Hartshorne v. Hartshorne, (2010) 289 B.C.A.C. 244 (CA)

• Judge: Frankel, D. Smith and Groberman, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: June 28, 2010
• Jurisdiction: British Columbia
• Citations: (2010), 289 B.C.A.C. 244 (CA);2010 BCCA 327

Hartshorne v. Hartshorne (2010), 289 B.C.A.C. 244 (CA);

    489 W.A.C. 244

MLB headnote and full text

Temp. Cite: [2010] B.C.A.C. TBEd. JN.087

Robert Kenneth Hartshorne (appellant/respondent on cross-appeal/plaintiff) v. Kathleen Mary Mildred Hartshorne (respondent/appellant on cross-appeal/defendant)

(CA037220; 2010 BCCA 327)

Indexed As: Hartshorne v. Hartshorne

British Columbia Court of Appeal

Frankel, D. Smith and Groberman, JJ.A.

June 28, 2010.

Summary:

The 52 year old husband and the 46 year old wife separated in 1998 after 12.5 years' cohabitation, including  nine years' marriage. They had two children. Both spouses were lawyers and were previously married. The wife practised law for six years until their first child was born. Thereafter she stayed home with the children. The husband, who brought $1.6 million in assets into the marriage, had the wife, who brought substantial debt and no assets into the marriage, sign a marriage contract. The wife's independent legal advisor advised against signing it, but also advised that the courts would set it aside on the grounds of unfairness. The contract provided that each spouse retain their own property, depriving the wife of any share of the husband's assets, except for three percent of the value of the marital home for each year of marriage and a provision for marital home contents and family vehicles. The contract did reserve the wife's entitlement to spousal and child support. The spouses sought a divorce. At issue was custody and access, the quantum of child support (including extraordinary expenses), spousal support and the enforceability of the contract, which the wife claimed was signed under duress and was unfair.

The British Columbia Supreme Court, in a decision reported at (2001), 22 B.C.T.C. 288, granted a divorce, awarded sole custody of the children to the wife and access to the husband, fixed child support and extraordinary expenses under the Federal Child Support Guidelines and awarded the wife $2,500/month spousal support (to be reduced to $1,500/month when the wife's income reached $2,000/month). The court held that the marriage contract was not unconscionable or entered into under duress, coercion or undue influence. However, the contract was "unfair" within the meaning of s. 65 of the Family Relations Act and the court reapportioned the marital assets more equitably. The court ordered an equal division of the marital home and its contents and a division of vacation property, RRSPs and savings at 60 percent in favour of the husband and 40 percent in favour of the wife. In reasons reported at [2001] B.C.T.C. Uned. 72, the Supreme Court conducted a valuation of assets. The husband appealed both decisions.

The British Columbia Court of Appeal, Thackray, J.A., dissenting in part, in a judgment reported (2002), 174 B.C.A.C. 129; 286 W.A.C. 129, dismissed the appeal. The husband appealed.

The Supreme Court of Canada, Deschamps, Binnie and LeBel, JJ., dissenting in part, in a judgment reported (2004), 318 N.R. 1; 194 B.C.A.C. 161; 327 W.A.C. 161, allowed the appeal. Enforcement of the contract was not unfair given the circumstances present at the time of distribution. Any economic disadvantage suffered by the wife could be compensated for by way of spousal support. The wife then applied for spousal support and increased retroactive and prospective child support.

The British Columbia Supreme Court, in a judgment reported [2009] B.C.T.C. Uned. 698, awarded the wife lump sum spousal support of $350,000 (retroactive to the February 2001 date that marital property was initially divided) and increased retroactive and prospective child support. The husband appealed. The wife cross-appealed that she was entitled to only a 27% interest in the marital home, calculated on the basis of 3% per year times nine years of marriage.

The British Columbia Court of Appeal allowed the appeal in part. The lump sum award was affirmed. Although the trial judge was correct to find that the husband was disentitled to the negotiated 7% interest on the compensation award payable by the wife to the husband, he erred in failing to award post-judgment interest on the initial $265,318 compensation order. The court rescinded the award of prospective child support for the eldest son as of May 28, 2009, as the trial judge erred in finding that he continued to be a child of the marriage after that date. The wife's cross-appeal was dismissed.

Family Law - Topic 867

Husband and wife - Marital property - Distribution orders - Interest on awards (incl. post-judgment interest) - A 1999 court order provided that the husband was to convey his interest in the spouses' marital home to the wife as part of a marital property distribution that required the wife to make a compensation payment of $265,318 to the husband - The parties agreed to the wife paying 7% interest on the compensation payment - The husband never conveyed his interest over the years, yet still claimed entitlement to 7% interest - Because he never conveyed his interest, the wife could not mortgage the property to pay the compensation payment - The British Columbia Court of Appeal held that the husband was not entitled to the negotiated 7% interest, stating that "he cannot, in my view, be permitted to profit from the higher negotiated interest rate when he failed to comply with the other terms of the order in Hartshorne 2001 that were never appealed" - The husband was entitled post-judgment interest only - See paragraphs 62 to 66.

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance awards - Retroactive awards - Spouses separated in January 1998 after 12.5 years' cohabitation, including nine years' marriage - Both were lawyers - It was the second marriage for each of them - The wife left the practice of law to raise their two children, now aged 21 and 23 - As of the date of separation, the husband was 52 and the 46 year old wife had been out of the workforce for 11 years - In 1999, the court awarded spousal support and in 2002, spousal support was terminated - The wife re-entered the practice of law in 2001 at a salary of $52,000 - In 2004, the Supreme Court of Canada reversed the marital property division (now more favourable to the husband) and directed that the wife's right to spousal support could be determined by a "new application" - In 2007, the wife applied for spousal support - The trial judge awarded lump sum spousal support of $350,000, retroactive to the division of marital property in February 2001, based on the husband's average post-separation income - The husband appealed, submitting that the trial judge erred in awarding compensatory support where the wife framed her application as a "variation" application and erred in using his post-separation income - The British Columbia Court of Appeal dismissed the appeal - The husband's characterization of the application (and the wife's initial formulation of her application) as a "variation" application misstated the direction of the SCC to convert the initial support order as the functional equivalent of an interim order and which authorized the filing of a "new" application - The initial support orders were fundamentally flawed and could not therefore be the starting point for any new application - The trial judge was correct to proceed under s. 15.2(1) of the Divorce Act as an initial application rather than as a variation under s. 17(1) - The trial judge did not err in basing his award on the husband's average post-separation income or in awarding support at the high end of the range of the Spousal Support Advisory Guidelines for the 10 year period commencing January 1, 2000 - Consideration of the parties' post-separation income more accurately reflected the reality of the wife's economic disadvantage arising from the marriage breakdown - See paragraphs 44 to 61.

Family Law - Topic 4011

Divorce - Corollary relief - Maintenance awards - Lump sum - [See Family Law - Topic 4001.1 ].

Family Law - Topic 4014

Divorce - Corollary relief - Maintenance awards - To children and children defined - A father paid child support for his son born in 1987 - In 1997, the son was diagnosed as a "special needs" child - However, the son completed high school (2005) - He worked periodically from 2005 to 2008, taking an adult education course from September 2006 to May 2007 - The son started university in January 2008, but left in April - He returned to his employment, yet still maintained his desire to attend university, although there were no concrete plans to do so - In May 2009, the trial judge awarded increased retroactive and prospective child support - The father appealed, submitting that the son was no longer a child of the marriage when the order was made, so the trial judge had no jurisdiction to hear the application - The British Columbia Court of Appeal allowed the appeal in part - The trial judge did not lack jurisdiction to award increased retroactive and prospective child support where the child was over the age of majority at the time of the application, because the application was first made by the mother in 2002 when the son was still a child of the marriage - However, the trial judge erred in awarding increased prospective support for the son, as the son was no longer a "child of the marriage" - The judge erred in finding the son unable to withdraw from his parent's charge because he was a "special needs" child - The court stated that "in the absence of evidence of 'special needs' that is linked to the son's inability to find employment to support himself, the trial judge's implicit finding of an ongoing dependency by reason of his ADHD and ODD as the basis for the award of ongoing prospective child support amounts to palpable and overriding error" - The court noted that the son may return to the status of child of the marriage if he returned to university - See paragraphs 67 to 78.

Family Law - Topic 4021.5

Divorce - Corollary relief - Maintenance awards - Awards - Support guidelines - [See Family Law - Topic 4001.1 ].

Cases Noticed:

Toth v. Toth (1995), 64 B.C.A.C. 81; 105 W.A.C. 81; 13 B.C.L.R.(3d) 1 (C.A.), refd to. [para. 46].

Metzner v. Metzner (1997), 91 B.C.A.C. 241; 148 W.A.C. 241; 34 B.C.L.R.(3d) 314 (C.A.), refd to. [para. 46].

Fisher v. Fisher (2008), 232 O.A.C. 213; 2008 ONCA 11, refd to. [para. 48].

Oakley v. Oakley (1985), 48 R.F.L.(2d) 307 (B.C.C.A.), refd to. [para. 49].

Moge v. Moge, [1992] 3 S.C.R. 813; 145 N.R. 1; 81 Man.R.(2d) 161; 30 W.A.C. 161, refd to. [para. 52].

Yemchuk v. Yemchuk (2005), 215 B.C.A.C. 193; 355 W.A.C. 193; 16 R.F.L.(6th) 430; 2005 BCCA 406, refd to. [para. 55].

Redpath v. Redpath et al. (2006), 228 B.C.A.C. 272; 376 W.A.C. 272; 33 R.F.L.(6th) 91; 2006 BCCA 338, refd to. [para. 55].

Tedham v. Tedham (2005), 217 B.C.A.C. 250; 358 W.A.C. 250; 47 B.C.L.R.(4th) 254; 2005 BCCA 502, refd to. [para. 55].

D.B.C. v. R.M.W., [2006] A.R. Uned. 809; 69 Alta. L.R.(4th) 170; 2006 ABQB 905, refd to. [para. 56].

Kelly v. Kelly, [2007] B.C.T.C. Uned. 105; 2007 BCSC 227, refd to. [para. 56].

Bryant v. Gordon, [2007] B.C.T.C. Uned. 525; 45 R.F.L.(6th) 99; 2007 BCSC 946, refd to. [para. 56].

C.L.M. v. R.A.M., [2008] B.C.T.C. Uned. 194; 2008 BCSC 217, refd to. [para. 56].

Chalifoux v. Chalifoux, [2006] A.R. Uned. 415; 2006 ABQB 535, revd. (2008), 425 A.R. 361; 418 W.A.C. 361; 2008 ABCA 70, refd to. [para. 56].

Rozen v. Rozen, [2003] B.C.T.C. 973; 37 R.F.L.(5th) 205; 2003 BCSC 973, refd to. [para. 56].

Fletcher v. Fletcher, [2003] A.R. Uned. 656; 2003 ABQB 890, refd to. [para. 56].

Robinson v. Robinson (1993), 66 O.A.C. 381; 107 D.L.R.(4th) 78; 48 R.F.L.(3d) 265 (C.A.), refd to. [para. 56].

Chutter v. Chutter et al. (2008), 263 B.C.A.C. 109; 443 W.A.C. 109; 2008 BCCA 507, refd to. [para. 58].

D.B.S. v. S.R.G., [2006] 2 S.C.R. 231; 351 N.R. 201; 391 A.R. 297; 377 W.A.C. 297; 2006 SCC 37, refd to. [para. 67].

Counsel:

M.R. Ellis, Q.C., for the appellant;

S.N. Mansfield, for the respondent.

This appeal and cross-appeal were heard on April 1, 2010, at Vancouver, B.C., before Frankel, D. Smith and Groberman, JJ.A., of the British Columbia Court of Appeal.

On June 28, 2010, D. Smith, J.A., delivered the following judgment for the Court of Appeal.