Mar 17, 2014

Summary of Johnson v. Johnson

Johnson v. Johnson, 2008 SKQB 517 (CanLII)
The petitioner married the respondent in July 2006. They separated in about December 2007, about 17.5 months after their marriage. They have a daughter Leah born December 2006. The parties have been able to resolve all of the issue except for two family property issues. One is whether the petitioner is entitled to unequal division of the proceeds of the Broadway house he owned before the marriage and which was transferred into joint name of the parties after the marriage. The second is whether it is appropriate to allow any adjustment in the value of the family home (the Easthill house) to reflect the petitioner's perceived obligation to his mother who sold the home to the parties for an amount substantially less than then the fair market value of the property.HELD: 1) The petitioner owned the Broadway house for about 4.5 years. The last 11 months was after the marriage. It doubled from $93,000 to $186,000 during the time the petitioner owned it. It is reasonable to infer that a substantial part of the value increase occurred during the period between the marriage and the sale, but certainly not all of it. There is no evidence as to the value at the date of marriage. The Court must consider the petitioner's equity in the property at the time of the marriage, the $7,000 he owed his mother, the realization of equity to pay down on the mortgage on the Easthill home, the $12,679 of the proceeds applied against the mortgage on the Easthill home and the portion of the final proceeds which appears to have been applied on debts owing by both parties. The Court finds that his equity at the time of the marriage was equal to the $35,554 he took out of the joint account after the sale. The question is whether the transfer of the title into joint names shortly after the marriage engaged the provisions of s. 50(2)(a) of the Act and, if so, whether the evidence of the circumstances is sufficient to override the presumption. It is clear from the evidence that neither party viewed the transfer as having any implications as between them. They were simply following the banker's advice without any clear understanding of the reasoning behind it. It is not speculative to assume that the bank's lending rules required the parties to have some equity in the Easthill home. The obvious source of money to establish the equity was the Broadway house. There is sufficient evidence to the contrary to overcome the presumption that the parties intended by the creation of the joint title to convey a beneficial interest to the respondent so as to engage s. 50(2)(a) of the Act. The balance of $35,554 remaining in the petitioner's account is exempt from distribution in accordance with s. 23(1)(c) of the Act. 2) The law is abundantly clear that it is not appropriate for the Court to require the participation of the respondent in the performance of any moral obligation that the petitioner may have incurred to his mother. The petitioner's mother has no legal claim that the Court can enforce. If the petitioner feels obligated to pay his mother $60,000 or more to cover the difference between the value of the property at the time of the transfer and the mortgage assumed by the present parties, that is up to him. The contribution of the parties to the Easthill property is equal. As the parties contributed equally toward the acquisition of the property, the fact that the marriage was of a very short duration is not relevant.