Home bought with settlement proceeds of spouse’s child not subject to division: AB Court of Appeal

The Alberta Court of Appeal has ruled that a separated spouse does not have interest in a home purchased using the settlement proceeds of the other spouse’s child from a previous relationship.

In Big Throat v. Fox, 2022 ABCA 223, Richard Fox and Doris Big Throat married in 2008. Big Throat had children from a previous relationship, one of which was injured in an accident in 2002 and required around-the-clock care.

In 2014, Big Throat settled a personal injury claim on her child’s behalf amounting to $335,000, which she used to pay off the mortgage for a home they had purchased suitable for her child’s needs. Around this time, Fox quit his job and remained unemployed until late 2016.

At their separation in 2016, much of the settlement funds had been spent. After separation, Big Throat had to couch surf until she obtained exclusive home possession in 2017. In 2018, Big Throat received reimbursement for the amounts spent on the child’s care, which was returned to her “in-trust” claim.

In a hearing concerning the division of marital property, the judge ruled that Fox had no interest in the home since it was purchased using litigation loans and the settlement funds for Big Throat’s child. He also ruled that the remaining balance from the 2018 payment was not subject to division as it was an award for damages in tort in favour of Big Throat.

On appeal, Fox argued that he should receive half of the home’s equity since there was no evidence that litigation loans were used for the mortgage and, even if there were, it was akin to rent for letting Big Throat’s child stay there. He also sought half of the 2018 in-trust payment, arguing that it was compensation for income replacement for Big Throat taking care of her child instead of working.

The appellate court disagreed.

Both of Fox’s arguments did not warrant appellate intervention, said the court. The court said there was no basis to reweigh the evidence on the judge’s discretionary determination that the child’s settlements paid off the entire mortgage. Further, contrary to Fox’s assertion, Big Throat’s use of the 2018 funds to purchase a vehicle more suitable for her child’s needs likewise did not constitute dissipation, said the court.

“[For] someone who quit his job for no reason and went on a two-and-a-half-year spending spree, which included two concerts in Texas to see Willie Nelson, ... it is a bit rich to criticize ... [Big Throat] for using funds as she did,” noted the court.