2008 BCSC 1222err1 Friedl v. Friedl

Before: The Honourable Mr. Justice Blair

Reasons for Judgment

Counsel for the Plaintiff	M.J. Keim
Counsel for the Defendant	P.R. Albi
Date and Place of Trial/Hearing:	April 7-10, 14-18, 21-25 & 28, 2008
	Kamloops, B.C.

[1] The parties, Carola Heide Friedl (“Ms. Friedl”) and Hans Peter Friedl (“Dr. Friedl”), seek orders to reflect the end of their marital relationship and to resolve questions relating to the custody and access of their two children, Ms. Friedl’s application to move from Kamloops, property entitlement and division, and spousal and child support.

[2] Although the questions appear straightforward, such is not the situation. The trial consumed 16 days. It involved an extensive examination of the parties’ credibility, the validity and enforceability of their German Marriage Agreement, the involvement of German courts, evidence as to whether British Columbia family law or German law should be applied with respect to the Marriage Agreement, and the interpretation of the applicable German law. Underlying this case is a palpable and significant level of animosity between the parties, which has further complicated the resolution of their difficulties.

[3] While I will of necessity describe some of the events surrounding the breakdown of the parties’ marriage, I intend to limit the detail as I am concerned that the parties’ two children will obtain a copy of these Reasons regardless of my direction to the parties that neither are to give these Reasons to the children nor discuss the contents with them, except with respect to the questions of custody, access and Ms. Friedl’s application to relocate. I am satisfied that the children’s involvement in the parties’ dispute has been more than peripheral and has been a factor in the children’s present behaviour.

Background

[4] Ms. Friedl was born in Germany on December 30, 1966, and is aged 41 years. She trained and subsequently worked as a physiotherapist, however her credentials are not recognized in Canada. Dr. Friedl was born on May 22, 1960 and is aged 48 years. He qualified as an orthopaedic surgeon and until May 2000 he was the chair and professor of surgery in the orthopaedic surgery and traumatology department at the University of Freiburg Hospital. Freiburg is a city located in the southeast corner of Germany, close to the Swiss and French borders. Dr. Friedl has been on paid leave from his position since May 2000.

[5] The parties met in 1986, commenced living together in January 1993, and were married on January 3, 1997 in Michigan, in the United States. The parties and their two children are German citizens and in November 2001 they settled in Kamloops and obtained permanent resident status. The children, Victoria Carolyn Friedl, born May 11, 1997 and Hans Julius Friedl, born March 24, 1999, currently live with their mother and attend school in Kamloops.

[6] When considering the testimony of both Dr. Friedl and Ms. Friedl, I am aware that German is the first language for both individuals. However, Dr. Friedl’s answers and the exchanges that involved him during the trial demonstrate that he has a thorough knowledge of English, having spent 1988 and 1989 doing research at the University of Michigan and having lived in Canada for the past seven years. Ms. Friedl speaks English but, while fluent, she does not have as wide a vocabulary as Dr. Friedl. However, she made up for any vocabulary deficit by referencing a German-English dictionary when necessary. At no time during the trial did either party leave me with the impression that they were having difficulty understanding what was happening in the process or in expressing themselves in English.

[7] Prior to their marriage, the parties executed a Marriage Agreement (the “Marriage Agreement”) on December 23, 1996, which Ms. Friedl challenges and Dr. Friedl seeks to uphold. The Marriage Agreement provides that the parties, through their marriage, will maintain their property separately and that upon the termination of the marriage each will leave the marriage with the property they owned when they signed the Marriage Agreement and the property they each subsequently acquired during the marriage. Dr. Friedl, or corporate entities he controls, own real property and investments acquired before and during the marriage. Ms. Friedl has no real property and few movables registered in her name.

[8] The parties separated on January 22, 2006, and Ms. Friedl, on February 21, 2006, commenced this action with Dr. Friedl being served on February 27, 2006. I order that the parties be divorced.

[9] Dr. Friedl holds properties and business interests either in his own name or in the name of Friedl Development Ltd. or Friedl Holdings Inc., British Columbia companies in which he is the sole shareholder, officer and director. The properties and the business interests include the following:

(a) A waterfront property and cottage purchased in 1995 and located at 3605 S. Lakeview Drive, Shelby Drive, Michigan, legally described as Sec 25 T14N R19W Plat of Driftwood Beach Lot 51 & N ½ of Lot 52, bare land located in Chippewa County purchased in 2001, and a garage and storage building located at 7831 Florida Street, Shelby, Michigan, legally described as Sec 33 T14N R18W Holiday Shores Subdivision Lot 41, the three properties all being registered in Dr. Friedl’s name (“the Michigan lands”);

(b) 377 Cevio, Switzerland, a vacation property acquired in May, 1995 and registered in Dr. Friedl’s name and legally described in exhibit 7, tab 1 (“the Swiss property”);

(c) Three flats, also described as apartments, and associated garages located in Leipzig, Germany, and acquired in 1996, registered in Dr. Friedl’s name, and legally described in exhibit 7, tabs 2, 3 and 4 (“the Leipzig flats”);

(d) A home near Freiburg at Hohenzollernweg 7, Umkirch, Germany, purchased on or about April 14, 1998, legally described in exhibit 7, tab 7, and registered in the name of Dr. Friedl (“the Umkirch home”);

(e) A home at 70 Bestwick Drive, Kamloops, British Columbia legally described as Lot 11, Plan KAP47418, S. 36, Tp. 108, KDYD, purchased November 14, 2001 and registered in Dr. Friedl’s name (“the Bestwick home”);

(f) Property near Clearwater, British Columbia, legally described as Lot 1, DL 2839, KDYD, Plan 36290, purchased October 21, 2002, registered in the name of Dr. Friedl, transferred to Friedl Development Ltd. on February 9, 2006 and sold to a third party on June 29, 2007 (“the Clearwater property”);

(g) A ranch at Hyas Lake, British Columbia, near Kamloops, and legally described as the SE 1/4 of S. 2, Tp. 21, R. 15, W6M, KDYD, purchased September 2004 and registered in the name of Friedl Development Ltd. (“the Hyas Ranch”); and

(h) Dr. Friedl through his company Friedl Holdings Inc. in April 2002 purchased interests in Progressive Air Services Ltd. and P.A.E. Holdings Ltd. (collectively referred to as “Proair”), companies involved in the aviation business, including aircraft maintenance, engine repairs, and the sale of parts. The transaction involved Friedl Holdings paying $1.5 million for these interests, consisting of $625,000 advanced by way of a shareholder’s loan and a further $875,000 for the purchase of shares.

[10] The monetary figures found throughout these Reasons refer to Canadian dollars unless otherwise indicated.

Jurisdiction

[11] Ms. Friedl asserts that the Canadian courts have jurisdiction to hear the trial of this matter and rule on the matters arising from the end of the parties’ marriage. When Ms. Friedl commenced her divorce action in February 2006, the family had been resident in Canada since 2001. The family members were permanent residents of Canada although they retained their German citizenship. Since their marriage in 1997, they have lived longer in British Columbia than they did in Germany. Dr. Friedl has substantial property and business interests in British Columbia, although he also holds property and business interests in Germany, Switzerland and the United States.

[12] Following service of Ms. Friedl’s petition, Dr. Friedl, on March 3, 2006, commenced a divorce action in Germany seeking to have the German courts assume jurisdiction of the parties’ dispute, contending in part that the Canadian divorce would not be accepted in Germany as it may include settlements pertaining to matrimonial property contrary to the parties’ Marriage Agreement.

[13] Judge Lips of the Family Court, District Court of Schoneberg, Germany, held on March 9, 2007 that the Canadian court had undisputed jurisdiction over the divorce proceedings between the parties in Canada and dismissed Dr. Friedl’s German divorce application, concluding that the family’s divorce action would be resolved in Canada, referring to the fact that Ms. Friedl commenced the divorce action in British Columbia before Dr. Friedl commenced his divorce action in Germany. Judge Lips’ reasoning is similar to that of Mr. Justice Kelleher in Hormandinger v. Bender-Hormandinger, 2007 BCSC 949 in which Kelleher J. declined to exercise jurisdiction with respect to property the divorcing parties owned in British Columbia. Kelleher J. held that the German courts were in the best position to deal with property questions between the divorcing parties, including the division of the parties’ British Columbia property.

[14] District Judge Lips anticipated that a Canadian divorce decree would be accepted in Germany, noting the following at pp. 4 and 5 in the judgment, as translated:

... the [German] acceptance procedure does neither include a review as regards content, nor regarding possible incidental rulings pertaining to matrimonial property law. Even if the Canadian court does not base its ruling on the arrangements laid out in the matrimonial agreement, the content of such ruling would not be reviewed as part of the acceptance procedure and therefore would not impede its acceptance. Regardless, matrimonial agreements must bear close examination as regards content also according to prevailing German case law and may even be invalid as the case may be so that a ruling of the Canadian court in this respect would also not infringe upon the German ordre publik or the Applicant’s basic rights.

[Comments in brackets and underlining are mine]

[15] District Judge Lips continued:

The parties are required to settle this lawsuit in Canada. Open proceedings adjourned sine die suggests that the parties can have the Canadian ruling reviewed in Germany and appeal against the judgement. This is not the case. The Canadian divorce decree will be accepted in Germany without question. The present divorce proceedings are dismissed.

[16] The German Court of Appeal dismissed Dr. Friedl’s appeal from District Judge Lips’ decision on December 14, 2007.

[17] I conclude that with the parties’ extensive ties to British Columbia and the refusal by the German courts to take jurisdiction of the parties’ divorce action given that the matter was already before the Canadian courts, it is appropriate for this court to exercise jurisdiction and rule on the various matters arising from the breakdown of the parties’ marriage.

Choice of Law

[18] In the absence of an agreement to the contrary, international law provides that when a court is determining the ownership of real or immovable property, the law ordinarily applied would be that of lex situs, that being the jurisdiction in which the property is located: see Tezcan v. Tezcan, (1992), 87 D.L.R. (4^th) 503, 62 B.C.L.R. (2d) 34 (C.A.). However, in the instant case the parties’ Marriage Agreement provides that German law applies to their property, the Marriage Agreement at p. 1 stating, as translated:

I. Laws to be applied

For our marriage as well as in case of it’s termination, the laws of Federal Republic of Germany will be applied.

[19] Ms. Friedl challenges the validity of the Marriage Agreement contending it ought not be enforced because her signature to the Marriage Agreement was obtained through coercion, duress or undue influence. If this court finds the Marriage Agreement invalid, Ms. Friedl asserts its terms cannot be enforced and that the court should apply Canadian law as found in the Family Relations Act, R.S.B.C. 1996, c. 128 (the “FRA”), and specifically s. 65, which allows the court to judicially reapportion property held by the parties on the basis of fairness.

Validity of the Marriage Agreement

[20] I accept Ms. Friedl’s evidence that she and Dr. Friedl became engaged to be married in 1993 when vacationing in Ireland, although Dr. Friedl diminished the seriousness of the engagement. Dr. Friedl described the engagement entered into as involving considerably less formality than is usually associated with an engagement in Germany. Nevertheless, Ms. Friedl obtained an engagement ring from Dr. Friedl and she stated that the ring attracted the attention of her colleagues. The parties started living together in Zurich, Switzerland, in January 1993.

[21] Dr. Friedl testified that he considered marriage as a relationship useful only for the purpose of raising children and, other than that, said that it was not an institution in which he had much interest. In September 1996, at which time the parties were residing and working in Zurich, Ms. Friedl became pregnant. Ms. Friedl stopped birth control practices in 1995, a decision she says with which Dr. Friedl agreed. Dr. Friedl denied knowing Ms. Friedl had stopped practicing birth control and said he was surprised when she told him of her pregnancy. Dr. Friedl testified that he found the timing of the news difficult because of his work commitments at the Zurich hospital where he worked, but nevertheless undertook to make wedding plans, which he asserts first included the preparation of the Marriage Agreement.

[22] Dr. Friedl testified that it was important to him that the Marriage Agreement provide a separate property regime under which all property acquired by either party before or during the marriage would remain with the party who acquired the property and it would not be open to variation upon divorce. In Germany, when there is no agreement between spouses providing for a separate property regime, the statutory default regime applies and the spouses, upon divorce, share equally in the value of the net asset gains made by both during the marriage.

[23] Dr. Friedl testified that it was his idea to have a separate property agreement, but at his examination for discovery he stated that his sister, Barbara Friedl-Schoning, a lawyer in Leipzig, Germany, first recommended he have the Marriage Agreement prepared. Dr. Friedl further testified that he had discussed the preparation of a Marriage Agreement with Ms. Friedl-Schoning. Ms. Friedl testified that she did not know of Dr. Friedl’s wish to have a Marriage Agreement until late 1996. There is no evidence to suggest Dr. Friedl expressed his intention to have a Marriage Agreement when the parties became engaged in 1993.

[24] Ms. Friedl’s evidence differs significantly with that of Dr. Friedl as to the process leading to the creation of the Marriage Agreement. Dr Friedl describes the preparation of several drafts of the Marriage Agreement with the assistance of his Leipzig lawyer, Frieder Schoning, the law partner and husband of his sister, Barbara Friedl-Schoning. Dr. Friedl says he provided the drafts to Ms. Friedl and that changes were made in accordance with her comments. He did not know if she consulted a lawyer, but he was aware that she spoke to her brother and her parents about the Marriage Agreement.

[25] Ms. Friedl testified that she was aware that Dr. Friedl was having the Marriage Agreement prepared, but that in spite of her requests she did not see the Marriage Agreement, nor any draft, until she and Dr. Friedl attended before a notar, Dr. Friedrich Jung-Heiliger (“Dr. Jung-Heiliger”), in Leipzig on December 23, 1996, when she was expected to and did sign the Marriage Agreement. Ms. Friedl said she wanted to review the proposed Marriage Agreement before seeing the notar, as did her father and her brother after she told them about it. She testified that her brother declined to participate in her wedding party unless he first had the opportunity to review the Marriage Agreement.

[26] Ms. Friedl filed an English translation of the Marriage Agreement together with the German original and the defence took no issue with the correctness of the translated Marriage Agreement. The terms of the Marriage Agreement provide in part, that it will be interpreted pursuant to German law, that the parties will keep the property with which they entered their marriage separate from each other and that property obtained during the marriage will also remain their own, separate from that of their spouse, with provisions for spousal and child support should the marriage produce children.

[27] Before considering the other circumstances surrounding the execution of the Marriage Agreement, I will first address the difficulty posed by the parties’ contradictory evidence with respect to the Marriage Agreement’s preparation. Counsel commenced the trial by advising that the credibility of the parties would be a major factor in the determination of this case and that there would be considerable evidence adduced that reflected on the parties’ credibility in conjunction with various aspects of their dispute. Counsel’s submission proved to be correct and in the course of these Reasons I will, of necessity, address the parties’ credibility to determine their disputes.

[28] However, I do not wish to digress from the topic of the validity of the Marriage Agreement to fully canvass the parties’ credibility and its role in my decision, but I will later in these Reasons discuss in further detail my conclusions on credibility. It is sufficient to note that Dr. Friedl’s evidence with respect to certain difficult events involving the parties’ children is not believable, that he has been less than forthright in his evidence, and that he has not produced documents relating both to the drafting of the Marriage Agreement and the labyrinth of banking, business and real estate dealings with which he has been involved in Canada, the United States, Germany, and Switzerland during the parties’ relationship. I conclude that Dr. Friedl’s document production has been at best selective, as he appears to have produced only those documents that he was prepared to have the court review, coupled with other documents that he appears to have revealed reluctantly or, on occasion, by court order.

[29] Dr. Friedl has withheld a significant number of documents relating to his financial affairs, including details with respect to the origin of the $1.5 million that financed the Proair purchase and the history of the mortgage transactions and the mortgage balances with which he is involved, and to which he alone would have access. I find Dr. Friedl’s testimony relating to various and sometimes remarkable events that occurred during the parties’ relationship and following their separation lacks the honesty and frankness that the trier of fact requires to fully and fairly assess the evidence in reaching the conclusions required to settle the parties’ dispute.

[30] It is with the aforementioned perspective of Dr. Friedl’s evidence gathered through the trial that I approach the validity of the Marriage Agreement and determine whether it is enforceable. The onus lies with Ms. Friedl, as the plaintiff, to prove on a balance of probabilities and in all the circumstances that coercion, duress, or undue influence by Dr. Friedl led her to sign the Marriage Agreement.

[31] Dr. Friedl testified that he discussed the preparation of the Marriage Agreement with Ms. Friedl and that several drafts of the Marriage Agreement were prepared, apparently by his lawyer, Mr. Schoning, and that he delivered those drafts to Ms. Friedl who denied receiving any drafts of the proposed agreement in spite of her requests to obtain a draft. Dr. Friedl described a process of drafting and amending the Marriage Agreement until it reflected the final Marriage Agreement, which was then given to the notar. Dr. Friedl testified that the notar, as part of his duty, prepared the Marriage Agreement, which the parties ultimately signed, but he also stated that his lawyer, Mr. Schoning, drafted and delivered the terms of the Marriage Agreement to the notar.

[32] When queried about the drafts of the Marriage Agreement, Dr. Friedl testified that he did not keep copies of the drafts and when asked if his lawyer, Mr. Schoning, retained copies he first replied that the drafts were not accessible, but then added that he understood from Mr. Schoning that the drafts were destroyed after the parties signed the Marriage Agreement. It is strange that none of the drafts that Dr. Friedl testified were prepared are available to determine how the Marriage Agreement evolved. Ms. Friedl recalled that in her first view of the Marriage Agreement at the notar’s office she noted immediately that the first page did not properly describe her occupation and required amendment. It is fair to infer that if the drafts of the Marriage Agreement had been given to Ms. Friedl, such an obvious error would have been noted earlier.

[33] Ms. Friedl testified that when she and Dr. Friedl attended with the notar she knew that the marriage would not occur unless she signed the Marriage Agreement, a fact that Dr. Friedl made clear to her as the marriage date approached. I accept that Dr. Friedl insisted that Ms. Friedl enter into the Marriage Agreement and that he would not marry Ms. Friedl until the Marriage Agreement was executed. She testified that when she attended before the notar she was four months pregnant with the parties’ first child and she was adamant that she did not want to have the child born out of wedlock, a very real concern given aspects of her family’s background. The Marriage Agreement does not refer to Ms. Friedl’s pregnancy.

[34] Dr. Friedl’s arrangements to sign the Marriage Agreement also appear destined either wittingly or unwittingly to have created an air of urgency to the document’s execution. Although the parties were then living and working in Zurich, close to the southeast corner of Germany and within easy travelling distance of several large German cities such as Munich or Stuttgart where it might be anticipated that notars would be located, Dr. Friedl arranged for the involvement of a notar in Leipzig, a city located approximately 500 kilometres from Zurich. Dr. Friedl planned the appointment to sign the Marriage Agreement for the morning of December 23, 1996 and arranged airline flights from Zurich to Leipzig and return.

[35] Dr. Friedl testified that he was upset about what appear to be minor changes to the Marriage Agreement sought by Ms. Friedl because of the tight schedule with the notar. Dr. Friedl said the changes involved not just rectifying the description of Ms. Friedl’s qualifications, but also included the addition of a schedule referring to some matters of minor concern, including three vehicles, books, domestic goods and firearms owned by the parties. The necessity of a further amendment is another piece of evidence suggesting that the drafting and amending process did not occur in the fashion Dr. Friedl described. Ms. Friedl could not recall this second amendment, but did not deny that it could have been made.

[36] Dr. Friedl’s arrangements included not just the December 23 meeting with the Leipzig notar, but also reservations on flights which saw the parties depart December 25 for Michigan and their January 3, 1997 wedding. His control of those events reflects the position of dominance over Ms. Friedl that he took in other areas of their relationship including where they lived, their move to Canada and his tight control of the family’s finances including the expenses incurred by Ms. Friedl in managing the household during their marriage.

[37] Before further discussing the circumstances surrounding the execution of the Marriage Agreement, I will address the notar and his role in the preparation and execution of the Marriage Agreement. The defence filed two reports prepared by Dieter Henrich, a professor at the University of Regensburg in Germany with 35 years of academic experience in civil law, private international law and comparative law who has published widely on German, foreign and international family law. In his report dated February 11, 2008, Prof. Henrich described notars as individuals having legal training, are qualified to hold a judicial office, and who are appointed by the state government. Under German law a notar dealing with a Marriage Agreement is obliged to ascertain the parties’ intentions, clarify the factual situation, and instruct the parties about the legal implications of the agreement they wish to execute, including making them aware of any legal concerns that the notar may have.

[38] Dr. Friedl arranged for the involvement of the notar, Dr. Jung-Heiliger, in the execution of the Marriage Agreement, testifying that the notar had been involved in registering his acquisition of two of his three Leipzig flats. Dr. Friedl testified that he chose Dr. Jung-Heiliger because he was the only notar he had ever met. However, in cross-examination just minutes later, Dr. Friedl denied that he had previously met Dr. Jung-Heiliger. Whether Dr. Friedl had or had not met Dr. Jung-Heiliger is of little consequence, but the contradiction reflects on Dr. Friedl’s recollection and his credibility.

[39] The defence submits that the notar’s involvement in the execution of the parties’ Marriage Agreement provides Ms. Friedl with independent legal advice and protection with respect to the fairness of the Marriage Agreement’s terms. While I give considerable deference to the role of the notar in the execution of marriage agreements as he is a quasi judicial officer appointed by the state, I am not convinced that a notar is necessarily in a position to provide a party such as Ms. Friedl with independent legal advice. A relatively short meeting, attended by both parties without the advantage of speaking separately to each party to ascertain their respective concerns, if any, in the absence of their prospective spouse, would appear to limit the information available to the notar. For example, there is no evidence that the notar was aware that Ms. Friedl was pregnant when she signed the Marriage Agreement and there is no reference to her pregnancy in the Marriage Agreement. Dr. Friedl, on the other hand, did have independent legal advice, from Mr. Schoning and Ms. Friedl-Schoning, who both participated in the preparation of the terms of the Marriage Agreement that were put before the notar.

[40] Prof. Henrich, in his initial report dated November 15, 2006, described how a German court would review a Marriage Agreement in which one of the parties challenged its legality and enforceability. In the translation of his 2006 report he writes at p. 7:

In accordance with German law, though spouses are entitled to make an agreement on the marital property regime to be applied to their marriage, postnuptial support and the pension rights adjustment, any such agreement is subject to a judicial review.

…

Such a review comprises of two stages. The first stage is an assessment of effectiveness. Here, it is examined whether the agreement regulated the consequences of the divorce to the disadvantage of any of the spouses in way that it must already be deemed contrary to public policy (and thus void, s. 138 of BGB [German Civil Code]) upon its execution. At the second stage, it is examined whether any of the spouses fails to comply with good faith when invoking the – effective – agreement, even though the circumstances have changed since the execution of the agreement in a way that is no longer reasonable for the other spouse to abide by the agreement (s. 242 of BGB).

[41] Prof. Henrich notes that at the first stage of the review, the German courts consider whether the Agreement interferes with the core areas of the law of the consequences of divorce, which would require stricter assessment criteria. He refers to the core areas as being marital property, pension rights, and parental support, the latter claimed by the spouse who cannot be expected to work since they care for and bring up a child or children of the marriage.

[42] At pp. 8-9 of his 2006 report, Prof. Henrich observes of the Friedls’ Marriage Agreement:

In the present case, the agreements on parental support indeed deviate from the regulations usually taken as a basis by the courts when awarding parental support. However, the deviation does not reach such a degree that this agreement can be deemed unconscionable. What is critical is the complete exclusion of sickness and old-age support.

However, the limit to being unconscionable is not exceeded in this respect either, since the spouses will have expected upon their marriage that the wife, being a certified physiotherapist, would be able to earn her own living.

[43] Prof. Henrich makes no reference to the fact that in 2000, Dr. Friedl moved his family to Canada where Ms. Friedl’s physiotherapy qualifications were not recognized and that to qualify for Canadian physiotherapy standards would take a further six years of education.

[44] At pp. 9-10 he writes:

If each of the agreements made between the spouses itself is legally admissible, an overall assessment must finally be made. Such an overall assessment must be based on the individual circumstances existing upon the execution of the agreement, particularly the income and financial condition, the planned or realized form of the marriage and the consequences towards the spouses and children. The purposes intended by the agreement and any other motives that caused the benefiting spouse to request the execution of the marriage contract and the disadvantaged spouse to meet such a request must also be taken into account. In such a context, it might be important whether the wife was in a position of constraint. If, for example, a pregnant woman has only agreed to the execution of a contract that is significantly disadvantageous for her since the husband would have refused to marry her without such a marriage contract, the contract can be assumed to be unconscionable (Federal Court of Justice FamRZ 2006, 1359). However, the wife’s pregnancy upon the execution of the agreement alone is not sufficient in order for the contract to become void. However, the pressure to execute the agreement that has been exerted on her which takes advantage of her pregnancy is an indication of the wife’s negotiating position being weaker and should be a reason to intensify the legal review (Bergschneider, FamRZ 2006, 1437).

[Underlining mine]

[45] In his February 11, 2008 report, Prof. Henrich revisited the topic of pregnancy at the time when a Marriage Agreement is executed, the translation containing the following at p. 7:

b) The wife’s pregnancy at the time of the execution of the contract does not change the existing legal situation. It can, however, be indicative of an unequal negotiation position at the time of the contract execution, which would warrant a closer examination of the contract contents [citations omitted]. Should the husband have taken advantage of the wife’s pregnant condition to coerce her into accepting an agreement that either completely or to a significant degree excludes rules falling under the core area of the law on the consequences of the divorce, whereby this disadvantageous position of the wife is neither softened through other advantages nor justified through the spouses’ special situation, the type of marriage envisioned or lived by them, nor through other notable needs of the husband, this may be regarded as unethical and can thus result in the agreement being declared nil and void [citations omitted]. The important question in this context is: Would the wife have refrained from entering into this agreement or an agreement with these terms if she had not been pregnant?

[Comments in brackets and underlining are mine]

[46] Although the translation uses the term “nil and void” I consider that it actually should read “null and void”, which appears to more accurately describe the situation in the context of the translation.

[47] As I understand the defendant’s submissions, it is not open in German law for a German court to review the marital property provisions of a German Marriage Agreement. However, as I interpret Prof. Henrich’s opinion, together with District Judge Lips’ March 9, 2007 decision, it is open for a German court, and thus this court, to consider the circumstances surrounding the making of a Marriage Agreement to determine its validity and enforceability. I construe from the remarks of both Prof. Henrich and Judge Lips that if the circumstances include coercion, duress or undue influence by one party to the agreement over the other party, such as to leave the former in an advantageous position and the latter in a disadvantageous position, then it is open for the court to determine whether the agreement is valid and enforceable.

[48] Ms. Friedl submits that the Marriage Agreement should be found to be unenforceable, her signature having been obtained by duress, coercion and undue influence on the part of Dr. Friedl. Prof. Henrich’s reports outline the process in which the German courts would assess the circumstances surrounding the execution of a marriage agreement where one of the parties alleges the agreement to be unenforceable. The German court’s assessment process as described by Prof. Henrich appears similar to the approach that would be followed in British Columbia as to the validity of the Marriage Agreement, requiring the court to review the circumstances in which the Marriage Agreement was executed to determine if the Marriage Agreement is invalid and unenforceable, as contended by Ms. Friedl.

[49] The circumstances that I find proven by Ms. Friedl, and which bear on the validity of the parties’ Marriage Agreement, include the following:

(a) that Ms. Friedl did not see the proposed Marriage Agreement until she attended the notar’s office in Leipzig on December 23, 2006;

(b) that Ms. Friedl did not have the opportunity to review the proposed Marriage Agreement with her father or brother or both;

(c) that Ms. Friedl lacked the opportunity to review the terms of the proposed Marriage Agreement with a lawyer of her own choosing and did not receive independent legal advice as to the ramifications of her entering into the Marriage Agreement;

(d) that Dr. Friedl was more sophisticated in business, investments and property dealings than Ms. Friedl and that she would have benefited from receiving independent legal advice before signing the Marriage Agreement;

(e) that Dr. Friedl directed the preparation of the Marriage Agreement with legal advice he received from his counsel, Mr. Schoning and his sister, Ms. Friedl-Schoning;

(f) that Dr. Friedl scheduled an appointment with the notar during a brief visit by the parties to Leipzig with the time constraints precluding Ms. Friedl from fully reviewing and discussing the Marriage Agreement to assist her in understanding its terms;

(g) that although the notar read the Marriage Agreement to Ms. Friedl I accept Ms. Friedl’s testimony that she did not comprehend the implications of the terms of the Marriage Agreement;

(h) that the Marriage Agreement was signed at a time when Ms. Friedl was stressed from having to fly from Zurich to Leipzig and back to Zurich to sign the Marriage Agreement on December 23 before she and Dr. Friedl flew to Michigan on December 25 where they anticipated being married before the end of December, although the marriage did not actually occur until January 3, 1997;

(i) that in December 1996 Ms. Friedl was pregnant, although no mention of her pregnancy appears in the Marriage Agreement, nor is there any evidence that the notar was aware of her pregnancy, a condition that is a significant but not conclusive factor for a German court when assessing the validity of a Marriage Agreement according to Prof. Henrich;

(j) that at the time of signing the proposed Marriage Agreement Ms. Friedl was in the fifth month of her pregnancy and suffering the stresses of pregnancy including tiredness;

(k) that Dr. Friedl told Ms. Friedl that he would not marry her unless she signed the Marriage Agreement, a factor which is particularly relevant when considering the arrangements in place for the marriage to occur soon after in the U.S.;

(l) that Ms. Friedl did not want her child to be born out of wedlock;

(m) that Dr. Friedl knew of Ms. Friedl’s pregnancy when the Marriage Agreement was being drafted and later signed;

(n) that if the marriage foundered the Marriage Agreement, according to Prof. Henrich provides for Dr. Friedl, whose income at the time was approximately $750,000 a year, to pay minimal but not unconscionable support provisions to Ms. Friedl, but excluded any responsibility to pay sickness and old-age support;

(o) that throughout the parties’ relationship, Dr. Friedl controlled and dominated Ms. Friedl, particularly in an economic sense because soon after their marriage Ms. Friedl terminated her employment due to her pregnancy, thereby losing the financial independence provided by that employment; and

(p) that the Marriage Agreement provided Ms. Friedl would receive 10,000 Deutsche Marks, worth approximately $6,880 for every year of the marriage, a total of $62,000, a pittance given Dr. Friedl’s 1996 income of $750,000 a year and the fact that Ms. Friedl would be precluded from pursuing her own career and earning her own income as she was to be out of the work force while she raised the parties’ two children and managed the family’s home.

[50] I find that the factors (a) to (p), including Ms. Friedl’s pregnancy and her concern that the child not be born out of wedlock, left her in an unequal negotiating position when she signed the Marriage Agreement, an unequal position of which Dr. Friedl took advantage to coerce or pressure her into signing the Marriage Agreement.

[51] I conclude that the consequences of the Marriage Agreement left Ms. Friedl in a disadvantageous position, which, to paraphrase Prof. Henrich’s language, was neither softened through other advantages nor justified by the parties’ situation. Prof. Henrich noted that the important question is whether Ms. Friedl would have entered into the Marriage Agreement if she had not been pregnant? I conclude that in the circumstances and on her testimony, she would not have entered the Marriage Agreement but for the fact that she was pregnant and was not prepared to have her child born out of wedlock.

[52] In all the circumstances, including those described in these Reasons at ¶49, (a) to (p) inclusive, I am satisfied that Ms. Friedl has established on a balance of probabilities that Dr. Friedl obtained her signature on the Marriage Agreement by duress, coercion or undue influence rendering the Marriage Agreement and its terms invalid and unenforceable. I consider the Marriage Agreement null and void whether the situation is considered under either the laws of Germany or those of British Columbia.

[53] I further conclude that my finding that the Marriage Agreement is invalid terminates the term that provides that the laws of the Federal Republic of Germany are to be applied to the termination of the Friedls’ marriage. The Friedl family has established substantial property ties and other links with British Columbia and I find it appropriate, given the absence of a valid Marriage Agreement, that Part 5 of the FRA will apply when dividing the family’s assets.

Property Division involving Foreign Assets

[54] When the parties separated in 2006, Dr. Friedl held assets including real property in Switzerland, Germany, the U.S., and Canada in his own name alone or in the name of Friedl Development Ltd. or Friedl Holdings Inc., corporations in which he is the sole shareholder, officer and director and, importantly, the sole controlling mind. Some of the assets located outside Canada are family assets in which Ms. Friedl is entitled to a share. In directing a division of property, this court has the jurisdiction to consider the value of the family’s assets, including those located beyond Canada’s borders and make a compensation order with respect to property held by Dr. Friedl outside of British Columbia to which Ms. Friedl is entitled to share: Laurence v. Laurence (1991), 56 B.C.L.R. (2d) 254, 33 R.F.L. (3d) 27 (C.A.).

[55] Dr. Friedl has not submitted any independent evidence as to the present value of the assets located outside British Columbia, nor has he assisted with the valuation of the Hyas Ranch although counsel for Ms. Friedl requested that it be appraised. Although there appear to be encumbrances against certain of the foreign properties, Dr. Friedl has not supplied current statements prepared by the banks or financial institutions holding the charges that would reflect when the monies were advanced to Dr. Friedl, the reasons given for obtaining the funds, the amount owing, the interest rate, and the repayment terms.

[56] Dr. Friedl is uniquely placed to assist the court with the information as to the value of the foreign assets as well as the current status of the debts, if any, against the foreign as well as the British Columbia assets. Unfortunately, I surmise that Dr. Friedl has not provided the property and debt information based on his belief that the Marriage Agreement allowed him to do as he wished with property he owned in his own name or through companies he controlled. He has disregarded Ms. Friedl’s claims or interest to the British Columbia and foreign properties as advanced by her in the petition that commenced this action.

[57] It is open to this court to determine, as best it can on the limited evidence available, the value of the foreign and Canadian property with a view to fashioning a reapportionment order in favour of Ms. Friedl utilizing the Canadian property and, if necessary, the making of a compensation order with respect to the foreign property: Liu v. Liu, [1995] B.C.J. No. 574 (S.C.)(QL); Teehankee v. Teehankee, [1995] B.C.J. No. 575 (S.C.)(QL); Ghurani v. Ghurani, [1991] BCJ No. 3443 (BCSC).

Family Assets and Property Division

[58] Part 5 of the FRA addresses matrimonial property, its provisions include s. 56, which states the principle that there is an equality of entitlement to family assets on marriage breakup, s. 58 defines “family asset”, s. 59 excludes business assets and s. 60 places the onus on the spouse opposing a s. 56 claim to prove the property in question is not ordinarily used for a family purpose. I will review Dr. Friedl’s holdings in the order of their acquisition within the context of Part 5 to determine if they fall within the definition of family assets.

[59] Dr. Friedl’s property purchases commenced after the parties began cohabiting in 1993, the same year Dr. Friedl received a promotion and a significant increase in his earnings from his employment in Zurich. Dr. Friedl’s first property acquisition involved the purchase of the three Leipzig flats, which were financed in full by mortgages. The apartments were rented and their management left to Dr. Friedl’s sister, Barbara Friedl-Schoning. Dr. Friedl testified that the rents paid for the financing charges, maintenance and administration until 2000 after which the expenses exceeded the rents, requiring the injection of funds to cover the expenses. The funds to pay the shortfall came from Dr. Friedl’s employment income. I accept that Dr. Friedl purchased the three flats for income tax purposes and for the parties’ future financial security.

[60] In 1995, Dr. Friedl purchased the waterfront lot, the first of his three Michigan lands, which is located close to the University of Michigan at Ann Arbor where he wrote his post-doctoral thesis in 1988 and 1989. Dr. Friedl paid for the Michigan lands with his savings and income, which also provided the funds necessary to build a home on the waterfront lot between 1995 and 1996. The parties and their children used the Michigan lands, particularly the waterfront home, for their summer holidays and considered that it might be their retirement residence.

[61] In 1995, the Swiss property was acquired and the Friedl family subsequently used it for their holidays following the marriage. Its acquisition was assisted by a mortgage paid from Dr. Friedl’s income.

[62] Following Dr. Friedl’s appointment to the University of Freiburg on October 15, 1997, the family purchased the Umkirch home and used it as the family residence until the move to Canada in 2001. Dr. Friedl’s income provided the down payment, with the remainder of the purchase price paid through a mortgage against the home. The mortgage payments were made from Dr. Friedl’s income.

[63] In November 2001, the parties purchased the Bestwick home in Kamloops and it was paid by savings accumulated during the marriage. The home was registered in the name of Dr. Friedl. A mortgage was subsequently placed against the home to assist in the September 2004 purchase of the Hyas Ranch. Ms. Friedl and the two children continue to occupy the Bestwick home.

[64] In 2002, Dr. Friedl purchased and registered the Clearwater property in his own name. After the parties separated on January 22, 2006, Dr. Friedl transferred the Clearwater property to his corporation, Friedl Development Ltd., and then sold the Clearwater property in June 2007 without Ms. Friedl’s knowledge and in spite of a court order freezing the parties’ assets pending resolution of Ms. Friedl’s action. The net sale proceeds were forwarded by cheques payable to Dr. Friedl personally.

[65] In September 2004, Dr. Friedl through his company, Friedl Development Ltd., purchased the Hyas Ranch, located near Kamloops, with a $350,000 line of credit advanced by the HSBC Bank and secured by a mortgage against the titles of the Hyas Ranch and the Bestwick home. The family used the Hyas Ranch as a recreational property. Improvements have been made to it, and Dr. Friedl has resided there since the parties’ 2006 separation.

[66] In addition to the real property acquired prior to and during the parties’ marriage and used for family purposes, there also exists ranching and farming equipment purchased to operate the Hyas Ranch, a number of motor vehicles used at the Hyas Ranch and for family purposes, a Cessna aircraft registered in the name of Apple Aero LLC, a Michigan corporation in which Dr. Friedl holds a 49 percent interest, as well as furniture found in the Swiss property, the Michigan lands, the Umkirch and Bestwick homes, and the Hyas Ranch. Dr. Friedl also acknowledges holding $17,000 in a Registered Retirement Savings Plan (“RRSP”) with HSBC Bank.

[67] The properties described as the Umkirch and Bestwick homes, the Michigan lands, the Swiss property and the Hyas Ranch have been ordinarily used by the family during the marriage and are family assets within the meaning of s. 58 of the FRA. The Umkirch home was the family’s principal residence in Germany and the Bestwick home provided the family with a residence in Kamloops. The Michigan lands, the Swiss property, and the Hyas Ranch have been used for recreational and vacation purposes during the parties’ marriage. The Hyas Ranch was purchased in the name of Friedl Development Ltd. in September 2004 at a cost of $370,000, consisting of $342,000 for the land and $28,000 for chattels. As I have noted, the purchase was financed in part with a $350,000 loan from the HSBC Bank. The loan was secured with a mortgage covering the Hyas Ranch and the Bestwick home, the latter being an asset that from its November 2001 purchase at a cost of $230,000, was used as the family’s home. The use of the Bestwick home to secure the loan required to purchase the Hyas Ranch further confirms that Hyas Ranch is a family asset in which Ms. Friedl has an interest.

[68] Section 60 of the FRA places the onus on Dr. Friedl to prove that the assets in question are not ordinarily used for a family purpose. Dr. Friedl has led little evidence in that respect, relying mainly on the Marriage Agreement to establish his claim to entitlement to full ownership of the Leipzig flats, the Swiss property, the Michigan lands, the Umkirch and Bestwick homes, the Clearwater property, Hyas Ranch and the investment in Proair.

[69] I find that the interests in Proair, which was placed in the name of Dr. Friedl’s company, Friedl Holdings Inc., and the Clearwater property held prior to sale by Friedl Development Ltd., are both family assets as each falls within the definition of a “venture” as found in s. 58(3)(e) of the FRA, being investments in which there was and remains an element of risk and which had the potential for profit. In October 2002, Dr. Friedl purchased the Clearwater property in his own name for $22,000 and then transferred it to Friedl Development Ltd. in February 2006 before selling the property in June 2007 for $105,000. Dr. Friedl personally received the net proceeds of $97,631.68 in three cheques made payable to him from his solicitors, reflecting the lack of distinction between Dr. Friedl and Friedl Development Ltd. For the purposes of this divorce action I make no legal distinction between Dr. Friedl and Friedl Development Ltd., and Dr. Friedl and Friedl Holdings Inc.

[70] Although Dr. Friedl took the position at trial that Ms. Friedl had no claim to the Proair investment as it was a business asset, that was not his position in 2003 when he was seeking permanent residency status in Canada for himself and Ms. Friedl. Dr. Friedl met with the Kamloops mayor at the time who wrote to Canadian immigration authorities on October 8, 2003, supporting the couple’s application for permanent residency and advising that “Dr. and Mrs. Friedl” had invested $1.5 million in Proair and owned unencumbered real property assets in excess of $5 million. The mayor described the “parties’ investments” as being of benefit to the Kamloops community. On March 20, 2003, the directors of Proair also wrote a letter supporting the Friedls’ application for residency in Canada, confirming that the couple had invested $1.5 million in Proair, referring to the investment as coming from both Dr. and Ms. Friedl. On March 20, 2003, G.P. Tetreau, chief financial officer for Proair, provided a further confidential letter of reference confirming that Dr. Friedl and Ms. Friedl had invested $875,000 to purchase a 25 percent interest in Proair and had loaned Proair a further $625,000 to expand its aviation parts distribution business.

[71] The roles of the parties within the family structure were of a traditional nature. When they began living together in 1993, they contributed to their living expenses in proportions reflecting their respective incomes, acknowledging that Ms. Friedl’s earnings as a physiotherapist were less than those of Dr. Friedl. When they married on January 3, 1997, Ms. Friedl was already pregnant and she terminated her employment soon after the wedding. She did not work outside the home during the marriage and I accept that the parties agreed that Ms. Friedl would manage the home, care for the parties’ two children, and fulfill the social obligations required of the spouse of the chief of a medical department at the University of Freiburg.

[72] I conclude that Dr. Friedl acquiesced with respect to Ms. Friedl’s role within the family. In 2000, when Dr. Friedl determined to settle in Canada, he did so knowing that Ms. Friedl’s qualifications as a physiotherapist would not be recognized in Canada. I infer that Dr. Friedl anticipated that his wife would continue with the same function within the family as existed prior to their move to Canada and that he would continue to be responsible for providing the family’s income.

[73] I find that Ms. Friedl, through her role in the family during the nine years of the marriage, contributed either directly or indirectly or both to the acquisition or maintenance or both of the family’s interests in the Bestwick and Umkirch homes, the Swiss property, the Michigan lands, the Clearwater property, the Hyas Ranch and Proair, the latter three interests being held by the family through Dr. Friedl’s control of Friedl Development Ltd. and Friedl Holdings Inc.

[74] Dr. Friedl purchased the three Leipzig flats for tax planning and investment purposes and testified that the rental income was sufficient to cover the expenses associated with their ownership. Although Dr. Friedl says that since 2000 there has been a shortfall between the rent and the expenses, there is a paucity of material to support his position. In his form 89 financial statement sworn April 11, 2008, Dr. Friedl asserts that in 2007 he suffered a loss of $38,749 on the Leipzig flats in covering the shortfall between the rent and the expenses. There are no supporting documents that I am prepared to rely on to support Dr. Friedl’s assertion. The injection of monies from the family’s income leads me to conclude that the Leipzig flats fall within the definition of a family asset, even though they were neither used for a family purpose nor purchased as a “venture” during the parties’ marriage. However, there has been a financial contribution through the family’s income, and I conclude this is sufficient to classify the Leipzig flats as family assets.

Dr. Friedl’s Non-Disclosure

[75] During the trial the evidence suggested there were gaps in Dr. Friedl’s disclosure of his financial affairs leading first to a consideration as to whether those gaps followed from a deliberate non-disclosure on Dr. Friedl’s part and raising further doubts as to his credibility and, second, if deliberate, how would such non-disclosure effect the determination, distribution and apportionment of the family’s assets.

[76] Dr. Friedl’s reluctance to reveal his financial affairs was previously noted in the German Court of Appeal decision on December 14, 2007, in which it dismissed Dr. Friedl’s appeal from Judge Lips’ March 9, 2007 decision. In its reasons as translated, the Court of Appeal wrote at p. 3:

The argument of the Applicant [Dr. Friedl], which essentially is no more than a repetition of his arguments before the trial court, does not give rise to a different judgment. Again, the Applicant alleges recurring charges with regard to his vast real estate holdings without providing any proof.

[Comments in brackets and underlining are mine.]

[77] From the use of the word “again” I gather that Dr. Friedl declined to provide proof at both the German trial and appellate courts with respect to the recurring expenses emanating from what the Court of Appeal described as his “vast real estate holdings”. A similar comment is appropriate in the case before this court.

[78] Dr. Friedl’s failure to disclose pertinent information to the courts with which he is dealing is further reflected in the written submission dated May 21, 2007, signed by counsel, Barbara Friedl-Schoning on Dr. Friedl’s behalf, and filed with the German Court of Appeal, in which she criticized the delay and the prejudice caused to Dr. Friedl in having the trial of this matter heard in the British Columbia Supreme Court. At p. 3 of her translated submission she wrote:

The hitherto and yet to be expected (even in the view of the originating court) long duration of proceedings lead to a damnification of the legal protection of the Applicant [Dr. Friedl] that exceeds the limits of reasonability: The Respondent [Ms. Friedl] has instituted the procedures in Canada on 21-02-2006. Fifteen months have passed without a hearing or negotiation with regards to the divorce. No pertinent reasons for the court’s inactivity are apparent. In particular, the court’s inactivity is not due to reasons within the husband’s sphere of influence.

[Comments in square brackets are mine.]

[79] The written submission filed by Dr. Friedl’s counsel stating that the British Columbia action remained dormant between February 21, 2006 and May 21, 2007 is not borne out in a cursory review of the trial record filed in this case, which includes 12 orders made by this court, those orders being dated March 6 and 15, June 28, August 14 and 26, October 2, and December 21, 2006, and January 15, April 2, 12, and 16 and May 7, 2007.

[80] Further, the trial of the British Columbia action was initially set for hearing in June 2007, but on May 7, 2007, Dr. Friedl obtained an adjournment and the trial was re-scheduled for September 17, 2007, when it was again adjourned at Dr. Friedl’s request. Dr. Friedl’s May 7, 2007 application to adjourn the initial June trial date was made 14 days before his counsel represented to the German Court of Appeal that the inactivity in the Supreme Court of British Columbia was “not due to reasons within the husband’s sphere of influence”. That contention is contradicted by this court’s records. By May 21, 2007, when Dr. Friedl’s appeal came before the German Court of Appeal, Dr. Friedl had already influenced the timing of the British Columbia litigation with his adjournment application that delayed the parties’ scheduled trial.

[81] Dr. Friedl’s conduct with respect to the Clearwater property offers a further troubling perspective of his attitude towards the judicial system. At paragraph 33(ix) of the statement of claim filed February 21, 2006 and served on February 27, 2006, Dr. Friedl received notice that Ms. Friedl was claiming an interest in the Clearwater property. On February 9, 2006, after the parties separated but before Ms. Friedl commenced this action, Dr. Friedl transferred the Clearwater property into the name of his company, Friedl Development Ltd.

[82] By Order dated March 15, 2006, Master Hyslop directed that the parties are

… restrained and enjoined from disposing of, encumbering, assigning, or in any similar manner dealing with the family assets or of any assets in which the Plaintiff or Defendant has, or may have, an interest, pending final determination of this action, without the consent in writing of both parties, or without further Order of this Court.

[83] Dr. Friedl knew from Ms. Friedl’s pleadings that she was claiming an interest in the Clearwater property. On June 29, 2007, in the face of Master Hyslop’s freezing order, Dr. Friedl sold the Clearwater property at a price of $105,000 with the net proceeds paid to Dr. Friedl, not to his company Friedl Development Ltd., by three cheques dated July 4, 2007, in the sums of $50,000, $30,000 and $17,631.68.

[84] Ms. Friedl’s counsel states that the sale of the Clearwater property was not disclosed until a week before the April 7, 2008 commencement of this trial when the plaintiff obtained the files from Kamloops lawyer Gerald Watson (“Mr. Watson”) who acted for Dr. Friedl in various matters including the transfer of the Clearwater property. Mr. Watson testified that when instructed to transfer the property to Friedl Development Ltd. in February 2006, he cautioned Dr. Friedl about proceeding with the transfer and recommended that he discuss the transfer with the lawyer then acting for him in his family dispute. I conclude that Dr. Friedl transferred the Clearwater property to his company in an attempt to avoid claims to the property advanced by Ms. Friedl and that the subsequent sale on June 29, 2007 occurred in deliberate defiance of Master Hyslop’s freezing order.

[85] The disclosure of Mr. Watson’s files shortly before trial also revealed Dr. Friedl’s hitherto unknown interest in Apple Aero LLC, which Mr. Watson identified as a Michigan limited liability corporation and the owner of the Cessna aircraft in which Dr. Friedl acknowledged having an interest. The other corporate entity identified in Mr. Watson’s file was CAM Concorde Asset Management (“Concorde”), which on June 6, 2002, transferred to the trust account maintained by Mr. Watson’s then law firm to the credit of Dr. Friedl 225,000 Euros, which, at an exchange rate of $1.4836 amounted to $333,810. The funds became part of the monies used to purchase the Friedls’ interest in Proair. Dr. Friedl testified that Concorde had not been mentioned previously because it was no longer an operating entity, although he allowed that Concorde might have filed a tax return in 2006.

[86] The purchase of the interest in Proair leaves additional queries beyond that raised by the $333,810 that Concorde transferred into trust to Dr. Friedl’s credit. Dr. Friedl testified that he borrowed $1.5 million from his family in Germany to enable his corporation, Friedl Holdings Inc., to purchase the interest in Proair, although Mr. Watson, whose evidence I accept, testified that some of the Proair purchase monies came from a Kelowna law firm that was in receipt of funds from Dr. Friedl in connection with another earlier investment that did not proceed. Mr. Watson’s file relating to Proair did not become available to the plaintiff until on or about April 1, 2008, shortly before this trial commenced.

[87] Dr. Friedl testified that as he received the $1.5 million loan from his family to purchase the interest in Proair there was no reason to prepare documents to confirm or secure the loan and testified that the court would just have to believe him as to the source of the purchase funds. Dr. Friedl did not lead evidence from any of his family to confirm that they advanced the funds. Dr. Friedl further testified that in 2007 he repaid his family for the monies it advanced for the Proair investment by arranging a loan of approximately 1,046,357.21 Euros, the equivalent of some $1,589,535.50, from Bankhaus Mayer, those sums being included in his April 11, 2008 financial statement. He produced two letters written in German from Bankhaus Mayer dated 03-12-07 and 01-02-2008, filed at exhibit 7, tabs 43 and 44, which he testified confirms the loan. However, Dr. Friedl does not produce any documents to support his testimony that the loan from Bankhaus Mayer went to his family. He provides no records showing that the monies from Bankhaus Mayer were paid first to him for distribution to his family or paid directly to the family by the bank. Either way, I would expect a paper record of some sort given that the large sum of money involved would have discouraged payment by cash.

[88] In his 2008 financial statement filed with this court, Dr. Friedl deposed that his U.S. properties, by which I assume he means the Michigan lands given the absence of evidence of other U.S. properties owned by Dr. Friedl, secured the loan from Bankhaus Mayer. Dr. Friedl did not produce any security documentation against the Michigan lands to support this assertion.

[89] Dr. Friedl’s evidence that he borrowed money from his family in Germany to complete the purchase of the interest in Proair is complicated further when reviewing a mortgage and loan application he prepared for the HSBC Bank dated July 28, 2004, when seeking funds to purchase Hyas Ranch. In his application Dr. Friedl stated he had assets worth $2,416,675.12, liabilities of $53 and a net worth of $2,416,622.12. Dr. Friedl makes no reference to monies owing to his family. The same application also contains a statement from Dr. Friedl that he had an income in 2004 of $180,000, but he testified that he did not know how that income figure had been calculated.

[90] To put it bluntly, the origin of the $1.5 million paid to obtain an interest in Proair was a mystery at the commencement of the trial and remained so at the trial’s conclusion. I have considered Dr. Friedl’s testimony in the context of all the evidence relating to the financing of the interest in Proair. In the absence of further substantive evidence I am not satisfied that Dr. Friedl has established on a balance of probabilities that the monies used to purchase the interest in Proair came from his family or that he subsequently repaid his family with funds advanced from Bankhaus Mayer and to which Dr. Friedl says he is now indebted for some 1 million Euros, or $1.5 million, plus whatever interest has accumulated.

[91] Dr. Friedl has failed to establish the existence of a debt owing to Bankhaus Mayer which, if proven, could be considered as a valid encumbrance against the family’s assets. In the absence of such evidence, I find Dr. Friedl to be solely responsible for the repayment of this purported debt which Dr. Friedl asserts is owing to Bankhaus Mayer. The valuation of the family’s assets and the shares to which I find Ms. Friedl is entitled will be determined without considering the sums that Dr. Friedl contends are owed to Bankhaus Mayer.

[92] Dr. Friedl’s financial picture also contained at one time an interest in a German company called BioTissueTechnologies (“BioTissue”), which he described as being created in 1997 and involving four professors of surgery in Freiburg who researched cartilage replacement material. He described the company as being successful initially but after it became publicly traded its value diminished and the company went bankrupt in 2003 or 2004. Dr. Friedl testified that as one of the company’s founders, he was not able to sell his shares and he made no money from his interest before BioTissue went bankrupt. In cross examination, plaintiff’s counsel put before him exhibit 12, a 2008 report on BioTissue Technologies GmbH, which described the company as working with scientific centres including the University of Freiburg Hospital in the field of tissue engineering.

[93] Dr. Friedl said the internet article referred to a corporation different from the company in which he had been involved. He described the present company as being founded by new people and did not involve any of the personnel from the original BioTissue in which he had been a shareholder. He testified that he knew nothing of the present company or Dr. Victor Tiegermann, described in the internet article as the chair of BioTissue’s management board. However, the internet article referred to another individual, Dr. Eszter Tanczos, who was featured on the same page of the article just below the picture and short biography of Dr. Tiegermann. The article described Dr. Tanczos as a co-founder of BioTissue in 1997 and stated she had served on its executive board since its founding. The article makes no reference to the original BioTissue entity going into bankruptcy as described by Dr. Friedl. The article also notes Dr. Tanczos received her medical degree in 1995 and from 1996 to 1998 headed the tissue engineering research of the plastic and hand surgery department at the University of Freiburg Hospital. Dr. Friedl commenced work at the University Hospital in October 1997, was involved with BioTissue, and his employment appears to have overlapped the period when Dr. Tanczos also worked at the hospital and was also involved in an entity known as BioTissue. Dr. Friedl reviewed the internet article when testifying, but made no reference to Dr. Tanczos, although her picture and background information followed immediately below that of Dr. Tiegermann.

[94] Mr. Watson provided another perspective of BioTissue when asked about his knowledge of Dr. Friedl’s assets. Mr. Watson testified that he understood Dr. Friedl was involved in a German public company called BioTissue and that he, Mr. Watson, did some research into the company’s development of artificial cartilage tissue. Mr. Watson testified that Dr. Friedl told him that BioTissue had been sold and he understood that Dr. Friedl had done well from the sale of the company. Mr. Watson further testified that during the eight years he dealt with Dr. Friedl he understood that he was a high worth individual and believed that the bulk of Dr. Friedl’s assets were held by a German holding company. Dr. Friedl testified that Mr. Watson’s evidence regarding BioTissue surprised him and the lawyer’s testimony with regard to BioTissue was incorrect.

[95] I wrote earlier in these Reasons that I found Mr. Watson’s evidence credible. I continue to hold that view, particularly given his lack of interest in this matter and that Dr. Friedl’s comment with respect to BioTissue sufficiently piqued Mr. Watson’s curiosity that he researched BioTissue, that research being a factor that likely assisted his recollection of his discussions with Dr. Friedl.

[96] Dr. Friedl’s involvement with BioTissue was also raised by Dr. Friedl’s then lawyer, B.J. Harwood (“Mr. Harwood”) in a letter, filed as exhibit 1, tab 6 dated October 28, 2003, addressed to the Canadian Consulate General in connection with the family’s application for permanent residence in Canada. Mr. Harwood wrote that Dr. and Ms. Friedl had “made significant business investments in a German company, BioTissue Technologies Inc.”.

[97] On the evidence before me I find it probable that Dr. Friedl recovered more from his interest in BioTissue than he admits and that the history of whatever recovery he did make from BioTissue appears to be buried in his undisclosed or partially disclosed financial affairs. My conclusion with respect to Dr. Friedl’s interest in BioTissue follows in part from the difficulty in understanding how he has been able to maintain his family’s lifestyle since he went on paid leave from the University of Freiburg Hospital in May 2000, which left him with an income of $100,000 annually compared to the $1 million he earned annually prior to going on paid leave.

[98] On the income he receives while on paid leave, together with the limited funds he receives from the investment in Proair, he maintains the family’s properties in Leipzig, Michigan, Umkirch, and Switzerland at a monthly cost of $9,276 or $111,312 annually according to p. 9 of his April 11, 2008 financial statement entered and filed as exhibit 9. In the net worth statement he prepared in November 10, 2000, and filed as exhibit 1, tab 2, Dr. Friedl stated the Michigan lands were worth $750,000 and the Umkirch home was worth $1 million and that both the Michigan lands and Umkirch home were owned in clear title. However, the documents transferring the Umkirch home to Dr. Friedl indicate he purchased it with the assistance of a bank, the Bayerische Hypo- und Vereinsbank, and that the loan was secured by a 1,200,000 Deutsche Mark mortgage, the equivalent of approximately $900,000. Dr. Friedl, in his June 16, 2006 financial statement, said there was a balance owing on the Umkirch mortgage of $532,000. In his April 11, 2008 financial statement, Dr. Friedl asserts the unpaid balance on the Umkirch mortgage remained at $532,000. Dr. Friedl states his 2007 income in Canada was $34,000, which he receives from Proair through Friedl Holdings Inc. and that his net German income in 2007 was just $50,000 after deducting the $38,000 required to make up the difference between rental income and expenses for the three Leipzig flats. The total of $34,000 and $50,000 provides him with a total 2007 net income of just $84,000.

[99] In spite of Dr. Friedl’s reduced income since going on paid leave in May 2000, in November 2001 he purchased the Bestwick home for $230,000 and in September 2004 he purchased Hyas Ranch at a cost of $370,000, with the latter purchase assisted in part by a $350,000 mortgage from HSBC Bank secured by the Bestwick home and Hyas Ranch. In addition, in October 2002 he purchased the Clearwater property at a cost of $22,000, which he sold in 2007. I presume the upkeep, taxes, and their accompanying mortgages for the Bestwick home and Hyas Ranch further stretch Dr. Friedl’s already strained income.

[100] It is difficult to place even a loose grip on Dr. Friedl’s financial situation, particularly in light of Dr. Friedl’s failure to produce supporting documentation with respect to the financial arrangements he has entered into with his family in Germany, the Bankhaus Mayer, coupled with the contradictory financial information found in statements prepared by or on behalf of Dr. Friedl.

[101] During Ms. Friedl’s evidence she described the role played in the Friedl family by an individual named Christa Brunner (“Ms. Brunner”). She said Ms. Brunner had a knack for playing the stock market, a skill she and Dr. Friedl appreciated and utilized by giving Ms. Brunner authorization to buy and sell shares on their respective investment accounts. Dr. Friedl denied that Ms. Brunner managed any of his investments, allowing only that the 80-year-old Ms. Brunner advised him in her field and he advised her in his. When asked if Ms. Brunner had authority to buy and sell shares on his behalf, he stated that “we had to renew it and it was not renewed”, from which I infer that at one time Ms. Brunner had authority to buy and sell on his behalf.

[102] Although Dr. Friedl appeared dismissive of Ms. Brunner’s role in his financial affairs, exhibit 7, tab 41, contains a statement from HSBC Bank dated December 31, 2001, for the account of Friedl Holdings Inc. The statement shows transfers on December 17, 18 and 19, 2001, from Christa Brunner to Friedl Holdings’ account in the amounts of $128,855, $79,141 and $131,068 respectively for a total of $339,064. Dr. Friedl said the transaction shows money collected in a pool and a person, presumably he meant Ms. Brunner, had the authority to convey the funds to him. He said the monies were used towards the purchase of the interest in Proair. Dr. Friedl provided no further details of his involvement with Ms. Brunner or the origin of the $339,064. Ms. Brunner did not testify.

[103] An analysis of Dr. Friedl’s financial situation is further complicated by his failure to produce all of his German tax statements and attachments, including his German tax return for 2005. In cross examination, counsel reminded Dr. Friedl that his 2005 German tax return had been requested at his examination for discovery and that Master Hyslop, in her order dated April 2, 2007 and modified by her order of April 16, 2007, directed Dr. Friedl to deliver his 2005 German tax return. Dr. Friedl’s response in cross examination was that he had given all the answers he was prepared to give. Dr. Friedl testified that the attachments to his tax returns consisted of his original documents and they were sent to the German tax authorities. He said that he did not keep copies of the attachments and that he did not seek copies of the attachments from the tax authorities or from his accountants who prepared his German tax returns.

[104] I find Dr. Friedl’s evidence with respect to his financial affairs disingenuous. He has failed or deliberately refused to offer this court a comprehensive and thorough explanation of his financial affairs. Instead he has provided evidence, including documents, that appear to be selective and sometimes contradictory. He blames others including Ms. Friedl for preventing him from accessing documents necessary to advance his case. However, Dr. Friedl could have pursued the documents requested from other sources, including, for example, the information with respect to his various mortgages and his income tax returns. I conclude that Dr. Friedl deliberately failed to seek that information in order to prevent this court from determining the full extent of his financial affairs, including what the German Court of Appeal described as his “vast real estate holdings”. As I have previously noted, Dr. Friedl’s behaviour in this litigation includes defiance of orders made by this court and an apparent attempt to mislead the German Court of Appeal as to the pursuit of the action Ms. Friedl commenced in the Supreme Court of British Columbia.

[105] The question then turns to how this court can best divide the family’s assets in the face of Dr. Friedl’s disinclination or refusal to provide full and appropriate disclosure. Counsel for Ms. Friedl submits that I should apply the principles found in Cunha v. Cunha (1994), 99 B.C.L.R. (2d) 93 (S.C.) in which Mr. Justice Fraser addressed the proper response of the court where one party to matrimonial litigation has consistently obstructed the proper progress of the litigation and, contrary to the scheme of the FRA and to specific orders of the court, has persistently failed to make full disclosure of assets.

[106] In Cunha, Fraser J. dealt with a marital situation in which the wife knew little of the family’s finances as the husband managed the finances through the 19-year marriage with the wife signing whatever papers the husband told her to sign. A similar situation appears in the Friedls’ relationship, with Dr. Friedl exercising a tight grip on the family’s finances, even to the extent of being somewhat miserly with the funds he provided Ms. Friedl to run the household given his huge income. Fraser J. found at ¶8 that the husband had not made adequate disclosure of his financial dealings, both before and after separation and he wrote the following at ¶9 - 15:

[9] Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably-based suspicion that justice was not done. Non-disclosure also has a tendency to deprive children of proper support.

[10] It is not enough to respond to non-disclosure by an award of costs. Nor is it enough, in a case like this one, to deal only with what is known. Either of these approaches, or both together, may still reward the non-disclosing litigant for his conduct, depending whether his concealment has been successful.

[11] I conclude that where there has been concealment of assets, it ordinarily should be held that the concealment is ongoing, that there are assets still undisclosed, and that the division of assets should be affected accordingly. I am not sure whether it is of consequence whether this is characterized as an assumption, a rebuttable presumption or an inference of fact. The result is the same. Such a holding may be avoided if the trial judge is satisfied by the conclusion of the trial that full disclosure has by then been made.

[12] Not only is it a matter of doing justice in any particular case, it is also a matter of general interest. The system should not give offence to the honourable litigant by treating the dishonourable litigant the same.

[13] Once non-disclosure at any stage has been established, the onus of satisfying the Court that afterwards there has been full disclosure should be on the non-disclosing party. If by the end of trial the Court is satisfied that full disclosure finally has been made, an award of costs only might be the appropriate penalty.

[14] My approach in this case has been based on the principles I have just articulated. I am not satisfied that Mr. Cunha has disclosed his assets. The origins of some of his assets which were uncovered is unknown. Were they the descendents of family assets which were dissipated? We do not know. Certainly Mrs. Cunha does not know. Mr. Cunha managed the family finances from the marriage in 1972 until the separation of 1991; she was not involved, except to sign whatever papers he told her to sign.

[15] I conclude that I must infer that he has control and possession of family assets of which I have no knowledge. The proper working inference, in my view, is that the value of undisclosed assets is at least equal to the value of disclosed assets.

[107] Having concluded that Mr. Cunha’s undisclosed assets equalled his disclosed assets, Fraser J. then directed the transfer of the bulk of the disclosed assets to Mrs. Cunha, leaving Mr. Cunha with the undisclosed assets.

[108] However, in Eng v. Eng, [1998] B.C.J. No. 2574 (S.C.)(QL), Madam Justice Humphries added a cautionary note to the principles expressed in Cunha, writing at ¶43-45:

[43] According to Cunha, supra, if, at the conclusion of the trial, the court is satisfied on a balance of probabilities that one party has not fully disclosed assets, there is an assumption, a rebuttable presumption, or an inference that the concealment is ongoing, and that this should affect the division of assets. In Cunha, the learned judge, being satisfied that the respondent was concealing assets, drew an inference that the value of the concealed assets was equal to the value of those disclosed. As it was an oral judgment following a trial in which the respondent was, for most of it, unrepresented, there is no review of the evidence upon which the learned judge reached the conclusion that assets were being concealed. It appears, however, that the judge considered such an inference inevitable, given the course of the proceedings.

[44] I stress, however, that in order for the presumption to operate, or the inference to be drawn, the court must be persuaded that assets are not fully disclosed.

[45] Obviously a party cannot hide behind disorganization and sloppiness to rebut an allegation that assets are undisclosed, but neither can the other party establish concealment simply by pointing to poor business practices. There must be some basis upon which the court can reach the conclusion that the party is probably concealing assets. This will differ from case to case depending on the available evidence and the court's impression of the witnesses.

[109] Humphries J. found Dr. Eng untrustworthy on the evidence, but was unable to conclude on a balance of probabilities that Dr. Eng had failed to disclose hidden assets.

[110] I find myself in a similar situation with respect to Dr. Friedl. I have difficulty comprehending how Dr. Friedl manages his financial situation given the circumstances in which his expenses appear to significantly outweigh his income. Dr. Friedl’s continued retention of properties in the U.S., Switzerland and Germany, which are left empty, but for the Leipzig flats, in spite of the costs associated with their ownership, his defiance of court orders, and his explanation of his involvement with BioTissue all suggest that he has access to other undisclosed assets or income. However, in spite of the circumstances that attract considerable scepticism about the adequacy of Dr. Friedl’s financial disclosure, I am unable to conclude on a balance of probabilities that Dr. Friedl has hidden assets such as to allow me to make an order with respect to the division of the family’s assets as that made in Cunha. However, I am satisfied on a balance of probabilities that Dr. Friedl has undisclosed assets of a value that permits me to reapportion the disclosed assets in Ms. Friedl’s favour.

Division of Family Assets

[111] Given my conclusion that the reasoning in Cunha cannot be applied to the Friedls’ situation, the quandary is how fairly to divide the family assets between the parties and to ensure that Ms. Friedl receives a proper and sufficient portion of the family’s assets as provided by the FRA and its provisions for the determination, distribution and reapportionment of the family’s assets.

[112] I have determined that the parties’ family assets include interests in the Leipzig flats, the Swiss property, the Michigan lands, the Umkirch and Bestwick homes, the Hyas Ranch, the since sold Clearwater property, and Proair, the latter three assets being held either in the name of Friedl Development Ltd. or Friedl Holdings Inc., both being British Columbia incorporated companies owned and controlled by Dr. Friedl who used Friedl Development Ltd. to purchase the Clearwater property and Hyas Ranch and Friedl Holdings Inc. to acquire the family’s interest in Proair. I conclude that both Friedl Development Ltd. and Friedl Holdings Inc. are family assets and that Dr. Friedl holds a one-half share in each company in trust for Ms. Friedl.

[113] A further quandary arises with respect to the valuation of the family’s various properties and business interests given the absence of independent and recent appraisals of value, complicated further by the differing values given to the properties and interests by Dr. Friedl over the years. As a result, I am unable to affix even a rough value to each of the assets, but will determine the interests held by Dr. Friedl and Ms. Friedl in the property situate outside of Canada on a percentage basis, reflecting the manner in which the differing assets came into the family.

[114] I accept the legal proposition that the general rule under conflict of laws is that the courts of British Columbia have no power to determine the right, title or interest in land situated outside the province: In Laurence the Court of Appeal referred to Derrickson v. Derrickson, [1986] 1 S.C.R. 285, 26 D.L.R. (4^th) 175. The Supreme Court of Canada held in Derrickson that even though the court might be precluded from awarding an interest in Indian Reserve lands it could make an order for compensation for the purpose of adjusting the division of family assets between spouses. The Court of Appeal in Laurence held at ¶5 that:

By analogy, to carry out the objectives of the Family Relations Act, we should recognize the right to a compensation order in the circumstance of land located in a foreign jurisdiction.

[115] As a result, in Laurence the Court of Appeal upheld the trial judge’s decision that although he could not give the respondent an interest in New Zealand property, a family asset worth $40,000 held in the name of the petitioner, the court could order that from monies payable to the petitioner from the sale of the parties’ matrimonial home in British Columbia, the sum of $20,000 be paid to the respondent as compensation for the petitioner retaining sole ownership in the New Zealand property. I anticipate having to make a similar compensation order in favour of Ms. Friedl to fairly divide the family assets between herself and Dr. Friedl.

[116] Dr. Friedl acquired the Swiss property in 1995 for 175,000 Swiss francs, approximately $175,000, two years before the parties married. He made a down payment of $45,000 and obtained a $130,000 mortgage, which has been paid down principally from Dr. Friedl’s income before and after the parties’ marriage. There remains approximately $92,000 outstanding on the mortgage. The home was used as a recreation property by the family during the marriage. It lies furnished but vacant. I acknowledge Dr. Friedl’s payments towards the property’s purchase prior to the parties’ marriage and apportion the property 75 percent to Dr. Friedl with the remainder to Ms. Friedl who is entitled to a 25 percent interest in the Swiss property and compensated by Dr. Friedl with a sum equal to the value of that 25 percent interest in the equity in the Swiss property.

[117] Dr. Friedl acquired the Michigan lands starting in 1995, originally with 60 feet of waterfront on Lake Michigan located on Lakeview Drive in Oceana County, Michigan, but he later expanded the width of the property by 30 feet with the acquisition of an adjacent one-half lot. A new home was built on the property commencing in 1995. Dr. Friedl stated in 2000 that the property was worth $750,000, but by 2008 he estimated its value had decreased to $400,000. In 2001, Dr. Friedl purchased acreage at Chippewa County, Michigan, and in his 2008 financial statement he estimated its value at $20,000. In 2002, Dr. Friedl purchased a garage and storage building at 7831 W. Florida Street, Michigan, which in his 2008 financial statement he valued at $40,000.

[118] While finding that the family has used the Michigan lands for recreational purposes and Ms. Friedl has directly or indirectly contributed to the lands’ maintenance and upkeep, Dr. Friedl did acquire the waterfront portion of the lands and contributed to its development prior to the parties’ 1997 marriage. The home was used as a recreation property by the family during the marriage. It lies furnished, but vacant. I acknowledge Dr. Friedl’s payments towards the property’s purchase prior to the parties’ marriage and apportion him with a 65 percent interest in the Michigan lands, with Ms. Friedl entitled to a 35 percent interest in the Michigan lands and compensated by Dr. Friedl with a sum equal to the value of that 35 percent interest in the equity of the Michigan lands and the furniture and contents of the waterfront cottage.

[119] Dr. Friedl acquired the three Leipzig flats for 750,000 Deutsche Marks, or approximately $500,000, the purchase being 100 percent financed. In his April 11, 2008 financial statement Dr. Friedl, after valuing the flats at $300,000, stated $560,368.43 remained owing on the mortgage. Dr. Friedl’s tax returns indicate that it has cost him approximately $30,000 to $39,000 in each of the past four years to make up the difference between the rentals paid and the expenses incurred. Dr. Friedl did not produce any independent appraisals to support his statement as to the value of the Leipzig flats. Dr. Friedl acquired the Leipzig flats prior to the marriage and they were not used by the family during the marriage, being simply investment ventures. However, monies from the family were used to pay expenses to maintain the flats. Given their history, the date of their acquisition and the family’s involvement with the flats, I find that Ms. Friedl is entitled to a 25 percent interest in the Leipzig flats with the remaining 75 percent to be held by Dr. Friedl. Ms. Friedl is entitled to be compensated by Dr. Friedl with a sum equal to the value of that 25 percent interest in the equity in the Leipzig flats.

[120] The parties acquired their Umkirch home in 1998 after moving from Zurich and the family remained in the home until 2001 when they moved to British Columbia. The home, which remains furnished, but vacant, cost 1.5 million Deutsche Marks, the equivalent of approximately $1,125,000 and its purchase was assisted by a mortgage of $900,000 from the Bayerische Hypo- und Vereinsbank registered against the property. I conclude that Ms. Friedl contributed directly or indirectly to the acquisition and maintenance of the family’s interest in the home and that she is entitled to a 50 percent interest in the Umkirch home, entitling her to be compensated by Dr. Friedl with a sum equal to the value of that 50 percent interest in the equity in the Umkirch home.

[121] Ms. Friedl seeks return of certain items in the Umkirch home. No objection was taken to her claims and she shall have 60 days from the filing of the order reflecting these Reasons for Judgment to remove the following from the Umkirch home: the oak dining room furniture including table, chairs, wheeled serving tray, buffet and furniture previously owned by Ms. Friedl’s parents; all china and linens; all furnishings from the children’s bedrooms; and furniture and personal belongings contained in what Ms. Friedl describes as the Household Room, which is located to the right of the front door on the main floor.

[122] I previously expressed my concern that there was little or no evidence tendered as to the present value of the family assets described as the Leipzig flats, the Swiss property, the Umkirch home and the Michigan lands and valuations must be obtained in order to determine the compensation payable by Dr. Friedl. I order that within 60 days of the filing of the order reflecting these Reasons for Judgment, that the Leipzig flats, the Swiss property, the Umkirch home and the Michigan lands each be valued by professional property appraisers of Ms. Friedl’s choice with Dr. Friedl paying the expenses associated with the appraisals. Within 90 days of the filing of the order reflecting these Reasons for Judgment, Dr. Friedl shall compensate Ms. Friedl for her interests in the properties, 25 percent for the Leipzig flats, 25 percent for the Swiss property, 50 percent for the Umkirch home and 35 percent for the Michigan lands. The compensation due to Ms. Friedl for each of the properties will constitute a judgment against Dr. Friedl.

[123] To facilitate the aforementioned direction and to ensure the payment of compensation by Dr. Friedl to Ms. Friedl of her interests in the Leipzig flats, the Swiss property, the Umkirch home and the Michigan lands, I order that Dr. Friedl’s one half interest in Proair, held through Friedl Holdings Inc., be held in trust pending the determination and payment of the compensation payable by Dr. Friedl to Ms. Friedl for her differing interests in the aforementioned properties.

[124] The parties acquired the Bestwick home in 2001 at a cost of $230,000 and it was unencumbered. The family resided together in the home until separation in January 2006 and Ms. Friedl continues to reside there with the parties’ two children. It is a family asset, the ownership of which I will reapportion entirely in favour of Ms. Friedl pursuant to s. 65 of the FRA after considering the duration of the marriage, the duration of the period in which the spouses have lived separate and apart, the date when the property was acquired, and the need of Ms. Friedl to become economically independent and self sufficient. The other factor leading me to the reapportionment of the Bestwick home in favour of Ms. Friedl lies in my conclusion expressed at ¶109 that Dr. Friedl has failed to fully disclose his assets and his full financial worth, thus permitting me to reapportion some of the disclosed assets in Ms. Friedl’s favour. I also find that Ms. Friedl is entitled to the contents of the Bestwick home, but for the items located in the room used by Dr. Friedl as his office and which should be returned to him.

[125] In determining the parties’ interest in the Bestwick home, there is a $350,000 mortgage encumbering the title in favour of the HSBC Bank, that sum being advanced to facilitate the purchase of the family’s interest through Friedl Development Ltd. of Hyas Ranch. I order that Dr. Friedl will be solely responsible for discharging the HSBC mortgage registered against the Bestwick home, although it can remain against the Hyas Ranch subject to certain conditions which I will discuss later in these Reasons.

[126] Further, Dr. Friedl in or about November 15, 2005 received $57,500 as settlement in a lawsuit which he commenced for reimbursement to repair a structural deficiency in the Bestwick home. To date, the deficiency has not been rectified and I conclude that Ms. Friedl is entitled to recover the sum of $57,500 from Dr. Friedl to permit her to correct the deficiency.

[127] In 2002, Dr. Friedl purchased the Clearwater property for $22,000, which he initially registered in his own name. The parties separated on January 22, 2006, and Dr. Friedl, on February 9, 2006, transferred the Clearwater property to his corporation, Friedl Development Ltd. He then sold the property in June 2007 without Ms. Friedl’s knowledge and in spite of a court order freezing the parties’ assets pending resolution of the parties’ matrimonial litigation. Dr. Friedl, not Friedl Development Ltd., directly received the net proceeds of $97,631.68. I found the Clearwater property purchase to be a venture undertaken on behalf of the Friedl family and it is property in which Ms. Friedl is entitled to a one-half interest, either directly or through Dr. Friedl’s interest in Friedl Development Ltd. I find Dr. Friedl’s transfer of the property to Friedl Development Ltd. to be a sham, perpetrated in an attempt to avoid paying any of the proceeds from the Clearwater property to Ms. Friedl. The reality of the situation is clear from Dr. Friedl’s acknowledgment that he personally received the proceeds from the eventual sale of the property. I find Ms. Friedl is entitled to $48,815.84, being one-half of the net proceeds of $97,631.68 received from the sale of the Clearwater property.

[128] Dr. Friedl acquired Hyas Ranch in November 2004 at a cost of $370,000, which included $28,000 in equipment and various chattels required to operate the ranching portion of this recreational property. He registered the property in the name of Friedl Development Ltd. However, the HSBC Bank advanced $350,000 to Dr. Friedl to facilitate the purchase, securing the loan with mortgages against both the Hyas Ranch and the Bestwick home.

[129] Dr. Friedl, in his 2006 and 2008 financial statements filed in this litigation, appears loath to include Hyas Ranch as an asset in which he has a financial interest through Friedl Development Ltd. However, I conclude that Dr. Friedl owns and controls Friedl Development Ltd. and that the company is a family asset in which Ms. Friedl has a 50 percent interest. Dr. Friedl, therefore, holds a one-half interest in Friedl Development Ltd. in trust for Ms. Friedl and she is entitled to receive one-half of the net equity of Hyas Ranch, its equipment, livestock, crops, and hay or, alternatively, one-half of the proceeds received by Friedl Development Ltd. from the sale of the Hyas Ranch, the equipment associated with the Hyas Ranch operation together with any livestock, crops or hay that are located on the property. Dr. Friedl will have the furniture located in the home at Hyas Ranch.

[130] I order that Dr. Friedl have 45 days from the date of the filing of the order reflecting these Reasons for Judgment to pay Ms. Friedl for her half interest in Friedl Development Ltd.’s holdings in Hyas Ranch, net after the determination of the sum owing on the HSBC mortgage. The value of the interest will be determined by an appraiser agreed upon by the parties of the property, livestock, crops, hay and equipment, or by the parties each selecting an appraiser with the value to be the midpoint between the two appraisals. Dr. Friedl will be solely responsible for the HSBC mortgage and he will ensure that the HSBC mortgage is removed as a charge against the parties’ Bestwick home. The alternative to Dr. Friedl paying Ms. Friedl for her share in Friedl Development Ltd.’s interest in Hyas Ranch is that the company list for sale Hyas Ranch, its equipment, livestock, hay, as well as and any crop on the property. Both parties will have conduct of the sale. I further order that Dr. Friedl have exclusive possession of Hyas Ranch pending either payment to Ms. Friedl for her one-half interest in Friedl Development Ltd. or the sale of Hyas Ranch by the company, but that during that period of occupancy Dr. Friedl will be responsible for all expenses incurred on Hyas Ranch including utilities, property taxes, and mortgage payments.

[131] Although the HSBC mortgage encumbers both the Bestwick home and Hyas Ranch, the loan was acquired solely to enable Dr. Friedl, on behalf of the family and through Friedl Development Ltd., to purchase Hyas Ranch. It is for that reason I have concluded that if Dr. Friedl decides to remain at the Hyas Ranch he will be solely responsible for the repayment of the HSBC mortgage and, specifically, its removal as a charge against the Bestwick home.

[132] The interest in Proair, purchased through Friedl Holdings Inc., cost $1.5 million consisting of $875,000 paid to purchase a 25 percent interest in the operations and a further $625,000 advanced by way of loans to Proair. I concluded earlier in these Reasons that Dr. Friedl utilized Friedl Holdings Inc. to purchase the interest in Proair, but that he had failed to establish on a balance of probabilities that the monies used to make the purchase had first been advanced by his family in Germany whom he later asserted that he repaid with monies borrowed from Bankhaus Mayer. I find it more likely, if not probable, that the monies came from assets acquired by Dr. Friedl from his income in Switzerland and Germany together with his associated financial activities prior to and during the parties’ marriage. During the marriage, Ms. Friedl assumed responsibilities for the family and the operations of the household, which I conclude allowed her to make direct or indirect contribution to the acquisition of the interest in Proair through Friedl Holdings Inc. I find that Dr. Friedl owns and controls Friedl Holdings Inc. and in that capacity he holds one-half of his interest in Friedl Holdings Inc. and its interest in Proair in trust for Ms. Friedl.

[133] I order that Dr. Friedl within 60 days of the filing of the order reflecting these Reasons for Judgment, transfer one-half of the shares in Friedl Holdings Inc. to Ms. Friedl or, alternatively, that he arrange for Friedl Holdings Inc. to transfer one half of its shares in Proair and one half of its shareholder’s loan with Proair to Ms. Friedl with the costs of the transfer or transfers and the payment of any tax ramifications flowing from the transfer or transfers to be borne by Dr. Friedl.

[134] I order that notice be given to the companies comprising Proair advising that Friedl Holdings Inc.’s interests in Proair is subject to an order of this court against Dr. Friedl with respect to the ownership and control of Friedl Holdings Inc. Ms. Friedl’s interest in Friedl Holdings Inc. applies not just with respect to her one-half share in Friedl Holdings Inc. as a family asset, but also to her interest in Dr. Friedl’s one-half share of Friedl Holdings Inc. and its holdings in Proair, pending the determination and payment by Dr. Friedl to Ms. Friedl of her interests in the Leipzig flats, the Swiss property, the Umkirch home and the Michigan lands as referred to earlier at ¶122 of these Reasons for Judgment, the payment of $57,500 for structural deficiencies for the Bestwick home, and the payment of $48,815.84 for Ms. Friedl’s share of the monies received by Dr. Friedl for the Clearwater property.

[135] I further direct that if Dr. Friedl fails to comply with the obligations imposed upon him as found in these Reasons for Judgment with respect to the removal of the HSBC mortgage against the Bestwick home, the payments due to Ms. Friedl of $57,500 and $48,815.84, the satisfaction of Ms. Friedl’s claims against Friedl Development Ltd. with its interest in Hyas Ranch and Friedl Holdings Inc. with its interest in Proair, and the compensation to which she is entitled with respect to the Michigan lands, the Swiss property, the Leipzig flats and the Umkirch home, Ms. Friedl is entitled, after 120 days from the filing of the order reflecting these Reasons for Judgment, to apply for an order that Dr. Friedl’s interests in Friedl Development Ltd. and its interest in Hyas Ranch and in Friedl Holdings Inc. and its interests in Proair be transferred to her, in whole or in part, to satisfy Dr. Friedl’s obligations.

[136] The trust I impose upon Dr. Friedl also includes fiduciary obligations restricting Dr. Friedl from any and all activities with Friedl Holdings Inc. which might affect Ms. Friedl’s interest in that company and Proair, including distribution of payments received by Friedl Holdings Inc. from Proair. Dr. Friedl is precluded from exercising any voting rights available to Friedl Holdings Inc. through its interest in Proair that might impact negatively on Ms. Friedl’s interest in either Friedl Holdings Inc. or Proair.

[137] I wish to be clear that pending the resolution and payment to Ms. Friedl for her interests in the family’s assets, Dr. Friedl is deemed to hold one half of his shares in each of Friedl Development Ltd. and Friedl Holdings Inc. in trust for Ms. Friedl. He is prohibited from encumbering, disposing or otherwise dealing with the shares in these two companies or those companies’ property or other interests held by those companies without the written consent of Ms. Friedl or by further order of this court.

[138] Dr. Friedl owes $100,000 to the shareholders of Proair, payable by the end of 2008. This obligation belongs to Dr. Friedl alone and it is not one for which he can seek compensation either in whole or in part from Ms. Friedl.

[139] Among the assets found in the evidence located in British Columbia, Michigan, and Germany are various older motor vehicles mainly, I gather, of interest to Dr. Friedl, some which were acquired prior to the parties’ marriage. Dr. Friedl also has an interest in a Cessna aircraft through Apple Aero LLC. I conclude that these chattels are family assets having been used by the parties. I find that Dr. Friedl is entitled to sole ownership of his various motor vehicles and Apple Aero LLC, subject to any encumbrances against those assets for which he is solely responsible and subject to the transfer by Dr. Friedl, to Ms. Friedl of his registered retirement savings plan with the HSBC Bank containing approximately $17,000. The RRSP is a family asset and Ms. Friedl is entitled to one-half as a family asset and the other half will compensate her for her share in the motor vehicles and Apple Aero LLC.

[140] In summary, the parties will share equally in Friedl Development Ltd. and Friedl Holdings Inc., and the assets held by those companies including Hyas Ranch and Proair, and the proceeds of the sale of the Clearwater property which Dr. Friedl received personally. In addition, Ms. Friedl will receive compensation orders entitling her to a 35 percent interest in the equity in the Michigan lands, a 25 percent interest in the equity in the Leipzig flats, a 25 percent interest in the equity in the Swiss property, and a 50 percent interest in the equity in the Umkirch home. It is difficult to assess with certainty the value of the disclosed assets that each of the parties will receive, although I believe that the existence of undisclosed assets leaves Dr. Friedl with assets greater than those going to Ms. Friedl.

Custody and Access

[141] Dr. Friedl agrees that Ms. Friedl should have custody of the two children, Victoria and Julius, but only if she and the children continue to reside in Kamloops. Dr. Friedl opposes Ms. Friedl’s application to relocate with the children to Edmonton where she plans to attend a two-year program to qualify as a registered massage therapist. Master Hyslop made a consent order of joint guardianship on March 15, 2006. Joint guardianship will continue and shall mean:

(a) The parents are to be joint guardians of the estates of the children;

(b) In the event of the death of either parent, the remaining parent will be the sole guardian of the persons of the children;

(c) Ms. Friedl, as the custodial parent, who has the primary responsibility for the day-to-day care of the children, will have the obligation to advise Dr. Friedl, as the non-custodial parent, of any matters of a significant nature affecting the children, including significant decisions concerning the health (except emergency decisions), education, religious instruction, and general welfare of the children;

(d) Dr. Friedl will have the right, under s. 32 of the FRA to seek a review of any decision that he considers contrary to the best interests of the children;

(e) Each parent will have the right to obtain information concerning the children directly from third parties, including teachers, counsellors, medical professionals, and third-party care givers.

[142] The parties have not been able to agree to access, with Dr. Friedl seeking relatively minimal specified and unsupervised access with Ms. Friedl responding that Dr. Friedl’s access should be supervised in light of what she submits is a risk to the children from Dr. Friedl’s intemperate alcohol consumption. On April 12, 2007, Master Hyslop ordered that Dr. Friedl’s access be supervised as a result of an incident that occurred on March 18, 2007, but unsupervised access was returned to Dr. Friedl in December 2007.

[143] At the conclusion of the trial I made an interim access order, which provided that Dr. Friedl shall have unsupervised access to the children provided that he be tested prior to each access visit to establish that he had not been consuming alcohol, otherwise the access had to be supervised. I emphasized at the time that I had not reached any conclusions about Dr. Friedl’s use of alcohol and that I was not comfortable with ordering supervised access, but that some evidence was of such concern that I wanted to ensure that Dr. Friedl’s access to the children was not impeded by the possibility of alcohol use on his part.

[144] Ms. Friedl and the children left the Bestwick home in January 2006 and stayed briefly with the family of Mr. Watson before moving into a women’s shelter. The parties, with the assistance of counsel, then agreed that Ms. Friedl and the children could move into the Bestwick home and Ms. Friedl obtained orders dated March 6 and 15, 2006 granting her exclusive possession of the Bestwick home where they continue to reside.

[145] Contact between the parties since separation has been and continues to be difficult. I concur with the observation of counsel for Dr. Friedl that the level of hostility between the parents is extraordinary. I find that there is considerable animosity between the parents, and its presence is attributable to both Ms. Friedl and Dr. Friedl. The difficulty raised by such hostility and animosity is the threat that it poses to the well being of the children as some of the evidence suggests that the children have observed and to some extent participated in the negative interaction between their parents. I conclude that both Dr. Friedl and Ms. Friedl have allowed their personal difficulties to intrude upon the goal of ensuring or at least trying to ensure that the children be kept out of the parents’ conflict. Such conflict, involving the children as it does in this situation, is neither in the children’s best interests nor does it assist in facilitating contact between the children and their parents.

[146] Dr. Larry Krywaniuk (“Dr. Krywaniuk”), a registered psychologist, prepared a custody and access assessment dated June 27, 2007, pursuant to s. 15 of the FRA. He concluded that joint custody was not an option given the relationship or lack thereof between the parents and recommended that Dr. Friedl have custody of Victoria and Ms. Friedl have custody of Julius. However, Dr. Krywaniuk made his recommendation for divided custody specifically disregarding an incident in March 2007, when the children were at Hyas Ranch with Dr. Friedl and his new partner, Claudia Burger (“Ms. Burger”). Dr. Krywaniuk stated he was unable to determine whether the incident occurred as alleged by Ms. Friedl, it being denied by Dr. Friedl and Ms. Burger who told Dr. Krywaniuk the allegations surrounding the incident were entirely unfounded. Dr. Krywaniuk recommended at p. 8 of his report that if the March 18, 2007 incident (the “March 2007 incident”) was found to have occurred as described by Ms. Friedl, then Ms. Friedl have custody of both Victoria and Julius.

The March 2007 Incident

[147] Although Dr. Friedl has since agreed that Ms. Friedl should have sole custody of the two children, what occurred in the March 2007 incident is germane with respect to Dr. Friedl’s credibility and, in the context of Ms. Friedl’s application to relocate to Edmonton with the children, his parenting abilities in light of his alleged abuse of alcohol and the anger that he allegedly exhibited during the incident.

[148] Ms. Friedl testified that on the weekend of March 18, 2007, the children were with their father at Hyas Ranch and on the evening of March 18 she received a telephone call from Ms. Burger advising that she had left Hyas Ranch with the children and asked to drop off the children at the Bestwick home. Ms. Friedl testified that Ms. Burger told her about difficulties she encountered with Dr. Friedl during the day. Ms. Friedl testified that she asked a neighbour, Edward Tickle (“Mr. Tickle”), to be with her when the children came home. Ms. Friedl testified that the children arrived home in a truck with Rob Schneider (“Mr. Schneider”) and Elaine Schneider (“Ms. Schneider”) whom she recognized. She asked Mr. Tickle to collect the children from the truck. The children told her that their father had been drinking and had lost his temper and that they escaped from Hyas Ranch with Ms. Burger.

[149] Mr. Tickle testified that he picked up the children from Mr. Schneider, whom he had met earlier, and walked them back to Ms. Friedl. He then heard the children describe what they called their “escape” from Hyas Ranch and their difficulties with Mr. Friedl who had been drinking. Ms. Friedl testified that over the next 24 hours she had lengthy telephone conversations with Ms. Burger who provided further details with respect to the problems that led her to leave Hyas Ranch with the children.

[150] Ms. Schneider testified that Mr. Schneider, had met Dr. Friedl at Proair and they had socialized with Dr. Friedl, particularly after the Friedls separated in January 2006. She had met Ms. Burger at Hyas Ranch in July 2006, and subsequently Ms. Burger came to the Schneider home about twice a week to phone her daughter in Germany as there was no phone service at Hyas Ranch. Ms. Schneider testified that she and her husband had concerns with respect to Ms. Burger’s well being as a result of some information she provided them. Ms. Schneider testified that at about 7 p.m. on March 18, her husband received a telephone call and as a result she accompanied him to Hyas Ranch. Counsel for Ms. Friedl obtained an order that Rogers Communications identify the cellular telephone records and as a result were able to track the telephone use involving cellular phones operated by Dr. Friedl, Ms. Burger, Proair, Ms. Friedl, Mr. Schneider and Ms. Schneider.

[151] The telephone records were filed as exhibit 1, tab 15, and Ms. Schneider on p. 10 of the records recognized a call made at 18:55:16 on March 18, 2007 to her husband’s cell number. The only call at that time on p. 10 was from a number identified as originating from Ms. Burger’s telephone and directed to a number with the last four digits being 1022. A colour key and guide found at p. 9 of exhibit 1, tab 15, indicates that the last four digits of Mr. Schneider’s cell number were 1077. I accept Ms. Schneider’s evidence that her husband’s phone number ended in 1022, not 1077 as indicated on the colour key and guide.

[152] Ms. Schneider testified that as she and Mr. Schneider approached the driveway to the Hyas Ranch she saw Ms. Burger, Victoria and Julius, who called for them to stop and when they did the three piled into the truck. Ms. Schneider testified that her husband got out of the truck and told her to lock the doors while he went to speak to Dr. Friedl whom they had seen driving down the driveway. Ms. Schneider described a bit of pushing between her husband and Dr. Friedl before the latter moved his vehicle to block the Schneiders from leaving. Dr. Friedl removed his vehicle after further discussions with Mr. Schneider and they were allowed to depart with Ms. Burger and the children.

[153] As her husband was dealing with Dr. Friedl the children told Ms. Schneider that their father had been drinking through the weekend and had been abusive towards Julius and Ms. Burger. The children described Ms. Burger making a plan that enabled them to get out of the house. During the drive into Kamloops, Ms. Schneider testified that Ms. Burger telephoned Ms. Friedl, calls identified in the telephone records, and arranged to return the children to the Bestwick home. Ms. Schneider said that before reaching the Bestwick home, Ms. Burger got out of their vehicle and waited while they drove the children home to Ms. Friedl. The Schneiders then picked up Ms. Burger and went to a restaurant where they discussed the events at Hyas Ranch during which Ms. Burger showed them a bruise on her abdomen. Ms. Schneider testified that Ms. Burger had her passport with her and she understood Ms. Burger planned to return to Germany. Ms. Burger telephoned Ms. Schneider the following day and the telephone records indicate the conversation lasted 86 minutes.

[154] Ms. Friedl testified that after the children returned to her home she had several telephone conversations with Ms. Burger. The telephone records reflect two brief calls from Ms. Friedl’s number to Ms. Burger’s number at 21:39 hours and 22:16 hours on March 18 and two calls from Ms. Burger to Ms. Friedl at 23:56 hours on March 18 and at 02:05 hours on March 19, the latter two calls lasting for 129 minutes and 65 minutes respectively. Ms. Friedl telephoned Ms. Burger at 22:06 and 23:21 hours on March 19 and those calls lasted 74 minutes and 42 minutes respectively. Ms. Friedl testified those conversations included discussions about the events of March 18 and the departure of Ms. Burger, Victoria and Julius from Hyas Ranch.

[155] Ms. Burger apparently flew out of Kamloops on March 19, although there is no direct evidence to that effect as Ms. Burger did not testify. However, John Favelle, a security guard at Kamloops airport testified that in March 2007, at the request of a ticket agent, he talked to a woman who appeared distressed and expressed concern about her boyfriend who she said had slapped her. She also showed Mr. Favelle bruises to her hands. Mr. Favelle placed the woman in a private room away from the other passengers and personally escorted her onto her east bound flight. Mr. Favelle testified that he saw the woman’s passport, remembered her name was Claudia and that she had a one-way ticket through to Toronto and onto Munich. Mr. Favelle said the woman described her boyfriend as a part owner of Proair and named him, but he did not recognize the name.

[156] Dr. Friedl acknowledges that on Sunday, March 18, 2007, the children were with him on an access visit and that day he and Ms. Burger had a dispute over a short trip to Toronto that she had planned. She was upset that he was unable to join her. Dr. Friedl said he and Ms. Burger argued over dinner, Ms. Burger got her things together, and she contacted Mr. Schneider for a ride for herself and to return Victoria and Julius to their mother. Dr. Friedl said he then picked up Ms. Burger on her return to Kamloops on Tuesday, March 20, 2007, and they settled matters between them. He denied that on March 18 he was drunk, that he had struck Ms. Burger, or that he had become physical with the children. He further denied that Ms. Burger and the children had to run down the driveway to meet the Schneiders, stating that Mr. Schneider drove a two-wheel drive vehicle that could not get up the snow packed driveway. Dr. Friedl said he drove down the driveway after Ms. Burger and the children had left the house and had a brief conversation with Mr. Schneider. He acknowledged that Ms. Burger did not fly out of Kamloops until Monday, March 19, and returned the following day from Toronto. Dr. Friedl testified that Ms. Burger was not going to testify because she was not willing to attend the trial.

[157] It is appropriate for the children not to testify with respect to the March 2007 incident. As I mentioned earlier in these Reasons, these two children have been exposed far too much to the problems between their parents. However, I am not prepared to ignore the children’s statements as to the March 2007 incident, considering that the children described the events to various individuals involving their father drinking alcohol and being abusive at Hyas Ranch. Ms. Friedl, Mr. Tickle, and Ms. Schneider, all heard the children describe the incident at Hyas Ranch. In addition, the children, since their parents’ separation have met regularly with Nicole Arnould (“Ms. Arnould”), a counsellor who specializes in working with children who have seen conflict between their parents. On Tuesday, March 20, two days after the March 2007 incident, Ms. Arnould testified that she met with Victoria and Julius who both reported the incident, including the violence against them and Ms. Burger as well as Dr. Friedl’s use of alcohol that day.

[158] Dr. Friedl suggested that the March 2007 incident had been manipulated against him so that it appeared as described in the evidence from Ms. Friedl and the other witnesses, including Ms. Schneider, Mr. Tickle and Ms. Arnould.

[159] I am unable to accept Dr. Friedl’s description of what happened at Hyas Ranch during the March 2007 incident given the statements made by his two children to others who testified, the evidence of Ms. Schneider as to the telephone call from Ms. Burger, which took her and Mr. Schneider to the Hyas Ranch where they picked up the children and Ms. Burger, and Mr. Schneider’s confrontation with Dr. Friedl. Mr. Favelle’s evidence as to his dealings with a woman named Claudia at the airport lends some support to Ms. Schneider’s evidence that she understood Ms. Burger intended to return to Germany after the March 2007 incident. Dr. Friedl said Ms. Burger had previously planned a short visit to Toronto, leaving Kamloops on March 19 and returning on March 20, and had also made arrangements for a ride from the Schneiders. Ms. Schneider made no reference to any earlier arrangements to pick up Ms. Burger and when they left Ms. Burger at a Kamloops motel that night Ms. Schneider understood she was arranging a flight to Germany the following day.

[160] The evidence of Ms. Friedl and Ms. Schneider as to their contact with Ms. Burger on the weekend of March 18, 2007 was corroborated by the telephone records filed as exhibit 1, tab 15. Dr. Friedl opposed the production of those records, forcing Ms. Friedl to obtain the May 7, 2007 order. However, the records enabled Ms. Friedl to confirm that various telephone calls were made between the cellular telephones to which she, Dr. Friedl, Ms. Burger, and Mr. and Mrs. Schneider had access on the weekend of March 18, 2007.

[161] It was as a result of the March 2007 incident that Master Hyslop, in orders made April 12 and 16, 2007, directed that Dr. Friedl’s access to the children should be supervised, although the supervision provision of the orders was terminated in December 2007 with the condition imposed that he abstain from the use of alcohol during the access visits.

[162] I find on the evidence that during the March 2007 incident, Dr. Friedl had been drinking alcohol, that he lost his temper, and that he was abusive towards the children and Ms. Burger. The difficult situation led Ms. Burger to call the Schneiders to pick up her and the children at Hyas Ranch and that Dr. Friedl tried to prevent the Schneiders from leaving the Hyas Ranch with Ms. Burger and the children. I further conclude that Dr. Friedl likely opposed Ms. Friedl’s application to access the telephone records as the records would corroborate that conversations occurred between Ms. Burger, Ms. Friedl and Mr. and Mrs. Schneider as well as the timing of those conversations.

The March 2008 Incident

[163] A year later, on March 27, 2008, shortly before this trial commenced, another incident occurred between the parties that deserves consideration as it also reflects on Dr. Friedl’s credibility, his alcohol use and his judgment with respect to his relationship with his children and Ms. Friedl.

[164] On a date determined to be March 27, 2008, Deborah Goodman (”Ms. Goodman”), a nurse and a neighbour of Ms. Friedl on Bestwick Drive saw Dr. Friedl’s girlfriend, Ms. Burger attend at Ms. Friedl’s home to pick up the children. Later, at about 5:30 p.m., she saw Dr. Friedl arrive. Ms. Goodman was aware of the difficulties between Ms. Friedl and Dr. Friedl and believed the children had already gone with Ms. Burger, so she thought she should observe what was happening. Ms. Goodman testified that Dr. Friedl pulled a rifle out of his vehicle and put it under his leather jacket before walking towards the Friedl family home with the gun barrel hanging down below his jacket. Ms. Goodman said she went on to her deck and yelled at Dr. Friedl but he did not react, so she telephoned Ms. Friedl and told her what she had seen. Ms. Friedl advised that another neighbour, Jim Davie (“Mr. Davie”), was in the house to observe Mr. Friedl picking up the children. Ms. Goodman testified that the gun was not in a box and that from her vantage point she noticed that Dr. Friedl’s face was “super red”. She subsequently observed him to leave, putting the rifle back in his vehicle before doing a u-turn on the street and proceeding onto McGill Street.

[165] Mr. Davie testified that Ms. Friedl had earlier asked him to attend her home to observe the children being picked up by Dr. Friedl. He was present when Ms. Burger arrived about 5 p.m. when she had a conversation with Ms. Friedl and left when Ms. Friedl would not let her take the children. Mr. Davie testified that upon opening the door to the Bestwick home when Dr. Friedl arrived he observed Dr. Friedl and asked if he had been drinking. He described Dr. Friedl having one hand down at his side, his eyes were glassy, he was not as stable as usual, and his speech was slurred. Dr. Friedl responded by telling him to mind his own business and shut up, pointing his left finger to his temple as if indicating Mr. Davie was crazy. Mr. Davie described Dr. Friedl as aggressive, repeatedly telling him to keep his nose out of it and mind his own business. By this time, Victoria and Julius were at the door as was Ms. Friedl. Mr. Davie described Dr. Friedl attempting to pull Julius out of the home, but he helped pull the child back into the house before closing the front door, an action that Dr. Friedl resisted. Mr. Davie stated that at no point did he see a gun with Dr. Friedl and it was only after he closed the front door that he heard Julius, Victoria and Ms. Friedl mention the gun. At that point, both he and Ms. Friedl called the police on their cell phones. He saw Dr. Friedl do a u-turn outside the house, run a stop sign and head west on McGill Street. Mr. Davie stayed in the home for another 10 minutes during which time he saw that Julius was quite agitated while Victoria played a video game.

[166] While giving a statement to police after they arrived, Mr. Davie said he received a call from a number that showed on his call display as coming from Friedl Development Ltd. and the officer told him not to answer it. Mr. Davie testified that he received five calls from that number over the next two hours, and that twice a message had been left by Dr. Friedl. Mr. Davie said that in the first message Dr. Friedl sounded very agitated and said that he was going to sue him. Mr. Davie said in the second message Dr. Friedl called him a couple of names, said he wanted to speak to Jim Courageous or something like that, and demanded that he call him back. Mr. Davie testified that he took the messages as an attempt to intimidate him. He said that he was not concerned about the messages, but they upset his wife.

[167] Ms. Friedl testified that on March 27 she would not let the children go with Ms. Burger, in part because she wanted to observe Dr. Friedl to see if he had been drinking. She testified that Dr. Friedl telephoned and she asked when he was picking up the children to which he responded by insisting on talking to Victoria to whom Ms. Friedl passed the telephone. Ms. Friedl said Dr. Friedl was loud, slurring his words a little and was very aggressive. Ms. Friedl testified that shortly after that call, a neighbour, whom I presume was Ms. Goodman, telephoned and told her that Dr. Friedl had a gun. Ms. Friedl described Dr. Friedl at the front door falling backwards, unsteady on his feet, slurring his words and glassy eyed. In her view, he appeared inebriated, further confirming her belief that he was an alcoholic. Ms. Friedl testified that she then saw the barrel of the rifle protruding from his jacket and she did not believe it was a toy gun. Contrary to Dr. Friedl’s evidence she said the gun was not in a box when she saw it under Dr. Friedl’s jacket, stating that she saw the butt and the barrel.

[168] Dr. Friedl testified that when he attended at the Bestwick home on March 27, 2008 he brought with him an air rifle as a present for Julius whose birthday occurred on March 24. He described the rifle as a toy and that it was in a box when he removed it from his vehicle and it remained in the box throughout. He further stated that he had abstained from alcohol consumption since ordered to do so in December 2007, and that he was not intoxicated on March 27, 2008.

[169] As with the March 2007 incident, I am unable to accept Dr. Friedl’s version of the events of March 27, 2008. Ms. Goodman specifically testified that she observed Dr. Friedl take the rifle from his vehicle, put it under his jacket and then return it to his vehicle. She stated that the rifle was not in a box at any point when she observed it. Ms. Goodman has no interest in the outcome of this litigation and presented as an accurate and acute observer. Her description of the rifle being located under Dr. Friedl’s arm matches the evidence of Ms. Friedl who also said the rifle was not in a box when she saw it. Dr. Friedl testified that he had not been drinking that day nor had he consumed alcohol since December 2007. In contrast, Mr. Davie concluded that Dr. Friedl had been drinking when they faced each other on the doorstep of the Bestwick home, describing Dr. Friedl as having glassy eyes, slurred speech and difficulty walking. Further, there are Dr. Friedl’s messages to Mr. Davie after the incident. Those messages, which Mr. Davie took as an attempt to intimidate him, do not reflect the behaviour of a sober and thoughtful individual, which is how Dr. Friedl presented in court. Mr. Davie’s assessment of Dr. Friedl’s sobriety on March 27, 2008 echoes that of Ms. Friedl, but the advantage to Mr. Davie’s conclusion is that he lacks any interest in the outcome between the parties. His description of Dr. Friedl’s state has more weight than might be accorded to that of Ms. Friedl by itself.

[170] Dr. Friedl’s explanation that he had not been drinking and that he was merely delivering an air rifle to his son Julius as a gift does not accord with his hasty departure from the Bestwick home. Instead of waiting to tell police the innocence of his behaviour with the air rifle and that he had not consumed alcohol, he immediately left the scene. I conclude that Dr. Friedl had been drinking prior to attending at the Bestwick home to pick up Victoria and Julius and that he was carrying a rifle, albeit an air rifle, under his arm and that it was not boxed when he went to the door of the family’s home.

[171] I have concluded that the incidents of March 2007 and March 2008 happened largely as described in the evidence adduced on behalf of Ms. Friedl. Both incidents show a lack of judgment on Dr. Friedl’s part and I consider it probable that his judgment had been impacted negatively by whatever he had consumed in the way of alcohol prior to or during those incidents. It is difficult to reconcile his behaviour on those occasions with the positive descriptions of his behaviour on other occasions when he had not been drinking alcohol. Those two incidents are not the only evidence that suggests Dr. Friedl has a problem with alcohol. Ms. Friedl testified that she believed him to be an alcoholic, describing the discovery of bottles in the family’s home as well as a drawer full of empty vodka bottles in a filing cabinet in Dr. Friedl’s home office.

[172] Ms. Friedl’s evidence alone would not convince me that Dr. Friedl has some problems with alcohol, but there is other evidence from witnesses who are not involved in the conflict between the Friedls. Ms. Schneider testified that in 2006 she and her husband saw Dr. Friedl quite frequently and they believed his drinking was out of control and that an intervention involving a treatment plan ought to be considered, but that discussion did not go any further.

[173] George Sherlock (“Mr. Sherlock”), another neighbour of the Friedls, described a fairly close relationship with the Friedls. He and his wife stayed with the Friedls at their Michigan vacation home in 2003. After the Friedls’ separation in 2006 he had less contact with Dr. Friedl, but described meeting him at a counselling session for the children which he attended at Ms. Friedl’s request. Mr. Sherlock described Dr. Friedl as staggering and putting his arm around him, behaviour he had not seen before in Dr. Friedl. Mr. Sherlock said he had worked around alcohol over many years and saw in Dr. Friedl’s actions somebody who had been drinking alcohol, but was not drunk. Mr. Sherlock also recounted hearing Victoria and Julius speak of their father’s drinking. On one occasion Mr. Sherlock saw Victoria walking in a peculiar fashion and when asked what she was doing, Victoria told him that she was walking like her father.

[174] Tibor Kesztyues (“Prof. Kesztyues”), of Germany, the plaintiff’s brother-in-law and a professor of applied science, testified on April 11, 2008 that while visiting Ms. Friedl the previous evening he had met Dr. Friedl when the latter arrived to pick up the children for an access visit. He stated that when introducing himself he shook hands with Dr. Friedl and that he smelled alcohol on Dr. Friedl’s breath. Some time after the children returned from the access with their father, nine-year-old Julius handed him a piece of paper, which was filed as exhibit 3, and which he asked Prof. Kesztyues to arrange for it to be given to the judge. Exhibit 3 states:

94% of my fathers blood is infected with this elcohole bug

and continues:

Danger comes in votca and other elcohol products.

[175] The paper is dated April 10, 2008 and is signed “Julius”. I construe exhibit 3 as an indication by Julius of his concern about his father’s use of alcohol.

[176] I have described at length the evidence that leads me to conclude that Dr. Friedl has problems with alcohol consumption that are causing him difficulties with certain aspects of his life. However, I am primarily concerned with the impact of Dr. Friedl’s alcohol consumption on his relationship with his children and the access he has with them.

[177] It is not my function to speculate on the effect that alcohol has had on Dr. Friedl since 2000, but at 37 years of age his talent in orthopaedic surgery took him to a chairmanship’s position at the University of Freiburg and earnings of $1 million annually. A scant three years later in May 2000 he was put on paid leave from his chairmanship with his income dropping to around $100,000 annually. Although still qualified to practice medicine in Germany, he has not worked in the medical field since 2000. Dr. Friedl was reticent about the circumstances leading to his taking leave, however it appears to have followed malpractice allegations against him, some of which involved his appearance in court. Dr. Friedl attributed his problems to a group of colleagues who were unhappy with his appointment.

[178] While Dr. Krywaniuk in his s. 15 report recommended that Dr. Friedl have custody of Victoria and Ms. Friedl have custody of Julius, his recommendation was subject to the caveat that if the March 2007 incident at Hyas Ranch was found to have occurred then he recommended that Ms. Friedl have custody of both children. I have concluded that the March 2007 incident occurred as alleged by the plaintiff with the result that Dr. Krywaniuk’s recommendation is that Ms. Friedl should have custody of both children.

[179] Ms. Arnould has counselled the children since soon after the parties’ separation and continued to do so until the time of the trial. She said that Dr. Friedl attended a number of the counselling sessions with the children before March 18, 2007, but not after the March 2007 incident. Ms. Arnould described the children as being concerned about their father’s drinking and that when she told them she was going to be a witness at the trial both children expressed that they wanted to reside with their mother and that access with their father be supervised.

[180] With respect to custody, Ms. Friedl will have an order of sole custody of the children, Victoria and Julius.

Determination of Access

[181] The determination of custody leads to the next question, which is that of access and how best to facilitate contact between Dr. Friedl and his children, keeping in mind the principle of maximizing the amount of time that a child should have with each parent as is consistent with the best interests of the child. As stated earlier in these Reasons, at the conclusion of the trial I directed that Dr. Friedl have unsupervised access provided he could establish that he had not been consuming alcohol prior to the access visit, otherwise, his access was to be supervised.

[182] Since the end of the trial I have had the opportunity to review the evidence, the law and counsel’s submissions with respect to access and how it is to be established for such time as the parties and their children continue to reside in Kamloops. Ms. Friedl has testified that she intends to upgrade her education by qualifying as a massage therapist and to do so she wishes to move with the children to Edmonton for a two-year program. I will address that relocation application later in these Reasons. Dr. Friedl’s future plans appear somewhat vague as he testified that he has had discussions about returning to the University of Freiburg.

[183] I am satisfied on all of the evidence that the children are concerned about their father’s behaviour during their access time when he is or has been drinking. Both children have expressed their worries about their father’s drinking habits, not just to their mother but also to other witnesses. The note to the court prepared by Julius and filed as exhibit 3 also reflects his thoughts about his father’s use of alcohol. Victoria, whom both Dr. Krywaniuk and Ms. Arnould saw originally as bonding more with her father than her mother, has since the March 2007 incident expressed her wish to reside with her mother. Ms. Arnould observed that a more comfortable relationship developed between Victoria and her mother after the March 2007 incident.

[184] Victoria’s grade 5/6 teacher, Bonita Witty (“Ms Witty”), testified that between September and November 2007 she found Victoria to be hard working and helpful with her classmates and that she met or exceeded her scholastic and behavioural expectations as reflected in her report card filed as exhibit 1, tab 41. However, from January to March 2008, Ms. Witty testified that while Victoria’s scholastic performance usually exceeded expectations as seen in exhibit 1, tab 42, she found that Victoria had lost her patience with her classmates, a change from the helpful child she had been in the first term. Ms. Witty wrote that Victoria’s goal for the next term should revolve around anger management.

[185] Ms. Witty also testified that in early 2008 Victoria wrote a short story as an assignment; her story was filed as exhibit 6. Ms. Witty said the story was fine until the last paragraph when it referred to a King Einer who never heard or saw his wife Queen Cecilia or his daughter Olivia ever again and, “surprisingly he didn’t even miss Olivia, his daughter, a bit!” Ms. Witty said she found that the last paragraph came out of the blue and was so strange that she remained troubled by it when she testified. It is hard to determine what, if anything, can or should be read into Victoria’s story, particularly the last paragraph, but there is an inclination to relate it to the on-going difficulties present within the Friedl family.

[186] I do not believe it is in the children’s best interests that their time with their father should be affected negatively by his use of alcohol. The children’s time with their parents is important and precious both for the children and for the parents and that time ought not be diminished by the use of alcohol.

[187] The parties, since separation and with the assistance of counsel, have reached various agreements with respect to access times. For so long as Ms. Friedl and the children continue to reside in Kamloops, I direct that Dr. Friedl have access every Thursday from 1700 to 1900 hours, alternating weekends from 1700 hours Friday to 1800 hours Sunday, that the children have regular telephone access with their father and such further access as agreed to between the parties.

[188] However, given my concerns with respect to Dr. Friedl’s alcohol use I order that access be supervised by a supervisor, but not Claudia Burger, agreeable to both parties subject to the following provisos:

(a) that Dr. Friedl abstain from the use of alcohol for eight hours prior to the commencement of all access periods as well as during the entirety of the access periods;

(b) that the access need not be supervised if Dr. Friedl establishes through a testing arrangement conducted of Dr. Friedl by a third party agreed to by Ms. Friedl and with the third party advising Ms. Friedl at least two hours prior to the commencement of the access that Dr. Friedl has not consumed any alcohol for a two-hour period prior to the test;

(c) that Dr. Friedl will take another test within two hours of the end of the access and if that test is positive, showing that Mr. Friedl has been using alcohol since the previous test, the third party will advise Ms. Friedl and Dr. Friedl’s future access will be supervised until further order of this court with respect to further supervision and testing;

(d) Dr. Friedl is entitled to apply for a review of the supervision and alcohol testing requirements upon establishing with written confirmation from a third party that he has attended and successfully passed a treatment program for alcohol use and abuse; and

(e) Dr. Friedl will bear all costs associated with his exercise of access.

[189] I would like to see Dr. Friedl’s access extended if the parties can agree and if the appropriate grounds can be established to ensure that there is no longer any concern that Dr. Friedl might drink prior to or during the access or, alternatively, that another form of testing arrangement might be made to ensure that Dr. Friedl has abstained from using alcohol prior to and during the access periods.

[190] Counsel have leave to apply for further directions with respect to access if they are unable to reach an agreement.

Mobility Application

[191] Ms. Friedl anticipates that to achieve a degree of economic self-sufficiency it is necessary that she retrain and she is seeking to qualify as a registered massage therapist. Although she trained as a physiotherapist in Germany and subsequently worked in that field in both Germany and Switzerland, her German qualifications are not accepted in Canada and to qualify as a physiotherapist would require six years of university education. Ms. Friedl does not see retraining to meet Canadian physiotherapy standards as a viable alternative, but has looked into programs that would allow her to qualify as a massage therapist, the programs offered being a two year program in Edmonton, Alberta, or a three year program in Vernon. She prefers the Edmonton program as it is shorter by one year and she has friends in that city.

[192] Dr. Friedl opposes Ms. Friedl’s application as he anticipates that it will restrict the children’s time with him, a principal concern where children are separated geographically from one of their parents. If Ms. Friedl’s application to relocate with the children is granted, there must be provision to expand the access to ensure that the ties between Dr. Friedl and the children are maximized, a provision which might well be difficult to achieve in the circumstances given my conclusion that Dr. Friedl’s use of alcohol requires the imposition of conditions with respect to his access to the children. The resolution to that difficulty lies with Dr. Friedl.

[193] The circumstances are complicated somewhat as it was Dr. Friedl who agreed to take a paid leave of absence from his position with the University of Freiburg. It was also his decision to leave Germany and settle in British Columbia where he knew Ms. Friedl’s qualifications as a physiotherapist would not be accepted. In October 1997, when he accepted the chairmanship at the University of Freiburg, both Dr. Friedl and Ms. Friedl anticipated that he would occupy this prestigious and highly-paid position until retirement, a period of 30 to 35 years. Ms. Friedl did not anticipate moving to Canada, a country where her physiotherapy qualifications would not be recognized. The marital breakdown has left her without recognized skills and restricted her to low paying employment. Her predicament has been brought about largely as a result of Dr. Friedl’s decisions.

[194] The leading case with respect to a mobility or relocation application such as that initiated by Ms. Friedl is Gordon v. Goertz, [1996], 2 S.C.R. 27, although there is a significant difference in the instant case which involves the making of an initial custody order. In Gordon McLachlin J. (as she then was) held that in a mobility application the party seeking the variation must first establish a material change in circumstances, but that is not a factor applicable to Ms. Friedl’s application where there is no previous custody order, just the March 6 and 15, 2006 orders in which the court directed that the children reside with Ms. Friedl, but made no order with respect to custody.

[195] However, in Nunweiler v. Nunweiler, 2000 BCCA 300, Madam Justice Saunders concluded that in an initial custody determination, the principles set out by McLachlin J. in Gordon with respect to the factors to be considered when determining a mobility application were relevant, but with appropriate modifications taking into account that there had been no previous decision on custody. The following are the factors drawn from McLachlin J.’s judgment at ¶49 which I find relevant after some modification:

(a) the only issue is the best interests of the children in the circumstances of this case;

(b) the focus is on the best interests of the children, not the interests and rights of the parents;

(c) the existing residential and access arrangement and the relationship between the children and their respective parents;

(d) the desirability of maximizing contact between the children and both parents;

(e) Ms. Friedl’s reasons for moving which are relevant to her ability to meet the needs of the children;

(f) disruption to the children relocating to Edmonton; and

(g) disruption to the children consequent to their removal from family, schools, and the community they have come to know.

[196] I turn to the considerations expressed at (a) to (g) above. The existing arrangement has seen the children reside with their mother since the parties separated in January 2006. Prior to that Ms. Friedl occupied a traditional role in the family, being responsible for the management of the home and looking after the children. Ms. Friedl appears have had a good relationship with both her children particularly since the March 2007 incident, although prior to that date her relationship with Victoria was not without some wrinkles. Ms. Arnould testified as to the positive nature of Ms. Friedl’s relationship with both children. Ms. Witty noted that although she has had occasion to speak to Ms. Friedl with respect to Victoria, she has had no contact with Dr. Friedl.

[197] The existing arrangement provides access between the children and their father, but it has been restricted with supervised access between April and December 2007, unsupervised access from December 2007 to April 2008 and with some restrictions imposed upon the completion of the trial arising from the incident on March 27, 2008. I am satisfied that the children want to see their father and I am further satisfied that they love him. However, they prefer the access to be supervised and that their father not drink alcohol before or during their access visits because it changes his behaviour.

[198] It is a principle of family law that contact be maximized between a child and both of his parents. Ms. Friedl’s proposed move to Edmonton will impact on Dr. Friedl’s access to his children. However, I am satisfied that he has the financial ability to see the children in Edmonton or to have them visit him in Kamloops. He is not working in the usual sense so he is not burdened with employment responsibilities, which might otherwise restrict the time available for him to be with his children. However, the principal restriction on his exercise of access lies not in the distance the children would be from him if they lived in Edmonton, but from his alcohol consumption, which is a situation only Dr. Friedl can address.

[199] Counsel for Dr. Friedl submits that it would be an error to consider Ms. Friedl’s application as there is no evidence as to the views of the children towards the proposed move to Edmonton. I have considered counsel’s submission and concluded, given the unique circumstances of this family, the ages of the children, and the evidence I have received with respect to the children and their relationships with their mother and father, that there is sufficient material for me to address Ms. Friedl’s application without hearing the views of the children directly or through a further s. 15 report. The children’s relationship with their father has been impaired to the detriment both of the children and to Dr. Friedl as a result of his conduct. The children have expressed a continuing wish to see their father, but only when supervised, and implicit in that is that he not be affected by alcohol consumption during the access visits. Further, their access with their father will continue if they move to Edmonton, although the extent of that will depend on Dr. Friedl’s ability to come to terms with his alcohol use.

[200] Ms. Friedl’s application to move to Edmonton stems from her concern that she needs to further her education in order to achieve a level of economic independence not only for herself, but to ensure that she has the ability to assist her children and meet their needs in future. Given the hostility between the parties, I conclude that her apprehension is reasonable particularly as she does not know what she will realize from the property division found in these Reasons.

[201] As for the disruption to the child consequent on removal from family, schools, and the community he or she has come to know, the only family member left in Kamloops would be Dr. Friedl. Otherwise, as far as the evidence indicates, the families of both parties reside in Germany, although I understand from Ms. Friedl that she has some ties to individuals in Edmonton. As for schools, these children are both bright and with their academic record I would not anticipate their having difficulty in adapting to a new school and new friends in Edmonton. Although the children have lived in Kamloops for seven years, there is little evidence that they have established ties with the community, other than the neighbours surrounding their Bestwick home with whom they created some positive relationships, including Mr. Sherlock who testified the children sometimes called him grandpa.

[202] The importance of the children remaining with Ms. Friedl in the new location must be weighed against the continuance of full contact with Dr. Friedl and their community. Their extended family has no bearing in these circumstances.

[203] The ultimate question is what is in the best interests of the children in all the circumstances, old as well as new? After considering the factors expressed by McLachlin J. in Gordon, I conclude that it is in the children’s best interests that Ms. Friedl’s application be allowed and that she be allowed to move to Edmonton with Victoria and Julius.

[204] I allow Ms. Friedl’s application while recognizing that she has not finalized either her move to Edmonton or enrolled in the massage therapy course, reflecting her caution about the outcome of this trial. I granted her sole custody anticipating her move to Edmonton in the near future, with the intention that when the move occurs it not be considered a “change in circumstance”, which might be interpreted as a basis upon which Dr. Friedl might apply to restrict the change in the children’s residence.

Access to Children in Edmonton

[205] Counsel for Ms. Friedl proposed an access plan for the children and Dr. Friedl after the move to Edmonton and I am satisfied that it is a reasonable proposal and maximizes the access in the circumstances. The access provisions applicable to Ms Friedl and the children’s move to Edmonton however, must continue to provide restraints on Dr. Friedl’s alcohol use prior to and during the access periods, the conditions being similar to those imposed while the children continue to reside in Kamloops. The order will provide:

(a) that the access be supervised by a third party acceptable to both parties, but not Claudia Burger:

(b) that Dr. Friedl abstain from the use of alcohol for eight hours prior to the commencement of all access periods as well as during the whole of the access periods;

(c) that the access need not be supervised if Dr. Friedl establishes that he has not consumed alcohol through a testing arrangement conducted of Dr. Friedl by a third party agreed to by Ms. Friedl, with the third party advising Ms. Friedl every third day during the access if tests taken of Dr. Friedl have revealed any positive results for alcohol consumption;

(d) If at any time during the access there is a positive test of alcohol usage by Dr. Friedl the access will be terminated and the children returned to Ms. Friedl;

(e) If Dr. Friedl shows a positive result for alcohol consumption during an access period, subsequent access will be supervised until further order of this court with respect to further supervision and testing;

(f) Dr. Friedl is entitled to apply for a review of the supervision and alcohol testing requirements upon establishing with written confirmation from a third party that he has attended and successfully passed a treatment program for alcohol use and abuse;

(g) Dr. Friedl will bear all costs associated with his exercise of access;

(h) Upon 14 days notice, Dr. Friedl shall be entitled to access in Edmonton with dates and times to be as agreed to between the parties;

(i) Dr. Friedl may arrange to have the children come to Kamloops for up to four 3-day weekends during the school year, with dates and times to be as agreed to between the parties;

(j) Regular telephone access, with calls to be monitored at Ms. Friedl’s discretion;

(k) One-half of Christmas break with Dr. Friedl to have the children for the first half of the Christmas break in 2008 and alternating thereafter;

(l) Every other spring break with Dr. Friedl to have the children in the 2009 spring break and alternating thereafter;

(m) Easter in even number years;

(n) Thanksgiving in odd number years;

(o) August 1 – August 31 in even numbered years; and

(p) July 1 – July 31 in odd numbered years.

[206] I would like to see Dr. Friedl’s access extended if the parties can agree and if the appropriate grounds can be established to ensure that there is no longer any concern that Dr. Friedl might drink prior to or during the access or, alternatively, that another form of testing arrangement might be made to ensure that Dr. Friedl has abstained from using alcohol prior to and during the access periods.

[207] Counsel have leave to apply for further directions with respect to access if they are unable to reach agreement.

Spousal and Child Support

[208] The spousal and child support payable by Dr. Friedl is dependent on the determination of his income impacted as it will be with respect to the property division described in these Reasons. Dr. Friedl does not make it easy to determine his income. In exhibit 1, tab 37, dated July 28, 2004, Dr. Friedl filed a personal loan/mortgage application with HSBC Bank in which he stated his annual income was $180,000. Dr. Friedl’s form 89 financial statement, dated April 11, 2008, reflects a gross income of $112,170 from his paid leave from the University of Freiburg and $34,000 or more from the Proair investment, which is paid to him through Friedl Holdings Inc. Pursuant to these Reasons, the payments from Proair will at least be divided equally between the parties, reducing Dr. Friedl’s income from Proair to approximately $17,000 annually. Dr. Friedl contends he pays $38,749 to cover the expenses of the Leipzig flats and reduces his German income by that amount. In the absence of evidence other than the bare statement at exhibit 7, tab 5, from his sister, Ms. Friedl-Schoning, I do not find that these purported expenses ought to reduce his German income when considering his spousal and child support obligations.

[209] Earlier in these Reasons I queried how Dr. Friedl manages financially given his monthly expenses. In his June 16, 2006 financial statement he deposed that he paid monthly expenses of $515.40 for the Swiss property, $6,995 for the Umkirch home, and $1,260 for the Michigan lands, a total of $8,770.40 monthly or $105,244.80 annually, in addition to which according to his April 2008 financial statement Dr. Friedl paid $38,749 in 2007 to cover the shortfall between rent and expenses for the Leipzig flats. Dr. Friedl also has other mortgage and other expenses associated with the Bestwick home, the Hyas Ranch and support for his children and Ms. Friedl.

[210] I conclude that notwithstanding the information he has sworn to his financial statements, Dr. Friedl’s present guideline income for the purposes of determining spousal and child support is more likely $150,000 than the figures he has placed in his financial statements and this figure reflects Dr. Friedl’s income flowing from the asset division found in these Reasons. The Federal Child Support Guidelines, S.O.R. /97-175 (the “Guidelines”) provides that on an income of $150,000, Dr. Friedl should pay child support for his two children in the sum of $2,061 a month, with payment to commence on August 1, 2008, and payable on the first day of each and every month thereafter and continuing for so long as each child is a child of the marriage as defined in the Divorce Act.

[211] The child support payments will be adjusted annually based on Dr. Friedl’s income shown in Canadian dollars obtained from his German and Canadian tax returns, copies of which will be delivered by Dr. Friedl to Ms. Friedl within 30 days of his filing same with the German and Canadian tax authorities, together with copies of all attachments delivered with the tax returns. Ms. Friedl will also deliver copies of her German and Canadian tax returns to Dr. Friedl within 30 days of her filing same with the German and Canadian tax authorities, together with copies of all attachments delivered with the tax returns. Further, both parties will forward to each other immediately upon receipt copies of any assessments or reassessments received by them from the respective tax authorities. The obligations to exchange income tax information will continue for so long as either Victoria or Julius is a child of the marriage pursuant to the Divorce Act. Child support payable will be recalculated annually and shall be payable effective August 1 of each year in accord with the Guidelines.

[212] Based on their incomes, the parties will share the net cost of all s. 7 special expenses for the children, with Dr. Friedl to contribute 66 percent of the net cost of all s. 7 special expenses for the children including school tuition, school uniforms, and the costs related to the children’s orthotic and orthodontic expenses.

[213] With respect to spousal support, given Dr. Friedl’s income of $150,000 and Ms. Friedl’s roughly estimated income of $30,000, the Spousal Guidelines Calculator would place spousal support at between $2,231 and $3,051 monthly. In determining spousal support payable I consider the formula found in the calculator and the various other factors seen in the parties’ relationship including the length of time the parties cohabited, Ms. Friedl’s age at separation, the ages of their two children, the length of time before the children finish high school and the situation in which Ms. Friedl finds herself, namely being brought to a country by Dr. Friedl in which her training and qualifications are not recognized, thereby forcing her to retrain for two years before she can return to the work force. I direct that Dr. Friedl pay spousal support of monthly of $2,640, commencing August 1, 2008 and payable on the first day of each month thereafter.

[214] I further order that Mr. Watson release to Ms. Friedl the children’s passports and any other documentation pertaining to either the children or Ms. Friedl.

[215] I will seize myself of this file until February 28, 2009.

Costs

[216] The parties will arrange a date to address costs within 45 days of the filing of these Reasons for Judgment.

“R.M. Blair J.”

BLAIR J.

September 10, 2008 – Revised Judgment

Corrigendum to the Reasons for Judgment issued advising that sentence in paragraph 7 should read:

[7] “… executed a Marriage Agreement (the “Marriage Agreement”) on December 23, 1996.

Citation:	*Friedl v. Friedl,*
	2008 BCSC 1222