C.B.F. v. J.E.F.

IN THE SUPREME COURT OF BRITISH COLUMBIA IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: C.B.F. v. J.E.F., 2004 BCSC 803 Date: 20040617 Docket: DIV 4288 Registry: Prince Rupert Between: C.B.F. Plaintiff And J.E.F. Defendant Before: The Honourable Mr. Justice A.F. Wilson Reasons for Judgment Counsel for the Plaintiff: R.D. Punnett Counsel for the Defendant: M.J. Shaw Dates and Place of Trial: May 17, 18, and 19, 2004 Prince Rupert, B.C. I INTRODUCTION [1] The plaintiff, C.B.F., and the defendant, J.E.F., commenced cohabitation in August or September, 1992, were married on August 12, 1993, and separated on August 29, 2002. The issues arising from the separation which have not been resolved are: 1. whether term deposits held by Mr. J.E.F. at Northern Savings Credit Union are family assets; 2. the valuation of F.[ ] Ltd..; 3. whether there should be re-apportionment of the interest of the parties in F.[ ] Ltd.., the Canada Life insurance policy held by Mr. J.E.F., and, if they are family assets, the term deposits at Northern Savings Credit Union; 4. the quantum and period of spousal maintenance. II BACKGROUND [2] Mrs. C.B.F. was born on [ ], 1962, and is thus now age 41. She took her schooling in Surrey, completing grade 10, then took a course and apprenticing as a hairdresser. She moved to Prince Rupert in the early 1980s, and worked at M.[ ] for approximately ten years, stopping that employment in December, 1991, when she was pregnant. Mrs. C.B.F. was married once before, and has two children from that relationship, who are aged 20 and 22. Her third child, M.D.M., was born on [ ], 1992. [3] When she was employed at M.[ ], Mrs. C.B.F. was paid on a commission, 60% of the income she brought in. By the end of her ten years employment at M.[ ], she had established a steady clientele, and was clearing approximately $1,000 per month, after taxes. She stopped work at M.[ ] in December, 1991, as she was too pregnant to continue, with a plan to collect Employment Insurance maternity benefits for a year. At that time, Mrs. C.B.F. was living on her own in a house which she rented from Mr. J.E.F. at [ ] Avenue East, in Prince Rupert. [4] In January, 1992, there was a fire at the funeral home operated by Mr. J.E.F. He employed Mrs. C.B.F. to do cleaning, which she did on a full-time basis, being paid $10.00 an hour, until M.D.M. was born. [5] After M.D.M.'s birth, Mrs. C.B.F. resumed working for Mr. J.E.F., doing work in the office, cleaning, and hairdressing of deceased persons. That work for F.[ ] Ltd. continued throughout the relationship, and included a variety of tasks: not only office work, cleaning and hairdressing, but also such things as assisting in funeral ceremonies, and driving bodies to Terrace for cremation. [6] In August or September, 1992, Mr. and Mrs. C.B.F. started to live together, at a house owned by Mr. J.E.F. at [ ] S.[ ] Avenue, in Prince Rupert. They remained in that property for one and one half years, when they purchased the home where Mrs. C.B.F. and M.D.M. are still living, at [ ] Avenue East, in Prince Rupert. [7] Although Mrs. C.B.F. did some work at F.[ ] Ltd.. during the relationship, her primary role was as a homemaker. Mr. J.E.F. did not wish her to return to work as a hairdresser, and, apart from the work at F.[ ] Ltd.. when she was needed, she did not work out of the home. Mr. J.E.F. was the primary income earner. Mrs. C.B.F. received a pay cheque from F.[ ] Ltd.., but that did not reflect the time spent by her at work. Rather, it was done for the purpose of income splitting. The cheque was delivered by Mr. J.E.F. to Mrs. C.B.F., who endorsed it and returned it to Mr. J.E.F., who deposited it in a joint bank account at the Royal Bank of Canada. Mr. J.E.F. then provided funds to Mrs. C.B.F., as requested, to cover day-to-day household expenses. [8] When they commenced the relationship in 1992, Mrs. C.B.F. had only her furniture and a [ ] Toyota. She had no savings, or debts. Mr. J.E.F., on the other hand, had substantial assets when they entered the relationship. [9] Mr. J.E.F. was born on [ ], 1955, and is thus 49 years old. He was brought up in Prince Rupert, where his family operated a funeral business which had been established by his grandfather. His father took over the operation of it in 1975 when his uncle, who had been operating it, died. However, his father did not want to operate the business. Mr. J.E.F. thus gave up his work at the pulp mill, and started working in the funeral business in 1976. He took a two-year apprenticeship and became qualified as an embalmer. Over time, he took on more and more responsibility for the business, with his father spending more time away, building a house in the K.[ ] Valley. Although Mr. J.E.F. had full-time employees from time to time, and employed others, including Mrs. C.B.F. as required, he was the primary one who operated the business. [10] Under a Share Purchase Agreement dated August 31, 1989, Mr. J.E.F. agreed to purchase the shares of F.[ ] Ltd.. (but not the building in which it is located) from his father, for $56,000, payable in monthly payments of $1,000 per month, from September 1, 1989, until April 1, 1994. In addition, Mr. J.E.F. paid his father $800 rent for the use of the premises in the building. Although he does not know the precise value of the equipment owned by the company at the time, Mr. J.E.F. says the agreement was a "good deal" for him. [11] On December 12, 1989, Mr. J.E.F.'s father died. As his wife had pre-deceased him, his Will provided for equal division of the estate between his four sons. The major assets were the building in which the funeral home was located, a one half interest in a duplex on [ ] Avenue, the K.[ ] property, cash of approximately $80,000, and the balance of the indebtedness of Mr. J.E.F. for the purchase of the shares of F.[ ] Ltd.. Although it took some time, Mr. J.E.F. did eventually buy out his brothers' interest in the building in which the funeral home was located, at [ ] M.[ ] Street, and title to that property was transferred into the name of F.[ ] Ltd.. The consideration for each one quarter interest was shown as $38,000. Mr. J.E.F. borrowed approximately $120,000 from the Royal Bank of Canada to purchase his brothers' interests. In addition, he, or the company, assumed a loan of approximately $40,000 his father had taken out for the company, and on which only interest had been paid. The loan from the Royal Bank of Canada was also in the name of the company, and has not been paid down, as further funds have been required for repairs to the building. [12] At the time his relationship with Mrs. C.B.F. commenced, Mr. J.E.F. had assets, including: (a) all of the shares of F.[ ] Ltd.., which owned the building, which had been valued at $152,000 for the purpose of the purchase of his brothers' interests; the equipment and goodwill, which he had purchased from his father for $56,000; but with debts of approximately $40,000 and $120,000; (b) his home at [ ] S.[ ] Avenue, Prince Rupert, purchased in March, 1990 for $168,000, subject to a mortgage at that time of $144,840 (which was sold in November, 2001 for $170,000, resulting in a net payment, after payout of the mortgage and other adjustments, of $54,843); (c) the rental property at [ ] Avenue East, Prince Rupert, sold in June, 1993 for $42,000, resulting in a payment to Mr. J.E.F., after paying out the mortgage and other adjustments, of $17,521; (d) funds received from his father's estate, held in term deposits at Northern Savings Credit Union, and his interest in the remaining estate of his father which had not yet been administered, including the K.[ ] property; (e) one or more cars, and a "Get-away van". [13] During the relationship, Mr. J.E.F. managed the finances, and Mrs. C.B.F. had little knowledge of them, apart from knowing that there were accounts at Scotiabank and Northern Savings Credit Union. The F.s did not discuss financial affairs. However, Mrs. C.B.F. says that when the house at [ ] Avenue East was sold, Mr. J.E.F. told her that it had been sold, and that the money would be put into a term deposit for their retirement. When put to him on cross-examination, Mr. J.E.F. did not deny that was possible. At one point in his direct examination, in referring to funds received from his father's estate and put in term deposits at the Credit Union, Mr. J.E.F. said, "I just put it in there and forgot about it until I retire". [14] Since the separation, Mrs. C.B.F. has returned to employment at M.[ ], on the same commission basis. However, she has had difficulty in establishing a clientele with the current economic conditions in Prince Rupert. Before the separation, Mrs. C.B.F.'s only income was the amounts paid by F.[ ] Ltd.., shown as $11,400 on her 2000 income tax return and $17,100 on her 2001 income tax return, and child maintenance, which was in the amount of $3,600 in 2000, the last year it was paid. In 2002, the year of the separation, she was paid $7,600 by F.[ ] Ltd.., and earned $4,283 from her earnings at M.[ ], during the period from May until the end of the year. In 2003, her earnings from that employment were $9,779, although she worked for the entire year on a full-time basis. She says her clientele is picking up slowly, "but not that much". She thus says her standard of living is now considerably lower than it was when she was living with Mr. J.E.F.. [15] Mr. J.E.F. has continued to operate F.[ ] Ltd.. Although concerns have been expressed about the business in light of the increased proportion of cremations, which F.[ ] Ltd.. does not provide, diversion of some of the business to Terrace, and the general state of the Prince Rupert economy, the income from sales and the gross income of the company has remained fairly consistent over the period from 1997 until 2002 (the period for which Financial Statements have been provided). Mr. J.E.F. has thus also been able to maintain a fairly stable income. As reflected on his income tax returns, or Notices of Assessment, his total income has been as follows: 1998: $53,324 (including interest income of $1,124); 1999: $73,191 (revised from $48,191 as set out on his income tax return, which included $1,141 of interest); 2000: $54,910 (including $1,163 interest); 2001: $55,511 (including $1,512 interest); 2002: $55,697 (including $1,697 interest), in addition to which there was a T5 issued by F.[ ] Ltd.. for $15,000 dividends, which are not included in the income tax return); 2003: $54,685 (including $1,920 interest income). [16] Since the separation, Mr. J.E.F. has paid the mortgage, taxes and house insurance on the home at [ ] Avenue East, occupied by Mrs. C.B.F. and M.D.M., and has paid child maintenance of $460.00 per month. He also paid for cablevision until July, 2003, when Mrs. C.B.F. and M.D.M. went on holidays. Mr. J.E.F. also paid for extended medical and dental coverage for Mrs. C.B.F. for the first year after the separation, and paid the insurance for her vehicle for the first year, and loaned her funds for vehicle insurance and repairs last year which has not been paid back. [17] M.D.M. now spends one week of every three or four with Mr. J.E.F.. III RELIEF CLAIMED (a) Divorce [18] The grounds for divorce have been established, and I am satisfied that there is no reasonable prospect of reconciliation. The divorce is thus granted, to take effect thirty-one days after the date of this order. (b) Custody, Guardianship and Access [19] The child, M.D.M., born [ ], 1992, has been in the primary care of Mrs. C.B.F. since his birth. Her application for sole custody and guardianship of him is not opposed, and I am satisfied that is in his best interests. There will be an order accordingly. Mr. J.E.F. seeks an order for reasonable access, which is not opposed, and that is also granted. (c) Child maintenance [20] It is agreed that maintenance is payable for M.D.M., as provided in the Guidelines, based on Mr. J.E.F.'s 2003 income as reflected in his income tax return. That income is $54,685, and the monthly maintenance will thus be $465.00, commencing effective June 1, 2004, and continuing so long as M.D.M. is a "child of the marriage" or until further court order. (d) Division of assets [21] The correct approach is to consider division of assets before considering spousal maintenance: Toth v. Toth (1995), 13 B.C.L.R. (3d) 1 (C.A.), approved in Hartshorne v. Hartshorne, 2004 SCC 22. i Family Assets [22] It is agreed that all of the assets and debts in the possession of both parties are family assets, with the exception of the boat purchased by Mr. J.E.F. since the separation, and the contents of the safety deposit box maintained by Mr. J.E.F. at G.[ ] Shop, which are conceded not to be family assets, and the term deposits at Northern Savings Credit Union, which are in dispute. [23] With respect to the term deposits at the Northern Savings Credit Union, Mr. J.E.F. gave evidence that there were two, one in the amount of approximately $4,000, and one in the amount of approximately $30,000 (his Financial Statement sworn May 17, 2002, shows the balance on term deposits at the Credit Union to be $35,226.28). He did not recall the origin of the smaller term deposit, although indicated that it might have been the proceeds of sale of the house at [ ] Avenue East. However, he said the source of the larger term deposit was the cash inheritance from his father's estate, to which he added his share of the proceeds of sale of the K.[ ] property. Mrs. C.B.F. was not in a position to say what the source of those funds was. [24] Mr. J.E.F. said that those term deposits have just been rolled over since the deposit of the funds. However, $10,000 was transferred from the term deposits to the chequing account at the Credit Union on July 4, 2000. Mr. J.E.F. was not able to say what those funds were used for. He suggested they may have been used to pay down his shareholder's loan account with F.[ ] Ltd.., but was very uncertain about that. There is no documentary evidence in support of such a payment, such as entries in the books of account of the company, which one would expect to exist if such a payment had been made. I thus do not accept that those funds were used to pay down his shareholder's loan account. Although Mr. J.E.F. said the savings account at the Scotiabank was the one used primarily to pay bills, and the one out of which the mortgage payments came, he said the chequing account at the Credit Union was also used to pay bills, and to make payments to Mrs. C.B.F.. It was used, for example, at least after the separation, for such payments as the debt on a vehicle, the life insurance premiums, and the cablevision accounts. The term deposits at the Credit Union were also used as collateral for personal loans he had there, which were used to purchase vehicles and a trailer which were used for family purposes. In cross-examination, Mr. J.E.F. also admitted that the net proceeds of sale of the house at [ ] Avenue East, in the amount of $17,521, may have been put into the Credit Union account. As noted in paragraph 13, Mrs. C.B.F. said Mr. J.E.F. told her that the funds were to be used for retirement, which Mr. J.E.F. did not deny. (a) Law [25] Pursuant to s. 58(2) of the Family Relations Act, (2) Property owned by one or both spouses and ordinarily used by a spouse or a minor child of either spouse for a family purpose is a family asset. In addition, pursuant to s. 58(3)(c) the definition of family assets includes: (c) money of a spouse in an account with a savings institution if that account is ordinarily used for a family purpose. Pursuant to s. 60: 60. The onus is on the spouse opposing a claim under section 56 to prove that the property in question is not ordinarily used for a family purpose. The onus is thus on Mr. J.E.F. to show that the term deposits at the Northern Savings Credit Union are not family assets. [26] In Graff v. Graff, [1987] B.C.J. No. 2202 (C.A.), Seaton J.A. noted that, in the usual case, savings made by either spouse during the marriage will be at the expense of the family, and with the intention of providing for the family in the future, or to provide retirement income, and are thus family assets. He referred to the earlier decision of the Court of Appeal in Lawrence v. Lawrence (1985), 69 B.C.L.R. 268 (C.A.) as authority for the proposition that pre-marriage savings, and the interest accruing on them, may not be a family asset, although noted that is subject to then s. 45(2)(c) [now s. 58(2)(c)]. From that, I take it that even if the savings were made before the marriage, they will be a family asset if the account "is ordinarily used for a family purpose". [27] In this case, the source of the term deposits appears to have arisen from savings both before the marriage (in the case of the cash portion of the inheritance), before the marriage but after the commencement of cohabitation (in the case of the proceeds of sale of the house at [ ] Avenue East), and after the marriage (in the case of Mr. J.E.F.'s share of the proceeds of sale of the K.[ ] property). [28] In Folk v. Folk, [1994] B.C.J. No. 2616 (C.A.), the Court of Appeal held term deposits held by the husband in order to provide for himself after retirement were family assets, notwithstanding the fact that they came from the proceeds of the sale of property owned by the husband before the marriage (although, in that case, the interest earned on the term deposits was used to support the family for more than two years immediately prior to the separation). The court referred to Martin v. Martin (1992), 39 R.F.L. (3d) 360 (B.C.C.A.), in which the court held that savings for retirement accumulated before marriage may sometimes become family assets, particularly during a long marriage, but that in other cases only retirement savings accumulated during the marriage will be deemed to be a family asset. Again, however, the case turns on whether the savings are used "for a family purpose" during the course of the marriage. [29] In Rettie v. Rettie, [1997] B.C.J. No. 298 (S.C.), Catliff J. held that funds held by the husband in an investment portfolio, derived from an inheritance received by him during the marriage, was a family asset, as the intended use of the inheritance was to secure the financial future of the parties. In that case, the funds had twice been used for a family purpose, for the purchase of a vehicle and a boat. He did, however, re-apportion the portfolio, 60% to the husband and 40% to the wife. [30] By way of comparison, in Lye v. McVeigh (1991), 56 B.C.L.R. (2d) 158, the Court of Appeal upheld the finding of the trial judge that the husband's savings were personal assets where each party was employed full-time, contributed equally to their living expenses, and had separate bank accounts. That is not the situation here: Mrs. C.B.F. was not employed out of the home to any significant extent during the marriage; Mr. J.E.F. paid all of the expenses relating to the upkeep of the family, and managed the family finances; and Mrs. C.B.F. did not maintain a separate bank account. [31] In Stuart v. Stuart, [1996] B.C.J. No. 526 (C.A.), the court held that the husband's inheritance did not constitute a family asset, notwithstanding the fact that the income from it was used for a short time to support the family. Southin J.A. held that the mere use of income from property does not, in and of itself, turn that property into a family asset (¶61). When there had been only nine withdrawals from the account from the date of its being opened until the triggering event, she concluded that the account was not "ordinarily used for a family purpose". McEachern C.J. dissented in the decision, but did agree with the majority that the inheritance should not be considered as a family asset "mainly because the income from those assets was only used for family purposes for a short time" (¶14). However, he did consider it to be "a very close call", noting that income from the assets was used as collateral in the purchase of the family home and to retire the mortgage. (b) Discussion [32] I find that, in the circumstances of this case, the term deposits at the Northern Savings Credit Union are family assets. There are a number of reasons for that finding: 1. the source of the funds is unclear, but it appears it came from: (a) a cash inheritance before the commencement of the relationship, the amount of which was not stated; (b) sale of the home on [ ] Avenue East after the commencement of the relationship (although before the marriage); and (c) Mr. J.E.F.'s share of the proceeds of the sale of the K.[ ] property, which he estimated at between $1,000 and $2,000. As the net proceeds of the sale of the [ ] Avenue East property were in the amount of $17,521, those proceeds likely provided the largest portion of the fund; 2. Mrs. C.B.F. says, and Mr. J.E.F. does not deny, that he told her the funds were to be kept for retirement purposes. Her evidence of this intended use is supported by the facts that: (a) with the exception of the $10,000 withdrawal, the term deposits were just rolled over; (b) Mrs. C.B.F. did not work out of the home, and thus had no source of funds for her own retirement; (c) Mr. J.E.F. had no pension, R.R.S.P.s or other sources of retirement income; and (d) Mrs. C.B.F. did not maintain any significant separate accounts; 3. the funds were used for "family purposes" on at least two occasions: as collateral for the loan used to purchase the boat used by the family, and the $10,000 withdrawal, which I consider most likely to have been used for expenses relating to the family. ii Valuation of Assets [33] The only asset the valuation of which is in issue is the shares in F.[ ] Ltd.. In a report dated March 10, 2004, Mr. Jerry Zuk concluded the fair market value of all of the issued shares of F.[ ] Ltd.. to be between $215,000 and $240,000, as at December 31, 2003. Mr. Zuk was not called for the purpose of cross-examination, nor was a report tendered providing a different opinion. His opinion adopted the opinion of Mr. G., dated August 19, 2003, that the property owned by F.[ ] Ltd.. had a market value as of August 19, 2003, of $230,000. Again, Mr. G. was not required to attend for the purpose of cross-examination, nor was a report delivered providing a different value. However, counsel for Mr. J.E.F. did challenge some aspects of both reports. [34] The first submission for Mr. J.E.F. relates to the G. valuation, that he failed to take into account the need to replace the asbestos shingles on the building. Mr. J.E.F.'s evidence was that the asbestos shingles on three sides of the building have been replaced, but that there was an estimated cost of $20,000 to do the last side, of which one half relates to the extra cost to deal with the asbestos. Counsel noted that, on page 6 of Mr. G.'s report, under the heading "Critical Assumptions and Limiting Conditions", Mr. G. stated, "It is assumed that the site and property are not subject to any environmental contamination ". Further, in the "Assumptions and Limiting Conditions" on page 44 of the report, he noted that, "Unless otherwise stated in this report, there are no known, unapparent or hidden conditions of the property or adverse environmental conditions that would make the property more or less valuable". However, on cross-examination, Mr. J.E.F. admitted that he had pointed out the need to replace the asbestos shingles on the fourth side of the building to Mr. G. when he did his inspection in preparation for preparing the report. That is reflected on page 16 of the report, in which Mr. G. referred to the asbestos shingles, noting that they had been replaced on three sides, and existed on the north side only. Further, in the "Assumptions and Limiting Conditions" on page 44 of the report, he qualified the comment with respect to adverse environmental conditions by noting, "It has been assumed that there are no such conditions unless they were observed at the time of the inspection ..." (my emphasis). I thus conclude that Mr. G. was aware of the need to replace the asbestos shingles on the fourth side of the building, and took that into account in his valuation of it. [35] The second submission, with respect to that valuation, is that to adopt it as the value at the date of trial does not take into account the declining property values in Prince Rupert, in view of the fact that the appraisal is now almost a year old. Counsel noted that the 2003 assessment of the property was $232,800, while the 2004 assessment was $223,700. Based on that, counsel for Mr. J.E.F. submitted that a value should be accepted at the bottom end of the range provided by Mr. G., of $210,000 to $215,000, rather than the mid-point of $230,000. [36] With respect to the valuation of Mr. Zuk, counsel for Mr. J.E.F. submitted that, taking into account the value of the building, the court should adopt a value at the bottom end of the range provided by Mr. Zuk, of between $215,000 and $240,000. He noted that the company is valued on a liquidation approach, but questioned whether there would be a willing purchaser at that value in light of the economic conditions affecting the funeral business, and Prince Rupert in particular, at the present time. [37] On the other hand, in calculating the value, Mr. Zuk allowed latent disposal costs of the land of $3,000 and of the building of $26,000. However, Mr. J.E.F.'s evidence was that, particularly in the current market, he has no plans to sell the business until he is ready to retire. In Lotzkar v. Lotzkar (2003), 20 B.C.L.R. (4th) 195 (C.A.), the Court of Appeal held that tax consequences of sale need not be taken into account in the absence of a current intention or need to sell. Presumably, the same principle would apply to other costs which would arise on the sale of the business. In those circumstances, I find that the deduction for the latent disposal costs should not be made in valuing the shares of the company. [38] I accept that, on the one hand, the declining market values in Prince Rupert indicate a value at the date of trial of less than the $230,000 concluded by Mr. Zuk. On the other hand, excluding the latent disposal costs would increase that valuation. I also accept the submission of counsel for Mr. J.E.F. that I should not determine a value outside the range set by Mr. Zuk, as that range was accepted by both counsel. Balancing those factors, I conclude that Mr. Zuk's estimate of the value of the shares of F.[ ] Ltd.. as of the date of trial of $230,000 is reasonable, and accept it. iii Re-apportionment pursuant to ss. 56(1) and (2) of the Family Relations Act [39] Upon the occurrence of a "triggering event", in this case the order for dissolution of marriage, each spouse is entitled to an undivided one half interest in each family asset as a tenant in common. However, if an equal division of the asset would be unfair, having regard to the factors set out in s. 65(1) of the Family Relations Act, the court may order that the property be divided into shares fixed by the court. [40] In this case, the parties agree that all of the family assets should be divided equally, except for the shares in F.[ ] Ltd.., the Canada Life insurance policy, and the Northern Savings Credit Union term deposits, with respect to which Mr. J.E.F. seeks a 75%/25% re-apportionment. He relies primarily on the facts that the marriage lasted nine years, and was thus not of long duration; that he had substantial assets when he entered into the marriage, whereas Mrs. C.B.F. did not; and that he received further assets by way of inheritance during the relationship. Counsel for Mrs. C.B.F. submits that those factors are balanced off by her need to become, and remain, economically self-sufficient, particularly as she was out of the work force, and lost her hairdressing clientele, during the marriage. [41] Each counsel has provided cases: on behalf of Mr. J.E.F., in which re-apportionment was ordered, and, on behalf of Mrs. C.B.F., in which it was refused. However, ultimately, each case turns on consideration of the factors as set out in s. 65(1), based on the facts of the case. [42] To consider those factors generally, the first is "(a) the duration of the marriage". There is a variety of views in decisions of this court as to what is a long marriage. In Stammler v. Stammler (1979), 14 B.C.L.R. 57 (S.C.), Taylor J., as he then was, indicated that the one half interest under what is now s. 56(2) must be "earned" by the claimant during the marriage (at p. 60). That was cited with approval by Anderson J.A. in Zaurrini v. Zaurrini (1981), 33 B.C.L.R. 15 at p. 18. In Stammler, Taylor J. determined that the wife had "earned" the one half interest over the course of a 15 year marriage. [43] In Dresen v. Dresen, unreported, B.C.S.C. Kamloops Registry, November 7, 1979, MacDonald L.J.S.C., considered that a 10 year marriage did not justify any adjustment under what is now s. 65. On the other hand, in Treacher v. Treacher (1979), 10 R.F.L. (2d) 216 (B.C.S.C.), Spencer J. expressed the view that a marriage of 12 years was not "a long marriage". In Mayuk v. Mayuk (1980), 25 B.C.L.R. 57 (S.C.), Taylor J. referred to the decisions in Treacher and Dresen, and noted "10 years in one marriage may represent as substantial a contribution to the acquisition of the family assets as 20 years in another". In Past v. Past, [2003] B.C.J. No. 1785, Warren J. found a marriage of nine years to be of short duration, while in Flewin v. Flewin, [1996] B.C.J. No. 484 (S.C.), affirmed [1997] B.C.J. No. 2519 (C.A.), Smith J. considered a marriage of seven years not to be a short one by contemporary standards (at ¶51(a)). [44] In this case, with a marriage of approximately nine years, and ten years of cohabitation, I consider the marriage not to be either short or long. However, taking into account, in particular, the fact that Mr. J.E.F. had substantial equity when he entered into the relationship, which Mrs. C.B.F. did not have, I consider that the duration of the marriage is a factor which might justify some re-apportionment (notwithstanding her contribution during the marriage, both direct and indirect). [45] With respect to sub-paragraph (b) "the duration of the period during which the spouses have lived separate and apart", although there has been some sale of small assets by Mr. J.E.F. since the separation, it is not a significant factor. [46] The factors set out in sub-paragraph (c), "the date when property was acquired or disposed of", and (d), "the extent to which property was acquired by one spouse through inheritance or gift", are the major factors which favour re-apportionment in favour of Mr. J.E.F.. Specifically, he was the owner of F.[ ] Ltd.., including the building, before he entered the relationship with Mrs. C.B.F., and had built up the goodwill of that business through his involvement in the operation of the business since 1976. In addition, he had other assets, including the rental property at [ ] Avenue and the home at [ ] S.[ ] Avenue, in which he had equity, before entering into the relationship. The importance of assets brought into the marriage does decrease the longer the marriage lasts: Lodge v. Lodge (1993), 79 B.C.L.R. (2d) 360 (C.A.) at 367. It is also not clear the extent of Mr. J.E.F.'s equity at the time he entered into the relationship with Mrs. C.B.F.. His interest in F.[ ] Ltd.. had been recently purchased, and was subject to debt, as were his interests in the rental property on [ ] Avenue and the S.[ ] Avenue property. [47] The next factor to be considered, under sub-paragraph (e) of s. 65(1) is: "the needs of each spouse to become or remain economically independent and self-sufficient". Mr. J.E.F. has a steady income from the funeral home business, and is thus economically independent and self-sufficient, and likely to remain so. Mrs. C.B.F., on the other hand, despite now working on a full-time basis for over two years, has not been able to re-establish a clientele such that she has a significant income. There is no evidence indicating that she can expect a substantial increase from her 2003 employment income of $9,779. However, the only training she has is as a hairdresser. I accept the submission on her behalf that the only reasonable thing for her to do is to remain working as a hairdresser, in the hope of building a clientele. This is thus a significant factor favouring her application for re-apportionment. [48] Section 65(1)(f) is "any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse". In that regard, counsel for Mrs. C.B.F. noted that during the marriage the parties had separate roles, that while Mr. J.E.F. was the income earner, Mrs. C.B.F. made a substantial contribution as a homemaker. He also submitted that she is never likely to have the capacity to earn the type of income earned by Mr. J.E.F., in the $50,000 per annum range. [49] The case which is most comparable to this one is K.A.B. v. A.E.B., [2003] B.C.J. No. 1255 (S.C.). That case involved a seven year marriage where the husband had received an inheritance before entering into the relationship. The wife was primarily a homemaker, but did contribute to the company as a result of her work at it. There was a substantial impairment in economic self-sufficiency of the wife as a result of her role as a full-time homemaker. She had limited education and job skills, and thus lower potential earning power than the husband. The wife had the use of the former matrimonial home after separation. An equal division of the family assets would not prejudice the economic independence of the husband. In those circumstances, Burnyeat J. concluded that both parties had met the onus of showing that there should be re-apportionment, but that the re-apportionment sought by each party was offset by the re-apportionment sought by the other. In the result, he ordered that there be an equal division of the family assets (¶37). [50] As noted above, s. 56 provides that each spouse is entitled to an undivided one half interest in each family asset unless such a division would be unfair, having regard to the factors set out in s. 65(1): Elsom v. Elsom, [1989] 1 S.C.R. 1367. The onus of proof lies on the spouse seeking re-apportionment: MacNeil v. MacNeil (1995), 14 R.F.L. (4th) 24 (B.C.S.C.). Thus, the test is not whether an unequal division would be fair, but whether an equal division would be unfair: M. (S.B.) v. M. (N.) (2003), 14 B.C.L.R. (4th) 90 (C.A.). Further, the one half interest that each spouse is entitled to is in each family asset, rather than the value of that asset: Frydrysek v. Frydrysek, 2002 BCCA 428. It is thus necessary to consider the factors with respect to re-apportionment as they apply to each asset. [51] In this case, the assets with respect to which Mr. J.E.F. seeks re-apportionment are his interests in F.[ ] Ltd.., the Canada Life insurance policy, and the term deposits at the Northern Savings Credit Union. [52] In Grange v. Grange (1982), 40 B.C.L.R. 145 (S.C.) Proudfoot J. ordered re-apportionment of the interest the husband held in a family company owned by the husband and his brother. In that case, the interest of the husband arose first as a gift, then as an inheritance, and the business was operated successfully for many years prior to the marriage. However, the marriage was of long duration, and the wife indirectly contributed to the maintenance and enhancement of the business. Proudfoot J. ordered a re-apportionment of the business, 40% to the wife, and 60% to the husband. Although the F. marriage may not be considered to be a long one, the other factors set out in Grange are applicable. In those circumstances, I find that an equal division of the interest in F.[ ] Ltd.. would be unfair, and order a re-apportionment of 60% to Mr. J.E.F. and 40% to Mrs. C.B.F.. In those circumstances, the shareholder's loan by Mr. J.E.F. to the company should be also apportioned in the same manner, so that, for the division of assets, he is responsible for 60% of the indebtedness, and Mrs. C.B.F. is responsible for 40% (although it will be assumed by Mr. J.E.F.). [53] With respect to the life insurance policy with Canada Life, the argument on behalf of Mr. J.E.F. is that he obtained the policy well before entering into the relationship, and it thus had substantial value at that time. However, there is no evidence as to its value then, as compared to its value at the end of the relationship. Further, the premium payments during the relationship were made from funds in bank accounts which would otherwise have been available to the family. Further, as shown by the fact that Mrs. C.B.F. was designated as the beneficiary, the policy was intended to benefit her in the event of the death of Mr. J.E.F.. In those circumstances, I am not satisfied that equal division would be unfair, and there will be no re-apportionment. [54] With respect to the term deposits at the Northern Savings Credit Union, as outlined above, they are derived from Mr. J.E.F.'s inheritance, most of which was received before entering into the relationship with Mrs. C.B.F., and the proceeds of sale of the [ ] Avenue property, which he had before that relationship, although it was not sold until after he entered into the relationship. Since that time, apart from one withdrawal of $10,000 which I consider was likely used for family purposes, and the use of the term deposit as security for a loan for a trailer, the funds have been rolled over. It thus cannot be said that Mrs. C.B.F. made any contribution to the value of that asset, either direct or indirect. I consider those circumstances to outweigh Mrs. C.B.F.'s need for self-sufficiency, particularly as there are other assets which will result in payments to Mrs. C.B.F.. It will thus be re-apportioned 75% to Mr. J.E.F. and 25% to Mrs. C.B.F.. iv Mechanism for division of assets [55] No submissions were made by counsel with respect to the mechanism for the division of assets, apart from counsel for Mrs. C.B.F. indicating that she wished to remain in the former family home, and that there should be a compensation order to her with respect to her interest in the other assets held by Mr. J.E.F.. Counsel will thus have liberty to apply for ancillary orders, pursuant to s. 66 of the Family Relations Act, if necessary. [56] Subject to those further submissions, the assets and debts will be divided as follows: 1. shares of F.[ ] Ltd.., valued at $230,000, to be apportioned 60% to Mr. J.E.F. and 40% to Mrs. C.B.F.: all shares to be transferred to Mr. J.E.F.; Mrs. C.B.F. to resign as director and officer; Mr. J.E.F. to assume liability for shareholder's loan; Mr. J.E.F. to compensate Mrs. C.B.F. in the amount of $75,087 (40% of $230,000 value of company minus $42,281 shareholder's loan); 2. former family home at [ ] Avenue East, Prince Rupert, with a value of $94,700, subject to a mortgage in the amount of $90,098: Mr. J.E.F. to transfer his one half interest to Mrs. C.B.F., who will be responsible for payments on the mortgage, and will indemnify Mr. J.E.F. from liability with respect to the mortgage; Mrs. C.B.F. to pay Mr. J.E.F. compensation in the amount of $2,301 (one half of $94,700 minus $90,098); 3. 1999 Ford F250 truck, value $19,000: to be retained by Mr. J.E.F.; to pay compensation to Mrs. C.B.F. in the amount of $8,500; 4. 2002 Ford Focus car, value $12,000, subject to debt to Ford Credit in the amount of $5,000: Mr. J.E.F. to retain title to the car, to assume liability for the debt and to indemnify Mrs. C.B.F. from liability for it, and to pay her $3,500 in compensation for her interest; 5. Nash travel trailer, value $18,000: to be retained by Mr. J.E.F., to pay Mrs. C.B.F. $9,000 compensation; 6. 1995 Ford Explorer, value $8,500: to be retained by Mrs. C.B.F., to compensate Mr. J.E.F. in the amount of $4,250; 7. Term deposits, chequing account, and shares at Northern Savings Credit Union, totalling $37,716, less consumer loan in the amount of $30,949: to be retained by Mr. J.E.F., with liability for the consumer loan, for which he will indemnify Mrs. C.B.F.; Mr. J.E.F. to pay Mrs. C.B.F. compensation in the amount of $1,692 (25% of the $37,716 less $30,972); 8. Scotiabank term deposits, savings account (also referred to as Blue Chip account) and chequing account, value $48,582: to be retained by Mr. J.E.F., to compensate Mrs. C.B.F. in the amount of $24,291; 9. Canada Life insurance policy and shares in Canada Life, value $32,082: to be retained by Mr. J.E.F., with a payment to Mrs. C.B.F. in compensation in the amount of $16,041. [57] In preparing this portion of the Reasons for Judgment, I noted discrepancy in the schedules prepared by counsel with respect to the bank accounts at the Scotiabank. Counsel for Mr. J.E.F. showed a savings account in the amount of $6,136, and a chequing account in the amount of $2,329, whereas counsel for Mrs. C.B.F. showed only a savings account, but in the amount of $14,526. I have used the amounts provided by counsel for Mr. J.E.F., which appears more consistent with his Financial Statement sworn May 17, 2994, supplemented with the copy of his Scotiabanki savings account bank book. If that is not correct, counsel will have liberty to apply. [58] There are also a Thunderbird car and a flat deck trailer which have been sold by Mr. J.E.F. since the separation. That has been included on each counsel's schedule. However, if compensation is provided to Mrs. C.B.F. for the proceeds of sale, as well as the amounts in the bank accounts, there will likely be a double counting. I have thus made no allowance for that. Again, however, counsel will have liberty to apply with respect to that item. [59] Finally, there are the [ ] R.[ ] boat, purchased by Mr. J.E.F. since the separation, and the safety deposit box in his name, and its contents, at G.[ ] Shop. Those items are agreed not to be family assets, and thus will be retained by Mr. J.E.F.. There are also personal loans made by Mr. J.E.F. to Mrs. C.B.F.'s brother and a friend of hers. However, it appears those are not likely to be recoverable. Mr. J.E.F. will be entitled to retain those accounts receivable without providing compensation to Mrs. C.B.F. for them. [60] Offsetting the amounts for which Mr. J.E.F. is entitled to compensation from Mrs. C.B.F., Mrs. C.B.F. will be entitled to payment of a net amount of $115,519. [61] If any further orders are required to give effect to this division of the assets, counsel will again have the liberty to apply. (e) Spousal Maintenance [62] With respect to spousal maintenance, there is no issue of the entitlement of Mrs. C.B.F.. Quantum at this time is also not seriously disputed, nor is the appropriateness of review when it is determined what income Mr. J.E.F. will receive from the P. estate. The major issues are whether maintenance should be payable for an indefinite period or a fixed term, and whether there should be an automatic review. [63] Counsel for Mrs. C.B.F. referred to Nelson v. Nelson, [2001] B.C.J. No. 2763 (C.A.) for the proposition that Mrs. C.B.F. is entitled to a standard of living that is reasonable in light of her expectations during the marriage. He noted her standard of living now is considerably less than it was during the marriage, and less than that enjoyed by Mr. J.E.F.. He noted that in Touwslager v. Touwslager (1992), 63 B.C.L.R. (2d) 247 (C.A.), the husband had a substantially larger income than the wife, who was not self-supporting, and it was unlikely that she would become self-supporting. The Court of Appeal ordered that the maintenance of $1,200 per month was to be paid indefinitely. He also referred to Spring v. Spring, [1999] B.C.J. No. 2995 (S.C.), in which Neilson J. ordered retroactive and future spousal maintenance, noting "the present disparity in the standards of living of the parties can be taken as an indication of the economic disadvantages inherent in the role assumed by the wife during the marriage". I note, however, that the order for spousal maintenance in that case was subject to review after approximately two years. [64] Counsel for Mr. J.E.F. submitted that it is the current practice not to order maintenance for an indefinite period, but to allow for a period to enable the wife to become self-sufficient, and to review the maintenance at that time. That will depend to a large extent on the individual circumstances of the case. Where there is no evidence to support an inference that the wife is likely to become economically self-sufficient, a time limited order may not be appropriate: Sitwell v. Sitwell (1998), 50 B.C.L.R. (3d) 205 (C.A.); M.(L.S.) v. M.(E.J.) (2001), 16 R.F.L. (5th) 185 (Ont. C.A.). On the other hand, if there is a reasonable prospect that the wife may become economically self-sufficient, or there are other factors which may bear upon her entitlement to, or the quantum of, maintenance, a review is appropriate. [65] Pursuant to s. 15.2(4) of the Divorce Act, R.S.C. 1985, c. 3, The court shall take into consideration the condition, means, needs and other circumstances of each spouse, including: (a) the length of time the spouses cohabited; (b) the functions performed by each spouse during cohabitation, and; (c) any order, agreement or arrangement relating to support of either spouse. The objectives of a spousal support order, as set out in s. 15.2(6) of the Divorce Act, were considered in the decisions of the Supreme Court of Canada in Moge v. Moge, [1992] 3 S.C.R. 813; Bracklow v. Bracklow, [1999] 1 S.C.R. 420; and Hickey v. Hickey, [1999] 2 S.C.R. 518. Those cases establish that a claim for spousal maintenance may be contractual, compensatory, or based on the means and needs of the parties. Of note, Bracklow involved a wife whose increasing illness rendered her unable to work. The court said that, even if there was no basis for compensatory support, need alone might be enough to ground an award for support. When the matter was referred back to the trial judge, an award of $400 per month was made for a period of five years, in light of what was considered to be a relatively short marriage of seven years duration: Bracklow v. Bracklow (2000) 3 R.F.L. (3d) 179 (B.C.S.C.). [66] In this case, I am satisfied that it is very unlikely that Mrs. C.B.F. will ever be able to become self-supporting, at a level anywhere near that enjoyed by her during the marriage, and which Mr. J.E.F. is capable of maintaining, based on her employment as a hairdresser. She has now been back to work for two years, working on a full-time basis, yet has an income from commissions of less than the amount she would earn working full-time at a minimum wage salaried job. However, I find she has made reasonable efforts to become self-sufficient, and that, in light of her education and training, it is reasonable for her to continue to work as a hairdresser, and to attempt to build up her clientele. [67] In addition to her income from employment, however, Mrs. C.B.F. will receive a capital sum as a result of the division of property set out above. That sum can either be used to earn an income from investment, or to reduce her expenses by paying off debts, such as the mortgage on the family home. [68] The other complicating factor in this case is the income Mr. J.E.F. will receive from the P. estate, which will likely be payable back to the date of Mr. P.'s death in the fall, 2003, once the estate is administered. Counsel for Mrs. C.B.F. has submitted that should be a basis for an application to vary the amount of both spousal and child maintenance. That is not disputed by counsel for Mr. J.E.F.. [69] A letter has been filed from O.[ ] Ltd., (which holds one half of the licence, the other half of which is held by the P. estate) indicating that average rental rates for herring seine licences over the past five years has been approximately $60,000; that the rental rate in 2004 was set at $40,000 with a possible adjustment; and that there is a downward trend in licence rentals. Under the terms of Mr. P.'s Will, Mr. J.E.F. will be entitled to 30% of the licence rental, although that is before payment of taxes, and it may also be paid through a corporate vehicle, which might affect the net amount eventually received. There is certainly not enough information at this point to be able to properly assess the value of that income stream. In the end analysis, it may not make a substantial difference with respect to spousal maintenance, as I am satisfied that Mr. J.E.F. does have the means to enable him to pay spousal maintenance of $1,000 per month, the amount counsel for Mrs. C.B.F. submitted was the minimum appropriate based on an equal division of assets, and which counsel for Mr. J.E.F. agreed was reasonable. Although there has been some re-apportionment of the assets, Mrs. C.B.F. will receive a capital sum, such that I am satisfied $1,000 per month is a reasonable amount for spousal maintenance. [70] As to the term of maintenance, I am not satisfied that it should be indefinite, taking into account the length of cohabitation, and the fact that Mrs. C.B.F. is capable of earning an income, which may increase if the economy of Prince Rupert improves. Those factors outweigh the fact that Mrs. C.B.F. was not significantly employed out of the home during the marriage, and has suffered economic hardship arising from the breakdown of it. [71] In the circumstances, spousal maintenance of $1,000 per month will be payable, commencing June 1, 2004. There will not be an automatic review, but Mrs. C.B.F. will have the right to apply for review of the quantum of both spousal and child maintenance once the amount of income Mr. J.E.F. will receive from the P. estate has been determined, and each party will have liberty to apply for a reconsideration of entitlement to, quantum of, and the period of spousal maintenance on or after the end of April, 2007, being five years after the date of separation. [72] To enable each party to determine the appropriateness of review, there will be a mutual disclosure of financial information in the meantime. Mr. J.E.F. will advise Mrs. C.B.F. of the amount which he will receive from the P. estate, within thirty days of the receipt of that information, and will continue to do so on an annual basis, again within thirty days of receipt of the information. Each party will provide a copy of his or her income tax return to the other within thirty days of filing it, and will also provide a copy of any Notice of Assessment or Notice of Re-assessment issued by Canada Customs & Revenue Agency within thirty days of receipt. Mr. J.E.F. will also provide Mrs. C.B.F. with a copy of the Financial Statement of F.[ ] Ltd.., each year, within thirty days of completion of that Financial Statement. This obligation for exchange of financial information will continue for so long as there is spousal or child maintenance payable. IV COSTS [73] No submissions were made with respect to costs, pending the outcome of the trial. Counsel will thus have liberty to apply. In absence of any Offers to Settle, or further submissions of counsel, I order that each party bear their own costs, as there was mixed success, in that neither achieved all that he or she was seeking. "A.F. Wilson, J." The Honourable Mr. Justice A.F. Wilson October 13, 2004 - Revised Judgment In paragraph 60 of the Reasons for Judgment, I stated the net amount payable to Mrs. C.B.F. to be $115,519.00. That amount did not take into account the payment to Mrs. C.B.F. in the amount of $16,041.00, being her share in the Canada Life insurance policy and shares in Canada Life to be retained by Mr. J.E.F.. The correct amount payable to Mrs. C.B.F. is thus $131,560.00.