Spouse Used $200k From her Husband to Purchase an Funding Property

A Nova Scotia case known as Wintrup v. Adams affords a great illustration of how Household Courts have discretion – and a few creativity – to style a work-around, with a purpose to obtain a good end result between former {couples}. On this case, it was by awarding a husband $68,000 to interchange the funding earnings he may have earned, if solely his spouse had not secretly skimmed $200,000 from his checking account.

Once they married in 2014, the husband and spouse have been of their 50s, and every of them had been married earlier than. Every of them was a profitable skilled in their very own proper, with vital belongings, actual property holdings, and investments. That they had no kids collectively.

The couple had an unconventional relationship within the six years previous to the marriage: Though they lived collectively for 4 of these years, that they had lengthy intervals of separation, and every of them had lengthy stints of worldwide journey that they undertook individually.

Nonetheless, their relationship was turbulent: Lower than two months after the marriage the spouse requested the husband for a divorce. (And because the proof later revealed, she’d contacted the court docket about an annulment solely two weeks in). All of this was across the identical time that she surreptitiously eliminated $200,000 from one of many husband’s financial institution accounts, that contained an inheritance acquired from his father. It appears that evidently because of financial institution error, she had been granted full entry to all the husband’s accounts, unbeknownst to him. The court docket defined the timing:

The events’ relationship was turbulent and fractious all through. In the course of the time the [wife] claimed she was in a standard legislation relationship with the [husband], she tried to interrupt it off. Six weeks after their June 2014 wedding ceremony the [wife] suggested the [husband] she needed a divorce. It was in August 2014 that the [wife] withdrew the funds from the [husband’s] Scotiabank account which the trial decide discovered to have been achieved with out his data or consent.

The spouse used the $200,000 to purchase a brand new funding property, and instructed the husband that he was a “proud half proprietor” of a brand new home. He assumed she’d purchased it utilizing her personal funds.

The couple lastly separated in 2015, and went to court docket in 2022 to resolve their variations. They utilized below the provincial Matrimonial Property Act, which offers with property division. After a four-day trial, the court docket ordered an unequal division of matrimonial property (together with the bought funding property), and ordered the spouse to make a $268,000 fee to the husband to attain that.

The spouse appealed this ruling. She pointed to the truth that the additional $68,000 was clearly tantamount to pre-judgment curiosity, which was technically not allowed below the Act besides the place the court docket was making an order regarding a debt or damages (which, being an order for unequal division, this was not). The spouse claimed the court docket had no jurisdiction to make what was basically an order for pre-judgment curiosity on the $200,000 she had taken.

The Enchantment Court docket disagreed with the spouse’s characterization. The trial decide had stopped in need of calling the additional $68,0000 “curiosity”; fairly, it was clear the quantity was mounted as a correct train of the decide’s discretion, and was supposed as an unequal division of the couple’s shared property.

On the details, the husband had been fraudulently disadvantaged of his $200,000 for seven years. The $68,000 was what the trial decide calculated may have been earned with the cash, in an funding automobile with even only a modest price of return. Technically, this was not an award of “curiosity”, and the trial decide’s method was not in error. As a substitute, because the Enchantment Court docket put it, it was an order supposed to “rebalance the inequity and restore the [husband] to the place he would have been in had the [wife] not plundered his inheritance account.”

Full textual content of the choice: Wintrup v. Adams, 2023 NSCA 19 (CanLII)