Clarke v. Clarke

2014 BCSC 1617 Clarke v. Clarke

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Clarke v. Clarke, 2014 BCSC 1617 Date: 20140825 Docket: E140965 Registry: Vancouver Between: Teresa Lynne Clarke Claimant And Allan Dale Clarke Respondent Before: The Honourable Mr. Justice Voith Reasons for Judgment Counsel for the Claimant: Anna Laing Respondent Allan Dale Clarke appearing on his own behalf: Allan Dale Clarke Place and Date of Trial: Vancouver, B.C. June 24-27, 2014 Place and Date of Judgment: Vancouver, B.C. August 25, 2014 [1] These reasons arise out of the breakdown of the marriage between the claimant, Teresa Clarke, and the respondent, Allan Clarke. The central issues that arise relate to: i) the identification and division of various family assets; ii) whether Ms. Clarke is responsible for any of the debts in Mr. Clarke's name; and iii) whether Ms. Clarke should pay spousal support to Mr. Clarke and, in addition, whether health concerns prevent Mr. Clarke from contributing to his own support. Relevant Procedural History [2] This action was commenced on April 30, 2012. There have been several interlocutory decisions. For present purposes the following matters are relevant. On December 5, 2012 Mr. Justice Saunders ordered that the family home be sold and that the proceeds of that sale be divided between the parties, with $100,000 of those proceeds to be held back from Mr. Clarke to be used, in part, to

discharge a tax lien on the parties' home. A sum of $30,000 was to be held back from Ms. Clarke pending the resolution of all matters in this case. Saunders J. also ordered Ms. Clarke to make interim spousal support payments, commencing on January 1, 2013, in the amount of $600 monthly. Finally, Saunders J. made, what was then, a s. 57 declaration under the Family Relations Act, R.S.B.C. 1996, c. 158. [3] Mr. Clarke was represented until shortly before trial when he dismissed his counsel. On June 19, 2014 Master Baker dismissed Mr. Clarke's application for an adjournment. Accordingly, Mr. Clarke was self-represented at trial. Factual Background and Findings A) General [4] Ms. Clarke is presently a 54-year-old elementary school teacher. Mr. Clarke is 66 years old and has not worked since approximately 2008. The parties started living together in a marriage-like relationship in November 1997. At that point Ms. Clarke had been a teacher for 16 years. They married on May 26, 2002. They had no children together. Mr. Clarke had been married once before and has two adult children from that earlier relationship. The parties started living separate and apart, under the same roof, in March 2012. [5] The parties had a "modern" marriage, in that they kept their finances almost entirely separate and neither subordinated their career to the other's career. B) The Parties' General Financial

Arrangements [6] When the parties met, each owned a condominium. Mr. Clarke sold his condominium first and he moved in with Ms. Clarke. Thereafter, Ms. Clarke sold her condominium and, in the fall of 2001, the parties bought a home in Surrey (the "Home"). They resided at the Home throughout the rest of their relationship. [7] The parties' general financial arrangements in relation to the Home remained relatively static, though its details varied over time. Thus, for a time, each contributed $1,600 a month toward the mortgage and utilities. They did this through a joint bank account. This was their only joint account. Sometimes they shared the cost of home insurance, sometimes Ms. Clarke paid for such insurance herself. Though Ms. Clarke was determined to pay off the mortgage as quickly as possible, Mr. Clarke could not maintain the $1,600 a month payments. At some point he began to contribute either $800 or $1,200 a month, with Ms. Clarke making up the difference. [8] There was also a loose sharing of other home expenses, including food, between the parties with each paying roughly half of such expenses. Each party paid for their personal expenses and hobbies or interests. Each maintained separate bank accounts. Each attended to their own finances. Neither shared their bank statements or other financial information with the other. [9] Ms. Clarke said that though the parties did

not discuss their finances she was aware that Mr. Clarke's money was tight. Though she sometimes paid a disproportionate amount of some expenses, for example on a trip, he never asked her for money. C) Other Contributions [10] Though of limited direct relevance, the parties addressed their respective contributions to the Home and their daily lives. It appears, and I find, that Ms. Clarke did more of the day to day cleaning of the Home and of the maintenance in the garden. Mr. Clarke, would, however, undertake major renovation projects. He rebuilt the kitchen and bathroom. He built a shed and various retaining walls in the garden, though Ms. Clarke also assisted with these projects. The parties generally shared the cost of such projects. [11] My strong sense was that, prior to the breakdown of the marriage, the parties lived relatively separate lives for some years. They pursued their own interests. They made their own meals. They had relatively limited communication. The Details of the Parties' Finances A) The Former Matrimonial Home [12] The major asset of the parties, the Home, has already been dealt with pursuant to the order of Mr. Justice Saunders. The value of that asset was divided equally. Ms. Clarke purchased Mr. Clarke's interest in the Home and Mr. Clarke received $384,000, with $100,000 of that sum initially being placed in trust. B) Ms. Clarke's Financial

Circumstances [13] Ms. Clarke has a master's degree in education. She would normally earn a salary, for Spousal Support Advisory Guidelines purposes, of approximately $82,000 a year. An assessment of her actual income for the current year is complicated by the present teachers' strike. Her salary for this year, for Guideline purposes, will not exceed approximately $78,000. It may, in fact, be less if the current strike is not resolved before September of this year. [14] To acquire Mr. Clarke's interest in the Home Ms. Clarke took on significant debt. She also increased that debt to build a suite in the basement with the object of having a place where her mother, who is elderly and not well, might stay in the future. At present, however, she receives $950 per month in rent from a friend who is staying in the suite. [15] Ms. Clarke has a mortgage of approximately $440,000. She has further debt of approximately $24,000. That debt was incurred largely as a result of the present litigation. [16] Ms. Clarke's other assets include her teacher's pension. She will receive that pension, on an unreduced basis, starting in November 2015 or some 15 months from now. It is common ground that it has always been Ms. Clarke's intention to retire as soon as she could do so with a full pension. When Ms. Clarke retires she will receive $3,646 monthly and a further amount of $1,041 monthly for a

period of ten years, as a bridging amount until she is eligible for a Canada Pension Plan ("CPP") retirement pension. Thus, commencing on November 1, 2015, she will receive a total amount of $4,687 monthly. [17] Ms. Clarke also has further RRSPs in the amount of approximately $55,000 and approximately $7,000 in her bank accounts. She has a 16-year-old car that is of nominal value. C) Mr. Clarke's Financial Circumstances [18] Mr. Clarke received $384,000 for his interest in the Home. Of the $100,000 that was placed in trust, approximately $62,000 was used to pay off tax debts that Mr. Clarke had accumulated over the years (the "Tax Debt"). Apparently $37,000 remained in trust. Mr. Clarke had also accumulated credit card debt of approximately $30,000 over the years (the "Credit Card Debt") that he has also since paid off. [19] Mr. Clarke receives royalties from an oil and gas lease that relates to an oil field that is situated in Manitoba and that is located on property that was homesteaded by his grandfather. He has received these royalties for decades. The precise amount of these royalties varies from year to year depending on the price of oil and the exchange rate that exists between the Canadian and U.S. dollar at the time. These royalties would also obviously depend on the ongoing level of productivity of the oil well. Mr. Clarke says that that productivity has decreased

over the years, though there was no direct evidence before me that allowed me to test or assess that assertion. Over the last seven years Mr. Clarke has received the following royalty payments: 2008 $ 34,159 2009 $ 24,446 2010 (not available) 2011 $ 41,600 2012 $ 37,903 2013 $ 35,896 2014 $ 12,434 to April 2014 (extrapolated to one year -$37,300). [20] Thus over this period of time Mr. Clarke has received, on average, $35,210 annually, or $2,935 monthly, from these royalties. Mr. Clarke also receives $1,000 monthly by way of his Old Age Pension and his CPP benefits. He also has a Life Income Fund that has a value of $24,400 and that provides him with $1,500 annually or approximately $125 monthly. He thus has an average annual income of approximately $49,000 or a monthly income that is slightly more than $4,000. [21] Mr. Clarke owns a 1938 Ford Roadster that he built during the marriage and that the parties agree has an approximate value of $35,000. He also owns an old Bronco that is of nominal value. Mr. Clarke disposed of a Ford Falcon vehicle to his son, having a value of approximately $11,000, shortly after the parties separated. He also disposed of RRSPs in 2009 and 2011 that had values of $27,343.42 and $10,305.66 ($8,244 net of tax) respectively. D) Mr. Clarke's Work History and Health [22] Mr. Clarke has a grade nine education, though he returned to Douglas College at

age 40 to undertake further schooling. He has also taken some 19 different night school classes and he has his private pilot's licence. [23] Mr. Clarke also has a varied employment history. Though he traced his work history in some detail there is no need for me to repeat that detail. He has extensive home renovation experience. He has extensive experience working with cars. He has worked as an auto mechanic and at an auto body shop. He had his own business restoring vintage automobiles. He has worked at gas stations and in logging. He was with the RCMP for five years. He worked with ICBC as an estimator and as an inspector. He worked for the Department of Transport as a mechanic. He has been the manager of numerous other businesses. Sometimes he left his employment, sometimes he was fired. [24] He last held employment in 2006 when he was approximately 58 years old. Since that time he has lived off of the sources of income that I have described. When he left the workforce in 2006 Ms. Clarke was not concerned. She said that she too expected to retire when she was 55 and consequently she did not consider Mr. Clarke's decision unreasonable. [25] At the outset of the trial it appeared as though Mr. Clarke would be seeking long-term spousal support and so the issue of Mr. Clarke's health was important and a significant focus of the evidence. Ultimately, Mr. Clarke only sought

spousal support until Ms. Clarke retires late next year. Nevertheless, I consider it prudent to address the matter of Mr. Clarke's ability to work. [26] Mr. Clarke asserts that he suffers from a wide range of physical and mental disabilities. He said that he had problems with his neck, back and knees. He said he has some compressed discs in his back and he had knee surgery some years ago. He has some hearing loss. He says he suffers from sleep apnea. He says that he has come to learn that he has attention deficit disorder. He says he has suffered from depression. He has worked in autobody shops, at different times, for many years and he says that the solvents associated with paint cause him almost immediate headaches that can be quite severe. Even when not working with solvents he says he often has headaches. [27] Mr. Clarke led virtually no medical evidence to support any such difficulties or disabilities. Though he said he took various prescription medications in the past and continues to do so at present there was no record before me to establish that this was so. Furthermore, Ms. Clarke, through her work, has medical, dental and extended health benefits and Mr. Clarke was covered under her plan. Over the years she submitted some receipts for prescriptions for him but she said, for example, that she never submitted any receipts for antidepressants nor was she told by Mr.

Clarke that he was taking antidepressants. Mr. Clarke accepted that this was so. He further accepted that he did not discuss most of these conditions or difficulties with Ms. Clarke while they were together. She, in turn, said that she considered Mr. Clarke to be in good health and was unaware of him having any substantial health concerns. [28] Mr. Clarke's claims of physical difficulties of the sort that would limit his ability to work are diminished by several other factors. [29] He is an unusually good and fit athlete. As recently as 2011, at the age of 63, he completed a full Ironman competition in Penticton, British Columbia. This is a significant physical achievement requiring that a person successively swim 2.4 miles, cycle more than 110 miles and run a full marathon. He also completed three shorter triathlons in 2009 and 2010 in Squamish, British Columbia, in Kelowna, British Columbia and in Idaho, U.S.A. In 2012 he was a member on a team that participated in a race called the Ski to Sea that runs from Mount Baker to the coast of Washington State. The race consists of various stages involving various activities, and Mr. Clarke was responsible for the kayaking stage. [30] Ms. Clarke gave evidence about Mr. Clarke's swimming, cycling, running, going to the gym and participating in yoga classes. Various neighbors who testified similarly saw Mr. Clarke exercising regularly

or were told by him that he did so. None were aware that Mr. Clarke was suffering from a physical difficulty of any sort. [31] Mr. Clarke has had a lifelong interest in vintage automobiles. He is apparently very talented and has either built or rebuilt entire cars doing all of the necessary engine and body work. Ms. Clarke said that Mr. Clarke often worked in the garage for extended periods of time. He would sometimes work past midnight. Two neighbors, Ms. Mueller-Buschhausen and Mr. Rattray, also testified that Mr. Clarke regularly worked long days, sometimes well past 10 pm, in the garage that was to the rear of the Home and that had been set up so that he could pursue this interest. That garage had a full shop, a compressor, a paint booth and sanding equipment. It was described as quite an operation. [32] I accept the evidence I heard from each of Ms. Clarke, Ms. Mueller-Buschhausen and Mr. Rattray and find that Mr. Clarke regularly worked long days on his cars, and he did so without any apparent physical difficulty. [33] I do not consider that I need to decide that Mr. Clarke has not been forthright about the state of his health. He may well have had some physical injuries in the past. The medical records indicate that he has had knee surgery. At age 66 it would not be surprising if he had some periodic aches and pains. I also accept that he may have, after many years of

working with solvents, some particular sensitivity to such materials. [34] I do not accept, however, that such matters are difficulties that prevent him from pursuing any and all forms of employment, if only on a part-time basis. He is extraordinarily fit by any standard, and even more so for a man of his age. He is also a bright, presentable and well-spoken individual with a host of specialized skills. Division of Assets i) The Legal Framework a) Governing Law [35] In this action, the division of property and responsibility for family debt is governed by Part 5 of the Family Relations Act, R.S.B.C. 1996, c. 128 (the "FRA") as this action for property division was commenced before the Family Law Act, S.B.C. 2011, c. 25 (the "FLA") came into force: see FLA, s. 252(2). [36] The rules for division of the Claimant's pension are governed by Part 6 of the FLA: see FLA, s. 253. b) Property Division Under Part 5 of the FRA [37] Section 56 of the FRA provides that each spouse is entitled to an undivided half interest in each family asset upon the occurrence of a triggering event. In this case, the triggering event was the s. 57 declaration pronounced by Mr. Justice Saunders on December 5, 2012. [38] The relevant portions of s. 58 of the FRA provide: 58 (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. (3) Without restricting subsection (2), the definition of family asset includes the following: (c) money of a spouse in an account with a savings institution if that account is ordinarily used for a family purpose; (d) a right of a spouse under an annuity or a pension, home ownership or retirement savings plan; [39] Under s. 60, the onus is on the spouse opposing a claim under s. 56 to prove that the property in question was not ordinarily used for a family purpose. [40] Section 65(1) allows a court to unequally divide family assets if the court finds that equal division would be unfair having regard to the considerations that are identified in that provision. [41] Section 66 allows the court to determine any matter respecting the ownership, right of possession or division of property under Part 5, including the vesting of property under s. 65, or under Part 6 (division of pension entitlement) and the court may make any orders that are necessary, reasonable or ancillary to give effect to such determinations. In particular, the Court can "declare the ownership of or right of possession to property" (s. 66(2)(a)); "order that, on a division of property, title to a specified property granted to a spouse be transferred to, or held in trust for, or vested in the spouse either absolutely, for life or for a term of years" (s. 66(2)(b)); and/or "order a spouse to pay

compensation to the other spouse if property has been disposed of, or for the purpose of adjusting the division" (s. 66(2)(c)). ii) The Matters on which the Parties Agree [42] The parties agree on a number of issues. The parties agree that the 1938 Ford that Mr. Clarke built is a family asset. That vehicle is worth $35,000. They also agreed each of their own vehicles is a family asset and that the respective value of those cars is similar and very modest. [43] Ms. Clarke accepts that a sum of approximately $3,780, which was in the bank account that the parties use jointly as of February 27, 2012, is a family asset. [44] Ms. Clarke accepts that the approximately $55,000 that she has in RRSPs is a family asset. Mr. Clarke disposed of an RRSP in 2009, well before the parties separated, and Ms. Clarke accepts that she has no claim over that asset. [45] Mr. Clarke's Life Income Fund is in the nature of an annuity and is, by definition, a family asset; s. 58(3)(d) of the FRA, see also Fisher v. Fisher, 2009 BCCA 567 at para.

55. I did not understand Mr. Clarke to dispute this issue. [46] Ms. Clarke accepts that her teacher's pension is a family asset and that Mr. Clarke is entitled to a one-half interest in that portion of her pension that accrued during the time that the parties cohabited or were married. More precisely, she accepts this result if Mr. Clarke's royalties are also considered a family asset. If they are not, she would seek to have her pension reapportioned in her favor. [47] The calculation that arises under s. 17 of the Division of Pensions Regulation, B.C. Reg. 348/2012, to calculate a proportionate share of pension benefits is 0.5 x (years of pensionable service during relationship ÷ total pensionable service) [48] The Claimant started contributing to her pension in September 1981. Through June 2014, she has 32 years and 8 months (or 392 months) of pensionable service. She will qualify for an unreduced pension on November 1, 2015. At that time, she will have 408 months of pensionable service. The relevant period of pensionable service during the relationship runs from November 1997 to December 5, 2012 (the triggering event) or 182 months. Applying the foregoing formula, Mr. Clarke's proportionate share of Ms. Clarke's pension is 0.5(182/408) = 0.22 or 22%. [49] This 22% portion of Ms. Clarke's pension would, starting on November 1, 2015, provide Mr. Clarke with $1,031.14 monthly

for the next decade. This figure represents the sum of $802.12 (22% of $3,646, Ms. Clarke's basic pension) and $229.02 (22% of $1,041, the bridging amount that Ms. Clarke receives until she is 65 years old). [50] The Credit Card Debt, incurred by Mr. Clarke, was ultimately about $30,000. The parties agree that approximately $9,000 of that amount related to expenses associated with the 1938 Ford. The parties also agree that this $9,000 portion of the total Credit Card Debt should be divided equally. Ms. Clarke would thus be responsible for $4,500. Mr. Clarke does not seek any further contribution from Ms. Clarke for the Credit Card Debt. iii) The Matters on which the Parties Do Not Agree a) Funds Held by Ms. Clarke [51] Ms. Clarke has a GIC worth $2,014.51 and a further $536.88 in a Tax Free Savings Account, both of which she acquired with her own funds many years ago and these funds have effectively sat dormant throughout the parties' relationship. No portion of these monies has ever been used for family purposes. Nevertheless Mr. Clarke asserts that these monies are a family asset. I do not consider that this is so. The determination of whether an asset has been used for a family purpose "cannot rest on an assumption but must be based on evidence" (Haring v. Haring, 2011 BCCA 65 at paras. 35; see also paras. 33-36). I consider that Ms. Clarke has discharged her burden of

proving that these funds were not ordinarily used for a family purpose. As such they are not family assets and are not subject to equal division under s. 56 of the FRA. b) The Royalties [52] Mr. Clarke argues that the royalties he receives are not a family asset, largely because he did not place the royalty payments directly into the joint account that was shared by the parties. I do not consider that the account where Mr. Clarke first deposited the royalty payments is particularly significant. Instead, the central question is whether the funds from the royalty stream were used for family purposes. The onus of establishing that these royalties are not a family asset rests with Mr. Clarke. [53] In this case it is manifest that the royalty monies received by Mr. Clarke were used to pay for his share of the expenses associated with the Home and for his share of the parties' other household and living expenses. His use of these royalties for family purposes was not occasional or incidental. Instead the royalties were the customary means by which he contributed financially to his share of the parties' expenses. Indeed, as a practical matter, for many years, and at least since 2006 when Mr. Clarke stopped working, Mr. Clarke had limited other sources of any substance that could have been used to pay for his share of the family expenses. Mr. Clarke received the royalties throughout

the period that the parties cohabited and were married; they were his most consistent source of revenue. [54] The royalties generate income. The fact that only the income of an asset, rather than the capital asset itself, is used for a family purpose is not determinative of whether the asset is a family asset. Thus, in Evetts v. Evetts, [1996] B.C.J. No. 2614, 1996 CanLII 2712, (C.A.) the court said: [23] I think it would be unwise to try to establish any rules for the determination of whether a capital asset will be considered to be a family asset. However one or two guidelines are readily revealed from the cases. The fact that income from a capital asset is used occasionally for a family purpose does not of itself make the capital asset a family asset (Stuart v. Stuart). The fact that capital from the asset is used from time to time, when required, for a family purpose may be an indication that the asset is a family asset (Brainerd v. Brainerd). But the distinction between income being used for a family purpose and capital being used for a family purpose is not, in itself, determinative (Starko v. Starko). So the fact that only income is used for family purposes does not necessarily mean that the capital asset itself is not used for a family purpose. The use of the asset to provide financial security and protection against erosion of income or other family misadventure in the

future may constitute a present ordinary use for a family purpose (Tezcan v. Tezcan; Folk v. Folk). The fact that the words "ordinarily used...for a family purpose" are the governing words in the statute means that the use pattern must be examined in each case to determine whether, in the ordinary course, the present use commitment to meet a present or future need includes a use for a family purpose. Ordinary use for a family purpose is not inconsistent with ordinary use for other purposes. [55] I should also observe that in oral reasons delivered by Skipp J. following Mr. Clarke's first divorce proceeding (October 25, 1995, Vancouver Registry D091120 (B.C.S.C.)), Skipp J. concluded, "It is clear from the evidence that the proceeds from these royalties were applied to family purposes as they were received during the term of the marriage. There is no question but that the royalties are a family asset". Thereafter, a portion of the royalties were provided to Mr. Clarke's first wife who has received them since that time. [56] Mr. Clarke also sought a possible reapportionment of the royalties in his favor. Section 56 of the FRA presumptively contemplates an equal division of assets. The criteria in s. 65 allow a court to deviate from an equal division if that result would be unfair. This assessment has been explained many times. In S.B.M. v. N.M., 2003 BCCA 300, the court

said: [23] The wife argues that the latter two remarks are simply the flip side of the test as it appears in the opening words of s. 65(1), and as recited by the trial judge at the beginning of paragraph 23 of his reasons. I do not agree. The question is not whether an unequal division would be fair; that is not the obverse of the test in s. 65(1). The Legislature created a presumption of equality -- a presumption that can only be displaced by a demonstration that an equal division would be unfair. So the issue of fairness is not at large, allowing a judge to pick the outcome that he prefers from among various alternative dispositions, all of which may be arguably fair. He must decide, in accordance with the language of s. 65(1), that an equal division would be unfair before he considers apportionment. Otherwise, although an equal division would be fair, a reapportionment could be ordered on the basis that it is more fair, and that, in my opinion, is not what the statute intends. [57] The onus of proof in seeking a reapportionment again lies with Mr. Clarke. [58] This was a ten year marriage. The parties have been separated for slightly more than two years. Though Mr. Clarke owned or received the royalties for decades, this consideration is attenuated by the length of the parties' marriage. Furthermore, though Mr. Clarke originally inherited the royalties, or at least a portion

of them, he subsequently sold his interest to his sister in the mid-1990s and thereafter reacquired that interest. The royalties were then neither an inheritance nor a gift. [59] The needs of the parties under s. 65(1)(e) of the FRA are to be determined by their standard of living prior to separation as well as by their post-separation needs. The issue is not one of equality of income but rather the needs of a spouse to become or remain economically independent and self-sufficient; Andersson v. Andersson (1992), 69 B.C.L.R. (2d) 204, 41 R.F.L. (3d) 241 (C.A.) at paras. 59-61, Lodge v. Lodge (1993), 79 B.C.L.R. (2d) 360, 48 R.F.L. (3d) 365 (C.A.) paras. 19 and 23. [60] This is not a case where Mr. Clarke can be said to have sacrificed his self-sufficiency for Ms. Clarke's interest. Furthermore, the parties divided the proceeds from their most significant asset, the Home, equally. Though Ms. Clarke's present income significantly exceeds Mr. Clarke's income, this is only until Ms. Clarke retires, or for a further 15 months or so. That short-term disparity can better be dealt with when addressing Mr. Clarke's claim for spousal support. After November 2015 the parties' respective incomes will be very similar and, more importantly, their respective abilities to live independently and self-sufficiently will also be similar. [61] Having regard to the foregoing circumstances and

conclusions I do not consider that Mr. Clarke has satisfied the onus that lies with him to establish that an equal division of the royalties would be unfair. [62] The more difficult question is whether each of Ms. Clarke's pension and Mr. Clarke's royalties should be divided so that each party receives an interest in each asset. Ms. Clarke suggested, instead, that she should be entitled to retain the whole of her pension and that Mr. Clarke should retain his royalties. Though I asked several times, Mr. Clarke did not express a firm position on what his preference was and he vacillated on the issue. At one point he suggested that he get a 22% interest in Ms. Clarke's pension and that she receive 22% of his royalties. At another point, near the conclusion of his submissions, Mr. Clarke said that he preferred to keep his royalties and to have Ms. Clarke keep her pension. [63] The primary concern militating against each party retaining their respective sources of future income is the uncertainty that is attached to the royalties in the future. Mr. Clarke asserts that the oil wells from which the royalties are generated are not likely to produce indefinitely. I accept that this is likely so. Having said that, the wells have been producing since the 1950s. At the time of Mr. Clarke's earlier matrimonial dispute in 1995, there was some discussion in the reasons of Skipp J. regarding

the wells and their anticipated lifespan. Aspects of that issue were addressed by way of expert evidence. That evidence generated certain calculations premised on the wells having a further life expectancy of ten years, without stating that that was, in fact, the anticipated lifespan of the wells. [64] In this case I have no such expert evidence. It has now been, however, 20 years since that earlier evidence was given. Furthermore, there has been no apparent diminution in the production of the wells, or in the royalties that Mr. Clarke has received, over the last seven years based on the royalty information that I was given and that I have referred to. [65] In addition, a division of each of Ms. Clarke's teaching pension and Mr. Clarke's royalties will actually have significant immediate and ongoing adverse financial consequences for Mr. Clarke. [66] First, the division of the royalties would take place as of the triggering date - in this case December 5, 2012 when Mr. Justice Saunders made a s. 57 declaration. The annual returns over a seven year period that I listed earlier, at paragraph 19, generated an average annual and monthly income of $35,219 and $2,935 respectively and thus would require a payment to Ms. Clarke for the past 19 months of some $27,882.50. Mr. Clarke will also not share in Ms. Clarke's pension until November 2015 or for a further 15 months. Her receipt,

and, in a sense, Mr. Clarke's losses from the royalties over this further 15 month period would be $22,012.50. These amounts, arising from a division of the royalties up to November 2015, total almost exactly $50,000. [67] Furthermore, the revenue stream from the division of the pension and royalties do not, on a monthly basis, work in Mr. Clarke's favor. Simply put, the amount that Mr. Clarke would receive on a monthly basis from Ms. Clarke's pension, including the bridging amount, is $1,031.14. In 11 years, when Ms. Clarke turns 65, the bridging amount would no longer be paid and Mr. Clarke would only receive $802 per month. [68] Conversely, based on the average monthly royalty figures I have been using, Ms. Clarke would receive $1,468 monthly from her share of the royalties. I recognize that though the division of assets and spousal support are distinct issues, the former having to be addressed first, I have considered whether these monthly disparities could be addressed through an ongoing order for spousal support to Mr. Clarke. This, however, would, in turn, give rise to further difficulties with double dipping and the issues that are raised or addressed in Boston v. Boston, 2001 SCC 43. [69] Ultimately, I consider that the risks associated with the potential drop in Mr. Clarke's royalty stream at some point in the future are offset by the immediate and ongoing benefits

that Mr. Clarke receives by holding onto those royalty payments in full; the offsetting security that would be provided by his receiving an interest in Ms. Clarke's pension would come at a very high cost. Even if his royalty payments dropped by more than 50% over the next decade, at which point Mr. Clarke would be 76, he would still be considerably further ahead by retaining his royalty stream. [70] Accordingly, I consider that an equal division of Mr. Clarke's royalties would be unfair having regard to the above practical concerns and s. 65(1)(f). Therefore each of Ms. Clarke and Mr. Clarke are to retain the whole of their pension and royalties respectively. c) Tax Debt [71] The respondent argues that a portion of the Tax Debt is family debt. That debt was $29,420.49 at April 2, 2012. The Respondent subsequently filed his 2009 and 2010 tax returns in 2012, after the parties separated. By October 2012, his tax due after those returns were assessed was $50,115. This amount included the following interest and penalties: (a) 2009 tax year: $1,093.72 interest, $192.36 instalment interest, $1,206.24 penalties; (b) 2010 tax year: $713.93 interest, $1,371.10 penalties. Total interest and penalties were $4,577.35. When the Tax Debt was paid out in July 2013, the amount required to discharge that debt was slightly more than $62,000. [72] The starting point in determining whether the Tax

Debt should be shared is the Court of Appeal's decision in Mallen v. Mallen, 1992 CanLII 4034 (B.C.C.A.), cited by Holmes J. in Hicks v. Hicks, [1996] B.C.J. No. 2688, 1996 CanLII 2420 (S.C.), where he said: [45] I find it appropriate to apply the test as stated by Lambert J.A. in Mallen v. Mallen (1992), 40 R.F.L. (3d) 114 (B.C.C.A.) at p. 117: The proper focus for the examination of a debt should be a focus on the nature and purpose of the borrowing and on the expenditure of the borrowed funds. If the funds were used to acquire a family asset, to maintain a family asset, to discharge a family burden, or to maintain the family members, then it is likely that equality and fairness will require an equal sharing of the debt or liability and its adjustment in the division of the assets in such a way as to carry out the principles of equality and fairness. If the funds were used entirely for the personal purposes of the spouse who borrowed them, it is likely that equality and fairness will require that spouse to bear the whole burden of the debt after the triggering event. Other relevant factors in considering debts of the spouses were referred to by Madam Justice Huddart in Moore v. Moore, [1988] B.C.J. No. 740 (May 16, 1988), Docs. Vancouver A871838 and D63345 (B.C.S.C.), [1988] B.C.W.L.D. 2006, [1988] W.D.F.L.

1316. But, of course, the debt or other liability may not be the only factor affecting equality and fairness. Each debt or liability must be examined in relation to all the other factors mentioned in s.51. [73] In Hicks, the court found that the wife played no part in encouraging or supporting the husband in not paying his taxes. She was not aware of any tax arrears owing until close to the date of separation. Instead, the court found that the husband likely intentionally deceived her, originally as to the fact of the arrears and later as to the amount of the debt. The court considered that it was not appropriate to require the wife to share in the penalties and interest he incurred. [74] The Court in Hicks ultimately found that while the husband diverted some of his income to support an extra-marital affair, most but certainly not all, of the husband's earnings were used and enjoyed by the family: [48] I conclude most, but certainly not all, of Mr. Hicks' earnings were used and enjoyed by the family. It is fair a contribution [sic] to the ordinary tax liability representing that income be taken into account now as family debt. At best on the evidence that must be an assessment. I will allow as a family debt $35,000 of the tax debt paid. [49] Mr. Hicks has totally discharged the tax liability. The sum of $17,500, being one-half of the assessed $35,000, will be taken into

account in considering the compensation order to adjust asset division and allocation between the parties. Accordingly, the court held that $35,000 out of the husband's total $72,000 tax debt was a family debt; see also Moore v. Moore, 2012 BCSC 987 at paras. 85-93 [75] I am satisfied that in this case Ms. Clarke had no idea that Mr. Clarke was not paying his taxes. The parties, as I have said, communicated little and still less in relation to financial matters. Furthermore, Ms. Clarke is a meticulous person and a careful money manager. I have little doubt that if she had been aware of the Tax Debt she would have ensured the situation was addressed. She would not have allowed a lien for tax arrears to be placed on the Home. [76] There is evidence that Mr. Clarke chose to spend relatively significant sums on himself - for athletic activities, hobbies, trips and leisure. This evidence is in the form of admissions that were made by Mr. Clarke. These admissions pertain, however, to the Credit Card Debt. [77] Though there is no detailed evidence before me of Mr. Clarke spending specific sums for family purposes that gave rise to the Tax Debt, I am satisfied that to some degree this must have been so. It is unlikely in the extreme that Mr. Clarke would have used his royalties for family purposes but that he would have only spent additional monies solely on himself. His remaining

income after paying his contribution to the mortgage and utilities and his taxes was quite modest. I am satisfied that he would have spent still further monies on the Home, other joint living expenses and some joint activities and that some of those funds underlay what gave rise to the Tax Debt. [78] Mr. Clarke proposed that Ms. Clarke be responsible, in a sense, for $10,000 of the Tax Debt. I consider that proposal fair and reasonable, as it fixes only 40% of the principal of the Tax Debt as relating to family expenses or family purposes. Those portions of the Tax Debt that represent fines and penalties are to be Mr. Clarke's alone. d) The Ford Falcoln [79] In 2012 Mr. Clarke gifted an older Ford Falcon, that was worth approximately $11,000 and on which he had done a considerable amount of work, to his son. There is no dispute about whether this car was a family asset. Mr. Clarke says, however, that he discussed the matter with Ms. Clarke and that she agreed that he could give the vehicle to his son. Ms. Clarke disputes this and says, instead, that this understanding was contingent on the parties also agreeing on how to deal with Ms. Clarke's pension and Mr. Clarke's royalties. Though I believe that the parties likely misunderstood each other, I accept Ms. Clarke's evidence and find that there was no agreement that Mr. Clarke could give the Falcon to his son. Likely in

recognition of the fact that the parties may have misunderstood each other, Ms. Clarke was content to have two thirds of this asset reapportioned to Mr. Clarke, and to receive one-third of its value, or $3,666.00. e) Mr. Clarke's RRSP [80] In 2011, before the parties separated, Mr. Clarke disposed of an RRSP and received $8,244 net of taxes. Ms. Clarke seeks a compensation order that would provide her with one-half of that sum. Though the relevant date for determining family assets and for deciding whether equal division is unfair is the date of the triggering event, here December 5, 2012, the court nevertheless has the ability to order compensation where potential assets have been disposed of under s. 66 of the FRA. [81] In Newson v. Newson, 27 D.L.R. (4th) 738, 1986 CanLII 166 (B.C.C.A.), the court, at pp. 751-752, described the considerations that are relevant to such compensation orders. Importantly, at p. 751 the court stated, "Compensation orders are not made in respect of every disposal or expenditure. There must be proof of "unfairness" having regard to the factors enumerated in s. 51 of the Act". See also Parminter v. Parminter, 2011 BCCA 347. [82] In the present circumstances I do not consider that Mr. Clarke's disposal of his RRSP gave rise to unfairness having regard to the factors in s. 65 of the FRA. The reality is that Mr. Clarke's economic situation was

deteriorating. Though he continued to expend monies on his hobbies, he also continued to contribute to the Home and other family expenses. To do so he incurred some tax and some credit card debt. He disposed of an RRSP in 2009. [83] The admissions that were filed indicated that Mr. Clarke also made withdrawals from an RRSP in 2010 and from his RRIF's in each of 2009, 2010 and 2011. The RRSP that he cashed in 2011 went into his bank account and assisted in supporting, again, both his personal interests and the expenses of the parties. It would have also been applied to those portions of the monthly credit card debt that he was servicing. The RRSP was not secreted or disposed of with a view to defeating Ms. Clarke's interests. I do not consider that a compensation order, in the circumstances, would be appropriate. f) Canada Pension Plan [84] The issue of the parties' respective CPP retirement pensions arose in passing in Mr. Clarke's closing submissions. There was no evidence of the parties' respective contributions during their period of cohabitation or otherwise. I have no sense of what financial result would flow from the equalization of these benefits. [85] Counsel for Ms. Clarke suggested, at the 11th hour, that a component of Ms. Clarke's willingness to have Mr. Clarke keep his royalties while she kept her teacher's pension, was that Mr. Clarke would also forego any

equalization of their respective CPP benefits. I did not understand that to be so nor do I understand it to be consistent with the written submissions that were filed on behalf of Ms. Clarke. [86] The parties agreed that the CPP permits equalization at source of the pension credits which both spouses acquired during their relationship assuming certain requirements are met. Pension entitlement earned while the parties cohabited are split by the plan administrator so that each spouse is entitled to an equal amount of unadjusted pensionable earnings for the period of their cohabitation. This is the result that I consider should ensue in this case, and I so order. g) The Practical Result of the Foregoing Conclusions [87] The consequence of the foregoing individual conclusions requires that Ms. Clarke pay $10,655.33 to Mr. Clarke to equalize the division of the parties' assets. This calculation is based on the difference between the sum total of what each of Ms. Clarke and Mr. Clarke owes to the other. Specifically, Ms. Clarke owes Mr. Clarke $44,012.33. That amount is the sum of: i) $10,000 - her share of the Tax Debt; ii) $4,500 - her share of the Credit Card Debt; iii) $1,890.33 - one-half of the joint bank account as of February 27, 2012; and iv) $27,622 - one-half of Ms. Clarke's RRSP. Mr. Clarke, in turn, owes Ms. Clarke $33,366. This amount is the sum of: i) $17,500 -

one-half of the 1938 Ford Roadster; ii) $12,200 - one-half of the Life Income Fund; and iii) $3,666 - one-third of the Ford Falcon. Spousal Support [88] Mr. Clarke does not seek spousal support after Ms. Clarke retires in November 2015. He does seek ongoing spousal support until that time. [89] The objectives of spousal support that are prescribed in each of s. 161 of the FLA and s. 15.2(6) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), are substantially the same; Lee v. Starinovich, 2013 BCSC 1557 at para.

179. In this case there is no basis for compensatory spousal support. Mr. Clarke did nothing, in real terms, to further Ms. Clarke's professional advancement. The couple had no children. Mr. Clarke's own career and his self-sufficiency were not, in any way, disadvantaged by the marriage. [90] There is, however, a legitimate basis for short-term needs-based support. The parties' respective incomes are significantly different. In saying this, I recognize that Ms. Clarke took on significant debt to buy Mr. Clarke's interest in the Home. Nevertheless she will, subject to the duration of the current teachers' strike, earn approximately $78,000 this year. She will also generate a further $11,400 annually from her suite. [91] I do not consider that the rental income Ms. Clarke receives should be factored into her Guideline income. The issue of whether post-separation increases in income should be taken into account in fixing spousal support has been addressed numerous times. In Judd v. Judd, 2010 BCSC 153 at paras. 21-28, Punnett J. summarized a number of the relevant authorities and the legal principles that flow from them. These cases generally deal with increases in salary. In such cases, the issue is fact-based and turns on whether and to what extent the increase in salary is tied to or founded upon the expertise and seniority established during the marriage (Judd at para.

23). [92] In this case, the revenue from the suite has no relationship to Ms. Clarke's formal employment. It is a source of revenue that she created, post-separation, without any assistance from Mr. Clarke. It is also a result, at least in large part, of her taking on additional debt to construct the suite. Accordingly, I do not consider that it should be factored into Ms. Clarke's Guideline income. Having said this, the revenue from the suite is relevant to Ms. Clarke's financial circumstances and to her ability to manage her debt and other expenses. [93] Mr. Clarke has had some short term expenses that exacerbate his financial need. He received one-half of the value of the Home. Some $75,000 of that sum, even after the results of this judgment apportioning some liability to Ms. Clarke, went to the Tax Debt and the Credit Card Debt. He has moved to the Okanagan, in part because homes are cheaper there. He has not yet, however, purchased a home. He is both renting an apartment and renting storage space for his tools. He has also not yet obtained any form of part-time employment, though this is a function of his not having looked for any employment. [94] I consider that Mr. Clarke's present financial circumstances, his ongoing self-sufficiency and his ability to establish himself independently in economic terms would be materially assisted by his receiving some support in the

short term. The Guideline support that is payable based on the respective incomes of the parties is $519 monthly at the lower end, commencing September 1, 2014. Ms. Clarke is to pay this amount to Mr. Clarke until November 1, 2015. [95] Ms. Clarke was also ordered, as I have said, to pay interim spousal support to Mr. Clarke in the amount of $600 a month. Ms. Clarke made many, but not all, of these payments. Some of this may have been Mr. Clarke's fault in that he did not cash all the cheques sent to him. The evidence of the precise amount Ms. Clarke has paid, by way of interim support, was somewhat confused. That information, particularly with Ms. Clarke's careful record keeping, should be readily available to the parties. Thus, Ms. Clarke is to pay, retroactively, the outstanding amounts of interim spousal support that she was ordered to pay by Saunders J. Summary [96] I have made the following distinct orders: i) Ms. Clarke is to pay Mr. Clarke $10,655.33 to equalize the division of the parties' assets. Each party is to keep those assets that they now possess; ii) Ms. Clarke will keep her teacher's pension free from claim by Mr. Clarke; iii) Mr. Clarke will keep his royalties free from claim by Ms. Clarke; iv) The parties are to undertake an equalization of their Canada Pension Plan benefits; v) Ms. Clarke is to pay Mr. Clarke $519 monthly until October 31, 2015; vi) Ms.

Clarke is to pay Mr. Clarke such amounts of interim support that remain unpaid; vii) The restraining orders against each of the parties shall be vacated. [97] During the trial I vacated the order that required each party to continue to hold certain amounts in trust pending the resolution of this action. [98] I consider that the success of the parties has been divided. Accordingly, I consider that each party should bear their own costs, absent matters of which I am presently unaware, in which case the parties have leave to make further submissions as to costs. "Voith J."