070 PORTER-CONRAD v. CONRAD
Vanessa left her employment with Air Canada in either late
29 Jul. 1999 | Vickers J. |
PLAINTIFF: Vanessa Denyse Porter-Conrad
DEFENDANT: Norman Charles Conrad
SUMMARY
DOCTRINE
[1] There are several matters before the court relating to division of
property, custody, access and child and spousal support. Counsel for
the parties appeared to agree that it was in the interest of their clients
and the children that the matter be resolved pursuant to the provisions
of Rule 18A of the Rules of Court.
[2] Nevertheless, Vanessa seeks an order joining in these
proceedings two companies owned by the defendant, namely (1)
279846 Alberta Ltd.; and (2) Trilobite Resources Inc.
As well, she seeks orders for production of documents and for payment
of $50,000 out of money now held in trust.
FACTS:
1. The parties began to live together in 1981 and were married on
March 5, 1982. Vanessa is 40 and the Norman is 52 years of
age. There are two children of the marriage:
a. Verity Deidra Elize Conrad, born December 13, 1985
and
b. Felicity Vanessa Ruth Conrad, born December 7, 1988.
2. At the time of the marriage, Vanessa was single and worked full
time as a flight attendant with Air Canada. She also had some
part time employment at a law library. Norman was divorced
and engaged in the practice of law in the Province of Alberta.
3.
1989 or early 1990. The parties moved from Alberta to Crofton,
B.C. in the fall of 1993. There they purchased a home, selling
the former Calgary matrimonial home in January 1994. They
separated on December 4, 1997 and the defendant has, since
separation, resumed his residence in Calgary, Alberta. They
were divorced on April 19, 1999.
4. Prior to the marriage the defendant prepared a prenuptial
agreement which the Vanessa did not like. She took the
document to a lawyer to whom she was referred by tNorman
5. . He drafted a second agreement that revoked the first
agreement and the parties executed it after the marriage, on
October 22, 1982. By the terms of this agreemen,t the Vaness
agreed she had no interest in SHARES OF norman held in Elmer
C. Conrad Ltd. In addition, she released the defendant from any
claim she might have against three pieces of property in
Calgary, and acknowledged she had no claim in the defendant’s
personal law corporation. This short agreement contained the
following clause that is the central subject of the dispute
between the parties:
In all other respects the husband and the wife mutually
acknowledge and agree that the provisions of the
Matrimonial Property Act of the Province of Alberta
shall apply relative to their respective holdings and
assets.
6. Norman discontinued his legal practice many years ago. From
1981 to 1983, Elmer C. Conrad Ltd. and its shareholders,
consisting of the defendant’s parents and siblings, undertook a
plan of corporate realization. This resulted in the Norman’s
shares being rolled over into 279846 Alberta Ltd. He caused
that company to be incorporated and he is the beneficial owner
of all of its shares. As at October 1981 those shares were valued
at $454,937.64
7. Between 1986 and 1988 the numbered company sold real
estate and related assets using some of the funds to pay off the
mortgage on the Calgary matrimonial home. The balance was
invested in the oil and gas industry. Eventually, 279846 Alberta
Ltd. purchased Trilobite Resources Ltd. and has earned income
from that company which, in turn, has provided income for the
Norman and his family
8. The three properties owned by Norman at the time of the
marriage were sold from December 1988 to March 1999,
netting approximately $45,200. These funds were paid to the
numbered company and Trilobite Resources Ltd. as repayment
of advances. The professional law corporation is no longer in
existence.
9. In November of 1993 the parties purchased a family home for
approximately $550,000. They would not have been able to
purchase this home without an investment from 279846
Alberta Ltd. in the amount of $248,500. They assumed a
mortgage of $270,000 and the defendant contributed a further
$31,500. The Calgary home sold in January 1994 for $217,000
and these proceeds were used to reduce the mortgage on the
Crofton home.
10. The investment of 279846 Alberta Ltd. in the Crofton home was
made possible by the execution of a joint venture agreement
and a collateral mortgage as security. The mortgage was not
registered against the property. The agreement provided that
upon sale of the property the numbered company was to
receive the first $248,500 of the sale proceeds in priority to the
personal claims of the parties, without regard to any loss that
might occur at the time of sale. In the event of a profit at the
time of sale, the debt to the company was to be repaid and the
company was to receive 55% of any profit. The loan of $248,500
was interest-free.
11. The family home in Crofton was sold in June 1998 for $535,000.
The net sale proceeds were $428,512.14. Of those proceeds,
$248,500 has been placed in an interest bearing GIC, in trust,
pending resolution of this dispute. Of the remaining
sale proceeds, $6,000 was initially paid to the plaintiff and the balance
was set aside in a separate interest bearing solicitor’s trust account. By
order of Master Horn made on August 6, 1998, a further sum of
$25,000 was paid to the plaintiff. In April 1999 Melvin J. ordered, with
the consent of the parties, that each be paid $20,000. As at the end of
June 1999, there is approximately $88,000 remaining in this trust
account.
[12] The two major assets of 279846 Alberta Ltd. are its ownership
of all of the shares of Trilobite Resources Ltd. And the sum of $248,500
plus interest now held in trust.
[13] The remaining assets of the parties include the
following:
Furniture and furnishings now with the plaintiff;
R.R.S.P. of plaintiff, approximately $57,515;
R.R.S.P. of defendant, approximately $12,140;
Automobile in possession of plaintiff, $8,000-$12,000;
Sailboat, sold by plaintiff, $2,000.
[14] The total income of the defendant for the past four years is as
follows:
1995. 1995 $59,990
1996. 1996 $51,700
1997. 1997 $67,000
1998. 1998 $60,500
[15] While they lived together, the family benefited from income
splitting. Separation ended that tax advantage. The order of Melvin J.
also granted sole interim custody of the children to the plaintiff with
joint interim guardianship. He found the defendant’s guideline income
was $48,000, and the plaintiff’s guideline income was nil. He ordered
child support in the amount of $1,500 per month and spousal support
in the
amount of $1,000 per month. Spousal support was to be paid from the
defendant’s share of the funds held in the solicitor’s trust account.
[16] The plaintiff has not been able to find suitable employment in
Duncan, where she now resides with her children. She intends to
commence a four and one-half year course of study this fall to obtain
a B.C. teaching certificate from Malaspina University College.
[17] There has been a tragic breakdown in the relationship between
the eldest child, Verity, and the defendant. The terms of the current
access order made by Melvin J., by consent, are that access with Verity
is at her discretion. Access to Felicity, by consent, is at the plaintiff’s
sole discretion.
[18] The defendant has been emotionally abusive towards the
children. It is clear he has an anger management problem that has not
been addressed. It is in his own interests, and particularly in the
interests of his children, that he gain some insight into the reasons for
his abusive behavior. In saying this, I do not place a great deal of weight
on the report of Dr. Stupka.
I find it difficult to give much weight to her conclusions because she
has yet to meet with the defendant. I need only read some of the e-
mail messages between the defendant and his children to conclude he
has some issues that could use the assistance of appropriate
counseling.
[19] The defendant seeks an order for joint custody of the children
and, accordingly, argues that the matter should go to the trial list. The
plaintiff seeks an increase in spousal support and the defendant says
that matter should also go to the trial list. If I were to accede to those
requests and abandon the effort to deal with all matters, that would
leave only the property issues to be resolved. As I have already
indicated, it is my intention to assist the parties by making final orders
that would resolve all of the issues.
[20] There are no good reasons advanced for adding as
parties to these proceeding, 279846 Alberta Ltd. and Trilobite
Resources Ltd. There has been adequate production of
documents. I conclude the value of 279846 Alberta Ltd. Does not
exceed the value of the predecessor assets. In short, there has not
been an appreciation in the value of the assets during the course of the
marriage. The valuation evidence now before the court is adequate
and no purpose would be served by incurring the expense of further
valuations. The motions to add the corporate entities and for
production of documents are
dismissed.
[21] The real issue relates to the division of assets. In that regard,
the central question to be decided is whether Alberta or British
Columbia law applies and the consequences of that decision on the
division of assets.
[22] This is a choice of law issue and as such it is not to be compared
with Stark v. Stark (1990), 26 R.F.L. (3d) 425 (C.A.); Schaub v. Schaub,
[1984] B.C.J. No. 1495 (B.C.C.A.); and Doehring v Doehring, [1996]
B.C.J. No. 2308 (QL) (S.C.).
The applicable rule in determining choice of law is
as follows:
(a) claims to moveable property are determined by the law
of the matrimonial domicile, in this case, British Columbia;
(b) claims to immovable property are governed by the law
where they are situated unless;
(c) any marriage contract, express or implied, provides
otherwise.
[24] There is no doubt about the existence of a marriage contract in
this case. Is it a valid marriage contract? It is signed by the parties and
under seal. Vanessa was advised by her lawyer and he drafted the
document. This was the second or third agreement, the latter
agreements being drafted at the plaintiff’s request. There is no
evidence of duress or undue influence. An agreement confirming the
existing family law of the Canadian province in which the agreement is
executed by the parties cannot be characterized as unconscionable.
The professional evidence is that the agreement does not comply with
Sec. 38 of the Alberta Matrimonial Property Act. That section requires
that each spouse acknowledge in writing, separate and apart from the
other that:
(a) they are aware of the nature and effect of the agreement;
(b) they are aware of the possible future claims they may have
and are prepared to give them up to the extent necessary to
give effect to the agreement; and,
(c) they are executing the agreement freely and voluntarily and
without compulsion on the part of the other spouse.
The absence of such a formal acknowledgment does not nullify the
jurisdiction of the court to make a Matrimonial Property Order under
Part 1 of the Alberta legislation and it does not mean that the
agreement is not otherwise, a valid contract.
[27] Counsel for the plaintiff says the contract, in its entirety, should be
set aside for failure to comply with the Alberta legislation. I cannot
agree. The provisions of this agreement do not offend public policy in
any way. The plaintiff merely acknowledged she had no interest in
certain property and the parties agreed that the Matrimonial Property
Act of Alberta was to apply to their assets. The effect of this agreement
does no more than say the Alberta legislation is to apply, a matter that
would not be in issue had the parties not moved to this province.
RATIO:
I conclude the parties fully understood the nature of
the agreement. It is not possible for the court to say that Alberta law,
the law the parties chose, is unfair. That law does not become unfair
merely because they move to British Columbia. I conclude the
agreement is a valid contract and it is procedurally and substantively
fair. In the result, the Matrimonial Property Act of Alberta is the
legislation to be applied to the distribution of assets in this case.
In reaching this decision I reject the argument advanced on behalf of
the plaintiff to the effect that the use of the words “in all other
respects” leads to a conclusion the parties intended to exclude the
application of Alberta law. A plain reading of the language of this
agreement could not possibility lead to such a conclusion.
[30] I turn now to the effect of applying Alberta law and in that
regard I rely on the professional evidence before the court. I have
found the contract to be fair. Even if I had not reached such a decision,
under Alberta law it cannot be varied on the grounds of unfairness.
[31] Under s. 7(2) of the Alberta legislation, the court must first
categorize property that is exempt. The exempt property in this
agreement is 279846 Alberta Ltd., the successor to the defendant’s
interest in Elmer C. Conrad Ltd. In that regard, the sum of $248,500
now held in trust is not an asset owned by the parties. It is an asset
owned by 279846 Alberta Ltd. I reject the argument that the joint
venture agreement was unfair. It was a fair agreement without which
there never would have been a purchase of the Crofton property.
There will be an order this money be repaid forthwith to the company
in accordance with the terms of the agreement.
[32] By consent of the parties I also find that $25,000 worth of the
plaintiff’s R.R.S.P. is also exempt property, being the value of her Air
Canada pension benefits at the time of marriage.
[33] Next, under s. 7(3) of the Alberta legislation, the court must
determine any increase in value of this property because an increase
in value is an asset, not exempt from consideration and distribution. I
find there is no increase in value of the exempted property.

Finally, under the provisions of s. 7(4) of the Alberta legislation there is
a presumption of equal sharing in all other property. Much of the
disagreement with respect to the other property was resolved by
agreement in the course of argument. The plaintiff is to retain all of
the furniture and furnishings in the family home for her own use
absolutely. She acknowledged that guns in her possession were the
property of the defendant but for reasons of safety she was reluctant
to see them returned to the defendant. The evidence does not warrant
withholding this property from the defendant. The guns are to be
returned to the defendant. The plaintiff is at liberty to report delivery
of these weapons to local law enforcement authorities if she thinks
that is appropriate.
[35] The automobile in the possession of the plaintiff and
the $2,000 she received from the sale of the boat are to be
retained by her, by consent.
[36] With respect to the balance of the property, s. 8 of the Alberta
legislation says the court must determine “whether it would be unjust
or inequitable to divide the property equally.” The factors in s. 8 to
take into account include:
(a) the contribution to the marriage and welfare of
the family;
(b) not applicable;
(c) contribution to acquisition, conservation or
improvement of property;
(d) financial situation of each at the time of the
marriage and time of trial;
duration of marriage;
(f) not applicable;
(g) terms of agreement;
(h) not applicable;
(i) previous distributions;
(j) prior orders of the court;
(k) tax liability;
(l) dissipation to the detriment of the other
spouse; and
(m) any other factor or circumstance.
[37] The plaintiff has received $56,000 of trust money and
the defendant has received $41,000, of which $21,000 was used
to pay his support obligation. I believe the strongest factor
to take into account in the distribution of property is the
financial situation of each of the parties at the present time.
In that regard, the defendant’s assets remain as they were at
the time of the marriage. I find he is earning approximately
$52,000 per annum. The defendant is unemployed and, while her
asset position is improved, she will remain a student for the
next four and one-half years. She needs a home that can only
be acquired if she has sufficient funds for a down payment.
She has the day to day care of the children whose
best interests are served by a stable home
environment. In all of the circumstances, I
believe it would be unjust and inequitable
to divide the property equally.
[38] Each of the parties will retain their
own R.R.S.P accounts and the whole of the funds
held in the solicitor’s trust account at the
time this judgment is filed are to be
transferred to the plaintiff for her own use
absolutely.
[39] This is not a case where the parties
are able to communicate concerning their
children. No useful purpose can be served by
ordering a full trial on the issue of custody
and access. The interim custodial and
guardianship orders are to be made permanent.
By consent, the defendant will continue to
pay the sum of $1,500 per month for the support weekends access will be every second weekend,
of the children. one in Duncan,
[40] The plaintiff’s property and the other in Calgary. These weekends may
financial statement include two
indicates expenditures far exceeding her overnights. Christmas, spring break and summer
income. She will have holidays are to
to take steps to decrease her expenses, or find be agreed upon by the parties. If they are
other part time unable to agree
income as the defendant’s income cannot continue to they will have to seek the assistance of the
support the family as it once did. I conclude court. In that
the order for spousal regard, I am not seized of this matter.
maintenance in the amount of $1,000 per month
should be made a
permanent order to be reviewed when the
plaintiff finishes
school, remarries, co-habits with another
person or obtains
employment, whichever event first occurs. The
order is, of
course, subject always to the usual rules
relating to a change
in circumstances.

[41] With respect to access I do not think

the
arrangements now in place for Verity should be
altered. The
time has come for the defendant to begin to
restore a
relationship with Felicity. To achieve that
end there will be
an order that for a period of two months the
defendant will be
entitled to weekend visits in the Duncan area
every second
weekend, to include one overnight per weekend.
After four such