Kvarnstrom v. Kvarnstrom

2013 BCSC 1566 Kvarnstrom v. Kvarnstrom IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Kvarnstrom v. Kvarnstrom, 2013 BCSC 1566 Date: 20130827 Docket: E041491 Registry: New Westminster Between: Toni Louise Kvarnstrom Claimant Ulf Anders Kvarnstrom and Integral Contracting & Development Respondent Before: The Honourable Mr. Justice Smart Reasons for Judgment Counsel for the Claimant: Angela S. Kerslake Counsel for the Respondent: Stephen Glanzberg Place and Date of Trial: New Westminster, B.C. April 22-26, 29-30, May 8, July 18, 2013 Place and Date of Judgment: New Westminster, B.C. August 27, 2013 I. INTRODUCTION AND BACKGROUND [1] The primary questions on this family law trial are child support, spousal support, and the division of family assets. Underlying the child and spousal support questions is the issue of what is the respondent's actual income from his contracting business. Dominating the dispute concerning the division of family assets is whether to reapportion the family home in favour of the claimant. [2] Toni Louise Kvarnstrom, the claimant, and Ulf Andres Kvarnstrom, the respondent, are presently 59 and 52 years of age, respectively. They met in 1992 while residing in nearby recovery houses and dealing with their respective addiction to drugs. They became friends and eventually began living together as a couple in January 1993. They were married on December 30, 1994, and separated on September 20, 2010, although they continued living together in the family home until July 2012. They have both successfully abstained from drugs since 1992. [3] The parties had one child together, Christopher, who is 14 years of age. They also have custody and guardianship of their grandchildren, Jade and Darion, 13-year-old twins. Jade and Darion have lived with Mr. and Ms. Kvarnstrom since 2004. They are the children of Natasha Loeffler, Ms. Kvarnstrom's 39-year-old daughter. Ms. Loeffler is addicted to drugs and incapable of raising the children, as is the children's father. Darion is a child with special needs who spends his school days at a special needs foster home, and the remainder of his time with Ms. Kvarnstrom. She has interim custody of all three children. [4] The breakdown of the marriage occurred after Mr. Kvarnstrom began having significant mental health problems in August 2010, apparently in reaction to certain medication that he was given after undergoing surgery. After a few days at home following the surgery, he re-entered the hospital and spent several weeks in the psychiatric ward. He returned home in mid-September 2010 and, within a few days, moved into a bedroom in the basement, and the parties began living separately and apart. Thereafter, Mr. Kvarnstrom suffered from depression and his work and his relationships suffered as a result. His depression was most acute during October 2010 to March 2011. [5] The respondent has worked for many years as a building contractor, primarily in residential construction. He operates through a personal company, Integral Contracting & Development Ltd. ("Integral"). Between approximately 2000 and 2008 Mr. Kvarnstrom operated his business primarily in the Seattle area and during this time the business was very profitable. It has been less profitable since he returned to the Lower Mainland in 2008. In recent years the respondent has been usually Integral's only employee, as it would subcontract work to others as necessary. [6] Ms. Kvarnstrom worked as a paralegal in a law firm prior to their marriage. She attended the British Columbia Institute of Technology ("BCIT") after they were married and in 1995 successfully completed a two-year marketing management program with Honours. She had originally intended to continue her education at BCIT to obtain a Business Administration degree but accepted an offer to work as a marketing research analyst at a large company where she had done her practicum. She worked there for six months until the company was sold. She then obtained employment with Neptune Foods as a marketing specialist where she worked for four years, until Christopher was born. [7] Ms. Kvarnstrom testified that she wanted to stay home with Christopher until he was enrolled in school, and that Mr. Kvarnstrom agreed, telling her that it was better for them financially if she was not working and was a tax "write off" for his business. In 2004 the parties adopted Jade and Darion. Ms. Kvarnstrom has not been employed since she left Neptune Foods in 1999. [8] Mr. Kvarnstrom worked long hours at his business, Ms. Kvarnstrom worked long hours caring for the children and the family home, and they did well financially over the course of their marriage. They own the family home outright. It was recently appraised at $1,250,000. They have purchased valuable jewelry, art, rugs, and other items for their home. They have taken expensive vacations. They usually had a nanny or au pair to assist with the children. As Ms. Kvarnstrom testified, they enjoyed a privileged lifestyle. [9] The respondent left the family home on July 3, 2012, after an incident between him and the claimant that resulted in the police attending the residence. He returned the following day and removed certain items, including some art work and rugs. He also took items from a storage locker. He has had no contact with the three children or Ms. Kvarnstrom since. [10] In the weeks and months that followed Ms. Kvarnstrom obtained various court orders with which Mr. Kvarnstrom failed to comply. The breached orders include an ex parte order made on July 23, 2012 that the respondent not dispose of assets, and an interim order made on December 11, 2012 that he pay spousal and child support based on an imputed annual income of $150,000. [11] The respondent has paid no spousal support and only paid child support on July 18, 2013, the last day of submissions, when he provided a cheque to the claimant for child support. This was provided from the proceeds of a tax refund Integral received from Canada Revenue Agency (the "CRA"). The respondent had offered to pay support in December 2012 if a line of credit could be obtained on the family home but the claimant refused to have it encumbered by the respondent, presumably because she was seeking to have the court order that it be reapportioned to her. [12] In October 2012 the respondent was in a motor vehicle accident that he says has left him unable to work. He has been receiving income payments from ICBC based on an imputed annual income of $60,000. He testified that he is hopeful of being able to return to work in September 2013. [13] Ms. Kvarnstrom seeks the following orders: · a divorce based on separation for over a year; · sole custody and guardianship of the three children with Mr. Kvarnstrom having only supervised access to the children after certain pre-conditions are satisfied; · periodic and/or lump sum child support for all three children and s. 7 special expenses; · periodic and/or lump sum spousal support; · a division of family assets with reapportionment in favour of her; · a permanent restraining order against the respondent including no direct or indirect contact except for the purpose of arranging or facilitating access to the children; and · special costs. [14] The respondent is anxious to see his children and agrees to the conditions recommended by Dr. Colby in his s. 15 Psychological Assessment Report; even though he does not believe some of the recommendations are necessary. He also agrees to pay child and spousal support but disputes the amount sought, arguing that his income is far less than claimed. He opposes any reapportionment of the family assets in favour of the claimant, particularly the family residence. He disputes that certain pieces of valuable jewelry were a gift to the claimant, arguing that they are family assets purchased for investment purposes. [15] The focus of the dispute with respect to the respondent's past and projected income is the extent to which he has received cash for work done that was not declared to CRA. There is also a question as to the extent to which the respondent's ability to work has been, and may continue to be, impacted by the motor vehicle accident of October 3, 2012 and his other health issues. [16] In addition to the documentary evidence, I heard from six witnesses: · the respondent and the claimant; · Patty Cameron and Eliza Lum, two persons for whom the respondent recently did work; · Robin Forster, a friend of the respondent; and · Jesse Kvarnstrom, the respondent's 23-year-old son from his first marriage. [17] I will first address the credibility of the witnesses. II. CREDIBILITY [18] Credibility has two aspects - honesty and reliability. Positions of Counsel [19] The most important witnesses are Mr. and Ms. Kvarnstrom and their counsel take opposing positions with respect to their credibility. [20] Counsel for Mr. Kvarnstrom submits that while "there are gaps and omissions in his evidence, Mr. Kvarnstrom had provided everything asked of him and has testified and answered questions in his examination for discovery and his cross-examination honestly." He submits that Ms. Kvarnstrom's evidence on the other hand, "has been completely self-serving and at no point has she acknowledged the difficult circumstances and experiences Mr. Kvarnstrom has been through." He says: She frequently would not provide an answer to questions that were damaging to her case and she often did not remember or could not say when asked about the family's history. Ms. Kvarnstrom returned to the witness stand after her case had closed and provided further evidence with respect to the jewelry. Her evidence was completely one-sided and she failed to acknowledge or admit to any of the questions posed by Mr. Kvarnstrom. [21] Counsel for the respondent also submits the court should carefully scrutinize the evidence of Betty Cameron because she volunteered information "about the respondent's cash flow from his jobs" and, most importantly, provided an assessment of the respondent's parenting that mirrored the claimant's precisely: "he is a good provider but an absentee father". [22] Counsel for the claimant submits it is the respondent, not the claimant, who was not a credible witness. She argues that there "are many examples of him not being credible and/or evasive and/or misleading in his evidence before this Court". Some of the examples she provides are: · His evidence that he was unaware of the July 23, 2012 restraining orders until early September 2012 is not believable, especially given that he appeared at the August 15, 2012 hearing. · He has ignored many of the court's orders. · He failed to disclose his personal Scotia bank account on his sworn Form 8 Financial Statement. · He failed to disclose money he received from the Lums in July 2012 and January 2013. · He failed to apprise Master McNaughton during the application before her for interim support application in December 2011 that he was awaiting receipt from ICBC of monthly disability income of $4,108.75 and instead swore, "I have not been employed for some time and I have no monies to pay maintenance currently". · She says he gave false evidence at his examination for discovery and at this trial regarding his receipt of cash income. She points to his answers to questions 649 to 653 at his discovery where he swore that he received the occasional cash bonus but otherwise payment for the work performed by Integral was paid by cheques. Eliza Lum and Patty Cameron both testified that Mr. Kvarnstrom specifically requested and received payment in cash. Analysis [23] Respectfully, I am unable to agree with Mr. Glanzberg's position concerning the credibility of the claimant and the respondent. [24] I find Ms. Kvarnstrom to be an intelligent and articulate witness who did her best to answer questions accurately, precisely, and without embellishment. If she did not know the answer to a question, she said so. Her testimony was generally consistent and consistent with the documentary evidence. It made sense and was inherently probable in the context of the evidence as a whole. It was not undermined in cross-examination. That she did not acknowledge Mr. Kvarnstrom's difficult circumstances does not, in my view, detract from her credibility, particularly given his apparent failure to recognize the difficulties she and their children have faced over the last many months. In short, I find Ms. Kvarnstrom to be a credible witness. [25] Unfortunately, my assessment of Mr. Kvarnstrom's credibility is not the same. His answers often were not responsive to the questions asked of him. At times, he volunteered information for some collateral purpose; for example, his gratuitous comment that the claimant had spent thousands of dollars on plastic surgery. His evidence was often internally inconsistent or inconsistent with other evidence. His evidence that he did not learn about the July 23 restraining order until sometime in early September, despite being served with it on July 31, 2012, was not believable, particularly given that he appeared at the August 15, 2012 hearing. His explanations as to how he found out about the order in September were inconsistent. His attempt to shift responsibility for not knowing about the order onto a law student who he said was assisting him at the time was unconvincing, as was his attempt to shift responsibility for his failure to comply with another court order onto his present counsel. [26] However, the most significant evidence with respect to his credibility was his evidence at trial and his discovery concerning cash payments for work done. [27] Ms. Lum and Ms. Cameron both testified they made sizeable payments in cash to the respondent at his request. Both had documents supporting their evidence that were prepared at the time of the construction or renovations. Both were witnesses who attempted to be fair to the respondent when giving their evidence. For example, Ms. Cameron volunteered several times what a hardworking, capable builder Mr. Kvarnstrom was. I accept Mr. Glanzberg's submission of the need to scrutinize Ms. Cameron's evidence carefully for the reasons he identified but having done so, I find her and Ms. Lum to be honest and reliable witnesses. [28] Ms. Lum testified that she paid the respondent approximately $14,000 in cash for work he did for her. [29] Ms. Cameron testified that she had paid the respondent over $30,000 in cash for work he did on three different jobs at her residence between 2009 and 2011. Ms. Cameron said the first was to remedy a problem with black mold in their basement. The job took a couple of days and she paid him $4,700 in cash, the total cost of the job. [30] She said the second job was a kitchen renovation totalling $39,000 and for which she paid him $24,000 in cash. The invoice includes materials used to complete the renovations but, according to Ms. Cameron, most of these materials were items the respondent already had in storage from other jobs. Again, the respondent asked her to pay him cash. [31] Ms. Cameron said the third job was to correct a sewage problem for which she received an invoice in the amount of $ 5,637.71. She paid the invoice by cheque. The invoice included $1,600 for labour. She said the invoice was only part of the cost of the job and she gave the respondent an additional $5,000 in cash at his request. She testified the respondent said he wanted to put some of the labour cost of the job on the invoice so it looked "okay". [32] The cash payments are consistent with the claimant's evidence that she received $3,000 cash each month from the respondent to pay household expenses and her evidence that the respondent always possessed large sums of cash during their marriage. They are consistent with the respondent's evidence that when he was working in the Seattle he would give the claimant $5,000 to $7,000 in cash to take home to invest or to pay bills. They are consistent with the claimant and respondent enjoying a standard of living that far exceeds his stated income. In my view, they accumulated assets and jewelry that belie a family with gross earnings of approximately $60,000 to $90,000 per year, even accounting for the significant motor vehicle damage awards. [33] While some of the cash the respondent received from Ms. Cameron and Ms. Lum may have been paid to sub-trades, I find such payments were relatively small amounts and it was the homeowner who usually paid the sub-trades directly. [34] I find the respondent has not been forthright at discovery and at trial concerning the receipt of cash payments for his work. [35] I also find that since leaving the family home in early July 2012, the respondent has conducted himself with apparent indifference towards his spouse and children. He has done little to assist them financially and has attempted to use as a justification that he was "saving" Natasha. Regardless, his primary responsibility was to his spouse and children and he failed in fulfilling that responsibility. He cashed in his RRSPs and recklessly spent thousands of dollars from the proceeds. Perhaps there are psychological reasons which caused him to overlook his obligations to the claimant and his children but, whatever the reason, I must be cautious in relying on his evidence concerning anything that affects his financial interests. In reaching these findings I have not overlooked his offer to pay support if he and the claimant obtained a line of credit secured by the family home. [36] In addition to the respondent's lack of honesty as a witness, I also find his evidence on some matters to be generally less reliable than the claimant's evidence on many matters. During the marriage he worked very long hours and his focus was on running his business not what was occurring in his home; in recent years he has also been through challenging mental health issues. [37] I have not addressed the credibility of Jesse Kvarnstrom or Robin Forster because their evidence does not impact on the issues in dispute. III. THE RESPONDENT'S ANNUAL GROSS INCOME [38] The respondent's evidence is that his annual income over the last dozen years ranged between $60,000 and $90,000 with the upper end of the range representing his best years when working in the Seattle area and the lower end representing his leaner years in Seattle and since returning to work in the Lower Mainland in 2008. [39] The claimant acknowledges that she does not know the respondent's actual gross annual income but estimates it has been approximately $150,000. She arrives at this amount by taking the 12 months between June 2011 and June 2012 as a sample year and combining the cash the respondent gave her each month to pay household expenses, the money spent on other family expenses that was paid by cash, cheque or credit card, and the income tax that should have been paid on the income earned. She says she had been receiving $3,000 cash every month for household expenses for many years. The respondent agrees but says he only gave her $2,000 to $2,500 per month in the spring of 2012 because his income was less. [40] I accept the claimant's evidence as to the amount of cash she received in the spring of 2012. I am confident she would recall if it had been less because that would have been of significance to her. In addition, she prepared a document listing monthly expenses and the cash she received when she applied for interim support in December 2012. This document was entered as an exhibit before me. It shows personal expenses for this 12-month period averaged $6,686 per month, over and above the household expenses the claimant paid from her $3,000. Combined, the total household and personal expenses for the family averaged $9,686 per month. While some of these expenditures likely include some business expenses, I am satisfied that the large majority are household and personal expenses. In addition, the respondent also carried relatively large amounts of cash and likely spent cash on additional personal expenses. [41] It is difficult to accurately determine the respondent's true annual gross income for a number of reasons. First, the respondent has received significant unreported cash payment for work done and I cannot rely on his evidence as to what he earned or his tax returns. Second, the claimant does not know what his income was; only what they spent. Third, since August 2010 the respondent's ability to work has been affected by health issues and, since October 2012, by the motor vehicle accident. Fourth, money spent during the sample year does not necessarily reflect money earned because some of it may have been derived from selling assets such as tools, building materials and jewelry. [42] I accept that the respondent's income decreased after he returned to Canada and that by September 2010 he had begun liquidating some assets to maintain their standard of living. His evidence concerning the items he sold was not challenged by the claimant and is consistent with Ms. Lum's evidence that he tried to sell her rugs in July 2012. [43] The claimant urges me to follow Master McNaughton's decision to impute the respondent's annual income at $150,000. However, I have considerably more evidence before me than was before Master McNaughton. [44] I anticipate the respondent's annual income will increase over time after he returns to work. How much it will increase will depend on his health, on his motivation, and on the health of the construction business. Mr. Kvarnstrom is obviously a skilled and capable builder with decades of experience. He is only in his early 50s and says he is motivated to rebuild his business. [45] I find his gross annual income since July 1, 2012 to be $80,000, despite the fact his income was significantly higher during the preceding years and despite the fact ICBC is making payments to him based on an imputed annual income of $60,000. In July he received additional payments from Ms. Lum and received cash or other benefits for work he did at Whistler later that year. [46] I impute his gross annual income for 2013 will remain at $80,000 as he returns to work next month and rebuilds his business. I expect with the passage of time and his motivation to re-establish his business, his income will increase. I impute his annual income for 2014 to be $100,000 and his annual income for 2015 to be $120,000. IV. DIVISION OF FAMILY ASSETS [47] The parties agree that July 3, 2012 should be the date for valuating family assets and debts even though they began living separate and apart in September 2010. [48] The claimant provides a schedule of family assets and debts. There is no dispute that the items listed are family assets or debts but there is a dispute as to the value of some of the listed assets, whether there should be reapportionment, and whether certain jewelry is a family asset. A. The Applicable Legal Principles [49] Before I move on to consider the issues in dispute, I recognize that it is important to separate the division of assets, reapportionment, and spousal support. As noted by the British Columbia Court of Appeal in Narayan v. Narayan, 2006 BCCA 561, citing earlier decisions of that Court in Toth v. Toth (1995), 64 B.C.A.C. 81, 13 B.C.L.R. (3d) 1; Metzner v. Metzner (1997), 91 B.C.A.C. 241, 34 B.C.L.R. (3d) 314, and Tedham v. Tedham, 2005 BCCA 502, the appropriate approach to these issues is to divide property, including any reapportionment, before determining spousal support. Combining the analyses may create confusion and blur the distinctions between the factors relating to division of property (including reapportionment), and those relating to spousal support. It also creates a greater potential for double recovery. [50] Part 5 of the Family Relations Act, R.S.B.C. 1996, c. 128 (the "FRA"), pertains to the division of matrimonial property. The key provisions in this case are ss. 56, 58, and 65. There is no disagreement between the parties as to the applicable law. The parties also agree the FRA should apply, not the Family Law Act, S.B.C. 2011, c. 25. [51] An order was made on August 15, 2012 pursuant to s. 57 of the FRA declaring there was no reasonable prospect of reconciliation. The parties have an undivided one-half interest in the family assets as tenants in common as of that date, subject to the court ordering otherwise under s. 56(2)(a). [52] Sections 58 and 59 explain what is a family asset. Pursuant to s. 58(2), it is 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". What constitutes a family asset hinges on the words "ordinarily used for a family purpose." [53] Once the court has divided the family assets under Part 5 of the FRA, it must go on to consider the mechanism by which the division of property is to be achieved, pursuant to s. 66(1). [54] The relevant provisions of the FRA with respect to the issues of reapportionment and compensation are ss. 65 and 66 and provide, in part: Judicial reapportionment on basis of fairness 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. [55] As such, the undivided one-half interest as a tenant in common to which a spouse is presumptively entitled upon the happening of a triggering event (here the s. 57 order) is subject to an order for reapportionment under s. 65(1). B. Jewelry and Related Items [56] Not listed on the claimant's schedule of assets is jewelry in the possession of each party. The claimant has possession of a number of pieces of valuable jewelry. They include the following together with the respondent's estimate as to their value: · Rolex watch valued at $20,000; · Yellow gold diamond necklace valued at $18,000; · Tiffany pearls valued at $7,000; · Bulgari bracelet valued at $4,000; · GIA certified diamond earrings valued $15,000; · Chandelier diamond earrings valued at $3,500; and · The claimant's wedding ring valued at $15,000. [57] The respondent's position is that the first four items are family assets purchased for investment purposes. He concedes the remaining three items were gifts to the claimant from him and are not family assets. [58] The claimant's position is that all seven of these items were given to her as gifts. She produced photographs of her wearing some of the disputed items at social events she attended during the marriage (Exhibit 12). [59] The respondent lists the following additional jewelry or valuables he says are in the safety deposit box held in the claimant's name: · Two pair of gold diamond earrings (appraised by the claimant earlier this year at $3,350 and $10,785 respectively - Exhibit 18); · Other jewelry; · Jade Buddhas, a gold Panda coin and a Roman coin; and · $15,000 American cash. [60] The respondent testified that he provided cash to the claimant when he was working in the Seattle area and that she told him that she had put $15,000 cash in the safety deposit box. The claimant denies putting the money in a safety deposit box or telling the respondent that she had done so. The respondent notes the claimant failed to originally list on her financial statement that she had savings bonds in the safety deposit box when she in fact did, and gave the explanation for her error that she had not noticed them. He also notes that she said in cross-examination she "was not entirely sure what was in there", referring to the safety deposit box. Analysis [61] The respondent provided the claimant with considerable quantities of American cash when he was working in the United States. However, I am not satisfied she ever kept that money in the safety box or told him she had done so. I accept her evidence on this point, which is consistent with the money being provided to her for expenses or investment. Putting $15,000 in cash in a safety deposit and leaving it there for years does not fit either purpose. Putting it in an interest bearing account, as they did with other money, would. The fact she initially did not see the Canada Savings Bonds was explained by her and does not cause me to question either the honesty or reliability of her evidence concerning the $15,000. [62] With respect to the four pieces of jewelry that the respondent argues were purchased as investments, I again have his word against hers. To support her testimony she has provided photographs of her wearing some of this jewelry at social events while they were still married. I accept her evidence. [63] Perhaps the respondent thought at the time he gave these various gifts to her that they would appreciate in value and she might agree in the future to sell one or more of them for profit, but that was not the basis upon which they were given to her or they were used. They were given as gifts and used as such, and are not family assets. [64] I find that none of the women's jewelry is a family asset. The claimant is entitled to retain possession of them all to use or sell as she sees fit. The respondent's estimate of their value is almost $100,000. Whether this is accurate or not, the collective value of the jewelry is very significant and reflects the affluent lifestyle the parties enjoyed. [65] The claimant agrees that the respondent should be entitled to have any men's jewelry in his possession or in the safety deposit box, as well jade pieces, the Panda coin and any similar items, and they not be considered family assets. C. Family Assets Other Than the Family Residences [66] The other family assets are: · The Ford F350 in the respondent's name. The respondent estimates its value to be $15,000; the claimant estimates it to be $25,000. It was "totaled" in a motor vehicle accident after the respondent moved out and ICBC paid the respondent the sum of $24,700 in compensation. · The 2007 Audi Q7 in the claimant's name. The claimant estimates its value as being $20,000; the respondent gave no estimate. · The 2006 Mercedes E55 AMG sedan in the name of the respondent. It also was involved in a motor vehicle accident after the respondent moved out. The claimant estimates its pre-accident value at $25,000; the respondent gave the same value. · The 2005 Harley Davidson Road King motorcycle in the name of the respondent. The claimant values it at $15,000; the respondent now also values it at $15,000. · The 2006 American Ironhorse Texas Chopper motorcycle. The claimant values it at $20,000; the respondent values it at $10,000. · The 2004 Harley Davidson motorcycle. It was sold by the claimant in October 2012 for $12,000. · The Raymond James RRSP account in the claimant's name. $32,752 was remaining but has now been liquated by the claimant. The net amount received after tax was approximately $28,000. · The Raymond James RRSP account in the claimant's name in the amount of $44,950 but now liquidated by the claimant. The net amount received after tax was $35,825. · CIBC GIC in the amount of $20,258 liquidated by claimant in July 2012 but used to pay down the parties' joint Visa account. · Raymond James Investment Account in the claimant's name in the amount of $19,993 cashed by the claimant in September 2012. · CIBC TFSA accounts in the claimant's name in the amount of $5,000 cashed in by her in January and March 2013. · Sculptures, art works, rugs, and other household contents. Claimant estimates the value of the items taken by the respondent at approximately $120,000 including jewelry but acknowledges that determining the precise value is a difficult exercise. The claimant says the value of the household furniture and other items still in the family home are negligible. She says the respondent "cherry picked" and took the valuable items when he left and left behind that which had little value. The claimant proposes that the value of what is in the family home is fairly offset by what the respondent took from the storage locker which is in addition to the $120,000 of belongings already accounted for. The claimant says the respondent's estimate of the value of the items taken concerning which photographs were entered is approximately $36,000. The respondent provided an appraisal for four of the items but it is not clear whether the appraiser actually saw those items. · The furniture and other belongings still in the family home. Other than certain art, the claimant has an appraisal (Exhibit 25) which values the contents at $17,165. From these items, the claimant agrees to give to the respondent the tools, equipment and accessories in the garage, the carved granite Buddha, the patio table and chairs, and the barbeque. The total value of these items is approximately $7,000 leaving the claimant with approximately $3,000 more in family assets in the home, plus the art works. · RRSP in the name of the respondent in the amount of $65,517 and cashed in by him after leaving the family home. The net proceeds received after tax was $45,862. · CIBC US money account in the amount of $2,200 withdrawn by the respondent after leaving the family home. · CIBC GIC in the amount of $8,735 cashed in by the respondent after leaving the family home. · According to the respondent, the claimant also has $2,500 US savings, $4,000 Canada Savings Bond, $1,000 savings account, and $9,000 in the children's savings accounts. [67] The family debts are: · CRA tax debt of $86,000 in respondent's name. · CIBC Integral account 15-51418 estimated to be approximately $39,500. · The invoice of $12,000 for Dr. Colby's s. 15 Report that was paid for by the claimant. [68] The respondent says he will be responsible for the Integral line of credit debt provided he is credited with having absorbed half of this family debt - $19,500. He submits that the CRA debt is a family debt and should be paid out of the sale proceeds from the family home. [69] The parties have provided varying estimates of the value of various family assets, including art work and rugs. Some appraisals were recently provided. There is considerable uncertainty as to the actual resale value of most of the items. The respondent has already removed many items from the home or storage. The parties agree that the respondent can keep: · the items he has already taken from the family home and storage; · the stereo, speakers and amplifiers in the basement; · from the safety deposit box, if there, any Buddhas, his jewelry, the piece of 8 necklace, the Roman coin, the gold Panda coin, his gold necklace, and Natasha's jewelry; · one of the barbeque and patio sets, · the three aboriginal paintings and two carvings; · one of the vacuums; · a reasonable share of the records, CDs and DVDs; · his tools, bicycle, and belongings from the garage, · half of his collection of glass vases, · the large stone Buddha in the backyard; and · the various personal belongings as identified at page 13 para. 20, of his written submissions. [70] There are other items the respondent is requesting but which the claimant either says she does not have or disagrees they should be given to him. I am not satisfied the respondent is entitled to them and conclude they shall remain with the claimant. The parties agree each should be able to keep their own family photographs but allow the other party the opportunity to make copies. If I have overlooked anything concerning which the parties agree, that agreement should stand. [71] I will round off the assets and debts to the nearest dollar. Where the value of the vehicles is in dispute I have split the difference. I have done so because determining the value in July 2012 is an imprecise task. [72] The claimant has possession of or has already liquidated the following family assets: Audi motor vehicle $ 20,000.00 2004 Harley Davidson motorcycle 12,000.00 $32,752 Raymond James RRSP (net) 28,000.00 $44,950 Raymond James RRSP (net) 35,825.00 CIBC GIC N/A Raymond James investment account 19,993.00 CIBC TFSA accounts 5,000.00 TOTAL $120,818.00 [73] The money from the CIBC GIC was used to pay down the Integral line of credit and therefore has not been included in the total of her share of the family assets. I have also not included the contents of the family residence in her possession. I have not included the money in the children's bank accounts because that is their money. According to the respondent, the claimant also has or had an additional $7,500 in savings and savings bonds. This increases her share of the family assets to $128,318 [74] The respondent has possession of or has already liquidated the following family assets: Ford 350 $ 24,700.00 Mercedes 25,000.00 2005 Harley Davidson motorcycle 15,000.00 American Chopper motorcycle 15,000.00 RRSPs in the amount of $65,517 (net) 45,862.00 CIBC U.S. account 2,200.00 CIBC GIC 8,735.00 TOTAL $136,497.00 [75] I have only credited the respondent with the net proceeds of the RRSP in order to be consistent with how I have credited the claimant. I have done so notwithstanding the circumstances in which it was liquidated and the use made of the proceeds. I would not have done so if that occurred after he became aware of the restraining order. [76] If the respondent's position is correct with respect to the other assets, the claimant has received approximately $8,179 more than the respondent. [77] I have considered having professional appraisers assess the market value of all of the art work, rugs, household furnishings, assets in the safety deposit box, and other assets whose value is in dispute. I have concluded the benefit of doing so is outweighed by the cost - the delay, the additional financial cost, the logistics of having the appraisals done, and the frustration for both of the parties who need to move on with their lives. [78] I will therefore estimate the market value of these family assets. I estimate the value of the assets taken by the respondent to be approximately $50,000 once he also receives the agreed-upon assets from the family home. The value of the remaining assets in the family home including the art work retained by the claimant is approximately $15,000. Subtracting the $15,000 the claimant will keep from the $50,000 the respondent will keep results in him receiving approximately $35,000 more than the claimant. However, that benefit is more than offset by him assuming responsibility for the $39,000 Integral line debt. [79] The total difference in value between what each receives after combining the $8,179 and the $4,000 is that the claimant receives approximately $12,179 more than the respondent. However, the respondent recently received the Integral tax refund of approximately $13,000 which he used to pay past child support. In the result and given the lack of precision with respect to the valuation of the family assets, I find that the difference between what each of the parties has or will receive from the division of the family assets other than the family residence is equal. [80] The claimant shall give to the respondent the family assets or other items she has agreed to provide to him. The other assets that have not been liquidated remain in the possession of the party presently in possession of them as their property. D. The Family Residence [81] The claimant seeks to have the family home reapportioned entirely in her favour. The respondent vigorously opposes her application and submits that it should be sold with the net proceeds divided equally after payment of the Integral CRA debt. [82] The claimant submits that s. 65(e) of the FRA is of particular importance in the circumstances of this case and highlights that she has no income and has not worked since 1999. She also submits that the respondent has failed to comply with court orders, has deliberately been underemployed, and was financially irresponsible during the summer of 2012 in how he spent the proceeds of his RRSP. She points to the contents of the medical reports and questions the extent or legitimacy of the injuries suffered in the motor vehicle accident in October 2012. She says the court cannot count on the respondent to pay whatever support payments are ordered and submits that the court can, if necessary, combine reapportionment and lump sum spousal and child support awards in order to transfer ownership in the family home to her. [83] The claimant reviews a number of case authorities to support her position including: M.L.N. v. D.N., 2006 BCSC 249, and the appeal from that decision Narayan v. Narayan, 2006 BCCA 561; Brintnell v. Grasley, 2000 BCSC 1322; and Myatt v. Myatt (1993), 45 R.F.L. (3d) 45 (B.C.S.C.), with respect to when it is appropriate for a court to order lump sum child support. [84] She submits, beginning at page 7 of her written argument: Ms. Kvarnstrom is seeking a reapportionment of the family assets in her favour pursuant to Section 65 of the Family Relations Act. She wishes to retain the former family home in New Westminster because it is the home that the children have known for years and the children will benefit from the stability of not having to move. Christian has been suicidal in the past and Darion is a special needs child. In addition to the home being close to the schools, it is in a safe and familiar neighbourhood. Furthermore, Ms. Kvarnstrom has the ability to rent out the basement to generate rental income if need be . The case authorities being relied upon by the Claimant support this proposition. If the former family home is reapportioned 100% in favour of the Claimant, the Claimant proposes that she not have any further spousal support entitlement . [85] The respondent submits that he has been 100 per cent responsible for all of the efforts to financially support the family since 1999 and has put a great amount of work into the family home to preserve, maintain and improve the value of the home and should get to equally realize the equity his efforts have led to. He says this has been a long-term marriage and the presumption of an equal division of the assets should apply. Analysis [86] Section 65 requires the court to address the six enumerated factors. Here the duration of the marriage was almost 16 years and thereafter the parties continued to live in the family residence for almost two years. The property was purchased approximately 13 years ago and the mortgage paid off through the combined efforts of both parties - the respondent through the income he generated through his hard work and the claimant through her management of the household and finances and care of their children. In addition, the respondent did extensive work to improve and upgrade the house and contributed money from his personal injury settlement. [87] It is subparagraphs (e) and (f) of s. 65 that the claimant points to as inspiring reapportionment on the basis of fairness. I agree with the claimant that there are many similarities between the circumstances of this case and Narayan although there are also differences, including that the equity in this home is approximately $1.2 million. [88] The claimant is 59 years of age and wants to return to school to obtain her Bachelor of Business Administration, which will assist her to obtain a more senior employment position. She has been accepted into the program at BCIT for this September and believes she can graduate by September 2014. She believes she can be thereafter successfully re-enter the job market and eventually earn a reasonable income to assist her to support herself and her children. Considering her past success employed in marketing positions and having had the benefit of watching and listening to her give evidence, I find her goals are realistic. [89] The respondent will have to rebuild his business after he returns to work. While his health is somewhat uncertain, he is only 52 years of age, has many years of experience in construction, is a skilled worker, and will be able to earn a good income from his business. [90] Applying the factors set out in s. 65, I am satisfied that it is necessary to reapportion the house to the claimant in order for her to become and remain economically independent and self-sufficient. She has to finish her education and obtain employment. She will be re-entering the job market at 60 years of age after having been out of the workforce for approximately 15 years. She will have primary care for their three children, all in their early teens, and one of whom has special needs and may require continuing care as an adult. [91] Further, the respondent has been financially irresponsible since leaving the family home, and has disregarded court orders and his obligations to the claimant and his children. The claimant's efforts to finish her schooling and become economically self-sufficient should not be tied to the respondent's willingness to re-establish himself financially and pay her spousal support. Another consideration is that the respondent is unable to qualify for life insurance to ensure future support for the claimant or the children. [92] I find that what is fair and necessary is to order the sale of the family home and reapportion the net proceeds from the sale 75 per cent to the claimant and 25 per cent to the respondent. Based on the assessed value of the home the claimant should receive approximately $900,000 and the respondent approximately $300,000. [93] This reapportionment of the proceeds will permit her to have the funds available to purchase another suitable home for her and the children, to cover the cost of moving and other incidental expenses, to attend and pay for her schooling, and to become and remain economically independent and self-sufficient while continuing to care for the children and their home. [94] I find it would be unfair to divide the proceeds of the house 50/50 when the claimant will have custody and care of their three children and must re-enter the job market after an absence of almost 15 years. I also find it would be unfair to the respondent to reapportion the house 100 per cent to the claimant even if that included lump sum child and spousal support payments. [95] The CRA family debt of Integral should be paid from the net proceeds of the sale of the family residence before the reapportioned proceeds are provided to the parties. The respondent is responsible for Integral's line of credit debt. [96] The claimant paid for Dr. Colby's report so $6,000 should be paid to her from the respondent's share of the net proceeds. V. SPOUSAL SUPPORT [97] The claimant seeks spousal support pursuant to the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp), and FRA. She argues that she has both a compensatory and non-compensatory claim for support given her age, the length of time she has been out of the work force, and her ongoing family responsibilities. For the reasons she argued that the family home should be reapportioned to her entirely, she also argues that the court should award lump sum spousal support. She submits the award should be based on the respondent having an annual gross income of $150,000. She says that using Support Guidelines' mid-point, the amount should be $533,774. [98] The respondent does not disagree there should be spousal support, or that there should be a lump sum awarded for the next two years, but argues that it should be no longer and that it should be based on him having a gross annual income of $60,000. Analysis [99] The applicable legal principles with respect to spousal support are stated in Chutter v. Chutter, 2008 BCCA 507 at paras. 45-49: Section 15.2 of the Divorce Act is the main provision governing entitlement to spousal support. Subsection 15.2(6) provides that a spousal support order should meet the following objectives: (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time. In order to achieve a fair and equitable distribution of resources, all four of these objectives should be examined: Moge v. Moge, [1992] 3 S.C.R. 813 at 850-853, 43 R.F.L. (3d) 345. Having regard to these policy objectives, courts must consider the condition, means, needs and other circumstances of each spouse, including the factors set out in s. 15.2(4): (a) The length of time the spouses cohabited; (b) The functions performed by each spouse during cohabitation; and (c) Any order, agreement or arrangement relating to support of either spouse. Based on the statutory provisions and the case authorities, the Supreme Court of Canada has identified three grounds for entitlement to spousal support: (1) compensatory support, which primarily relates to the first two objectives of the Divorce Act; (2) non-compensatory support, which primarily relates to the third and fourth objectives; and (3) contractual support (Bracklow v. Bracklow, [1999] 1 S.C.R. 420 at paras. 15, 41-42, 44 R.F.L. (4th) 1). The claim for spousal support in this case was advanced on compensatory and non-compensatory support principles. Although the compensatory and non-compensatory grounds for spousal support are animated by different models of marriage, the case authorities hold that there is no single basis of support or objective under the Divorce Act that supersedes the other, and that many claims involve aspects of both compensatory and non-compensatory principles (Bracklow, at para. 27; Moge, at 852). A court is not called upon to decide on one basis for support to the exclusion of the other but rather to "[apply] the relevant factors and strik[e] the balance that best achieves justice in the particular case" (Bracklow, at para. 32). Moreover, the doctrine of equitable sharing is the overarching principle that must be borne in mind (Moge, at 864). [100] However, there can also be a relationship between the division of family assets and the need for spousal support. This was explained in Tedham at paras. 62-64: I turn, then, to the question of how the Court is to deal with the fact that Ms. Tedham has already received partial compensation for the losses she suffered as a result of the marriage and its breakdown with a view to promoting her self-sufficiency as a result of this Court's order for reapportionment of assets. The relationship between the reapportionment provisions in the FRA and spousal support was referred to in the majority judgment of this Court in Toth v. Toth (1995), 13 B.C.L.R. (3d) 1, as follows (at para. 59): In discussing the relationship between maintenance and the division of property under Part 3 of the FRA, it is useful to note that ss. [65(1)(e) and (f)] of the FRA, relating to reapportionment of property, incorporate concepts which are also found in the maintenance provisions of both the Divorce Act, 1985 and the FRA. Thus, property division and maintenance are closely intertwined. One advantage of this legislative tie is that [s. 65] may be utilized in the division of property to reflect the relative abilities of the parties to become or remain economically independent and self-sufficient ([s. 65(1)(e)]), and the respective capacities and liabilities of the parties ([s. 65(1)(f)]). These concepts are also relevant to determinations of spousal maintenance. The potential pitfall presented by this legislative link between property and maintenance, however, is the danger of double recovery where, for example, property is reapportioned under [s. 65] and then further reapportioned by an award of lump sum maintenance. Another potential pitfall arising from the interaction of these sections is that the court could mistakenly conclude that by reapportioning property under s. 65 of the FRA, it had necessarily addressed the full extent of the economically disadvantaged spouse's claim for support under s. 15.2 of the Act (or its equivalent under the FRA). The fact that there has been a reapportionment does not mean that there should not be an award of spousal support. That decision will turn on the extent to which the reapportionment has adequately compensated for the economic dislocation caused to a spouse flowing from the marriage or its breakdown, and any continuing need the spouse may have for support arising from other factors and objectives set forth in s. 15.2 (and the equivalent provision of the FRA). [101] After considering the factors listed in s. 15.2(4) and the objectives identified s. 15.2(6), I am satisfied that the significant reapportionment of the proceeds of the family home obviates the need for spousal support for the next 28 months. The claimant is going to receive approximately $600,000 more than the respondent. This will address the objectives set out in s. 15.2(6) during that time. [102] Prior to January 1, 2016, a review should be conducted to reassess the gross annual income of both the respondent and the claimant. This will permit the court to determine appropriate spousal support payments at the expiry of the 28 months, as well as vary monthly child support payments, if necessary. [103] The respondent has failed to pay any spousal support as ordered. Notwithstanding his failure to do so, I am going to cancel past support payments for the same reason I am not ordering spousal support for the next 28 months. [104] I now turn to the issue of child support. VI. CHILD SUPPORT [105] The claimant seeks an order for child support pursuant to the Divorce Act and FRA. Section 15.1 of the Divorce Act provides for child support orders. It requires adherence to the Child Support Guidelines except as permitted under s. (5). [106] As stated, the respondent's conduct since July 2012 is a matter of grave concern. He has consistently failed to comply with court orders. He has been financially irresponsible and ignored the best interests of his own children as he spent the proceeds of his RRSP contributions during the summer of 2012 while the claimant eventually had to borrow money to support her and the children. [107] Thus, there is some uncertainty whether the respondent will comply with court orders or make his best efforts to generate an appropriate income to support his children. Further, I am not confident that he will be financially prudent in how he uses the proceeds from the sale of the family home. In other words, this is the one time when the court can be sure that money is available to support his children as the claimant strives to become financially independent. [108] In order to ensure that child support payments are made, I have concluded that a lump sum award should be ordered to provide child support for the next 28 months. This will cover child support from September 1, 2013 up to and including December 1, 2015. The lump sum support will be deducted from the respondent's share of the net proceeds of the family residence at 124 Durham Street in New Westminster. Thereafter, child support payments will be made on a monthly basis beginning January 1, 2016 and the first day of each month thereafter. [109] While this order will reduce the respondent's share of the proceeds from the sale of the family residence, it will also relieve him from the obligation to make child support payments for his three children for the next 28 months. [110] The amount payable for the first four months (September 1, 2013 to December 1, 2013) at an annual imputed income of $80,000 is $1,577 per month for a total of $6,308. [111] The amount payable for 2014 (January 1 to December 1) at an imputed annual income of $100,000 is $1,923 per month for a total of $23,076. [112] The amount payable for 2015 (January 1 to December 1) at an annual imputed income of $120,000 is $2,252 per month for a total of $27,024. [113] Monthly payments will thereafter begin on January 1, 2016 in the amount of $2,252. [114] In addition, the respondent owes past child support. These payments cover the 14-month period from July 2012 until the end of August 2013. At an annual gross income of $80,000 the amount due is $1,577 per month for a total of $22,078. He recently paid approximately $14,000. Accordingly he still owes $8,078. [115] Finally, there are the children's special expenses. I agree with the claimant's statement of past special expenses. [116] I also agree with the respondent's position that the expenses must now be adjusted to reflect the reality of the family's current financial circumstances. I agree with his position that he pay $500 per month towards special expenses including Darion's medication, Christian's guitar lessons, and Jade's dance lessons, as well as contribute to any additional special expenses agreed to in advance by the parties. These payments will commence September 1, 2013 and for the first 28 months will be paid as a lump sum payment from the proceeds of the family home. Thereafter, commencing January 1, 2016, monthly payments of $500 will be made. [117] Thus, the total child support payments for the next 28 months will be $56,408 plus $14,000 for special expenses for a total of $70,408. This amount plus the $8,078 in outstanding past child support and past special expenses shall be paid directly to the claimant from the respondent's share of the net proceeds of the family residence. VII. CUSTODY AND ACCESS [118] Section 16 of the Divorce Act deals with custody and access. Subsection 10 states: In making an order under this section, the court shall give effect to the principle that a child of the marriage should have as much contact with each spouse as is consistent with the best interests of the child and, for that purpose, shall take into consideration the willingness of the person for whom custody is sought to facilitate such contact. [119] Here, the parents have responsibly focused on the best interests of the children and are largely in agreement with the recommendations of Dr. Colby with a few variations. I agree with his recommendations with the suggested variations. [120] I will leave it to the parties to draft the terms of the order with respect to custody and access which should include that: (i) The claimant will have sole custody and guardianship of their children, Christian, Darion and Jade. (ii) The claimant will, through a third party, advise the respondent as soon as reasonably practical of any major developments or significant health issues in the life of each of the children. (iii) The respondent may contact in a reasonable manner any third party dealing with the children such as teachers, coaches, and health care professionals, in order to obtain information concerning the children. Such third parties are at liberty to disclose any information they deem appropriate to disclose in the circumstances. (iv) The respondent may have graduated access to the children on the terms recommended by Dr. Colby. These terms include a series of re-introduction sessions jointly with the three children, the assistance of a child specialist agreeable to both parties, supervision by a professional agency, and the respondent participate in a therapeutic psychiatric treatment program. (v) The respondent will be responsible for the costs of the child specialist, the professional supervising agency, and his own therapy. (vi) The respondent may vary or change any of these terms with the consent of the claimant, and in the absence of such consent, may apply to the court to do so. VIII. CONCLUSION [121] The family home will be sold. The claimant will have conduct of the sale at a listing price to be agreed upon by both parties, conducted by a listing agent agreed upon by both parties, and at sale price agreed upon by both parties. In the event of a dispute of any of these matters either party return to court to vary these terms. [122] From the net proceeds of sale, Integral's tax debt in the amount agreed upon will be paid directly to the CRA as well as any additional expenses incurred with the consent of both parties for the purpose of improving the home or yard for sale to whomever has incurred those expenses or whoever is owed that money. [123] Thereafter, the remaining proceeds of sale will be reapportioned so that the claimant will receive three-quarters of the remaining net sale proceeds and the respondent one-quarter of the remaining net sale proceeds. [124] From the respondent's share of the net proceeds will be deducted and paid to the claimant though her counsel: · the outstanding past child support payments of $8,078 plus the lump sum child support payments for the next 28 months totaling $56,408 and the lump sum child special expenses for the next 28 months totaling $14,000 · the past special child expenses as stated by the claimant · $6,000 for the respondent's share of the cost of Dr. Colby's report. [125] I order that the parties are divorced effective 31 days from the date of this judgment. [126] I order that the claimant's name, Toni Louise Kvarnstrom, be changed to Toni Louise Mabey. [127] I order that without their mutual agreement the respondent and claimant have no direct or indirect contact with each other except indirectly through their counsel or through third persons, or in writing; and only for the purpose of fulfilling the terms of this decision, including the division of family assets, the payment of child and spousal support, and dealing with parenting issues for their three children, including arranging and facilitating access to them. [128] The claimant has largely been successful and will have her costs but I decline to order special costs against the respondent. [129] I will leave it to counsel to draft the final order to include the additional orders I have made with respect to the jewelry, the other family assets, child and spousal support, and custody and access. [130] The evidence and issues have evolved somewhat as the trial has proceeded. If there is anything that I have overlooked, assets or debts or support payments I have significantly miscalculated, or if there is uncertainty as to what I have ordered, the parties should arrange to speak to those matters before me in person or by phone on or before Friday, August 30, 2013. [131] I want to thank counsel. Ms. Kerslake and Mr. Glanzberg have each acted with professionalism throughout these proceeding. They have capably represented their clients while at the same time properly assisting the court. "SMART J."