MacLellan v. MacLellan

2011 BCSC 644 MacLellan v. MacLellan IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: MacLellan v. MacLellan, 2011 BCSC 644 Date: 20110517 Docket: E028926 Registry: New Westminster Between: Joseph Anthony MacLellan Claimant And Shirley Beth MacLellan Respondent Before: The Honourable Mr. Justice Kelleher Reasons for Judgment Counsel for the Claimant: D.C. MacDougall Counsel for the Respondent: A.J. Benson Place and Date of Trial: New Westminster, B.C. March 7-10, 2011 Place and Date of Judgment: New Westminster, B.C. May 17, 2011 [1] This is a matrimonial matter. The issue is the division of family assets. [2] Joseph and Shirley MacLellan are 67 and 65 years old, respectively. They began to live together in 1981, were married on December 24, 1985, separated November 1, 2006, and were divorced on November 26, 2010. [3] There are no children of the marriage. Both parties were previously married and divorced, and have children from their first marriage. [4] There is no claim for spousal support. [5] The claimant, Mr. MacLellan, seeks an order for 50% of the family assets, except for some recreational property registered in the claimant's name. He seeks reapportionment of this recreational property. [6] The respondent seeks a substantial reapportionment of family assets in her favour. [7] The parties met in approximately 1978 and began seeing each other in 1980. Both the claimant and the respondent were working for the Township of Langley at the time. Mr. MacLellan continues to be an employee of Langley and works as a truck driver. Ms. MacLellan was a computer operator with Langley, but she left soon after and became an employee of the Delta School Board. She recently retired. [8] In 1981, Mr. MacLellan moved into the townhouse that Ms. MacLellan was renting. At the time, Mr. MacLellan was still paying child support for his children. Ms. MacLellan's daughter, Corinne, lived with the parties off and on until 1983. [9] In 1982, Ms. MacLellan received notice from her landlord that the townhouse was being sold. She decided to buy a home. After inspecting several homes, she made an offer on a property in Langley. Mr. MacLellan visited that property on two occasions before the property was purchased. [10] The purchase of the Langley house was completed on November 30, 1982. The price was $73,000. The respondent assumed an existing mortgage, obtained a provincial government second mortgage and put in funds of her own. Mr. MacLellan was not a party to the mortgage loans and made no contribution to the purchase price. [11] The house is in the respondent's name. The respondent's evidence is that she invited Mr. MacLellan to participate in the investment, but he declined. The claimant testified he did not have the money to put into the house purchase. He further testified that they reached this agreement: he would fix up the house and in turn would be entitled to a one-half share. Ms. MacLellan denies this. [12] A current appraisal indicates that the home is now worth $445,000. [13] The parties were married in 1985. At that time, according to Ms. MacLellan, the claimant asked that he be registered as an owner of the Langley property. She said that she told him that when he contributed an equal share of the money, she would be happy to place him on title. That did not happen. [14] When it comes to financial matters, the claimant and the respondent are a study in contrasts. [15] The claimant is a spender. Despite a long history of steady employment, he is in poor financial shape. Before the parties met, he leased some recreational property near Clinton. He subsequently purchased it from the Crown for $6,300. He spent a lot of money on gas travelling back and forth to that property. He has also spent money buying tools and slowly constructing a log cabin on it. [16] Mr. MacLellan is a consumer of vehicles and owns an ATV, guns, and at least one boat. He testified that he has owned some ten vehicles over the last 30 years. Between 2000 and 2004, he bought four pickup trucks. [17] Mr. MacLellan also has substantial credit card debt, and has been in that condition for several years. He was asked in cross-examination why he had so many credit cards. He answered that he did not know, and that he wished it were otherwise. [18] At the time of separation, he had a $45,000 mortgage in respect of the Clinton property and other debt totalling some $36,000. [19] The claimant testified he investigated bankruptcy at one time, but discovered that he had "too many assets". He admits to overspending and going on trips that he could not afford. [20] Mr. MacLellan takes no interest in financial matters. For example, in 1994, he sold timber from his Clinton property for just over $9,000. He believes he used the money to pay bills. He received an inheritance of $19,000 a few years ago. He has no recollection of how the funds were spent. He thinks he used the funds to pay bills. He obtained a $30,000 mortgage on his Clinton property in September 1996. He believes that the proceeds of the mortgage were to pay off creditors or possibly to buy a truck. He increased the mortgage to $50,000 in 2001. Again, he is not sure where the money went. [21] Ms. MacLellan, on the other hand, is frugal. Although she has earned slightly less than the respondent over the years, her financial situation is relatively secure. This is, in part, because the respondent was careful to keep their financial affairs entirely separate. [22] The only joint account the parties ever had was opened for the purpose of depositing a small amount of money received as a wedding present. Sometime later, the respondent said that he wanted his half. So, they took the money out of the joint account, split it and closed the account. [23] All of their finances are separate. For example, when they went out for dinner, each paid one-half. Also, when they travelled (and they took several trips, to Australia, Arizona and Hawaii on more than one occasion) it was entirely on a 50/50 split. The respondent testified that he could not afford some of these trips, but that did not stop him from going. [24] In 1999, Ms. MacLellan made the final mortgage payment. She testified that she told the claimant of this because she was very happy to have made the final payment. Mr. MacLellan denies being told this. Her recollection is far more likely. There is no reason why the respondent would not tell him this. Furthermore, he took little interest in financial matters and would likely not remember such a conversation. I accept her evidence in this regard. [25] The arrangements between them were to Mr. MacLellan's advantage. When they began to live together, he told her that he did not have much money left after paying child support. He therefore agreed to pay her $250 per month. The financial contribution went up gradually over the years. He paid $250 per month from September 1981 to December 1985; $350 per month until December 1990; $450 per month from January 1991 to December 1995; $500 per month from 1996 through 2000; and $600 per month from January 2001 to May 2006. That payment was the total of Mr. MacLellan's share of the rent, utilities (Shaw Cable, Telus, BC Hydro and later Terasen Gas), and groceries. He also paid long distance charges when he called relatives in Nova Scotia. [26] Although Mr. MacLellan has worked on the Langley property, he never contributed financially to the upkeep of the house. Nor did he contribute to the mortgage, property taxes or house insurance. He said to Ms. MacLellan at one time words to the effect that since the house was hers, the expenses were hers as well. Ms. MacLellan paid the utilities, the property taxes and insurance. [27] Ms. MacLellan had next to no knowledge of the Mr. MacLellan's finances. She knew of his property in Clinton and visited it with him several times early in their relationship, but did not know that he had placed a mortgage on it. [28] In May 2006, the claimant asked the respondent for a $40,000 loan. She asked what this was for, but he would not tell her. She declined his request. In June, he asked for $60,000. Again, he said the reason was "none of her business". When she refused to lend him the money, he stopped making monthly contributions to the household. [29] In October 2006, the relationship came to an end. The respondent learned that he was seeing another woman when she found a letter from the woman. She asked him if he wanted to work on restoring their relationship. He declined. They separated. [30] Mr. MacLellan moved to rental property. Ms. MacLellan has stayed in the home. [31] While the parties cohabitated, there was some sharing of household duties. Ms. MacLellan did the vast majority of the household chores and the cooking. In addition, she did more than her share of mowing the lawn. The initial lawnmower was self-propelled but difficult for her to handle. Mr. MacLellan obtained a new lawn mower that was easy for her to use. [32] Mr. MacLellan did considerable work on the property. He assisted a contractor in repairing the septic field. He put together a 12-foot by 16-foot prefabricated shed, which Ms. MacLellan paid for, to store things that he owned. He also had a room in the basement where he stored tools, and there was room on the property to store his trailer, his ATV, his boat and other items. He carried out a number of other tasks. For example, he repaired appliances, built a fence and removed trees from the property. [33] Ms. MacLellan paid for a number of repairs and improvements to the property. These included roof, gutter and driveway repairs, as well as new carpeting, stairs from the deck, a new septic field, new windows, a new furnace, stone for the front of the house, a new washing machine and refrigerator, new fencing, and so on. She calculates having spent about $37,280 on such matters. Some $10,000 of that amount was spent after the parties separated. [34] Over the years, Ms. MacLellan has been able to accumulate more than $60,000 in RRSPs. Mr. MacLellan indicated to Ms. MacLellan that he was saving as well. However, while he purchased RRSPs from time to time, he later cashed them in. [35] With Mr. MacLellan's income, he could have been in the same or a better financial position than Ms. MacLellan. However, he enjoys spending money, whether he has it or not. The best example of this is a $44,000 truck, which he leased in 2004. At the end of the lease, he purchased it by borrowing $10,000 from a friend (at 10% interest) and financing the rest. [36] In summary, Mr. MacLellan paid a very small amount to live in the Langley home. It left him with plenty of disposable income. If he had not been spending money so freely, he could have had a one-half interest in the property and been free of debt and mortgages. [37] Regarding the Clinton property, when the parties first started seeing each other, Ms. MacLellan travelled there several times. It was their main summer activity for the first three summers. When the respondent saw it for the first time, there was a cement foundation and walls two or three logs high. During her visits, she peeled logs, assisted with the winching of logs into place, and performed a number of tasks to clean up the site. However, after three years she told the claimant that it was just too much for her. With the upkeep of her own property and a fulltime job, she found it too tiring to travel to Clinton every summer weekend. [38] Mr. MacLellan continued to spend most weekends in the summer at the cabin. In addition, he is an avid hunter and used the cabin as headquarters for hunting trips in the early fall and again in the late fall of every year. Legal Framework [39] Sections 56, 65 and 66 of the Family Relations Act, R.S.B.C. 1996, c. 128, are the relevant statutory provisions. [40] Nearly all of the parties' assets are family assets within the meaning of the Act: the Langley property, the Clinton cabin, the parties' RRSPs, any savings and household contents. I agree with the claimant that his gun collection is not a family asset; the respondent had no interest in guns and they were not used for any family purpose. [41] The parties both have municipal pensions. The respondent retired August 31, 2010. However, the claimant is still working, so it is not appropriate to make the usual order dividing the pensions. I refer this issue to the parties for further discussion. If necessary they can return for directions. [42] The household contents should be divided between the parties. If the parties are unable to agree they may return for directions. [43] The central issue is whether there should be a reapportionment of the family home and the Clinton property. [44] Pursuant to s. 56 of the Family Relations Act, each party is presumed to have a half interest in family assets: 56(1) Subject to this Part and Part 6, each spouse is entitled to an interest in each family asset on or after March 31, 1979 when (a) a separation agreement, (b) a declaratory judgment under section 57, (c) an order for dissolution of marriage or judicial separation, or (d) an order declaring the marriage null and void respecting the marriage is first made. (2) The interest under subsection (1) is an undivided half interest in the family asset as a tenant in common. (3) An interest under subsection (1) is subject to (a) an order under this Part or Part 6, or (b) a marriage agreement or a separation agreement. (4) This section applies to a marriage entered into before or after March 31, 1979. [45] A judge may only interfere with equal division where the person seeking a reallocation establishes that equal division would be unfair having regard to the criteria set out in s. 65. See: Murchie v. Murchie (1984), 53 B.C.L.R. 157 (C.A.); M. (S.B.) v. M. (N.), 2003 BCCA 300; Ai v. Zhu, 2010 BCSC 1107. [46] The criteria in s. 65 are: 65 (1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to (a) the duration of the marriage, (b) the duration of the period during which the spouses have lived separate and apart, (c) the date when property was acquired or disposed of, (d) the extent to which property was acquired by one spouse through inheritance or gift, (e) the needs of each spouse to become or remain economically independent and self sufficient, or (f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse, the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court. (2) Additionally or alternatively, the court may order that other property not covered by section 56, Part 6 or the marriage agreement, as the case may be, of one spouse be vested in the other spouse. (3) If the division of a pension under Part 6 would be unfair having regard to the exclusion from division of the portion of a pension earned before the marriage and it is inconvenient to adjust the division by reapportioning entitlement to another asset, the Supreme Court, on application, may divide the excluded portion between the spouse and member into shares fixed by the court. [47] I will now turn to these criteria. (a) Duration of the Marriage [48] Generally speaking, the longer the marriage the more likely there will be an equal division. Here the parties had a relatively long marriage, but for both it was their second marriage. They did not spend their marriage building a "nest egg" together. Rather, throughout this marriage, they kept their finances separate. (b) Period during which spouses have lived separate and apart [49] This is not a significant criterion in this case. (c) Date when the property was acquired or disposed of [50] It is noteworthy that the Clinton property was acquired before the parties were together. (d) Extent to which property was acquired by one spouse through inheritance or gift [51] This does not arise here. (e) Needs of each spouse to become or remain economically independent and self-sufficient. [52] An equal division would assist Mr. MacLellan in attaining a measure of financial benefit to assist with the payment of his debts. (f) Any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse [53] This criterion is the most significant one in this case. [54] Where an asset is acquired through the efforts of one spouse with no significant contribution from the other spouse, this can form the basis for an unequal division: Johnstone v. Johnstone (1981), 26 R.F.L. (2d) 18, 33 B.C.L.R. 368 (S.C.) at 388-389 (as cited to B.C.L.R.). There can be reapportionment where an asset was preserved wholly through the efforts of one spouse, without contribution from the other spouse. For example, in Low v. Low, 2000 BCSC 947, aff'd in part 2001 BCCA 574, assets were reallocated 70% in favour of the wife where she was the primary income earner and took care of the household. The husband's contribution was insignificant and his actions required her to cash in savings. [55] On one hand, the role of a trial judge is not to inquire into the parties' spending habits. In Newson v. Newson (1986), 27 D.L.R. (4th) 738, 3 B.C.L.R. (2d) 1 (C.A.) at 15, the Court of Appeal said: In my opinion, it is not necessary to have regard to the above facts. Sections 51 and 52 do not provide a trial judge with a roving commission to inquire into the spending habits of the spouses during the marriage. Moreover, sections 51 and 52 do not provide a basis for re-apportionment based on reckless, wasteful or improvident expenditures made by either of the spouses during the marriage. If the Legislature had so intended it would have made provision for such re-apportionment in clear and explicit language. ... [56] On the other hand, it is not fair for one party to a marriage to amass debts, not disclose the debts, and then claim an equal division of assets at the end of the marriage. In this way, the present case can be distinguished from Newson. There was no communication between the parties about Mr. MacLellan's financial difficulties. [57] When debts are incurred for the benefit of both spouses, they are family debts. For example, a husband who is in business for himself and does not pay his income tax has still provided the family with use of the income that otherwise would have gone to pay taxes. Here, the claimant has substantial indebtedness because he purchased goods and services for his own use, such as the $44,000 truck. The respondent did not benefit from the increasing debt load. In fact, she had no knowledge of it. It was not until May 2006 that she learned that the claimant had a debt problem. [58] In light of this, it would be manifestly unfair to equally divide the home. It is appropriate that the Langley property be reapportioned 70% in favour of the respondent. The cabin in Clinton, on the other hand, should be reapportioned 70% in favour of the claimant. With that, however, go the debts and mortgages that Mr. MacLellan incurred. [59] The claimant argued that the respondent has lived in the home since 2006 and should pay some amount for occupational rent. I disagree. During the period of separation the respondent maintained the home and invested in improvements to it. Mr. MacLellan will benefit from that. No adjustment need be made. [60] To summarize: (a) There will be an equal division of household effects. (b) There will be a reallocation of the Langley home 70% in favour of the respondent. (c) There will be reallocation of the Clinton property 70% in favour of the claimant. (d) There will be a reallocation of the parties' bank accounts, savings and registered retirement savings plans 100% in favour of the party in whose name they are registered. (e) Superannuation will be shared as the parties agree or will be the subject of a further order. (f) The claimant will retain his gun collection. [61] If the home is sold, the proceeds, net of real estate commission and legal fees, will be approximately $425,000. Mr. MacLellan is entitled to 30% of that. The Clinton property is valued at $90,000. Ms. MacLellan is entitled to 30%, or $27,000. The result is a payment from the respondent to the claimant of 30% of the sale proceeds less $27,000. [62] If the parties cannot agree on costs, costs may be spoken to. "Kelleher J."