available in the companies. Contrary to what the respondent may think, he is not able to use the corporate accounts as his retirement fund to the detriment of the claimant. [142] Therefore, I am prepared to accept the Guidelines income analysis set out in the Guidelines Income Report. [143] The problem with the Guidelines Income Report is that it does not

include any Guidelines income figures for the years 2021 and 2022. Due to a lack of this evidence, I have concluded that the appropriate assessment is to use the average of the Guidelines income for 2018 to 2020 as established by the Guidelines Income Report. [144] I have reached this conclusion by reviewing the personal income tax returns for the respondent and the pre-tax income amounts for Nufloors and Holdco for the years 2021 and 2022. In reviewing those figures, I observed that the respondent's personal income increased in 2022 to $300,000 from $160,000 in 2021 and $137,000 in 2020. On the other hand, the pre-tax income of Holdco decreased significantly from $404,000 in 2020 to $18,000 in 2021, but increased to $786,000 in 2022. [145] With respect to Nufloors, its pre-tax income for 2020 was $453,000. Its pre-tax income increased to $966,000 in 2021, but then returned to $459,000 in 2022. [146] Based on the fluctuating incomes of all of these entities, including the respondent's personal income, I have concluded that the appropriate level of income to assign to the respondent for the relevant years is an average income over the years for which the Guidelines income is known. [147] The Guidelines Income Report concludes that the respondent's Guidelines income for the years 2018 to 2020 is $928,000 in 2018, $507,000 in 2019, and $761,000 in 2020. The average income over

these years is $732,000 per year. [148] An annual income of $47,000 for the claimant and $732,000 for the respondent over a duration of three years, yields a lump sum payment of $106,804 payable by the respondent. [149] The parties agree that the respondent has paid interim spousal support totalling $51,300. Therefore, the net amount payable by the respondent for spousal support in a lump sum is $55,504. [150] In accordance with the submissions of the claimant, I have assessed the lump sum amount for support at the low end of the spousal support range and at the mid-point between the respondent's after-tax cost and the claimant's after-tax benefit. Summary [151] Table 7 is a summary of the financial consequences of the orders I have made in these reasons. Table 7 Summary Disposition Amount payble by the claimant Amount payable by the respondent Audi Q5 to claimant Payment of loan to Movable Spaces Porsche to sell 50% of proceeds 50% of proceeds 2010 Mercedes to respondent 2011 Mercedes to claimant Claimant's investments to claimant $153,427.47 Respondent's investements to respondent $68,269.24 Sonora Property sold $37,825.00 Westpoint Property to respondent $26,325.00 Westside Road Property to claimant $392,500.00 Holdco to respondent $954,400.00 Spousal Support to claimant $55,504.00 Totals $583,752.47 $1,104,498.24 Net payable $520,745.77 [152] The net amount payable by the

respondent to the claimant is $520,745.77. [153] From the net amount payable to the claimant, the claimant must payout the loan received from Moveable Spaces for the Audi Q5. [154] When the parties sell the Porsche, they will divide the net proceeds of sale equally. Costs [155] The parties have leave to make written submissions on costs if they cannot agree. The claimant will have 21 days from the date of these reasons to file her submissions on costs. The respondent will have 21 days from receiving the claimant's costs submission to file his response submissions. [156] If the claimant wishes to make reply submissions, they must be filed within seven days of receiving the respondent's submissions on costs. "D.K. Hori J." HORI J.