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

A Nova Scotia case known as Wintrup v. Adams affords an excellent illustration of how Household Courts have discretion – and a few creativity – to style a work-around, as a way to obtain a good outcome between former {couples}. On this case, it was by awarding a husband $68,000 to interchange the funding revenue he might 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 had 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 property, 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, they’d 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 courtroom 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 obtained from his father. It appears that evidently as a result of financial institution error, she had been granted full entry to all the husband’s accounts, unbeknownst to him. The courtroom 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 marriage ceremony the [wife] suggested the [husband] she wished a divorce. It was in August 2014 that the [wife] withdrew the funds from the [husband’s] Scotiabank account which the trial choose 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 courtroom in 2022 to resolve their variations. They utilized beneath the provincial Matrimonial Property Act, which offers with property division. After a four-day trial, the courtroom ordered an unequal division of matrimonial property (together with the bought funding property), and ordered the spouse to make a $268,000 cost to the husband to realize 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 beneath the Act besides the place the courtroom was making an order regarding a debt or damages (which, being an order for unequal division, this was not). The spouse claimed the courtroom had no jurisdiction to make what was primarily 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 choose had stopped in need of calling the additional $68,0000 “curiosity”; somewhat, it was clear the quantity was fastened as a correct train of the choose’s discretion, and was supposed as an unequal division of the couple’s shared property.

On the info, the husband had been fraudulently disadvantaged of his $200,000 for seven years. The $68,000 was what the trial choose calculated might have been earned with the cash, in an funding automobile with even only a modest fee of return. Technically, this was not an award of “curiosity”, and the trial choose’s strategy 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)