



COURT OF APPEAL FOR ONTARIO

CITATION: Anderson v. McWatt, 2016 ONCA 553

DATE: 20160708

DOCKET: C60768

MacPherson, Cronk and Benotto JJ.A.

BETWEEN

Helen Anderson

Applicant (Respondent)

and

Roger McWatt

Respondent (Appellant)

Gary Joseph and Ryan Kniznik, for the appellant

Patrick D. Schmidt, George Karahotzitis and Melanie A.
    Larock, for the respondent

Heard: July 6, 2016

On appeal from the order of Justice
Victoria
    R.
Chiappetta of the Superior Court of Justice, dated June 24, 2015.

By the
    Court:

[1]

At the conclusion of the appellants submissions, we advised that the
    appeal would be dismissed with reasons to follow. These are those reasons.

[2]

The parties began living together in 1980. They married in 1989 and had
    two children who are now adults. In 2000, the respondent petitioned for
    divorce. For the next 15 years, the parties were mired in high conflict
    litigation. The trial in 2015 lasted 16 days. The appellant (husband), who
    represented himself at trial, challenges certain aspects of the judgment and
    the costs award.

Brief Background

[3]

The parties are interior designers who together created a successful
    business and acquired various properties. McWatt Anderson was jointly owned;
    the appellant had a 55% interest and the respondent 45%.

[4]

In April 1987, just prior to the parties marriage, the appellant purchased
     in his name alone  a commercial investment property on Atlantic Ave. in
    Toronto. The parties had previously discussed with their accountant the
    advisability of incorporating a company to take ownership of the Atlantic
    property.  In 1988, the appellant incorporated Stratus Development Corporation
    (Stratus). The respondent believed that Stratus owned the Atlantic property. The
    financial statements of Stratus stated that ownership of the property was
    transferred or rolled over to it under s. 85.1 of the
Income Tax Act
.
    However, no such transfer or rollover ever took place. The trial judge found
    that it was not until 2012 that the respondent learned that title to the
    property was registered in the appellants name alone.

[5]

Both parties contributed to the renovations and maintenance of the building
    after it was purchased. Between April 1987 and June 2000, the Atlantic property
    was used by the parties, in part to house the operations of McWatt Anderson.
    After June 2000, following the parties separation, the respondent stopped
    going to work at McWatt Anderson and formally resigned in December 2001. From
    June 2000 onward, the appellant operated his own business, McWatt & Associates,
    out of the Atlantic property.

[6]

In May 2014, the respondent obtained leave to amend her pleadings to
    make an unjust enrichment claim and to seek a constructive trust against the
    Atlantic property. The unjust enrichment issue was a primary focus of the trial
    below.

Trial Judgment

[7]

The trial judges reasons run to 87 pages and deal with all matters
    arising from the marriage. The appellant challenges three aspects of the
    judgment: (i) the award of a 45% interest in the Atlantic property to the
    respondent on the basis of unjust enrichment; (ii) the award of retroactive
    spousal support for the years 2000-2015; and (iii) the award of prejudgment
    interest on the equalization payment.

Discussion

Unjust Enrichment

[8]

The appellant raises three issues with respect to the finding of unjust
    enrichment: first, he alleges that the claim is statute barred; second, he
    challenges the apportionment of 45% to the respondent; third, he submits that if
    he is unsuccessful on his limitation period argument, the respondent should receive
    a monetary award, not an interest in the property.

[9]

The trial judge found that the doctrine of fraudulent concealment
    applied to toll the limitation period. In accordance with
R. v. Guerin
,
    [1984] 2 S.C.R. 335 at paras. 98-99, the limitation period did not start to run
    until the respondent discovers the fraud, or until the time when, with
    reasonable diligence, she ought to have discovered it. The trial judge
    concluded at para. 77:

By attesting to the untruth that Stratus was the beneficial
    owner of 28 Atlantic, the [appellant] concealed the [respondents] right to
    claim equitable ownership in the building as her claim in equity is triggered
    by the very ownership he was purposively concealing.  It is appropriate
    considering the totality of the circumstances, therefore, to invoke the Courts
    equitable jurisdiction to stay the operation of the limitation period. The [appellants]
    conduct in representing that his interest was transferred and concealing that
    his interest was never transferred constitutes an abuse of the parties special
    relationship. The [respondent] discovered that abuse for the first time by the [appellants]
    admission of previous deceit in February/May 2012. The limitation period under
    the
Real Property Limitations Act
is
    therefore stayed until that time.

[10]

The appellant submits that the trial judge erred in her finding that the
    respondent did not know that the property was registered in the appellants
    name until 2012.  He says that the respondent knew or should have known in 2001
    that the property was in the appellants name. He submits that, because her
    counsel knew, she knew. In particular, she is bound by comments her counsel
    made during her questioning in 2001 when her counsel said that the appellant
    was the registered owner of the Atlantic property. Counsel was then asked if he
    was making a claim to the Atlantic property on the basis of a constructive
    trust. He responded: When we finish your clients examination, we have no
    claim at the present made in our petition. We may very well have a claim
    against the property.  And he also said: We will make our claim as and when
    we feel we have sufficient facts to base it on. This section of the
    questioning was read on the record at trial.

[11]

The appellant argues that the trial judge did not address this evidence
    when she considered the limitation period. By not addressing this evidence, the
    appellant argues that the trial judge made a reversible error because the
    evidence confirms that the respondent knew of her claim in 2001.

[12]

We do not agree.

[13]

At the time of the questioning, and for the next 11 years, the appellant
    swore financial statements and affidavits confirming that the Atlantic property
    was held by Stratus. The respondent was entitled to rely on this disclosure. Her
    counsels indication that she may have a claim was not an admission that she
    had a claim such that the limitation period was triggered.

[14]

While not pressed in oral submissions, the appellant submits generally
    that the respondent could have, with reasonable diligence, discovered the true
    ownership of the Atlantic property long before 2012. While the trial judge did
    not directly address the reasonable diligence argument  made for the first
    time on appeal  her reasons read as a whole make her findings clear that the
    respondent did everything she reasonably could to determine the truth that the
    appellant was concealing.

[15]

The trial judge found that the respondent suffered from clinical
    depression,  depleted her RRSPs as a result of the appellants continual child
    support arrears,  was abused by the appellant and by the time of trial was a
    shell of a personvisibly diminished.  At paragraph 25, the trial judge said
    this:

As the [appellant] is self-represented, he conducted the
    cross-examination of the [respondent]. His conduct demonstrated the [respondents]
    testimony of her gradual diminishment at the hands of a controlling spouse who
    consistently undermined their mutual efforts and dismissed her thoughts and
    feelings. Instead of asking a question and receiving an answer, the [appellant]
    attempted to control the answers, telling her what she meant to say or
    suggesting that her words were in some way unworthy. The [appellant] felt it
    appropriate to judge the [respondents] answers using the words yes, no or
    close despite clear direction by the Court not to do so. The [respondent] on
    one occasion pleaded that she needed a break as he is in my head. Throughout
    the cross-examination it became abundantly clear to me that this woman was
    conditioned to be submissive to the thoughts and opinions of the person asking
    her the questions.

[16]

These findings make it clear that the trial judge determined that the
    respondent did all she could reasonably have done to find out the true
    ownership of the Atlantic property.

[17]

Although the appellant takes no issue with the finding of unjust
    enrichment, he submits that the trial judge erred in finding that the
    respondent was entitled to a 45% interest in the property.  Again, we disagree.

[18]

The trial judge accepted the respondents evidence that she believed
    that the Atlantic property would be jointly owned. She found that the joint
    efforts of the parties contributed to the acquisition and maintenance of the
    building. She rejected the appellants evidence that he had arranged and
    personally paid for renovations post-separation which contributed to the
    present day value. She also found that the appellant had lied to the respondent
    by telling her the property was owned by Stratus  a corporation in which she
    held shares. These findings of fact were open to the trial judge and supported
    the finding of a constructive trust.

[19]

Lastly with respect to unjust enrichment, the appellant challenges the
    remedy. He submits that the trial judge should have made a monetary award
    instead of awarding an interest in property. The trial judge considered and
    rejected the appropriateness of a monetary award. She considered the difficulty
    of recovery, the contributions made by the respondent, the market forces that
    increased the value of the property, and the profits that the appellant had
    taken for himself. We see no error in her analysis.

Retroactive Spousal
    Support

[20]

Although addressed only briefly in oral submissions, the appellant also
    challenged the retroactive spousal support award.

[21]

The quantum of spousal support was based on compensatory and non-compensatory
    principles. The trial judge found that the respondent: (i) assumed primary
    responsibility for the household and the children during the marriage and after
    separation; (ii) contributed equally to the success of the parties joint
    business; (iii) suffered undue economic hardship from the marriage breakdown by
    drawing from her RRSP investments and securing debt against the matrimonial
    home to provide for her needs and those of the children; (iv) made valiant
    efforts at self-sufficiency after the marriage but has been unable to achieve a
    degree of self-sufficiency having regard to the marital standard of living; (v)
    suffered economic disadvantage to the advantage of the appellant; and (vi)
    suffered  emotional abuse by the appellant, which had an ongoing impact on her
    health and professional abilities. The quantum of support ordered was based on
    the high range of the SSAGs. We see no error in this analysis.

[22]

Nor did the trial judge err in awarding retroactive spousal support in
    light of her findings that: (i) the respondent had to deplete $670,000 in RRSPs
    during the proceedings to support herself because of the appellants failure to
    provide adequate support; and (ii) the appellant engaged in a repeated pattern
    of ignoring the interim spousal support order and accumulating arrears, and suppressed
    his true available income for support purposes through the company he
    controlled, Stratus.

Prejudgment interest

[23]

The trial judge found that the appellant owed the respondent an
    equalization payment of
$62,731.69. She held that the
    equalization payment was due and payable to the respondent on September 1, 1997
    and that there is no reason to depart from the general rule that the payor
    spouse is required to pay prejudgment interest on the equalization payment
    owing to the payee spouse, at the judges discretion.

[24]

There was no objective evidence that the
    appellant did not have the ability to pay the equalization amount prior to this
    order. Rather, he delayed the precise calculation of the equalization amount by
    concealing until 2012 that the Atlantic property was not rolled over into
    Stratus and further concealing until 2014 that the parties other properties
    had not been rolled over into McWatt Anderson. The trial judge concluded that
    he should therefore pay prejudgment interest in accordance with the average
    rate on an annual basis for each year in question, as set out in the
Courts of Justice Act
R.S.O. 1990,
    c.43. We see reason to interfere with this exercise of discretion.

Costs

[25]

We also see no error in the trial judges award
    of costs. While the amount awarded is high, it reflects 15 years of
    high-conflict litigation involving multiple court attendances. The trial judge
    set out the provisions of Rule 24 in detail and carefully applied each
    consideration to the facts. In our view, the costs award is neither plainly
    wrong, nor tainted by any palpable and overriding error.

Disposition

[26]

The appeal is dismissed with costs payable to
    the respondent in the amount of $35,000, inclusive of disbursements and HST.

Released: July 8, 2016

J.C. MacPherson
    J.A.

E.A. Cronk J.A.

M.L. Benotto J.A.


