IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20101018

Docket: E030661

Registry:
New Westminster

Between:

Verona Dawn
Sparacino

Plaintiff

And

Joseph Anthony
Sparacino

Defendant

Before:
The Honourable Mr. Justice N. Smith

Reasons for Judgment

[1]            
The parties to this divorce action were married in June, 1998, and
separated in February, 2006.  There is no dispute about the divorce and the
requirements of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) [Divorce
Act] have been satisfied. The primary issues before me are division of
family assets and spousal support.

[2]            
 The plaintiff wife is 50 years old and is employed as a supermarket
clerk.  As of the date of trial she was working reduced hours as a result of
injuries she suffered in a series of motor vehicle accidents.  Although she
hopes to return to full time employment, it is not clear if or when she will be
able to do so. Her income from part-time employment has been supplemented by
payments under a short-term and a long-term disability plan.

[3]            
The defendant husband is 63.  Prior to the marriage he had worked in
automobile sales and had taken a college writing course.  During the marriage
he attended university and obtained a degree in psychology but has not been
able to find work in that field.  After the parties separated, he returned to
automobile sales, but was also working only part time at the date of trial.  He
says his ability to work is limited by a heart condition, for which he has been
unwilling to undergo surgery.

[4]            
I do not find it necessary to set out the financial circumstances and
history of these parties in great detail.  The defendant brought far more assets
into the marriage but the plaintiff had a significantly higher income while
they were together.  The plaintiff’s current income, including disability
benefits, is approximately $47,000 a year, while the defendant’s income,
including pension and investment income, is about $18,000.

[5]            
The major family asset is the former matrimonial home on Best Avenue in
Mission.  The parties purchased that house in June 1997−a year before
their marriage.  There is conflicting evidence about the nature of their
relationship before then.  The plaintiff says they had effectively lived
together in a condominium she owned from 1993 to 1996.  The defendant says he
was a frequent visitor to that residence, but they did not begin cohabiting
until the Best Avenue property was purchased.

[6]            
The defendant says that prior to purchase of the Best Avenue property,
he had lived primarily at his parents’ home on Moffat Avenue in Mission.  In
1996, his parents added him to the title of that property as a joint tenant,
although the transfer was not registered until February 1999, after both
parents had died.  As a result of his parents’ death, the defendant became the
sole owner of the property.  He sold it in 2002 after performing repairs and
renovations.  The parties lived in the Moffat Avenue house for about a year
while the defendant was preparing it for sale.  They then returned to the Best
Avenue house and the defendant has continued to live there since the separation.

[7]            
 The defendant received net sale proceeds of approximately $167,000 from
the sale of the Moffat Avenue property, of which he used approximately $121,000
to pay off the mortgage on the matrimonial home.  According to an appraisal
prepared for the defendant, that house is now worth $310,000.  An appraisal
prepared for the plaintiff places its value at between $335,000 and $350,000. 
I find the defendant’s appraisal to be more reliable because it is a full
appraisal, including inspection of the interior, while the plaintiff’s
appraisal was performed on a “drive-by” basis.

[8]            
The defendant holds bank and investment accounts totalling $128,455,
plus a registered retirement savings plan worth $10,150.  Some of the
investment accounts have been opened since separation, but they were generally
opened with funds transferred from other accounts that existed during the
marriage.  The defendant concedes they are family assets.  The plaintiff’s only
significant financial asset, other than her employee pension plan, is an RRSP
worth about $30,000.

[9]            
The plaintiff seeks equal division of assets while the defendant seeks a
re-apportionment in his favour.  The relevant sections of the Family
Relations Act, R.S.B.C. 1996, c. 128 [Family Relations Act] are
ss. 56 and 65(1), which read as follows.

Equality of entitlement to family assets on marriage
breakup

56 (1)   Subject to this Part and Part 6, each spouse
is entitled to an interest in each family asset on or after March 31, 1979 when

(a)        a separation agreement,

(b)        a declaratory judgment
under section 57,

(c)        an order for dissolution
of marriage or judicial separation, or

(d)        an order declaring the
marriage null and void respecting the marriage is first made.

(2)        The interest under subsection (1) is an undivided
half interest in the family asset as a tenant in common.

(3)        An interest under subsection (1) is subject to

(a)        an order under this Part
or Part 6, or

(b)        a marriage agreement or
a separation agreement.

(4)        This section applies to a marriage entered into
before or after March 31, 1979.

…

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.

[10]        
 The re-apportionment provided for in s. 65 is an exception to the
general rule that family assets must be divided equally. It applies only where
equal division would be unfair and then only when the unfairness arises from
the specific factors set out in s. 65.  As noted in Lockhart v.
Lockhart (1989), 19 R.F.L. (3d) 359 (B.C.C.A.) at 362,“[t]he determining
factor is whether equality is offensive to a sense of fairness and justice,
having regard to the circumstances of the parties.”

[11]        
The majority of the considerations contained in s. 65 reflect
contributions made to the assets and may be used to prevent a financial
windfall resulting from a short marriage.  However, s. 65(1)(e) focuses on
the economic independence and self-sufficiency of each spouse and, in that way,
incorporates the self-sufficiency objectives of the support provisions in the Divorce
Act.  The court should first deal with the division of property, including
reapportionment, before it goes on to determine entitlement to spousal support:
Zavari v. Zavari, 2008 BCSC 317, 52 R.F.L. (6th) 54 at para. 30.

[12]        
Among the “other circumstances” that the court may consider under
s. 65(1)(f) is a “marked disparity” in the contribution to the acquisition
and maintenance of a family residence: Bajwa v. Bajwa, 2007 BCCA 632, 45
R.F.L. (6th) 229 at para. 20, aff’g 2006 BCSC 514.

[13]        
In dealing with the division of property, it is proper for the court to
look at each individual asset and decide whether equal division would be unfair
within the meaning of s. 65: Kaur v. Ram, 2006 BCCA 527, 34 R.F.L.
(6th) 59 at para. 19, rev’g 2005 BCSC 1536.

[14]        
Counsel have provided me with a great many cases in which the Court has
re-apportioned or declined to re-apportion family assets.  Those cases provide
some guidance but, of course, each case must be decided on its own facts and I
must determine whether equal division of these assets between these
parties would be unfair.

[15]        
The defendant provided virtually all of the initial down payment for the
Best Avenue property and later paid off the mortgage with the proceeds of an
inheritance.  However, while the mortgage remained in place, the plaintiff had
the greater income available to service it.  Since separation, the defendant
has continued to live mortgage free in the former matrimonial home for more
than four years, while the plaintiff has been required to find rental
accommodation.

[16]        
These parties married relatively late in life and stayed together for
almost eight years.  That is not a particularly long marriage, but neither is
it an unusually short one.  They purchased the Best Avenue house together and
it was the matrimonial home throughout the marriage, except for the year they lived
in and renovated the Moffat Avenue property.  This is not a case where one
party had owned and lived in the matrimonial home long before the marriage,
such as Murphy v. Murphy, 2007 BCSC 870, or where one party acquired a
property through inheritance relatively late in the marriage, such as Hofer
v. Hofer, 2005 BCSC 423.

[17]        
The defendant has a lower income than the plaintiff and limited capacity
to improve his income over a shorter working-life expectancy. This is, to some
extent, a situation of his own making because he chose, during the marriage, to
pursue education in a field where, it turned out, there were no job
opportunities for him.  However, the fact remains that his ability to earn
income in the future is limited by his age and the state of his health.  I have
not ignored the fact that he has declined medical treatment for his heart
condition, but I do not have the necessary medical evidence to assess the
reasonableness of that decision or the extent to which such treatment would
have improved his ability to work.

[18]        
In the circumstances of this case, and balancing the factors set out in
s. 65, I am not persuaded that equal division of the Best Avenue property
would be unfair within the meaning of the Family Relations Act.  There
will therefore be an order that the property be listed for sale immediately and
proceeds of sale divided equally between the parties.  If, prior to any offer
to purchase being received, one party is in a position to buy out the other’s
interest, he or she may do so on the basis of the value set out in the
defendant’s appraisal report.

[19]        
I have come to a different conclusion in regard to the defendant’s
financial assets.  By their very nature, such assets change in value and form
over the years and the court is not required to engage in a forensic accounting
exercise.  But it is clear that the assets held by the defendant were augmented
by inheritance.  He retained the balance of the Moffat Avenue sale proceeds,
after paying off the mortgage on the matrimonial home, in his own account.  He
also testified that he received a further inheritance of about $45,000 on the
death of his father in 1999.  To the extent that the money he holds did not
result from inheritance, it is derived largely from assets that he brought into
the marriage.

[20]        
Those facts, along with his more limited income, weigh heavily in favour
of re-apportionment and are only partially balanced by the fact that the
defendant’s ability to preserve those assets during the marriage was enhanced
by his having the benefit of the plaintiff’s higher income.

[21]        
 In all the circumstances, I find it is appropriate to re-apportion the
defendant’s bank and investment accounts, giving the defendant 75 per cent and
the plaintiff 25 per cent.  The more limited financial assets held by the
plaintiff will be similarly re-apportioned 75-25 per cent in her favour.  All
of these assets will be divided on the basis of their value at the date of
trial.  The plaintiff’s employee pension plan, to the extent of benefits
accrued during the marriage, will be divided equally according to part six of
the Family Relations Act.

[22]        
 Both parties have made a claim for spousal support, but if any such claim
is to be considered, it must be that of the defendant, who has the lower
income.  Spousal support may be awarded on the basis of compensatory, contractual
or non-compensatory (needs-based) considerations: Moge v. Moge, [1992]
3 S.C.R. 813, 99 D.L.R. (4th) 456 and Bracklow v. Bracklow, [1999] 1
S.C.R. 420, 169 D.L.R. (4th) 577.

[23]        
Compensatory considerations do not arise here because, as I have said,
the defendant’s more limited income is not a consequence of either the marriage
or its break-up.  The non-compensatory considerations are relevant, but I have
taken them into account in re-apportioning the defendant’s financial assets in
his favour. I am satisfied that re-apportionment is sufficient to address his
need for self-sufficiency to the extent that need can be addressed in the
context of the limited means of these parties.  The unfortunate reality is that
neither party alone has the income or assets to support the lifestyle they
enjoyed together.

[24]        
There will therefore be an order for divorce, with family assets divided
as set out above.  In view of the divided success, I make no order as to costs.

“N.
Smith J.”