Staehli v. Staehli

2015 BCSC 1558 Staehli v. Staehli

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Staehli v. Staehli, 2015 BCSC 1558 Date: 20150901 Docket: E131146 Registry: Vancouver Between: Maria Janina Szablewska, also known as Maria Staehli Claimant And Richard Staehli Respondent Before: The Honourable Madam Justice B.J. Brown Reasons for Judgment Counsel for the claimant: K.W. Wince Counsel for the respondent: L. Barron Place and Dates of Trial: Vancouver, B.C. December 8 - 12, 2014 Place and Date of Judgment: Vancouver, B.C. September 1, 2015 [1]

INTRODUCTION [1] These are family law proceedings. The parties were married March 15, 2008 and separated in March 2013. Ms. Szablewska says that they began to live in a marriage-like relationship in June 2006. Mr. Staehli asserts that the marriage-like relationship did not start until 2008. There are no children of the relationship. [2] The issues for determination are: 1. Duration of the relationship; 2. Determination of family property; 3. Division of property; 4. Spousal support; and 5. Divorce.

BACKGROUND AND CREDIBILITY

THE CLAIMANT [3] Maria Szablewska testified that she was born in Poland on May 9, 1951. She arrived in Canada in 1990 with her husband, daughter, and infant son. Her daughter was born in 1980 and her son in 1988. Her first marriage ended. She moved to Vancouver with the children and started working when her son started school full-time. Her English was limited so she worked as a cleaning lady. In 2000, she was involved in a motor vehicle accident and incurred injuries to her neck and back and could not work for a period of time. In 2004, she had a second motor vehicle accident and her health worsened. [4] She met Richard Staehli in July 2002 through a mutual friend. At that time, her son was 14 and her daughter was 21. Mr. Staehli lived in Pemberton and Ms. Szablewska lived in North Vancouver. She did not want a relationship until her son finished school. Despite this, the relationship progressed quickly. They went to Las Vegas for New Years 2003. In August 2003, they went to Poland together. In 2004, they attended his family reunion near Kelowna. They would see each other regularly, approximately every week. [5] Mr. Staehli suggested that Ms. Szablewska continue with her business until her children were independent. [6] He was considering building a new house on his farm in Pemberton and sought her opinion. [7] In 2005, the parties went together to Hawaii. [8] In June 2006,

they became engaged. He took her on an expensive cruise through the Baltics, Scandinavia, Russia, and Poland. They went for a week to Switzerland to meet his family. At the time of their engagement, Mr. Staehli was living in Pemberton and visiting Ms. Szablewska every weekend. In the summer she would go to Pemberton and help in the garden and put up fruits. She started to become involved in the property at Pemberton. The new house was not yet built and they were living in the old house. Meanwhile, she was also living with her children at her residence on Premier Street in North Vancouver. [9] In February 2007, Mr. Staehli bought an apartment at 1404-1327 Keith Road in North Vancouver (the "North Vancouver Apartment") and he put the property in joint names. The idea was that they would have two residences, one in North Vancouver and one in Pemberton. She painted and changed the tiles in the North Vancouver Apartment. She gave Mr. Staehli $5,000 for a leather sofa. She paid the property taxes all of the years that she lived there. She cleaned and cooked. [10] She received compensation from the motor vehicle accidents in June 2006 of approximately $40,000. Her idea was to use the funds to ensure her children would be independent. Mr. Staehli agreed. In 2009, she gave some of the money to her son and some to Mr. Staehli. Mr. Staehli returned the money she had lent him in 2011 when

he received funds from Cloudworks Energy ("Cloudworks"). [11] They first prepared income taxes together in 2006. Salal Management Corporation was Mr. Staehli's company and $18,000 from that company was shown as income to Ms. Szablewska. In 2003, Mr. Staehli made her the beneficiary of his RRSP held at Investors Group, worth approximately $250,000. [12] The construction started on the new house at 1100 Arn Road in Pemberton ("1100 Arn Road") in 2007. In December 2010, the house was completed and Mr. Staehli and Ms. Szablewska moved in. Between 2008 and 2010, they lived partly in North Vancouver and partly in Pemberton. [13] From 2009 onward, they were mostly in Pemberton and Ms. Szablewska helped with the new house. She painted the new house as well as two older houses, one or both of which were rented out. She also took care of the garden, vegetables and fruits, and the landscaping. She grew enough fruits and vegetables for household consumption to last the entire winter. The garden started in 2005 and grew larger with each successive year. She also helped Mr. Staehli to remove trees, which he had cut down. Ms. Szablewska was also responsible for the housework and the meals. [14] She first heard about the Cloudworks' share options in 2011 when Mr. Staehli was to receive payment. She testified that he was very surprised to hear that he held share options and that they had

value. [15] While she lived in Pemberton, Ms. Szablewska earned some income from babysitting and from cleaning. She estimated that to be about $6,000 annually. [16] She anticipates a Polish pension but that has not yet been concluded. [17] She had health problems before separation. She suffered from high blood pressure. Since separation, her blood pressure has become very high. She has arthritis, which started approximately ten years ago and since separation this has become exacerbated. She also has lower back problems. She has undergone fairly significant dental work and will require further dental work. Her dentist has recommended that she receive implants. [18] In addition, she experiences depression and anxiety. She has been seeing a psychologist every two weeks.

THE RESPONDENT [19] Richard Staehli testified that he is 66 years old. He was born in Zürich, Switzerland and moved to Canada in June 1951. He was employed by provincial and municipal governments for 28 years. He acquired the family farm in Pemberton in 1996, after his parents died. He was married to his first spouse for 30 years. That marriage ended in 2003. He met Ms. Szablewska in 2002 through a mutual friend. At that time, Ms. Szablewska's daughter was 21 or 22 and her son was 14. To his mind, he was not prepared to make a commitment to her while her children were still in the home. [20] Ms. Szablewska's son told him that he would be moving out by the fall of 2007. Mr. Staehli then bought the North Vancouver Apartment. He put Ms. Szablewska on the title, even though he said he was paying for everything. [21] In 2006, they had an engagement lunch in Whistler but he said they were not in a marriage-like relationship at that time. In his view, that would commence when they were living together full-time. [22] She lived in the apartment for two years on her own. She paid for the landline to the condominium. He paid for the utilities and her cell phone. He said he also paid all of the taxes except for a year or two. Mr. Staehli later acknowledged that Ms. Szablewska paid the taxes on the property. [23] Between 2007 and 2010, he would see her every couple of weeks and during the

winter weekly. [24] In December 2010, Ms. Szablewska moved to Pemberton. [25] At this time, Mr. Staehli said he still had business to complete. He would cook breakfast and take care of some work in the house. They lived a very modest lifestyle and did not go to restaurants. [26] When she was living in Pemberton in 2011, they shared chores. She did housework and some weeding. [27] With respect to his share options in Cloudworks, Mr. Staehli did field studies for some 14 projects for the Andrews family, the principals of Cloudworks. He had share options in two of the Andrews' numbered companies. He finished work for Cloudworks in 2007. After that he was involved in developing subdivisions and spec houses. He continued to be socially involved with the Andrews. They built on one of his lots. Nick Andrews, David Andrews' son, started in the business in approximately 2004. Mr. Staehli did not receive share options in Cloudworks before 2010. He did receive share options in Rutherford Creek, which he sold in 2006 for approximately $140,000. [28] In 2010, the Andrews told him that they were reviewing past books. They were planning to sell and were reviewing who they owed options to. In his view, the largest portion of the share options was a gift. [29] He developed a property in Westbank, which he sold for a profit in 2006. [30] He had a line of credit starting in 2003, always between

$350,000 and $400,000. It was paid down numerous times. When he was building the house, he was short of funds. His lawyer, Garth Evans, loaned him $100,000. That was used to finish the building and furnish the house. The loan was repaid from money paid to Mr. Staehli from the profit received from his Cloudworks share options. [31] In total, he received $1.1 million from Cloudworks in 2011. Ms. Szablewska never contributed to his businesses. She loaned Salal Management Corporation some money once, which Mr. Staehli paid back with interest. [32] He plans to sell everything and retire.

FINDINGS ON CREDIBILITY [33] I found Ms. Szablewska's evidence to be more reliable than Mr. Staehli's. In some cases, his evidence was clearly wrong, such as his evidence that he purchased the North Vancouver Apartment when Ms. Szablewska was no longer entitled to subsidized housing on Premier Street and his evidence that he paid the property taxes on the North Vancouver Apartment. In other instances, it was apparent that Mr. Staehli was minimizing Ms. Szablewska's contribution and the amount of time that they spent together. START OF MARRIAGE-LIKE RELATIONSHIP [34] The start of the parties' relationship is significant for calculating the duration of the relationship and the related division of family property as well as for calculations of spousal support. [35] These proceedings are brought pursuant to the Family Law Act, S.B.C. 2011, c. 25 and the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). [36] Section 3(3) of the Family Law Act provides that the relationship between spouses begins on the earlier of the date on which they began to live together in a marriage-like relationship or the date of their marriage. [37] Mr. Staehli argues that the relationship started on the date of their marriage. Ms. Szablewska argues that the relationship started possibly as early as 2003 and certainly by 2006. [38] In J.J.G. v. K.M.A., 2009 BCSC 1056, Madam Justice Dardi reviewed the factors to

consider in determining when a marriage-like relationship begins. [31] The court has recognized the difficulty of examining a relationship after its dissolution in order to determine whether it had the characteristics of a marriage: Ford v. Werden (1996), 27 B.C.L.R. (3d) 169 (C.A.). [32] The starting point for the analysis is the legal test articulated in Gostlin [v. Kergin (1986), 3 B.C.L.R. (2d) 264 (C.A.)] at 268: If each partner had been asked, at any time during the relevant period of more than two years, whether, if their partner were to be suddenly disabled for life, would they consider themselves committed to life-long financial and moral support of that partner, and the answer of both of them would have been 'Yes', then they are living together as husband and wife. If the answer would have been 'No', then they may be living together, but not as husband and wife. Of course, in the particular circumstances of any case, the answer to that question may prove elusive. If that is so, then other, more objective indicators may show the way. Did the couple refer to themselves, when talking to their friends, as husband and wife, or as spouses, or in some equivalent way that recognized a long-term commitment. Did they share the legal rights to their living accommodation? Did they share their property? Did they share their finances and their bank accounts? Did they share their

vacations? In short, did they share their lives? And, perhaps most important of all, did one of them surrender financial independence and become economically dependent on the other, in accordance with a mutual arrangement? [33] The Court of Appeal in Austin v. Goerz, 2007 BCCA 586, clearly articulated that some level of financial dependence is not a necessary component of a "marriage-like" relationship. As the trial judge in Austin observed, such a principle would be untenable in the context of modern society's marriages and relationships. How the parties arrange their financial affairs is but one factor to be considered in the analysis of whether a relationship is "marriage-like". Likewise, shared shelter, sexual and personal behaviour, services, social activities, and social perception of the couple, as described in Molodowich v. Penttinen (1980), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), are factors to be considered. [34] In modern society, however, there is no "checklist of characteristics" that will be found in all marriages or "spousal-equivalent" relationships: Austin. Rather, in undertaking the analysis of what constitutes a marriage-like relationship, the court should take a broad view in order to reflect the diversity of spousal relationships that exist in modern society. [35] The focus of the inquiry is on the parties' intention to live as "husband and wife" or in a

"marriage-like" relationship as "divined" from an objective overview of the facts. The comments of the majority decision in Takacs v. Gallo (1998), 157 D.L.R. (4th) 623 (B.C.C.A.) at para. 53, are instructive: [53] By the same token, of course, subjective or conscious intentions may be overtaken by conduct such that whilst a person living with another might not say he or she was living in a marriage-like relationship, the reality is that the relationship has become such. [36] The Court states at para. 55 that, while objective factors will be relevant to determining the intention of the parties, those factors will rarely be determinative in and of themselves. [37] In summary, in undertaking an analysis of whether persons are living together as spouses, the court must examine the relationship as a whole and consider all the various objective criteria referred to in the authorities. The presence or absence of one particular factor will not be determinative. The court must recognize that each relationship is unique and, in applying a flexible approach within the context of the particular relationship, make a determination as to whether the parties intended to and were living in a marriage-like relationship. [39] I prefer the evidence of Ms. Szablewska as to the start of the marriage-like relationship between the parties. I am satisfied that the relationship started at least by June

2006 when they became engaged. Neither party called other witnesses who may have been able to assist in determining when the parties referred to themselves as husband and wife, or spouses, or some equivalent. They took the North Vancouver Apartment in joint title in February 2007. They shared vacations before that date. I accept the evidence of Ms. Szablewska that they spent a significant amount of time together. In December 2006, Mr. Staehli paid Ms. Szablewska $18,000 from Salal Management Corporation. (While this may have been a tax device and paid for tax purposes only, in my view Mr. Staehli would not have drawn a cheque payable to Ms. Szablewska in such an amount unless he was committed to their relationship and to Ms. Szablewska as a spouse, not merely as a girlfriend.) In July 2006, Mr. Staehli designated Ms. Szablewska as the beneficiary of his retirement savings plan with the North Shore Credit Union. In August 2006, they applied jointly for a membership application at the North Shore Credit Union with rights of survivorship. [40] Accordingly, while there is no checklist of characteristics that will be found in all marriages, or all spousal-equivalent relationships, in my view these are indicia that the parties considered themselves in a spousal-like relationship as of June 2006 when they became engaged. I accept Ms. Szablewska's evidence as to the amount of time that they were spending together from June 2006 forward. Although they had two residences, I accept Ms. Szablewska's evidence that her children remained in the subsidized housing, they did not live in the North Vancouver Apartment. Mr. Staehli and Ms. Szablewska separated in March 2013. This was a seven year relationship.

DETERMINATION OF FAMILY PROPERTY [41] The assets in issue are: 1. The property at 1100 Arn Road in Pemberton; 2. Subdivision lots referred to as Cedar Grove Estates; 3. A one-half interest in 7458 Dogwood Street in Pemberton; 4. Proceeds of sale of 1404-1327 Keith Road, North Vancouver; 5. Lot in Szale, Poland; 6. 2011 Mercedes GLK 350; 7. 2011 GMC truck; 8. 2003 Mitsubishi Lancer; 9. 2002 Chevrolet Trailblazer; 10. Receivable owing by Talbot Holdings $219,428; 11. Construction deposit for water supply project $206,426; 12. Investors Group RRSP value $272,000; 13. Credential Securities RRSP value of $5,043; 14. Furnishings of 1100 Arn Road and the North Vancouver apartment; 15. Farm equipment; 16. Manulife life insurance with a value of $3,041; 17. Pierway Environmental Inc. shares, value unknown; 18. Pierway Environmental Inc.'s shareholders loan of $63,000; and 19. Line of credit owing $400,000. [42] Sections 84, 85, 95, and 96 of the Family Law Act provide: 84 (1) Subject to section 85 [excluded property], family property is all real property and personal property as follows: (a) on the date the spouses separate, (i) property that is owned by at least one spouse, or (ii) a beneficial interest of at least one spouse in property; (b) after separation, (i) property acquired by at least one spouse if the property is derived from property referred to in paragraph (a) (i) or from

a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either, or (ii) a beneficial interest acquired by at least one spouse in property if the beneficial interest is derived from property referred to in paragraph (a) (i) or from a beneficial interest referred to in paragraph (a) (ii), or from the disposition of either. (2) Without limiting subsection (1), family property includes the following: (a) a share or an interest in a corporation; (b) an interest in a partnership, an association, an organization, a business or a venture; (c) property owing to a spouse (i) as a refund, including an income tax refund, or (ii) in return for the provision of a good or service; (d) money of a spouse in an account with a financial institution; (e) a spouse's entitlement under an annuity, a pension, a retirement savings plan or an income plan; (f) property, other than property to which subsection (3) applies, that a spouse disposes of after the relationship between the spouses began, but over which the spouse retains authority, to be exercised alone or with another person, to require its return or to direct its use or further disposition in any way; (g) the amount by which the value of excluded property has increased since the later of the date (i) the relationship between the spouses began, or (ii) the excluded property was acquired. (2.1) For the purposes of

subsection (2) (g), any increase in value of a beneficial interest in property held in a discretionary trust does not include the value of any property received from the trust. (3) Despite subsection (1) of this section and subject to section 85 (1) (e), family property includes that part of trust property contributed by a spouse to a trust in which (a) the spouse is a beneficiary, and has a vested interest in that part of the trust property that is not subject to divestment, (b) the spouse has a power to transfer to himself or herself that part of the trust property, or (c) the spouse has a power to terminate the trust and, on termination, that part of the trust property reverts to the spouse. Excluded property 85 (1) The following is excluded from family property: (a) property acquired by a spouse before the relationship between the spouses began; (b) inheritances to a spouse; (b.1) gifts to a spouse from a third party; (c) a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for (i) loss to both spouses, or (ii) lost income of a spouse; (d) money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for (i) loss to both spouses, or (ii) lost income of a spouse; (e) property referred to in any of paragraphs (a) to

(d) that is held in trust for the benefit of a spouse; (f) a spouse's beneficial interest in property held in a discretionary trust (i) to which the spouse did not contribute, and (ii) that is settled by a person other than the spouse; (g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f). (2) A spouse claiming that property is excluded property is responsible for demonstrating that the property is excluded property. Unequal division by order 95 (1) The Supreme Court may order an unequal division of family property or family debt, or both, if it would be significantly unfair to (a) equally divide family property or family debt, or both, or (b) divide benefits as required under Part 6 [Pension Division]. (2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following: (a) the duration of the relationship between the spouses; (b) the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division]; (c) a spouse's contribution to the career or career potential of the other spouse; (d) whether family debt was incurred in the normal course of the relationship between the spouses; (e) if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family

debt; (f) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends; (g) the fact that a spouse, other than a spouse acting in good faith, (i) substantially reduced the value of family property, or (ii) disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse's interest in the property or family property to be defeated or adversely affected; (h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order; (i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness. (3) The Supreme Court may consider also the extent to which the financial means and earning capacity of a spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses if, on making a determination respecting spousal support, the objectives of spousal support under section 161 [objectives of spousal support] have not been met. Division of excluded property 96 The Supreme Court must not order a division of excluded property unless (a) family property or family debt located outside British Columbia cannot practically be divided, or (b) it would be significantly unfair not to divide excluded property on consideration of (i) the duration of the relationship between the spouses, and (ii) a spouse's direct contribution to the preservation, maintenance, improvement, operation or management of excluded property. [Emphasis added.]

CLOUDWORKS STOCK OPTIONS [43] I deal first with the Cloudworks stock options. Mr. Staehli received $1.1 million from the exercise of these options in 2011. The funds were used to acquire other property at issue and determining whether these funds are excluded property is relevant to determining family property. [44] Nick Andrews testified that Mr. Staehli had been involved in a business called Cloudworks started by his father, David Andrews. The business was started in 2001 or 2002. Mr. Staehli was involved from approximately 2002 until 2007. During that time, he received stock options. By 2011, the company was worth significantly more than it had been in 2007. Nick Andrews estimated the 2007 value at $30,000,000 to $40,000,000. By 2011, it was worth $180,000,000 to $200,000,000. When the Andrews were looking at selling Cloudworks, they looked at everyone's stock options. Mr. Staehli's had expired so they replaced his stock options shortly before the business was sold. They backdated the stock options to the date when his stock options expired. They wanted to ensure he received approximately $1 million. Mr. Andrew's evidence regarding the Cloudworks stock options differed in some respects from Mr. Staehli's. Mr. Andrews is an independent witness and I prefer and accept his evidence as set out herein. [45] Although Mr. Staehli viewed some or all of the stock options as a gift, I

am not persuaded that they were. From Nick Andrews' evidence, I conclude that Mr. Staehli had performed valuable services for which he received stock options. He must have seen no value in those stock options because he allowed them to lapse. When Mr. Andrews was looking at selling the business, he reviewed all of the stock options and found that Mr. Staehli's had lapsed. As Nick Andrews said, "Mr. Staehli had done a lot and we wanted to make sure that he realized a benefit". I do not see this as a gift, although there was no legal obligation to replace the expired stock option. Rather, Nick Andrews wanted to ensure that Mr. Staehli enjoyed the significant appreciation in share value that others were receiving, even though he had allowed his stock options to lapse. The significant increase in value took place between 2007 and 2011, during the course of the marriage. The stock options and the funds they generated were received during the relationship. Accordingly, the increase in value is family property. [46] I do not have evidence as to the value of the stock option in 2007. If I assume that the option had a value similar to Mr. Andrews' evidence as to the value of the company, the option would have a value of $176,000-$220,000 in 2007. Based on Mr. Staehli's conduct, permitting the option to lapse, the option had little or no value. Accordingly, the increase would be between

$880,000 and $1,100,000. [47] From the $1.1 million received, Mr. Staehli said that he paid $127,000 in tax; $402,000 to the line of credit; $100,000 to Staehli Talbot Holdings; $198,000 to 1100 Arn Road; $55,000 for the Mercedes; $27,000 for the GMC truck; $67,319 for farm equipment; $5,000 for a Caribbean trip; $15,000 to tax-free savings accounts; $63,602 to Pierway Environmental Inc. ("Pierway"); $110,000 to the Tulloch Partnership; and $22,000 for farm expenses. 1100 ARN ROAD [48] Mr. Staehli acquired this property before the parties' relationship started, so only the increase in value from the beginning of the relationship is family property. The issue is the value of that increase. Ms. Szablewska argues that the increase in value in the property since 2006/2007 is $1.45 million and should be divided equally. Mr. Staehli argues that all of the increase in value comes from the construction of the house. He says that replacement cost, as set out in the expert report, is $1,257,314. Mr. Staehli has provided a list of his expenses for the house, which totals $1,135,492.02, including $200,000 for his labour. He says that only the labour component would be family property. [49] He says that the marriage was a short-term marriage and that Ms. Szablewska contributed nothing financially. He says she made little indirect contribution since they only lived together for three years

and during that time she provided meals, cleaned house, and so on. He says that her interest in the increase in value should be re-apportioned to between 10 and 15%, or $20,000 to $30,000. [50] After the trial concluded, I approved a sale of the Arn Road property, including furniture and certain farm equipment for $2.6 million to close July 31, 2015. I understand that the closing has since been extended. I sought submissions from the parties as to the impact of this sale on values of property. The parties do not agree. Ms. Szablewska argues: Section 87 (b)(ii) of the Family Law Act, provides that the value of family property must be determined as of the date of the hearing before the court respecting the division of property. Therefore, this sale of the property and chattels after trial, and resulting diminution in value of the property and chattels when compared to the values presented at trial, should not be considered by the court. The evidence of value of the property and chattels at the time of trial is the only evidence that is admissible, regardless of what occurs after the hearing. [51] Mr. Staehli argues: Regarding the impact of the sale of the Arn Road residence in Pemberton along with the farm equipment and household furnishings, it is Mr. Staehli's position that $2,559,000, which reflects the purchase price of $2.6 million minus realtor's commission of $41,000

(affidavit #8 of Richard Staehli, para. 7), should be the total value attributed to those assets in the court's decision. The values attributed to the assets at trial were the estimations put forward by each party of the values of those assets at the time. There was a joint appraisal of the residence and land, but the claimant's valuations as regards the household furnishings simply reflected the purchase prices and not any depreciated value. In any event, it must also be reasonably acknowledged that the values attributed at that time were just that, ie. only at best an estimation of the liquidated value, and it could not be guaranteed that those values were what those assets could actually be sold for. [52] Under s. 87(b) of the Family Law Act, the value of family property and family debt must be determined either the date an agreement dividing the family property and family debt is made, or the date of the court hearing respecting the division of property and family debt. There is no agreement. The best evidence that I have of the value of the Arn Road property as of the date of trial is the appraisal evidence and I will use that evidence. [53] I have concluded that the parties' relationship started in 2006. Since then, the property has increased in value by $1.45 million. There is no dispute that the increase was largely or entirely due to the construction of the house. The

complicating issue is the source of the funds for construction: was the house built with excluded funds? [54] Mr. Staehli has the burden of demonstrating that the property (or some portion) is excluded property. [55] I have not been provided with an accounting that would permit me to assess in detail the source of funds for the construction of the house. From the evidence available to me, I am satisfied that the bulk of the funds to construct the house was received or earned by Mr. Staehli during the course of the relationship and so would not themselves be excluded assets. [56] Mr. Staehli testified that he used $331,000 from the sale of his Westbank property toward the construction at 1100 Arn Road. The Westbank project pre-dated the relationship, and the proceeds would be excluded assets. Apart from this amount, Mr. Staehli has not satisfied me that the house was constructed with excluded property or that the increase in value is excluded property. [57] Accordingly, the increase in value of 1100 Arn Road, after deducting the portion derived from excluded property is $1,119,000. one half of that, $559,500 would be Ms. Szablewska's portion under s. 81 of the FLA. PEMBERTON SUBDIVISION LOTS ("Cedar Grove Estates") [58] This property is composed of 12 bare strata lots in Pemberton. They are held in the names of Richard Staehli and Weldon Talbot. The lots had a value in June 2006

of $1.98 million and their value as of March 2013 had not increased. The lots were held by Mr. Staehli before the relationship. [59] Mr. Staehli is owed between $300,000 and $400,000 by his partner, Mr. Talbot, which he expects to recover when the lots are sold. [60] Mr. Staehli argues that, as there has been no increase in value over the course of the relationship, there is no family asset to divide with Ms. Szablewska. [61] Ms. Szablewska argues that because Cloudworks' funds were contributed to the subdivision, it would be significantly unfair not to divide this excluded property. [62] In accordance with s. 85(1)(a) of the Family Law Act, Cedar Grove Estates is excluded from family property. [63] Under s. 96(b), the court must not order the division of excluded property unless it would be significantly unfair not to do so in consideration of the duration of the relationship and the spouse's direct contribution to the property. [64] In V.J.F. v. S.K.W., 2015 BCSC 593 at para. 79, Mr. Justice Walker found the comments of the court on s. 95 of the Family Law Act in Remmem v. Remmem, 2014 BCSC 1552, instructive for the approach to be taken for s.

96. In Remmem at para. 44, Mr. Justice Butler provided; [44] Significantly is understood to mean more than a regular impact -- something weighty, meaningful, or compelling. In other words, the legislature has raised the bar for a finding of unfairness to justify an unequal distribution. It is necessary to find that the unfairness is compelling or meaningful[.] [65] In V.F.J., Walker J. went on to find: [83] The FLA has not set the bar so high that finding significant unfairness is next to impossible. For example, in Cabezas v. Maxim, 2014 BCSC 767, the Court found that significant unfairness would result from the unequal division of the claimant's purported excluded property given the respondent's contributions to the maintenance of the property, her decision to undertake liability on the mortgage, her greater contribution towards expenses, and the length of their cohabitation of 6.5 years[.] [66] There was no evidence of Ms. Szablewska contributing directly to the preservation, maintenance, improvement, operation, or management of this property. This relationship was not lengthy. Having regard to the definition of "significantly unfair" as well as the factors under s. 96(b)(i) and (ii), Ms. Szablewska has not demonstrated that it would be significantly unfair for Mr. Staehli to retain Cedar Grove Estates as an excluded asset not subject to division. Further, any Cloudworks' funds contributed to Cedar Grove Estates did not increase the value of the property during the course of the parties' relationship.

THE DOGWOOD PROPERTY [67] This property is a residence located at 7468 Dogwood Street in Pemberton (the "Dogwood Property"). Mr. Staehli holds a half interest in the property. Mr. and Mrs. Tulloch together hold the other half interest in the property. It was purchased during the parties' relationship. It has a value of $560,000. It has been marketed without success and is currently tenanted. [68] The respondent argues that the appraisal values the property at $560,000 and his half interest at $280,000. His contribution to the construction of that property came from pre-existing assets plus labour contributions. He argues that it has not been demonstrated that there has been any increase in the value of the property since it was purchased. There is a mortgage on the property of approximately $450,000. The respondent says that should the house sell for $550,000 his half of the proceeds, $50,000, would leave him in a deficit position due to already incurred costs. He says that even if there were a $50,000 profit, the claimant would be entitled to only a portion of that, 10% to 15%, which would result in her receiving $2,500 to $3,000. [69] The claimant argues that she should receive half of Mr. Staehli's equity, which she values at $55,000, so her share would be $27,500. [70] I accept the claimant's valuation and award her $27,500 as being half of the value of the Dogwood Property

as a family asset. PROCEEDS OF SALE OF 1404-1327 KEITH ROAD [71] This property was purchased in 2007. It was sold in 2013 and generated net sales proceeds of $334,617. [72] The claimant acknowledges that the proceeds of sale of the condo appear to be excluded property relying on Remmem. The purchase of the property in joint names using the proceeds of excluded property does not reduce the exclusion. The claimant argues that, because she made direct financial contribution in the payment of property taxes and utilities as well as a labour contribution to maintain the property, it would be significantly unfair not to divide this property or items purchased with the proceeds of sale from the mortgaging of this property as family property. [73] I do not accede to this argument. Although Ms. Szablewska contributed to the property, she also received the benefit of living there. The North Vancouver Apartment is excluded property. LOT IN SZALE, POLAND [74] Ms. Szablewska purchased this property in 1999 with the proceeds of sale from her parents' apartment. It had a value in June 2006 of $94,071 and in March 2013 of $109,637. One-half of the increase in value is $7,783. Mr. Staehli is entitled to this amount as a family asset.

MISCELLANEOUS ASSETS [75] Mr. Staehli testified that he used the proceeds from Cloudworks to purchase the 2011 Mercedes GLC, the 2011 GMC truck, and farm equipment. These are family assets. As of March 2013, the Mercedes was valued at $30,000 and the GMC truck was valued at $26,000. The parties disagree as to the value of the farm equipment. The respondent claims he put $67,319 that he received from the sale of the Cloudworks' share options toward farm equipment. The claimant values the farm equipment at $100,000. The farm equipment is used. I fix its value at $50,000. [76] The parties each brought a vehicle into the relationship, a 2003 Mitsubishi and a 2002 Chevrolet. These are excluded property. [77] Mr. Staehli has an RRSP of approximately $300,000 with Investors Group. If there was appreciation over the course of the relationship, the increase is family property. [78] Ms. Szablewska has an RRSP of approximately $3,000 with Credential Securities. There is no suggestion that this has appreciated, so it is excluded property. [79] Mr. Staehli is owed $219,428 from his partner, Mr. Talbot, for road access to the Pemberton lots, as well as between $300,000 and $400,000 in extra contributions. The road access would not be family property. As to the other debt, the only evidence is Mr. Staehli's testimony that he paid $100,000 from Cloudworks to Staehli Talbot Holdings, which I

understand to refer to this investment. If so, $100,000 of the debt due would be family property. It is not clear when the property will be sold and the debt repaid, or if it will be repaid in full. [80] Mr. Staehli acquired approximately 5% of the shares in Pierway in 2007. In 2011, he loaned $63,000 to Pierway from the Cloudworks funds. I accept Mr. Staehli's evidence that he does not expect to recover on the loan and considers the shares to be worthless. Ms. Szablewska will receive one-half of Mr. Staehli's shares in the company pursuant to s. 97 of the Family Law Act. [81] Ms. Szablewska says she was given the furnishings for the North Vancouver Apartment. She values the 1100 Arn Road furnishings at $67,000 and says that they should be divided. Mr. Staehli argues that he purchased the 1100 Arn Road furniture with excluded funds and the furniture is therefore excluded property. He gave evidence that he used funds borrowed from his lawyer to buy the furniture and repaid the loan with Cloudworks funds. He says that Ms. Szablewska has overvalued the furnishings, using purchase prices rather than current value. Ms. Szablewska will have the North Vancouver Apartment furnishings and Mr. Staehli will keep the 1100 Arn Road furnishings. [82] $400,000 is owed on the line of credit. Apart from the $53,952 that Ms. Szablewska withdrew from the line of credit in April 2013, there is no

evidence that the debt was incurred for family purposes after it was paid using proceeds from Cloudworks in 2011. [83] These funds that Ms. Szablewska has received from the line of credit should be treated as an advance of her share of the family property. [84] Ms. Szablewska holds a life insurance policy with Manulife Insurance in her name for the benefit of her children valued at $3,041. This is a family asset and subject to equal division. Mr. Staehli will receive $1,520. [85] $206,426 is being held by the water authority, pending final approval, as a construction deposit for a water supply project that Mr. Staehli is engaged in. Ms. Szablewska claims a portion of the excluded value. The parties provided very limited information as to the source of this money. In cross-examination, Mr. Staehli said that the funding for this project came entirely from Salal Management Corporation in 2007.

DIVISION OF PROPERTY [86] I have concluded that the increase in value of 1100 Arn Road, the Dogwood Property, and the lot in Szale Poland are family property. Further, the Mercedes, the GMC truck, the farm equipment, the Manulife insurance policy, any increase in Mr. Staehli's RRSPs during the relationship, the loan to Staehli-Talbot of $100,000 from the Cloudworks' funds, and the Pierway shares are family property. The $53,952 that Ms. Szablewska withdrew from the line of credit will be counted against any award in her favour. Ms. Szablewska says that these assets should be divided equally. Mr. Staehli argues that they should be reapportioned in his favour (particularly 1100 Arn Road). He argues that the marriage was short, the parties only lived together for three years and Ms. Szablewska made no financial contribution to the property and minimal indirect contribution. [87] Ms. Szablewska argues that some portion of the excluded property should be reapportioned in her favour and that it would be significantly unfair to do otherwise. [88] As discussed above, the Family Law Act provides that family property is to be divided equally unless it would be significantly unfair to equally divide the family property: ss. 95-96. [89] The legislature, in enacting the Family Law Act, has significantly changed the division of family assets in British Columbia. Under its predecessor, the

Family Relations Act, R.S.B.C. 1996, C. 128 (now repealed), family assets were defined as "[p]roperty owned by one or both spouses and ordinarily used by a spouse or a minor child of either spouse for a family purpose": s. 58(2). Under the old legislation, family assets were divided equally unless it was unfair to do otherwise. Under the new legislation, when a spouse brings assets into the relationship, it is only the increase in value after the commencement of the relationship that is family property, to be divided equally unless it would be significantly unfair to do otherwise. There are two substantial changes: the asset pool is smaller and the threshold for unequal division is higher. It is in this context that "significantly unfair" is to be interpreted. [90] I accept the discussion of the courts on the interpretation of "significantly unfair" as above as well as the view of Mr. Justice Brown in L.G. v. R.G., 2013 BCSC 983. There, he said: [71] In my view, the term 'significantly unfair' in s. 95(1) of the FLA essentially is a caution against a departure from the default of equal division in an attempt to achieve 'perfect fairness'. Only when an equal division brings consequences sufficiently weighty to render an equal division unjust or unreasonable should a judge order depart from the default equal division. [91] Would it be significantly unfair for Ms. Szablewska to

receive half of the increase in value of 1100 Arn Road? Mr. Staehli entered this relationship with significant assets. His financial statement shows net assets of more than $4 million. If Ms. Szablewska receives half of the increase in value of 1100 Arn Road, Mr. Staehli will still be left with net assets of more than $4 million. She will receive approximately $600,000 of family property. [92] This relationship was a relationship of approximately seven years. During that time, Ms. Szablewska continued to work in her cleaning business until 2010 although she scaled it back because Mr. Staehli encouraged her to do so. After she moved to Pemberton in 2010, she did very little work outside of the home. I accept her evidence that she contributed directly and indirectly to 1100 Arn Road. I accept her evidence that she painted, gardened, put up fruits and vegetables, cooked, cleaned, held dinner parties, and was generally available to assist on the property. She provided support, indirectly, to Mr. Staehli's endeavors. I do not accept Mr. Staehli's evidence in this regard. It is my view that Mr. Staehli would not tolerate a spouse who did not carry her fair share of the load and I prefer Ms. Szablewska's evidence. [93] Mr. Staehli contributed all or virtually all of the finances to construct and maintain the residence. [94] Considering the length of the relationship between the

spouses, the contributions made by each and any other consideration which may lead to significant unfairness, in my view it would not be significantly unfair for Ms. Szablewska to receive half of the increase in value of 1100 Arn Road as well as half of the other family property. [95] Considering the factors set out in s. 96 of the Family Law Act, it is not significantly unfair that Ms. Szablewska receives no portion of the excluded property. This was not a long relationship. Mr. Staehli had accumulated most of the property before the relationship started. Although Ms. Szablewska paid the property taxes on the North Vancouver Apartment, she had the benefit of living there. She made no direct contribution to the other excluded property.

SPOUSAL SUPPORT [96] Ms. Szablewska seeks spousal support, relying on s. 15.2 of the Divorce Act. She argues that she is entitled to support on compensatory and non-compensatory bases. [97] She says that she gave up her cleaning business and moved to Pemberton to help Mr. Staehli in his business endeavors and to help at 1100 Arn Road, as well as providing household support including cooking, cleaning, and meal preparation. [98] She says that she is in poor health, suffering from hypertension, arthritis, and depression. Her English is poor and she has few employment skills. She has no income. She requires expensive dental treatment. [99] As to quantum, she argues that this is an exception to the use of the Spousal Support Advisory Guidelines (the "Guidelines"). She says that the Guidelines do not account for the multiple factors that should be considered when determining amount and duration in a case of disability and permanent unemployment. She argues that, while Mr. Staehli claims to have a small income, he has not been employed for more than ten years and has used his assets to generate an income. [100] She argues that her expenses as set out in her financial statement are reasonable and reflect her need. [101] Mr. Staehli argues that if the marriage were four years in duration, using the Guidelines, Ms. Szablewska would only receive three years of support. If the marriage

were five years, the Guidelines suggest indefinite support because of Ms. Szablewska's age. He argues this is arbitrary. He says that if Ms. Szablewska receives a significant property award, spousal support should end after five years because she will have the award to draw on as well as her pension, which will start when she is 65. [102] He says that, based on his current income, spousal support would be between $230 and $276 per month. He says that spousal support should be set at the amount currently paid, $4,000 per month, for a period of five to six years. He says that her pension, when it is received, should reduce the monthly amount payable by Mr. Staehli. [103] I accept that Ms. Szablewska has various chronic health issues. This, together with her age and lack of English and job skills, means that she will not be able to earn employment income. [104] In determining the amount and duration of support for a spouse, a court shall consider the circumstances of the parties and the specific factors set out in the Family Law Act. [105] Sections 161 and 162 of the Family Law Act provide, in part: 161 In determining entitlement to spousal support, the parties to an agreement or the court must consider the following objectives: (a) to recognize any economic advantages or disadvantages to the spouses arising from the relationship between the spouses or the breakdown of that

relationship; (c) to relieve any economic hardship of the spouses arising from the breakdown of the relationship between the spouses; (d) as far as practicable, to promote the economic self-sufficiency of each spouse within a reasonable period of time. 162 The amount and duration of spousal support, if any, must be determined on consideration of the conditions, means, needs and other circumstances of each spouse [106] The age, career disadvantages, and poor health of the dependent spouse are relevant considerations in determining the quantum of support: Bracklow v. Bracklow, [1999] 1 S.C.R. 420; Beninger v. Beninger, 2007 BCCA 619. [107] Mr. Staehli has sold 1100 Arn Road. He is in the process of liquidating his other properties. He intends to retire. As I have indicated above, he will be left with assets of approximately $4 million. With the sale of Arn Road, he now has liquid assets of more than $2 million. Conservatively, he should be able to invest and earn $100,000 per year from those funds. [108] Imputing an income to Mr. Staehli of $100,000, the Guidelines suggest a range of $625 to $833 for spousal support, to be paid indefinitely. The mid-range, $725 per month, paid indefinitely, is reasonable. The amount paid can be reviewed when Ms. Szablewska begins to receive her pension income.

DIVORCE [109] The divorce is not opposed and is granted.

COSTS [110] If necessary the parties may speak to costs. "B.J. Brown J."