Saskatchewan Estate Litigation Update: McCabe v Kowalyshyn, 2022 SKCA 56

The recent Court of Appeal decision in McCabe v Kowalyshyn, 2022 SKCA 56, offers various lessons to Estate litigators. These include:

  1. The reality that court approvals of Estate land sales, under s. 50.5 of The Administration of Estates Act, SS 1998, c A-4.1, do not simply focus solely on market value. The court can also look at other considerations, such as whether the sale will reasonably reduce future litigation, wasted effort, or delay in the Estate.
  2. The reality that if parties agree in advance to a certain specified sale process, but do not later like the result, the court may not let them later challenge the outcome of that sale process.
Background:

McCabe arose out of a sale of farmland owned by an Estate. The background of McCabe informs some of the issues addressed by the Court. The background is summarized as follows:

  1. The deceased, Mike Kowalyshyn, died on July 1, 1996, ostensibly leaving a life interest in his estate to his wife and the remainder of it to their 12 adult children. The Estate owned, inter alia, eight quarter sections of farmland (“Farmland”), which had been leased to Nicky (a beneficiary of the Estate) and his wife, Debbie since the 1990s;
  2. Joseph Kowalyshyn was the executor of the Estate and was also one of its beneficiaries;
  3. There were a total of 12 adult siblings involved, who were the children and beneficiaries of their father’s estate, the estate of Mike Kowalyshyn;
  4. In 2017, certain of the Estate’s beneficiaries (the “Objecting Beneficiaries”) commenced proceedings against Joseph and the Estate, as well as against Nicky and Debbie, asserting that the Farmland had been leased at less than fair market rent (thus failing to maximize the Estate value);
  5. The focus of the parties turned to the sale of the Farmland. A variety of purchase offers were made:
  1. Nicky and Debbie offered to buy the Farmland for $987,121, which Joseph “conditionally accepted” as executor of the Estate (Queen’s Bench decision, McCabe v Kowalyshyn, 2021 SKQB 144, at para 8);
  2. This caused rancor amongst the Objecting Beneficiaries because they believed the Farmland was worth more than this price;
  3. On December 9, 2020, the Objecting Beneficiaries advised Joseph Kowalyshyn that some or all of them would be making an offer to purchase the land on more favourable terms, namely a purchase price of $1,000,000.00 (Queen’s Bench decision at para 8);
  4. On January 3, 2021, Nicky and Debbie Kowalyshyn increased their offer to purchase to $1,010,000.00  (Queen’s Bench decision at para 8);

The closed auction process:

  1. The parties could not agree, and the matter went to a court hearing on January 5, 2021, as well as various later conference calls with the Court. As a result of discussions, the parties agreed to a closed, inter-family auction. The process was reduced to writing, and set out a time-sensitive, process-detailed procedure whereby the land would be exposed to offers from the Kowalyshyn family;
  2. In accordance with the proposed method of sale, two groups (Nicky and Debbie Kowalyshyn on one hand, and Joyce Kowalyshyn, Walter Kowalyshyn, Eugene Kowalyshyn and Michael Kowalyshyn on the other hand) presented various back and forth offers on the Farmland;
  3. Nicky and Debbie Kowalyshyn presented the last and highest bid on February 8, 2021 in the amount of $1,325,000.00.
  4. No higher counter offer was received from Joyce Kowalyshyn, Walter Kowalyshyn, Eugene Kowalyshyn and Michael Kowalyshyn;
  5. However, the Objecting Beneficiaries then objected to any sale for $1,325,000.00. They asserted that they had gained evidence that the Land was worth more. For example, on February 24, 2021, Joyce Kowalyshyn contacted SAMA and learned that the Farmland had been newly assessed at $1,422,700.00, an increase from the former assessment of $1,150,681.50;
  6. Further, Joyce Kowalyshyn also contacted Wayne Berlinic, a realtor, and asked him to prepare a marketing plan for the estate land. Mr. Berlinic stated his belief that the most likely sale price for the land would be between $1,448,100.00 and $1,544,800.00 given recent market trends. Counsel for the Objecting Beneficiaries, in correspondence directed to the court, advised that later on March 26, 2021 he was advised that Mr. Berlinic had sold 120 acres of farmland near Buchanan, Saskatchewan for $2,083.00 per acre. If an equivalent price was received for the estate land, the total value of the land would approach $1,778,882.00;
  7. In reply,  the executor, Joseph Kowalyshyn, responded by commissioning a formal appraisal of the land by Robin Johnson, a member of the Appraisal Institute of Canada. He appraised the land using a .86 multiple of the new SAMA assessments and provided a value of $1,209,000.00, including buildings on the home quarter.
Queen’s Bench Ruling in McCabe v Kowalyshyn:

The Objecting Beneficiaries refused to consent to the sale of the land for $1,325,000.00.

The issue for the Queen’s Bench court (“Chambers judge”) was whether to approve the sale for $1,325,000.00, or to send it a future auction on the open market.

For context, s. 50.5(1) of The Administration of Estates Act, SS 1998, c A-4.1  holds that  an executor shall not sell land in an Estate, for the sole purpose of distributing the estate among the beneficiaries, unless those persons concur in the sale. Thus, the executor either needed unanimous agreement of the beneficiaries to the $1,325,000 sale, or, he needed a court order to override the non-consent of certain beneficiaries.

The Chambers judge approved the sale by the Estate of the Farmland to the respondents, Nicky and Debbie Kowalyshyn, for $1,325,000. The Court largely relied on the below grounds:

  1. The Objecting Beneficiaries were reneging (in the view of the Court at least) on a method of sale that they had agreed to, and in which they actively participated;
  2. The Objecting Beneficiaries had changed their position on what was the appropriate value of the Farmland. The Objecting Beneficiaries all agreed in writing that the offer of $1,000,000.00 was “deemed to be in the interest and to the advantage of the Estate.” Notably, that price was not only $325,000.00 below the price offered just weeks later by Nicky and Debbie Kowalyshyn but, more significantly, below the SAMA assessment then in currency ($1,150,681.50);
  3. The sale for $1,325,000 was in the best interest of the Estate. True, such sum may not maximize total market value, but s. 50.5 did not focus solely on market value. It instead allows the Court to look at other facts as well, such as:
  1. What sale would avoid further legal fees and dispute;
  2. What sale would avoid further delay or limbo, for the Estate;
  3. What would avoid having the Farmland sit fallow and unused in 2021.
  1. The Court preferred the appraisal evidence of Mr. Johnson. He used approved methods of appraisal, including comparable land sales as late as April 2021. He had provided topographical photographs of the Farmland. The court said that it would always favour an appraiser’s report over an opinion of value offered by a realtor, particularly a realtor who proposes to be engaged in the sale of the land.
Issue at the Court of Appeal:

The Objecting Beneficiaries appealed to the Court of Appeal. They asked the Court of Appeal to approve the sale and to direct the Estate to sell the Farmland at public auction.

Court of Appeal decision in McCabe v Kowalyshyn:

The Court of Appeal held that the Objecting Beneficiaries were bound by the process they had helped negotiate, and agreed to. That is, the bidding process had been negotiated and agreed upon by all parties, it had been conducted fairly, and it had established a closed market restricted to Estate beneficiaries and their spouses. Its object was not to achieve a sale at fair market value; it was to resolve the dispute over the sale of the Farmland fairly and finally (Court of Appeal decision at para 35).

Nothing about the new evidence of market value, had impugned the agreed-upon bidding process or how that process had been managed by Joseph.

Thus, the Court of Appeal upheld the Chambers judge’s reliance on factors, which were not limited to market value. For example, the Chambers judge had considered such factors as:

  1. The reality that the Estate faced mounting legal fees due to sharp divisions amongst the beneficiaries and the continuing litigation;
  2. The Estate’s principal asset — the Farmland — would be left fallow in 2021 if not sold, producing neither rent nor crops, until the dispute was resolved;
  3. The Objecting Beneficiaries had not satisfied their burden of proving that the $1.325 million was under value;
  4. Moreover, even if $1.325 million was not the highest possible value, the price was not the sole consideration when giving approval under s. 50.5. Had the Legislature intended for s. 50.5 to solely hinge on market value, when approving a sale, the legislature could have said just that. 
Lessons learned:

First, if beneficiaries agree to the method of sale and, participate in that method of sale, they will have a difficult time in later challenging the outcome.

Second, the criteria of highest “fair market value” is not the only consideration that the Court will consider, when approving a sale under s. 50.5.

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

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Estate Litigation Update: Poole v Dailey, 2020 SKQB 226

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My Contractor Doesn’t Exist, Can I Sue?

It is common for contractors and other service providers to incorporate prior to starting a business. A corporation can provide a certain level of insulation from liability for the people who operate it, and in addition, allows for other advantages such as tax planning. While it provides the operators with liability protection, it can leave an aggrieved customer with nowhere to turn. This is especially true where the issues are not evident at first instance. Many times a construction defect takes years to materialize.

Making this situation even worse for the customer is that by the time the construction defect materializes, the corporation that provided the service may no longer be in business. A corporation can, subject to certain requirements, dissolve and liquidate its assets at any time. If a corporation does so before it is sued, or even knows about the construction defects, any leftover assets can be paid out to its shareholders. At the first instance, the customer is left holding the bag, while the shareholders are left with a windfall.

Thankfully, The Business Corporations Act (Saskatchewan) (the “Act”) contemplated these issues. Section 219 specifically allows someone to sue an inactive corporation. However, even in that instance, you must act fast as you only get two years to do so. While not a perfect solution, it does provide an avenue for aggrieved customers to right the wrong.

In addition, the Act also allows you to attempt to recover the assets or at least their value, that were paid out to the shareholders. This prevents the corporation and its operators from side-stepping its liabilities.

That being said, deciding to sue a dissolved corporation will cost time and money. It may be that the corporation dissolved because it had no assets. In some situations, all of the assets of the corporation may have gone to other creditors such as a bank or someone else who sued the corporation. Therefore, any legal action is unlikely to provide meaningful results.

Before deciding to sue, some background work can be done to determine if legal action is worthwhile. These steps include:

  1. Pulling a corporate profile report from Information Services Corporation. A certificate of dissolution, and sometimes other supporting documents, may be filed online. Recovering a copy of these, for a small fee, may shed some light on the financial situation of the corporation; or
  2. Contact the Ministry of Finance. The Act specifically requires corporations with known creditors, who cannot be located, to payout a certain portion of their assets to the Ministry of Finance for future claims. There is no guarantee that the corporation will have done so, and if it did not know that the construction was faulty, the funds may not have been paid, but it is an inexpensive step that may lead to partial recovery.

At the end of the day, you should ask yourself whether you are ready to commit the time and financial resources to pursue an inactive corporation. In some instances, your first loss is your best loss, and throwing further money down the rabbit hole may only lead to frustration.

However, in others, meaningful recovery may be achieved. You should not simply give up because your contractor has gone out of business, especially where he or she has started a new business. They may have simply taken their assets to avoid their liabilities, and you can still recover.

This article is intended to provide legal information only, not legal advice. 

For further information, please contact:

Travis K. Kusch
Direct: 306-933-1373
Email: [email protected]

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What if I just don’t? A cautionary tale for those who ignore Saskatchewan’s new prompt payment requirements

For the past several years, we have been presenting to the construction industry the pending (and as of March 1, 2022, now in force) prompt payment provisions, which are now included in The Builders’ Lien Act of Saskatchewan. A common question that arises during every discussion on the topic is “what if I just don’t follow these provisions?” While the answer in many cases is clearly outlined in the legislation, there are many unknowns as well. For example, we know that if an Owner does not formally dispute an invoice within 14 days, the invoice becomes due and payable. However, some wondered about the repercussions of simply ignoring the paperwork or payment requirements along the way.  Surely there would be some second chances? We often rely upon Court decisions to interpret legislation, but since the legislation itself is new, it may be a while before we know how the Saskatchewan Courts will address questions of this nature.

Fortunately, we can now take some guidance from the Courts in Ontario (the first jurisdiction in Canada to enact prompt payment legislation.) Their prompt payment provisions have been in place for over two years, and the related Court decisions are now starting to trickle in. The verdict? The Courts fully appreciate the importance of the prompt payment provisions and will interpret them strictly and to the detriment of those who choose to ignore them.

One such case was very recently reported in SOTA Dental Studio Inc. v. Andrid Group Ltd., 2022 ONSC 2254. SOTA hired Andrid to construct a dental clinic in Vaughn, Ontario. Andrid issued invoices to SOTA, none of which were disputed within 14 days of receipt, making those invoices due and payable. When SOTA did not pay within the required 28 days, Andrid invoked the adjudication process and obtained a decision from the adjudicator requiring SOTA to pay the invoiced amount. SOTA continued to ignore its payment obligations, leaving Andrid to pursue enforcement measures. Andrid was able to garnish a portion of the amount owing from SOTA’s bank account, but the majority of the debt remained unpaid.

Similar to Saskatchewan, Ontario’s prompt payment legislation permits a party to apply for judicial review of an adjudicator’s decision, though in Ontario the parties are required to seek leave of the Court to do so, which is not a requirement in Saskatchewan. However, in both provinces, an application for judicial review does not operate as a ‘stay’ of the adjudicator’s order unless the Court orders otherwise.

SOTA was granted leave to bring the judicial review application but did not seek a ‘stay’ of the adjudicator’s decision in the interim. As such, the adjudicator’s decision remained enforceable until the judicial review application was heard by the Court.

In advance of the hearing, the Court flagged their concern with SOTA’s continued failure to pay the amount owing under the adjudicator’s decision. Notably, the Court outlined the following principles to be understood by all parties in the construction industry:

[12]           …  So that there is no misunderstanding in future cases, we suggest the following principles to be borne in mind.

(a) prompt payment is integral to the scheme of the Construction Act. 

(b) failure to pay in accordance with the prompt payment requirements of the Act may lead this court to refuse leave.  Where leave is granted, an applicant must obtain a stay or must make payment, failing which this court may dismiss the application on motion to quash or at the hearing of the application.

At the hearing, SOTA argued that it had not made payment because “there was no money.” The Court responded sternly:

[13] … If the owner is insolvent, as appears to be the case, it should not be permitted to run up costs and delays through recourse to litigation in the face of the order below and the prompt payment provisions of the Act.  If there are circumstances that should lead the court to grant a stay, in all of these circumstances, these must be established on proper evidence in the context of a motion for a stay.

And with that, the Court dismissed SOTA’s application for judicial review and awarded costs to Andrid in the sum of $10,000.

So, what’s the answer to the question “what if I just don’t?” Well, so far the message appears to be that the Courts will take no mercy upon you. All parties in the construction industry should understand the prompt payment and adjudication requirements that are now in force for non-exempt construction contracts entered into after March 1, 2022. In this case, ignorance will not be bliss!

This article is intended to provide legal information only, not legal advice.  Dividing family property can be quite complicated. It is recommended that you seek the advice of a lawyer when considering the division of family property.

For further information, please contact:

Misty S. Alexandre
Direct: 306-933-1352
Email: [email protected]

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Saskatchewan Estate Litigation Update: Choquette v Viczko, 2021 SKQB 167

The recent decision in Choquette v Viczko, 2021 SKQB 167, offers a new interpretation of s. 50.5 of the Administration of Estates Act (“Act”).

Background:

Under s. 50.5 of the Act, if an executor sells land to which a beneficiary is beneficially entitled, the executor requires the consent of that beneficiary. The provision reads as follows:

50.5(1) The executor or administrator shall not sell real property for the sole purpose of distributing the estate among the persons beneficially entitled to it unless those persons concur in the sale.

Facts in Choquette v Viczko

The factual background in Choquette may be summarized as follows:

  1. Joseph Viczko died on September 10, 2011. Joseph had three children, namely, Ms. Choquette, Donna Boots and David Viczko;
  2. Joseph had been a farmer. His will directed that it was his “intention to sell the W1/2 12‑39‑27 W2, or any other farm land that [he owned] while I am living and distribute the proceeds of sale equally between my daughters”. The will further provided that if, at his death, Joseph had not sold the farmland, then it “shall be sold by my Trustee and the proceeds divided equally between my daughters”;
  3. At the time of his death, Joseph had not sold the west half of section 12, and so it was left to be distributed in accordance with his will. Ms. Boots was named as executor under the will;
  4. In 2012, she sold the land to her brother, David Viczko, and his spouse, Jennifer Viczko;
  5. In 2013, Ms. Choquette commenced an action seeking to set aside the sale and transfer. In her statement of claim she identified two grounds. Among her objections, was the assertion that her consent to the sale was required because of s. 50.5(1) of the Administration of Estates Act.
Queen’s Bench Ruling in Choquette v Viczko:

One issue that Choquette considered was this: who qualifies as a  beneficiary whose consent to the sale of the land is required under s. 50.5 of the Act?

Choquette clarified that not every sale of estate land will trigger the need for s. 50.5 consents from Estate beneficiaries.

For example, Choquette said that if the Will is such that the beneficiaries of the Estate are only left the proceeds of the sale of the land (but not given a right to go on title to the land itself), then the executors need not obtain consent.

The Court in Choquette reasoned as follows:

23      This operation of s. 50.4 is consistent with the overall approach of the Legislature to wills and estates. That approach is to accommodate, where possible, the implementation of a testator’s final testamentary wishes. Reading “the persons beneficially entitled to it” to mean “the persons beneficially entitled to the real property” is consistent with that approach. I conclude that “the persons beneficially entitled to it” in s. 50.5(1) means “the persons beneficially entitled to the real property”.

24      Therefore, s. 50.5(1) refers to persons who are beneficially entitled to the real property that is proposed to be sold. Here, Ms. Choquette is not such a person. Rather, she is beneficially entitled to a portion of the proceeds of the sale of the real property. Therefore, the answer to this question is “no”. Ms. Choquette is not a beneficiary whose consent to the sale of the land is required under s. 50.5 of The Administration of Estates Act.

This has practical implications for many executors. Many wills say that the Estate is to be sold (liquidated) and the proceeds divided between the beneficiaries. In such case, the names of beneficiaries are not actually going on title to the land. Rather, the beneficiaries will later get a sum of cash (representing the sale proceeds).

Choquette also declared that where is a direction in the Will to sell land, and distribute the proceeds, s. 50.5 simply does not apply to that situation. That is because the terms of the Will already provide sufficient authority for the Executor to sell Estate land:

27             Put another way, s. 50.5 is an enabling provision, not a restricting provision. It enables an executor to sell real estate where the executor is not otherwise empowered to do so. Here, where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to s. 50.5 for authority to do so.

36      The question that I am considering here asks whether the specific direction given in the will of the deceased, to sell the land and distribute the proceeds thereof, is paramount to the provisions of the Act (specifically s. 50.5). The answer effectively is “yes”, but the more precise answer is that, because of the specific direction given in the will, the provisions of s. 50.5 have no application. It is not that both the will and s. 50.5 apply to the circumstances, with the direction in the will being paramount. Rather, because of the direction in the will s. 50.5 of the Act does not apply to the circumstances at all.

The court has the ability to retroactively approve a sale:

Choquette also affirmed that the court has the ability to retroactively approve a sale which occurred without beneficiary approval. The court will look at whether the sale was appropriate (i.e. is there evidence it was sold for fair market value? Would it serve no purpose to re-open the sale, causing delay or expense).

If the sale was appropriate, then the court can “cure” the prior lack of beneficiary consent.

We find the below in Choquette:

39      Section 50.5(4)(b) refers to court approval of a sale where a beneficiary does not concur in the proposed sale. Here, the sale occurred years ago. The sale to the Viczkos is not a proposed sale. What is sought is retroactive approval of the sale. In the circumstances of this matter, it is appropriate to approve the sale retroactively. In so saying, I have reference to the guidance provided to the court, in s. 50.5(5), when considering a request to approve a sale:

(5) On application pursuant to subsection (4), the court may make an order approving the sale of the real property if the court is satisfied that it is in the interest and to the advantage of the estate of the deceased and the persons beneficially interested in it.

(emphasis added)

Leave to appeal:

The unsuccessful party in Choquette sought  an order extending the time within which to appeal the Queen’s Bench decision. The Court of Appeal did not give her permission to appeal. In large part, the Court of Appeal found that there was no error with the underlying conclusion that the sale should be approved as reasonable, in any event.

However, the Court of Appeal did suggest that Choquette’s interpretation of s. 50.5 may one day be revisited (and thus is not yet cemented in stone):

[36]           If the Chambers judge’s decision to dismiss Ms. Choquette’s claim rested solely on his analysis in relation to these three questions, I would have found that there was an arguable issue raised by her appeal and would also have been inclined to grant Ms. Choquette an extension of time to appeal, even in the face of her significant delay in making her application. The conclusions reached by the Chambers judge involve determinations of questions of law, largely turning on the proper interpretation of the Act. In the course of his analysis, he acknowledged the existence of ambiguity in the meaning of several of the key provisions. On several key issues, the Chambers judge referred only to decisions of judges of the Court of Queen’s Bench. In this regard, on the question as to whether s. 50.5(1) is applicable when a will gives an executor a right of appeal was raised, but left undecided, in Viczko CA. Moreover, although the Chambers judge supported his conclusion with reference to several decisions from the Court of Queen’s Bench, he was required to distinguish Tomochko Estate v Wilchuk2017 SKQB 381, 34 ETR (4th) 283, and Holter v Holter2019 SKQB 102. Regardless of whether the distinctions he offered are sound, it is at least arguable that s. 50.5(1) should be interpreted as applying even when a will provides for a right of sale.

Choquette v Viczko, 2022 SKCA 11

Thus, it is very possible that the proper interpretation of s. 50.5 may continue to be litigated in Saskatchewan court, until the Court of Appeal addresses this specific issue.

The law in light of Choquette

For now, as Choquette was not overturned on appeal, the law of Saskatchewan is currently set out below:

  1. Where a person is merely beneficially entitled to a portion of the proceeds of the saleof the real property, but not the land itself, s. 50.5 does not apply (Choquette at para 24);
  2. Where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to  50.5for authority to do so” (Choquette at para 27).

Thus, some executors may find their task simplified, when they go to sell Estate land.

However, executors should still, if possible, attempt to obtain beneficiary approval to sales of Estate land. While this consent may not be strictly legally required under s. 50.5, getting advance consent can reduce headaches later. That is, a beneficiary could still later complain that land (in whose proceeds they have an interest) was sold for undervalue. Getting prior approval from beneficiaries, is a means to avoid any later complaints.

 

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

Exemptions when Dividing Family Property: What You Need to Know

Many twists and turns are involved when dividing family property following a separation. There are special rules for dividing the family home, equitable claims that can be made, and many issues to consider. One such issue which can add complexity is exemption claims.

Exemptions can be claimed for items owned before marriage or before you became common-law spouses. Section 23 of The Family Property Act (Saskatchewan) provides for this. If you are eligible to claim an exemption, it will mean the value of that property is not subject to division (i.e. you will not have to share the value of that property with your spouse upon separation).

Here are six things you need to know about exemption claims:

  1. The definition of family property is broad under the Act. Examples of family property include items such as investments, bank accounts, land, personal property, etc. Generally, family property can be claimed as exempt if owned before the relationship.
  2. There are certain items that cannot be claimed as exempt. These include the family home and household goods which, generally, refers to property that is used for transportation (vehicles), household use (furniture, appliances, décor, etc.), and recreational use, but does not include antiques, artwork, jewelry, or anything used in a business or hobby.
  1. This means that if you owned a house prior to the relationship which your spouse moved into, in the vast majority of cases, you will be unable to claim an exemption for the house and it is presumptively equally divisible.
  2. Likewise, if you owned furniture before the relationship which you moved into your spouse’s house, you cannot claim it as exempt since it would be considered household goods.
  1. The value which can be claimed as exempt is limited to the fair market value of the property at the start of the relationship (the value at the date you are married or become common-law spouses). This means that, if the property grows in value over the course of the relationship, your spouse is, generally, entitled to share in that growth of value.  There are certain exceptions to this rule which will not be covered in this article.
  1. For example, if you owned an investment at the date of marriage and it grows by $50,000 over the course of the marriage, your spouse is entitled to share in that $50,000 growth in value.
  1. The exemption claim can be traced through the property.
  1. For example, if you were to cash in an investment worth $50,000 at the date of marriage and purchased artwork with it, the value of the artwork would be exempt up to the $50,000. Any increases in value over $50,000 over the course of the relationship would be shareable. 
  2. If you instead purchased a vehicle used for everyday driving, you would lose the exemption since that vehicle would be considered a household good.
  1. The fair market value of shares in a corporation as of the date of marriage/common-law is exempt. Any increase in value of the shares over the course of the relationship is, generally, shareable by your spouse.
  2. There are circumstances where an exemption claim will not be allowed if the Court finds that allowing the exemption would be unfair and inequitable. For example, if the property declines in value over the course of the relationship, it is generally unfair to allow the full amount of the exemption.

This article is intended to provide legal information only, not legal advice.  Dividing family property can be quite complicated. It is recommended that you seek the advice of a lawyer when considering the division of family property.

For further information, please contact:

Curtis P. Clavelle
Direct: 306-933-1341
Email: [email protected]

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Family Violence in Family Law

When asked to make a parenting order, courts will consider family violence as a factor relating to the child’s circumstances and, ultimately, their best interests. But what if the evidence is controverted?

One consideration is credibility. In assessing the appropriate parenting arrangements for a child, credibility of the witnesses is measured. The Nova Scotia Family Court, in H.L. v Z.L., 2018 NSFC 5, helpfully sets out the following factors to consider when making credibility determinations:

  1. What were the inconsistencies and weaknesses in the witness’ evidence, which include internal inconsistencies, prior inconsistent statements, inconsistencies between the witness’ testimony, and the documentary evidence, and the testimony of other witnesses: Re: Novak Estate2008 NSSC 283 (S.C.);
  2. Did the witness have an interest in the outcome or was he/she personally connected to either party;
  3. Did the witness have a motive to deceive;
  4. Did the witness have the ability to observe the factual matters about which he/she testified;
  5. Did the witness have a sufficient power of recollection to provide the court with an accurate account;
  6. Is the testimony in harmony with the preponderance of probabilities which a practical and informed person would find reasonable given the particular place and conditions: Faryna v. Chorney 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354;
  7. Was there an internal consistency and logical flow to the evidence;
  8. Was the evidence provided in a candid and straight forward manner, or was the witness evasive, strategic, hesitant, or biased; and
  9. Where appropriate, was the witness capable of making an admission against interest, or was the witness self-serving?

While the above factors are an excellent guide to assessing credibility, the Saskatchewan Court of Queen’s bench has acknowledged that, at the end of the day, the focus is on the best interests of the child. The question is how to safely structure parenting in view of the allegations of family violence, as opposed to whether certain, or any, events did or did not occur. Refer to Juraville v Armstrong, 2021 SKQB 73.

So, while there may be conflicting evidence between parties, particularly as it relates to family violence, it remains possible to fashion a parenting plan for the child that will compliment their best interests and safeguard their mental, emotional, physical and spiritual wellbeing.

Contacting a Lawyer on this Subject

The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations. Contact Kelsey Dixon at 1-306-933-1359 or [email protected] to learn more.

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