



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Storey v. Terry,









2020 BCCA 30




Date: 20200122

Docket: CA46123

Between:

Kevin Allen James Storey

Respondent

(Claimant)

And

Michelle Carla Terry

Appellant

(Respondent)




Before:



The Honourable Madam Justice Saunders

The Honourable Mr. Justice Fitch

The Honourable Mr. Justice Butler




On appeal from:  An
order of the Supreme Court of British Columbia, dated
May 1, 2019 (
Storey v. Terry
, 2019 BCSC 674, Nanaimo Docket E80768).

Oral Reasons for Judgment




The Appellant, appearing in person:



M.C. Terry





Counsel for the Respondent:



R. Yousefi

A. Ngom





Place and Date of Hearing:



Vancouver, British
  Columbia

January 20, 2020





Place and Date of Judgment:



Vancouver, British
  Columbia

January 22, 2020








Summary:

The appellant appeals a
summary trial order providing for the equal division of the parties interest
in a jointly owned home following their four and a half year marriage‑like
relationship. The appellant lived in the home after separation and paid the
mortgage, property taxes and insurance without contribution from the respondent
for approximately two years. Held: Appeal dismissed. The judge did not err in
rejecting the appellants claim for reapportionment of the family property on
the basis that her contribution to the home was greater following the
separation. Nor did the judges order effectively require the appellant to
assume a greater share of the family debt. The judge properly considered all of
the circumstances including the fact that the appellant had sole occupancy of
the family home while the respondent had to provide housing for himself.

[1]

BUTLER J.A.
: Michelle Terry appeals orders dividing property and
debt made following a summary trial application in this family proceeding. The
appellant and the respondent, Kevin Storey, lived in a marriage-like
relationship for four and a half years before separating. They had each been
previously married and for the most part kept their personal financial assets
separate after they began to cohabit. The parties jointly purchased a home (the
Merrill Lane property) in which they resided and they maintained a joint bank
account to deal with expenses relating to that home. The division of the net
equity in the Merrill Lane property was the primary issue in the court below
and is the focus of this appeal.

[2]

The respondent issued the notice of family claim in February 2017 but
the matter did not proceed to a summary trial until March 2019. In spite of
that delay, the pleadings remained somewhat unclear at the commencement of the
summary trial. In his amended notice of family claim filed in November 2018,
the respondent sought an order for an unequal division of the family property and
family debt but did not indicate what division he sought until the start of the
hearing. The amended notice of family claim sought a determination that the
assets the respondent held prior to the commencement of the relationship were
excluded property. In November 2018, he filed the notice of application for a
summary trial in which he raised for the first time a claim for occupational
rent based on the fact that the appellant continued to reside in the Merrill
Lane property after he moved out in July 2016.

[3]

By way of a counterclaim, the appellant also sought an unequal division
of family property and debt because she paid all of the expenses to maintain
the Merrill Lane property after the respondent stopped contributing to
those expenses at the end of March 2017. She also advanced a claim for excluded
property. In addition, in the materials she filed in response to the summary
trial application, she alleged for the first time that the parties had an oral
agreement to keep their own property and debt separate during their
relationship.

[4]

Following a three-day summary trial hearing, the judge ordered that the
net proceeds from the sale of the Merrill Lane property be divided equally
between the parties and that any funds remaining in their joint bank accounts
be divided equally. She found that the parties had an oral agreement to
maintain the rest of their property separate. Accordingly, she reapportioned
the remaining family assets so that each party would retain 100% of the
increase in their respective pension benefits and 100% of the increase in value
of the real property held prior to the commencement of the relationship. The
appellant was also entitled to retain 100% of the increase in the value of her
RRSP. The judge also reapportioned the family debt so that each party was
responsible for 100% of their personal debt. The judge dismissed the
respondents claim to occupational rent and the appellants claim that the
respondent should contribute to mortgage payments, property taxes and other
expenses incurred to maintain the Merrill Lane property for the period from
March 27, 2017 until the date of trial. She ordered that each party bear
their own costs.

[5]

The appellant advances various grounds of appeal directed at overturning
the judges orders in relation to the Merrill Lane property. In brief, she says
the judge erred by either failing to order an unequal division of the net
equity in that property or by failing to require the respondent to contribute
to the cost of maintaining the property from March 27, 2017 to the date of
trial. She says that the effect of the judges order is to reapportion family
debt in favour of the respondent. She also appeals the costs order. For the
reasons that follow, I am of the view that the appellant has failed to identify
any error of law or fact made by the judge and I would dismiss the appeal.

Summary Trial Decision

[6]

The reasons for judgment are indexed as:
Storey v. Terry
, 2019
BCSC 674 (the Reasons). The judge began the Reasons by noting the lack of clarity
in the pleadings and the fact that the appellants claim of an oral agreement
and the respondents claim for occupational rent were made late in the day.
Nevertheless, she was of the view that the parties had a fair opportunity to
respond to those claims. The judge agreed with the parties that the case was
suitable for determination by summary trial. She concluded that she was able to
find the facts necessary to decide the issues on a summary trial application
and that it would not be unjust to do so.

[7]

The Reasons set out the assets and debts of the parties. The judge noted
that the parties each owned a home prior to purchase of the Merrill Lane
property. They both retained those properties and rented them out during the
relationship. Those properties increased in value by a similar amount during
the parties cohabitation. She described the circumstances leading to the joint
purchase of the Merrill Lane property. The respondent refinanced the mortgage
on his existing property in order to make the down payment on the Merrill Lane
property. The total down payment was approximately $28,500. The parties agreed
that the appellants half of the down payment was to be treated as a loan from
the respondent to the appellant that she was required to repay. The respondent
maintained that the appellant failed to repay her half of the down payment and
the appellant asserted she had done so. The judge did not resolve that issue,
although she recognized that at least some repayment was made by the appellant.

[8]

The parties interest in the Merrill Lane property was their major
asset. The equity in the home at the time of trial was approximately $313,000.
The judge noted that the appellant sought reapportionment on the basis that she
had been entirely responsible for maintaining the Merrill Lane property,
including by paying the mortgage, property tax and insurance, from late March
2017 to the date of trial. The respondent sought an unequal division of that
property on the basis of his disproportionate contribution to the original
purchase price and the fact that the appellant had sole occupancy after the
date of separation.

[9]

The parties were employed as letter carriers and each had an employee
pension through the Canada Post Corporation Registered Pension Plan. The
respondent sought an order dividing the pension benefits accrued during
cohabitation at source. The appellant maintained that the parties pension
benefits were to remain their separate property pursuant to the oral agreement.
The appellants pension entitlement was significantly less than the
respondents given her much shorter period of employment. However, she made
significant contributions to an RRSP before, during and after cohabitation. She
maintained that she was entitled to retain the full amount of her RRSP as a
result of the oral agreement.

[10]

The evidence established that the respondent owed approximately $27,000
on various personal lines of credit while the appellant owed approximately
$3,000 on a line of credit. The appellant maintained that the parties agreed to
be personally responsible for their own debt while the respondent sought an
order that they were to be equally responsible for those debts.

[11]

The judge correctly set out the principles regarding the division of
family property and debt with reference to relevant provisions of the
Family
Law Act
, S.B.C. 2011, c. 25 [
FLA
]. She noted that pursuant to
s. 81 of the
FLA
, spouses have a presumptive entitlement to an
equal interest in all family property and are equally responsible for family
debt. She further noted that family property includes the amount by which the
value of excluded property increases during the period of the relationship:
s. 84(2)(g). She recognized that family debt includes financial
obligations incurred after separation for the purpose of maintaining family
property: s. 86. She referred to s. 87 of the
FLA
for the
principle that family property or debt is to be determined as of the date of
the trial and must be based on the fair market value of the property. She noted
that s. 92 permits spouses to make agreements to divide property and debt
equally or unequally or to exclude as family property or debt, property or debt
that would otherwise be included. Finally, she noted that s. 95 of the
FLA
allows the court to make an order for unequal division of family
property or debt if an equal division would be significantly unfair. She set
out the factors to be considered under s. 95(2) including that a court may
take into account the terms of an oral agreement.

[12]

Referring to the affidavit evidence provided by the parties and taking
into account their personal circumstances, the judge found that the parties had
an oral agreement in relation to assets and debts other than the Merrill Lane
property and joint bank accounts. She concluded that the parties agreed that
the property brought into the relationship, including their homes and pensions,
would remain separate. Further, she concluded that they had separate control
over discretionary spending and separate responsibility for any debt accruing as
a result of personal overspending: at paras. 5663.

[13]

The judge considered whether the family assets that were not included in
the oral agreement should be divided equally. She recognized that an unequal
division of family property should only be ordered where it would be
significantly unfair to order an equal division. Referring to
Jaszczewska v.
Kostanski
, 2016 BCCA 286, she noted that to justify an unequal division of
family property, a court must find that the unfairness is compelling or
meaningful having regard to the factors set out in s. 95(2): at paras. 6567.

[14]

The judge concluded that there were no circumstances warranting an
unequal division of the Merrill Lane property:

[70]      Because the Merrill Lane Property is to be valued
as of the date of the summary trial, the parties are presumptively entitled to
share in any post-separation increases in the value of the Property. This
entitlement exists independent of the parties' respective contributions to the
post-separation increase in value:
Jaszczewska
at para. 39. This is
not to say that post-separation contributions are irrelevant, but rather that
courts must be constrained in relying on post-separation contributions as
warranting a departure from the presumption of equal division:
Jaszczewska
at para. 41.

[71]
Jaszczewska
provides an example of
exceptional circumstances that may warrant an unequal division of family
property based on post-separation contributions. In that case, one spouse had
designed and rebuilt a new residence after separation which enhanced the value
of the property beyond market trends. The present case, by contrast, concerns
the more typical scenario in which one spouse has remained in the family home
post-separation, prompting debate as to the relative economic advantages of staying
in the home or having to find new accommodations.

[72]      I conclude that an equal division of the proceeds
of the sale of the Merrill Lane Property would not be significantly unfair to
either party. While the respondent has made a disproportionate contribution to
reducing the mortgage debt post-separation, the claimant has had to find
alternate accommodations that, for at least some portion of time, has required
him to pay rent. Also relevant to the analysis is the claimant's original
contribution to the deposit and down payment on the Merrill Lane Property
purchase.

[73]      In the circumstances, I
find that neither party has provided persuasive reasons to depart from the
presumption of equal division of the Merrill Lane Property. For the purpose of
clarity I should note that I have considered the claimant's claim for
occupational rent as relevant to the issue of whether the Merrill Lane Property
should be unequally divided. To the extent that the claimant seeks compensation
from the respondent for occupational rent as an independent claim, I dismiss
the claim.

[15]

On the issue of costs, the judge reasoned at para. 81:

[81]      Given the manner in
which this application proceeded, and the parties divided success, I consider
it appropriate to order that each party bear their own costs.

Issues on Appeal

[16]

The appellant alleges eight errors in judgment. She says the trial judge
erred in ordering each party to bear their own costs. The other alleged errors
focus on the judges decision to equally divide the equity in the Merrill Lane
property. Most of the alleged errors are based on the appellants assertion
that the judge made an order dividing family debt unequally. This assertion is
based on the appellants characterization of the payments she made to maintain
the property after the separation as family debt. She says that the judge erred
by failing to apportion those debts equally between the parties. In advancing
these arguments, the appellant says the judge made errors of law and fact.

[17]

I do not intend to separately examine each of the errors alleged but
would restate the grounds of appeal as follows:

i.

Did
the judge err in law or fact in ordering equal division of the parties equity
in the Merrill Lane property?

ii.

Did the
judge err in ordering each party to bear their own costs?

Division of Equity in the Merrill Lane Property

Standard of Review

[18]

This appeal concerns a question of reapportionment. The judge considered
the issue to be the reapportionment of the parties interest in the Merrill
Lane property. The appellant now says the case raises an issue of the
reapportionment of family debt. Whether debt or property is being considered
for reapportionment, the same standard of review applies. Reapportionment is an
exercise of a trial judges discretion taking into account the legislation and
findings of fact. An appellate court is justified in intervening in a trial
judges exercise of discretion only if the trial judge misdirects himself or
herself or is so clearly wrong as to amount to an injustice:
Hickey v.
Hickey
, [1999] 2 S.C.R. 518 at para. 12. This Court has adopted this
standard of review for questions of reapportionment under the relevant family
law legislation:
Karisik v. Chow
, 2010 BCCA 548 at para. 51.

[19]

The appellants arguments are based on the allegation that the judge
erred in her appreciation of the facts by misunderstanding or failing to
consider relevant evidence. Alternatively, she says that the judge misapplied
the law to the facts the judge found. The appropriate standard of review for
such errors is set out in
Van de Perre v. Edwards
, 2001 SCC 60
at paras. 1315. A court can only intervene if the judge erred in law or
made a material error in her appreciation of the facts. An omission is not a
material error unless 
it gives rise to the
reasoned belief that the trial judge must have forgotten, ignored or
misconceived the evidence in a way that affected his conclusion. Without this
reasoned belief, the appellate court cannot reconsider the evidence.: at para. 15.

[20]

As I am of the view that the appellant
has not identified an error of law, the standard of review applicable to the
errors alleged is deferential
.

Analysis

[21]

The appellants arguments about the Merrill Lane property assume that
the judge ordered an unequal division of family debt. The judge made no such
order. The Merrill Lane property was the only significant asset to be divided
between the parties and they each sought unequal division. The judge ordered
the net proceeds of sale of the Merrill Lane property to be divided equally between
the parties. The Reasons, which responded to the arguments advanced at trial,
explain why the judge ordered an equal division of the equity in the Merrill
Lane property without any reapportionment for the appellants contribution to
the expenses of that property after separation, and without any reapportionment
to the respondent or compensation for occupational rent. While the judge did
not directly state that she was dividing the family debt in relation to the
Merrill Lane property equally, that is what she did; she deducted the
outstanding principle on the mortgage to arrive at the approximate equity in
that property. In dividing the family property as of the date of the summary
trial application, the judge followed the provisions of s. 87 of the
FLA
that require property to be valued on its fair market value as of the date of
the hearing.

[22]

The appellant argues that the effect of the order was to divide family
debt unequally. She says this is because the payments she made to the mortgage,
property taxes and insurance after the respondent stopped contributing to those
expenses were made for the purpose of maintaining that property. She stresses
that during the time she made those payments, the principal owing on the
mortgage was reduced by approximately $26,000. She says that the payments she
made, or some portion of them, are family debt because of the provisions of
s. 86(b) of the
FLA
:

86        Family debt includes all financial obligations
incurred by a spouse

...

(b) after the date of separation, if incurred for the
purpose of maintaining family property.

[23]

I disagree with the appellants characterization of the expenses
incurred after separation as family debt. Rather, the judge considered the
appellants payment of those expenses along with other circumstances relevant
to the division of the equity in the Merrill Lane property. Subsection 86(b)
does not require that all payments made to maintain property after separation
be regarded as family debt to be divided equally. As this Court recognized in
Jaszczewska
,

entitlement to an equal share of the family property exists independent of
use or contribution:

[38]       The
FLA
starts with the presumption found
in s. 81 that family property is to be equally divided. As I read s. 81,
each spouse is presumptively entitled to an undivided half interest in all
family property, regardless of their respective use or contribution.  But as I
read it, the phrase in s. 81(a) refers to the basis of entitlement to
family property. Entitlement exists independent of contribution or use, and the
extent of that entitlement on separation is defined in s. 81(b).

[39]      Also, because family
property is generally valued on the date of the hearing, the parties will
presumptively share in any post-separation increases in the value of family
property. Once again, because of s. 81, this entitlement exists
independent of the parties' respective contribution to the post-separation
increase in value.

[24]

When faced with claims for unequal division of an asset of significant
value based on alleged differences in contribution, a court must consider all
of the provisions of Part 5 of the
FLA
. That is what the judge did here.
She recognized that property and debt are presumptively to be divided equally. The
values of the property and debt are to be determined as of the date of trial
and the court can order unequal division only where it would be significantly
unfair to divide property and debt unequally. She set out and applied the test
for significant unfairness as explained in
Jaszczewska
at paras. 4143.
Any unfairness must be significant or weighty having regard to the factors set
out in s. 95(2) of the
FLA
. In order for a trial judge to
reapportion the family property or family debt, there must be something
objectively unjust, unreasonable or unfair in some important or substantial
sense:
Jaszczewska
at para. 42.

[25]

In
Jaszczewska,
this Court found it significant that the listed
factors in s. 95(2), while not exclusive, do not include contributions to
the maintenance of property. The Court explained why the circumstances in which
unequal contributions to the maintenance of property may be considered and
relied upon is to be much constrained:

[43]      The determination of whether an equal division
would be significantly unfair is also guided by a more precise identification
of relevant factors than was found in the
FRA
. Importantly, the
Legislature did not include in s. 95(2) the principle of relative
contribution found in s. 65(1)(f) of the
FRA
. Under s. 65(1)(f),
a court could consider circumstances relating to the acquisition, preservation,
maintenance, improvement or use of property. Section 95(2), by comparison, refers
rather narrowly to career contributions (95(2)(c)) and to post-separation
increases in value beyond market trends caused by one spouse (95(2)(f)). I
agree with the judge's view that if relative contribution to the acquisition,
preservation, maintenance or improvement of family property during the
relationship was intended to be a significant factor or one frequently relied
on in justifying the conclusion that the equal division of family property is
significantly unfair, the Legislature would have said so. Allowing relative
contribution to become a regular consideration in the context of s. 95
would likely create uncertainty and complexity. This would be contrary to the
legislative objectives discussed earlier that underlie the
FLA
division
of property regime.

[44]      Having said that, in enacting s. 95(2)(i) the
Legislature recognized that there may be factors other than those listed that
could ground significant unfairness. Hence, while the Legislature intended to
limit and constrain the exercise of judicial discretion to depart from equal
division, it did not provide a closed list of factors and it did not eliminate
the discretion. Accordingly, in my view, one cannot read the
FLA
as
abolishing unequal contribution as a factor that may be relevant to
reapportionment, although
the circumstances in which it may be considered
and relied on are intended to be much constrained
.

[Emphasis added.]

[26]

The judge concluded that dividing the equity in the Merrill Lane
property would not result in a situation that was unjust, unreasonable or
unfair in an important or substantial sense even though the appellant paid the
expenses for maintenance of the property and reduced the principal on the
mortgage after March 27, 2017. In doing so, she considered the fact that the
respondent had to provide for his own accommodation once he left the Merrill
Lane property. The respondents affidavit set out the steps he took to do that:
he provided various services to friends in lieu of paying rent; he worked at an
inn that gave him room and board as part of his compensation; and he ultimately
moved into his pre-owned home as a result of which he lost the rental income
that he otherwise received. The judge also took into account the benefit that
the appellant received by residing in the Merrill Lane property without paying
rent to the respondent.

[27]

In my view, the judge did not err in taking these circumstances into
account. The approach she took has been approved in this Court in
Stasiewski
v. Stasiewski
, 2007 BCCA 205, and
Shen v. Tong
, 2013 BCCA 519. The
proper approach to considering claims for occupational rent where one spouse
leaves the family property was accurately summarized by Justice Fleming in
J.D.G.
v. J.J.V.
, 2016 BCSC 2389:

[226]    At common law, a co-tenant is entitled to claim
occupation rent when he or she has been ousted from property. Absent an ouster
from the property, there is no claim. However, if the tenant in possession
seeks to recover property expenses from the departed tenant, the court retains
a discretion to set off occupation rent against the expense claim. There is no
absolute right to such a claim or set off. Occupation rent is an equitable
remedy (
L.M.R
. at paras. 27-29, 31, 32).

[227]    In
Stasiewski
the
Court of Appeal held that in family proceedings occupation rent is not a
stand-alone claim but should be considered in deciding whether to order an
unequal division of family property. In
Shen v. Tong
,
2013 BCCA 519
, Justice Smith in concurring
reasons identified the objective of an award for occupation rent as doing what
is "'just and equitable' between the parties, albeit within the parameters
of s. 65(1) of the
FRA
" (at para. 94).

[28]

The judge properly did not treat the claim for occupation rent as a
stand-alone claim but treated it as a factor to be considered because the
appellant, the tenant in possession, was seeking to recover expenses paid to
maintain the property from the respondent. It is evident from the whole of the Reasons
that she considered all of the circumstances in order to divide the equity in
the Merrill Lane property in a way that was just and equitable. She properly
considered the additional contributions made by the appellant post-separation,
the fact that the appellant was in possession of the family property and the
respondent incurred expenses or losses in order to provide housing for himself.
I see nothing wrong in principle with the approach taken by the judge and would
not interfere with her exercise of discretion. Indeed, I would agree that equal
division of the Merrill Lane property is just and equitable taking all of the
circumstances into account.

[29]

While this is a full answer to this issue, I should note that I am of
the view that there is no merit to the allegation that the judge committed
errors of fact, let alone errors that are palpable and overriding. The finding
at para. 72 that the claimant has had to find alternate accommodations
that, for at least some portion of time, has required him to pay rent was
available to the judge on the evidence of the respondent.

[30]

The appellant also says the judge erred or misunderstood the evidence by
taking into account the respondents provision of the down payment for Merrill
Lane, without a finding of fact considering this was a loan. I do not see any
error in the judges approach. She merely stated that the respondents original
contribution to the deposit and down payment on the Merrill Lane property was
relevant to the analysis, presumably because those contributions enabled the
purchase of the property which proved to be a good investment for the parties.

[31]

One of the appellants principle arguments is that the order fails to
give effect to the presumption in s. 81 that each spouse has equal
responsibility for family debt. I do not agree. The appellants arguments ask
this Court to require the respondent to reimburse her for half of the expenses
she incurred to maintain that property without having regard to the benefit she
received from residing in the property or the costs the respondent incurred
when he left. As I have indicated, the judge approached this issue correctly by
taking a holistic view of all of the circumstances relating to the use,
occupation and maintenance of the Merrill Lane property and equally dividing that
property, the value of that property, net of the mortgage, at the date of
trial.

[32]

At the hearing, the appellant argued that in order to make the payments
for the mortgage, property tax and insurance for the Merrill Lane property she
had to access her high interest savings account that held a compensation
payment she received from WorkSafe B.C. She notes that this is excluded
property and says the judges order effectively reapportioned her excluded
property in favour of the respondent. I would reject this argument. The judge
made no order reapportioning excluded property. Rather, she accepted the
appellants submission that the parties should retain their personal assets
including their savings and be responsible for their personal obligations. The
judge noted that the parties each exercised independent discretion over
allocation of their income and personal savings. The judges order allowed the
appellant to retain the full amount of the substantial increase of $160,000 in
her RRSP savings account during the course of their relationship that was
facilitated by the appellants bi-weekly contributions to those savings. The
appellants suggestion that she should be compensated in some way for the
allocations she made to savings and expenses after the parties relationship
ended is not only inconsistent with the provisions of the
FLA
, it is
contrary to her position at trial that was accepted by the trial judge.

[33]

Finally, I am of the view that there is no merit to the appellants
assertion that the judge failed to apply the proper test when considering
significant unfairness, whether of property or debt. The judge properly
considered the relevant provisions of the
FLA
and did not err in
applying the law to the facts she found.

Costs

[34]

The appellant says the judge made an error of fact by attributing the
failure to communicate equally between the [parties]. She said this was an
important factor that led the judge to order the parties to bear their own
costs.

[35]

An award of costs is discretionary and subject to limited appellate
review:
Hamilton v. Open Window Bakery Ltd.
, 2004 SCC 9 at para. 27.

An appellate court should not interfere with a discretionary award unless
satisfied the judge misdirected herself as to the law, or the decision is so
clearly wrong as to amount to an injustice:
Elsom v. Elsom
, [1989] 1
S.C.R. 1367.

[36]

The judge ordered the parties to bear their own costs because of the
manner in which the application proceeded and the divided success. While the
manner in which a summary trial application proceeds is not usually relevant to
a costs order, the judges assessment of which party was substantially
successful is highly important. The main issue to be determined was division of
the Merrill Lane property, the family asset of real substance. Each party applied
for an unequal division. The judge rejected the claims of each party for
reapportionment and ordered an equal division. The judges assessment as to the
relative success of the parties was not unreasonable.

[37]

I see no error in principle in the approach taken by the judge.
Accordingly, I would also dismiss this ground of appeal.

[38]

SAUNDERS J.A.
: I agree.

[39]

FITCH J.A.
: I agree.

[40]

SAUNDERS J.A.
: The appeal is dismissed.

The Honourable Mr. Justice Butler


