Gosse v. Sorensen-Gosse, 2011 NLCA 58

In Gosse v. Sorensen-Gosse, the Newfoundland and Labrador Court of Appeal held that sections 14, 15, and 26 of the Family Law Act ("FLA") must be exercised in a manner consistent with each spouse’s equal interest in the matrimonial home. The Court also held that corporate income could be attributed to a sole shareholder where that shareholder had complete discretionary control of the corporation’s income.

In the case, the Court held that, where an occupying spouse was given the opportunity to buy out a non-occupying spouse’s interest in the matrimonial home, the payment to the non-occupying spouse should reflect as equal an increase in the value of the matrimonial home as circumstances allow. Consequently, the Unified Family Court’s Judge’s ruling, which accounted for increases only until the date of trial and not until the date of the buying out of the non-occupying spouse’s interest, was quashed.

In dividing the monthly rental value of the matrimonial home, Wells, J.A. warned that the discretion to award occupational rent or a comparable offsetting payment is more narrow than suggested in Harvey v. Harvey, and some compensation to the non-occupying spouse will usually be required to conform with the objectives of FLA section 5(b). Since expert evidence concerning the value of monthly rental of the matrimonial home was in conflict, the Court awarded the median of the conflicting amounts.

Wells, J.A. finally analyzed sections 17 and 18 of the Child Support Guidelines (which allow a corporation’s income to be imputed to a shareholder in determining what funds that shareholder has available for the purposes of child support payments). In determining what funds the Respondent had available for the purpose of paying child support obligations, Wells, J.A. noted that the Respondent was the sole shareholder of the Corporation, the Respondent had discretionary control over 100% of the Corporation’s income, and the Corporation had paid 75% of the Respondent’s legal fees in previous proceedings. As such, the Court attributed 85% of the Corporation’s pre-tax income to the Respondent.

September 14, 2011
Link to Decision

Liam Oster
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