A Nova Scotia case called Wintrup v. Adams offers a good illustration of how Family Courts have discretion – and some creativity – to fashion a work-around, in order to achieve a fair result between former couples. In this case, it was by awarding a husband $68,000 to replace the investment income he could have earned, if only his wife had not secretly skimmed $200,000 from his bank account.
When they married in 2014, the husband and wife were in their 50s, and each of them had been married before. Each of them was a successful professional in their own right, with significant assets, real estate holdings, and investments. They had no children together.
The couple had an unconventional relationship in the six years prior to the wedding: Even though they lived together for four of those years, they had long periods of separation, and each of them had long stints of international travel that they undertook separately.
Still, their relationship was turbulent: Less than two months after the wedding the wife asked the husband for a divorce. (And as the evidence later revealed, she’d contacted the court about an annulment only two weeks in). All of this was around the same time that she surreptitiously removed $200,000 from one of the husband’s bank accounts, that contained an inheritance received from his father. It seems that due to bank error, she had been granted full access to all of the husband’s accounts, unbeknownst to him. The court explained the timing:
The parties’ relationship was turbulent and fractious throughout. During the time the [wife] claimed she was in a common law relationship with the [husband], she tried to break it off. Six weeks after their June 2014 wedding the [wife] advised the [husband] she wanted a divorce. It was in August 2014 that the [wife] withdrew the funds from the [husband’s] Scotiabank account which the trial judge found to have been done without his knowledge or consent.
The wife used the $200,000 to buy a new investment property, and told the husband that he was a “proud half owner” of a new house. He assumed she’d bought it using her own funds.
The couple finally separated in 2015, and went to court in 2022 to resolve their differences. They applied under the provincial Matrimonial Property Act, which deals with property division. After a four-day trial, the court ordered an unequal division of matrimonial property (including the purchased investment property), and ordered the wife to make a $268,000 payment to the husband to achieve that.
The wife appealed this ruling. She pointed to the fact that the extra $68,000 was clearly tantamount to pre-judgment interest, which was technically not allowed under the Act except where the court was making an order relating to a debt or damages (which, being an order for unequal division, this was not). The wife claimed the court had no jurisdiction to make what was essentially an order for pre-judgment interest on the $200,000 she had taken.
The Appeal Court disagreed with the wife’s characterization. The trial judge had stopped short of calling the extra $68,0000 “interest”; rather, it was clear the amount was fixed as a proper exercise of the judge’s discretion, and was intended as an unequal division of the couple’s shared property.
On the facts, the husband had been fraudulently deprived of his $200,000 for seven years. The $68,000 was what the trial judge calculated could have been earned with the money, in an investment vehicle with even just a modest rate of return. Technically, this was not an award of “interest”, and the trial judge’s approach was not in error. Instead, as the Appeal Court put it, it was an order intended to “rebalance the inequity and restore the [husband] to the position he would have been in had the [wife] not plundered his inheritance account.”
Full text of the decision: Wintrup v. Adams, 2023 NSCA 19 (CanLII)
