IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: |
Smith v. Smith, |
|
2018 BCSC 1577 |
Date: 20180914
Docket: E12796
Registry: Rossland
Between:
Smith
Claimant
And
Smith
Respondent
Before: The Honourable Madam Justice W.A. Baker
Reasons for Judgment
Counsel for Claimant: |
J. Gelber |
Counsel for Respondent: |
J. Van Allen |
Place and Date of Trial: |
Nelson, B.C. July 23-27, 2018 |
Place and Date of Judgment: |
Vancouver, B.C. September 14, 2018 |
Table of Contents
A. What is the date of separation?
B. Division of Family Property
1. Financial contributions during the marriage
2. Ability to earn income post separation
3. Health conditions of Mrs. Smith
4. Health conditions of Mr. Smith
5. Ability of the parties to earn income in the future
6. Support obligations – retroactive and future
[1] This is a family dispute between Mr. and Mrs. Smith who began living together in 1982, were married in 1983, and separated in August 2013. While there is some issue as to whether they reconciled for a period of time, it is clear that they cohabited for a minimum of 31 years, and were married for 30 years.
[2] The Smiths have two daughters, who are both adults with professional careers. One is a teacher and one is a lawyer.
[3] Mr. and Mrs. Smith were engaged in a very successful “family business” for over 20 years. This business was the illegal production and sale of marijuana in BC, California, and Alberta.
[4] Due to the illegal nature of the business enterprise, their income was received in cash and normal business records were not kept. The evidence from the parties as to the income derived from the marijuana sales was oral, inferential, thin and often contradictory. Credibility of both parties is in issue in this litigation.
[5] In Nearing v. Sauer, 2015 BCSC 58 (“Nearing”) at para. 32, the court reiterated the factors relevant in assessing the credibility and reliability of witnesses as follows:
[32] The factors to be considered when assessing the credibility (and reliability) of a witness were summarized in Bradshaw v. Stenner, 2010 BCSC 1398 at para. 186, aff’d 2012 BCCA 296 [Bradshaw]. They include the firmness of the witness’s memory, the ability of the witness to resist the influence of interest in modifying her recollection, whether the witness’s evidence harmonizes with independent evidence that has been accepted and whether the witness changes her evidence during direct examination and cross-examination (or between examination for discovery and trial) or is otherwise inconsistent in her recollections. Other factors are whether the witness’s evidence seems generally unreasonable, impossible or unlikely and the witness’s demeanour. At bottom, the question is whether the witness’s evidence is consistent with the probabilities affecting the case as a whole.
[6] In this case, the evidence of both parties relating to the details of the marijuana grow operations, and the cash generated from that business, was unreliable. I was asked to draw inferences from recollections which were inconsistent and unsupported by helpful documentary evidence.
[7] For example, much was made about a video taken by Mrs. Smith on August 23, 2013, which showed a disagreement between the parties on the night Mr. Smith left the family home. Mr. Smith was seen taking a clear plastic bag filled with US dollars out of the bathroom. It could not be seen on the video how much money was in the bag. Mrs. Smith testified that she put the bag in the bathroom and that it contained approximately $60,000 to $80,000 which Mr. Smith had given to her for the purposes of running the household. She testified that this money was was all she had to live on at the time. Mr. Smith said that there was about $20,000 in the bag, and he took it because she had that much or more in a safety deposit box.
[8] On the video Mr. Smith says something to the effect that the money did not exist. Each party urged me to take something different from this statement. Mrs. Smith urged me to find that Mr. Smith took all the money she had, and taunted her by saying no one could trace it. Mr. Smith urged me to find that he only took a small amount of money leaving Mrs. Smith with ample money contained in a safety deposit box, and that his comments were simply him repeating back to her what she had taunted him with, implying that the safety deposit box money was untraceable.
[9] Other than the inconsistent statements of these witnesses, no other evidence was presented to tend to confirm either version of events. All I can conclude is that there was some money taken by Mr. Smith on the evening of August 23, 2013.
[10] Other contrary evidence was given about the amount of money that was earned from the grow operations, to what extent sums of money were buried to avoid detection, and other details of the various marijuana grow operations. Without confirmatory evidence, there is very little I can draw from the evidence presented by these witnesses regarding their “family business”.
[11] The family moved often during the marriage. In 1987 the parties bought a home in Coquitlam for $95,000. They used $25,000 that Mrs. Smith had received as a payout from two car accidents, as well as a $10,000 homeowner grant, and a $60,000 mortgage. Mr. Smith operated a small marijuana grow operation in the Coquitlam home. In 1989 the parties sold the Coquitlam home for $136,000.
[12] The parties next bought a home in Langley in 1989 for $100,000. Mr. Smith operated a marijuana grow operation in the Langley home. Mrs. Smith received a settlement for one or more subsequent car accidents, and they used that money to build an underground growing room. The marijuana grow operation was run out of that underground room. Mr. Smith generated sufficient income through this operation to finance the family’s expenses.
[13] In the early 1990s the parties purchased property in Mendocino, California, known as the Bells Spring property. Mr. Smith developed this as a substantial marijuana grow operation with a friend of his named Peter Corriveau. He and Mr. Corriveau constructed the grow operation, developed roads, septic, servicing, and installed a double wide trailer on the property. This was a substantial operation with both indoor and outdoor crops.
[14] Mrs. Smith and the children arrived a number of months after Mr. Smith. After a few months the family moved off the Bells Spring property and into a rented home in nearby Laytonville. Mr. Smith continued to run the marijuana grow operation on the Bells Spring property along with Mr. Corriveau. The Bells Spring property was sold in or around 1998.
[15] While the family was in California, the Langley house was rented to a friend of Mr. Smith’s. The family returned to Canada in 1998. They sold the Langley house for $250,000 and purchased a home in Walnut Grove for $400,000. The Walnut Grove home was purchased with the proceeds of sale of the Langley house, US$80,000 which they received in the sale of the Bells Spring property, and a mortgage which was less than $100,000. The mortgage was paid off in December 1999, with the final payment coming from casino winnings of Mrs. Smith.
[16] In 2004 the family moved to Red Deer, Alberta, where they rented a house. Mr. and Mrs. Smith opened a hydroponics store in Red Deer, which was not successful and closed after approximately one year. Mrs. Smith was involved in setting up the store, and stocking the initial inventory. She also worked behind the counter in the store. During this time Mr. Smith was working in a marijuana grow operation in Hannah, Alberta. Mr. Smith also ran a marijuana grow operation in Stettler, Alberta at or around this time.
[17] In 2006 the parties sold the Walnut Grove property for $895,000. With the proceeds of sale they bought a property in La Paz, Mexico for between $75,000 and $100,000, and a property on Strathcona Street in Calgary for $475,000.
[18] In 2007 the parties purchased property in Leggett, California for US$340,000. There was no mortgage on the Leggett property. Their daughters were no longer living with Mr. and Mrs. Smith at this point. In Leggett, California the parties began a large marijuana grow operation. They spent six months of the year, during the growing season, at their property in California. Because they could not stay in the United States for longer than six months without a visa, they had to return to Canada for the other six months of the year.
[19] In 2010 the parties sold the property in Calgary and bought a property in Grand Forks on the Willow Road for $295,000, which they rented to a friend known as Chad Gillies. In 2012 they moved to the Willow Road property but Mr. Smith continued to work at the marijuana grow operation in California. Mr. Smith ultimately joined Mrs. Smith at the Willow Road property in 2013.
[20] The parties sold the California property in January 2013 for US$310,000 to a man known as Troy Keenan.
[21] In 2013 the parties began a marijuana grow operation at the Willow Road property. Both Mr. and Mrs. Smith obtained medical marijuana grow licenses in 2013, which Mrs. Smith testified were obtained as a cover for their illegal grow operation. Under the licenses they were permitted to grow marijuana but were not permitted to sell it. However they did in fact sell the marijuana they grew.
[22] In December 2014 the parties jointly purchased a home in Calgary for $392,000. $100,000 of the payment for the Calgary property came from the sale of the Leggett property in California. The remainder of the purchase price was financed by a mortgage. In 2018 the Calgary property was sold for approximately $350,000. The net sales proceeds from the Calgary property were $156,380.56. These proceeds remain in the trust account of counsel for Mr. Smith.
[23] The Willow Road property in Grand Forks is still owned jointly by the parties.
[24] The parties have been able to agree to certain issues. They agree to the order for divorce and agree to a no contact order. They also agree that Mr. Smith’s pension which has been commuted into a Bank of Montreal RRSP account and the SunLife investment account should be split equally. The parties divided their liquid assets located in the Grand Forks Credit Union sometime after they separated in 2013. They are in agreement that the personal bank accounts they created after they divided their joint account should remain in their individual names without any further adjustments, and that any personal debt acquired after separation in 2013 does not need to be adjusted.
[25] The issues to be determined in this litigation are the following:
a) Date of separation: did the parties reconcile after August 2013?
b) Division of family assets: is either party entitled to an unequal reapportionment of family assets?
c) Spousal support: is Mrs. Smith entitled to spousal support from Mr. Smith and, if so, when does such support begin and end?
[26] At trial Mr. Smith argued that the parties separated on August 23, 2013 and did not reconcile after that point. Mrs. Smith agrees they separated on August 23, 2013 but submits that they reconciled in 2014 and finally separated in May 2016.
[27] In August 2013 the parties were living on the Willow Road property and were running a marijuana grow operation on that property.
[28] The parties got into a fight in the evening of August 23, 2013, and the result was that Mr. Smith left the Willow Road property and moved into the nearby Riverside Motel. While Mr. Smith continued to run the marijuana grow operation at the Willow Road property, and occasionally spent the night there, he did not move back into the Willow Road property.
[29] When the growing season ended in October 2013, Mr. Smith stayed with friends in Penticton and then ultimately moved to Calgary.
[30] The parties did go on an anniversary cruise in the fall of 2013 to recognize their 30 years of marriage. There is a dispute in the evidence as to how long the vacation took. Mrs. Smith says that it was approximately three weeks in total. Mr. Smith says that it was approximately five days. No documentary evidence was provided to corroborate either time estimate.
[31] Mr. Smith had filed for divorce in 2013, but in early 2014 he withdrew that claim.
[32] In December of 2014 Mr. and Mrs. Smith bought a house together in Calgary. Mrs. Smith bought furniture for the home and spent a number of months living in the home, including spending Christmas there.
[33] On his 2014 tax return Mr. Smith indicated that he was separated. Mrs. Smith agreed in testimony that she would consider herself separated in 2014 on a reporting to CRA.
[34] After the argument in 2013, the parties agreed to separate their liquid assets, which they described as their joint bank account in Grand Forks. Their evidence was consistent that they went to the bank together and opened new personal accounts, depositing in each personal account 50% of what was in the joint account. The only other joint account they opened after 2013 was a mortgage account for the Calgary house they purchased in 2014.
[35] Mr. Smith says that they paid their own way on the vacation in 2013. He says that they never had sexual relations after he left the Grand Forks home in 2013. He agrees that Mrs. Smith slept in the same bed as him when she visited him in Calgary but says this was platonic and denies that they were in a spousal relationship at that point.
[36] Mr. Smith says that they bought the Calgary house merely as a business investment and that it was not a shared family home. He was working many weeks out of the year in Fort McMurray and was agreeable to Mrs. Smith setting up a business in the basement of the Calgary home. The evidence on this point was unclear as to whether Mrs. Smith intended to or did set up a business in the basement of the Calgary home. However, it was clear that her primary residence was in Grand Forks and that she continued to be engaged in marijuana production there through 2015.
[37] Mr. Smith was clear in his evidence that as of August 23, 2013 the marriage was over and he had no intention of reconciliation.
[38] As found by this court in Nearing:
[53] Section 8(3) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) [Divorce Act] reads:
(3) …
(a) spouses shall be deemed to have lived separate and apart for any period during which they lived apart and either of them had the intention to live separate and apart from the other; and
(b) a period during which spouses have lived separate and apart shall not be considered to have been interrupted or terminated
…
(ii) by reason only that the spouses have resumed cohabitation during a period of, or periods totalling, not more than ninety days with reconciliation as its primary purpose.
[54] It is clear that a meeting of the minds on the intention to separate is not required. A physical separation, combined with one party’s intention to live separate and apart, is sufficient: Dhillon v. Dhillon, [1998] B.C.J. No. 823 (C.A.).
[39] I am satisfied on the balance of probabilities the parties separated in August 2013 and that there was not a reconciliation within the meaning of s.3 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) (“Divorce Act”) following that date. I am further satisfied that both parties did not resume cohabitation for the primary purpose of reconciliation for more than 90 days after August 2013.
[40] Pursuant to s. 81(b) of the Family Law Act, S.B.C. 2011, c. 25, each spouse is presumed to have a one half interest in all family assets. This presumption can be rebutted in situations where equal division is significantly unfair.
[41] The parties agree that their liquid assets were divided at or shortly after the time of separation, and at the time of separation there were no family debts.
[42] The only family assets left to be resolved are the Willow Road property, property in Mexico, three vehicles owned by the parties, certain shares, and miscellaneous chattels including artwork and goods kept at the Willow Road property. In addition, a determination must be made regarding the proceeds of sale of the Calgary home.
[43] Mrs. Smith urges me to transfer all family property to her in recognition of what she says was the failure of Mr. Smith to fully disclose his financial situation. While I do find fault with Mr. Smith and his failure to be forthright in disclosing information on its financial statements and affidavits, I do not find that these deficiencies in his evidence are sufficient to vary from the presumption of equality in sharing the family assets acquired during the course of the marriage. I am not satisfied that Mr. Smith was less forthcoming than Mrs. Smith regarding cash held as a result of the marijuana grow operations during the marriage. The evidence of both parties was unreliable on this front and I am not prepared to order a transfer of all family property to Mrs. Smith on this basis.
[44] The Willow Road property was purchased during the marriage with funds earned during the course of the marriage, whether through property sales or income from marijuana grow operations. There is no dispute about the value of the Willow Road property. In December 2017 it was valued at $335,000. While section 95 of the Family Law Act does allow for unequal distribution of a family asset in certain circumstances, I find that none of the circumstances apply here. The parties were spouses in a long-term relationship and the Willow Road property was intended to be the family home when it was purchased. I see no reason to depart from the presumption that each of Mr. and Mrs. Smith are entitled to a one half interest in the Willow Road property. The value of each party’s interest based on the appraisal evidence is $167,500.
[45] The parties purchased property in Mexico with the proceeds of sale from family property. I see no reason to depart from the presumption that each of Mr. and Mrs. Smith are entitled to a one half interest in the property in Mexico. While I cannot make any orders with respect to the land in Mexico, I can make orders with respect to the conduct of the parties in Canada. I order that the parties list the Mexican property for sale, and the proceeds of sale be divided equally between them.
[46] The parties own three vehicles: a 2003 VW Beetle and a 1999 Ford truck, presently used by Mrs. Smith; and a 2006 Hyundai Santa Fe, presently used by Mr. Smith. While in argument some values were cited for these vehicles, no evidence of value was tendered.
[47] There is no real disagreement between the parties that Mr. Smith should retain the Hyundai and Mrs. Smith should retain the VW Beetle. While Mr. Smith urges me to order the sale of the Ford truck and divide the proceeds between the parties, I am not prepared to do so. The evidence was that the truck was used to clear the road at the Willow Road property in the winter and was not licensed in the summer. Mrs. Smith uses the VW Beetle in the summer and did not have it licensed in the winter. No reliable evidence of value of the vehicles was tendered at trial. The parties agreed in their financial statements that the Hyundai was valued at $6,000, but Mr. Smith stated the combined value of the VW and the Ford truck to be $8,500, while Mrs. Smith stated the combined value to be $2,500. Without admissible evidence in the case of disputed values, I cannot find that the value of the Hyundai is significantly different from the value of the VW and Ford truck combined. I order that the Ford truck remain in the possession of Mrs. Smith. It was not clear from the evidence whether the truck was owned by both parties or by Mrs. Smith alone. If it is not presently owned by Mrs. Smith, Mr. Smith shall transfer ownership to Mrs. Smith solely.
[48] Mr. Smith has conceded that the Sun Life investment in the amount of $1,196 shall be divided equally.
[49] During the marriage the parties acquired shares in a corporation known as Firstline Environmental Solutions, Inc. The shares are held unequally: Mrs. Smith holds 35,715 shares and Mr. Smith holds 10,000 shares. The evidence at trial was that the shares are worthless. Mrs. Smith testified that they were given the shares by a friend of Mr. Smith. She had relentlessly attempted to realize some value on the shares, including hiring lawyers to assist. None of these have been successful. Mr. Smith agreed that the shares had no value. While Mr. Smith urged me to equalize the ownership of the shares, I decline to do so on the basis that the shares are valueless.
[50] The parties testified that certain chattels were stored in containers on the Willow Road property, that certain chattels were purchased by either or both of the parties and placed in the Calgary house, that the Willow Road property was furnished with jointly owned goods, and that certain artwork was transferred to Mr. Smith with other artwork being retained by Mrs. Smith. The evidence in relation to all of these items was inconsistent and vague.
[51] While I was shown photographs of containers on the Willow Road property, there was no evidence of an inventory being taken of the contents of the containers. Mrs. Smith testified that materials had been taken out of the containers by various persons, including the possibility that items were stolen from the containers. Mrs. Smith testified that Mr. Smith came and emptied the containers after he left the family home in August 2013. This was denied by Mr. Smith. I was provided with no evidence that would assist me in preferring one party’s testimony over the other.
[52] None of the items allegedly held in the containers were itemized in any way. I am not satisfied with the evidence in relation to the chattels which may or may not be held in the containers on the Willow Road property. With respect to the artwork, I was given some lists of artwork which Mr. Smith said he has. Mr. Smith testified that Mrs. Smith had more artwork and produced what he said were photographs of the artwork in the containers. These photographs were never put to Mrs. Smith to confirm or deny that she had any of those artworks in her possession.
[53] Both the Calgary home and the Willow Road home were furnished to a livable standard. I heard no evidence about what happened to all the goods and furnishings stored in the Calgary property when it was sold. I am prepared to assume that any such materials that were in the Calgary home when it was sold remain in the possession of Mr. Smith. Mrs. Smith similarly has an equivalent amount of household goods kept in the Willow Road property.
[54] In the result I am not satisfied that the evidence before me is adequate to make any orders with respect to the chattels allegedly held in the Willow Road property containers or the artwork allegedly held by either of the parties. Each of the parties shall retain whatever chattels and artwork they currently have in their possession with no claim on the chattels or artwork held by the other party. Mr. Smith will retain all of the goods and furnishings which were held in the Calgary property and Mrs. Smith will retain all of the goods and furnishings held in the Willow Road property.
[55] I also heard evidence, as discussed above, about cash taken by Mr. Smith on the evening of August 23, 2013. I find that the value of the money taken by Mr. Smith on that day was not established. I was provided with evidence of monies held in the safe in the Calgary home, which was discovered by Mrs. Smith. Mr. Smith alleged that she planted the money in the safe. Mrs. Smith said she had no money to plant in the safe. Photographs were taken by Mrs. Smith of the monies in the safe. However I find that the evidence at trial was unsatisfactory to prove who owned the money, why it was there, whether it was legitimately owned by Mr. Smith from his employment or earnings, or whether it was placed in the safe by Mrs. Smith. Various suggestions and allegations were made of cash that was or was not kept in a storage locker in Spokane, and in a safety deposit box in Grand Forks. None of the evidence or suspicions about cash held in Spokane or the safety deposit box was corroborated in any way.
[56] I am unable to draw any conclusions about the cash held by Mr. or Mrs. Smith. As such I make no orders with respect to cash held by either party.
[57] The Calgary property was purchased post-separation in December 2014. As such, it falls outside the definition of family property under the Family Law Act. I agree with counsel for Mr. Smith that the division of net sale proceeds from the Calgary property should be made in accordance with the principles found in McArthur v. Dodgson, 2010 BCSC 1172, where the court calculated the specific contributions of each person to the property, returned those contributions to the parties, and divided the remaining profits from the sale equally.
[58] The parties purchased the Calgary home in 2014 using money generated from the sale of the family property in Leggett, California. While both parties contributed $100,000 to the purchase price, the evidence at trial was that a portion of Mrs. Smith’s $100,000 contribution in fact belonged to Mr. Smith. The unequal contribution arose from the fact that Mrs. Smith improperly retained Mr. Smith’s share of the balloon payment on the Leggett property in 2014, and agreed at trial that she used $25,200 from Mr. Smith’s portion of the balloon payment to make up the $100,000 she contributed to the purchase price. In the result I find that Mr. Smith is entitled to receive from the proceeds of sale of the Calgary property $25,200 in recognition of his notional overpayment in the original contribution.
[59] Mr. Smith testified that he was solely responsible for the mortgage on the Calgary home. Mrs. Smith testified that she contributed to mortgage payments on the Calgary home initially, although she agrees that at some point Mr. Smith took over the mortgage payments and closed the joint account. I was not provided with any documents from the joint account to corroborate either version of events. I was provided with Mr. Smith’s account which he opened in January 2016 and used to pay the mortgage. This account shows that he paid $905.09 per month from that account beginning on February 1, 2016.
[60] I find that Mr. and Mrs. Smith contributed equally to the mortgage payments on the Calgary property from January 2015 until January 2016. Mr. Smith has solely contributed to the mortgage payments on the Calgary house since February 1, 2016. Those payments from February 1, 2016 to the end of April 2018, when the property was sold, total $24,437.43.
[61] Similarly, it is not disputed that Mr. Smith paid the property tax and insurance on the Calgary property. The value of the property tax payments made by Mr. Smith to the date of sale was $8,480, and the value of the property insurance to the date of sale was $4,720.
[62] I find that Mr. Smith is entitled to retain $62,837.43 from the sale of the Calgary home and that the remaining proceeds of sale are to be shared equally between the parties. In the result, Mrs. Smith is entitled to $46,771.57 from the proceeds of sale of the Calgary house, and Mr. Smith is entitled to $109,609 from the proceeds of sale.
[63] Mr. Smith has a pension from the Boilermaker Union #359, which was rolled into a RRSP held at the Bank of Montreal and is valued at $15,724. He agrees that this was earned during the marriage and should be divided equally with Mrs. Smith.
[64] Mr. Smith has contributed to a new pension in Alberta since 2013. This pension arose after separation and I make no orders with respect to it.
[65] Throughout the relationship Mr. Smith was the primary income earner. During the marriage he was qualified in welding, boiler making, and steel fabrication. When he was not working in marijuana grow operations, he supported the family through work in these trades.
[66] Mrs. Smith worked as a receptionist prior to the marriage, and during the marriage was primarily a traditional homemaker.
[67] In 1998 when the parties purchased the Walnut Grove house, Mr. Smith began working at his own company called LR Welding. Mr. Smith worked as a stainless steel welder and fabricator and provided services to a variety of contractors. Mrs. Smith did have a small role in LR Welding. She did some office management for LR Welding and drew a small salary. I find that Mrs. Smith’s role was very minor and to the extent she drew a small salary it was in the nature of an income split with Mr. Smith. I find that Mrs. Smith maintained primary responsibility for the children during the Walnut Grove years. Mr. Smith’s work at LR Welding supported the family.
[68] Other than the brief time that Mr. Smith worked at LR welding, I find that the majority of the family’s income from at least the early 1990s was derived through illegal marijuana grow operations. Because these were illegal operations, the parties had very limited evidence to assist me in understanding how much money was brought into the family. However it was clear that the family enjoyed a comfortable lifestyle on this income. They travelled in the United States and abroad. They financed 50% of their daughters’ university educations. They took winters off and generally lived well. Mr. Smith testified that he earned approximately $120,000 a year through the grow operation at Leggett, California. I was provided with no documentary evidence to support any of the illegal earnings of the parties. As such, based on Mr. Smith’s admission, I find that the family’s annual income between 2007 and 2012 was at least US$120,000.
[69] While both parties were involved in the marijuana grow operations, I find that Mrs. Smith’s role was minor and secondary to Mr. Smith’s role. Mrs. Smith did assist Mr. Smith with certain aspects of the marijuana grow operation. In particular, she was responsible for counting and bundling the cash received from marijuana sales. The money was bundled into $1,000, $5,000, and $10,000 bundles which she handed back to Mr. Smith for him to deal with. In later years she was involved in trimming the crops and bagging it. Her primary responsibilities during the marriage were to raise the children and maintain the household.
[70] There was a dispute in the evidence as to whether Mrs. Smith was responsible for selling marijuana. Mrs. Smith said that her husband was responsible for selling marijuana. Mr. Smith said that Mrs. Smith took a lead role in selling marijuana. Based on my assessment of the witnesses and the obvious inability of Mrs. Smith to run a successful operation on her own post separation, I accept that Mr. Smith was primarily responsible for selling marijuana and for running the marijuana grow operation the family relied on during the marriage. I find that Mrs. Smith was involved in some sales, but only to a limited extent in the later years.
[71] I find that Mrs. Smith was reliant on Mr. Smith throughout their marriage. Mr. Smith was the driving force of the grow operation and controlled the money. He provided Mrs. Smith with cash as needed to run the household.
[72] When the parties sold the Leggett property in January 2013, the business arrangement was that the purchaser, Troy Keenan, would pay them each US$900 a month as a blended payment of principal and interest, and Mr. Keenan would pay each of Mr. and Mrs. Smith a principal amount of US$20,000 at the beginning of January each year. In January 2014 Mr. Keenan made a payment of US$40,000 in cash, which was picked up by Mrs. Smith and deposited into her account. Both Mr. and Mrs. Smith received the $900 monthly payment amount as income in the years 2013 and 2014. They no longer receive income from this property.
[73] Following the parties’ separation, Mr. Smith began working in Fort McMurray in the metalwork trades. His reported income for the years 2014 through 2017 is set out below:
a) 2014 – $64,927,
b) 2015 – $111,765,
c) 2016 – $97,025,
d) 2017 – $86,319.
[74] Mr. Smith significantly undervalued his income on an affidavit and a financial statement sworn in this proceeding.
[75] In an affidavit dated November 3, 2016, Mr. Smith swore that his income was $55,145.78 and that he was currently collecting employment insurance benefits. At the time he swore the affidavit, this was not true. His income in 2016 was significantly more than $55,000.
[76] Mr. Smith swore a financial statement on November 16, 2017. In this financial statement, which was sworn almost at the end of the year, Mr. Smith swore that his total income was $28,236. In fact his income in 2017 was almost $60,000 more than his reported income.
[77] Mrs. Smith stayed in Grand Forks after August 2013. She testified that in 2014 Mr. Smith continued to grow marijuana on the Grand Forks property with a partner. In chief she testified that she received 10 lbs of marijuana from the 2014 crop, and Mr. Smith received 30 lbs from the 2014 crop. This was denied by Mr. Smith, who says that Mrs. Smith attempted to continue the marijuana grow operation at the Willow Road property on her own in 2014. In cross examination, Mrs. Smith stated the 30 lbs of marijuana was transferred to Mr. Smith in 2015, and Mr. Smith paid her $8,000 for this product. Mr. Smith agreed he paid Mrs. Smith $8,000 in 2015, but for 5 lbs of marijuana. At one point, Mr. Smith suggested the $8,000 was in fact a form of spousal support, but I do not accept this statement.
[78] Mr. Adams was called as a witness. He testified that Mrs. Smith hired him to assist her in 2014. Mr. Adams testified that approximately 20 pounds of marijuana was harvested in 2014. It was unclear from the evidence what the value of 20 pounds of marijuana in 2014 would have been. Mrs. Smith testified that she sold 3 pounds of marijuana to somebody in 2014 for $800 a pound. If this can be extrapolated to 20 pounds of marijuana which Mr. Adams says was harvested from the property, and it is not entirely clear that it can be, Mrs. Smith would have received less than $20,000 for this crop.
[79] In 2016 Mrs. Smith attempted to grow a small crop in pots, and was able to harvest 10 lbs.
[80] In the fall of 2016 Mrs. Smith ordered marijuana seeds. There is no evidence that she planted a crop in 2017 or 2018.
[81] The evidence from Mrs. Smith regarding her grow operations from 2014-2016 is unreliable. I accept the evidence of Mr. Adams in relation to the 2014 crop year. For the 2015 crop year, I find that Mrs. Smith did grow a crop and sold some amount to Mr. Smith for $8,000. However, I am satisfied that the 2015 crop would not have been materially better than the 2014 crop, and her crop was much worse in 2016. Since then, her production has diminished. I am satisfied that Mrs. Smith is not capable of maintaining a successful marijuana grow operation.
[82] Mrs. Smith reported negligible income in the years after separation. She reported the interest received from Troy Keenan in the approximate amount of $3,200 each year. She did not report any income received from her marijuana grow operation.
[83] Mrs. Smith has looked into a few possible revenue streams for the future, such as renting out rooms. She has a limited ability to work due to her health conditions, which are discussed below.
[84] Mrs. Smith has suffered a number of serious health conditions over her lifetime. Her family doctor, Dr. Dalla Lanna, testified at trial. He has been her treating family doctor since 2012. Dr. Dalla Lanna testified that Mrs. Smith suffers from a number of chronic ailments which significantly impact her life and require large amounts of time to manage.
[85] Mrs. Smith has had type I diabetes for over 40 years and is insulin-dependent. Dr. Dalla Lanna testified that prolonged use of insulin over so many years renders her a fragile diabetic who must intensively manage her sugars. She is required to prevent low blood sugars in her system, which in Mrs. Smith’s case can be quite severe and dangerous. She has to do regular blood sugar checks and insulin dosing 4 to 6 times a day. Related to her diabetes, Mrs. Smith also suffers from diabetic retinopathy. This is treated by her ophthalmologist. It results in a macular edema which ultimately will lead to blindness. Mrs. Smith is already suffering from peripheral vision loss as a result of this condition.
[86] Mrs. Smith has diabetic neuropathy in her feet causing chronic pain and impacting her mobility at times.
[87] Mrs. Smith has been diagnosed with primary biliary cirrhosis, which is an autoimmune disease attacking her liver. It is not related to alcohol consumption. One of the effects of this cirrhosis is debilitating and significant fatigue. Dr. Dalla Lana testified that there are no known treatments for the fatigue she suffers related to the cirrhosis.
[88] Mrs. Smith’s suffers from a hypothyroid condition. This is another autoimmune disease which is presently being controlled with a thyroid adjustment drug. The symptoms of this condition are fatigue and weight gain.
[89] Mrs. Smith has septal hyperkinesia, which is a congenital condition where the muscles between her heart chambers do not contract normally.
[90] Over the last two years Mrs. Smith has suffered from depressive symptoms and Dr. Dalla Lanna has referred Mrs. Smith to a psychiatrist for treatment.
[91] Counsel for Mr. Smith suggested that Mrs. Smith did not follow recommended treatment programs, including for exercise. There was no medical evidence proffered to support this challenge to Mrs. Smith’s medical history. Dr. Dalla Lana testified that he is only aware of Mrs. Smith missing one appointment with a specialist in the years he treated her. He did not testify that Mrs. Smith was not compliant with his recommended treatments. Counsel for Mr. Smith suggested Mrs. Smith did not participate in a number of therapies, such as massage or chiropractic treatments; however, there was no medical evidence that such therapies were ordered to address her medical issues.
[92] Mrs. Smith testified that she has lost 70 pounds and walks daily. For a woman who is 60 years old, and in the absence of any medical evidence to the contrary, I find that Mrs. Smith is maintaining an exercise program sufficient to address her medical issues and is compliant with her doctor’s recommendations.
[93] No medical practitioners testified on behalf of Mr. Smith. However he did testify that he suffers from severe osteoarthritis in his hips and knees. Mr. Smith was scheduled for hip replacement surgery on August 15, 2018. Mr. Smith testified that his current surgical plan is to have his right hip replaced first, followed by his right knee, then his left knee and left hip. Mr. Smith is taking significant pain medication right now to deal with the osteoarthritis.
[94] I accept that presently Mr. Smith’s ability to work in a strenuous job is compromised.
[95] Mr. Smith did not testify that he had any chronic medical conditions. I received no evidence to suggest that when his joints have been replaced, he will not be able to return to a reasonably active lifestyle.
[96] Mr. Smith has shown an ability to earn a good income both during the marriage and after separation. While I accept that he is currently disabled and receiving disability benefits, I am satisfied that this is not a permanent state. Following his orthopedic surgeries I accept that Mr. Smith will be able to return to work.
[97] Mr. Smith testified that he would not be able to do the same kind of work he was doing in the period 2015 to 2017, when he was working in Fort McMurray in the oil fields, because that work involved too much physical work: climbing, working in confined spaces, climbing stairs, etc. Mr. Smith is qualified for a wide range of metalwork trades, including sheet metal fabrication, boiler making, and welding. I was not provided with any evidence to suggest that Mr. Smith was not able to obtain employment in a metal work trade outside of Fort McMurray or the oil fields. I am satisfied that, given his work history, Mr. Smith will continue to work and earn a reasonable income.
[98] Mrs. Smith has not demonstrated an ability to sustain herself financially. Mrs. Smith was cross-examined extensively on her failure to prepare a resume or apply for jobs since separation. However, I accept Mrs. Smith’s evidence that she is not capable of holding a job due to her medical conditions. I accept that her medical conditions require intensive management and that she is not capable of reliably turning up for work on a full-time basis. Mrs. Smith has made some attempts to start home-based businesses which she can work at when her conditions allow, however these have not been successful to date.
[99] In Chutter v. Chutter, 2008 BCCA 507 (“Chutter”), the Court of Appeal reviewed the objectives of spousal support under the Divorce Act starting at para. 45:
[45] Section 15.2 of the Divorce Act is the main provision governing entitlement to spousal support. Subsection 15.2(6) provides that a spousal support order should meet the following objectives:
(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;
(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;
(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and
(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
[46] In order to achieve a fair and equitable distribution of resources, all four of these objectives should be examined: Moge v. Moge, [1992] 3 S.C.R. 813 at 850-853, 43 R.F.L. (3d) 345. Having regard to these policy objectives, courts must consider the condition, means, needs and other circumstances of each spouse, including the factors set out in s. 15.2(4):
(a) The length of time the spouses cohabited;
(b) The functions performed by each spouse during cohabitation; and
(c) Any order, agreement or arrangement relating to support of either spouse.
[47] Based on the statutory provisions and the case authorities, the Supreme Court of Canada has identified three grounds for entitlement to spousal support: (1) compensatory support, which primarily relates to the first two objectives of the Divorce Act; (2) non-compensatory support, which primarily relates to the third and fourth objectives; and (3) contractual support (Bracklow v. Bracklow, [1999] 1 S.C.R. 420 at paras. 15, 41-42, 44 R.F.L. (4th) 1).
[100] Compensatory support was further explained by the Court of Appeal in Chutter, at paras. 50-51, as compensating the recipient spouse for economic sacrifices made to the benefit of the family during the marriage, which resulted in lower earning potential and fewer future prospects of financial success. Compensatory support addresses both the disadvantaged position of the recipient spouse, and the advantaged position of the other spouse, arising from the roles each assumed during the marriage. Noncompensatory support, on the other hand, “aims to narrow the gap between the needs and means of the spouses upon marital breakdown”: Chutter at para. 54.
[101] I find that Mrs. Smith is entitled to both compensatory and non-compensatory support from Mr. Smith in accordance with the objectives set out in the Divorce Act. Mr. Smith focused on building a successful, albeit illegal, business during the marriage. He was assisted to some extent by Mrs. Smith, but I find that he was the main driver of the family business. Through the efforts of Mr. Smith the family enjoyed a reasonably high standard of living throughout the marriage. In addition, Mr. Smith was able to maintain his skills in the metalwork trades, and has proven adept at re-entering that trade at various points in his life, including in his mid-50s when he began working in the oil fields. Mrs. Smith, on the other hand, was primarily responsible for raising the children and maintaining the household. While she assisted in the family business, she did not develop skills which have proven to be sufficient to allow her to become economically independent. Given the length of the marriage, Mrs. Smith is entitled to a level of support from Mr. Smith consistent with their different but equal contributions to the family.
[102] I am satisfied that Mrs. Smith will not become economically self-sufficient at this stage of her life. The breakdown of the marriage has disproportionately affected Mrs. Smith in terms of her financial situation. She was reliant on Mr. Smith throughout their long marriage and has no viable means of supporting herself today.
[103] In December 2016 an interim spousal support order was made in favour of Mrs. Smith in the amount of $2,800 a month. This was based on an imputed income for Mr. Smith in the amount of $80,000 a year.
[104] Mrs. Smith was entitled to spousal support from the date of separation and these payments should have commenced in September 2013. For the four years 2014 to 2017, Mr. Smith’s average income was $90,000 a year. I find that Mrs. Smith was entitled to spousal support from September 2013 until December 2017 in the amount of $3,000 a month. The total spousal support to which Mrs. Smith was entitled over this period of time (52 months) is $156,000.
[105] In 2018 Mr. Smith has been on disability and employment insurance benefits. I accept that this has resulted in a decrease in his income in 2018. He has reported on his financial statement that his annual income is $28,236. He did not produce any receipts of income received through any benefit program. He did produce a summary of benefits from his union which shows he was entitled to $543 per week for disability income, and was entitled to long-term disability income of $2400 a month until the age of 65. I accept that Mr. Smith’s income was reduced to $28,000 for the 2018 year. The monthly support payable on this income is $118 per month. For the months January to September 2018 Mr. Smith was obligated to pay Mrs. Smith the total of $1,062.
[106] In summary, Mr. Smith is obliged to pay spousal support to Mrs. Smith from September 2013 to the date of trial in the amount of $157,062. To date Mr. Smith has paid Mrs. Smith $58,800. As such, Mr. Smith is liable to pay Mrs. Smith $98,262 in retroactive spousal support.
[107] Ongoing spousal support is much more difficult to determine based on the evidence in this case. Mr. Smith is 62 years old and is currently suffering from a condition which makes it impossible for him to continue with his trade in the short term. This will have an impact on his ability to provide spousal support to Mrs. Smith.
[108] While I accept that Mr. Smith’s current income is approximately $28,000, I do not accept that this will be his maximum income over the next three years until he reaches retirement age. Mr. Smith testified that it was his intention to seek work once the surgery was complete and I accept that he will do so. I find that within the next two years Mr. Smith will have obtained work which will provide him with a minimum income of $80,000 per year.
[109] Mrs. Smith seeks an order for lump-sum spousal support. In Robinson v. Robinson, 2011 BCSC 1489 (“Robinson”) this court reviewed the law relating to spousal support:
[96] The Ontario Court of Appeal, in Davis v. Crawford, 2011 ONCA 294, sitting as a five judge panel has recently reviewed and discussed in detail the factors that a court should take into account in determining whether or not to order lump sum spousal support:
...
[65] These statutory provisions make it clear that ability to pay is an important consideration in making an award of spousal support, including lump sum spousal support.
[66] Most importantly, a court considering an award of lump sum spousal support must weigh the perceived advantages of making a lump sum award in the particular case against any presenting disadvantages of making such an order.
[67] The advantages of making such an award will be highly variable and case-specific. They can include but are not limited to: terminating ongoing contact or ties between the spouses for any number of reasons (for example: short-term marriage; domestic violence; second marriage with no children, etc.); providing capital to meet an immediate need on the part of a dependant spouse; ensuring adequate support will be paid in circumstances where there is a real risk of non-payment of periodic support, a lack of proper financial disclosure or where the payor has the ability to pay lump sum but not periodic support; and satisfying immediately an award of retroactive spousal support.
[110] The law in Robinson is consistent with the law in Dong v. Liu, 2008 BCSC 1795 where the court sets out a number of factors to be considered, at para. 54, when making a lump-sum maintenance order, including: the existence of animosity between the parties, the only asset of the payor being the payor’s interest in the family home, the payor not being in a position to pay any amount towards the support, it being neither practical nor feasible for the payor to make periodic maintenance considering the earning capacity of the payor, the payor disobeying a previous maintenance order and not demonstrating prudent financial management, and the payor having limited means to earn an income in the foreseeable future and one financial asset.
[111] In the case before me I am satisfied that a lump sum spousal support order should be made. The parties have agreed to a no contact order. Periodic spousal maintenance is not consistent with that no contact order. Mr. Smith is required to pay both retroactive and prospective spousal support. At present he is on disability and has limited ability to make such payments. The primary assets of the parties are the real property assets which are discussed in this decision. Mr. Smith in the past failed to truthfully disclose his income, and initially failed to make maintenance payments as ordered. All of these factors, in my view, weigh in favour of making a lump-sum order for spousal support.
[112] I order Mr. Smith to pay future spousal support for two years based on an income of $28,000, and one year based on an income of $80,000. The total future spousal support payable is $36,432. Together with the retroactive spousal support payable by Mr. Smith in the amount of $98,262, I make a lump sum spousal support order payable by Mr. Smith to Mrs. Smith in the amount of $134,694.
[113] Mrs. Smith has expressed a strong desire to remain in the Willow Road property. Pursuant to the division of family assets I have ordered, Mr. Smith has an interest in the Willow Road property in the amount of $167,500. I give Mrs. Smith the right to pay out to Mr. Smith funds equal to the difference between $167,500 and $134,694, whether through her share of the proceeds of the Calgary house or otherwise, and accept the transfer of Mr. Smith’s interest in the Willow Road property to Mrs. Smith in satisfaction of the lump sum spousal support obligation. Within 30 days of this decision Mrs. Smith must advise Mr. Smith whether she will exercise this right. If Mrs. Smith exercises this right, Mr. Smith shall forthwith execute all documents required to effect the transfer. If Mrs. Smith does not exercise this right, Mr. Smith shall pay the lump sum spousal support order within 60 days of this decision, and the Willow Road property will be sold with the proceeds divided between the parties.
[114] The parties are divorced from each other and the divorce is to take effect on the 31st day after the date of the trial order.
[115] The date of the parties’ separation is August 23, 2013.
[116] If Mrs. Smith exercises her right to obtain the transfer of the Willow Road property interest from Mr. Smith, as set out above, Mr. Smith shall forthwith execute all documents required to transfer his interest in the Willow Road property to Mrs. Smith. If Mrs. Smith does not exercise her right to obtain the Willow Road property, the Willow Road property shall be listed for sale and sold with the parties having joint conduct of sale. The parties shall jointly agree on a realtor and shall list the property at the price suggested by the realtor. All offers shall be shared with both parties and the parties shall jointly agree on the terms of sale. The parties have the right to apply to the court for approval or sole conduct of sale if agreement on either the terms of listing or of the sale cannot be reached between them. Once the Willow Road property has been sold, all proceeds of sale shall be divided equally between the parties.
[117] The parties shall list the Mexican property for sale, with the parties having joint conduct of sale, and the right to apply to the court for approval or sole conduct of sale if agreement on either the terms of listing or of the sale cannot be reached between them. Once the Mexican property has been sold, all proceeds of sale shall be divided equally between the parties
[118] The proceeds of sale of the Calgary property currently held in the trust account of counsel for Mr. Smith shall be distributed as follows: Mrs. Smith will receive $46,771.57, and Mr. Smith will receive $109,609.
[119] Mrs. Smith shall retain the 2003 VW Beetle car and the 1999 Ford truck, and Mr. Smith shall execute any documents required to make this order effective. Mr. Smith will retain the 2006 Hyundai Santa Fe, and Mrs. Smith will execute any documents required to make this order effective.
[120] The SunLife investment in the amount of $1,196 will be shared equally between the parties.
[121] The Bank of Montreal RRSP in the amount of $15,724 shall be divided equally between the parties.
[122] Mr. Smith will pay to Mrs. Smith spousal support in a lump sum amount of $134,694. Such payment shall be made within 60 days of this order, or as otherwise agreed to between the parties.
[123] Neither party shall have contact or communication with the other in any manner, except through legal counsel now or at any time in the future.
[124] Except with prior written consent, and as required for the execution of any legal obligations, the parties shall not attend within 100 m of the other party’s residence now or at any time in the future.
[125] All other claims are dismissed.
[126] As success has been divided, I make no order for costs.
“Baker J.”