THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2005 SKCA 89 Date: 20050624 Between: Docket: 868 Leith Robert Stewart Dewar (Respondent) Appellant and Deborah Jane Ruskin (Petitioner) Respondent Coram: Cameron, Vancise, and Lane JJ.A. Counsel: Hal Wellsch for the Appellant Jeffrey Brick for the Respondent Appeal: From: 2003 SKQB 514 (CanLII) Heard: November 30, 2004 Disposition: Appeal Allowed Written Reasons: June 24, 2005 By: The Honourable Mr. Justice Cameron In Concurrence: The Honourable Mr. Justice Vancise In Dissent: The Honourable Mr. Justice Lane CAMERON J.A. [1] This appeal stems from proceedings under The Family Property Act, S.S.1997, c. F- 6.3, initiated by Deborah Ruskin, a nurse, against Leith Dewar, a doctor. The two had lived together for several years. She sought judgment distributing their property or its value equally between them. The property included house in Vancouver, which he had acquired some years earlier with the financial assistance of his parents, first in the form of gift from his mother in the amount of $125,000 and then in the form of loans from his parents in the amount of $100,000 each. [2] He contended the value of the house was exempt from distribution because he had acquired it before the commencement of the spousal relationship between the parties. Alternatively, he contended the gift and loans served to reduce the value available for distribution. [3] The trial judge disagreed. He held that Dr. Dewar had acquired the house after the commencement of the spousal relationship and then went to hold that Ms. Ruskin was entitled to an equal share of its value with no reduction owing to the gift or the loans. With that, Dr. Dewar appealed, saying the trial judge had erred in both respects. [4] Whether the trial judge erred in either respect is best considered in light of the material facts, the relevant provisions of The Family Property Act, and the distribution made by the trial judge. That will serve to identify the issues and set the stage for their analysis. I. The Material Facts [5] The parties, both of whom then resided in Vancouver, met in the summer of 1991 and began dating. He was twenty-nine-year-old medical graduate living in rented condominium and training to become surgeon. She was twenty-eight-year-old nurse living in an apartment and employed in one of the hospitals. Each was earning about $40,000 year. [6] few months later, in May of 1992, she left her apartment and began residing in his condominium. He was hospitalized at the time undergoing prolonged treatment for life-threatening illness, and she wanted to be nearer him. On leaving hospital later, he stayed with his parents for month while recuperating and then went back to the condominium, where the two began living together. They began sharing household expenses, sleeping with one another, having sexual relations, travelling and socializing together, visiting friends and family in common, and so on. [7] Some months afterwards his parents sold their farm in Langley, and in late 1993 or early 1994 his mother gave him $125,000 to be used to buy house. She did likewise for her only other child. His mother testified to giving the money to her son for his benefit alone, saying he and Ms. Ruskin were “boyfriend and girlfriend”, not “a couple,” for they had not married and, as far as she knew, had no plans to marry. [8] Then, in September of 1994, friend and colleague of his informed him that he and his wife were leaving Vancouver and would like to sell their home, small two bedroom bungalow located at 3996 West 31st St. The house had been appraised at $430,000. Dr. Dewar decided to buy it, and in doing so he: applied the $125,000 he had received from his mother toward the purchase price; borrowed $130,000 from the Hong Kong Shanghai Bank of Canada, giving it first mortgage on the house to secure the loan; and borrowed an additional $100,000 from each of his parents, applying $175,000 to the purchase price and the remainder to improvements including the construction of garage. The loans were made payable on demand, without interest, and were secured by mortgages in favour of his parents. [9] Ms. Ruskin was aware generally of the purchase of the house, and knew Dr. Dewar had received financial assistance from his parents, but she was not involved in the purchase and knew little of the details. [10] The two of them moved into the house shortly afterwards, in October of 1994. She paid him $600 to $700 per month toward the expenses associated with the house, as she had been doing when they were living together in his condominium. [11] Just under two years later, in the summer of 1996, as Dr. Dewar was about to complete his training in cardio-thoracic surgery, he was offered post in Regina. He accepted and then bought house in Regina located at 2231 Hanover Crescent. He bought it for $153,000. He paid $30,000 down and borrowed the remainder from the Hong Kong Shanghai Bank of Canada, granting it mortgage on the house to secure the loan. [12] As before, Ms. Ruskin was generally aware of the transaction but was not involved in it, financially or otherwise. It seems there was some doubt about whether she would accompany him to Regina, though that is not entirely clear. In any event she did accompany him and the two of them moved into the Regina house in October of 1996. He took up his medical practice, and she enrolled in the College of Arts at the University of Regina. [13] little over three years later, in January 2000, they separated. He remained in the home, and she moved to place of her own. [14] Then, on March 13, 2000 she applied for distribution of their property under The Family Property Act and for maintenance under The Family Maintenance Act, 1997, S.S.1997, c. F-6.2. In the months that followed she completed her studies at the University of Regina, receiving Bachelor of Arts degree, and then left for Vancouver where she rented home and resumed her nursing career. [15] At trial she sought to have the property owned by each of the parties, or its value, distributed equally between them. Inasmuch as this included the value of the Vancouver house, he took the position, as noted earlier, that its value was wholly exempt from distribution because he had acquired the house before the commencement of the spousal relationship, or was partially exempt because the gift he had received from his mother had found its way into the purchase of the house. He also took the position the loans he obtained from his parents when purchasing the house fell to be offset against the value of the property. II. The Relevant Provisions of the Act [16] Ms. Ruskin’s application under The Family Property Act amounted to an application for an order distributing the “family property” or its value equally between the parties. Generally speaking, family property is defined in subsection 2(1) of the Act to mean all property of whatever kind that is owned by one or both spouses as of the date of application under the Act. [17] Having regard for this, her application extended to the house in Vancouver, for Dr. Dewar still owned the house on March 13, 2000, the date of her application. His father was apparently looking after the property and overseeing its rental on his behalf, though that is neither here nor there. [18] Now, insofar as her application extended to this property, she was unable in principle to claim any right, title, or interest in the house itself. This is so because the house constituted an immoveable situated outside Saskatchewan: Hlynski v. Hlynski (1999), 1999 CanLII 12299 (SK CA), 176 D. L.R. (4th) 132 (Sask. C.A.). However, she was able in principle to claim half the value of the house pursuant to section 21 of the Act: Hlynski v. Hlynski. [19] Section 21, beginning with subsection 21(1), directs that family property or its value be distributed equally. This is predicated on the presumption, found in section 20, that spouses contribute equally in one form or another to the responsibilities of their partnership and are therefore entitled on its breakdown to share equally in the tangible fruits of the partnership, namely the family property or is value. This is so irrespective of which of the spouses actually owns this or that asset. But the entitlement to an equal share is subject to certain exceptions, equitable considerations, and exemptions. [20] The equitable considerations to which this entitlement is subject are referred to in subsection 21(2) and enumerated in subsection 21(3). Subsection 21(2) empowers the court to order an unequal distribution if satisfied, having regard for the equitable considerations mentioned in subsection 21(3), that equal distribution would be unfair or inequitable. [21] Among the equitable considerations mentioned in section 21(3) is “the value of family property situated outside Saskatchewan.” This is found in clause 21(3)(p) and allows the court to give one spouse larger share of the property or its value situated within Saskatchewan if the other owns property situated outside Saskatchewan that is not available for distribution on order of Saskatchewan court. In aid of this and other provisions of the Act, subsection 26(3) empowers the court to order payment by one spouse to the other of sum equivalent to the other’s interest: Hlynski v. Hlynski. [22] This, then, was the statutory foundation for Ms. Ruskin’s claim to half the value of the Vancouver property. To the extent her claim was subject to the equitable considerations mentioned in the Act, number of them came into play besides that having to do with the value of family property situated outside Saskatchewan as mentioned in clause 21(3)(p). And they served, potentially, to defeat or reduce her claim. These included the equitable considerations mentioned in clauses 21(3)(e), (n) and (o): (e) the contribution, whether financial or in some other form, made directly or indirectly by third party on behalf of spouse to the acquisition, disposition, operation, management or use of the family property; (n) interests of third parties in the family property; (o) any debts or liabilities of spouse, including debts paid during the course of the spousal relationship. [23] Notionally, this is where Dr. Dewar’s position regarding the loans he obtained from his parents to enable him to purchase the Vancouver property, and the mortgages in favour of his parents, came to rest. [24] Then there are the exemptions to which the entitlement to an equal share is also subject. These are found in section 23 of the Act. Among them are those found in subsections 23(1)(a) and (c), which exempt the fair market value, at the commencement of the spousal relationship, of family property (other than the family home or household goods) where the property is: (a) acquired before the commencement of the spousal relationship by spouse by gift from third party, unless it can be shown that the gift was conferred with the intention of benefiting both spouses…; or (c) owned by spouse before the commencement of the spousal relationship. This is modified by subsection 23(2), which provides as follows: 23(2) Subject to subsection (4), property acquired as result of an exchange of property mentioned in subsection (1) is exempt from distribution pursuant to this Part to the extent of the fair market value of the original property mentioned in subsection (1) at the commencement of the spousal relationship. [25] In principle, Dr. Dewar’s contention that the value of the Vancouver property was exempt from distribution in whole or in part came to rest on these provisions of section 23. III. The Distribution [26] The trial judge identified the family property and its value available for distribution under the Act in accordance with the following table: In the possession of Deborah In the possession of Leith 2231 Hanover Crescent, Regina $95,069.45 (in trust) $40,000.00 Household Effects/Art/Jewellery $55,000.00 2000 Ford Excursion $55,000.00 RRSP (after-tax value) $66,500.00 Savings/Cash $5,000.00 3996 West 31st St., Vancouver $427,000.00 Future Shop debt ($2,000.00) MasterCard ($7,463.23) Hong Kong Bank B.C. ($66,000.00) Hong Kong Bank Sask. ($76,000.00) Total Property $32,150.63 $741,569.45 [27] Having decided to distribute the property or its net value equally between the parties, the trial judge noted that in consequence Ms. Ruskin’s distributive share amounted to $386,860.04. Then, taking account of the property and its value in the possession of each of the parties, he ordered Dr. Dewar to pay her an equalization payment of $354,709.41. [28] As for the Vancouver property, the trial judge decided that its value fell to be taken into account without any exemption and fell to be distributed equally without allowance for any equitable consideration touching the loans in question. He explained this, saying ((2003), 2003 SKQB 514 (CanLII), 243 Sask. R. 126): [56] With respect to the Vancouver home, the respondent advanced the claim for an exemption on the basis it was owned prior to commencement of the spousal relationship. As it has been determined that the commencement of the spousal relationship is late June 1994 and the house was purchased in September 1994, there can be no claim for an exemption on this basis. [57] The respondent also claims that the debt to his parents associated with the Vancouver home should be taken into account. Each of his parents is said to have lent the respondent $100,000.00 in September 1994. The loans were later secured by mortgages signed by the respondent March 15, 1995. The mortgages are payable on demand. There has been no demand and no payments made. Collection of the loans appears to be statute barred by the Limitation Act, R.S.B.C. 1996, c. 266, ss. 3(5) and (6) after six years. Counsel for the respondent suggested the respondent had "confirmed" the debt or his obligation to repay on various occasions. However s. 5(5) of the Limitation Act requires any confirmation to be in writing and nothing has been produced. Statute barred debts are not considered in dividing family property. Russell v. Russell, 1999 CanLII 12313 (SK CA), [2000] W.W.R. 619; (1999), 180 Sask.R. 196 (C.A.) at paras. 113 and 114 (Sask.R.). [58] Apart from being statute barred, would not consider the "loans" from Leith's parents in the division of family property as it is far from clear the respondent will ever be required to repay them. It has now been approximately nine years. While Leith's income when he purchased the Vancouver home was perhaps unexceptional, he has had substantial income for the last number of years and made no payments…. [29] The appeal raises the following questions: 1. Did the trial judge err in finding that the parties had become “spouses” within the meaning of the Act in late June of 1994 and, therefore, err in concluding that the value of the Vancouver property was not exempt from distribution because the property had been acquired after commencement of the spousal relationship, not before? 2. Did the trial judge, in awarding the respondent an equal share of the value of the Vancouver property, err by: (a) failing to give effect to the gift of $125,000 the appellant had received from his mother for the purpose of assisting him with the purchase of house; and (b) declining to take into account the loans of $100,000 the appellant had obtained from each of his parents for the purpose of purchasing the Vancouver property? 1. The First Question [30] For the reasons that follow, am of the opinion the trial judge cannot be said to have erred in concluding that the appellant had acquired the Vancouver property after, not before, the commencement of the spousal relationship. [31] The term “spouse” is defined in section of the Act. The definition extends to persons who have cohabited as spouses for continuous period of at least two years. With this in mind, and having regard for the evidence before him, the trial judge found that as of late June 1994 the parties had cohabited with one another as spouses continuously for period of two years. [32] This reduces to finding of fact, and in my judgment it is sufficiently supported by the evidence as to preclude interference on appeal: H.L. v. Canada (Attorney General), 2005 SCC 25 (CanLII); C.P.C. (6th) 199. The significance of this is that the fact as found is sufficient in law to render the relationship between the parties spousal relationship, effective as of late June 1994, as contemplated by the definition of “spouse” found in section of the Act. [33] This is why say the trial judge cannot be said to have erred in concluding that the appellant, who acquired the Vancouver property in October of 1994, acquired it after the commencement of the spousal relationship, rather than before. It follows that the value of the property did not qualify for exemption under section 23(1)(a) of the Act. 2. The Second Question [34] This is more complex question, one that raises several issues [35] To begin with, the trial judge distributed the value of the Vancouver property on the premise its distribution was governed by sections 21 and 23 of the Act. The respondent, faced on appeal with the possibility the judge may have misapplied these sections, contended the matter was governed not by sections 21 and 23 of the Act but by section 22. [36] Section 22 concerns the distribution of “family home” and household goods. It directs that family home or its value be distributed equally (subject to any tax liability, encumbrance, debt, and so on), unless it would be unfair or inequitable to do so having regard only to any extraordinary circumstance or, where children are involved, to whom their custody is entrusted. The significance of this is that the equitable considerations mentioned in section 21, and the exemptions provided for by section 23, do not as such apply to the family home. The custody of children aside, it takes an extraordinary circumstance to warrant unequal distribution of the family home. [37] In relevant part, the term “family home” is defined as follows: 2(1) In this Act: “family home” means…property (b) that is or has been occupied by one or both spouses as the family home or that is mutually intended by the spouses to be occupied by one or both of them as the family home. [38] The definition twice speaks to the family home, rather suggesting an intention to limit the application of section 22 to one such home. This is reinforced by section 22(3) of the Act: 22(3) Where there is more than one family home, the court may designate to which family home this section applies, and any remaining family home is to be distributed in accordance with section 21. [39] In effect, this section empowers the court to designate to which family home section 22 applies, and then goes on to direct that any remaining family home be distributed in accordance with section 21. This Court considered the equivalent of this section in Mitchell v. Mitchell (1992), 1992 CanLII 8234 (SK CA), 41 R.F.L. (3d) 220 (Sask. C.A.).[1] The Court held that the section “specifically contemplates that the parties will have no more than one matrimonial home for the purposes of distribution”: Vancise J.A. on behalf of the Court at p. 231. [40] With this in mind, it might be noted that Ms. Ruskin’s application expressly identified the house in Regina as the “matrimonial home,” now known as the “family home.” Her application did not suggest that there were two such homes, the other being the Vancouver house, or that the value of the Vancouver house fell to be taken into account as though the house constituted the “matrimonial home”, or the “family home.” Understandably, she treated the Regina house as the matrimonial or family home. [41] Nor did the trial judge purport to designate the Vancouver house as the family home in exercise of the power afforded the court by subsection 22(3), and with view to distributing its value under section 22 instead of sections 21 and 23. Indeed, he addressed the distribution of the value of the house along the lines, first, of subsection 23(1)(c), exempting the value of property acquired before the commencement of spousal relationship, and second, of clause 21(3)(o), creating the equitable consideration regarding debts. [42] Nor, it might be added, did the circumstances lend themselves to designating the Vancouver property as the family home. On what basis would one designate the Vancouver house, rather the Regina house, as the family home? And for what purpose, if not that alone of artificially eliminating from play the equitable considerations mentioned in section 21 and the exemptions provided for by section 23? [43] Hence, disagree with the point that, inasmuch as the value of the Vancouver property featured in the distribution in question, the matter was governed by section 22 rather than sections 21 and 23 of the Act. [44] With that, turn to the trial judge’s treatment of the Vancouver property, having regard for the equitable considerations mentioned in section 21 and the exemptions provided for by section 23. [45] As is customary, the trial judge turned first to the exemptions provided for by section 23. More specifically, he turned to subsection 23(1)(c), which exempts from distribution the fair market value, at the commencement of the spousal relationship, of family property and its value (other than the family home and household goods), where the property is “owned by spouse before the commencement of the spousal relationship.” With this in mind he held that the value of the Vancouver property was not exempt from distribution because the property was acquired after the commencement of the spousal relationship, not before. That relationship, he found, had begun in late June of 1994, whereas the property was acquired by the appellant in September of 1994. [46] There the matter ended, as though this was the only exemption potentially available to the appellant on the facts of the case. That was not necessarily so, however, not in light of the gift the appellant had received from his mother, and that brings me to the first branch of the question at hand: (a) Did the trial judge err in failing to give effect to the gift of $125,000 the appellant had received from his mother for the purpose of assisting him to buy house? [47] In my respectful opinion, the answer is “yes.” am of view the $125,000 the appellant received from his mother gave rise to an exemption under section 23 because the $125,000 was brought into the spousal relationship by the appellant and later used by him in the purchase of the Vancouver property. This was overlooked in the Court of Queen’s Bench. [48] My view is founded on the combined effect of subsections 23(1)(a) and 23(2). Recall, subsection 23(1)(a) exempts from distribution the value, at the commencement of the spousal relationship, of family property or its value (other than the family home and household goods), where the property is: (a) acquired before the commencement of the spousal relationship by spouse by gift from third party, unless it can be shown that the gift was conferred with the intention of benefiting both spouses…. Subsection 23(2) goes on to state: 23(2) Subject to subsection (4), property acquired as result of an exchange of property mentioned in subsection (1) is exempt from distribution pursuant to this Part to the extent of the fair market value of the original property mentioned in subsection (1) at the commencement of the spousal relationship. [49] Subsection 23(2) serves to extend the reach of the exemption provided for by subsection 23(1)(a). It does so by allowing the value of property brought into spousal relationship, though that property no longer exists, to be traced to property acquired during the relationship, provided the latter is in existence on the date of application under the Act: Deyell v. Deyell (1990), 1991 CanLII 2761 (SK CA), 90 Sask R. 81(Sask.C.A.). (See, too, Mitchell v. Mitchell, supra, and Vilcu v. Grams (1999), 1999 CanLII 12231 (SK CA), 172 Sask. R. 201(Sask.C.A.)). [50] Turning from the content of these provisions to their application, they fall to be applied on the two-stage, step by step, approach suggested in Deyell v. Deyell and applied in each of Mitchell v. Mitchell and Benson v. Benson (1994), 1994 CanLII 4554 (SK CA), 120 Sask.R. 17 (Sask.C.A.). As Benson says at p. 31: [1] The first stage is concerned with the conditions of ss. 23(1) and (2) and entails enquiry into whether those conditions have been met. The party claiming the exemption bears the burden of establishing that they have in fact been met. If that party fails to do so, that is the end of the matter. If, on the other hand, he or she succeeds in doing so, there then arises in that party prima facie entitlement to the exemption and the matter shifts to the second stage. The second stage, if reached, is concerned with the provisions of ss. 23(4) and (5) and calls for consideration of whether the exemption ought to be disallowed. The party resisting the exemption bears the burden of establishing to the satisfaction of the court that it would be unfair and inequitable to allow the exemption in whole or in part having regard for the matters mentioned in ss. 23(5) and 21(2)(a) to (p). If that party fails to do so, the exemption must stand. Only if he or she succeeds in thus satisfying the court may the exemption be disallowed in whole or in part as the matters bearing upon the issue suggest. [52] As thus noted, the second stage entails application of subsections 23(4) and (5), which provide as follows: (4) Where the court is satisfied that to exempt property from distribution would be unfair or inequitable, the court may make any order that it considers fair and equitable with respect to the family property mentioned in this section. (5) In making an order pursuant to this section, the court shall have regard to the following: (a) any of the matters mentioned in clauses 21(3)(a) to (p); (b) contributions in any form made by the spouses to their relationship, children or property prior to the commencement of their spousal relationship; (c) contribution, whether financial or in any other form, made by spouse directly or indirectly to the acquisition, disposition, preservation, maintenance, improvement, operation, management or use of property mentioned in this section; (d) the amount of other property available for distribution…. [53] Turning to the case at hand with this two-stage approach in mind, and beginning with the first, there are number of facts that merit emphasis, facts that were amply established by the appellant at trial. First, he received the $125,000 from his mother before the spousal relationship commenced. Second, he still had that amount on hand when the relationship commenced. Third, he used the $125,000 as down payment on the purchase of the Vancouver house shortly after the relationship commenced. [54] I am of the view that by establishing these facts the appellant established the requisite conditions for the grant of an exemption of the value of the Vancouver property to the extent of the $125,000: Deyell v. Deyell and Vilcu v. Grams. As this Court observed in Vilcu v. Grams, property brought into relationship can be converted into other forms during the relationship and still qualify for exemption in relation to its value at the time the relationship commenced. For example, the Court noted that bank account brought into marriage can retain its exempt status to the extent of its value at the time of marriage despite the fact that at the time of the application it exists in the form of term deposit or an RRSP: Parker v. Parker (1987), R.F.L. (3d) 147 (Sask. Q.B.). The same may be said of bank account that at the time of application exists in the form of real estate, other than family home. Hence the appellant is prima facie entitled to the exemption in issue. [55] Had the respondent shown that the $125,000 was given to the appellant for the benefit both parties would disallow the exemption in light of the content of subsection 23(1)(a). But that is not the case. The only evidence on the point is that of the mother who said she intended the gift for the sole benefit of her son, the appellant. The trial judge did not make any finding adverse to the mother’s credibility, and to me her explanation rings true. The gift was made before the commencement of the spousal relationship between the parties and, as the mother said, their relationship was not that of “couple” but merely that of “boyfriend and girlfriend.” understand, and have no difficulty accepting this explanation. [56] That serves to advance the matter to the second stage, having to do with whether, in light of the considerations enumerated in subsection 23(5), including those mentioned in clauses 21(3)(a) to (p), it would be unfair and inequitable to allow the exemption in whole or in part. [57] With clauses 21(3)(a) to (p) in mind, many of which are inapplicable in the circumstances, can find little to suggest the appellant’s prima facie entitlement to the exemption should be disallowed in whole or in part. Indeed those that apply point in the opposite direction. This was spousal relationship of relatively short duration, having lasted for only about five and half years, and the Vancouver property was largely acquired and improved by means of the financial contributions made by the appellant’s parents on his behalf. Added to that is the fact the parties occupied the property for only two years of their spousal relationship. Otherwise it served as rental property apparently looked after by the appellant’s father. might add that it is not as though we are talking about exempting from distribution the whole of the value of the property. Were that so, it might change the complexion of the matter, but the property was valued at $427,000 and we are talking about exempting only $125,000. The remaining value is $302,000. [58] Turning to the considerations enumerated in subsection 23(5), am also of the view there is little in these considerations to suggest the appellant’s prima facie entitlement to the exemption should be disallowed in whole or in part. can see nothing in the contributions of the parties made prior to the commencement of their spousal relationship that has any material bearing on the exemption. Nor can see much in the contributions of the respondent to the acquisition, improvement, or management of the Vancouver property to suggest that allowing the exemption would be unfair to her or inequitable. note, too, that the amount of other property available for distribution is substantial, especially in light of the relatively short duration of the spousal relationship. [59] This is not to overlook or denigrate the presumed contribution arising out of the spousal relationship and the respondent’s resulting entitlement. While this is expressly subject to exemption under the Act, it is only so in the absence of unfairness or inequity. That raises the question of whether it would be fair for the exemption to prevail over her presumed contribution to the build-up of the equity in the house over the course of the spousal relationship. Aside from this, however, do not see any other form of unfairness or inequity in giving effect to the exemption. [60] It follows that would allow the exemption, subject to such adjustment as may be required having regard for her contribution to the build-up of the equity in the house, matter shall deal with in conclusion. Subject to that, would exempt from distribution the value of the Vancouver property to the extent of $125,000. (b) Did the trial judge err in declining to take into account the loans of $100,000 the appellant had received from each of his parents for the purpose of purchasing the Vancouver property? [61] In taking up this part of the question should like at the outset to make number of preliminary observations for the purpose of clarifying the subject-matter and illustrating the approach which the trial judge might have taken, in contradistinction to that which he actually took. [62] First, there was no suggestion the loans, made for the purpose of enabling the appellant to acquire the Vancouver property, were anything but wholly legitimate transactions. They were free of the expedient, sham-like marks that occasionally accompany intra-family transactions of this sort when it comes to contested division of property between spouses. [63] Second, each of the loans was secured by legal mortgage on the property, mortgages drawn by the Vancouver law firm of Ladner Downs, who oversaw their execution. Thus the loans constituted mortgage debts, so to speak, not simple contract debts (or debts arising from promissory notes). [64] Third, action on the mortgages, even if statute barred at some later date as suggested by the trial judge, was not barred on the date of the respondent’s application under The Family Property Act. The mortgages were made on March 15, 1995; the application was launched on March 13, 2000; and the limitation periods to which the trial judge referred bar commencement of action after six years from the date the cause of action arose. [65] Fourth, the family property and its value subject to distribution under the Act was agreed upon by the parties, with the value being agreed upon as of the date of application, rather than adjudication, for no adjudication in this respect proved necessary and adjudication came considerably later. (The trial took place from September 16 to 18, 2002 and judgment came down on December 4, 2003). More specifically, the market value of the Vancouver property, alleged by the respondent on the date of application to be $450,000 was later agreed to be $427,000. [66] Fifth, while it was not open to the judge to distribute the Vancouver property in specie, for it constituted an immoveable situated outside Saskatchewan, it was open to him to distribute the value of the property equally between the parties, which is to say the net value of the property as at the date of application. As of that date, the net value, allowing for the mortgage debts payable to the appellant’s parents, was as follows: Market value: 427,000 Less: (i) first mortgage, Hong Kong Bank 67,000 (ii) second mortgage, the Dewars $­­­ 200,000 $267,000 267,000 Net value: 160,000 [67] Rather than approach the distributable value of the Vancouver property along these lines, treating the matter at hand as an issue of net valuation as of the date of application, the trial judge approached it along the lines he mentioned, treating the matter as an equitable consideration issue as of the date of adjudication. Thus he declined to take the loans into account having regard for the equitable consideration mentioned in clause 21(3)(o): (o) any debts or liabilities of spouse, including debts paid during the course of the spousal relationship. [68] In effect, the trial judge declined to apply this clause for two reasons: (i) that “collection of the loans appears to be statute barred by the Limitation Act, R.S.B.C. 1996, c. 266, ss. 3(5) and (6),” noting that statute barred debts are not considered in dividing family property: Russell v. Russell, [2001] W.W.R. 619; and (ii) that it was “far from clear the [appellant] will ever be required to repay [the loans].” shall consider these in turn, (i) Collection of the loans and the Limitations Act [69] The limitation periods to which the trial judge referred, namely subsections 3(5)and (6) of the Limitation Act of British Columbia, provide that person may not bring an action (in relation to the specified subject matter) after the expiration of six years after the date on which the right to do arose. With this in mind the judge noted that the mortgages were payable on demand, and that no demand or payment had been made since they were granted on March 15, 1995, more than six years earlier. Thus, he was prompted to say, “collection of the loans appears to be statute barred.” [70] This statement strikes me as more in the nature of an observation on the appearance of the matter than finding. Certainly it is not conclusive finding. Did British Columbia law bar action by Mr. and Mrs. Dewar on the mortgage debts arising from the loans, as the respondent asserted, or did it not? That was the issue, though note in passing that the Dewars, whose interests were thus brought into question, were not joined as parties to the proceedings. [71] In fairness to the trial judge, he was given little to work with in determining the issue. What little he had did not allow for much more than commentary on the appearance of things. It fell to the respondent, having asserted that the debts were statute barred, to satisfy the judge this was so, but she did no more than produce copy of the Limitation Act of British Columbia. Assuming compliance with section 3(1) of The Saskatchewan Evidence Act, R.S.S. 1978, c. S-16, this served to prove the content of the Limitation Act but was of no assistance when it came to interpreting that Act and applying it accordingly. [72] The frailties of such limited proof of foreign law—foreign law being matter of fact—are illustrated by Royal Trust Co. v. H.A. Roberts Group Ltd. (1995), 1995 CanLII 6094 (SK QB), 129 Sask. R. 161 (Q.B.), wherein Mr. Justice Baynton observed: Under common law, foreign law (which includes the law of another province) has to be plead and proven as fact: 12 C.E.D. (West 3rd), Evidence, at ss. 643 and 1201; Canada National Steamships Co. v. Watson, 1938 CanLII 183 (SCC), [1939] D.L.R. 273 at 276 (S.C.C.). Section 3(2) of The Saskatchewan Evidence Act, supra, does not fundamentally change this principle. It simply permits (but does not require) the court to take judicial notice of such foreign law. The section preserves the discretion of the court to require formal proof: R. v. Clarke (1980), 1980 CanLII 2156 (SK QB), Sask. R. 283 at 286-7 (Q.B.)…. It is important to note however that proof of the contents of statute is not necessarily proof of the law on certain issue in the foreign jurisdiction. Statutory provisions are interpreted by case law in the context of the laws of that province. In many instances specific statutory provision has been given meaning not readily apparent by reading of that statutory provision alone….Accordingly proof of the contents of statute is by no means the end of the matter. [p. 168] [73] With this in mind, and having regard for the fact the debts in issue were mortgage debts rather than simple contract debts (or debts arising out of promissory notes), it seems to me the case raised some rather complex questions in relation to the interpretation and application of the Limitation Act of British Columbia. For example, when did the right to commence action on the mortgages arise, including the right of action on the covenant to pay and the covenant to yield possession on default? Was it on the date the mortgages were made, or the date of demand, or the date of default? The question is complicated by the fact each of the mortgages, while payable on demand, contains clause assuring the mortgagor possession of the land in the absence of default and obliging the mortgagor to pay the mortgage monies within two months of written notice by the mortgagee demanding payment. [74] The point of all of this is twofold: First, do not think the trial judge found, as matter of fact, that British Columbia law barred action on the debts. Given what he said of the matter, coupled with what he had to work with, his was more of commentary on the appearance of things than conclusive finding. Second, do not think enough evidence was adduced to enable him to find that the debts were in fact statute barred, bearing in mind the complexity of the matter and the approach adopted by Mr. Justice Baynton in Royal Trust Co. v. H.A. Roberts Group Ltd. Indeed, am inclined to think this is why the trial judge limited himself to saying “collection of the loans appears to be statute barred…”. [75] Thus, am of the respectful opinion that the first of the trial judge’s reasons for declining to give effect to clauses 21(3)(o) is unsatisfactory. [76] With that, turn to the second of the reasons the loans were put aside. (ii) Repayment of the loans [77] With clause 21(3)(o) in mind, allowing for any “debts” of spouse to be taken into account in the distribution of family property or its value, the trial judge declined to give effect to the loans as debts of the appellant because it was “far from clear the [appellant] will ever be required to repay them.” [78] find it difficult to know just what to make of this statement. The issue was whether or not the appellant was indebted to his parents, as contemplated by clause 21(3)(o), as result of their having loaned him $200,000 to enable him to acquire the Vancouver property. Can the trial judge be said to have found, as matter of fact, that the appellant would not be required to repay the loans? If so, this amounts to finding of fact that the appellant’s parents would forgive the loans, thus relieving the appellant of having to repay them and disentitling him to have them considered as “debts’ within the contemplation of clause 21(3)(o). say “would forgive,” for the trial judge, in commenting on the prospect of the appellant having to repay the loans, spoke in terms of it being less than clear the appellant “will ever be required” to repay them, terms connoting not the past or present but the future. [79] Nor, in light of the evidence bearing on the issue, is it easy to treat the trial judge’s observation as amounting to finding of fact that the appellant’s parents had forgiven or would forgive the loans. He noted that the loans had been made some years earlier and that in the meantime the appellant had begun earning substantial income, his parents had not demanded payment, and he had made no payment. Even if one could infer from this and such other circumstantial evidence as was before the court that the loans had been or would be forgiven, an arguable proposition, both the appellant and his mother testified that the loans were expected to be repaid. [80] Asked about this at trial, the appellant said, “I expect to repay them,” adding that he had acknowledged his indebtedness to his parents and that they had acknowledged their expectation the money would be repaid. His mother testified that her husband, who she described as “the businessman, not me,” had instructed their lawyer in relation to the mortgages, and when asked if she expected the loans to be repaid she said, “I think so, yes.” [81] Now the trial judge did not make any adverse findings of credibility in relation to either witness. Nor he did he reject the testimony of either. should have thought he would have taken some such steps had he intended his remarks to amount to finding of fact that the loans had been or would be forgiven by the appellant’s parents. [82] So say, it is difficult to know just what to make of the rather ambiguous observation: “It is far from clear the [appellant] will ever be required to repay the [loans].” But this much is evident: The assessment of the issue was incomplete, if not in its findings of fact then in its application of the law. say this because if, as matter of fact, the appellant will not be required to repay the loans, then their forgiveness by his parents amounts, as matter of law, to contribution by them on his behalf to the acquisition of the property as contemplated by the equitable consideration mentioned in clause 21(3)(e): (e) the contribution, whether financial or in some other form, made directly or indirectly by third party on behalf of spouse to the acquisition, disposition, operation, management or use of the family property…. [83] The trial judge did not consider this. So, as say, his assessment was incomplete. In my judgment, the incompleteness, whether in fact or in law, constitutes error. say this with the greatest of respect for the trial judge, noting that he may not have appreciated this in light of the submissions made to him. had the distinct sense the issues were more clearly defined on appeal than at trial, which is not as it should have been, either in fairness to the parties or the trial judge. [84] The error of which speak occurred in the exercise of the discretionary power of the court in giving effect to the equitable considerations mentioned in subsection 21(3). That being so, the error serves to vitiate the trial judge’s exercise of discretion in declining to take the loans into account: Benson v. Benson, at para. [90]. What is required, in consequence, is reassessment of the matter, and it is this to which now turn. [85] To put the case for the respondent at its highest in this regard shall assume the trial judge found that the appellant will not be required to repay the loans, which is to say the loans had been or will be forgiven by his parents. That, then, calls for assessment of the loans in the light of clause 21(3)(e). [86] In my opinion the forgiveness of the loans amounts to financial contribution by each of the appellant’s parents on his behalf to the acquisition of the Vancouver property. That being so, the question is whether in the interests of fair and equitable distribution of the value of the property as between the parties the contributions made by his parents on his behalf should be deducted from the value subject to distribution. [87] In my view they should be deducted on application of clause 21(3)(e). Assuming the loans have been forgiven, they are to be taken as having been forgiven not as of the date of application but the date of adjudication. This is so because the trial judge’s assessment was based on the situation as it existed as of the date of adjudication. [88] He noted that approximately nine years had elapsed since the loans were advanced, and that in the meantime no repayment or demand for repayment had been made. True, approximately nine years had elapsed between the advance of the loans, in October of 1994, and the date of judgment, in December 2003. But between the date of the mortgages, March 15, 1995, and the date of application, March 13, 2000, only five years had intervened. Had the trial judge considered the shorter period (i.e. between the date of the mortgages and the date of application), it would have been much more difficult to conclude that the loans had been forgiven during this time. Given that the trial judge based his finding on the period up to the date of adjudication, and if he is to be taken as having found that the loans had been forgiven, he must have found that they were forgiven as of the date of adjudication not application. It is the act of forgiving the loans which amounts to contribution by the appellant’s parents under subsection 21(3)(e) and, in consequence, the contribution was made after the date of application. [89] That serves to underscore the fact that this contribution to the acquisition of the Vancouver property was made on behalf of the appellant, rather than on behalf of both parties. The appellant’s parents cannot be taken to have made such contribution on behalf of both parties after the two had separated and the respondent had commenced proceedings under The Family Property Act. The separation, might add, was bitter one. [90] On the whole of the circumstances, none of which I intend to repeat but including those concerning the Vancouver property and the length of the spousal relationship, I can see no tenable basis for not giving effect to clause 21(3)(e) and the contributions thus made by the appellant’s parents on his behalf to the acquisition of the property. [91] This is not to shut out the respondent entirely from sharing in the value of this property. To the extent the value is not exempt, and is not the product of the contributions of the appellant’s parents on his behalf, the respondent is entitled to share in the value. In other words she is entitled to share in such of the equity in the property as was otherwise acquired during the spousal relationship. [92] This means she is entitled to share in the build-up of the equity in consequence of the pay-down of the mortgage in favour of the Hong Kong Shanghai Bank of Canada. Over the course of the spousal relationship this mortgage debt was reduced from $130,000 at its inception to $66,000 at the date of application. The difference is $64,000, of which she is entitled to one half, or $32,000. [93] may say that see this as consistent with the purpose and terms of The Family Property Act. The purpose, expressed in section 20, recognizes that inherent in the spousal relationship there is joint contribution, financial and otherwise, by the spouses to the assumption of their responsibilities. Thus each is entitled to an equal distribution of family property or its value, subject to the exceptions, exemptions, and equitable considerations mentioned in the Act. In enacting this legislation, the Legislature went to considerable lengths to identify the exemptions and spell out the equitable considerations to which the entitlement to equal distribution is subject. When the conditions requisite to their application are satisfied these exemptions and equitable considerations fall to be acted upon, unless the court is satisfied it would be unfair or inequitable to do so in light of the relevant circumstances and the applicable statutory criteria. The statutory criteria serve, of course, to condition the nature and govern the extent of the discretion left to the court in determining if it would be unfair or inequitable to allow an exemption or to act on an equitable consideration. [94] In this instance, do not see any unfairness or inequity to the respondent in limiting her share of the value of the Vancouver property to that portion which is truly the product of the spousal relationship and its inherent joint contribution. [95] For all of these reasons, would set aside the distribution in the Court of Queen’s Bench of the value of the Vancouver property and substitute another. would reduce the respondent’s share of the distributable value of the property from $180,500 to $32,000. The former is the effective amount of her half share as determined at trial. The latter is her half share in the equity acquired in consequence of the pay-down of the mortgage in favor of the Hong Kong Shanghai Bank of Canada from $130,000 to $66,000. [96] In allowing the respondent $32,000 have not overlooked the effect. The effect is to reduce the extent of the exemption allowed the appellant as result of the gift he received from his mother. Were the exemption to be allowed in full the respondent’s share would amount to one half of $36,000 or $18,000 as illustrated by the following calculation: Market value of property 427,000 Less: (i) exemption 125,000 (ii) balance of bank loan 66,000 (iii) balance of parental loans 200,000 391,000 391,000 Shareable value: 36,000 [97] The anomaly is accounted for by the fact, first, that the property was bought for $430,000 rather than $427,000 and, second that the parental loans of $200,000 were not fully applied to the purchase price. About $175,000 was applied to the purchase price, with the remaining $25,000 going to improvements such as the garage. But the improvements are not reflected in the agreed market value. [98] would not adopt this calculation in determining the respondent’s share of the value of the Vancouver property because it rests on estimate and does not reflect her presumed contribution to the build-up of the equity in the property over the course of the spousal relationship. That build-up of equity, represented by the pay-down of the Hong Kong Bank mortgage during the course of the spousal relationship, amounts to $64,000. Her half share of that amount, or $32,000, is not the product of estimate but of actual experience, and her entitlement derives not only from presumed contribution but also of actual contribution. Recall, that she contributed some $600 to $700 per month to the expenses associated with the Vancouver property while the parties lived there and she was working. In fairness to her would preserve her equal share in the build-up of equity over the course of the spousal relationship by reducing the exemption attributable to his mother’s gift to the extent necessary to achieve this end. [99] As result of determining her share of the value of the Vancouver property to be $32,000, rather than $180,500 as at trial, the equalization payment required of the appellant reduces from $354,709.41 to $206,209.41. To that extent, would allow the appeal and vary the judgment below. [100] would do so on order that the appellant have his costs on appeal, such costs to be taxed on the basis of double column as usual. Dated at Regina, Saskatchewan this 24th day of June 2005. Cameron J.A. concur: Vancise J.A. Lane J.A. (In dissent) [101] have read the judgment of Cameron J.A. and respectfully disagree with his reasons. would dismiss the appeal. [102] The parties were in common-law relationship which ended in the year 2000. The break-up ultimately led to this action wherein the respondent claimed division of family property and spousal support. In the main, the trial judge awarded equal distribution of the matrimonial property and agree with his result. [103] The facts are more completely set out in the judgment of the trial judge; however, brief statement is in order for the purposes of this appeal. [104] The parties, both professionals, (the respondent being nurse, aged 28 and the appellant surgeon, aged 29) both residents of Vancouver, met in July of 1991, and began sexual relationship in August of that year. In January of 1992 the appellant was treated for cancer. While he was in the hospital, the respondent moved into the appellant's condominium and visited him on daily basis, sometimes staying overnight. At the time of the visitations the Cancer Agency's policy permitted only family members to stay overnight. After his discharge and period of recovery with his parents, the appellant resumed residing with the respondent in his condominium. The respondent continued to work and make contribution towards the accommodation. [105] The parties spent large amounts of their time together including vacations and social activities. They shared the same bed in the condominium and both parties understood the relationship to be monogamous. Marriage was discussed on several occasions beginning in 1994. [106] In 1994, the appellant's mother gifted him $125,000 to be applied to the down payment on house. The parties moved into the house together. In addition to the down payment, each of the appellant's parents loaned $100,000 and further $130,000 was obtained by way of mortgage. The loans from the appellant's parents have not been repaid and are now unenforceable under British Columbia's Limitations Act.[2] No demand was ever made for repayment of the loans. [107] In October of 1996 the appellant moved to Regina and convinced the respondent to move with him. While in Regina the respondent attended University with her tuition being paid by the appellant. He claimed spousal tax deduction for the cost of the tuition in 1997. [108] The relationship began to unravel in 1998 with the parties discussing ending their relationship in 1999 and ultimately ending it in 2000. [109] The respondent returned to Vancouver and filed petition for division of property and claim for spousal support in March 2000. [110] The decision below gave rise to three issues on appeal. The appellant claims the trial judge erred in his determination of the date the parties began their spousal relationship; he erred in his failure to grant an exemption for the down payment gifted from the appellant's mother; and finally he erred in failing to exempt from the family property the loans given by the appellant's parents. [111] The following are the relevant sections of The Family Property Act:[3] 2(1) In this Act: “family home” means, subject to subsection (2), property: (a) that is: (i) owned by or leased to one or both spouses, (b) that is or has been occupied by one or both spouses as the family home or that is mutually intended by the spouses to be occupied by one or both of them as the family home; and that is: (c) house or part of house, including the land appurtenant to it consisting of not more than 65 hectares; “spouse” means either of two persons who: (c) is cohabiting or has cohabited with the other person as spouses continuously for period of not less than two years; 20 The purpose of this Act, and in particular of this Part, is to recognize that child care, household management and financial provision are the joint and mutual responsibilities of spouses, and that inherent in the spousal relationship there is joint contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities that entitles each spouse to an equal distribution of the family property, subject to the exceptions, exemptions and equitable considerations mentioned in this Act. 21(1) On application by spouse for the distribution of family property, the court shall, subject to any exceptions, exemptions and equitable considerations mentioned in this Act, order that the family property or its value be distributed equally between the spouses. (2) Subject to section 22, where, having regard to the matters mentioned in subsection (3), the court is satisfied that it would be unfair and inequitable to make an equal distribution of family property or its value, the court may: (a) refuse to order any distribution; (b) order that all the family property or its value be vested in one spouse; or (c) make any other order that it considers fair and equitable. (3) For the purposes of subsection (2), the court shall have regard to the following: (a) any written agreement between the spouses or between one or both spouses and third party; (b) the length of time that the spouses have cohabited; (c) the duration of the period during which the spouses have lived separate and apart; (d) the date when the family property was acquired; (e) the contribution, whether financial or in some other form, made directly or indirectly by third party on behalf of spouse to the acquisition, disposition, operation, management or use of the family property; (f) any direct or indirect contribution made by one spouse to the career or career potential of the other spouse; (g) the extent to which the financial means and earning capacity of each spouse have been affected by the responsibilities and other circumstances of the spousal relationship; (h) the fact that spouse has made: (i) substantial gift of property to third party; or (ii) transfer of property to third party other than bona fide purchaser for value; (i) previous distribution of family property between the spouses by gift or agreement or pursuant to an order of any court of competent jurisdiction made before or after the coming into force of this Act or The Miscellaneous Statutes (Domestic Relations) Amendment Act, 2001 (No. 2); (j) tax liability that may be incurred by spouse as result of the transfer or sale of family property or any order made by the court; (k) the fact that spouse has dissipated family property; (l) subject to subsection 30(3), any benefit received or receivable by the surviving spouse as result of the death of his or her spouse; (m) any maintenance payments payable for the support of child; (n) interests of third parties in the family property; (o) any debts or liabilities of spouse, including debts paid during the course of the spousal relationship; (p) the value of family property situated outside Saskatchewan; (q) any other relevant fact or circumstance. 22(1) Where family home is the subject of an application for an order pursuant to subsection 21(1), the court, having regard to any tax liability, encumbrance or other debt or liability pertaining to the family home, shall distribute the family home or its value equally between the spouses, except where the court is satisfied that it would be: (a) unfair and inequitable to do so, having regard only to any extraordinary circumstance; or (b) unfair and inequitable to the spouse who has custody of the children. (2) Where clause (1)(a) or (b) applies, the court may: (a) refuse to order any distribution; (b) order that the entire family home or its value be vested in one spouse; or (c) order any distribution that the court considers fair and equitable. (3) Where there is more than one family home, the court may designate to which family home this section applies, and any remaining family home is to be distributed in accordance with section 21. 23(1) Subject to subsection (4), the fair market value, at the commencement of the spousal relationship, of family property, other than family home or household goods, is exempt from distribution pursuant to this Part where that property is: (a) acquired before the commencement of the spousal relationship by spouse by gift from third party, unless it can be shown that the gift was conferred with the intention of benefitting both spouses; (b) acquired before the commencement of the spousal relationship by spouse by inheritance, unless it can be shown that the inheritance was conferred with the intention of benefitting both spouses; or (c) owned by spouse before the commencement of the spousal relationship. [112] The trial judge found the parties were cohabiting as spouses continuously for period of more than two years. He determined the parties commenced their cohabitation as spouses in late June of 1992 and determined for the purposes of distribution of the matrimonial property the commencement of the spousal relationship was two years later being June of 1994. He reviewed the indicia to be considered when determining whether or not common-law relationship is established as noted by this Court in Romanchuk v. Robin[4] which in turn referred to the indicia enumerated in Molodowich v. Penttinen[5] and Tanouye v. Tanouye:[6] [9] The courts have considered number of factors to determine what constitutes common law relationship. The most common factors relied on are those enumerated in Molodowich v. Penttinen and Tanouye v. Tanouye. The factors in Molodowich include: [16]… (1) Shelter: (a) Did the parties live under the same roof? (b)What were the sleeping arrangements? (c) Did anyone else occupy or share the available accommodation?; (2) Sexual and Personal Behaviour: (a) Did the parties have sexual relations? If not, why not? (b) Did they maintain an attitude of fidelity? (c) What were their feelings towards each other? (d) Did they communicate on personal level? (e) Did they eat meals together? (f) What, if anything, did they do to assist each other with problems or during illness? (g) Did they buy gifts for each other on special occasions?; (3) Services: What was the conduct and habit of the parties in relation to: (a) Preparation of meals, (b) Washing and mending clothes, (c) Shopping, (d) Household maintenance, (e) Any other domestic services? (4) Social (a) Did they participate together or separately in neighbourhood and community activities? (b) What was the relationship and conduct of each of them towards the members of their respective families and how did such families behave towards the parties? (5) Societal: What was the attitude and conduct of the community towards each of them and as couple?); (6) Support (economic): (a) What were the financial arrangements between the parties regarding the provision of or contribution towards the necessaries of life (food, clothing, shelter, recreation, etc.)? (b) What were the arrangements concerning the acquisition and ownership of property? (c) Was there any special financial arrangement between them which both agreed would be determinant of their overall relationship? (7) Children: What was the attitude and conduct of the parties concerning children? In Tanouye, the Saskatchewan Court of Queen's Bench summarized the factors to be considered in determining whether there exists common law relationship at para. 36 as follows: [36] The authorities seem to indicate that common law relationship or marriage requires perhaps not all but at least majority of the following characteristics: economic interdependence including an intention to support; commitment to the relationship, express or implied, for at least an extended period of time; sharing of common principal residence; common desire to make home together and to share responsibilities in and towards that home; where applicable, shared responsibilities of child rearing; and sexual relationship. As well, it appears that, superimposed on the relationship, there should be the general recognition of family, friends, and perhaps to some extent the larger community, that the particular man and woman appear as "couple", i.e., family unit.[7] [Footnotes omitted] [113] In approving the indicia as set out in Molodowich the Supreme Court of Canada in M. v. H.[8] stated: 59 Molodowich v. Penttinen (1980), 1980 CanLII 1537 (ON SC), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), sets out the generally accepted characteristics of conjugal relationship. They include shared shelter, sexual and personal behaviour, services, social activities, economic support and children, as well as the societal perception of the couple. However, it was recognized that these elements may be present in varying degrees and not all are necessary for the relationship to be found to be conjugal.[9] [114] The appellant contends because not all of the factors existed, the petitioner did not establish the existence of common-law relationship. In particular, he contends that there was no economic interdependence nor were provisions made in the event of illness and death. However, it is clear not all indicia need be present in each case. In this case the majority of the indicia found by the trial judge militated strongly in favour of spousal relationship and he made no error in so finding. It simply was not open to the appellant to select two isolated factors and consider only these factors in determining whether or not common-law relationship existed. In summary, the parties' relationship commenced in August of 1992, the spousal relationship for the purposes of the Act commenced in August 1994, with the relationship continuing until the respondent returned to Vancouver in 2000. [115] The appellant next contends he ought to be granted an exemption for the gift from his mother towards the down payment on the house he purchased. The appellant contends the gift was made to him personally and prior to the start of the spousal relationship, and thus should be exempt from distribution. [116] The issue was not dealt with in the court below as the trial judge seems to have assumed the gift was made at the time of the purchase of the Vancouver house (in September of 1994) rather than the date when the cheque was given (in late 1993 or early 1994). The respondent does not take issue with the argument the cheque was made out prior to the commencement of the spousal relationship and the appellant's mother freely acknowledged the monies were for the purposes of acquiring the house. However, the respondent argues the presumption of an equal distribution is stronger in the case of family home than for most family property.[10] [117] agree the Vancouver home ought to be distributed in accordance with s. 22 but that section requires the value shall be distributed equally "except where the court is satisfied that it would be: (a) unfair and inequitable to do so, having regard only to any extraordinary circumstance; …" [118] similar set of circumstances gave rise to decision by Vancise J. (as he then was) in Rudy v. Rudy.[11] In that case the husband's father made gift to his son prior to the marriage with the intent of benefiting the son. The trial judge refused to order an unequal division of the value of the home based on the gift. He considered s. 22(1) and found: [24] Extraordinary circumstances are circumstances which must, on proper interpretation of the statute, be circumstances other than those outlined in s. 21(1) which must be deemed to be ordinary circumstances which could affect equal distribution of matrimonial property other than the matrimonial home.[12] [119] Here, the mother's purpose was to help her children in the expensive Vancouver real estate market and to make their lives "a bit more stable." The appellant's mother denies she intended to give the money for the use of both parties, saying she only saw them as girlfriend and boyfriend, but her testimony also indicates she was of the view the parties would not become couple until they became married. [120] The gift was made by the appellant's mother with the full knowledge the parties were living together. She knew the relationship between the parties and she spent many occasions together with them. They, the respondent and the appellant's mother, exchanged gifts at Christmas. His mother made similar gift to the appellant's sister who at that time was living with her boyfriend, (whom the daughter ultimately married). [121] In this case the contribution by third party on behalf of spouse to the acquisition of family property is one of the “usual” factors outlined in s. 21 and in my view it would be inequitable to exempt the gift from distribution. [122] Finally, the trial judge did not err in failing to deduct from the family property the loans given by the appellant's parents. In my view the trial judge made finding the loans were statute barred. He had this to say: 57 The respondent also claims that the debt to his parents associated with the Vancouver home should be taken into account. Each of his parents is said to have lent the respondent $100,000.00 in September 1994. The loans were later secured by mortgages signed by the respondent March 15, 1995. The mortgages are payable on demand. There has been no demand and no payments made. Collection of the loans appears to be statute barred by the Limitation Act, R.S.B.C. 1996, c. 266, ss. 3(5) and (6) after six years. Counsel for the respondent suggested the respondent had "confirmed" the debt or his obligation to repay on various occasions. However s. 5(5) of the Limitation Act requires any confirmation to be in writing and nothing has been produced. Statute barred debts are not considered in dividing family property. Russell v. Russell, 1999 CanLII 12313 (SK CA), [2000] W.W.R. 619; (1999), 180 Sask.R. 196 (C.A.) at paras. 113 and 114. [Emphasis added] 58 Apart from being statute barred, would not consider the "loans" from Leith's parents in the division of family property as it is far from clear the respondent will ever be required to repay them. It has now been approximately nine years. While Leith's income when he purchased the Vancouver home was perhaps unexceptional, he has had substantial income for the last number of years and made no payments.[13] [123] Although the trial judge uses the words "collection of the loans appears to be statute barred…" see this as simply imprecise language as the trial judge goes on to refer to the specific sections and the further provision of the Act requiring confirmation be in writing. In other words he fully directed his mind to the legislation. The legislation was tendered pursuant to s. of The Saskatchewan Evidence Act[14] and no objection was taken by appellant’s counsel. In my view the trial judge clearly considered the legislation and his interpretation of the legislation was not challenged by the appellant, indeed the appellant does not claim the trial judge misinterpreted the legislation but claims the loans ought to be exempt from distribution. [124] The second reason he gives for not exempting the loans from distribution, as set out in para. 58 of his judgment, in my view becomes superfluous given his finding the loans were statute barred and not exempt. However, again as read his judgment he was simply using less than precise language to note the loans were not likely to be repaid. [125] Because the loan was not statute barred at the date of the petition it was open to the trial judge to choose that date to determine if the debt ought to be exempt as opposed to the date of the action as he did in Thompson v. Thompson.[15] In that case the trial judge found the loan, (although statute barred), from the party's family member likely to be repaid upon the lender's death out of the borrower's share of the estate and exempted the loan. Here, the trial judge, as read para. 58 of his judgment, made the finding the loans would likely never be repaid. The trial judge made no error in refusing to exempt the loan from distribution. [126] see no basis for interfering with the decision below and would dismiss the appeal with costs on double Column V. DATED at the City of Regina, in the Province of Saskatchewan, this 24th day of June, A.D. 2005. [1] Section 22(2) of The Matrimonial Property Act, S.S. 1979, c. M-6.1 [2] R.S.B.C. 1996, c. 266. [3] S.S. 1997, c. F-6.3. [4] (2003), 2003 SKCA 50 (CanLII), 232 Sask. R. 198 (C.A.). [5] (1980), 1980 CanLII 1537 (ON SC), 17 R.F. L. (2d) 376 (Ont. Dist. Ct.). [6] (1993), 1993 CanLII 8998 (SK QB), 117 Sask. R. 196 (Q.B.). [7] Supra, note 3. [8] 1999 CanLII 686 (SCC), [1999] [10] Rudy v. Rudy (1983), 1983 CanLII 2080 (SK QB), 22 Sask. R. 261 at para 24. [13] (2003), 2003 SKQB 514 (CanLII), 243 Sask. R. 126 (Q.B.). [14] R.S.S. 1978, c. S-16. [15] 2004 SKCA 169 (CanLII); [2004] S.J. No. 810 (Q.L.).
This appeal arises from proceedings under The Family Property Act. The couple had lived together for several years. She sought judgment distributing their property. The property included a house in Vancouver, which he had acquired some years earlier with the financial assistance of his parents. The trial judge found that the respondent had acquired the house after the commencement of the spousal relationship and then went to hold that the petitioner was entitled to an equal share of its value with no reduction owing to the gifts or loans from his parents. The respondent appealed. HELD: Appeal allowed by the majority. Lane J.A. wrote in dissent. Majority: 1) The Vancouver property was acquired after commencement of the spousal relationship. The value of the property did not qualify for exemption under s. 23(1)(a) of the Act. There are a number of facts that merit emphasis. The respondent received $125,000 from his mother before the spousal relationship started. He still had that amount on hand when the relationship commenced. He used the money as a down payment on the purchase of the Vancouver house shortly after the relationship commenced. By establishing these facts, the respondent established the requisite conditions for the grant of an exemption of the value of the Vancouver property to the extent of the $125,000. 2) The trial judge erred in declining to take into account the loans of $100,000 the appellant received from each of his parents for the purpose of purchasing the Vancouver property. There was insufficient evidence before the trial judge to enable him to find that the mortgage debts were statute-barred and he did not make a firm finding on this point. The trial judge's finding that the respondent will not have to repay the loans was incomplete. He did not assess the loans in light of s. 21(3)(e) of the Act. On the whole of the circumstances concerning the Vancouver property and the length of the spousal relationship, there is no tenable basis for not giving effect to s. 21(3)(e) of the Act and the contributions made by the respondent's parents on his behalf to the acquisition of the property. The petitioner is entitled to share in the build up of the equity in consequence of the pay-down of the mortgage. Minority: 1) The Vancouver home ought to be distributed in accordance with s. 22 of the Act. The gift of $125,000 was made by the respondent's mother with the full knowledge that the parties were living together. In this case, the contribution by a third party on behalf of a spouse to the acquisition of family property is one of the usual factors outlined in s. 21 of the Act and it would be inequitable to exempt the gift from distribution. 2) The trial judge did not err in failing to deduct from the family property the loans given by the appellant's parents. He made a finding the loans were statute-barred. The trial judge clearly considered the legislation and his interpretation of the legislation was not challenged by the respondent. He also made the finding the loans would likely never be repaid. He simply used less than precise language.