Make Justice Unaffordable...Again!
The Supreme Court of Canada recently refused
to hear an appeal in the matrimonial case LeVan v. LeVan,
thereby passing up a splendid opportunity to undo some major mischief
done by Ontario’s lower
courts over the past few years.
The facts of the case include more wrinkles
than can possibly be described here. However, in a
nutshell, the lower courts nullified a marriage contract under which
the wife had apparently agreed, in case of a separation, to forego the
property equalization and spousal support rights that Ontario law would normally bestow
Seven years after marriage, the couple split
LeVan then applied to the court for all the things the contract said
she wouldn’t get, and the court gave them to her: $5.3 million in
property equalization and $79,680 yearly in spousal support.
The court found the contract “unfair” for
several reasons, but the one I want to focus on here is the fact that
the husband had not disclosed in advance the dollar value of his assets. His family owned a
controlling interest in a large Canadian manufacturing company. In other words, Mr.
LeVan was rich—worth almost $15 million—but he neglected to tell his
he did tell her was that if she didn’t sign the marriage contract,
there would be no wedding.
Putting it bluntly, the bride had two
sign the marriage contract and get virtually none of the husband’s
money, or not get married at all—in which case she would obviously get
none of the husband’s money. Note that both
options included the part about not getting any significant amount of
the husband’s money. Therefore, how could it possibly have mattered
whether she knew the dollar value of his assets, since she wasn’t going
to get any of them either way? Zero percent of any
number is still zero.
Now, it’s possible that Mrs. LeVan didn’t
actually understand that she wouldn’t be getting any of her husband’s
contract was such a hasty, botched-up mess that it’s not even clear
whether the dyslexic husband or the three lawyers involved in
negotiating it understood the final product. But that’s a different
My beef, and the concern of lawyers across Ontario, is that the courts have now
made it virtually mandatory for betrothed individuals to disclose a
dollar value for their assets, supported by independent appraisals,
even if their marriage contract denies them any rights to each other’s
wealth and even if both parties understand that. Our
paternalistic courts have held that without knowing “what asset base
might potentially grow”, couples can’t understand what they are giving
even if they’re determined to marry for love rather than money, they’ve
got to produce those numbers.
During the negotiations, Mr. LeVan’s lawyer
had responded to a request for financial disclosure with the objection
that a “full-blown valuation” would cost “at least $10,000.” Ha!
By the time the trial was over, the wife’s
appraiser had billed $244,753 for valuing the husband’s pre-marriage
and post-separation assets, and for appearing as a witness. The
husband’s appraiser estimated, even more outlandishly, that the
valuations would cost over $500,000.
Faced with costs like this, what individuals
in their right minds would ever get marriage contracts prepared? Even my
middle-class clients will look askance at paying $1,000 extra to have
their houses and pensions appraised when the outcome won’t make one
iota of difference. How many people have just been effectively deprived
by the courts of their statutory right to opt out of property
The ultimate irony is that the Supreme
Court’s decision not to tackle this case was made by a panel of three
judges including Justice Ian Binnie. In
a 1999 speech, Justice Binnie denounced “astronomical” legal expenses,
saying “I am staggered at the amount of money law firms can burn up in
addressing issues. You can burn up thousands and thousands and
thousands of dollars unnecessarily.” Then, in a letter
published here in the National Post, he wrote: “…the fault lies with
the structure of civil litigation, which pushes conscientious lawyers
to engage in lengthy pre-trial procedures that are out of proportion to
the matter in issue and are in that sense ‘unnecessary’ to produce a
just result.” I
responded in these pages with this column arguing that, frequently,
it is judges who make justice unaffordable.
Justice Binnie, it appears that this is
another case where you judges were not part of the solution. Which means…
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