J. U.F.C. A.D. 1993 J.C.S. IN THE COURT OF QUEEN'S BENCH JUDICIAL CENTRE OF SASKATOON BETWEEN: GREG FEATHERSTONE PETITIONER (RESPONDENT BY COUNTER-PETITION) and CONNIE MAUREEN FEATHERSTONE RESPONDENT (PETITIONER BY COUNTER-PETITION) S. Whelanfor the petitioner (husband) P. Bitzfor the respondent (wife) JUDGMENT NOBLE J. (Supplementary to Judgment of November 19, 1993) June 3, 1994 In November 1993 following trial involving the divorce of the parties, including corollary relief on such questions as spousal maintenance and the division of the parties' matrimonial property, rendered judgment in which left the issue of the division of property until later date for reasons that outlined at that time. said as part of the order: If the husband shall resume livestock operation on the farm then the division of the balance of the property shall be postponed to determine whether or not the profits therefrom (if any) do lower the debts outstanding enough that it becomes, in the husband's opinion, viable farm operation which he wishes to continue. To facilitate this proposal would postpone the final division of property to May 15, 1994 at which time the whole issue can be reviewed. If the husband does not or cannot resume livestock operation on the farm once he takes possession then the entire farm assets save the Oldsmobile car shall be sold, the debts paid and the balance of the proceeds from such sale, if any, shall be divided between the parties. In this event then the share of the wife in any proceeds of the sale shall be reduced by the value of the 1990 Oldsmobile which fix for this purpose at $9,000.00 in order to achieve 50% split of the assets to each party in accordance with the Act. The petitioner (husband) did not pursue livestock operation on the farm for number of reasons, one of which being the fact that he required surgery on his back making it impossible for him to physically do the work. In addition his financial circumstances, which were dismal at the time of my judgment, became even worse in 1994 and as result he made voluntary assignment into bankruptcy on February 14, 1994. As a result a hearing date was set for May 13 atwhich I was asked in accordance with my prior judgment tocomplete the division of matrimonial property. In additionthe petitioner filed a motion seeking a variation of thespousal maintenance order I made in November in light of hisbankrupt financial situation and his inability to earn anyincome at this time. Maintenance Issues shall deal with the application to vary my previous maintenance order first. The petitioner did pay the respondent $2,300.00 by way of maintenance out of the proceeds of certain barley he sold privately. The respondent claims this was in violation of my original order prohibiting the sale of any assets of the marriage without consent of the other party or the Court. While view the petitioner's action as contrary to my order do not condemn him for it because it is clear did not consider at the time made the order the difference between income producing assets such as grain on hand and capital assets which were what really intended to prohibit the sale of when made the order. In my view the petitioner required income to live on and the barley fell into that category. In any event he paid one half the net proceeds to his wife which covered the maintenance payments ordered for November, December, January and $300.00 of the $1,100.00 payment which came due on February 1. He is now in arrears $800.00 for February and $1,100.00 for March, April and May for total of $4,100.00. The petitioner argues that for the foreseeable future he will be unable to make any maintenance payments to his former wife. The evidence supports this position so Ihereby order that there shall be a variation of the previousmaintenance order down to the nominal sum of $1.00 per monthpayable by the petitioner to the respondent commencing June 1,1994 and continuing thereafter until further order of theCourt. The respondent can renew her application for maintenance at such time as she concludes the petitioner's financial circumstances warrant. That leaves the question of what to do with the $4,100.00 arrears still owing. Counsel for the respondent seeks to have this amount set off against the petitioner's share of the matrimonial property as means of collecting it. The petitioner argues that his failure to pay relates to his physical disability at the moment and his bankrupt finances. am inclined to agree with the petitioner at least to the extent of the arrears which accumulated after he assigned into bankruptcy. There has been substantial change in his circumstances since my earlier judgment when the hope was that he could arrange to carry on livestock operation and revive the farm income. As result propose that he shall be required to pay the $800.00 arrears of maintenance for February but that the balance of $3,300.00 be cancelled. The sum of $800.00 shall be set off against his share of the matrimonial property division in favor of the respondent. Division of Matrimonial Property Issues This aspect of this dispute has seen some important changes take place since ordered equal division of the property in November 1993. The fact that the petitioner did not take up farming and his subsequent decision to assign into bankruptcy makes the calculation of what each party hopes to recover from the marriage assets problematic at best. Some assets such as the home quarter are clearly exempt although even there it is not possible to say how much would be left to divide between the parties after payment of the current encumbrances on the title. The farm machinery may be exempt to some degree although it is not clear how much the sale of the machinery and equipment will bring. The trustee in bankruptcy will sell it by auction and while he believes it will bring something close to the estimated value of $48,200.00, no one can be certain. The 1989 Ford truck in the possession of the petitioner is exempt and the parties accept the trustee's net value of $5,975.00. In addition two assets, the Oldsmobile car and the household furnishings became the property of the respondent by my order of November 19, 1993. The balance of the assets including the remaining farm lands, the parties equity in Saskatchewan Wheat Pool and grain on hand would normally go to satisfy the unsecured creditors of the respondent under his bankruptcy. As result of the bankruptcy it is simply not possible to determine at this point in time how much either of the parties can hope to recover from the equal division of the property pursuant to The Matrimonial Property Act, S.S. 1979, c. M-6.1. However, counsel for the respondent suggests that include all of the property in my order dividing the assets because he intends to take the position that the respondent's share of those assets may be subject to constructive trust and should he succeed in that contention then the trustee in bankruptcy would not be able to claim her share of those assets for distribution to the unsecured creditors of the petitioner. Since this is matter in issue between the respondent and the trustee shall base my calculations for division of property on all of it and take no position on those items which may or not be exempt under the bankruptcy proceedings. My approach will therefore be to make the division on the basis of the values indicated by the evidence including, in particular, the valuations determined by the trustee in bankruptcy (see Exhibit P-5). As see these assets that are available for division in whole or in part, they can be stated as follows (rounded to even numbers in recognition that they are estimates): Petitioner'sRespondent's AssetNet Value Share Share 1.Home and $34,500.00$17,250.00$17,250.00 residence 2.Household furniture$ 2,500.00$ 2,500.00* and effects 3.1989 Ford Truck$ 5,975.00$ 5,975.00* 4.Oldsmobile auto$ 9,000.00$ 9,000.00* 5.Farm machinery$29,600.00$14,800.00$14,800.00 6.Saskatchewan $12,800.00$ 6,400.00$ 6,400.00 Wheat Pool equity (estimated) 7.Grain and silage 2,630.00$ 1,315.00$ 1,315.00 on hand 8.Balance of farm nil nil nil lands leased or owned Totals$97,005.00$45,740.00$51,265.00 Indicates party that will retain possession of asset. Currently the respondent's share as have calculated it exceeds the petitioner's share by $5,500.00 (rounded). Equal division would give each approximately $48,500.00 which means that on the basis of the foregoing the respondent's share must increase by $2,750.00 and the petitioner's share must decrease by similar amount. However, counsel for the respondent claims certain set-offs accrue to the wife which must be taken into account. These include the following: (1)reimbursement for car payments she made on the Oldsmobile $1,082.00 (2)unpaid maintenance February to May included $4,100.00 (3)+ grain sold in November $2,300.00 (4)+ Canadian Wheat Board advance $4,487.00 (5)reimbursement of legal fees $6,600.00 shall deal with these items seriatim: (1)The car payments these are owing to the respondent since the petitioner admittedly defaulted after the November payment was made; (2)Unpaid maintenance have already dealt with this item and allow $800.00 being the balance of the February payment due. The rest is cancelled. (See above) (3)Grain sold in November As indicated above disallow this part of the claim; (4)+ of the Canadian Wheat Board advance have concluded based mostly on the petitioner's evidence that while this was matrimonial asset that the petitioner did not waste the proceeds of the advance. He indicates that he received almost $9,000.00. Some of it went to pay debts, some to legal fees, $1,100.00 to obtain Class truck driver's license and the balance to live on. note he had the two children to support and rent to pay. All in all cannot conclude he wasted this asset to the detriment of the wife and so decline to allow this aspect of her claim. (5)Reimbursement of legal fees In my opinion this part of the respondent's claim for set- off should be allowed. There is no doubt the petitioner used assets to pay his legal fees. The respondent should be granted the same privilege. (6)The respondent admitted selling cattle squeeze for $400.00. The wife is entitled to her share of that sale. Accordingly, the wife becomes entitled to the following set-off to be included in her share of the matrimonial property division: (1)Car payments made $1,082.00 (2)Unpaid maintenance 800.00 (3)Legal fees $6,600.00 (4)Share of cattle squeeze sold 200.00 Total $8,682.00 The division of property shall therefore be as follows: Total for division $97,000.00 (rounded) Respondent's share$48,500.00 Add set-off items$ 8,862.00 Total$57,362.00 Deduct respondent's asset currently held in excess of the half share of the petitioner's$ 2,750.00 $54,612.00 $54,600.00 (rounded to) Balance and share of the petitioner's $42,400.00 As have already stated this division is based on asset values which are at this stage problematical and indeed by including some assets which may not be exempt in whole or in part from the bankruptcy proceedings. On thebasis of the foregoing calculations I have granted therespondent wife 56% of the estimated asset value and therespondent husband 44%. When all of the assets have beenliquidated and it is determined what amount is actuallyavailable for division then I direct it shall be divided basedon the foregoing analysis 56% to the respondent and 44% to thewife. Each side shall bear their own costs.
This decision is supplementary to [1993]TWL QB93506. Applications to further divide matrimonial property and to vary spousal maintenance. The husband had declared personal bankruptcy since the date of the original orders obtained under the Matrimonial Property Act and Divorce Act. HELD: 1)The husband's obligation to pay maintenance was reduced to $1 per month and the arrears accruing after the date of his assignment into bankruptcy were cancelled.  2)The wife's counsel requested that the court value and divide all of the matrimonial property equally notwithstanding the bankruptcy, because she might pursue a constructive trust claim for her 1/2 share as against the husband's trustee. 3)The court valued all of the matrimonial property and determined that 56% of this value should be paid to the wife, and only 44% to the husband, given amounts he had spent since the separation.  4)The court left unresolved the issue of which matrimonial assets might be exempt under the Bankruptcy Act and therefore available to the wife.