Reasons for Judgment of the Honourable Madam Justice Prowse:

NATURE OF APPEAL

[1]         Ms. Tedham is appealing from those portions of the order of a trial judge providing for an equal division of family assets, child support and costs.

[2]         Reasons for judgment were released July 15, 2002, followed by an addendum on October 25, 2002.  Those decisions may be found at 2002 BCSC 1056 and 2002 BCSC 1497, respectively.

ISSUES ON APPEAL

[3]         Ms. Tedham submits that the trial judge erred in failing to reapportion the principal family assets in her favour.  She submits that his error arose out of his misapprehension of the evidence and his failure to consider, and apply, all of the factors relating to reapportionment set forth in s. 65(1) of the Family Relations Act, R.S.B.C. 1996, c. 128 (the "FRA").

[4]         Ms. Tedham also submits that the trial judge erred in failing to order that child support, including an amount for extraordinary expenses, be made retroactive to October 2000 based on Mr. Tedham's actual income for the years 2000 and 2001. 

[5]         During the course of the appeal, counsel agreed that the question of the quantum of child support for 2002, including any amounts for extraordinary expenses, should be remitted to the Supreme Court based on new evidence which was not available to the trial judge.  For that reason, it is unnecessary for this Court to address the new evidence filed on this appeal.

[6]         Finally, Ms. Tedham submits that the trial judge erred in awarding costs of the trial to Mr. Tedham.

BACKGROUND

[7]         The parties were married in 1983 and separated in 1999.  They have two children, Jamie and Michael, now aged 19 and 18 years, respectively.   Both children resided with Ms. Tedham following the separation until the date of trial.  In September 2002 (following the trial), Jamie left home to attend college in Nelson, B.C. 

[8]         The parties enjoyed what many authorities refer to as a "traditional marriage".  Ms. Tedham gave up her employment following Jamie's birth in 1984 and was a homemaker throughout the marriage, while Mr. Tedham worked in various businesses culminating in several years employment in the software industry. 

[9]         During the marriage, Ms. Tedham's parents, Mr. and Mrs. Flett, made substantial monetary contributions to the parties.  The estimates of those contributions varied between $281,000 and $329,000 according to various documents filed by Ms. Tedham.  The trial judge found that all but $33,000 of the amounts the Fletts contributed to the Tedhams were gifts. 

[10]    Mr. Tedham also received inheritances and gifts from his side of the family during the marriage, estimated by him at approximately $209,000.  These amounts were also treated by the trial judge as gifts.

[11]    These monetary gifts enabled the parties to live beyond their own means, and assisted them in acquiring and maintaining various family assets.

[12]    By the time of trial, the principal family assets of the parties were: the family home in Richmond, with an equity of $200,000; a recreational property at Whistler, with an equity of $365,000; and a recreational property at Bob's Lake, Ontario, jointly owned by Ms. Tedham and her brother, in which the parties had an equity of $74,000.

[13]    Following their separation, the parties attempted to reconcile and, when those efforts failed, they attempted, unsuccessfully, to resolve their differences by agreement.  Finally, Ms. Tedham issued a writ and statement of claim on September 12, 2000 claiming, amongst other things, a reapportionment of family assets, spousal support and child support. 

[14]    There were numerous proceedings thereafter, including interim applications before Master Scarth on December 6, 2000 and December 21, 2000.  On the latter date, Master Scarth made an order, by consent, granting the parties interim joint custody and guardianship of the children and declaring that there was no reasonable prospect of reconciliation between the parties.

[15]    On January 26, 2001, Master Scarth made an order that Mr. Tedham pay Ms. Tedham: interim child support in the amount of $1,589 per month, commencing October 1, 2000; $500 per month toward arrears of child support owing for the period October 1, 2000 - January 1, 2001 until the arrears were paid in full; interim spousal support of $4,000 per month; and an additional interim lump sum of $7,500 spousal support, representing one-half of a one-time payment Mr. Tedham received from his employer.  Master Scarth also ordered the parties to share equally the children's extraordinary expenses.

[16]    The order for child support was made pursuant to the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), and the Federal Child Support Guidelines, SOR/97-175 (the "Guidelines").  In that regard, Master Scarth estimated Mr. Tedham's income for Guidelines purposes as $137,000, rather than the $215,000 suggested by Ms. Tedham.   

DECISION OF THE TRIAL JUDGE

[17]    I will deal only with those aspects of the trial judge's reasons which are relevant to the issues of reapportionment of family assets and child support.

(a)  Reapportionment

[18]     The trial judge described the parties' acquisition of the various properties they owned during the marriage and the contributions made by the parties' relatives in relation to those properties.  As earlier noted, he found that the majority of these contributions were gifts.

[19]    Under the heading "Reapportionment of Family Assets", the trial judge noted that Ms. Tedham had asked for a reapportionment on the basis of the contributions she and the Fletts had made to the Richmond, Whistler and Bob's Lake properties over the years.  The trial judge rejected that argument as a basis for reapportionment in Ms. Tedham's favour, finding that the contributions from Mr. Tedham's side of the family, including the inheritances he received, were "roughly equal".  He observed that the court was not required to engage in an accounting of the monetary contributions made by each of the parties to the family assets on an application for reapportionment, citing Elsom v. Elsom, [1989] 1 S.C.R. 1367, as authority in that regard.  He concluded that "based solely on the evidence as to contributions, there should not be a reapportionment".

[20]    The trial judge observed that he was obliged to consider all of the factors under s. 65(1) in determining whether there should be a reapportionment.  The only factors he specifically dealt with in his reasons, however, were ss. 65(1)(d) and (f), namely,

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

...

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

[21]    The trial judge's conclusion with respect to reapportionment is set forth at para. 40 of his reasons:

An equal division of family assets would not be unfair considering the circumstances outlined in s. 65(1).  The family assets are the result of gifts from Mrs. Tedham's parents and the inheritances received by Mr. Tedham from the estates of his mother and his grandparents, together with the joint efforts of the parties and the increase in market value of the matrimonial home and the Whistler property.

[22]    The trial judge went on to state, however, that because of the "imbalance" in payments made by the parties to maintain family assets between the date of their separation in October, 1999 and February 2001, when the first interim child and spousal support payments were made pursuant to Master Scarth's order (a period of 16 months), there should be an accounting before the Registrar.  It is clear from his reasons that the trial judge anticipated that there would be a credit due to Ms. Tedham as a result of this accounting.  He stated that "I have in mind the mortgage payments, property taxes, house and life insurance premiums and the like paid by Mrs. Tedham during this period."

[23]    After a brief appearance before the Registrar, the matter of an adjustment with respect to these expenses was referred back to the trial judge, who requested further written submissions from the parties.  In the addendum to his reasons, the trial judge concluded that he had misapprehended the evidence in finding that Ms. Tedham had paid substantially more of these expenses during the 16-month period than Mr. Tedham.  (Indeed, the evidence was to the contrary.) In the result, the trial judge found that Ms. Tedham was not entitled to a credit for that period.

(b)  Child Support

[24]    The trial judge rejected Ms. Tedham's submission that, for child support purposes, he should determine Mr. Tedham's income by taking the average of his last three or four years' income, which would have been approximately $245,000.  Rather, the trial judge accepted Mr. Tedham's position that his income should be determined to be his base salary as of the date of trial, which was $126,000.  The trial judge noted that Mr. Tedham had recently changed jobs, that he was on probation in his current employment, and that his recent sales had not been significant.  He found Ms. Tedham's income for Guidelines purposes to be $4,000 per year.

[25]    The trial judge ordered Mr. Tedham to pay Ms. Tedham child support in the amount of $1,480 per month in two instalments on the 1st and 15th of each month commencing June 1, 2002.  He also ordered the parties to share the extraordinary expenses of the children in accordance with their respective incomes, with Ms. Tedham's income being taken as $52,000 per year (including $48,000 spousal support) and Mr. Tedham's income being $78,000 per year ($126,000 less $48,000 spousal support).  He stated that the extraordinary expenses of the children incurred by both parents appeared to be approximately $500 per month (although this amount is not reflected in the order, perhaps because it was uncertain).  He ordered the parties to report to each other in writing every three months from June 1, 2002 with respect to the special expenses each had incurred, complete with receipts, to ensure that the proportionate sharing of extraordinary expenses could be accomplished. 

[26]    The trial judge rejected Ms. Tedham's claim for "retroactive child maintenance" from the date of Master Scarth's interim order (January 26, 2001) to the date of trial, based on Mr. Tedham's actual income during that period.  In so doing, he accepted that Mr. Tedham's actual income during 2001 was $208,000, rather than the $137,000 on which the interim order for support was based.  The reasons given by the trial judge for rejecting Ms. Tedham's application for retroactive support are set forth at para. 32 of his reasons:

In cross-examination at trial Mr. Tedham said that at the time of the application for interim support he believed that his income for the year would be $137,000. I am satisfied that Mr. Tedham did not deliberately mislead the court on that interim application.  In the circumstances I have concluded that it is not appropriate to revisit this issue.  It was always open to Mrs. Tedham to seek further financial information from him and to apply to the court in a timely way and she chose not to.

[27]    Finally, the trial judge ordered that Ms. Tedham pay Mr. Tedham his costs of the proceedings at Scale 3 on the basis that he had been successful "on virtually all of the issues." 

DISCUSSION OF ISSUES

(a)  Reapportionment

[28]    The standard of review to be applied to the exercise of a trial judge's discretion under s. 65(1) was set forth by the Supreme Court of Canada in Elsom, supra.  There, Mr. Justice Gonthier, speaking for the court, stated that an appellate court was only justified in intervening in the exercise of a trial judge's discretion "if the trial judge misdirects himself or if his decision is so clearly wrong as to amount to an injustice."

[29]    Another statement of the standard of review in considering the exercise of a trial judge's discretion is found in Hickey v. Hickey, [1999] 2 S.C.R. 518.  There, Madam Justice L'Heureux-Dubé, speaking for the Court, stated at paras. 11-12:

     Our Court has often emphasized the rule that appeal courts should not overturn support orders unless the reasons disclose an error in principle, a significant misapprehension of the evidence, or unless the award is clearly wrong.  [citations omitted]

Though an appeal court must intervene when there is a material error, a serious misapprehension of the evidence, or an error in law, it is not entitled to overturn a support order simply because it would have made a different decision or balanced the factors differently.

[30]    I adopt the statements of the standard of review expressed in Elsom and Hickey as applicable to the review of the trial judge's exercise of discretion with respect to the issues of reapportionment and whether child support should be retroactive.

[31]    Ms. Tedham submits it is apparent from the trial judge's reasons for judgment (including the addendum) that he misapprehended the evidence as to the parties' contributions to the properties in issue under ss. 65(1)(d) and (f) of the FRA to Ms. Tedham's detriment.  She also submits that he erred in principle in failing to give any consideration, or effect, to s. 65(1)(e) of the FRA.

[32]    Mr. Tedham submits that the trial judge carefully reviewed and considered the contributions of the parties and found as a fact that they were sufficiently comparable that an equal division of the assets would not be unfair.  He also submits that the trial judge correctly applied Elsom in concluding that a precise weighing of contributions by the respective parties was not required in determining whether there should be a reapportionment.  Finally, he submits that, since the trial judge referred to s. 65(1) of the FRA in his reasons, this Court must assume that he had regard to all of the factors in that section in finding that an equal division of assets would not be unfair.

[33]    As earlier stated, the three principal assets of the parties as of the date of trial were the Richmond, Whistler and Bob's Lake properties.  It is these assets which Ms. Tedham submits the trial judge should have reapportioned 70/30 in her favour, having regard to all of the factors set forth in s. 65(1) of the FRA.  According to the figures accepted by the trial judge, the total equity of the parties in these properties was $639,000.  This figure is not disputed on appeal.

[34]    The 70/30 reapportionment of these properties which Ms. Tedham proposed at trial would have resulted in Ms. Tedham receiving approximately $447,000 in equity and Mr. Tedham receiving approximately $192,000.  As one alternative, Ms. Tedham proposed a 60/40 split by which she would receive an equity of $383,000 and Mr. Tedham would receive an equity of $256,000.  In either case, Mr. Tedham would have to make a compensation payment to Ms. Tedham pursuant to s. 66 of the FRA, since the total equity in the Richmond and Bob's Lake properties which were credited to Ms. Tedham in the division of assets totalled only $274,000 whereas the equity in the Whistler property, which was credited to Mr. Tedham, was $365,000.  Based on the equal division of these assets ordered at trial, Mr. Tedham was required to make a compensation payment to Ms. Tedham in the amount of $45,500.

[35]    The relevant provisions of the FRA for the purpose of this discussion are ss. 56, 57, 65 and 66. 

[36]    Section 56 of the FRA provides, in part:

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

...

(b)  a declaratory judgment under section 57

...

respecting the marriage is first made.

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

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

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

...

[37]    In this case, the triggering event was a declaration on December 21, 2000 under s. 57, which provides:

57   On application by 2 spouses married to each other or by one of the spouses, the Supreme Court may make a declaratory judgment that the spouses have no reasonable prospect of reconciliation with each other. 

[38]    The presumption of equal division under s. 56 is subject to an order for reapportionment under s. 65(1).  Section 65(1) provides, in part:

65   (1)  If the provisions for division of property between spouses under section 56, ... would be unfair having regard to

(a)  the duration of the marriage,

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

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

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

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

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

the Supreme Court, on application, may order that the property covered by section 56 ... be divided into shares fixed by the court.

[39]    Section 66 provides a mechanism for carrying out the division of family assets.  It provides, in part:

66   (1)  In proceedings under this Part ..., the Supreme Court may determine any matter respecting the ownership, right of possession or division of property under this Part, including the vesting of property under section 65 ... and may make orders which are necessary, reasonable or ancillary to give effect to the determination.

[40]    The trial judge found that there was no basis for a reapportionment of family assets having regard to ss. 65(1)(d) and (f) of the FRA.  He reviewed the evidence of contributions by the parties and their families, observed that the division of assets was not an exercise in accounting, and determined that the overall contributions of the parties to these properties over the years did not justify a departure from the presumption of equal division under s. 56.  In my view, this was a finding of fact which was open to the trial judge on the evidence.

[41]    As earlier noted, both parties received substantial moneys from their families through either gifts or inheritance which were utilized to acquire, preserve, maintain and improve the properties.  While the contributions of Ms. Tedham, including contributions by her family, were greater than those of Mr. Tedham, the trial judge was correct in stating that ss. 65(1)(d) and (f) do not require an exercise in accounting.  This is particularly true in a long marriage, as here.  One of the problems with the accounting approach to the division of assets is that it fails to recognize that contributions to assets are not necessarily reflected in their market value, which may fluctuate from time to time based on a variety of factors. 

[42]    In my view, while there may have been a basis for reapportioning the Bob's Lake property under ss. 65(1)(d) and (f), the trial judge was not required to approach the issue of reapportionment on an asset by asset basis.  In any event, that was not the focus of Ms. Tedham's submissions on appeal.  Rather, she is seeking an overall reapportionment of the three properties in her favour.

[43]    It is important to emphasize that Ms. Tedham did not restrict her request for a reapportionment at trial to the relative contributions of the parties and their families.  She also relied on s. 65(1)(e), and, in particular, her need to become or remain economically independent and self- sufficient.  This was a factor which was of critical significance in this case, given the fact that Ms. Tedham was 49 years of age at the time of trial and had been out of the paid workforce for 18 years caring for the children.  Unfortunately, the trial judge did not refer to this factor in his reasons for judgment.  His reasons indicate that he viewed the contributions of the parties as being the overriding, if not the sole, consideration on the issue of reapportionment. 

[44]    While it is not necessary for a trial judge to specifically refer to every factor under s. 65(1) in making a determination on the issue of reapportionment, those factors which could reasonably be viewed as providing a valid foundation for reapportionment should be addressed.

[45]    In these circumstances, I am satisfied that the trial judge erred in failing to give any, or adequate, consideration to s. 65(1)(e) on the question of reapportionment, and that his failure to do so amounted to an error in principle.  It is necessary, therefore, for this Court to determine whether an equal division of these properties would be unfair once s. 65(1)(e) is taken into account. 

[46]    At the time of the marriage in 1983, Ms. Tedham had her Bachelor of Commerce degree and was working as a financial accountant in Alberta at a salary of approximately $50,000 per year.  Mr. Tedham, who is four years younger than Ms. Tedham, was employed by an oil company and earning approximately $29,000 per year.

[47]    As earlier stated, Ms. Tedham gave up her employment in 1984 when Jamie was born.  Michael was born the following year.  For the next 18 years, Ms. Tedham worked primarily as a mother and homemaker, while Mr. Tedham assumed the role of breadwinner.  His work involved frequent travel, resulting in Ms. Tedham having primary responsibility for the children, both before and after the separation.  Ms. Tedham did occasional part-time work outside the home during the marriage, but it did not generate significant income. 

[48]    As of the date of trial, Ms. Tedham's Guidelines income was approximately $4,000 per year.  She testified that she had plans to pursue a degree in business administration, and she had audited a few courses in the Faculty of Commerce at the University of British Columbia in that regard. 

[49]    The trial judge expressed concern that Ms. Tedham had not established a schedule for completion of her academic goals.  Although he awarded her spousal support of $4,000 per month, he also ordered that spousal support be reviewed in two years, presumably with a view to assessing Ms. Tedham's progress in pursuing some degree of economic self-sufficiency. 

[50]    There are numerous decisions in which courts have referred to the difficulties encountered by women, in particular, seeking to rejoin the paid workforce in their late 40s or early 50s after raising families.  One example is Lodge v. Lodge (1993), 79 B.C.L.R. (2d) 360 (C.A.) where, on facts somewhat similar to those here, this Court referred to the capital loss suffered by such women (at paras. 20-1):

The fact that spouses, usually women, who stay at home to care for their children often suffer such a loss is now being recognized in the case law, frequently in relation to statutory provisions relating to maintenance.  One expression of this loss is found in Moge v. Moge (1992), 43 R.F.L. (3d) 345 ... (S.C.C.), where, in considering the support provisions of the Divorce Act, 1985, Madam Justice L'Heureux-Dubé, speaking for the majority, made the following comments at p. 389 of the decision:

     The financial consequences of the end of a marriage extend beyond the simple loss of future earning power or losses directly related to the care of children. They will often encompass loss of seniority, missed promotions, and lack of access to fringe benefits, such as pension plans, life, disability, dental and health insurance...  As persons outside of the workforce cannot take advantage of job retraining and the upgrading of skills provided by employers, one serious economic consequence of remaining out of the workforce is that the value of education and job training often decreases with each year in comparison to those who remain active in the workforce and may even become redundant after several years of non-use.  All of these factors contribute to the inability of a person not in the labour force to develop economic security for retirement in his or her later years.

     Madam Justice McLachlin, in separate concurring reasons, adopted the following comments from the reasons for judgment of Twaddle, J.A. in the Manitoba Court of Appeal, at p. 398 of the Moge decision:

As Twaddle J.A. put it:

"Depending on the duration of the marriage, and the wife's education and work experience, economic self-sufficiency may mean a permanent disadvantage from which the wife cannot recover. Having concentrated her efforts for many years on looking after the home, the husband and the children, the wife may have lost opportunities to learn, to train, to grow. Those lost opportunities may not be regainable.

"The husband, in the meantime, may not only have earned a living for the family, or part of one, but also have expanded his knowledge and experience in work-related areas.  He may have a higher earning potential than his wife because of their domestic arrangements."

[51]    In Lodge, this Court reapportioned a rental property 75/25 in favour of Ms. Lodge, relying primarily on s. 65(1)(e) (then s. 51(e)) of the FRA.  In my view, the comments from Lodge to which I have referred are applicable here.

[52]    Section 65(1)(e) requires the Court to have regard to the ability of each spouse to become and remain economically self-sufficient.  Certainly, Mr. Tedham is in a far better position than is Ms. Tedham in that regard.  His income from 1992-2001 was as follows: