IN THE SUPREME COURT OF BRITISH COLUMBIA

Date: 20110328

Docket: E100867

Registry:
Vancouver

Between:

S.M.M.

Plaintiff

And

K.J.H.

Defendant

Before:
The Honourable Mr. Justice Meiklem

Reasons for Judgment

Introduction

[1]            
The parties to this divorce proceeding are both 53 years old. They
started cohabiting in December 1982 and were married on December 18, 1984. They
separated 25 years later, on December 29, 2009. There were no children of the
marriage.

[2]            
A declaration pursuant to s.57 of the Family Relations Act,
R.S.B.C. 1996, c. 128 [FRA] was made on May 13, 2010. A divorce order
was pronounced on the final day of trial.

[3]            
The parties agree that all of their assets are family assets. They have
agreed on the division of chattels, and Mr. H. will pay Ms. M. a modest
compensation payment of $7,000 to equalize that category of their assets. The
remaining assets are substantial (totalling approximately $2.4 million) and are
comprised of GICs, RRSPs, and shareholdings in private corporations. There is an
issue in respect of the appropriate valuation of the corporate shares, or
alternatively whether they should simply be divided in specie, but the
main issue between the parties is whether or not there should be a
reapportionment of family assets in Ms. M.’s favour, as she claims, or an equal
division as sought by Mr. H.

[4]            
Mr. H. acknowledges that Ms. M. is entitled to spousal support and that
it will be payable for a long duration in light of the length of the marriage. Quantum
of spousal support is in issue, together with the determination or imputation
of the parties’ respective incomes. A short term complication in that respect
is that most of the investment income is locked in until 2013. Mr. H. submits
that the spousal award should be subject to a review on his retirement or on
Ms. M.’s remarriage.

Factual Background

[5]            
Ms. M. was born and grew up in Kimberley, British Columbia, and completed
high school Grade 12, but without mathematics past Grade 9. She was injured
very badly in a motor vehicle accident in 1977 at age 19, suffering a fractured
skull and a broken right arm. She said she was in an upper body cast for one
year. She was the driver and a passenger was fatally injured. Ms. M. has not
driven since. She was not able to take advantage of a college scholarship with
which she had hoped to study broadcasting, and her early employment history in
Kimberley was as a report clerk for an insurance company and later as a dental
office receptionist.

[6]            
At age 23, Ms. M. moved to Winnipeg and worked as a receptionist for a
small import/export company and then a chartered bank. She met Mr. H. when he
was a chartered accountant student. When they started living together, she was
working as a receptionist and had savings of approximately $10,000, part of
which was as a result of family gifts. Mr. H. acknowledged that during their
pre-marital cohabitation Ms. M. held two jobs, but he denies her recollection
that he had a student loan that she helped to pay off. He says he never had a
student loan, and that his education was funded by his summer employment and
help from his father. He does acknowledge that, when their cohabitation began, he
had no assets other than his books and some furniture from his parents’ home,
and that he had a small credit card debt.

[7]            
I understand that during, and perhaps following, his chartered
accountancy articles Mr. H. was employed by the Province of Manitoba as an
auditor, but by the time of the parties’ wedding in December 1984, he was
employed by Canada Packers in Winnipeg as an internal audit manager, and Ms. M.
was working as a receptionist at a mid-sized accounting firm. Mr. H.’s job took
him to Vancouver on occasion, and he suggested relocating to that city, where
he had relatives and Ms. M. would be closer to her roots. After Mr. H. secured
a job as a financial analyst at a hospital, the parties relocated to Vancouver
in December 1985.

[8]            
Mr. H. became the Director of Financial Planning and remained employed
by the hospital society until the summer of 1992. He also started a private
consulting business on his own time in 1989, providing tax filing and financial
planning services to individuals and corporations. When the society employing
him ceased to operate in the summer of 1992, he committed himself to his
established client base, with the use of an office set up in the family
residence, an apartment, and Ms. M. assisted him with letter writing, data
entry and banking duties. The nature of his clientele evolved into larger
enterprises, including health authorities and mid-sized private companies.

[9]            
Ms. M. worked for a series of employers through a temporary employment
agency following the relocation to Vancouver, although she underwent surgery in
1986 to remove a fibroid mass from her abdomen. Her Canada Pension Plan
contribution records confirm that she had pensionable earnings in 1986 and
1987, but not after those years, except in 1990 and 1991 when she was treated as
an employee of Mr. H.’s practice.

[10]        
In April 1996, Mr. H. incorporated K.H. Ltd. as a vehicle for providing
his services to his larger clients and continued to provide services to his smaller
clients as K.H.CA, a sole proprietorship.

[11]        
The parties continued to live in the same rented apartment and were very
successful savers. Ms. M. was very successful in obtaining above average
interest earnings on their savings. Mr. H. gave one example, recalling that Ms.
M. had obtained a rate of 8% on a GIC at a credit union when rates elsewhere
were in the range of 4%. He testified that she built their interest income to
the range of $50,000 to $60,000 annually. In addition to his accounting
practice, Mr. H. operated as a day trader of stocks and securities, which had
its ups and downs, but he estimates his profit was over $200,000.

[12]        
By 2000, the parties had accumulated over $1 million in cash assets and
were talking seriously about retirement. Mr. H. testified that a conscious
decision was made to wind down the practice in 2003, although he also mentioned
that he had given notice to one of his health authority clients in November
2002. He said: “we started shedding clients”. They started by shedding small tax
clients but retained some health authority clients for a couple of years and
one significant individual client has been retained to this date.

[13]        
Through his work for one of his health authority clients, Mr. H. met the
principals of a corporation providing health care housing and services, for which
he worked on a month-to-month basis starting in 2004 and then started to
provide regular consulting services in 2006.  I will refer to this
company by a pseudonym, “Helthco Inc.” Mr. H. continues to provide his services
as Chief Financial Officer to Helthco Inc. on a contractual basis through K.H.
Ltd. and this remains his largest source of income.

[14]        
The consulting revenue of K.H. Ltd. over the years 2007 to 2010 was
$183,330, $185,665, $178,264, and $171,635. K.H. Ltd. also earns investment
income on short-term investments.

[15]        
In 2006, K.H. Ltd. loaned $250,000 to a numbered holding company wholly
owned by Mr. H. (which I will call 835 Ltd.), which acquired a 22.5% interest
in the shares of Helthco Inc. In 2008, 835 Ltd.’s ownership interest in Helthco
Inc. increased to 33.33% when Helthco Inc. redeemed a portion of the shares of
the former majority shareholder, thereby reducing that shareholder’s interest
to 33.33%. (I have slightly simplified these transactions, which actually
involved other holding companies). The $250,000 loan remains a liability on the
balance sheet of 835 Ltd. and an asset on the balance sheet of K.H. Ltd.

Valuation of the Family Assets

[16]        
There is, of course, no issue in respect of valuing the GIC and RRSP
assets, which can be apportioned and distributed without any devaluation on
account of taxes. The parties have paid taxes on the annual interest earned on
the GIC investments, even though the interest has remained locked in and was
not distributed to them as it was earned.

[17]        
Ms. M. obtained and placed into evidence an expert report from Blair
Mackay Mynett Valuations Inc., in which Mr. Mynett estimated the fair market
value of Mr. H.’s shares in K.H.Ltd. to be $700,000 as of March 10, 2010, and
the value of his shares in 835 Ltd. (which holds Mr. H.’s interest in Helthco
Inc.) to be $190,000 as of the same date. Mr. H. takes no issue with those estimates
of market value, except to suggest that, based on some comments within Mr.
Mynett’s valuation report, there should be a discount on account of potential
taxes payable by a shareholder to whom K.H. Ltd might distribute the company’s
short term investment assets. He also sought an adjustment because an
automobile asset is worth less than its value on K.H. Ltd.’s balance sheet.

[18]        
The pertinent comments in Mr. Mynett’s report on the issue of
distributive taxes are as follows:

11.01   Consistent
with generally accepted valuation principles, our valuation conclusions do not
reflect any personal income taxes that may be incurred should there be a
requirement to distribute any assets out of the Companies in order to make a
compensation payment with respect to a division of family assets2. The computation of such taxes is influenced
by many factors, such that no meaningful calculation can be prepared without
knowing and considering the specific circumstances giving rise to a personal
tax liability.

11.02   We make mention of this issue to
highlight the fact that, due to differing tax treatment afforded certain
assets, assets having equivalent before-tax values may not have equivalent
after-tax values (for example, personal taxes are generally not payable on the
disposition of a principal residence, whereas they may be in the case of a
business asset). Therefore, if family assets are to be divided and those assets
include a principal residence and business assets, it may be appropriate to
consider the income tax implications associated with each. A discussion of
those implications is beyond the scope of our engagement.

2In this regard, it should be
noted that there are two levels of income taxes, commonly referred to as
corporate income taxes and distributive (or personal) income taxes. In general,
corporate income taxes are recognized in a valuation, where appropriate.
Distributive income taxes, however, are usually not recognized in the
determination of fair market value of a business interest but may be recognized
in the determination of net worth or for purposes of dividing assets subsequent
to a marital breakdown.

[19]        
Although Mr. H. suggested a discount of 33.33% in the market valuation
of K.H. Ltd. based on some hearsay advice he received, there is no evidence of
what the appropriate discount should be in the event that distributive tax was
to be considered. Of course, if the shares were distributed in specie,
there would be no need to distribute corporate assets. Even if the shares are
distributed solely to Mr. H., there is no necessity in this case to distribute
any assets out of the company in order to make the necessary compensation payment,
because there are sufficient other liquid assets that are available.

[20]        
Mr. H. vigorously opposed an in specie distribution of the shares
of 835 Ltd., while Ms. M. stated a preference for same because of the potential
for growth of Helthco Inc. and uncertainties as to the reliability of Mr.
Mynett’s valuation.

[21]        
The parties purchased their interest in Helthco Inc. based on a very positive
assessment of that company’s potential for growth. Ms. M. testified that Mr. H.
suggested at one point that 835 Ltd. was worth over $2 million and that they
considered it to be the source of their retirement. Mr. H. clearly remains
optimistic about that potential, although he points out there is also a
potential for loss and there have been setbacks in the past few months, in a
business which is inherently vulnerable to shifts in government funding
decisions and competitive factors in the health care sector. He will continue
to receive a large portion of his income from services provided to Helthco Inc.,
and he feels that continuing to have his former wife as a partner in his
holding company is likely to be an unwelcome complication for the other owners
of Helthco Inc. Mr. H. also advocates a clean break, to eliminate the potential
for future conflict between the parties as co-owners of 835 Ltd. While a
declaration of trust might reduce the former concern, it would certainly not be
a clean break.

[22]        
Ms. M. points out, quite correctly, that her entitlement under s. 56 of the
FRA is primarily to an interest in each family asset, which is in this
case the shares themselves, as opposed to compensation for the value of her
interest in those shares. (Of course this is subject to the court’s powers to
effect an adjustment under s.66(2)). She argued that a compensation payment for
her interest in the shares of 835 Ltd. may not be appropriate in this case because
of certain stated concerns about the current applicability of Mr. Mynett’s
valuation, which might preclude a judicious determination of a suitable
compensation payment. Counsel for Mr. H. was extremely concerned that the
plaintiff was challenging her own expert’s evidence in pointing out the
following concerns:

1)    The valuation is
one year old, and in the meantime Helthco Inc. has opened a new facility which
generates additional revenue for Helthco Inc;

2)    The redemption
by Helthco Inc. of a portion of its shares in 2008 occurred at a price which
would suggest an equivalent value of $1.48 million for 835 Ltd.’s shares in
Helthco Inc.;

3)   
The Mynett valuation takes into account a notional sale of a property that
Helthco Inc. owns an interest in and the valuation deducts income tax and
disposition costs in respect of that property, but there is no intention to
sell that property; Russell v. Russell, 2002 BCSC 1233 is cited.

[23]        
I will address Mr. Lecovin’s concerns regarding the reliability of the
expert report he tendered. While it is desirable to receive a valuation of a
family asset as close as possible to the date of trial, which is acknowledged
to be the significant valuation date, (Blackett v. Blackett, 40 B.C.L.R.
(2d) 99, [1989] B.C.J. No. 1889), that is often problematic in the case of
company shares, particularly where, as in this case, several companies are
involved, and there might be different year ends and several accountants
involved. I think the court should be cautious in deeming a one-year old share valuation
obsolete on that account alone, in the absence of evidence of a meaningful
change of value since the date of valuation.

[24]        
If plaintiff’s counsel considered their expert’s report wholly unreliable,
I would not expect it to have been tendered in evidence. Alternatively, if some
aspects of the expert report should be adjusted to deal with changed
circumstances or intervening events, I would expect counsel to tender updated
evidence to that effect, rather than argue against the reliability of their expert’s
evidence. This is not a case where counsel is simply acknowledging shortcomings
in their expert’s report which cannot be readily rectified with additional
evidence.

[25]        
In respect of the first of the specific concerns raised by plaintiff’s
counsel which are set out in para. 22 above, it should have been a relatively simple
thing to have Mr. Mynett produce a supplemental opinion as to whether the
additional revenue to Helthco Inc. from the new facility (which Mr. H. said was
about 5% of current revenue) would have any meaningful effect on the value of 835
Ltd.’s shares.

[26]        
In respect of the second concern, clearly Mr. Mynett was aware of the
share redemption transaction; and I must assume that if he thought it was
relevant to his valuation assignment, it would have been the subject of some
comment in his report.

[27]        
Any effect on the value of 835 Ltd.’s shares as a result of the
treatment of a notional sale of real property owned by a company that Helthco
Inc. holds a 13.75% interest in seems very remote, considering that 835 Ltd.
owns only 33.33% of Helthco Inc. Whether I am correct or not in that
observation, this criticism of Mr. Mynett’s valuation goes directly to his
original methodology, rather than any newly revealed fact, and should have been
taken up with Mr. Mynett long before trial, rather than left to argument and
then pursued without any evidentiary foundation. The same comment applies to
the suggestion that the valuation should have considered the effect that the
redemption price paid by the company in 2008 might have had on the value of 835
Ltd.’s shares in Helthco Inc.

[28]        
I conclude that the Mynett valuations represent the best evidence
available to the court of the value of the shares of K.H. Ltd. and 835 Ltd. as
of the date of trial, and they are reliable enough to base the calculation of a
compensation payment for Ms. M.’s interest in those shares. There is no basis
in principle or on the evidence for the court to adjust the valuations for any
of the reasons suggested by counsel for the plaintiff.

[29]        
There is one adjustment that I understand the plaintiff has concluded.
Mr. H. served a notice to admit the fact that the BMW automobile owned by the
company has an actual market value that is $27,497 less than its undepreciated
book value on the company balance sheet. Absent on agreement to the contrary,
it is not obvious to me that the value of the shares is affected
commensurately, since the company still has the benefit of a higher cost base
to claim further depreciation against revenue, but I will not interfere with the
parties’ dealings on this item, which may be tied in some way to Mr. H.’s
concession that he will not require Ms. M. to account for $25,000 of GIC funds
that she withdrew for her own use after their separation.

[30]        
I find Mr. H.’s reasons for opposing an in specie distribution of
the shares of 835 Ltd. more compelling than Ms. M.’s reasons for advocating
same. Furthermore, I find that ordering a compensation payment rather than
vesting her ownership interest in those shares, as well as the shares of
K.H.Ltd., neither of which is presently income-producing, is more in keeping
with her need to become and remain economically independent and self
sufficient, which is the s. 65(1)(e) factor that she primarily relies on in her
argument for reapportionment.

Would an Equal Division of Family Assets be Unfair?

[31]        
 The burden of establishing that an equal division is unfair is upon Ms.
M., as the party seeking reapportionment. It is common ground that the
considerations set out in the FRA, s. 65(1)(a) to (d) do not contribute
to any unfairness in an equal division. Ms. M. bases her claim to
reapportionment primarily on s. 65(1)(e); namely her need to become and remain
economically independent and self-sufficient, and on s. 65(1)(f) in connection
with a personal injury settlement of approximately $53,000 that she received in
2003, and immediately added to the family’s savings.

[32]        
Mr. H. opposes reapportionment on the basis that an equal division of
their assets, together with spousal support, is not unfair and would ensure Ms.
M.’s economic independence and self-sufficiency.

[33]        
Given my stated conclusion that Mr. H. should retain the shares in K.H.
Ltd. and 835 Ltd., and Ms. M. should be compensated with a greater share of
other assets, and incorporating the $7,000 furniture adjustment mentioned
above, as well as the agreements mentioned in para. 30 of these reasons, an
equal division of assets could be structured as follows: (the amounts are taken
from Scott schedules and are subject to updating if necessary):

[34]        
This hypothetical equal distribution would provide Ms. M. with the majority
of the liquid assets capable of producing investment income or enabling her to acquire
an interest in a business separate from Mr. H. As I have already suggested, it
addresses her need to initially become economically independent and self
sufficient more effectively than would an equal division where the shares are
divided in specie, which would result in her receiving approximately
$431,000 less in GICs.

[35]        
An unequal division in her favour of 60/40 percent, as she seeks, would
require the court to award her approximately $240,000 more of the RRSPs, or the
remaining GIC amount of $50,600 together with approximately $190,000 more of
the RRSPs. The RRSPs will not assist her prior to retirement unless she
encroaches on them, which would seem unnecessary and ill-advised, and not
something that Ms. M. is likely to do. Nevertheless, her income needs in her
retirement years are a very real consideration, and are the essence of why she wanted
to retain in specie interest in the shares in 835 Ltd.

[36]        
There can be no doubt that Ms. M. was economically disadvantaged by the
marriage and the breakdown of the marriage. Although there were no children to
raise, and she had the option of continuing in the workplace at modest levels
of income, she elected to perform all the cooking, shopping and household
duties as well as assist Mr. H. for a number of years in his home based
practice, and very effectively managed their savings program. There was no real
economic need for her to work outside the home any longer than she did, which
it appears was approximately 1987.

[37]        
The parties had very different recollections on the subject of Mr. H.’s
position on her working outside the home. I think the truth probably lies
somewhere between their versions, but closer to Mr. H.’s version. I do not
accept that Mr. H. was a traditionalist who insisted that she did not work
outside the home. Mr. H. testified that he was supportive of her staying home
during periods when she was ill, but otherwise encouraged her to find work or
go to school, for both financial and personal fulfillment reasons. I believe he
was encouraging on occasion, particularly in trying to turn her artistic
interest in jewellery making into a commercial endeavour, but essentially
acquiesced in her preference to not seek regular employment outside the home.

[38]        
In any event, the fact is that as a result of this long marriage, she
has been dislocated from the work place for a very long time and she is now 53
years old with limited and dated work experience. She is intelligent, very
personable, physically fit, and a good communicator, but she is nevertheless at
a competitive disadvantage in gaining immediate employment. Ms. M. was the
subject of a functional capacity evaluation by an occupational therapist and a
psychological and vocational assessment by a clinical and rehabilitation
psychologist. The former reported as follows in respect of her general work
capacity:

What is Ms. M.’s general work capacity?

In terms of work endurance, Ms. M. would tolerate full-time
work that would not exceed her demonstrated material handling abilities as
described previously, with the following limitations:

Ø 
No forceful gripping with her right hand (i.e. maximum grip
strength of 17 lbs.)

Ø 
Rare overhead reaching with her right arm (i.e. < 5% of
workday) secondary to pulling pain in her right shoulder/arm

Ø 
Rare typing with her right hand (i.e. <5% of workday)
secondary to right wrist discomfort.

Based on these findings, Ms. M.
would be best suited to occupations that involve a minimum of material handling
with her right arm, only light gripping with her right hand, and minimal typing
with her right hand.

Ms. M. expressed an interest in the
following occupations during the course of the evaluation: Counselor, Family
Childhood Educator and Teacher Assistant. Based on this evaluator’s knowledge
of the physical demands associated with these occupations, Counselor and
Teacher Assistant would be a good match to Ms. M.’s demonstrated functional
abilities and limitations. However, the occupation of Early Childhood Educator
is less suited to her physical abilities as this type of work may require her
to lift children as well as use her right upper extremity throughout the day to
reach and grip.

Based on her demonstrated limited tolerance for typing with
her right hand, this evaluator would conclude that clerical, office-type or
computer-related occupations in general are not physically suitable for her as
typing would be a significant component of this type of work. While Ms. M.
could train herself to type one-handed with her left hand using the 5-finger
touch-typing method, it is very unlikely that the typing speed that she would
be able to achieve using this typing technique after several months of practice
would exceed 20 words per minute based on her current typing speed of 21 words
per minute using both hands. While use of speech recognition software can be
used to limit use of the hands when performing computer work, this is an expensive
option considering the training that is required to learn to become proficient
with this technology, and this technology only works in a quiet work
environment with no significant background noise that would interfere with the
system.

[39]        
The report of David Aboussafy, registered psychologist, is quite
lengthy, but includes the following salient passages:

In terms of Ms. M.’s cognitive ability, the current findings
indicate overall Average intellectual functioning. Looking at the differences
between the results of tests measuring different cognitive abilities, Ms. M.
displayed High Average Processing Speed, indicating a relative strength in her
ability to process visual information quickly. Her Low Average Verbal
Comprehension and Perceptual Reasoning were two areas of relative weakness, and
may be related to some degree by the side effects of her psychotropic meds or
the impact of past traumatic brain injury (although the latter would have been
more likely to [affect] processing speed). These results may also possibly be
related to her limited experience, education, and knowledge over the past two
decades. Overall, however, the findings of the current comprehensive cognitive
assessment suggest that Ms. M. has adequate intellectual capability for theoretical
access to a broad range of career or training options. In particular, her High
Average Processing Speed would suggest the ability to meet job demands where
timely processing and response to verbal or written information was required.

Ms. M.’s academic abilities (Grade 12 levels for Reading and
Writing, Grade 9 for Mathematics) are consistent with her education (finished
Grade 12, but no Math after Grade 9) and cognitive ability. Her somewhat
limited Mathematics ability would suggest that she would not be a good fit for
jobs that had a strong quantitative component.

The results of the current clinical interviews and
psychometric testing suggest stability with respect to a clear absence of
psychosis or other severe psychiatric symptoms that resulted in her
hospitalizations in December 2008 and 2009. In general, she described her mood
and stress level as much improved since leaving her husband. She described her
mood as good at present. In the interviews and on the PAI, concerns regarding
her physical functioning and past traumatic stress were noted.

Recommendations

At present, Ms. M. has a number of clear strengths with
respect to employment or training. These include: 1) Currently stable mental
health with ongoing psychological support; 2) Improved psychosocial situation
and mood since separating from husband; 3) Good social support; 4) Overall
Average cognitive ability with no discernible issues with memory, and High
Average Processing Speed; 5) Academic abilities consistent with education and
cognitive functioning; 6) Very strong current motivation for work, training,
and education.

Ms. M. does have some current barriers to employment or
training: 1) Limited work experience and training; 2) past history suggests
stress may exacerbate tendency for mental health difficulties (would need to
manage stress/stress management strategies); 3) self-report of memory
difficulties, though appears to have managed this; 4) Ms. M. does not drive; 5)
pain and physical limitations related to decreased function in right arm (see
FCE).

Given Ms. M.’s desire to support herself in the near future,
a focus on brief training and more immediate work placement options may be of
interest to Ms. M. (see the recommended in the direct application employment
suggestions discussed below). Increasing her work activities gradually, may
also reduce the risk of setbacks, and increase her confidence and capability
for a durable and successful entry to the workforce. Participating in
pre-employment courses to develop work-readiness and workplace skills, and then
volunteer work experience is also recommended.

Given Ms. M.’s abilities, skills, interests, and current
functioning, she would appear to be suitable for direct application employment,
on-the-job training, or retraining. With respect to a job search, Ms. M. may
benefit for working with a Job Developer that could assist her in locating
appropriate work.

Although her artistic interests are quite strong, there may
be limited immediate opportunities for immediate work in this area (for
example, for training or work in jewellery design without a portfolio and
recent experience). However, there may be training and work opportunities
related to her current coursework in social justice and writing (for example,
certificate in community service social work at Douglas College or professional
writing programs at Douglas College and at Langara College. Her cognitive and
academic abilities, and current stable psychological functioning would appear
to be more than adequate to meet the demands of such programs.

In terms of direct application
employment, given her Social and interest in helping others, Ms. M. may enjoy
work at [a] number of local charity based event ticket-taker or worker. Many
charities and arts groups offer part time positions for bingo card and supplies
vendors. Ms. M. would be physically able to work at a table stand. Given Ms. M.’s
interest in working with people, good first impression and social skills, she
may welcome work in positions at charity or arts/cultural events and related
activities.

[40]        
Mr. Aboussafy goes on to recommend the following possible occupations
for Ms. M.:

·      
starting positions in retail as fitting room attendant or sales
associate in larger department stores or non-profit thrift stores;

·      
telephone-based as receptionist or marketer or customer service;

·      
community social services after training to college certificate
level;

·      
massage therapist following a 5-year program;

·      
spa technician after a one year program;

·      
early childhood education following a 2-year program;

·      
childcare after a one-year college program in preparation for a
home business;

·       pet
daycare worker, kennel attendant, and/or animal groomer.

[41]        
Mr. Aboussafy’s concluding comment is that:

… the community service and
writing training options would appear to be the best fit for her assessed
cognitive and academic abilities and her current psychological functioning.

[42]        
Ms. M. has determined that she wishes to pursue a 4-year course of fine
arts studies at Emily Carr University of Art and Design. She has spoken to the
admissions department and has an appointment this month. The primary admission
criterion is creative ability, which must be demonstrated by presentation of a
portfolio of her work. She expects to present her portfolio in December 2011,
and she will know by February 2012 whether she is accepted for the program
commencing in September 2012. She says her portfolio will consist of poetry, a
short story, a portrait, some jewellery pieces, and photography. The tuition is
$6,400 per year.

[43]        
Notwithstanding that she believes in her present artistic talent (which
is also acknowledged by Mr. H.), Ms. M. believes that this plan will make her
more employable in her chosen field of interest by giving her a degree
designation and improving her skills. Ms. M. obtained a Fine Arts Diploma from
the Vancouver School Board in December 2000, which was based on 240 hours of
study.

[44]        
Mr. H.’s concern is that her plan is economically impractical, because
she will be near or at retirement age by the time she obtains her degree and
seeks employment, assuming she is able to complete the course in 4 years after
commencement in September 2012.

[45]        
There is no evidence at all about what level of income Ms. M. could
expect to earn following successful completion of the proposed course of
studies at Emily Carr University. She said the types of jobs open to her would
include writing and illustrating children’s books, graphic artist, and
jewellery making. There is also no evidence of the opportunities for employment
in those fields.

[46]        
Ms. M. has not looked for work since the separation of the parties,
citing her preoccupation with this litigation, finding her own apartment, and
being on anti-psychotic medication, following her brief hospitalization at the
initiation of Mr. H. shortly before the separation. She has been meeting living
expenses with a combination of credit card advances, lines of credit, the
$25,000 GIC redemption referred to earlier, and interim spousal support
(ordered June 23, 2010 in the amount of $4,500 per month).

[47]        
Ms. M.’s December 6, 2010 Form F8 financial statement sets out an annual
income of $101,653 comprised of interest and investment income of $47,653 and
spousal support payments of $54,000. Her expenses set out a total of $8,202.12
monthly ($98,425 annually), which includes significant health care costs, some
of which may not be permanently ongoing, (specifically: $320 for a
psychologist, $300 for dental and $383.78 for physiotherapy and massage).

[48]        
Mr. H.’s financial statement does not set out any interest and
investment income; the interest income of $47,653 set out in Ms. M.’s financial
statement appears to be the whole of the income earned on their privately owned
GICs in 2009.

[49]        
A consideration of the respective needs of divorcing parties and the
concept of self sufficiency post-divorce should take into account their
standard of living while married as well as their post-separation circumstances.
Ms. M. is obviously far less able than Mr. H. to maintain the standard of
living they enjoyed as a married couple, because of the significant disparity
in their earning power. While I agree to an extent with Mr. H.’s argument that
Ms. M.’s educational/vocational plan may not be the most direct route to
maximize her earning capacity, it is also plain that none of the occupations
suggested by Mr. Aboussafy have the potential to allow Ms. M. to achieve self
sufficiency in the sense that it applies in the circumstances of this case.

[50]        
 Ms. M. is clearly motivated to pursue the development of her artistic
talents, and her earning power may well be eventually higher in that pursuit than
it would be if she chose immediate entry into the readily available but less
suitable retail or telephone-based jobs. It occurs to me that she may well not
be inclined to retire as early from an artistic career as she would from some
of the other careers suggested by Mr. Aboussafy.

[51]        
In the context of the spousal support issue, Mr. H. submitted that a
modest income from employment in the amount of $10,000 per year should be
imputed to Ms. M. notwithstanding that she does not intend to enter the work
force for a number of years. I think that is also a realistic estimate of the
extent to which she is going to be able to contribute to her self sufficiency
through the next few years, whether or not she takes any of the retraining
suggested.

[52]        
I am satisfied that in all the circumstances of this case set out, which
include the factors now permanently limiting her earning power by comparison to
Mr. H.’s earning power, her need to establish a retirement income, as well as
the 2003 contribution of her personal injury settlement to the family savings,
an equal division of assets would be unfair. I find that fairness would be
achieved by a reapportionment that divides the family assets 55% to Ms. M. and
45% to Mr. H., prior to their agreed adjustment in respect of chattels  This
reapportionment will take the following form:

[53]        
The parties are of course at liberty to perform the necessary rollovers
or transfers or withdrawals to effect this division, notwithstanding the
existing restraining order against the disposition of family assets. Liberty is
granted to apply for any further orders that may be necessary to clarify or
effect this division.

Quantum of Spousal Support

[54]        
I will first consider the appropriate income to impute to Ms. M. for the
purposes of considering the application of the Spousal Support Advisory
Guidelines [SSAG].

[55]        
Ms. M.’s counsel received a notice to admit that the average rate of
return on investments as at February 17, 2011 was 4% or better. This was denied
on the basis that the statement was too broad and unclear. Although that
response was fair comment, the documents that accompanied the notice were
admittedly authentic and these do establish that a rate of return of 4% or
better is available. The GICs in Ms. M.’s name are currently earning 5.3%,
although that relatively high rate is undoubtedly due in part to their
locked-in status. I infer that Ms. M. is not going to be able to obtain that
high rate of return and also have the interest income flow to her to meet her
living expenses. It is a reasonable inference that she will probably earn
interest or investment income at the rate of 4% per annum in the immediate
future on the approximately $980,000 she will have available for investment. This
should produce earnings of approximately $39,200 per year.

[56]        
I find that it is reasonable, as suggested by Mr. H., to impute
employment income to Ms. M. of $10,000 per year in all the circumstances
previously discussed. While one can respect her decision to forego immediate
employment in pursuit of her highest interest, there is no evidence that
persuades the court that it is a prudent course of study from an economic point
of view that Mr. H. should be expected to fund.

[57]        
Therefore, for the purposes of consulting the SSAG, I will impute
to Ms. M. an annual income of $49,200.

[58]        
Mr. H. drew a wage of $77,163 from K.H. Ltd. in 2010. The employment
income reported on his 2009 T1 General was $70,000, which was also his self
determined wage from K.H. Ltd. The historical statements of income and retained
earnings of K.H. Ltd. show that the combined totals of his salary and the company’s
net income before taxes in the years 2007 to 2010 inclusive averaged $127,000. The
retained earnings of K.H. Ltd. were $674,362 as of April 30, 2010. The
company’s net income was reduced by expenses that I find provided personal
benefit to the parties equivalent to income, including (amongst other things) rent
for the home office that exceeded the rent paid by them as head tenants in the
years 2007 through 2009, and 100% of vehicle expenses. I impute income to Mr.
H. of $150,000 per year.

[59]        
At a difference between gross incomes of $100,800, the SSAG range
is from a low of $3,150 per month to a high of $4,200 per month. The SSAG
suggest an order of indefinite duration for a marriage exceeding 20 years.

[60]        
Notwithstanding that the reapportionment ordered has partly addressed
the plaintiff’s need to achieve and maintain economic independence and self
sufficiency, I think that the circumstances of this case also call for an order
at the high end of the applicable SSAG range in order to fulfill the
objectives of spousal support set out in s. 15.2(6)(a),(c) and (d) of the Divorce
Act, R.S.C. 1985 c. 3 (2^nd Supp.). Mr. H. shall pay spousal
support to Ms. M. in the amount of $4,200 per month commencing April 1, 2011
and continuing until further order.

[61]        
Mr. H. requested a reviewable order on the basis that it should be
reviewed in the event of his retirement or Ms. M.’s remarriage. Provisions for
a review are particularly appropriate where it is desirable to relieve the
parties of the onus of establishing a material change of circumstances in
connection with an anticipated future event, but I do not consider that to be
the case here. The order will be indefinite, subject to variation upon
application and proof of a material change of circumstances.

[62]        
Counsel requested that I not make a decision on costs at this time.
Counsel should contact trial scheduling to arrange a hearing if the matter of
costs is contentious.

“I.C.
Meiklem J.”

MEIKLEM J.