The wife requested a robust preservation order over the husband's business
The PEI Supreme Court has granted a preservation order over a man's fishing business after his wife raised concerns about his drug addictions and unpaid loan obligations.
The dispute in M.B. v. D.B., 2023 PESC 39 involved the issue of whether to grant the wife's request for a robust preservation order concerning the husband's fishing operation, essentially giving control to the wife. The wife alleged that the husband has drug addictions. She was concerned with actions that have been taken and may be taken by the husband, resulting in potential depletion of assets and adverse impact on the wife's credit rating and the family home.
The wife raised concerns about thousands of dollars allegedly withdrawn from accounts, including over a relatively recent period. The wife was particularly alarmed that the husband recently failed to pay two substantial loan payments associated with the fishing operation. The wife claimed that the husband's actions put the fishing operation's entire existence at risk.
The wife's counsel highlighted that over $56,000 had been "diverted" in the six weeks from mid-June. The counsel argued that the husband was "either egregiously overspending or he is stockpiling money in an account hidden" from the wife.
The husband urged the court not to grant the preservation order. He denied that he has drug addiction issues. He argued that the wife's concerns about him were unwarranted and that the husband could run the fishing operation successfully. He asserted that the fishing operation was in good standing and well maintained and that bills were paid.
The husband contended that if a broad preservation order was granted, the operation of the business would be impossible because the husband would not be able to continue the daily basic operations of the business. He argued that the "husband is the business" and that granting the order sought by the wife would essentially "put the wife in control of the husband." The husband also argued that the wife is not equipped to control the business, highlighting that the wife does not fish herself and does not "know how to sell the fish once caught."
The PEI Supreme Court acknowledged that the wife has consistently sought a preservation order to prevent the husband from selling his fishing operation without the wife's written consent. The wife had also, generally, sought an order to assume control of the books and banking associated with the fishing operation and that she be the sole signatory on the banking accounts. The wife has also consistently sought an order that the husband not add to the balance of any business debts or jointly held debts without the wife's express consent.
The wife argued that if the preservation order was not granted, the wife would suffer irreparable harm. The wife was concerned about the depletion of assets and failure to meet financial obligations. The wife also believed that if the husband remained in control of the business, the husband would eventually refuse to pay support. The wife argued she would potentially lose millions if the fishing business failed before the parties could resolve the equalization of assets.
After carefully reviewing the law, the evidence, and the relevant case law, the court concluded that the wife's request for a preservation order should be denied.
The court noted that the purpose of a preservation order is to ensure that if an equalization payment is found to be owing, sufficient assets are available to satisfy the equalization payment. There must be some evidence to establish that the preservation order is necessary to preserve the other party's property to protect the moving party's interest in an equalization payment.
The court ultimately decided to decline to grant the wife's preservation order. The court refused to make any specific finding that the court mistrusted the husband or suspected him of "malfeasance." However, the court raised some concerns, including the husband's failure to pay spousal support or child support since the date of the separation, which was over a year ago.
The court likewise highlighted the husband's potential addiction issues and the fact that he failed to make two significant loan payments. The court also noted that significant sums were withdrawn from the business accounts over a relatively short period.
The court was satisfied that it was appropriate to place some safeguards in place. Accordingly, the court granted the wife's request for a preservation order with modifications upon finding that the order requested by the wife was broad.
