Sunday, July 19, 2009

Dealing With Antiques On Marital Breakdown

A recent decision of the Supreme Court of British Columbia confirms that trying to predict how a judge with deal with the division of antiques upon marital breakdown is futile, and that it’s best to resolve at least that one issue outside of the courtroom.

In the December, 2008, case of Lane v. Creighton, The Honourable Madam Justice Bruce was charged with deciding whether to order the antiques purchased by Melodie Lane and David Creighton during their 17 years of cohabitation, sold, or divided between them; who should pay for the storage costs incurred by Dr. Creighton after the parties’ separation; and all associated logistics. A compounding issue was that while an appraisal pegged the value of the antiques at $30,820, at one time Dr. Creighton had estimated that they were worth $200,000.

Dr. Creighton and Ms. Lane married in 1981, and separated in 1998. They had three children. The family continued to live together in the matrimonial home until late 2000, when Ms. Lane commenced court proceedings. In the course of eight years of litigation leading to the trial decision, their struggles and allegations escalated, and resulted in the court having to decide almost every issue imaginable, including: custody and access; child and spousal support; who was to blame for alienating the children from which spouse; whether Ms. Lane was mentally ill as repeatedly alleged by Dr. Creighton; and their acrimonious dispute over the sale and division of assets, including their collectibles.

Of course given this backdrop it should come as no surprise that Justice Bruce found that there was clear evidence that “there can be no trust between these individuals.” That being the case, why did she order Dr. Creighton alone to have conduct of the sale of the antiques simply because he had possession of them, and grant him authority to approve of any price offered without Ms. Lane’s consent (though she ordered him to provide an accounting)?

Dr. Creighton had retained the antiques since separation, initially in his garage. But between 2003, and the date of trial, he had been paying between $240 and $270 a month in storage fees … approximately $18,000 paid out altogether! Dr. Creighton never offered his wife the opportunity to hold onto any of the antiques. Ms. Lane never knew that her husband was incurring storage costs. But in the end Justice Bruce ordered that Ms. Lane was to be responsible for half of the costs up until the date of her judgment.

Dr. Creighton submitted that the antiques should be sold, with the proceeds divided equally after deducting his storage costs. Ms. Lane wanted everything sold, or divided equally, but stated that she should not be saddled with storage costs that she did not know were being incurred. She was agreeable to accepting half of their appraised value, somewhat surprising since her husband had at one point in time commented that they were worth more than seven times that amount.

The judge opined that it was difficult to strike a balance between on the one hand Ms. Lane’s position that she should not have to be responsible for costs she did not know were being incurred and over which she had no control, and on the other the fact that Dr. Creighton went to considerable expense storing the items and did not treat them as his own by selling or otherwise disposing of them, as often occurs in matrimonial disputes. The question as to the true value of the antiques also troubled the judge.

Justice Bruce concluded that the only fair means of allocating a value to and dividing the antiques was to have them sold. She ordered that Dr. Creighton be reimbursed for his storage costs out of the proceeds before they were divided equally. The incentive that the court gave to Dr. Creighton to sell the antiques on a timely basis, was that he alone was to bear the storage costs from the date of the judgment until their disposition. Finally, Justice Bruce ordered that in the event that Dr. Creighton was unable to sell any or all of the antiques by December 31, 2009, he and Ms. Lane were to divide them equally in specie (such as using an alternate choice mechanism), as long as Ms. Lane had paid her husband half of the storage costs incurred over the seven year period.

The decision may appear reasonable, but leaves two unanswered questions:

1) If the judge was prepared to have the parties divide up any remaining antiques, why didn’t she just order an alternate choice means of distribution in the first place, with Ms. Lane having to reimburse Dr. Creighton for half of his storage costs? A coin toss could have easily resolved the issue of who chooses first, and if there was one antique worth a great deal more than the rest, two other items could have been lumped together to reduce any financial inequity resulting from the coin toss. After all, she did order that precise resolution in the event some or all were not sold, so she must have been comfortable with how it would unfold. It would have avoided an extra step; enabled each party to retain half of the collectibles; and redressed any power imbalance resulting from Dr. Creighton having complete control.

2) Why did the Judge entrust the conduct of the sale to one party, when she knew that there was that level of mistrust and acrimony between the spouses, when should could have ordered an independent third party chosen by the spouses to conduct the sale?

The answer leads us to the lessons to be learned, and provides some insight into the role of the court in such disputes, and the discretion which a superior court judge exercises.

When rendering decisions, judges usually cite legislation and case law as precedents. They generally follow laws which reference broad yet exacting principles of financial fairness. But when it comes to asset distribution, their discretion is almost boundless as long as monetary equity prevails: division of assets vs. their sale; who gets what and by what means; the extent to which appraisal evidence will be accepted; etc. The adage “you never know what a judge will do” applies in spades to resolving disputes concerning assets.

Many family law lawyers refuse to deal with the division of household contents at the trial level, and basically insist that spouses either find a way to resolve the matter on their own, with minimal assistance of counsel, or through mediation. And many judges do not see that their role includes dealing with such minutiae. Of course there are exceptions, such as in the 2006, Saskatchewan decision in Cey v. Cey, where the judge considered who should get the antique dining room suite based upon which spouse had more of an emotional attachment to it.

If you cherish your antiques, play an active role in their division upon separation, outside of the courtroom, rather than leave the decision to a government employee. If the battle with your estranged spouse is bitter, and you hear “I don’t care, let the judge order everything sold,” remember that it might just be posturing. When a calmer moment emerges, seize the opportunity, through negotiation, to try to retain at least part of what you’ve spent years collecting.

You’ll be happier for it.

- Alvin Starkman, Oaxaca, Mexico

For 28 years Alvin Starkman has resented that his first wife ended up with the oak roll-top, while he got the Victorian sleigh style brass bed. Alvin is a member of The Law Society of Upper Canada. However, this article is not intended to be and should not be relied upon as constituting legal advice or opinion. Alvin and Arlene, former Toronto residents and collectors of Canadiana, moved to Mexico in 2004. They operate Casa Machaya Oaxaca Bed & Breakfast.

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