Hill v. Hill

2017 BCSC 2278 Hill v. Hill

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Hill v. Hill, 2017 BCSC 2278 Date: 2017/12/11 Docket: E51456 Registry: New Westminster Between: Linda Gayle Hill Claimant And Michael Dwane Hill Respondent Before: The Honourable Mr. Justice Smith Reasons for Judgment Claimant Acting on Own Behalf: L. Hill Respondent Acting on Own Behalf: M. Hill Place and Date of Hearing: New Westminster, B.C. November 21, 2017 Place and Date of Judgment: New Westminster, B.C. December 11, 2017 [1] The parties were married in July 2002 and separated in April 2010, but continued to work together in a contracting business for approximately six years following separation. [2] During that six-year period, the claimant alleges that the respondent misappropriated business opportunities worth $1.5 million. In a summary trial application, she seeks judgment on that claim, along with her claims for spousal support and sole ownership of the former matrimonial home. She also applies for the respondent to be found in contempt of previous interim orders for spousal support. The Summary Trial application [3] In applying for judgment on summary trial, the claimant seeks to enforce an agreement that she says was entered into at the time of separation. She says that the agreement provided for her to be paid a salary of $5,200 a month from the contracting business in lieu of spousal support and to receive

additional compensation for certain specialized work. She also says the agreement gave her sole ownership of the former matrimonial home while the respondent was to remain liable on the mortgages. The alleged agreement is contained in unsigned documents that the respondent says he never agreed to. [4] The contracting business was carried on by Michael Hill Project Management Inc. ("MHPM"). The respondent owns 90% of the shares in that company and the claimant owns 10%. [5] The claimant owns a separate company, Progressive Coaching and Consulting Services ("PCCS"). She says PCCS provided consulting services to MHPM on any building projects in which there were issues relating to mold or asbestos. She says she is a certified mold inspector and mold remediation contractor, as well as a certified asbestos consultant, and that neither the respondent nor anyone else employed by him has that expertise. [6] There are references in the material to a third company, Michael Hill Windows and Doors, but it is not clear if that company had any separate operations at the relevant times. [7] The claimant says it was agreed that, in addition to her salary from MHPM, she or PCCS would continue to provide and be paid for services relating to mold and asbestos work and that MHPM would do no such work unless she was involved in it. That is the basis of her claim for $1.5 million, which she estimates

to be the value of mold and asbestos work performed by MHPM without her knowledge or participation. [8] The respondent agrees that the claimant was employed for duties that included financial management and bookkeeping, but says she was terminated for cause in early 2016. He denies any agreement to guarantee mold and asbestos work to the claimant and says MHPM was free to retain whatever consultants or subcontractors it wished to. [9] The respondent says MHPM ceased operations earlier this year because it was heavily in debt and losing money. He says he is now an employee of a company owned by his brother. The claimant says that company is carrying on the business formerly operated by MHPM and the respondent has transferred family property to it. [10] The respondent also denies giving up his interest in the former matrimonial home. He wants that property to be sold and the net proceeds divided, saying that he needs his share of the equity to pay debts and avoid bankruptcy. [11] In her notice of family claim, the claimant refers to an agreement "entered into between the parties on May 5, 2010, not executed but substantially complied with and relied upon by both parties". She has produced a nine-page document dated in 2010, with blanks for the day and month. On August 15, 2010, she sent that document to the respondent with an email stating "I want it signed tomorrow." The

respondent clearly did not sign it. [12] In November 2016, the claimant applied before Master Muir for, among other things, interim spousal support: Hill v. Hill, 2016 BCSC 2087. On that application, the claimant relied on an unsigned 33-page "Amended Agreement" dated April 20, 2016. The Master said at paras. 23 and 24: [23] The alleged Amended Agreement, as presented, is clearly not a proper separation agreement, or a proper agreement of any sort. ... [24] I have no hesitation in concluding that this document has been created by the claimant for the purposes of this action and that it is not evidence of any agreement made as between her and the respondent. [13] Master Muir ordered that the respondent pay interim spousal support of $1,138 per month, based on an imputed income of $78,000 per year. [14] Before me, the claimant argued that the respondent has confirmed and acknowledged the Amended Agreement of April 20, 2016. That confirmation is alleged to have come through conduct over six years and through an email exchange dated April 25, 2016. [15] The claimant's email to the respondent referred to agreements of May 5, 2010 and January 8, 2015, which she said absolved her of any responsibility for debts of the respondent or his companies. The respondent replied that they had agreed "a long time ago" that the claimant had no part in his business. [16] That exchange may support

an inference that the parties had some discussion about division of property at or around the time of separation. Their conduct following separation also indicates they made some agreement about continuing to work together, at least for a time. But that is not evidence that the respondent agreed to everything contained in the documents the claimant prepared. [17] Rule 11-3(15)(a) of the Supreme Court Family Rules reads: Judgment (15) On the hearing of a summary trial application, the court may (a) grant judgment in favour of any party, either on an issue or generally, unless (i) the court is unable, on the whole of the evidence before the court on the application, to find the facts necessary to decide the issues of fact or law, or (ii) the court is of the opinion that it would be unjust to decide the issues on the application, [18] Both bases for declining to grant judgment on summary trial are present here. Although the claimant has produced three volumes of material, including multiple lengthy affidavits, I am left with no better evidence than Master Muir had when she said at para. 25: [25] There may well have been some agreement between the parties that governed their relationship since separation, but on the evidence before me, I am unable to conclude what the terms of that agreement, if any, were. [19] The claimant has failed to prove the existence of any agreement that

includes all of the terms of the written documents she relies on. Whether there was an agreement on some issues, the terms of any such agreement, and the inferences, if any, that can be drawn from post-separation conduct are all matters that require findings of credibility. Those findings can only be made on hearing both parties, cross-examination of them and, perhaps, the evidence of other witnesses at trial. They cannot be made on the basis of the affidavit material that has been put forward. [20] It is particularly difficult to give final judgment on a summary trial in a case involving self-represented parties. A summary trial application requires careful preparation of affidavits, based on an understanding of the legal issues raised in the action and knowledge of what evidence is admissible and relevant to those issues. [21] Where both parties are self represented, as in this case, it will often be unjust to give judgment on summary trial unless the court can be satisfied that the parties have a roughly equal understanding of the process and roughly equal ability to put forward the necessary evidence. The claimant has obviously acquired more skill at preparing affidavits than has the respondent, although they both have difficulty distinguishing between evidence and argument. I am not satisfied that the parties have an equal ability to deal with the matter on summary

trial. [22] I also note that although the claimant seeks relief under the Family Law Act, S.B.C. 2011, c. 25 ("FLA"), she actually alleges the agreement was entered into in 2010 ̶ three years before the FLA came into force. That requires consideration of the former Family Relations Act, R.S.B.C. 1996, c. 128 ("FRA") because s. 252 of the FLA reads: 252 (1) This section applies despite the repeal of the former Act and the enactment of Part 5 [Property Division] of this Act. (2) Unless the spouses agree otherwise, (a) a proceeding to enforce, set aside or replace an agreement respecting property division made before the coming into force of this section, or (b) a proceeding respecting property division started under the former Act must be started or continued, as applicable, under the former Act as if the former Act had not been repealed. [23] Under the FRA, the Court could recognize and give effect to an oral separation agreement: Bryan v. Chapman, 2011 BCCA 278, at paras. 16 to 20. However, if the Court finds there was an oral separation agreement, it might still consider the fairness of that agreement under s. 65 of the FRA. [24] If the Court finds there was no agreement, it must consider division of property under the applicable legislation. The property at issue would include the former matrimonial home and the shares in the various companies. That matter of the appropriate

division in the absence of an agreement was not addressed sufficiently on the summary trial application. [25] For all of the above reasons, I find that the matter is not suitable for summary trial and the claimant's application for judgment must be dismissed. I have come to that conclusion with some reluctance because I am not sure how much more assistance these parties will provide the Court at a full trial. However, that is the only procedure in which a fair determination of the issues is possible. The contempt application [26] The claimant seeks orders that the respondent continues to be in contempt of previous spousal support orders made by Master Keighley and Master Muir. [27] On August 11, 2016, the claimant's application for interim spousal support and other relief came before Master Keighley on short notice. The application was adjourned on certain conditions, including: a) The respondent pay $5,000 as spousal support by August 12, 2016; and b) The respondent continue to pay all costs related to the mortgage, utilities, property taxes and insurance for the matrimonial home until further order of the court. [28] There was a further adjournment by consent on the respondent paying a further $1,138. [29] An application was argued before Master Muir on November 3, 2016. As said above, in her Reasons for Judgment dated November 14, 2016, Master Muir ordered that the

respondent pay spousal support of $1,138 a month, beginning as of September 1, 2016. The master also said at paras. 42 and 43: [42] The payment by the respondent of $5,000 as spousal support pursuant to Master Keighley's order and the $1,138 as a condition of the further adjournment of this application are not to be deducted from the interim spousal support ordered herein, but may be argued as a set off to the claimant's entitlement at trial. [43] Given my views as to the employability of the claimant, there will be liberty to apply to set aside or vary this order after May 1, 2017. In my view, that is sufficient time for the claimant to face the reality that her continued employment by Project Management is not in the cards and for her to seek employment elsewhere. [30] The claimant subsequently applied for a finding that the respondent was in contempt of both masters' orders. On June 16, 2017, Justice Gropper found the respondent in contempt of the order of Master Muir and ordered him to pay $11,380 by July 31, 2017 in order to purge his contempt. Gropper J. found that contempt of Master Keighley's order had not been clearly established on the evidence. [31] The respondent filed an appeal from that order on July 14, 2017, but it appears no further steps have been taken before the Court of Appeal. [32] The respondent failed to purge his contempt and on September 26, 2017,

Gropper J. imposed a fine of $2,000 for contempt, but suspended the fine. The formal order that was filed is silent on the terms of that suspension, but a review of the audio recording of the proceedings indicate that Gropper J. intended a suspension until trial, when the matter should be dealt with as a whole. [33] This application was therefore heard less than two months after Gropper J. determined an appropriate penalty for contempt and suspended that penalty until trial. I agree that all outstanding matters should be addressed at trial and do not find it either appropriate or necessary to make further contempt orders. [34] In the interim, the order of Master Muir remains in effect and enforceable by the claimant unless and until there is a further order to vary it or set is aside. The respondent should understand that, in the absence of payment and/or a new order, the amount of arrears will continue to grow and it will be open to the trial judge to set off those arrears against any interest the respondent may have in family property. [35] On this application, the respondent said he wanted to set aside or vary the orders of both Master Keighley and Master Muir, but that issue was not before the Court because there had been no proper notice of such an application. [36] Gropper J. was not satisfied that the evidence established contempt of Master Keighley's order. However, the

claimant now seeks a declaration as to the amount owing under that order, which she says is necessary for enforcement purposes. That order required the respondent to continue paying the mortgage and other expenses related to the matrimonial home until further order of the Court, but did not state an amount. When the matter was before Master Muir, she stated at para. 52: [52] As to the application that the respondent continue paying the mortgage, utilities, taxes and insurance on the matrimonial home, that relief was granted by Master Keighley and contained in his order of August 11, 2016. No application to vary that order is before me and the order sought by the claimant is, therefore, unnecessary. [37] It therefore appears that Master Muir intended the spousal support she ordered to be in addition to the household costs ordered by Master Keighley, at least until that issue could be considered on a proper application to set aside or vary Master Keighley's order. [38] The claimant says the respondent has to date failed to make mortgage, property tax, and other expenses totalling $29,052.81. She has provided documents showing those expenses and the respondent has not disputed those amounts or denied that he has failed to pay them. [39] The respondent's position is simply that he has no money to pay. That is a matter the Court may consider if and when he brings his proposed

application to set aside or vary the order, but for now the order remains in effect and binding upon him. The claimant is therefore entitled to an order that sets out the amount owing. Conclusion [40] In summary, the claimant is entitled to an order declaring that the current amount owed by the respondent pursuant to the order of Master Keighley of August 11, 2016 is $29,052.81. The claimant's applications for judgment on summary trial and for further findings of contempt are dismissed. Costs of this application will be in the cause. "Smith J."