Nova Scotia Supreme Court clarifies rule on unequal division of matrimonial assets

The Nova Scotia Supreme Court has clarified the rule on the unequal division of matrimonial assets following an order of divorce.

The primary dispute in Whitman v. Hammond, 2023 NSSC 234, is how a divorced couple's property should be divided under the Matrimonial Property Act. Lana Whitman and Greg Hammon cohabited for almost four years before marrying. Their eventual marriage was childless. The court granted their divorce after Whitman proved the marriage had permanently broken down and there was no prospect of reconciliation.

Whitman wanted an equal division of their marital property, valued at over $500,000. On the other hand, Hammon wanted property divided unequally based on subsections 13(b) and (e) of the Matrimonial Property Act.

The Nova Scotia Supreme Court noted that marital assets would be divided into equal shares at the end of marriage under the act. The court, however, stressed that in limited circumstances under s. 13, the act allows an unequal division of marital assets if the court is satisfied that an equal division would be "unfair or unconscionable" regarding certain enumerated factors.

The court, citing jurisprudence, further explained that equal divisions "should normally be refused only where the spouse claiming a larger share produces strong evidence showing that in all the circumstances equal division would be unfair and unconscionable."

The court found that Hammon failed to prove, on a balance of probabilities, that it would be unfair or unconscionable to divide marital assets equally regarding the amount of debt and liabilities and the circumstances in which they were incurred.

However, the court found that the date and manner of the assets' acquisition justify an unequal property division. The court noted that more than 90 percent of the value of the assets originated with Hammond's inheritance, which he used for matrimonial purposes. These assets are matrimonial and subject to division.

Hammond was the sole heir of his parents, who died in 2013. He inherited a car, life insurance proceeds, cash assets, household contents and personal effects. Registration of their home had also been transferred into his name. The house was later sold for almost $700,000.

The court further noted that Whitman and Hammond's relationship endured approximately seven years. During this time, Whitman worked and contributed to the household. The court said, "This isn't a case where Ms. Whitman did not contribute, though most of the value of the matrimonial assets stems from Mr. Hammond's inheritance and his investment into the marriage."

Since much of the marital wealth was attributable to Hammond's inheritance, the court found that it would be unfair or unconscionable to divide the value of the matrimonial assets equally. Accordingly, the court ordered that the value of the matrimonial assets be divided unequally in Hammond's favour. The court ordered that he would retain 75 percent of the value of the assets, and Whitman would have 25 percent.