IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110111

Docket: E090993

Registry:
Vancouver

Between:

Mari-Anne Lenko

Plaintiff

And

Preston Daniel
Lenko

Defendant

Before:
The Honourable Madam Justice Gropper

Reasons for Judgment

Introduction

[1]            
Mari-Anne and Dan Lenko were married on September 22, 1990.  They have
two children, a daughter A, who is 15, and a son M, who is 13.  The couple
separated in August 2007.  Ms. Lenko is 44; Mr. Lenko is 54.

[2]            
The issues before me are:

1.         
divorce;

2.         
custody and guardianship of the children of the marriage, and child
support; and

3.         
division of assets pursuant to parts 5 and 6 of the Family Relations
Act, R.S.B.C. 1996, c. 128 (“FRA”).

Background

[3]            
The parties entered into an interim mediated agreement on September 11,
2007 which provided that Ms. Lenko would move out of the matrimonial home; the children
would reside alternately with each parent; and Mr. Lenko would pay $45,000 to
Ms. Lenko (which was to reflect a half interest in a Bank of America account in
Blaine, Washington).  The parties also agreed that certain assets were family
assets including:

i)       The family residence
located at … 32 Avenue, Surrey, BC V3T 0L5

ii)      100 acres of land located
at … Albreda, BC

iii)     The proceeds received by
Dan at the time of Settlement of his personal injury claims

iv)     RRSP in Dan’s name with an
approximate value of $26,000.00

v)      RRSPs in Mari-Anne’s name
with a total approximate value of $93,500.00

vi)     Dan’s public service pension plans benefits

[4]            
In accordance with the agreement, Mr. Lenko paid Ms. Lenko $45,000.  Ms.
Lenko moved out of the family residence.  In January 2008, the parties agreed
that Mr. Lenko would pay Ms. Lenko $650 per month rent for his use of the
former matrimonial home.  Mr. Lenko paid rent from January 2008 to April 2009,
when he unilaterally stopped payment.

Divorce

[5]            
After considering the evidence provided by Mr. and Ms. Lenko, as well as
the affidavit material filed by each, and after reviewing the pleadings, and
examining the marriage certificate, I find that the parties are entitled to a
divorce pursuant to s. 8(1) of the Divorce Act, R.S., 1985 (2^nd
Supp.), c. 3.

[6]            
The divorce shall take effect 31 days after the date of this judgment in
accordance with s. 12(1) of the Divorce Act.

Custody, Access and Child Support

[7]            
In accordance with the agreement, the children alternated between their
parents’ homes, until February 2010 when A chose to live primarily with Ms.
Lenko.

[8]            
The parties agree on joint custody and joint guardianship with terms as
follows:

…

(c)        primary residence of [A]:  The Respondent will
have access to [A] as directly arranged between them.  [M] will be with the
Claimant from Saturday at 4:00 p.m. until Wednesday at 2:30 p.m., and with the
Respondent from 2:30 p.m. on Wednesday, until Saturday at 4:00 p.m., as has
been the arrangement since the date of separation in 2007.

(d)        the holidays of the children will be divided
equally between the parties.  The children will be with the Claimant each
Mother’s Day and with the Respondent each Father’s Day.  Each of the parties
will have access to the children on their respective birthdays.

(e)        the joint guardianship
model will be based on the Master Horn model so that in the event of a
disagreement between the parties concerning the children, each of the parties
agree to attend and participate in mediation prior to the commencement of a
court application.

[9]            
Ms. Lenko seeks an order that the primary residence of A be with her.  Mr.
Lenko objects to the primary residence designation because he says it is “only
to undermine me and my credibility.”

[10]        
Ms. Lenko seeks child support from Mr. Lenko for A.  She says that
income should be imputed to him.  Ms. Lenko says that Mr. Lenko is entitled to
receive pension benefits now, although at a reduced rate.  Ms. Lenko is seeking
a share of the pension in accordance with Part 6 of the FRA but asserts
that even if that is taken into account, Mr. Lenko would have income upon which
to base an order for child support.  Ms. Lenko argues that Mr. Lenko is able to
commence drawing on his monthly pension effective April 1, 2009 in the monthly
amount of $2,527.  His pension benefits would be at least $1,700 per month.

[11]        
Mr. Lenko resists claiming his pension now, even if he is entitled to do
so, because he has not reached age 65 and his pension benefits would be
reduced.  His position is that he has no income and he should not have to pay
child support in respect of A.

Decision Regarding Custody, Access and Child Support

[12]        
I order that A’s primary residence be with Ms. Lenko.  A is 15 years old
and is able to make decisions about where she wishes to live.  There is no
evidence before me which would cause me to change the current arrangement.  Primary
residence is a designation which does not undermine another parent’s role in his
or her child’s life.  A parent remains a parent, with the attendant rights and
responsibilities.

[13]        
In respect of child support, I must consider whether income ought to be
imputed to Mr. Lenko.  In his financial statement, Mr. Lenko has provided his
income tax returns for 2007 and 2008 (but not for 2009).  In 2007, he claims
total income of $15,292, which includes business income of $10,000 and farming
income of $5,000 as well as employment income of $292.  In 2008 his total
income is $6,084.98 derived from interest and investment income.

[14]        
The obligation of a parent to support a child of the marriage
encompasses three fundamental principles:

1.         
Parents have a joint and ongoing legal obligation to support their
children.  A divorce cannot be granted until the parents make satisfactory
arrangements for the care of their children, Divorce Act, s. 11(1)(b).

2.         
The children, not the parent with custody, have the right to support. 
This is confirmed in the Federal Support Guidelines, which state that the first
objective must be to “establish a fair standard of support for children that
ensures that they will continue to benefit from the financial means of both
spouses after separation” (s. 7(1)(a)).

3.         
Support payments are based on an ability to pay.  They are not based on
what the parent does earn but what the parent can earn.  A parent has a legal
obligation to earn as much as he or she is reasonably capable of earning to
meet the obligations to support the children: S.G. v. G.W., 2006 BCSC
991 at para. 20.

[15]        
Mr. Lenko has a pension plan from which he can now receive benefits.  In
other words, he is capable of earning an income if he avails himself of his
pension.  He cannot avoid paying child support because he does not wish to take
his pension now at a reduced rate.  He has a legal obligation to provide
support for his children, and in respect of A, who resides with her mother, he
is obliged to pay child support.

[16]        
I find that Mr. Lenko has the potential of receiving $1,700 per month
(totalling $20,400 per year) in pension benefits, even if I determine Ms. Lenko
is entitled to an equal division of the pension under Part 6 of the FRA. 
He had some income in 2007 and 2008, which leads me to the conclusion that he
had some income in 2009 and 2010.  I find that he has other income – from
investments, business income or farm income – of $7,000 a year, for a total potential
income of $27,400 a year.  Based on that imputed income, in accordance with the
Child Support Guidelines, I find that Mr. Lenko must pay to Ms. Lenko in
respect of child support for A the amount of $251 per month.  Because A went to
live with her mother in February 2010, the order for child support is
retroactive to February 2010.

[17]        
In regard to M, the parties have agreed that they will each be responsible
for his expenses when he is in their respective care.

[18]        
Ms. Lenko seeks the sharing of extraordinary expenses including
prescriptions, orthodontia and summer camps.  Each party will contribute to
those expenses in proportionate shares in accordance with their income.  Ms.
Lenko’s income from her employment as an interior designer is $56,000 annually. 
I have found Mr. Lenko’s income to be $27,400 annually.

Division of Assets

[19]        
A list of the assets of the parties and their agreed values are attached
as Appendix A.  The parties own two properties: the former matrimonial home
located on 32^nd Avenue in Surrey, and the Albreda property located
on the South Yellowhead Highway in British Columbia.  Mr. Lenko has a one-fifth
interest in the Gabriola Island property, which had been gifted to him by his
parents at the time Mr. and Ms. Lenko got married.

[20]        
The parties operated a business buying and selling vehicles from the
premises of the former matrimonial home.  Mr. Lenko was in that business before
the marriage and owned some valuable vehicles when the parties married.  Mr.
Lenko agrees that this business was a joint venture with Ms. Lenko.  The trucks
have an agreed value of $40,000; the cars have an agreed value of $237,500.

[21]        
One of the vehicles which Mr. Lenko owned before the marriage and has sold
is a 1971 hemi ‘cuda (Barracuda).  The sales proceeds of $375,000 were used to
pay off some family debts, including the mortgage on the former matrimonial
home.  The remaining proceeds were deposited into an account in Blaine
Washington.  Mr. Lenko paid $45,000 out of those proceeds to Ms. Lenko, and
this is referred to in the agreement.  It is unclear whether any monies remain
in the Blaine account.  Despite repeated requests, Mr. Lenko has not produced
any documents which demonstrate the source of the funds in that account, where
they were distributed or whether any funds remain in that account.

[22]        
Some of the vehicles have been sold since the parties separated,
including a 1968 Plymouth road runner sold as parts and a 1968 blue hemi
Plymouth Roadrunner.  Mr. Lenko has used those proceeds to provide advances to
Ms. Lenko for his purchase of her interest in the matrimonial home.  He claims
that he has paid approximately $90,000 in advances.

[23]        
In addition, Mr. Lenko has a public service pension and a supplementary
pension sponsored by his union.  He has the proceeds of a personal injury
claim.  Both parties have RRSPs.  There are other assets and monies which I
must consider: Ms. Lenko disposed of a vehicle before the separation for
$4,000; the parties agreed that Mr. Lenko would pay rent to Ms. Lenko but
stopped doing so in May 2009.

Legal Principles

[24]        
Section 56 of the FRA presumes an equal division of assets.  The
presumption applies to all assets, including pensions and RRSPs.

[25]        
Section 65(1) of the FRA allows for an unequal division of
property, if an equal division would be unfair having regard to the factors
listed at s. 65(1)(a – f).  The factors are:

65  (1) If the provisions for division of property between
spouses under section 56, Part 6 or their marriage agreement, as the case may
be, would be unfair having regard to

(a) the duration of the marriage,

(b) the duration of the period
during which the spouses have lived separate and apart,

(c) the date when property was
acquired or disposed of,

(d) the extent to which property
was acquired by one spouse through inheritance or gift,

(e) the needs of each spouse to
become or remain economically independent and self sufficient, or

(f) any other circumstances
relating to the acquisition, preservation, maintenance, improvement or use of
property or the capacity or liabilities of a spouse

…

[26]        
Madam Justice Martinson considered the factors in W. v. W., 2005
BCSC 1010, at paras. 33 – 35:

[33]      No other factors may be taken into account. 
Reapportionment can be granted if a consideration of the factors listed in s.
65(1) reveals that the economic consequences of the marriage breakdown were not
shared equitably in the circumstances: Hartshorne v. Hartshorne,  2004
SCC 22.  The onus of proof lies on the person asking for reapportionment: MacNeil
v. MacNeil (1995), 14 R.F.L. (2d) 393 (B.C.S.C.), varied on other grounds,
(1997), 32 R.F.L. (4th) 438 (B.C.C.A).

[34]      The provision for equal division is based on the
presumption that there has been joint contribution to the accumulation and
maintenance of family assets: Bawtinheimer v. Bawtinheimer (1985), 49
R.F.L. (2d) 393 (B.C.C.A.).  The concept of contribution should be viewed on a
broad basis and the Court should not make fine distinctions regarding the
respective contributions of each of the spouses during the marriage. 
Contribution may be financial or by way of child care, household management or
other positive activities that promote the family unit.  The Family
Relations Act does not distinguish between the types of contribution, and
recognizes that each is as important as the others.

[35]      However, contribution
is only one factor.  Section 65 of the Family Relations Act, which sets
out the bases for reapportionment of family assets, does not require the Court
to effect a division of property that it feels is proportionate to the
contribution each spouse has made to the particular assets or groups of
assets.  While the contribution of a spouse, direct or indirect may be a
governing consideration in determining which assets are family assets, this is
not so in deciding their apportionment between the spouses where a number of
other factors come into play.

[27]        
In regard to assets which either party acquired before the marriage, the
length of the marriage is directly relevant.  In Murchie v. Murchie
(1984), 53 B.C.L.R. 157, the Court of Appeal stated: the … “parties marry in
contemplation of each other’s assets and by entering marriage they give up
other opportunities of doing other things”: at para. 32.

[28]        
In Eusanio v. Eusanio, [1996] B.C.J. No. 914 (S.C.) Mr. Justice
Lysyk described the length of the marriage as the most relevant factor in
denying reapportionment (at para. 50):

It is the case that the husband
brought assets of considerable value into the marriage while the wife brought
very little, but the significance of that factor diminishes with the passage of
time in a long-term relationship.

Position of the Parties

[29]        
Ms. Lenko relies on the presumption set out in the FRA.  She
asserts that it is not unfair to divide the assets equally, considering that
this was a 17-year marriage and both parties contributed to the accumulation of
assets, and in the care of the children and the household.  She also asserts
that although Mr. Lenko had certain vehicle assets when they married, they were
both involved in the business of buying and selling vehicles.  She also refers
to the principle that the value of assets which the parties bring into the
marriage has reduced significance in a long-term marriage.

[30]        
Mr. Lenko argues that he is disabled from employment, whereas Ms. Lenko
is healthy and can remarry.  He asserts that those assets which he brought into
the marriage should not be the subject of an equal division.  He wishes to buy
out Ms. Lenko’s interest in the former matrimonial home, which he says should
be valued at $1,000,000 for that purpose, despite his agreement to the value of
$1,200,000.  He asserts that he paid for the Albreda property through his
income, although he agrees that the proceeds of the sale of that property
should be divided equally.

[31]        
Mr. Lenko asserts that the buying and selling of vehicles was his
business, although he has admitted that the business was a joint venture with
Ms. Lenko.

[32]        
Most particularly, Mr. Lenko says that his needs are greater than Ms.
Lenko’s.  He is 10 years older than she is and has been the victim of several
car accidents which have left him disabled.  It is uncertain that he will be
able to return to work at any time, and he argues that he has to live off the
damages he has or may receive for his for the injuries he sustained. He also
says that because he is unable to work, and Ms. Lenko is, his pension should
not be divided equally between the parties.

[33]        
Mr. Lenko asks that I “strike down” the interim mediated agreement,
because it is unfair.  The $45,000 which he paid to Ms. Lenko in accordance
with it should be returned to him.  He has specific ideas about what should
happen with each of the vehicles.

Decision on Division of Assets

[34]        
Mr. Lenko bears the onus of demonstrating that an equal division of
assets would be unfair in accordance with the factors prescribed in s. 65(1). 
He has not done so.

[35]        
Mr. Lenko’s position reflects his perspective that it is more fair to him
that there be a reapportionment in his favour.  My duty is to be fair to both
parties in applying the provisions of the FRA.  I recognize that both
parties in this long marriage contributed to the obtaining of assets, the
performing of homemaking and childcare responsibilities and the operation of a
family business.

[36]        
Mr. Lenko says that there ought to be a reapportionment based upon his
need to become or remain economically independent and self-sufficient.  He has
been injured in three car accidents, none of which were his fault, and which have
rendered him unemployable.  I accept that Mr. Lenko’s health is compromised,
but I am not satisfied that this factor alone means that an equal division of
the assets is unfair.  Through their joint hard work throughout the marriage,
these parties have amassed considerable assets.  An equal division of assets
will provide both of them with economic independence and self sufficiency.

[37]        
I therefore order that Mr. Lenko purchase from Ms. Lenko the former
matrimonial home on 32^nd Avenue in Surrey, British Columbia within
30 days of this judgment, or failing that, that the home be sold and the
proceeds of that sale be divided between the parties subject to the advances
paid by Mr. Lenko, which I assess in the next paragraph. I am cognizant that
Mr. Lenko does not wish to sell the former matrimonial home and would not be
motivated to engage in the sale process. It is unworkable for the parties to
have joint conduct of sale.  I order that Ms. Lenko have conduct of sale of the
matrimonial home, and that Ms. Lenko advise Mr. Lenko of any offers which are
made by a potential purchaser and any offer which is accepted by Ms. Lenko is
subject to court approval.

[38]        
While Mr. Lenko provided proceeds of the sale of certain vehicles to Ms.
Lenko, he did not consider that Ms. Lenko was entitled to half of the proceeds
in any event as a result of an equal division of those assets.  Thus, half of
the monies which have been provided by Mr. Lenko to Ms. Lenko are already
hers.  Mr. Lenko should be credited for the portion of those advances which
reflect his half interest.  He is entitled to credit for $40,089.

[39]        
The proceeds from the sales of vehicles are to be divided equally.  Either
party is entitled to buy out the other party’s share in any or all of the
vehicles within 30 days of this judgment.  As the vehicles are all stored on
the property of the former matrimonial home, and I have ordered that Ms. Lenko
have conduct of the sale of that property, it is practical that she have conduct
of sale of the vehicles as well, to ensure that they are removed from the
property if the former matrimonial home is listed for sale.

[40]        
The property at Albreda, British Columbia is also to be sold and the
proceeds divided equally.  There is already an order in place providing Ms.
Lenko with sole conduct of sale.  The order requires that Ms. Lenko advise Mr.
Lenko of any offers which are made by a potential purchaser and any offer which
is accepted by Ms. Lenko is subject to court approval.

[41]        
Mr. Lenko’s share in the Gabriola Island property is also a family asset
which is to be divided equally between the parties.  Ms. Lenko’s interest,
valued at $10,000, will be paid out of Mr. Lenko’s share of the sale proceeds
of the former matrimonial home.

[42]        
Mr. Lenko’s pension plans are to be divided pursuant to Part 6 of the FRA. 
The period of entitlement is from the date of the marriage to the date of the
triggering event, June 10, 2009.

[43]        
The remaining assets, including RRSPs, less post separation
contributions, will be divided equally by way of a tax free spousal roll over
pursuant to the Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1.

[44]        
The parties will retain their own bank accounts.  The bank account in
Blaine, Washington, according to Ms. Lenko, has already been paid out through the
$45,000 payments to which the parties agreed in the agreement.

[45]        
Ms. Lenko disposed of a vehicle which she owned before the separation
and received $4,000.  She must account to Mr. Lenko for one-half of these
funds.

[46]        
Mr. Lenko agreed to pay rent to Ms. Lenko for the use of the former
matrimonial home commencing in January 2008 in the amount of $650 per month.  I
find that this was a reasonable arrangement considering that Ms. Lenko was
required to find alternative premises and has not had the benefit of her equity
in the home since 2007.  Mr. Lenko will pay Ms. Lenko $650 per month from May
2009 for each month until the former matrimonial home is sold or Mr. Lenko
purchases Ms. Lenko’s share in the property.

Spousal Support

[47]        
Mr. Lenko claims spousal support from Ms. Lenko.  Mr. Lenko claims that
he has no income and is living off the proceeds of his personal injury claim
settlement and some modest employment and investment income.

[48]        
Ms. Lenko proposes that Mr. Lenko’s claim be addressed by the court by allocating
the entire amount of his personal injury damages of $210,000 to Mr. Lenko in
lieu of his outstanding claim for spousal support.

[49]        
Ms. Lenko’s proposal is reasonable.  I therefore declare that Mr.
Lenko’s proceeds from his personal injury claims not be divided equally between
the parties, but retained by Mr. Lenko as spousal support.

Summary of Orders

[50]        
I order that the former matrimonial home located on 32^nd
Avenue in Surrey be listed for sale 30 days after this judgment.  Mr. Lenko is
at liberty to purchase Ms. Lenko’s interest in the property during that 30 day
period based on the agreed appraised value of $1,200,000.  If Mr. Lenko does
not purchase Ms. Lenko’s interest in the property within 30 days of this
judgment, Mr. Lenko will vacate the matrimonial home within 30 days and Ms.
Lenko will take possession of the property for purposes of preparing the
property for sale.

[51]        
Any costs which Ms. Lenko incurs in preparing the property for sale will
be shared equally by the parties.

[52]        
 Ms. Lenko will have conduct of sale of the former matrimonial home. 
She is required to advise Mr. Lenko of any offers that are made to purchase the
property and if Ms. Lenko accepts an offer it is subject to court approval.

[53]        
The net proceeds of the former matrimonial home are divided equally
between the parties subject to those funds which Mr. Lenko has advanced to Ms.
Lenko from his share of the family assets, which amount is $40,089.

[54]        
Ms. Lenko continues to have sole conduct of the sale of the Albreda
property, and the net proceeds of the sale will be divided equally between the
parties.  Any offers that are made in respect of purchasing the properties are
to be provided to Mr. Lenko and any offers accepted by Ms. Lenko are subject to
court approval.

[55]        
Mr. Lenko will pay to Ms. Lenko $10,000, representing half his interest
in the property on Gabriola Island.  The $10,000 will be paid out of Mr.
Lenko’s share of the proceeds of the former matrimonial home.

[56]        
Either party is entitled to buy out the other’s half interest in the
vehicles and trucks listed in Appendix A within 30 days of this judgment.  If
there are any remaining vehicles to be sold, Ms. Lenko has conduct of sale of the
vehicles.

[57]        
Mr. Lenko’s pension plans are divided pursuant to Part 6 of the FRA. 
The period of entitlement is from the date of the marriage to the date of the
triggering event, June 10, 2009.

[58]        
Mr. Lenko’s proceeds of his personal injury claims are to be retained by
him in lieu of spousal support.

[59]        
The current balances of the parties’ RRSPs less post separation
contributions are divided equally by way of a tax free spousal roll over
pursuant to the Income Tax Act.

[60]        
The only bank account to be divided between the parties is Mr. Lenko’s
account in Blaine, Washington.  Those funds were distributed equally between
the parties in 2007.

[61]        
Ms. Lenko is to account to Mr. Lenko for the disposal of a vehicle she
owned before the parties separated for a trade-in value of $4,000.

[62]        
Mr. Lenko is to pay Ms. Lenko for the period from May 2009 and each
month thereafter until the former matrimonial home is sold, the amount of $650
per month.

[63]        
Mr. Lenko is ordered to pay Ms. Lenko child support for the benefit of
A, retroactive to February 2010 in the amount of $280 per month.  He is ordered
to pay his proportional share of the special and extraordinary expenses
pursuant to s. 7 of the Federal Child Support Guidelines.

Costs

[64]        
The parties have leave to address costs by written or oral submission.

“Gropper J.”

APPENDIX
A

SCOTT SCHEDULE

OF MAJOR
ASSETS AND DEBTS