Mar 17, 2014

Summary of Kelln v. Walker

Kelln v. Walker, 2002 SKQB 360 (CanLII)
A division of property following a 15 year common law relationship. The initial causes of action brought in 1996 were pursuant to the equitable doctrine of constructive trust and unjust enrichment. A third cause of action was added in 2000 based on a settlement contract under which the plaintiff was to have received 25% of the net proceeds of the defendant's claim against a third party. His position with Walker Agro was terminated in 1994 and terms of the 1999 settlement were that Walker would purchase all of the defendant's shares in the amount of $370,000. The defendant paid sums owing to his previous spouse under an Interspousal Contract by withdrawing his equity in Walker Agro Ltd in the form of dividends. The plaintiff opposed the claim for an exemption for his shares, arguing her prior $55,000 matrimonial property settlement was used to the family's benefit, plus her income which she used to pay most of their living expenses over the 15 years allowed the defendant to keep the value of his shares intact. The defendant paid $65,587.71 into court to the credit of this action. The defendant suggested he should be entitled to a unequal division of the home. Neither took responsibility for the matrimonial home after a few months and the pipes burst. A friend of the defendant has been occupying the home rent-free for the past year. At issue was whether the amendments to the Matrimonial Property Act applied to this action.HELD: 1)The plaintiff was entitled to an equalization payment of $91,730.03 plus her share of the family home. The defendant will retain ownership of the family home. 2)The legislation as amended applies. The presumption against retrospectivity should apply to s.3.1 in this particular case. The court was satisfied that the legislature did not intend the limitation period to apply retroactively. There is a general rebuttable presumption against the retrospective application of statutes. The Interpretation Act set out the general principle respecting the repeal of an enactment and substitution of a new enactment. The SCC addressed the retrospective application of new limitation periods on existing actions (Upper Canada College v. Smith (1920); Angus v. Sun Alliance). The overall purpose of the amendment was to expand the scope of the MPA to grant property rights to persons who cohabited in a spousal relationship continuously for 2 years. There is nothing in s.3.1 which indicates that it is intended to extinguish existing claims. The constitutional issue, along with the issues of a constructive or resulting trust, were moot. 2)At the time of the trial in 2001, the definition of 'spouse' contained in the Matrimonial Property Act, 1997 applied only to legally married spouses. While this decision was reserved, the Miscellaneous Statutes Domestic Relations Amendment Act, 2001 (No.2) was passed. The Domestic Relations Act made significant changes to the MPA (renamed the Family Property Act), including amending the definition of spouse to include persons who cohabited as spouses continuously for a period of not less than 2 years, thus placing common law spouses on the same footing as married spouses. 3)The property was valued as at the date of application. Neither party made any submissions with respect to the identification or value of assets as at September 2000 or date of trial. The parties agreed with the exception and value of the shares and that the value of the RRSPs should be reduced by 33% to account for tax. Household goods and personal assets were divided equally. 4)It would not be unfair and inequitable to allow the exemption of $107,994 for the defendant's shares ($370,000 at date of application less his 1999 personal tax rate of 21%). His negotiated settlement was the best evidence of their value. The defendant established a prima facie claim to an exemption for shares owned by him when they commenced cohabitation. The plaintiff received the benefit of using Walker Agro vehicles and gasoline without charge. 5)There was an unequal division of the family home as the defendant bore its maintenance expenses since separation. The plaintiff's share was reduced by $1,832.74 for half of those expenses. 6)Even if an oral agreement were found to exist, the court would decline to order other than equal division of family property having regard to all the circumstances. They shared household expenses throughout the relationship. The defendant paid accounting and legal fees to obtain the value of the shares from his family. The plaintiff paid for utilities, food and rent while the defendant contributed to the day-to-day expenses if the plaintiff was unable to meet them and for entertainment and made the mortgage payments when they bought the house. 7)Each was to pay their own costs.