Did Wife’s Lawyer Know of Husband’s Asset? And Can Court Assume Wife Knew, Too?Anderson v. McWatt, 2016 ONCA 553 (CanLII)
In a family law decision called Anderson v. McWatt, the Ontario Court of Appeal addressed a narrow evidentiary point: If one party is truly unaware of a certain fact, but his or her lawyer may have known about it, can a court impute that knowledge to the party?
The background facts involved a former couple who were interior designers with a successful business. They started living together in 1980, married in 1989, and separated in 2000, after which point they became embroiled in a full 15 years of high-conflict litigation.
Part of that litigation involved apportioning the spouses’ respective interests in a commercial property in Toronto. Just prior to their 1989 marriage the husband had bought the property, and led the wife to believe was owned by a development corporation that had been set up. In reality, he put title in his own name only – a fact he did not reveal in his sworn affidavits and financial statements for over a decade after their 2000 separation. The wife only learned of the true state of affairs in 2012.
The date of her awareness as to title was key: One of the issues was the point at which her claim to the commercial property was barred under the two-year limitation period. Indeed, the wife amended her pleadings about two years after making the discovery, to add claim based in equity (i.e. claims for unjust enrichment and constructive trust); however, if it could be shown she knew or should have known earlier, then her legal claim would be barred.
At trial, the judge confirmed that the wife herself did not actually know that the husband held title to the property until 2012, but ruled that she should have known in 2001. This is because (as the judge concluded) her own lawyer seemed to know about it, based on some comments he made while questioning the husband in 2001. The upshot of the lawyer’s comments was that the wife “may very well have a claim against the property” and that “We will make our claim as and when we feel we have sufficient facts to base it on.”
On later appeal, the Court of Appeal rejected the trial judge’s conclusion on this point. The lawyer’s statement did not prove that he – or by extension, the wife – knew the husband was the actual owner of the commercial property. At the time of that questioning in 2001 – and for the next decade – the husband had been hiding the facts of his ownership in his sworn court documents. The wife was allowed to rely on this false information, and her own lawyer’s indication that she “may” have a claim was not an admission sufficient to trigger the limitation period. In fact, the Court found that the wife did “all she reasonably could to determine the truth that the [husband] was concealing.”
For the full text of the decision, see: