J. 2001 SKQB 98 D.I.V. A.D. 1999 No. 323 J.C. R. IN THE QUEEN'S BENCH (FAMILY LAW DIVISION) JUDICIAL CENTRE OF REGINA BETWEEN: DOREEN CAMPBELL and JAMES RUSSELL CAMPBELL RESPONDENT P.G. Alberts for Doreen Campbell B.R. Craik for James Russell Campbell JUDGMENT (ORAL) SCHEIBEL J. February 15, 2001 [1] This issues for resolution in this trial are:1. Divorce2. Custody of the Children3. Access to the Children4. Maintenance for the Children5. Spousal Support6. Division of Matrimonial Property [2] The issue of divorce, custody and access were disposed of by judgments given during the course of the trial by consent of the parties. It is not necessary to make further reference to these matters at this time except to say that any access as between the respondent and the child, Randy, shall be mutually agreed upon between the respondent and Randy who is now 18 years of age. [3] The evidence with respect to the remaining issues leaves much to be desired. It involves farming operation which includes the respondent's father and mother as well as three brothers of the respondent. The father of the respondent has died with the result that the issues are further complicated by the estate. It is necessary to attempt to deal with some issues which are in excess of 10 years old. Even though some of the evidence is not clear as to what took place, found that the petitioner and the respondent were both truthful witnesses as were the respondent's mother and his brothers. [4] There is no evidence as to the tax implications regarding matrimonial property although the respondent attempted to introduce such evidence through an expert. The respondent failed to give notice of the expert in contravention of the Rules of Court. Indeed, no mention of such evidence was given either on the pre-trial form or at the commencement of the trial when the parties were asked about the number of witnesses which would be called. Counsel for the petitioner strenuously objected to the calling of an expert as the last witness of the trial without notice or the reasonable potential of calling his own expert in reply. In the end the respondent closed his case without further argument about calling evidence on the tax implication. [5] must do the best can with the evidence such as it is. CHILD MAINTENANCE [6] now turn to the issue of maintenance for the children. [7] There are two children of the marriage, Kaitlyn, born November 13, 1992, and Breeanna, born May 7, 1996. In addition, the petitioner has son of prior marriage, namely, Randy, who was born December 11, 1982. It is agreed that the respondent stands in loco parentis in respect of Randy. It is also agreed that the petitioner receives the sum of $300.00 per month from the natural father of Randy. The court order for Randy predated the Guidelines and therefore the petitioner pays income tax on that amount. She also claims Randy as tax exemption on her returns. [8] The petitioner's income is $798.00 gross per month from her employment in restaurant. However, she receives tips which equate to about $10.00 per day. Therefore, she earns approximately $200.00 per month in tips. She claims this amount decreases in the winter, however, there is no evidence as to the number of months that her tips decrease. find that she earns an average of approximately $150.00 per month year round on tips. Therefore, fix her income for purposes of the Guidelines at $948.00 per month, or $11,376.00 per year not including the child support she receives for Randy. [9] The respondent is farmer. His income varies from year to year. Therefore, in my view the respondent's income should be determined on three year average. At issue is whether all or part of the capital cost allowance should be added back for purposes of arriving at the respondent's adjusted income. [10] The Saskatchewan Court of Appeal in Sjogren v. Pipchuk (1997), 1997 CanLII 9808 (SK CA), 34 R.F.L. (4th) 280 said that the facts of each case must determine what portion of the capital cost allowance, if any, should be added back to income. [11] Again in Sjogren the Court of Appeal stated that in the absence of any proof of underhanded or inappropriate conduct, grain is to be viewed as part of the gross income of the party in the year it is actually sold. Therefore it appears that where the cash method of accounting is relied upon, it is appropriate to ignore grain, livestock and other components of inventory artificially brought into income and deducted from income for averaging purposes. [12] The three year average taken from line 150 of the respondent's tax return is $15,238.13. am of the opinion that the average capital cost on land and buildings should be added back for purposes of determining the respondent's income and for the purpose of the Guidelines. This figure is $989.98 and brings the respondent's income to $16,228.11. Given the decisions of Beeler v. Beeler (1997), 1997 CanLII 10925 (SK QB), 161 Sask. R. 167 of the Saskatchewan Queen's Bench and Rudachyk v. Rudachyk of the Court of Appeal am of the view that the capital cost allowance taken on the machinery should generally not be added back for purposes of determining the respondent's income for the Guideline purposes. am also of the view that the capital cost allowance deducted by the respondent was proper farming expense which reflects the decreased value of the equipment over time. There are other authorities which have added back the capital cost of the machinery. In these authorities the amount added back for Guideline purposes ranges from "0" to "100%". In this case have concluded the facts justify adding back 25% of the average capital cost allowance over the last three years. The average capital cost allowance claimed on machinery was $37,971.86. Twenty-five percent of $37,971.00 equals $9,492.96. Therefore, this sum must be added to the respondent's income for Guideline purposes. The respondent's income is as follows: The three year average from line 150 of the tax return 15,238.13 100% of the capital cost on land and buildings on the three year average 989.98 25% of the capital cost on machinery on the three year average 9,492.96 Total Income $25,721.07 Therefore, for the purposes of the Guidelines the petitioner's income is fixed at $11,376.00 per year and the respondent's adjusted income is fixed at $25,721.07. [13] The petitioner claims she spends $100.00 per week of day care for Breeanna which equals $400.00 per month. She also pays $40.00 per month for Breeanna to attend play school. The total costs of $440.00 per month is to be paid by the petitioner and the respondent in their respective percentage based on the Guidelines. [14] In addition, the respondent is to pay one-half of the cost of extra-curricular activities as is set forth on Exhibits P-9, P-10 and P-ll, and is to pay one-half of the cost of any future extra-curricular activities which the parties mutually agree upon. [15] With respect to the child, Randy, both counsel agree that should adopt the approach used by MacLeod J. in Cook v. Kilduff, [2000] S.J. No. 482 QL (Sask. Q.B.). That is support is to be calculated as payable for three children, then deduct from that support figure the support which would be payable for the two natural children of the respondent to determine the difference the third child made. The, one-half of this difference is to be taken and added to the Guideline amount of support for the two children to obtain the total payable for the three children. SPOUSAL SUPPORT [16] now turn to spousal support. [17] The petitioner is presently employed and the respondent\'s income is unlikely to increase in the near future. Given the fact that after the respondent pays child support (including the extra costs) the income of the respondent and that of the petitioner will be nearly the same, I decline to order any spousal support. [18] The income of the respondent cannot be increased by adding back capital cost allowance for the sole purpose of bringing him to level of income which is artificial just so it might appear he has the means with which to pay spousal support. MATRIMONIAL PROPERTY [19] The petitioner called two experts and the respondent called one in an attempt to fix the value of the property. All three gave credible evidence, however, in some instances one or the other of the appraisers had better opportunity to view and assess some of the property and to determine its value. [20] Exhibit P-1 sets forth the appraisal of the farm land which consists of 11 parcels of land. The first 10 parcels which are described on page 17 of Exhibit P-1 is land which is in the name of the estate of the respondent's father. This land was left equal to the deceased's four children. The eleventh parcel, namely, the SE 1/4 of 11-20-7-W3 is registered in the names of the respondent and his brother, Colin, each as to an undivided one-half interest. [21] accept the evidence of Mr. Holstein as to the land values as is set forth on page 17 of Exhibit P-1. Indeed, the petitioner and respondent agree as to the value of all the parcels of land except as to the added value of the contributory yard site of the SW 1/4 of 30-20-5-W3 and the contributory yard site on the NW 1/4 of 19-20-5-W3. [22] The appraised contributory yard site for the SW 1/4 of 30-20-5-W3 is valued at $96,600.00. Mrs. Campbell testified that one grain bin described on page 10 of Exhibit P-1 at 4D and valued at $3,000.00 belongs to her and not to the estate. The reduces the contributory yard site value to $93,600.00. [23] The appraised contributory yard site for the NW 1/4 of 19-20-5-W3 is valued at $63,700.00. However, Colin Campbell testified that he personally owns the garden shed valued at $200.00 as shown on Exhibit P-1, page 12. In addition, he claims he personally owns the metal working chute with loading ramp valued at $2,000.00 as is shown on Exhibit P-1, page 13. Therefore, the contributory value of the yard site must be reduced by $2,200.00, which brings the value to $61,500.00. In addition the evidence establishes that the water source for the property on the NW 1/4 of 19-20-5-W3 is actually located on the SW 1/4 of 30-20-5-W3. The appraiser, Mr. Holstein, confirmed that the value of the contributory yard site on the NW 1/4 of 19-20-5-W3 would be reduced by the costs of getting water. Exhibit D-27 is the cost of the well for the SW 1/4 of 30-20-5-W3 therefore the contributory value of the yard site must be reduced by further $15,964.00, bringing the value of the contributory yard site on the NW 1/4 of 19-20-5-W3 to $45,536.00. [24] The value of the estate land is therefore calculated as follows: Value NE 1/4 of 28-21-5-W3 40,146.00 SE 1/4 of 30-21-5-W3 36,132.00 NW 1/4 of 30-20-5-W3 41,485.00 SW 1/4 of 30-20-5-W3 38,273.00 (add contributory value of yard site) 93,600.00 NW 1/4 of 19-20-5-W3 30,780.00 (add contributory value of yard site) 45,536.00 NW 1/4 of 36-19-6-W3 13,386.00 NE 1/4 of 36-19-6-W3 13,386.00 Portion of SE 1/4 of 36-19-6-W3 1,612.00 NE 1/4 of 1-20-7-W3 10 NW 1/4 of 1-20-7-W3 Total $407,868.00 [25] The respondent owns one-quarter of the estate land and it is agreed that his share of the estate land is matrimonial property. Therefore, one-quarter of $407,868.00 equals $101,967.00 which forms part of the matrimonial property. [26] The land described as the SE 1/4 of 11-20-7-W3 is valued at $26,778.00 and the respondent has an undivided one-half interest in the property, however, the property is mortgaged and the amount owing on the mortgage is approximately $28,650.00 as of the date of separation. Therefore, the land described as the SE 1/4 of 11-20-7-W3 has no value for the purposes of matrimonial assets. [27] The respondent owns an additional six quarters of land. Mr. Holstein, in Exhibit P-2 at page 11, values the land at $178,000.00. This land was owned by the respondent prior to the marriage to the petitioner. As of the month of December, 1989, (the date of the marriage) the land was valued at $176,400.00. This would indicate an increase in value of approximately $1,600.00 during the marriage. In cross-examination Mr. Holstein confirmed the land had not increased in value or, if it had, that the increase was marginal at best. Therefore, find this land has not increased in value. However, during the course of the marriage a mortgage debt of $24,000.00 was paid off with matrimonial property therefore the parties agree that $24,000.00 must be added to the value of the matrimonial property as the net increase in the equity in the six quarters. [28] The petitioner claims an interest in the standing crops. The respondent testified he had only completed seeding on one-third of the land when the petitioner left on June 3, 1999. He testified that he had large input costs which had to be paid after seeding and which were not charged as debt to the matrimonial property. He testified and accept that his costs exceeded the value of any potential interest in the standing crop. He also testified that he had farming loss for 1999. The issue is further complicated by the lack of evidence as to whether it was his personal land seeded or that of the partnership land. If it was partnership land, then his brother, Colin, would have an interest in the crops. In any event, am satisfied there is no interest to claim in the crops for 1999. PARTNERSHIP FARM EQUIPMENT [29] The respondent and Colin operate the farm in partnership with the equipment being owned equally by them except for the part which is estate equipment. [30] For the most part the appraisers, Mr. Hodgins and Mr. White, are close to each other as to the valuation of the partnership farm equipment. There are couple of major differences. The first relates to the TR97 combine with header. Mr. White values it at $109,000.00 which Mr. Hodgins values it at $84,000.00 (including the second header). prefer Mr. Hodgins value of the combine because he inspected it and Mr. White did nothing more than drive by while it was in operation. With respect the Ford NH tractor, Mr. White values it at $72,000.00 and Mr. Hodgins at $67,000.00. Again in this respect prefer the appraisal of Mr. Hodgins. In all other respects accept the appraisal of Mr. White. The net effect is to reduce the value of Mr. White's appraisal with respect to partnership equipment by the sum of $25,000.00 for the combine and $5,000.00 for the tractor for total of $30,000.00. [31] Therefore, find the partnership machinery and equipment to be as follows: Description Value TR97 x/971 30' NH Header pu header 84,000.00 Ford NH 9480 3000 hrs. 67,000.00 Versatile 855 7000 hrs. 18,500.00 JD 3155 w/MFWD 265 JD FEL 31,700.00 Ford 7700 6000 hrs. w/3pth (engine poor) 6,000.00 Flex 5000 x/1720 tank-single shoot 39' 45,000.00 IH cultivator w/applicator (rough) 5,000.00 NH 499 haybine (good shape except for reel) 12,500.00 NH 664 baler 15,000.00 Flexicoil 65 XL sprayer 130' wind guards 14,000.00 Ford 5000 w/FEL 3pth (power steering hyd pump shot) 2,500.00 Sakundiak HD7 45' w/Honda 13hp start 1,500.00 Old HD 4x45 Sakundiak (poor-motor no good) 250.00 Degelman rock picker ground drive (rough) 700.00 Westfield 61'x10' top load auger 53' Friggstad cultivator (very poor) 1,000.00 Morris B3-36 rod weeder 14' Noble double disc (rough) 1,200.00 MF 36 18' discer 250.00 MF 36 15' discer 250.00 CCI Co-op tractor 800.00 Case Model tractor 1,500.00 Auto trans swather 25' 500.00 Paysen swath roller 275.00 Shop contents were not appraised, but average contents w/floor hoist, etc. Total $319,925.00 [32] The respondent's share is one-half $319,925.00 which equals $159,912.50. [33] The respondent also owns the following property in his personal name: Description Value 1978 Kenworth 1,000.00 1975 Mac Tandem 10,000.00 1978 Grain Trailer 3,500.00 1972 Hay Trailer 2,500.00 1980 Yamaha SS440 [34] These items were acquired prior to the marriage and are exempt from matrimonial property. In addition, the respondent claims an exemption for the items listed on Exhibit D-22, however, am not satisfied that these items can be claimed as exempt because they have not satisfactorily been traced to replaced items. There is no pre-marriage valuation and no way to determine whether the trade in value represents the fair value. Therefore, decline to grant an exemption for them. [35] The respondent owns the following property in his own name which must be added to matrimonial property, namely: Value 1995 F-150 Truck 4x4 9,000.00 1983 F-150 Truck and fuel tank 800.00 1997 Skidoo 5,000.00 1976 Camper 3,000.00 1976 Glastron with 85 hp. Merc. 2,500.00 1997 Seadoo GTX and trailer 4,500.00 Contents of farm house [36] The matrimonial property is as follows: Description Value Respondent's value of estate land (agreed to be matrimonial property) $101,967.00 Value of SE1/4 11-20-7-W3 (joint with Colin) same as purchase price Nil quarters of land owned prior to marriage (no increase in value) Nil Value of mortgages paid off during marriage on land owned before 24,000.00 Partnership Equipment (½ $319,925.00) 159,912.50 48 cattle cow/calf pairs at $1,000.00 per pair 2,000.00 Grain on hand 21,476.72 NISA Fund #1 25,090.00 Amount withdrawn from NISA Fund II 18,739.00 Balance in NISA Fund II 9,650.00 RRSP (withdrawn) 7,443.28 Wheat Pool RRSP 838.00 Co-Op Equity 1,980.00 Bank of Nova Scotia 4,783.42 Final Wheat Board Payments 20,750.00 Value of standing crops Nil Value of respondent's personal equipment and leasehold contents 28,650.00 Disposition after date of Separation: Ford Truck value $26,000.00 interest Tub Grinder value $37,500.00 interest Total $509,997.92 [37] The farm partnership had the following debts as of the date of separation: Description Value FCC Combine 97,500.00 FCC Tub Grinder 20,030.68 NH Air Drill 1,913.75 Ford Truck (Bank of Nova Scotia) Total $198,595.43 The respondent is responsible for one-half of the $198,595.43 or $99,297.71. Therefore, the net matrimonial property after partnership debts is ($509,997.92 $99,297.71) $410,700.21. [38] The respondent's personal debts as of June 9, 1999, as shown on Exhibit D-14 and D-15 are: Description Amount Ford Credit Van 20,363.69 Ford Credit Truck 2,543.05 Bank of Nova Scotia 50,000.00 Scotia Bank Loan 8,971.15 Canadian Wheat Board Cash Advance 16,853.50 Livestock Feeder Association Loan 20,000.00 SaskTel Mobility 442.39 Peoples Jewellers 6,061.66 C.D. Haley Van Policy 719.98 Pioneer Grain 280.48 Atlas Grain 160.85 G.E. Noren Accountants 465.45 C.D. Haley Insurance 751.00 Heartland Agro 3,341.12 Tugaske Co-Op 1,127.08 Paysen Livestock 1,074.81 Barb Paysen for cows 2,000.00 R.M. of Ernfold 523.34 Revenue Canada 355.43 Sask Crop Insurance 9,439.12 Total Personal Debts $158,577.34 Description Amount Matrimonial Property before deduction of Personal Debts $410,700.21 Personal Matrimonial Debt 158,577.34 Net Matrimonial Property $252,122.87 [39] One further issue must be dealt with before finalizing the net matrimonial property. At the date of death of the respondent's father the value of the farm equipment was $103,250.00. Each of the four children is entitled to one-quarter of $103,250.00 or $25,812.50. This amount has not been paid. am satisfied on the evidence this debt still exists and that the respondent owes and must pay the sum of $25,812.50 from his interest in the estate. After deducting this sum, that is $252,122.87 $25,812.50, the net sum available as matrimonial property is $226,310.37. Each party is entitled to one-half $226,310.37 or $113,155.19. [40] The costs of the appraisals should be totalled and each party is responsible for one-half of the cost of appraisals. [41] accept the evidence of Barry White as to the valuation of the assets of the marriage in the possession of the petitioner. These assets are found on Exhibit P-6. Therefore, find the total value of the matrimonial property assets set forth on Exhibit P-6 and in the hands of the petitioner to be $15,580.00. [42] Several items were ordered to be turned over to the petitioner by Kyle J. do not intend to make any further order on these items other than to state that the Skidoo appears to belong to Randy and is therefore not matrimonial property. The buffet and hutch according to the petition has value of $1,200.00 if it were replaced. No evidence was given with respect to the value of the pots and pans, children's toys or the bedroom suite ordered transferred by Kyle J. to the petitioner. [43] Therefore, the petitioner will have judgment against the respondent for the sum of $113,155.19 less the sum of $15,580.00 (being the value of the assets in her possession) leaving a balance of $97,575.19 to be paid to the petitioner, less one-half the costs of the appraisals. The judgment shall be a charge on the respondent\'s personal land. [44] There are no costs awarded to either party and each must pay his or her own costs. [45] In the event the respondent fails to pay the amount of the loan secured by the van now in the possession of the petitioner, the petitioner may apply for judgment against the respondent for the amount remaining unpaid.
Issues of divorce, custody and access were disposed of by judgment given during the course of the trial by consent of the parties. Matrimonial property was to be divided, maintenance for the children and spousal support were to be determined. HELD: 1)Access was to be mutually agreed upon with the 18 year old to whom the respondent stood in loco parentis.  2)Expert evidence of tax implications was not called as the respondent failed to give notice as required by the Rules of Court. 3)The mother's annual income for purposes of the Guidelines was fixed at $11,376 not including the $300 child support she received from the natural father of the 18 year old. The respondent's farming income was determined on a 3 year average as it varied from year to year. The facts justified adding back 25% of the capital cost allowance on the machinery over the last 3 years for Guideline purposes. Day care and play school costs of $440 per month were to be divided according to their proportionate share based on the Guidelines. The respondent was to pay one-half of the cost of extra curricular activities and any future activities as agreed upon. The approach used in Cook v. Kilduff was adopted and the amount for the two natural children was deducted from the amount payable for three children. One-half of the difference was added to the Guideline amount of support for the two children. 4)Spousal support was not ordered. The mother was employed and the respondent's income was not likely to increase in the near future. Given he paid child support and the extra costs, their income was nearly the same. 5)Of the six quarter sections owned by the respondent prior to marriage, there was no equity in one and the increase in value in the others was marginal. Credit was given for the reduction in the mortgage debt by $24,000. There was no interest to be divided in the 1999 crops. 6)The petitioner was awarded judgment for $113,155.19 less $15,580 for assets in her possession and less one-half the appraisal costs. The judgment was to be a charge on the respondent's land. The petitioner may apply for judgment for the amount of the loan secured by the van in her possession if the respondent fails to pay off the loan. 7)Each was to pay his or her own costs.