The Supreme Court of Canada has refused to rewrite a marriage agreement that left a Vancouver woman with just a small portion of the family assets that built up during her nine-year marriage.
A 6-3 majority ruled that the couple -- both lawyers -- knew exactly what they were doing when they hammered out an agreement that ultimately left Kathleen Hartshorne with just $280,000 of the $1,415,000 in family assets.
The court emphasized that judges will be loath to interfere with fair agreements negotiated by couples who obtained legal advice and made a conscious decision.
The ruling cements a judicial move toward creating greater certainty and finality for both married and unmarried partners. In 2002, the court ruled that common-law partners cannot claim an equal division of matrimonial property if their relationship breaks down. In 2003, it ruled that separation agreements are binding contracts, not to be reopened lightly. "Once an agreement has been reached . . . the parties thereto are expected to fulfill the obligations that they have undertaken," Mr. Justice Michel Bastarache said of the decision. "A party cannot simply later state that he or she did not intend to live up to his or her end of the bargain."
When couples take personal responsibility in this way, Judge Bastarache said, "the courts should be reluctant to second-guess the arrangement on which they reasonably expected to rely."
At the same time, he added, courts will continue to ensure fair treatment for spouses who would be left in genuine financial hardship or who are incapable of returning to the career they have interrupted.
Judge Bastarche said many marriage agreements are specifically designed to safeguard the unequal assets of a couple planning to marry. Others simply fail to anticipate the twists and turns of a couple's financial affairs as their marriage progresses, and may eventually require judicial restructuring to return a measure of fairness.
Ms. Hartshorne, 50, and her ex-husband, Robert Hartshorne, lived together for three years before deciding to get married in 1987. Together, they had two children.
"He brought assets worth approximately $1.6-million into the marriage, including his law practice, while the respondent entered the relationship with no assets and heavily in debt," Judge Bastarache noted.
Having lost a great deal of assets after the breakdown of his first marriage, Mr. Hartshorne, 57, had insisted on a contract being signed on the wedding day to avoid any repetition of the experience. Their contract kept their property entirely separate, allowing only for Ms. Hartshorne to gain 3-per-cent interest annually in the family home.
Ms. Hartshorne signed the agreement after receiving legal advice that while the terms were "grossly unfair," the contract would probably be overturned by the courts if the couple ever separated.
After they separated in 1998, Ms. Hartshorne went to court arguing that the original agreement was signed under duress.
A court awarded Ms. Hartshorne assets worth $654,000, approximately 46 per cent of the family assets. Those included a share of their vacation property, RRSPs, savings and Mr. Hartshorne's law practice. She also received spousal support payments.
However, the Supreme Court said yesterday that the couple's financial history closely mirrored what they ought to have anticipated. It said Ms. Hartshorne can attempt to partly remedy disparity through a renewed application for support payments.