">
Allegations of fraud can arise in family law proceedings, particularly when assets or property are transferred into one party’s name alone. Courts have outlined the required elements for the tort of civil fraud. While there is concern about deceptive conduct that results in losses for the other party, one recent case demonstrates the importance of pleading with material facts to support an allegation of fraud. The court also shows how inconsistent testimony can damage a party’s case.
Applicant Claims Title to Home Was Fraudulently Transferred
Sanchez v. Sotomarino involved a summary judgment motion. When the parties separated, they did not obtain legal advice or enter into a written agreement. The applicant moved out of their home, and the respondent paid the expenses and mortgage. Later, the parties signed documents transferring the title to the respondent in the matrimonial home. The applicant claimed he did not recall going to the law office or signing the documents. He sought a declaration that he had an interest in the property and an order that the transfer of title was void. In response, the respondent brought a motion for summary judgment and an order dismissing the applicant’s claims.
The applicant alleged that he never consented to the home transfer and claimed that the respondent committed fraud in having the title transferred into her name alone. In Bruno Appliance and Furniture Inc. v. Hryniak, the court examined the tort of civil fraud and found that it required four elements:
- a false representation made by the defendant,
- some level of knowledge of the falsehood of the representation on the part of the defendant (whether through knowledge or recklessness),
- the false representation caused the plaintiff to act,
- the plaintiff’s actions resulted in a loss.
However, section 4 of the Real Property Limitations Act (RPLA) states that no person shall bring an action to recover any land within 10 years after the time at which the right to bring the action first arose. In this case, the applicant claimed the respondent had concealed the fraud. In such cases, section 8 of the RPLA delays the start of the limitation period. It provides that in cases of a concealed fraud:
“the right of a person to bring an action for the recovery of any land or rent of which the person or any person through whom the fraud may have deprived that person claims shall be deemed to have first accrued at and not before the time at which the fraud was or with reasonable diligence might have been first known or discovered.”
The issue was whether the respondent fraudulently transferred title to the property in her sole name and whether the fraud was concealed from the applicant. This required the court to consider the equitable doctrine of fraudulent concealment. In Pioneer Corp. v. Godfrey, the court explained that the doctrine prevents limitation periods “from being used “as an instrument of injustice.” This means that when a defendant “fraudulently conceals the existence of a cause of action, the limitation period is suspended until the plaintiff discovers the fraud or ought reasonably to have discovered the fraud.” Ultimately, courts have held that in such cases, what matters is the unconscionability of the defendant’s conduct, such as whether it would be unconscionable for the defendant to gain an advantage from concealing the existence of a cause of action.
Court Finds No Basis to Claim There Was Fraud
The applicant claimed that when the parties separated, they agreed that the respondent would remain in the house with their child to maintain stability and would return to the issue of dividing the property when the child was older and had completed her education. He originally claimed the respondent forged his signature on the property transfer documents. He also suggested the respondent previously discouraged him from using his equity in the property when he had financial problems and never informed him that he was no longer on the title. The applicant claimed the property transfer could have been carried out since the respondent had access to his personal information and because he trusted her to manage his financial affairs. However, during the motion, the applicant admitted that it was his signature on the transfer documents, although he could not remember any meeting at which the parties transferred title. The judge found that this admission meant that he was no longer alleging his signature was forged, and this removed the foundation for his pleading that the transfer was a fraud.
The applicant could not recall the events leading up to the transfer of title. In his affidavit, he originally claimed that the signature on the transfer deed was not his and that someone else signed the document. Later, he admitted that the respondent had spoken to him about a plan for her to assume the mortgage on the property. He claimed he did not object but did not know she was planning to transfer the title into her sole name. His evidence about how he learned of the transfer of title was also inconsistent.
In his affidavit, he stated that he searched for the title of the matrimonial home and only then discovered that the title had been transferred from their joint names into the respondent’s name. But when he was being questioned, his evidence changed. On this occasion, he described a conversation with his daughter where he claimed to learn for the first time that the property was not his.
Applicant’s Testimony Was Inconsistent
In reviewing the evidence, Justice Horkins noted that there were no emails, documents, or anything in writing that revealed the applicant believed he held equity in the property or when he learned that he had no interest in the home. Yet, contrary to his claims, there was a text message indicating his understanding that the house belonged to the respondent. Additionally, the applicant mortgaged other properties at various times and never indicated he held a 50 per cent interest in the matrimonial home when securing loans. The judge reasoned that the applicant would have disclosed this equity to the lenders, and the fact that he did not was very telling. On the other hand, the respondent had paid the home’s mortgage and taxes for years, and her request to assume the mortgage and title made sense.
The court found that for a party to rely on section 8 of the RPLA, there needs to be fraud, and it must be fraudulently concealed. But in this case, there was no evidence the respondent committed fraud when the property was transferred to her name. Importantly, the applicant’s testimony was inconsistent; instead, there was evidence contradicting his claim. Furthermore, there was no evidence that the purported fraud resulted in a financial loss for the applicant or that the respondent benefited from the alleged fraud. Overall, Justice Horkins concluded there was no genuine issue requiring a trial. The applicant’s pleading was defective as he did not plead the necessary facts to prove the elements of civil fraud. Additionally, the evidence did not show a trial was required on the issue of whether the respondent committed fraud and concealed that conduct. The application was barred by the limitation period.
Court Requires a Factual Foundation for an Allegation of Fraud
Where there has been concealed fraud, a limitation period may be delayed so the defendant does not gain an advantage. While courts will be concerned with a party’s deceptive conduct, some evidence to support any allegation of fraud is essential.
Windsor Family Lawyers Helping You Navigate Complex Family Law Matters
Our experienced family lawyers at Johnson Miller Family Lawyers can provide experienced guidance and representation in complex family law matters. From complex property and asset division to child support and decision-making responsibility, our family law lawyers will be with you every step. To see you through the best possible outcome, our team will help you navigate a complex, confusing, and often emotionally difficult process. For questions only a family law lawyer can answer, contact Johnson Miller Family Lawyers in Windsor at 519.973.1500 or online.
