Case information

Family law – Division of property – Fairness of marriage agreement – Remedy – Parties electing separate property regime in marriage agreement – Marriage agreement found valid – Trial judge finding marriage agreement to operate fairly and awarding a lump sum of spousal support – Court of Appeal concluding marriage agreement operated unfairly and ordering reapportionment of assets – How should the courts balance fairness and certainty of contract in marriage agreements? – Does significant growth in the value of assets excluded from division by a valid marriage agreement by itself render the operation of the agreement unfair? – To what extent should spouses be held to their original intentions at the time a marriage agreement is made? – Family Relations Act, R.S.B.C. 1996, c. 128, s. 65(1).

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The parties began living together in 1992, married in September 1997, and separated in June 2014. Prior to their marriage, they signed a marriage agreement which provided that Mr. Callahan’s business interests, including those he acquired following the parties’ marriage, would not be subject to division. Those business assets grew exponentially in value during the marriage and until the time of trial. The proceedings between the parties included a property division claim that had to be decided under the former Family Relations Act, R.S.B.C. 1996, c. 128, and the approach for determining the fairness of marriage agreements set out in Hartshorne v. Hartshorne, 2004 SCC 22, [2004] 1 S.C.R. 550. The trial judge found the marriage agreement was valid and operated fairly. He ordered Mr. Callahan to pay Ms. Bradley a lump sum of spousal support. The Court of Appeal found that the trial judge erred. It concluded that the agreement was not fair because it allowed Mr. Callahan to keep all the increased value in corporate assets despite Ms. Bradley’s contributions to their growth over a 17-year marriage. It ordered reapportionment of the corporate assets. The award to Ms. Bradley was meant to approximate 25 percent of the increase in the value of corporate assets from the date of the marriage to the time of marriage breakdown, plus a 5 percent return on that increase to the date of trial, less the lump sum award of spousal support made by the trial judge.