Whitfield v. Whitfield

2012 BCSC 965 Whitfield v. Whitfield

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Whitfield v. Whitfield, 2012 BCSC 965 Date: 20120629 Docket: 20754 Registry: Cranbrook Between: Dorothy Jean Whitfield Claimant And Jeffrey Allan Whitfield Respondent Before: The Honourable Mr. Justice Melnick Reasons for Judgment Counsel for the Claimant: R. Buddenhagen Counsel for the Respondent: R. Miles Place and Date of Trial: Cranbrook, B.C. May 7, 2012 Place and Date of Judgment: Cranbrook, B.C. June 29, 2012 [1] This is a summary trial proceeding in which the principal issues are a division of the parties' assets and spousal support. I. BACKGROUND: [2] The claimant, Dorothy Jean Whitfield ("Ms. Whitfield"), and the respondent, Jeffrey Allan Whitfield ("Cpl. Whitfield") were married in October 1993. While they disagree as to the date they separated, I am satisfied that it probably was on March 30, 2010. [3] Shortly after their marriage, Cpl. Whitfield graduated from Depot as an officer with the Royal Canadian Mounted Police ("RCMP"). He was posted to Golden where the parties' married life together effectively began. They purchased their first home there with the considerable assistance of the sale proceeds of Ms. Whitfield's house in Haliburton, Ontario which had been built with a gift of money from her father. [4] Throughout most of the marriage, both parties have been employed. Cpl. Whitfield has always been with the

RCMP, first in Golden and now in Cranbrook. Ms. Whitfield, on the other hand, has had a variety of jobs, none of which has paid as well as Cpl. Whitfield's. She has also operated a dog grooming facility and a dog kennel. [5] Ms. Whitfield first set up the dog business when the parties sold their home in Golden in 1999 and moved to Nicholson, a community near Golden. In Nicholson, the dog businesses were sufficiently successful that Ms. Whitfield did not need to be otherwise employed. [6] In 2006, Cpl. Whitfield was transferred to Cranbrook. The parties thus sold their home in Nicholson and purchased a residence near Cranbrook in the Gold Creek area. There, Ms. Whitfield established a dog grooming business at which she works approximately half-time. By "half-time" I mean about half the time she was occupied by the dog grooming portion of her business in Nicholson. [7] Their present home cost them $585,000 or $590,000 (the parties don't agree on this either). It was paid for in part by the proceeds of sale of the Nicholson property ($455,000) and a mortgage of about $150,000. Ms. Whitfield says that $200,000 of money she inherited from her father was used for the purchase as well but that is difficult to square with the above-noted figures unless it went toward improvements to the property. In any event, the residence has now been sold for $675,000 with possession to be delivered

on July 10, 2012. [8] The mortgage on the Gold Creek residence was re-negotiated at the end of 2011. The parties rolled into the mortgage a personal line of credit ("PLC") so as to be able to secure a better interest rate. Likely, they will now pay a penalty on that mortgage when the sale of their home completes and they have to discharge the mortgage. As of February 2012, the mortgage balance was approximately $238,000 with bi-weekly payments of $617.55 including property taxes. Cpl. Whitfield has been responsible for making those payments (and prior mortgage and PLC payments) pursuant to the order of Master Bishop dated January 17, 2011. [9] Master Bishop also ordered Cpl. Whitfield to pay $300 a month spousal support. This was predicated on the assumption that he would "continue paying the mortgage and family debts". That was understood to include payment of principal and interest on both the then current mortgage and PLC. However, Cpl. Whitfield apparently had cash flow problems so he arranged to pay interest only for a time on the PLC. Thus, when the former mortgage and the PLC were consolidated into the new mortgage in December 2011, the balance secured by that instrument was somewhat higher than it would have been had Cpl. Whitfield made the full payments as contemplated by the parties when the order of Master Bishop was made. In that respect, Ms. Whitfield says she has

been shorted about $3,450. That is, the spousal support component of the order was very low in proportion to Cpl. Whitfield's income presuming he would be paying monthly debt payments that were higher than he in fact did pay. [10] Ms. Whitfield's father died in 2005. She subsequently received a substantial inheritance from his estate. Over several installments she was paid about $720,000. That is in addition to the money he gave her to build her home in Haliburton which, she says, he told her was an advance on her inheritance. As noted earlier, the sale proceeds of that home were invested in the parties' first home in Golden. At present, she has remaining in liquid assets the sum of about $225,500 which is invested with Nesbitt Burns (she may have used some of that amount for personal living expenses since separation). [11] However, the parties own numerous chattels, the acquisition of which was made possible by the inheritance Ms. Whitfield received. While Cpl. Whitfield always earned a reasonably good income during their marriage, and while Ms. Whitfield had various forms of employment, then a dog grooming and kennel business, together they did not earn enough to live as comfortably, with as little debt, as was made possible by the receipt of the inheritance from Ms. Whitfield's father's estate. Then, too, once she began to receive installments of funds from the estate, Ms.

Whitfield was able to substantially reduce her hours of work as a dog groomer. [12] Now, she says that the reduction of work is due in large measure to arthritic changes in her knees due to a mishap she suffered as a teenager. Her orthopaedic surgeon, Dr.Chan, says in an opinion dated November 23, 2011, that she had had two arthroscopic debridements to her left knee in 2009, and would require a further arthroscopy to her right knee. Apparently, this has since been performed. [13] Given the extent of her continuing sporting and other physical activities, however, I conclude that, while she undoubtedly suffers discomfort in her knees from everyday activities, including standing to groom dogs, it is more probable that the primary reason she has cut back on her work hours is the availability to her of the inheritance money, making the need to generate income less pressing. Thus, the inheritance has been a source of money to acquire chattels and to invest in the parties' Gold Creek home, but also to replace in part the income she formerly contributed to the relationship. [14] Each party has her or his own bank account and share a joint account. Over the years, Cpl. Whitfield has generally contributed $1,200, then later $1,500 each pay period from his income from the RCMP to the joint account. He has had no other source of income. Ms. Whitfield has not contributed as regularly to the

joint account. But both have used funds from their personal accounts (and in the case of Ms. Whitfield, from her inheritance) for family purposes. [15] Both agree that the sale proceeds of the Gold Creek home should be divided equally, as should Cpl. Whitfield's pension to the extent it was earned during the marriage. That is essentially most of the value of about $402,000. Ms. Whitfield wants an order entitling her to share in Cpl. Whitfield's pension when she is eligible to receive it. That will be sooner than it will be available to him as she is presently 53 while he is 46. He plans to retire from the RCMP in November 2016. He would like to buy out Ms. Whitfield's interest in his pension for $200,000. By law, both have contributed to the Canada Pension Plan ("CPP"). [16] Other than the assets noted in the preceding paragraphs, Ms. Whitfield is of the view that they should be divided 73% to her and 27% to Cpl. Whitfield to compensate her for having deferred her career to his and to reflect the degree to which these assets were acquired with the benefit of her inheritance. Cpl. Whitfield submits that these assets should be divided equally. Alternatively, he suggests that the Nesbitt Burns account could be reapportioned 60% to her. [17] In addition to the inheritance money, Ms. Whitfield also received from her father's estate a 2003 Lexus automobile. She takes the position

that it is not a family asset. Cpl. Whitfield maintains that it is. Both parties want the boat acquired during the marriage. Ms. Whitfield values it at $30,000, Cpl. Whitfield at $35,000. A 5th wheel trailer is one of the assets acquired with inheritance money. About $50,000 of that money was used to purchase it. There remains a mortgage on it for about $30,000. Both agree that its present value is $35,000. [18] Ms. Whitfield maintains that her dog grooming business has only nominal value of $1,000 reflecting the value of some used equipment. Cpl. Whitfield is uncertain of its value but his counsel suggested something more like $5,000. [19] Ms. Whitfield claims to be entitled to spousal support in the mid-range of the Spousal Support Advisory Guidelines ("SSAG") for incomes of $20,000 a year for her and $90,000 a year for Cpl. Whitfield. Even that is a concession, she suggests, as she is suspicious that Cpl. Whitfield has been banking his overtime for the past couple of years. He denies doing so. By her calculations, he should pay her support of $1,500 to $1,600 a month. [20] Cpl. Whitfield points out that Ms. Whitfield is earning investment income of something close to $14,000 a year from her Nesbitt Burns investments. Further, he says, I should attribute a higher income to her than she presently declares. He suggests that she does a lot of work for cash and is not being

candid in what she declares as income; that when in Nicholson and working full-time (which in his view she is still capable of doing) she earned more like $30,000 a year. While not conceding that Ms. Whitfield is entitled to spousal support, Cpl. Whitfield's counsel suggested that I attribute income to her of between $20,000 and $30,000 a year. He also suggested that I find Cpl. Whitfield's income for SSAG calculation purposes to be the $1,500 per pay period that Cpl. Whitfield paid into the joint account as his contribution to the family pool of funds. Further, he suggested that if there is to be any reapportionment of family assets in favour of Ms. Whitfield, I should award spousal support from the low end of the range of the SSAG. II. DISCUSSION: 1. Division of Assets [21] Let me first say that there is no realistic suggestion in the evidence that Ms. Whitfield had to defer or abandon any career opportunity because of her marriage to Cpl. Whitfield. In choosing to marry him, during the time he was in training to be an RCMP officer, she undoubtedly accepted the reality that her life would be where he was posted from time to time. But, in doing so, she did not put a career on hold, nor was she foreclosed from pursuing any employment opportunities that may have been available to her given her education and interests, except to the extent that her interests would have to be

pursued where he lived. She did that in the context of establishing her dog businesses. [22] Next, as noted earlier, I have no doubt that Ms. Whitfield's decision to essentially work half-time in her dog grooming business since she started to receive her inheritance is because of its availability to her to replace income, not because of an inability to work more due to her arthritic knees. [23] The inheritance money was used for family purposes. In that I include the "advance on her inheritance" from her father to enable her to construct the home she built before marriage in Haliburton. In part, it was used to replace part of the income Ms. Whitfield used to contribute to the marriage. In part, it was used to help acquire chattels for their mutual use and pleasure. And, in part, it was invested in a manner that provided a measure of investment income. [24] The 2003 Lexus automobile is no less a family asset than is the inheritance money and what was purchased for the parties' use with it. Thus any reapportionment of the family assets must be based upon the factions set out in s. 65(1) of the Family Relations Act, R.S.B.C. 1996, c. 128: 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. [25] The parties' marriage was a relatively long one, 17 years. They have now lived separate and apart for just over one year. The acquisition of their most recent matrimonial home was made possible by a contribution of the proceeds of sale of Ms. Whitfield's home she owned prior to the marriage, earnings from Cpl. Whitfield's employment, earnings from Ms. Whitfield's employment and businesses, her inheritance, and capital gains from the sale of two prior homes. I took it that most of the more expensive chattels were acquired after Ms. Whitfield began receiving her inheritance from her father's estate. Thus, in large measure, the acquisition of those chattels was tied to disposable money made available by the inheritance. Without it, Ms. Whitfield could

never have worked less while they acquired more. [26] Ms. Whitfield does not have a secure profession as does Cpl. Whitfield (even though he intends to retire in less than three years). Her dog grooming business is capable of providing more income than she has chosen to generate since receiving her inheritance. Even the factor of her knees should not prevent that. However, her arthritic knees are a factor that should reasonably be considered with respect to her long range capacity to earn income from employment that requires her to stand for long periods of time. [27] However, whether she has access to Cpl. Whitfield's pension, or access to a retirement fund created by money he pays her to buy out her interest in it, she will be in a position not dissimilar to him with respect to retirement income. The only exception is that in the latter case, he will be able to contribute to his pension for a few more years. [28] Given the above, I conclude that in the circumstances of the parties, it would be unfair to equally divide all of their assets between them. The net proceeds of the sale of the Gold Creek property and Cpl. Whitfield's pension (and the parties' CPP entitlements to the extent they were accumulated during the marriage) should be divided equally. So, too, should any household furniture and effects. However, the balance of the family assets (which I find were largely

acquired because of the extra capital available to them from the inheritance) shall be divided 60% to Ms. Whitfield and 40% to Cpl. Whitfield. In arriving at that figure, I have taken into account that Ms. Whitfield chose to work less and contribute less earned income to the marriage as a result of the availability to her of the inheritance money. [29] The assets subject to reapportionment in favour of Ms. Whitfield are as follows (and will be distributed to each party as noted): Claimant Respondent 1. Pampered Puppy dog grooming business $2,500 2. 2007 Circle J horse trailer 10,000 3. 2005 Doral Sunquest 210 boat $35,000 4. 2003 Lexus LS430 12,000 5. Kubota tractor 14,000 6. Nebsitt Burns funds 225,500 7. Investor's Group RRSPs 14,500 8. Canada Savings Bonds 10,000 9. 2008 Chevrolet Avalanche 35,000 10. 2003 Chevrolet Silverado 2500HD 20,000 11. 2004 Skidoo 4,000 12. 2005 Skidoo 4,500 13. 2008 Can Am Outlander 650XT quad 6,500 14. 2004 Bombardier Quest quad 3,000 15. 2007 Cedar Creek 5th Wheel trailer 35,000 $320,000 $111,500 [30] Thus, of the $431,500 of assets listed above, at 60%, Ms. Whitfield is entitled to assets having a value of $258,900 and at 40%, Cpl. Whitfield's assets of a value of $172,600. With respect to those assets, therefore, if the distribution is to remain as I have directed, she must compensate him in the amount of $61,100. [31] As for the Gold Creek home

sale proceeds, those shall be divided equally between the parties after paying related real estate commission, the mortgage and any adjustments for which the parties are responsible as vendors. The parties will cause to be paid, from each party's share of the house sale proceeds, the mortgage on the 5th wheel trailer in the following proportion: Ms. Whitfield 60%, Cpl. Whitfield 40%. [32] I have determined that there is no principled reason why Cpl. Whitfield should not have the opportunity to retain his full RCMP pension upon payment of just compensation to Ms. Whitfield. I fix that compensation at $201,000, to be paid by his assigning to her that amount of his share of the net proceeds of the sale of the Gold Creek property. If he finds that he is unable to afford that compensation, then his RCMP pension will be divided between them on the "Rutherford formula" i.e. the years of marriage as related to the number of years the pension has been contributed to by him. [33] Cpl. Whitfield should compensate Ms. Whitfield in the amount of $1,732.64 which is one-half of the amount the new mortgage on their home was made larger by his not paying the full payments contemplated by the order of Master Bishop. I have set the amount at one-half of the $3,465.28 he did not pay as he will be paying the other half by being responsible for the payment of one-half of the mortgage balance. [34] I

accept that Ms. Whitfield has retained most of the parties' furniture. Cpl. Whitfield has valued it at $10,000. As best I could find in the material, Ms. Whitfield has not provided me with evidence of the value of the furniture and effects she has retained. In those circumstances, I would accept the valuation of Cpl. Whitfield and direct that Ms. Whitfield compensate him for the furniture she has retained in the amount of $5,000. [35] Although I have allocated the boat to Cpl. Whitfield, I am not at all certain that he will have the financial ability to retain it and operate it. I make the same observation with respect to Ms. Whitfield. Neither will have as comfortable a life as he or she did during the marriage. [36] Finally, the parties' CPP pensions shall be divided between them in accordance with the applicable legislation.

2. Spousal Support [37] I am satisfied that Ms. Whitfield is entitled to spousal support. Although she will have liquid assets of at least $600,000, she needs to acquire a residence in which to live and in which to operate her dog grooming business. As well, it is important that she invest the money she will be paid by Cpl. Whitfield for her share of his pension to provide for her own retirement. [38] Until there is a change in circumstances (such as his retirement or her re-marriage, for example), he should pay her spousal support in the mid-range of the SSAG on the basis of his having an income of $90,000 a year and her having an income of $25,000 a year. Although she presently has investment income of close to $14,000 a year from the Nesbitt Burns account, I would not take that into account as she will need to use her now available liquid assets to purchase a new home and to invest in a retirement plan. I impute an income of $25,000 a year to her based upon what I accept she is capable of earning as net income from her dog grooming business. [39] Thus, commencing July 1, 2012, Cpl. Whitfield shall pay Ms. Whitfield spousal support of $1,564 a month. [40] In fixing Cpl. Whitfield's income at $90,000 a year, I reject both Ms. Whitfield's suggestion that he has reduced his income by banking overtime and Cpl. Whitfield's suggestion that I should accept as his income only that

portion of it that he deposited to the joint account. All of his income was, in reality, available, and used, for family purposes. [41] In choosing the mid-range as suggested by counsel for Ms. Whitfield rather than the low end of the range as suggested by counsel for Cpl. Whitfield, I have considered Ms. Whitfield's age, her health situation (arthritic knees), her capacity to earn income relative to his, her need to provide for her retirement and her need to use capital to purchase a home in which she can re-establish her business. III. CONCLUSIONS: [42] The assets of the parties shall be divided as outlined above which shall include an unequal division of a number of those assets 60/40 in favour of Ms. Whitfield. [43] Cpl. Whitfield may buy out Ms. Whitfield's interest in his pension for $201,000. [44] Ms. Whitfield is entitled to spousal support in the amount of $1,564 a month commencing July 1, 2012. [45] The parties may make submissions as to costs. "Melnick J."