IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Daemore v. Von Windheim,

 

2011 BCSC 1523

Date: 20111110

Docket: E101156

Registry: Vancouver

Between:

Shannon Daemore

Claimant

And

Sita Von Windheim also known as Sita Christina Von Windheim and

Jesko Ade Von Windheim

Respondents

Before: The Honourable Mr. Justice Voith

Reasons for Judgment

Counsel for the Claimant:

Denovan T. Hill

Counsel for the Respondent Sita Von Windheim:

Megan R. Ellis, Q.C.

Counsel for the Respondent Jesko Ade Von Windheim:

Phyllis M. Kenney

Place and Date of Trial:

Vancouver, B.C.
June 27-30, July 4-8 and 29, 2011

Written Submissions:

October 4, 2011

Place and Date of Judgment:

Vancouver, B.C.
November 10, 2011


 

[1]             Each of the principal parties has advanced various claims within a matrimonial dispute. The claimant, Shannon Daemore, seeks multiple forms of relief which include:

i)        an order for spousal support;

ii)        an order that the respondent, Sita Von Windheim, holds the amount of $400,000 for him. This sum is based on an agreement which Mr. Daemore says he made with Ms. Von Windheim under which she was to hold 40% of the proceeds from the sale of the former matrimonial home for him;

iii)       alternatively, or in addition, Mr. Daemore contends that some part of the money he was owed by Ms. Von Windheim was used by her to purchase a home at 4993 College Highroad in Vancouver (the “College Highroad Home”), and he therefore claims an interest in the property on various bases. Title to this home rests in the name of her brother, the respondent, Jesko Von Windheim; and

iv)       a determination of the family assets and a declaration of ownership of such family assets as may be appropriate in the circumstances.

[2]             Ms. Von Windheim, in her counterclaim, seeks:

i)        retroactive and ongoing child support for the parties’ youngest child; and

ii)        reapportionment of the family assets.

General Background

[3]             The claims which are advanced by the parties are not, in concept, unusual. The circumstances which underlie these claims, however, are extraordinary. The claimant is a lifelong criminal who has been separated from Ms. Von Windheim for 16 years. Both parties have repeatedly and on an ongoing basis, including in recent years, jointly engaged in various forms of wrongful activity. Their three children have participated in some of these forms of illicit or wrongful conduct. Several of the witnesses who appeared before me unabashedly acknowledged their involvement in earlier activity that was either criminal or fraudulent.

[4]             The claimant is presently 69 years old. He obtained a degree from the University of Alberta and then held various jobs. He moved to Toronto when he was in his late 20s. He met Ms. Von Windheim, who is now 55 years old, in Toronto, when she was in her late teens. The couple moved to Vancouver in about 1974. Their daughter, Sasha, was born in November 1978. The parties married on October 7, 1981. Their daughter, Ashley Rose, was born in November 1983. Their son, Spencer, was born on September 24, 1989.

[5]             In the late 1970s through to the mid-1980s, Mr. Daemore was involved in various businesses. Some, such as a moving business, were legal. Most of these businesses seem to have failed. Others appear to have been fronts for illegal activity. For example, Mr. Daemore ran a body rub and photo business at which he acknowledged that he "suspected" prostitution was occurring. Mr. Daemore accepted that other forms of activity, to which I will return, were patently criminal in nature. From the late 1970s to the early 1980s, Ms. Von Windheim oversaw the operation of a clothing store which, at one point, had several outlets. From approximately 1983 to 1989, Ms. Von Windheim did not work.

[6]             In 1988, Mr. Daemore's mother transferred a property located at 1790 Cedar Crescent in Vancouver (the “Cedar Crescent Home”), to Ms. Von Windheim for $310,000. That purchase was secured by both a conventional mortgage and a loan from Mr. Daemore's mother. The Cedar Crescent Home was sold in November 1995 for $1,130,000. It is the proceeds from this home, less certain expenses, that Mr. Daemore says he agreed in 1994 or 1995 to divide with Ms. Von Windheim. He says he was to receive 40% of the remaining monies. Her 60% interest, he maintains, was also to provide her with both future child and spousal support.

[7]             From the late 1980s to the mid-1990s, Mr. Daemore spent much of his time in Edmonton. He acquired various properties and businesses in Edmonton with what he concedes were the proceeds of his earlier involvement in drug trafficking. He provided Ms. Von Windheim with money to support both herself and the children, who all still resided in Vancouver. Over time, the amount of this support diminished as Ms. Von Windheim began to generate revenue through her own activities.

[8]             In January 1996, Mr. Daemore was incarcerated. At that time, Sasha, Ashley Rose, and Spencer were 17, 12, and 6 years old, respectively. Mr. Daemore was released from prison on parole in December 1997, and then briefly returned to prison, for breach of his parole conditions, in 1998. He was again released from prison later that year.

[9]             From late 1998 to date, Mr. Daemore has paid no child or spousal support. From approximately 1989 to date, Ms. Von Windheim has engaged in a wide range of activities to provide for herself and her children. She has operated bed and breakfast businesses, owned and operated a café, acted as both an aromatherapist and a “cranial” therapist, leased out recreational vehicles, and acted as a consultant to a company that imported and sold cannabis seeds. She also helped establish and acquired control of a company called Green Harvest Inc., which sells implements associated with the harvesting of cannabis, which she continues to operate today.

[10]         Shortly after the Mr. Daemore’s release from prison, Ms. Von Windheim commenced an action in which she initially sought a restraining order against Mr. Daemore and which she later amended to include a claim for child support (the “1998 Action”). In the 1998 Action, Mr. Daemore counterclaimed, inter alia, for a declaration of ownership and possession of family assets.

[11]         In 2000, Mr. Von Windheim, purchased the College Highroad Home. The property has, at all times, been registered in his name alone. Ms. Von Windheim and various of her children have throughout resided at that home.

[12]         After his release from prison in 1998, Mr. Daemore acquired and operated a moving company. That company was not successful. From 2002 or 2003 to 2007 or 2008, Mr. Daemore again engaged in various forms of illegal activity. From the proceeds of these activities Mr. Daemore acquired, in August 2007, a co-op apartment in Kerrisdale (the “Kerrisdale Apartment”). At some point he also acquired an interest in a condominium, which was yet to be constructed, in Colombia (the “Colombian Property”).

[13]         Ms. Von Windheim, in turn, has also acquired various properties. In 1998, she acquired an interest in property in Costa Rica (the “Costa Rica Property”). She subsequently expanded her interest in that property. She also acquired a condominium property on Bellwood Avenue in Burnaby (the “Burnaby Property”). She further acquired, and thereafter sold, a condominium located on Thurlow Street in Vancouver. Ms. Von Windheim continues to hold both the Costa Rica Property and the Burnaby Property.

[14]         In January 2003, Mr. Daemore commenced an action, bearing Action Number S030046, against each of the respondents for breach of contract and unjust enrichment. He also registered a certificate of pending litigation against the College Highroad Home (the “2003 Action”). For all practical purposes, Mr. Daemore's claims in each of the 1998 and the 2003 Actions have throughout been dormant.

[15]         In September 2008, Mr. Daemore made an assignment into bankruptcy. He claimed to have approximately $326,000 in debts, and assets of $3,251. On June 4, 2009, Mr. Daemore was discharged from bankruptcy. On April 1, 2010, he commenced the current action.

The Illegal Activities and Credibility of each of Mr. Daemore and Ms. Von Windheim

[16]         The range of wrongful activity that Mr. Daemore and Ms. Von Windheim have each engaged in is fundamental to the primary basis on which I have dismissed most of their claims. It is also directly relevant to my inability to rely on the evidence which each of them provided to me. Because of the importance of these two issues, I have addressed them in greater detail than I otherwise would have.

a)       Mr. Daemore

[17]         There are three particularly noteworthy aspects of Mr. Daemore's unlawful activities: (1) the length of time which these activities span; (2) the breadth of such activities; and, (3)  his insidious ability to draw others into his schemes. The following catalogue of unlawful conduct represents some, but not all, of the activities that Mr. Daemore accepts he has engaged in or been convicted of since he moved to Vancouver with Ms. Von Windheim. This catalogue does not include numerous lesser, by comparison, improprieties. Some of the descriptions of these activities are somewhat informal and reflect how the activity in question was described before me. I am unaware, for example, of each of the precise offences under the Criminal Code, R.S.C. 1985, c. C-46, that Mr. Daemore has been convicted of.

[18]         Mr. Daemore’s illegal activities have spanned more than 35 years. He admitted that in the late 1970s he was convicted of keeping a bawdy house. This was a different establishment from the body rub studio he operated where he "suspected" that prostitution was occurring. Mr. Hermanous, who at one time was Ms. Von Windheim’s partner in Green Harvest, gave evidence that he met Mr. Daemore when he was in his late teens and that at that time he worked for Mr. Daemore in his "prostitute delivery" business. In the late 1970s, Mr. Daemore also ran an after-hours club which he accepted operated outside of the terms provided for by its licence.

[19]         From 1983 to 1987, Mr. Daemore admits he was involved in the trafficking of cocaine. With the proceeds of these activities he bought various buildings, as well as a pool hall and poker club, in Edmonton.

[20]         Mr. Daemore also admitted that by the late 1970s, he was not properly declaring the income he earned. He accepted that from 1984 onwards he has "constructed his life so as to be below CRA’s radar". He accepts that he has intentionally not kept any financial records and that he has consistently misstated his income to the tax authorities. He accepts that at some point he was stopped by the RCMP, that he had $130,000 in cash in a briefcase which was "drug money", and that that money was seized. Mr. Daemore accepts that he opened various offshore bank accounts to hide money from the authorities. He accepts that he had both Ms. Von Windheim and his mother assist him in these endeavours.

[21]         Mr. Daemore accepts that in 1996 he was convicted of "possession of the proceeds of crime", of drug trafficking, of money laundering, and of "counselling to commit murder". As it relates to this last offence, Mr. Daemore admits he endeavoured to hire an undercover police officer for a fee of $10,000 to kill a witness who he expected would give evidence against him. Mr. Daemore testified before me that "he thought it was the right thing to do at the time....", though he now views his conduct as “ridiculous”. Mr. Daemore says that in or about 1996 he forfeited his Edmonton properties and businesses as well as his offshore bank accounts to various regulatory authorities.

[22]         Mr. Daemore's mother, who died in 1989, left her estate to Sasha and Ashley Rose. It was suggested to Mr. Daemore during his cross-examination that the value of the estate was $100,000. This figure was based on a letter Mr. Daemore had written to his then lawyer. When Mr. Daemore was asked if he was being truthful when he wrote the letter, he responded that truthfulness was "not a primary prerequisite when I wrote the letter". In any event, Mr. Daemore accepts he personally used the estate’s funds from 1989 onwards and that after he was released from prison he effectively appropriated the estate. He used the funds in the estate’s account for the next 14 years as his own bank account and he invested these monies in various legal and illegal enterprises. He moved money in and out of the estate's account as he saw fit. Mr. Daemore sought to justify his conduct by asserting that he “felt” he was a beneficiary of the estate. He accepts that he never filed a tax return for the estate. He accepts that he never provided any formal accounting to the estate. He accepts that he used these funds hoping that the Canada Revenue Agency would be unaware of the estate’s account. He accepts that in 2003 he had his daughters, without the benefit of any legal advice, sign an agreement which purported to retroactively validate his earlier and ongoing mishandling of these monies.

[23]         Starting in about 2001, Mr. Daemore became involved in multiple versions of what he described as "creative financing”. In each of the variations of this scheme, a home would ostensibly be acquired for an inflated amount and the bank would provide mortgage financing in an amount which likely exceeded the true market value of the home. Thus, for example, a home which was actually worth $150,000 would notionally be purchased by a participant in the scheme for $200,000. The bank would then provide financing for perhaps $175,000. What happened to the difference between the real price of the home and the level of mortgage financing provided depended on how the deal was structured.

[24]         In some cases, Mr. Daemore simply allowed his name to appear on the purchase and mortgage documents and had no further role in the transaction. He would be paid a fee of $5,000 for his involvement by various third parties. Mr. Daemore said he was engaged in such deals two or three times. Mr. Daemore initially objected to the suggestion he had lied to the banks involved because, he said, the transactions had been structured and arranged by others. He later accepted that he knew the figures being provided to the banks were incorrect, but suggested that they were merely "white lies .....”, a white lie being one "which doesn't hurt anyone and from which everyone benefits". In at least one instance where Mr. Daemore had been paid to go on title and where he had signed mortgage documents, the bank involved later foreclosed on the property. Mr. Daemore conceded he never disclosed any of the money he received from these transactions to Revenue Canada. Ultimately, Mr. Daemore conceded he knew he was being paid to sign "documents with false information".

[25]         In at least one instance, when Mr. Daemore actually held the property he had acquired, he artificially inflated the purchase price so that the would-be purchaser could obtain 100% financing on the home. He then accepted a lower purchase price from the purchaser.

[26]         In some instances, when Mr. Daemore bought a property he would fraudulently alter a Notice of Assessment he had received from Revenue Canada and thereby both inflate and misrepresent his income so that he could obtain mortgage financing. In his words, “I just changed some numbers.”

[27]         On other occasions, and for present purposes more importantly, Ms. Von Windheim was involved in these transactions. Specifically, between 2002 and 2007, Mr. Daemore acquired a further five or six homes where either he or Ms. Von Windheim was on the title. He involved Ms. Von Windheim because her ostensible income was higher than his. The mortgages which were obtained were in her name. Mr. Daemore would then take the balance of what was obtained from the bank and use those additional funds to effect renovations to the properties and thereby increase their value. He would also use these monies to support his living expenses.

[28]         In addition, he rented out the basements of these various properties to individuals who operated marijuana grow-ops. Remarkably, he had his two daughters stay at two of these homes and he shared the rent proceeds which he received from the grow-ops with them. On more than one occasion, Mr. Daemore's daughter, Sasha, who has some expertise with computers, fraudulently altered bank and tax statements thereby misrepresenting Mr. Daemore's income. She was quite unabashed and unrepentant when she described her role in this scheme. Ultimately, each of these properties were sold for a profit which resulted partly from the renovations that had been undertaken on the properties and partly as a result of the rising residential real estate market that existed in the Lower Mainland at the time. Mr. Daemore said that following the sale of some of these properties, he shared the profits he received with his daughters. He accepts that he did not report the money he made to Revenue Canada.

[29]         It is worth pausing to reflect on how thoroughly dishonest each of these transactions were and how pervasively Mr. Daemore involved Ms. Von Windheim and his daughters. The original acquisition and financing of these properties was dishonest. Ms. Von Windheim was instrumental in this aspect of the transaction. So too was Sasha to the extent that she altered or forged documents. The homes were thereafter rented out as grow-ops and provided, in their upper levels, free housing to the girls. Both daughters also directly received rent monies from the grow-ops. Ashley Rose did not testify. Sasha confirmed that it was her responsibility to pay the bills and mortgage on the home she lived in from her share of the grow-op rent money. Mr. Daemore paid no tax on the money he received from the grow-ops. On the disposition of some of these properties, Mr. Daemore and his daughters again profited, with Mr. Daemore reporting nothing to Revenue Canada. There was no direct evidence before me of whether either of the girls reported the grow-op rent money or the proceeds of sale which they received. It is hard to imagine that they would have.

[30]         In August 2007, Mr. Daemore bought himself the Kerrisdale Apartment. Ms. Von Windheim was involved in the transaction. She arranged to transfer money, acquired through Mr. Daemore’s activities, through her bank account to pay for the property. Mr. Daemore also provided Ms. Von Windheim a mortgage for in excess of the full value of the Kerrisdale Apartment. The transaction was a sham and no money exchanged hands. Ostensibly, however, the consequence of the transaction was to make it appear as though Mr. Daemore had no equity in the Kerrisdale Apartment.

[31]         In April 2008, the estate of Mrs. Grealy, Mr. Daemore’s mother, received a Notice of Assessment from Revenue Canada in the amount of $175,000. At approximately the same time Revenue Canada garnished various bank accounts, including the estate's account, where Mr. Daemore had funds and thereby seized $45,000. It was this action which prompted Mr. Daemore, in September 2008, to declare bankruptcy. He accepts that, knowing he would declare bankruptcy, he first incurred a further $16,000 of debt on his credit cards. He accepts he did not disclose his interest in either the Kerrisdale Apartment or the Colombian Property in the bankruptcy documents he filed. He had earlier commenced an action arising out of a motor vehicle accident he was involved in. He did not disclose his interest in this action. He provided various reasons for his failure to disclose these assets or interests, none of which I accept.

[32]         In a similar vein, Mr. Daemore admits that prior to the bankruptcy he had bought himself a vehicle using the estate's bank account. He did not disclose this vehicle to the Trustee in Bankruptcy. Rather, he had transferred it to his son, Spencer, sometime earlier. He accepted that the transfer was effected to keep the vehicle away from his creditors, but nevertheless, sought to maintain that he had "no intention to deceive" and that he had done "nothing illegal". Three months after his discharge from bankruptcy, he had his son formally transfer the vehicle back to him. Similarly, in 2009, after Mr. Daemore’s discharge from bankruptcy, Ms. Von Windheim discharged the sham mortgage she held on the Kerrisdale Apartment.

[33]         For many decades Mr. Daemore has led a thoroughly amoral and dishonest existence. His illegal activities have been so pervasive that he sometimes could not recall if he was involved in certain wrongful activity, but conceded he might have been. Being truthful or forthright has no meaning for him. His evidence is replete with admissions that he has failed to report, misrepresented, or falsified information relating to his assets and income – matters which are central to the action before me. He has lied in his correspondence. He was not forthright in the financial statements he filed in this action. He has intentionally structured his affairs so as to prevent there being any record of his financial dealings or his financial status. The corollary of this is that there exists virtually no objective record which might support the evidence he provided to me on multiple issues. I believe very little of what he told me. I will address certain specific findings of fact as they arise in relation to given issues.

b)       Ms. Von Windheim

[34]         Ms. Von Windheim's history of unlawful and dishonest conduct is also varied and extensive. She accepts being involved with a credit card fraud in approximately 1980. She was directly involved in helping Mr. Daemore hide significant sums of money in some of his offshore accounts. She was central to Mr. Daemore’s schemes to acquire property and she was aware that those properties housed grow-ops. She knew that those properties were a source of illegal income for her daughters. She assisted Mr. Daemore in his plan to hide his true interest in the Kerrisdale Apartment.

[35]         It was argued on behalf of Ms. Von Windheim that her involvement in these activities was a product of her fear of Mr. Daemore and the nature of the relationship they had. It was further argued that it was a relationship where he was domineering, where he humiliated her, and where he would brook no disagreement. There is some basis for these submissions, but I do not accept that, in the main, they explain Ms. Von Windheim's conduct.

[36]         There was no evidence from Ms. Von Windheim that Mr. Daemore ever physically struck her. This matters not. It seems clear that he was a person with a dominating presence, that he routinely interacted with criminal personalities, and that he carried with him the spectre of violence. He was convicted, as I have said, of counselling to commit murder. At one point, in approximately 2001, Ms. Von Windheim learned from a friend that Mr. Daemore had been speaking about “needing to find a way to kill her”. In 2003, Mr. Daemore wrote a letter to Mr. Von Windheim in connection with his attempt to secure an interest in the College Highroad Home. The contents of that letter are overtly threatening. All of this would provide Ms. Von Windheim with good reason to fear the claimant.

[37]         I am also mindful that one must be cautious about applying ordinary and objective standards of behaviour to a spouse who consistently lives in fear or with abuse. In R. v. Lavallee, [1990] 1 S.C.R. 852 at 874, Wilson J. said:

If it strains credulity to imagine what the "ordinary man" would do in the position of a battered spouse, it is probably because men do not typically find themselves in that situation. Some women do, however. The definition of what is reasonable must be adapted to circumstances which are, by and large, foreign to the world inhabited by the hypothetical "reasonable man".

[38]         The further comments of Wilson J. in Lavallee, were also said to be relevant to the dynamic that existed between Mr. Daemore and Ms. Von Windheim:

The account given by Dr. Shane comports with that documented in the literature. Reference is often made to it as a condition of “learned helplessness”, a phrase coined by Dr. Charles Seligman, the psychologist who first developed the theory by experimenting on animals in the manner described by Dr. Shane in his testimony. A related theory used to explain the failure of women to leave battering relationships is described by psychologist and lawyer Charles Patrick Ewing in his book Battered Women Who Kill (1987). Ewing describes a phenomenon labelled “traumatic bonding” that has been observed between hostages and captors, battered children and their parents, concentration camp prisoners and guards, and batterers and their spouses. According to the research cited by Ewing there are two features common to the social structure in each of these apparently diverse relationships. At pp. 19-20, he states:

The first of these common features is an imbalance of power “wherein the maltreated person perceives himself or herself to be subjugated or dominated by the other”. The less powerful person in the relationship - whether battered woman, hostage, abused child, cult follower, or prisoner - becomes extremely dependent upon, and may even come to identify with, the more powerful person. In many cases, the result of such dependency and identification is that the less powerful, subjugated persons become “more negative in their self-appraisal, more incapable of fending for themselves, and thus more in need of the high power person.” As this “cycle of dependency and lowered self-esteem” is repeated over time, the less powerful person develops a “strong affective bond” to the more powerful person in the abusive relationship.

The second feature common to the relationships between battered woman and batterer, hostage and captor, battered child and abusive parent, cult follower and leader, and prisoner and guard is the periodic nature of the abuse. In each relationship, the less powerful person is subjected to intermittent periods of abuse, which alternate with periods during which the more powerful. abusive person treats the less powerful person in a “more normal and acceptable fashion.”

[39]         I was provided, however, with no expert evidence which supported the contention that Ms. Von Windheim’s conduct was the by-product of an abusive relationship. Furthermore, Ms. Von Windeim’s efforts to paint herself as either a dupe, as a weak link, or as a timid person are not supported by the evidence. Nor do I believe it is correct to describe her complicity in Mr. Daemore's activities as simply being the result of her efforts to pacify him and keep him at arm's length. I do not accept that her conduct is merely or even largely the product of Mr. Daemore’s control over her. Instead, I believe that the explanations for her behaviour are more complex.

[40]         Ms. Von Windheim sought to downplay anything positive, at any time, in her relationship with Mr. Daemore. Her daughter Sasha, however, said that her early memories of her parents’ relationship are positive and loving in nature.

[41]         In addition, though Ms. Von Windheim has limited formal education, she is clearly a bright, resourceful, and entrepreneurial person. As early as the late 1970s and into the 1980s, she oversaw a business with several outlets. She has bought and sold multiple properties. She has, since the early 1990s, owned and operated several businesses. Since the early 2000s, she has either been a consultant to or run her own business. In most years, Green Harvest has had gross revenues in excess of $500,000.

[42]         She has also been quite able to both disagree with Mr. Daemore and to place some distance between them. In the mid-1990s, Mr. Daemore wanted her to place a $500,000 mortgage on the Cedar Crescent Home. At that point, Mr. Daemore faced serious criminal charges and she suspected that he intended to flee with the funds. Consequently, she refused to do as he asked. Mr. Daemore says that, in or about 1995, he and Ms. Von Windheim came to an agreement on how to distribute the sale proceeds of the Cedar Crescent Home. Ms. Von Windheim says that she refused to agree to his proposal. In 1998, when Mr. Daemore was released from prison and moved close to where she lived, Ms. Von Windheim unhesitatingly commenced an action, obtained a restraining order, and required that his access to Spencer be supervised.

[43]         Still further, the tenor of the written communications between the parties is not consistent with the picture that Ms. Von Windheim seeks to paint. Her e-mail communications are neither submissive nor compliant. To the contrary, when Ms. Von Windheim became frustrated with the claimant she did not hesitate to express her frustration and irritation in a communication which ended with "you're going to die a sad lonely old man with nothing, no money and no family".

[44]         While I accept that Ms. Von Windheim was aware of and somewhat concerned about Mr. Daemore’s nature, I believe and find that her actions were primarily motivated by self-interest. From 1983 to 1988, Ms. Von Windheim did not work. The couple rented a house in Shaughnessy. The lifestyle they enjoyed was almost entirely the product of Mr. Daemore's drug trafficking activity. Ms. Von Windheim gave evidence about her intention to raise her children in the lifestyle they had come to know. This, however, was a lifestyle that was largely fuelled by criminality. While a desire to have your children enjoy music and riding lessons is, in the abstract, laudable, very different considerations arise when such desires are financed by illegal activity.

[45]         Counsel for Ms. Von Windheim sought to develop the thesis that others who were involved in Mr. Daemore's activities participated because they were intimidated by him. This suggestion was belied by Sasha when she gave evidence about her having forged banking and tax documents for her father. While it is unquestionably reprehensible for a parent to involve his child in such activity, it is worth noting that Sasha was, at the time, approximately 25 years old. The extent of the pressure which Sasha identified as having been placed on her was her desire to develop a positive relationship with her father and to maintain “a happy family atmosphere”. A desire to maintain “a happy family atmosphere” is far removed from a situation where a third party’s personality or behaviour is so frightening as to leave one with no option other than to succumb and to engage in wrongful activity. My own impression of the evidence given by Sasha is quite different. She seemed unembarrassed by and impenitent about her activities. This impression was further strengthened when she gave evidence of her outrage when her father reneged on their earlier agreement on how to distribute the rent monies from the grow-ops. It was the breach of this agreement which seemed to cause her distress, as opposed to any concern that the underlying activity was illegal.

[46]         Counsel for Ms. Von Windheim, in support of the thesis that Ms. Von Windheim was coerced into her actions or acted to appease Mr. Daemore, placed some emphasis on the fact that Ms. Von Windheim did not personally profit from the homes which she helped Mr. Daemore acquire or from assisting with the purchase of the Kerrisdale Apartment.

[47]         The issue is again more nuanced. Ms. Von Windheim derived no direct financial benefit, but her children clearly profited from these schemes. They each received a car from Mr. Daemore and the two girls received significant amounts of cash over a number of years. They lived rent free. Ms. Von Windheim asked rhetorically what kind of man would place his daughters in a home that contained a grow-op. One might inquire with equal vigour what kind of mother would facilitate or aid in making that situation possible?

[48]         Still further, I believe that the issue of benefit to Ms. Von Windheim is even more subtle. While she received no direct financial benefit from her dealings with Mr. Daemore during the period 2002 to 2007, she was able to deflect or deter Mr. Daemore from pressing forward with his claims in contract or for an interest in the College Highroad Home. Both these claims were advanced in the 2003 Action. Ms. Von Windheim confirmed that Mr. Daemore had been demanding the money which he believed he was owed by her since he got out of jail. She, in turn, said she wanted “to keep him off my back”. The oral evidence of Ms. Von Windheim and various e-mail communications in 2009 between her and Mr. Daemore are consistent with her acknowledging that Mr. Daemore might have had some claim, albeit for an uncertain amount, over the monies that had been generated by the sale of the Cedar Crescent Home.

[49]         Thus, I am satisfied and find that Ms. Von Windheim’s complicity in and unlawful assistance with Mr. Daemore's activities was undertaken, in large part, to benefit both herself and her children.

[50]         I also do not accept much of the evidence which Ms. Von Windheim gave in relation to her financial status and her income. The following examples are illustrative, but not exhaustive, of why I have arrived at this conclusion.

[51]         The Cedar Crescent Home was sold in November 1995 for $1,130,000. Sales commissions were deducted from this amount. The conventional mortgage on the property was paid out. Thereafter, Ms. Von Windheim sent the balance of the sales proceeds from the Cedar Crescent Home to an aunt in Germany and had them placed in an account. Ms. Von Windheim then paid approximately $100,000 from the account to lawyers she retained to assist with both her difficulties and those of Mr. Daemore. She paid a further $50,000 as a fine. She paid off about $30,000 to $40,000 of debt. She also spent about $16,000 re-acquiring certain shares that had been part of her mother-in-law’s estate. There would then, at most, have been about $900,000 remaining.

[52]         Her unequivocal evidence was that over the next five years, or by the end of 1999, she had virtually depleted the whole of that fund of money. She admitted that she transferred the balance of the amount in her aunt’s account to her own account in 2000 or 2001. She first said she had no recollection of what this balance was. She then conceded it was approximately $20,000. She said she spent the balance of what had earlier been in the account on food, rent, schooling for the children, and other like expenses. She further said she used a portion of these monies in 1998 to acquire an interest in the Costa Rica Property. She said she paid $100,000 or $110,000 for that initial interest. She filed a financial statement in 1999 which indicated her monthly expenses were about $11,500. She said these were her expenses during the period from 1996-1999. She failed to disclose the money she held in Germany in this financial statement. She accepted that she had withheld this information from the court.

[53]         Much of this evidence proved to be inaccurate. In September 2001, Ms. Von Windheim retained a firm of tax lawyers to make a voluntary disclosure on her behalf to the Canada Revenue Agency. The firm wrote a letter which was intended to disclose the income which she had made, but not reported, on the funds she held in Germany. The letter indicates that Ms. Von Windheim sent about $750,000 to Germany in 1996. The letter then discloses the income she earned on these monies in each year from 1996 to 1999, as well as the balance which remained in the account at the end of each year. Importantly, that letter and its enclosures establish that by the end of 1999 Ms. Von Windheim still had approximately $560,000 left in the German account. I say approximately, because the figure is the product of a currency exchange calculation which was undertaken by counsel for the claimant without there being any formal evidence before me of the appropriate currency exchange figures.

[54]         Equally importantly, these figures establish that Ms. Von Windheim did not purchase her interest in the Costa Rica Property by withdrawing funds from this account. There was no withdrawal from the account in 1998 to correspond with her purchase of an interest in that property. This gives rise to the further question of where Ms. Von Windheim actually got the funds to purchase her initial interest in the Costa Rica Property. It also gives rise to the question of where Ms. Von Windheim obtained the $11,500 per month she says she spent on living expenses for herself and her children in these years. An amount that, based on her own evidence, could not have been supported by her declared income in these years. Still further, where did the money from the German account go after 1999? The amounts in that account significantly exceed what flowed into the CIBC account which Ms. Von Windheim held in 2000.

[55]         It was suggested that perhaps Ms. Von Windheim was simply mistaken about the timing of her various expenses. I do not accept that this is so. When it suited her, Ms. Von Windheim's memory about dates and amounts was very precise. She expressed no reservation or uncertainty about her evidence. Instead, she was insistent and unequivocal about it. I also consider that the evidence she gave, about there being little or no money left in the German account by the end of 1999, was purposeful. The College Highroad Home was bought in 2000. It was important for Ms. Von Windheim to be able to establish that by that date she lacked the money necessary to contribute to the acquisition of that property.

[56]         Ms. Von Windheim's credibility was also significantly impaired by the disparity between her reported income and the very significant sums of money that have flowed into and out of her bank accounts on an annual basis for many years. These amounts are several multiples of the income she has declared in those same years.

[57]         Ms. Von Windheim was not expressly asked to account for the foregoing disparities. Likely under the rule in Browne v. Dunn (1893), 6 R. 67 (H.L.), as a matter of fairness such issues should have been put to her squarely. At the same time, and as a common sense matter, there is no apparent rational or principled explanation for this significant annual divergence between Ms. Von Windheim's reported income and the funds which flowed into and out of her bank accounts. Certainly no explanation for this ongoing incongruity was provided to me in argument, though the issue was raised squarely. If one looks at the most extreme and most recent year, Ms. Von Windheim has reported that her net income for 2010 was $6,393.00. She professes to have no more than about $10,000 in savings. These figures, without more, are simply not credible. These amounts are not enough to so much as pay for the maintenance and property taxes that she is responsible for on the College Highroad Home. In addition, in 2010, almost $120,000 flowed into her personal bank account and an excess of $122,000 flowed out of that account. Still further, though the precise timing of this is not clear, it appears that in 2010 Ms. Von Windheim purchased an increased interest in the Costa Rica Property.

[58]         Other aspects of Ms. Von Windheim’s evidence were also not honest. She professed to be uncertain about her present interest in the Costa Rica Property. I do not accept this. She accepted she had lied to Mr. Daemore in various written communications, to which I will return, about her assets or interest in the College Highroad Home. She accepts she was not truthful in her response to aspects of the relevant application documents that dealt with ownership of the College Highroad Home. She, too, has filed financial statements which were not forthright.

[59]         At bottom, I find that Ms. Von Windheim was not honest or forthright with the court. Accordingly, I do not accept her evidence generally. I also do not accept much of the evidence she provided about her financial status, her financial holdings, or her financial disclosure.

Analysis

[60]         I do not consider that there is any merit to any of the disparate claims advanced by Mr. Daemore or Ms. Von Windheim. Each of their respective claims suffers from various deficiencies arising from the application of those legal principles which are relevant to the particular claim. There is, moreover, an overarching impediment to many of these claims. This impediment is the result of the criminality and illegality which pervades most of the claims before me.

[61]         The maxim ex turpi causa non oritur actio, generally raised as a defence, but available to the court on its own motion, is directly relevant. The issues engaged by application of the maxim were not raised in the pleadings of the parties. They were raised by me in advance of argument and counsel were provided with a further opportunity to supplement their submissions in writing.

[62]         The central principles which animate the ex turpi doctrine are clear and of long standing. In Hall v. Hebert, [1993] 2 S.C.R. 159 at 170-171, McLachlin J., as she then was, said:

The power expressed in the maxim ex turpi causa non oritur actio finds its roots in the insistence of the courts that the judicial process not be used for abusive, illegal purposes. Thus Professor Gibson, in “Comment: Illegality of Plaintiff’s Conduct as a Defence” (1969), 47 Can. Bar Rev. 89, at p. 89, writes:

Few would quarrel with the proposition that a man who murders his wealthy aunt should not be allowed to receive the proceeds of her life insurance as beneficiary, or that two robbers who disagree over the division of the spoils would not be allowed to settle their dispute in a court of law. It was to deal with flagrant abuses like these that English courts developed the principle expressed in the maxim: ex turpi causa non oritur actio - - no right of action arises from a base cause. [Emphasis added.]

The use of the doctrine of ex turpi causa to prevent abuse and misuse of the judicial process is well established in contract law and insurance law, where it provokes little controversy. The same cannot be said for tort. ...

[63]         In British Columbia v. Zastowny, 2008 SCC 4, [2008] 1 S.C.R. 27, Rothstein J., for the court, summarized the doctrine as it applies to tort:

[19]      The ex turpi doctrine, as applied in tort, has not historically been well understood. In Hall v. Hebert, [1993] 2 S.C.R. 159, McLachlin J. (as she then was) says that its application in tort, “in both Canada and elsewhere, has had a chequered history” (p. 171). The seminal case explaining the judicial policy underlying the ex turpi doctrine and its application in the context of tort law is the majority judgment of McLachlin J. in Hall v. Hebert.

[20]      The question is, “under what circumstances should the immoral or criminal conduct of a plaintiff bar the plaintiff from recovering damages to which he or she would otherwise be entitled” (p. 169). The following principles and approach are established in Hall v. Hebert and are applicable in the present case.

1.         Application of the ex turpi doctrine in the tort context invalidates otherwise valid and enforceable actions in tort (p. 169).

2.         Therefore, its application must be based on a firm doctrinal foundation and he made subject to clear limits and should occur “in very limited circumstances” (p. 169).

3.         The only justification for its application is the preservation of the integrity of the legal system. This concern is only in issue where a damage award in a civil suit would allow a person to profit from illegal or wrongful conduct or would permit evasion or rebate of a penalty prescribed by the criminal law (p. 159).

It would, in short, introduce an inconsistency in the law. It is particularly important in this context that we bear in mind that the law must aspire to be a unified institution, the parts of which — contract, tort, the criminal law — must be in essential harmony. For the courts to punish conduct with the one hand while rewarding it with the other, would be to “create an intolerable fissure in the law’s conceptually seamless web”: Weinrib, supra, at p. 42. We thus see that the concern, put at its most fundamental, is with the integrity of the legal system. [p. 176]

[64]         The courts in this province also recently commented on the doctrine in Randhawa v. 420413 B.C. Ltd., 2007 BCSC 1507, aff’d 2009 BCCA 602, leave to appeal dismissed [2010] S.C.C.A. No. 73. Chiasson J.A., for the court, summarized the central facts as follows:

[7]        The trial judge stated at para. 241 she was “satisfied that, from 1994 until at least 2000, Mr. Randhawa initiated and actively participated in the distribution of unrecorded cash from the CVT taxi drivers”. She concluded there was a falling-out among the parties and the most likely scenario was that the appellants ceased to participate in the scheme and the Kang Group continued with it. She held that at some point after 2000 the Kang Group continued to take money from CVT without the appellants’ knowledge or participation but, applying the doctrine of ex turpi causa non oritur actio, the judge refused to award damages to the appellants.

[65]         At trial, Madam Justice Allan had said:

[256]    However, it is unnecessary to speculate as to the extent of Mr. Randhawa’s involvement after 2000. I am satisfied, on the basis of all of the evidence, that Mr. Randhawa, with the knowledge and acquiescence of his wife, was the architect of the money skimming plan and participated fully until there was a “falling out of thieves” and the entire scheme unravelled.

[257]    At some point after 2000, the defendant owners continued to take cash from CVT without Mr. Randhawa’s knowledge or participation. However, the plaintiffs cannot invoke the Court’s assistance to compensate them for their share of the illegal cash taken by the defendants. The doctrine of ex turpi causa non oritur action provides that no action may arise from a base cause. As Phillip H. Osborne stated in The Law of Torts: Torts, (Toronto: Irwin Law, 2000) at 102:

It embodies an intuitive reaction that plaintiffs who are involved in illegal conduct and other serious wrongdoing when they suffer damage should not be permitted to engage the legal system to pursue a remedy...

[258]    This principle was illustrated In Pupiec v. Dereniowski et al. (1998), 39 O.R. (3d) 150 (C.A.), where the Court allowed an appeal from a trial judgment in which a plaintiff successfully sued on an illegal contract. The Court said, at 152, that:

This disposition was clearly in error. Having found that Pupiec was a party to this fraud on Ermar, he should have applied the maxim, ex turpi causa non oritur actio (a claim cannot arise from a base cause). In more modern language, a plaintiff who is a willing participant in an illegal or immoral act may not have the assistance of the court if her damages flow from her involvement in the illegal or immoral act: see Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., [1983] 1 S.C.R. 452, 24 C.C.L.T. 111. Once the court finds that the plaintiff and the defendant participated in a scheme to defraud a third party, as this trial judge expressly found, it is wrong to suggest that the court should entertain an action between the participants to the fraud to allocate responsibility for the loss in reverse proportion to their guilt.

[259]    Accordingly, having found that the Randhawas participated in the scheme to divert unrecorded cash from CVT for at least six years, they are not entitled to a remedy even though the defendants may have received a greater amount of cash.

[66]         The Court of Appeal, in affirming the trial judgment, said:

[26]      These cases illustrate the proposition that a trial judge should not decide a case on a legal theory not advanced by a party or make findings of fact not based on evidence. They do not erode the right and obligation of trial judges to consider all of the evidence and to reject or accept all or part of it. Inherent in this right and obligation is the possibility that factual scenarios presented by parties will be accepted or rejected in whole or in part.

...

[45]      In my view, the judge did not step “outside of the pleadings and the case as developed by the parties to find liability”. In the circumstances of this case, the judge was entitled to reach a determination of the likely conduct of the parties that did not accord with their direct evidence or positions advanced by them at trial.

...

[66]      The ex turpi causa doctrine prevents a party from benefiting from illegaI or immoral conduct (Canada Cement LaFarge Ltd. v. British Columbia Lightweight Aggregate Ltd., [19831 1 S.C.R. 452). It applies in contract and in tort to maintain the internal consistency of the law (Hall v. Herbert, [1993] 2 S.C.R. 159 at 185). The justification for the rule is the preservation of the integrity of the legal system; it should be applied sparingIy (British Columbia v. Zastowny, 2008 soc 4, [20081 1 S.C.R. 27 at para. 20).

[67]      The appellants note that ex turpi causa was neither pleaded nor argued. They state the judge misapplied the doctrine because she applied it “without considering its doctrinal or public policy underpinnings, and without the benefit of argument from counsel”.

[68]      In my view, it is not necessary to plead the doctrine. It is a question of law. It is necessary to plead the material facts to support the application of the doctrine. In this case that was done (Miller v. Decker, [1955] 4 D.L.R. 92 at paras. 18-19 (B.C.C.A.); David Cooper Investments Ltd. v. Bermuda Tavern Ltd. (2001), 56 O.R. (3d) 243 at para. 44 (C.A.)).

[67]         The ex turpi doctrine has relevance beyond the insurance, contract, and tort contexts. In C.L.S. (Re), 2009 ABPC 107, J.K. was denied guardianship of V., a child conceived as a result of his sexual assault on the minor child of his common-law partner. One of the reasons given for this denial by Cook-Stanhope, Prov. Ct. J. was related to the fact that the conception of the child was an illegal act:

[51]      In addition, V. was born as a result of an illegal act. Courts have consistently ruled that a party should not be entitled to benefit from an illegal act. The Court in Major v. Canadian Pacific Railway, a decision of the Supreme Court of Canada, [1922] 3 W.W.R. 512; 1922 CarswellOnt 120, quoting Lord Mansfield in Holman v. Johnson, 98 E.R. 1120, ldlington, J. stated:

The principle of public policy is this: ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff’s own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff.

That is but one example of the principle in action. There are many more.

[52]      In applying this principle to the present case and to the interpretation of s. 20 of the FLA, it is clear that the illegal act in question is not in connection with a minor or collateral matter, it is the very basis of the existence of a child. Following this argument, I am satisfied that J.K. should not be permitted to benefit from his acts of sexual predation against a minor child under his care.

[53]      A further reason to find that J.K. is not a guardian of V. is that if this Court were to acknowledge that guardianship status can flow from cohabitation between sexual perpetrator and minor child in a civil context, such a result would cause the civil law to be applied in a manner totally inconsistent with the criminal law in force in this country.

[68]         There are a number of principles, which are conceptually distinct from the ex turpi doctrine, which achieve similar ends and which evince a similar unwillingness on the part of the courts to assist a party who has acted either improperly or illegally and who now seeks relief.

[69]         Many of the claims brought in matrimonial proceedings rely on causes of action such as unjust enrichment or constructive trust. Both these causes of action are advanced by Mr. Daemore in the instant action. Both causes of action are equitable in nature and consequently "clean hands" principles pertain: John McGhee Q.C. ed., Snell’s Equity, 31st ed. (Sweet and Maxwell Limited: London, 2005) at 5-15.

[70]         In BMF Trading v. Abraxis Holdings Ltd., 2002 BCSC 590, re-trial ordered on other grounds 2003 BCCA 559, Madam Justice Garson said:

[110]    More importantly, and regardless of alternative remedies, I do not think that good conscience requires that this court should intercede in these circumstances. First, the parties deliberately structured their affairs to insulate themselves from the burdens of ownership and they were cognisant of both the benefits and restrictions of such an arrangement. Now, the partners come to court alleging a relationship to Four Star which directly conflicts with both the documented legal structure created by Simons, Scott and Williams and with the position the partners had taken in an earlier trial. The modern doctrine of constructive trust, which has been created to remedy injustice to innocent or vulnerable parties, is not a device to be utilized by sophisticated business people caught in the web of their own intrigue. Constructive trusts are not to be used as a reward to parties who have gained advantages by denying legal ownership of an asset, only then to assert ownership when it suits them at a later date. This court must not facilitate such manipulation.

[111]    That is the reason why this case is distinguishable from the facts in Peter v. Beblow. The essential difference is that, unlike Ms. Peter, Scott and Simons intentionally contrived to separate themselves from the legal ownership of Four Star and its public company shareholdings.

[71]         In Bowles v. Beamish, 2008 ABQB 395, a common law husband claimed unjust enrichment against his former common law wife on the basis that properties he transferred to her to protect them from pre-existing child support obligations and to hide them from the trustee in bankruptcy and Canada Revenue Agency, should be returned to him. The unjust enrichment claim was dismissed on the basis that there was no unjust enrichment, as well as on the basis that the husband was not entitled to an equitable remedy:

[44] ... the claim of the respondent to an interest in Ms. Beamish’s asset by way of quantum meruit or constructive trust cannot be sustained. See Scheuerman v Scheuerman (1916), 52 S.C.R. 625; Goodfriend v. Goodfriend, [1972] S.C.R. 640; Morgan v. Morgan [1995] O.J. No. 3188 (Gen. Div.). As the Chief Justice of Canada said in Scheuerman at p. 627:

I am prepared to hold that a plaintiff is not entitled to come into Court and ask to be relieved of the consequences of his actions done with intent to violate the law, and that though they did not and even could not succeed in such purpose.

[72]         In Stoneman v. Gladman (2005), 16 C.B.R. (5th) 78, 45 C.C.E.L. (3d) 309 (Ont. S.C.J.), the plaintiffs were facing significant financial difficulties. They transferred all their assets to the defendant and declared personal bankruptcy. The defendant was to then gift 50% of their assets back to them, in the form of a new company. The defendant refused and hired Mr. Stoneman as an employee of the new company, but then terminated his employment. The plaintiffs acknowledged that their conduct was “dishonourable and of highly questionable legality” (at para. 8). P. Perell J. said:

[32]      There is an alternative ground to stay the plaintiffs’ claims for compensation for the alleged failure to transfer the business assets. Brought by these plaintiffs, this claim is, in my view, an abuse of the process of the court. The legal maxims ex turpi causa non oritur actio and ex dolo malo non oritur actio express the principle that the court will not aid a litigant who founds his or her claim upon an illegal or immoral act. A classic expression of the principle is by Lord Mansfield in Holman v. Johnson (1775), 98 E.R. 1120 (Eng. K.B.) at p. 1121 where he states:

The principle of public policy is this: ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act. If, from the plaintiff’s own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant but because they will not lend their aid to such a plaintiff.

[33]      In Pupiec v. Dereniowski (1998), 39 O.R. (3d) 150 (Ont. C.A.), the vendor participated in a fraudulent scheme to deceive the mortgagee who was providing first mortgage financing. The vendor was disentitled from enforcing her own mortgages that were received as part payment of the falsely stated purchase price. The court stated that a plaintiff who is a willing participant in an illegal or immoral act may not have the assistance of the court if damages flow from the illegal or immoral act.

[34]      In asserting that they should be allowed to advance the claim for compensation for the alleged failure to transfer the business assets, the plaintiffs attempt to take some comfort from the fact that the trustee in bankruptcy has, so far, shown no interest in taking over the claim. I do not see how this assists the plaintiffs. The trustee’s disinterest does not confer legal capacity on the plaintiffs, and unlike the trustee, they remain tainted by their professed acknowledgment that the scheme that they seek to have enforced is dishonourable and illegal.

[73]         More recently, in J.T.L. v. R.G.L., 2010 BCSC 1233, Harvey J. addressed the ambit and applicability of the ex turpi doctrine in a matrimonial case which dealt with the ownership and distribution of properties which had been obtained illegally. In addressing the objects of the ex turpi doctrine, Harvey J. succinctly said:

[113]    Although courts have given different descriptions of the underlying premise of the doctrine of ex turpi causa, it generally rests on the need to preserve the integrity of the judicial system.

[114]    Ex turpi causa is concerned not specifically with the lawfulness of contracts, but generally with the enforcement of rights by the courts. The courts will not enforce a right, which would otherwise be enforceable, if the right arises out of an act committed by the person asserting the right which is sufficiently anti-social to justify courts refusing to enforce that right: Hardy v. Motor Insurers’ Bureau, [1964) 2 ALL E.R. 742 (C.A.).

[115]    The purpose of the ex turpi causa rule is to defend the integrity of the legal system and the repute in which courts ought to be held by law-abiding members of the community. One way to ask the question is whether it be manifestly unacceptable to fair-minded or right-thinking people that a court should lend assistance to the plaintiff who has defied the law: Mandzuk v. Vieira, [19831 B.C.J. No. 1476 at para. 17 (S.C.).

[116]    The power expressed in the maxim ex turpi causa non oritur actio finds its roots in the insistence of the courts that the judicial process not be used for abusive, illegal transactions. Its use is justified where allowing the plaintiff’s claim would introduce inconsistency into the fabric of the law either by permitting the plaintiff to profit from illegal or wrongful act or evade the penalty prescribed by criminal law: Hall v. Hebert, [1993] 2 S.C.R. 159; British Columbia v. Zastowny, 2008 SCC 4.

[74]         Harvey J. declined to apply the ex turpi doctrine to the circumstances before him. This was, in part, based on the principled concern that application of the doctrine would cause the plaintiff to receive a windfall. It was, in part, also based on various factual concerns including the fact that a particular agreement was not in itself illegal. Ultimately, Harvey J., at para. 124, concluded that the "extent of the illegality is not nearly as severe as the unjust enrichment that would be faced by the defendant".

[75]         I have focused on the J.T.L. case because it is a recent decision of this court. Counsel for Mr. Daemore also made reference, however, to a number of other cases from Canada, Australia, and England where concerns about windfalls or unjust enrichment have caused courts to refrain from applying the doctrine of ex turpi causa. These cases, however, only serve to establish that concerns about windfalls or unjust enrichment may override a court’s concern about illegality, not that they need to do so. In addition, these cases overwhelmingly deal with finite or limited instances of impropriety or illegality.

[76]         The argument that Ms. Windheim might receive a windfall if she were allowed to retain the proceeds from the sale of the Cedar Crescent Home, is also more theoretical than real. Later in these reasons I have explained why this notional windfall is largely offset by Mr. Daemore’s failure to pay any child support post-separation.

[77]         Even if there were a windfall or unjust enrichment of some kind, such concerns do not, in this circumstance of this case, outweigh Mr. Daemore and Ms. Von Windheim’s unlawful conduct. The unlawful conduct of Mr. Daemore and Ms. Von Windheim is flagrant and pervasive. It arises not as a matter of inference, but is unequivocally acknowledged. Importantly, such illegality is central to many of the claims being advanced. The following examples make this clear.

[78]         Ms. Von Windheim seeks a reapportionment of the family assets. Mr. Daemore's assets include, for example, the Kerrisdale Apartment. That property was purchased, in part, with monies generated from Mr. Daemore’s "creative financing" schemes. Those schemes were facilitated and advanced by Ms. Von Windheim. The properties in question also housed grow-ops which generated further cash for Mr. Daemore. The Kerrisdale Apartment was purchased with monies that passed through Ms. Von Windheim’s bank account. The Kerrisdale Apartment was shielded from Mr. Daemore's creditors with Ms. Von Windheim's assistance and complicity. These facts, in combination, give rise to multiple criminal and civil wrongs. The parties acted improperly in relation to each of the banks involved, the Canada Revenue Agency, and Mr. Daemore's creditors. I believe right-thinking people would consider it manifestly wrong for the courts to lend assistance to and de facto endorse such a claim. Still further, the grant of such relief would introduce inconsistency into the fabric of the law and would allow Ms. Von Windheim to profit from her wrongful activities.

[79]         Mr. Daemore seeks spousal support from Ms. Von Windheim. The parties have been separated for 16 years. Mr. Daemore seeks to buttress or underpin this aspect of his claim with Ms. Von Windheim’s continuing involvement in his various illegal activities. In essence, he says that her ongoing unlawful assistance was central to his ability to sustain his criminal activity and his livelihood. There existed between them, it was argued, a form of economic interrelationship that helped Mr. Daemore support his lifestyle. Mr. Daemore's present financial needs, and the fact that these collaborative illegal activities have come to an end, are said to ground his claim for spousal support. I consider that right-thinking persons would shrink from the court's involvement in any such claim. I also consider that such a claim, based on joint illegal activity, fundamentally distorts the object of spousal support.

[80]         In a similar vein, both a claim for spousal support and a claim for reapportionment of family assets require the court to consider the parties’ pre-separation standard of living. In this case, that pre-separation standard of living was in very large part fuelled and sustained by criminal activity or the proceeds of earlier criminal activity. Again, in a case such as this, to apply general spousal support principles in the usual fashion would distort the object of those principles.

[81]         Mr. Daemore’s claim, based on his agreement with Ms. Von Windheim for a 40% interest in the sale proceeds of the Cedar Crescent Home, relies on a contract which was illegal. It does not matter that that home was initially transferred to Ms. Von Windheim by Mr. Daemore’s mother. At the time that Mr. Daemore says he made that agreement, he was being pursued both by various law enforcement agencies and the Canada Revenue Agency. His various assets and offshore bank accounts were about to be seized. Mr. Daemore openly acknowledged that he sought to have Ms. Von Windheim hold his 40% interest in the Cedar Crescent Home in order to prevent these various authorities from seizing that interest. Mr. Daemore now seeks to recover what he earlier sought to improperly shield. An illegal purpose behind an initial transfer does not always bar a claim for the recovery of property held in trust, but the party claiming a trust must be able to demonstrate its existence without relying on the illegal purpose: Oppermann v. Andersen, 2009 BCSC 992 at para. 56. Mr. Daemore cannot establish that the sale proceeds are held in trust without relying on the illegal purpose of the transaction. Once again, I do not consider that the court should lend its assistance to Mr. Daemore.

[82]         Still further, Mr. Daemore now seeks an interest in the College Highroad Home. He does so on various bases. At least one basis is premised on following the proceeds of the sale from the Cedar Crescent Home into the College Highroad Home. He would then, in essence, be advancing a claim which was grounded on his tracing money which he had earlier improperly shielded from, inter alia, the Canada Revenue Agency into a subsequent asset. Yet again, I am satisfied that in the extreme circumstances of this case the court should not extend its assistance to the claimant.

[83]         Counsel for Mr. Daemore argued on the basis of Oppermann that the very fact that neither party had clean hands should cause the court to refrain from applying the doctrine of ex turpi causa. I do not agree with this reading of the case. While Rice J. mentions the mutual lack of clean hands as a factor in the court’s decision not to apply the doctrine of ex turpi causa, a far more important factor in his decision was the existence of sufficient evidence to establish an intention to hold the property in question on a trust without relying on the illegal purpose: paras. 56-57. The general rule that emerges from this case, and the others which I was referred to, is simply that courts should be cognizant of the particular context of an illegal contract or transaction and not apply the doctrine of ex turpi causa blindly. In the context of this case, I am satisfied that the application of the doctrine is warranted.

General Principles

[84]         The various claims advanced by Mr. Daemore and Ms. Von Windheim also suffer from additional obstacles which are specific to each particular claim. To be thorough, I have addressed these additional difficulties.

a)       Mr. Daemore’s Claims

i)        The Verbal Agreement for a 40% interest in the sales proceeds of the Cedar Crescent Home

[85]         In 1994 and 1995, Mr. Daemore’s legal situation was "precarious". He did not know if he was going to jail, the Canada Revenue Agency was pursuing him vigorously, and his relationship with Ms. Von Windheim was "on the rocks". Mr. Daemore says that during this time, Ms. Von Windheim and he agreed to split the sale proceeds from the Cedar Crescent Home. He says he was to receive 40% of those proceeds, less certain expenses. Ms. Von Windheim was to receive the remaining 60%. She was also to hold his share for him. The difference between their respective shares, Mr. Daemore said, was intended to fully address all of the future child and spousal support obligations that he might otherwise have had.

[86]         Ms. Von Windheim accepts that these discussions took place, but says she never agreed to the terms Mr. Daemore proposed. She did not believe or accept that the difference in their proportionate shares of the sale proceeds, as proposed by Mr. Daemore, would adequately provide for herself and her children.

[87]         Though I have identified significant issues with the credibility of both parties, I accept Ms. Von Windheim’s evidence on this point. Mr. Daemore’s evidence lacked the certainty which one would expect. In his direct examination he described the alleged contract as "a discussion to reach an agreement". He went on to say "in my mind we agreed". He then added "she said, okay, that's good".

[88]         Still further, though Mr. Daemore claimed a legal or beneficial interest in the sale proceeds of the Cedar Crescent Home in his counterclaim in the 1998 Action, he did not assert that that interest was based on any agreement or contract until the 2003 Action.

[89]         Ms. Von Windheim’s evidence is also consistent with her financial circumstances at the time. The income she appears to have been generating, or at least declaring, was quite modest. She had three children. Sasha was about 15 years old, Ashley Rose was only about 11 years old, and Spencer was about 5 years old. Thus, they would require financial support for a considerable period. Ms. Von Windheim’s future economic prospects were uncertain. The amount Mr. Daemore was proposing to address these various ongoing obligations was relatively modest.

[90]         I would also dismiss this aspect of Mr. Daemore's claim on a further principled basis. Mr. Daemore frames the alleged agreement as a settlement agreement. There is no requirement that a separation agreement be in writing. The only requirements are those that are necessary to the formation of a contract, namely, offer, acceptance, consideration, and an intention to create legal relations: O.H.S. v. M.J.S., 2004 BCSC 600 at para. 22. In Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 295, however, Abella J. for the court, in referring to a separation agreement, said:

47.       In my view, it flows from the observations and principles set out in Miglin that a duty to make full and honest disclosure of all relevant financial information is required to protect the integrity of the results of negotiations undertaken in the uniquely honorable circumstances. The deliberate failure to make such disclosure may render the agreement vulnerable to judicial intervention where the result is a negotiated settlement that is substantially at variance from the objectives of the governing legislation.

48.       Such a duty in matrimonial negotiations and anchors the ability of separating spouses to genuinely decide for themselves what constitutes an acceptable bargain. It also helps protect the possibility of finality in agreements. An agreement based on full and honest disclosure is in agreement that, prima facie, is based on the informed consent of both parties. It is, as a result, an agreement that courts are more likely to respect. Where, on the other hand, an agreement is based on misinformation, it cannot be said to be a true bargain which is entitled to judicial deference.

[91]         During the period from the late 1980s onwards, the parties spent less and less time together. Ms. Von Windheim said she was unaware of how much money Mr. Daemore earned at that time. She said she had only a very general sense of what assets Mr. Daemore held and what the value of those assets were. There was no suggestion that Mr. Daemore had made the kind of full and frank disclosure of his economic circumstances which would be necessary to ground an enforceable separation agreement.

ii)        The College Highroad Home

[92]         Mr. Daemore claims an interest in the College Highroad Home and does so on various bases. Principally, however, he asserts that Ms. Von Windheim acquired this property in August 2000 with monies from the Cedar Crescent Home. I have said that the property is, and at all times since its acquisition has been, registered in the name of Mr. Von Windheim.

[93]         Mr. Daemore, in support of this theory, relies on the significant sum of money Ms. Von Windheim held in Germany in 1999 and for which no records exist after that date. He further relies on Ms. Von Windheim's e-mails to him, which I alluded to earlier, where she asserted she owned one-half of the College Highroad Home, and which she now claims were not true and were a product of her being "flip". He also relies on further objective evidence such as Ms. Von Windheim's application for her medical marijuana licence, in which she claimed that she was a legal and beneficial owner of the property. Ms. Von Windheim now says this information was also untrue. Finally, he relies on what he says is the inherent improbability of the claimed arrangement under which Ms. Von Windheim resides on the property.

[94]         Mr. Von Windheim immigrated to the United States some 20 years ago. He holds a Ph.D. in mechanical engineering and an M.B.A. He has held various prominent management and research positions in different corporations. In April 1999, Mr. Von Windheim acquired shares in a start-up company called “Cronos”. He acquired the shares for a penny a share as part of the start-up management team at Cronos.

[95]         Cronos was sold to a company called JDS Uniphase in 2000. The Cronos shares were exchanged for JDS Uniphase shares as part of this transaction.

[96]         In August and November 2000, Mr. Von Windheim sold a portion of the JDS Uniphase shares he held and realized more than US$1.75 million from his original investment in Cronos. He says he used a portion of these funds to acquire both a property in Toronto and the College Highroad Home.

[97]         The relevant exchange rate at the time of the purchase of these Canadian properties significantly favoured the U.S. dollar. Mr. Von Windheim used approximately US$550,000 to acquire the College Highroad Home, which cost more than CDN$800,000 at the time. There was no evidence before me of what the present value of that property is.

[98]         Mr. Von Windheim testified that in 2000 the significant volatility in the stock market caused him to look for more secure investments. He decided to buy two properties. One was outside of Toronto. It too is registered in his name. His parents and his sister live rent free in that home, though they are responsible for routine maintenance, property taxes, and utilities. At about the same time, he purchased the College Highroad Home. Again, the oral understanding he reached with Ms. Von Windheim was that she and her children could live rent free in the property, but that she would be responsible for routine maintenance, taxes, and utilities. It was understood that at some point in the future Mr. Von Windheim might wish to live in or sell the College Highroad Home.

[99]         Mr. Von Windheim's evidence at trial was consistent with an earlier affidavit he had filed and was supported by two further affidavits which were introduced into evidence by consent. One affidavit was from Mr. Von Windeim’s solicitor and the other from his investment account manager. These affidavits establish that the funds used to purchase the College Highroad Home came from Mr. Von Windheim’s U.S. investment account and that those funds came from investments held solely by him. The evidence given by Mr. Von Windheim was supported by related documentary evidence. To the extent there were modest gaps in that evidence, I am satisfied that they are the product of the passage of time since the events in question and that Mr. Von Windheim diligently sought to obtain the materials in question. I accept Mr. Von Windheim’s evidence as it pertains to the acquisition and ownership of the College Highroad Home.

[100]     Ms. Von Windheim’s mischief-making and lack of candour in her e-mail communications with Mr. Daemore, as well as her further dishonesty in other records, do not advance Mr. Daemore’s claim on this issue. In addition, I do not consider Mr. Von Windheim’s evidence of his arrangement with Ms. Von Windheim to be inherently improbable. That contention is belied by his purchase of a like property outside of Toronto in which his parents and sister presently reside on like terms and conditions. Mr. Von Windheim’s purchase of the College Highroad Home was simply a reflection of what he perceived to be a conservative investment strategy.

[101]     I am therefore satisfied that the College Highroad Home was purchased solely with Mr. Von Windheim’s funds and that both the legal and beneficial interest in the property are vested solely in him. This conclusion is also consistent with the statutory presumption created by s. 23(2) of the Land Title Act, R.S.B.C. 1996, c. 250. That provision establishes that persons registered on title of a property are presumed to hold the legal and equitable interest conveyed by the registrar and thus are indefeasibly entitled to an estate in fee simple.

[102]     The Torrens system places the burden upon those challenging title to show that the registered owner holds his or her interest or a portion thereof in trust for another: Virk v. Pannu, 2006 BCSC 921 at paras. 9 and 12.

[103]     The statutory presumption may be displaced by two equitable principles: (a) the presumption of advancement; or (b) the enforcement of an agreement between the parties in order to prevent the unjust enrichment which would arise if the face of the title were upheld: Skender v. Skender, 2005 BCSC 418 at paras. 12-17, aff’d 2006 BCCA 162. In relation to this latter principle, if the evidence establishes that there was an agreement between the parties which is contrary to the interest shown on title, then the court enforces that agreement through the law of trusts: Phung v. Feng, 2009 BCSC 374 at paras. 30-32.

[104]     These equitable principles are engaged by the alternate theories advanced in Mr. Daemore’s pleadings as to why he is entitled to an interest in the College Highroad Home.

[105]     First, at para. 36(ii) of the Amended Statement of Claim, Mr. Daemore pleads that "the Defendants, or one of them, hold their interest in assets that are in one of their names or in their possession in trust for the Plaintiff...".

[106]     At para. 36(vi), Fact (b) of the Amended Statement of Claim, Mr. Daemore asserts that "the common intention of the Defendant Jesko expressed, or in the alternative implied, was that the property at 4993 College Highroad, Vancouver, should be for the benefit of the Plaintiff and Defendant Sita and belong to them or to the Plaintiff and in turn by virtue it is a family asset to the benefit of the Plaintiff”.

[107]     There is no evidence before me, either express or implied, of any intention on the part of Mr. Von Windheim to benefit the claimant. The property was purchased some five years after Ms. Von Windheim and the claimant separated. The funds for the acquisition were provided solely by Mr. Von Windheim. I do not consider that the limited benefit to Ms. Von Windheim of living in a property can form the basis of a claim that the property is a "family asset" under the Family Relations Act, R.S.B.C. 1996, c. 128. Nor does it ground or otherwise form the basis for any form of trust in favour of the claimant. Neither of these theories was developed before me and no authority in support of these propositions was provided to me.

[108]     Next, at para. 36(vi) Fact (c) of the Amended Statement of Claim, Mr. Daemore claims "the plaintiff has contributed towards the acquisition, maintenance and improvement of the property held by the Defendant Jesko. His contributions include but are not limited to: (i) contribution of money and labour".

[109]     Paragraph 36(vi) Fact (c) also advances the assertion that "the Plaintiff has suffered a deprivation and the Defendants have been unjustly enriched by his contributions".

[110]     Both of these latter claims suffer from the same difficulty. The claimant led no evidence of any contribution by him. The only evidence in relation to maintenance of the property by anyone other than Ms. Von Windheim came from a witness who testified to doing some gardening at the house. That witness also testified, however, that he was paid by Ms. Von Windheim for this work.

[111]     I turn to a further matter, not directly relevant to the College Highroad Home, but related in nature. In her 2009 e-mails to Mr. Daemore, Ms. Von Windheim claimed to have made significant amounts of money on certain technology shares she had acquired through or with the assistance of her brother. Ms. Von Windheim now asserts that the content of these e-mails, or of similar earlier communications to Mr. Daemore, were not true and were again the product of her being "flip". Far more importantly, Mr. Von Windheim testified that no aspect of these communications from Ms. Von Windheim to Mr. Daemore was true and that he never assisted his sister in acquiring any shares in any company. I accept his evidence.

Family Assets – Reapportionment

Overview

[112]     Both Mr. Daemore and Ms. Von Windheim, in their respective pleadings, seek some reapportionment of the family assets. The legal framework which underlies these claims is clear. Its application to the present circumstances is less straightforward. The following principles are relevant:

a)       a division of family assets should be addressed before dealing with the question of support: Narayan v. Narayan, 2006 BCCA 561 at para. 33;

b)       in British Columbia the operative legal presumption, established in s. 56 of the Family Relations Act, is for an equal division of family assets;

c)       the appropriate date for establishing the character of assets as family assets and for undertaking the analysis associated with a reapportionment is the date of the triggering event: Fisher v. Fisher, 2009 BCCA 567 at para. 60. The divorce order I made mid-trial constitutes the relevant triggering event for present purposes;

d)       an asset acquired after separation will be a family asset if it was acquired, in whole or in part, from the proceeds of a family asset: Billingsley v. Billingsley (1991), 83 D.L.R. (4th) 673, 36 R.F.L. (3d) 188 (B.C.C.A.). Ms. Von Windheim accepts that at least portions of the Costa Rica Property and the Burnaby Property were acquired with money from the Cedar Crescent Home. Her equity in these properties is said to have a combined value of approximately $260,000;

e)       when an asset is acquired post-separation by a spouse from funds that should have been used to fulfill support obligations the asset may be declared to be a family asset: Pooni v. Pooni, [1993] B.C.J. No. 382. Ms. Von Windheim asserts that application of this principle renders both the Kerrisdale Apartment and the Colombian Property family assets. Their combined value, leaving aside the uncertain status of the Colombian Property, is approximately $400,000;

f)        Section 65(1) of the Family Relations Act establishes the factors relevant to considering whether an equal division of the family assets would be unfair and whether a reapportionment of those assets is appropriate. It provides:

65(1)    If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to

(a)   the duration of the marriage,

(b)   the duration of the period during which the spouses have lived separate and apart,

(c)   the date when property was acquired or disposed of,

(d)   the extent to which property was acquired by one spouse through inheritance or gift,

(e)   the needs of each spouse to become or remain economically independent and self sufficient, or

(f)    any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse,

the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court.

g)       counsel for Mr. Daemore accepts that Mr. Daemore's failure to pay child support from at least 1998 onwards ought to be factored into any reapportionment that might otherwise be directed.

[113]     The application of these principles is rendered difficult by numerous factors. Each party asserts that the other has not been honest. Each asserts that the other likely has significant undisclosed assets or monies, but does not begin to address what these assets might be or what the value of these assets or monies might be.

[114]     Counsel for Mr. Daemore has established to the required standard that Ms. Von Windheim had not, in 1999, exhausted the sale proceeds from the Cedar Crescent Home. That tells me little, however, about what, if any, portion of this sum remains today or of what further undisclosed assets were acquired with it.

[115]     Similarly, Mr. Daemore has asserted that the initial cost and value of the Colombian Property was $160,000. He produced nothing to establish this figure. It does appear that that investment was, at least at one time, at risk because Mr. Daemore, as recently as 2009, sought to borrow additional money from Ms. Von Windheim to support the investment. Mr. Daemore now says he expects that investment is lost, but again has produced nothing to support this contention.

[116]     The comments of Southin J., as she then was, in Le v. Milburn, [1987] B.C.J. No. 2690, are apposite and inform the whole of this analysis:

When a litigant practices to deceive, whether by deliberate falsehood or gross exaggeration, the court has much difficulty in disentangling the truth from the web of deceit and exaggeration. If, in the course of the disentangling of the web, the court casts aside as untrue something that was indeed true, the litigant has only himself or herself to blame. ...

[117]     I have considered the comments of Fraser J. in Cunha v. da Cunha (1994), 99 B.C.L.R. (2d) 93, to the effect that where there has been non-disclosure of assets the court should infer that the non-disclosing party has control and possession of family assets of which the court has no knowledge and rule on that basis. That guidance is of limited assistance in this case. In Cunha, only one of the parties was concealing assets and the court’s primary object or concern was to avoid injustice and unfairness to the innocent party. There was also some accurate information about potential family assets from which inferences could be derived.

[118]     Here, the evidence of both parties is unreliable. There are also few proven facts from which I can make or draw appropriate inferences. Any such exercise would be wholly speculative. As a result, I do not consider that there is any principled basis for me to conclude that either party holds any specific additional property or to fix the value of any further family assets. If any unfairness results to the parties, as Southin J. put it, they have only themselves to blame.

Analysis

[119]     The parties were married in October 1981. They have lived separate and apart since approximately 1995. Thus, this claim is advanced 16 years after the parties separated. This factor militates against any reapportionment in favour of Mr. Daemore or, in fact, of any equal division of the assets held by Ms. Von Windheim. In McPhee v. McPhee (1996), 74 B.C.A.C. 308, 22 R.F.L. (4th) 302, McEachern C.J.B.C., as he then was, and for the court, upheld an appeal from the reasons of the trial judge who had reapportioned a family asset entirely in favour of the party who had held the asset since the parties separated. The claim for an interest in the home in question was advanced more than 20 years after the parties separated. The court, at para. 14, said,

as to (b), the period of separation - over 20 years without a claim being made - is sufficient without more, to justify a substantially unequal distribution.

[120]     In Karreman v. Karreman, 2001 BCSC 1327, Nielsen J. addressed a claim brought 17 years after separation for the apportionment of the family home. The court concluded, having regard to various factors, including the length of time since separation, that the property should be apportioned 80% in favour of the defendant.

[121]     Under s. 65(1)(c) of the Family Relations Act all of the assets of the parties in which some interest is claimed were acquired post-separation, but remain, at least in concept, family assets.

[122]     I do not consider the fact that the Cedar Crescent Home was initially gifted, albeit subject to some debt, to Ms. Von Windheim to be particularly relevant in the present circumstances.

[123]     Section 65(1)(e) requires that the need of each spouse to be economically independent or economically self-sufficient be considered. The needs of the parties are to be determined with reference to their pre-separation standard of living. There was very little direct evidence of what standard of living the parties enjoyed pre-separation. From the late 1980s onwards, Mr. Daemore was spending an increasing amount of his time in Edmonton. Ms. Von Windheim described her own life in Vancouver as a "champagne lifestyle on a beer budget". It is also relevant that this pre-separation lifestyle, whatever its attributes, was primarily supported by criminal activity.

[124]     Furthermore, both s. 65(1)(e) and (f) incorporate concepts from the support provisions of the Divorce Act. Thus, the principles established in Moge v. Moge, [1992] 3 S.C.R. 813 are relevant. These principles, in relation to s. 65(1)(e), were developed at some length in Toth v. Toth (1995), 64 B.C.A.C. 81, 13 B.C.L.R. (3d) 1.

[125]     Mr. Daemore’s present claim for reapportionment is not based on compensatory principles. Nor, based on my earlier conclusions, is it premised on any contractual entitlement. Still further, it cannot properly be described as needs-based. I will develop this further when I address Mr. Daemore’s spousal support claim, but I do not consider that Mr. Daemore's present circumstances, to the extent Mr. Daemore is to be believed, either arise from the marriage or that they can properly ground a needs-based claim. In saying this, I accept that a needs-based claim does not have to be the product of the marriage. Thus, there are cases where a spouse who is sick or disabled advances a claim based on need. Mr. Daemore's present circumstances, however, are entirely of his own making and they arise overwhelmingly from his post-separation lifestyle and activities. In saying this, I am also mindful that the conduct of the parties is not to be considered under s. 65. I am not referring to Mr. Daemore’s criminal activities. I am referring to his profligate lifestyle for the better part of the past decade and since his separation from Ms. Von Windheim. He has made very significant sums of money during this period. He has chosen to dissipate that money. He is educated, articulate, and clearly resourceful. As I will establish, I do not accept that there is any impediment to his seeking some employment to supplement his income.

[126]     A number of further factors relevant under s. 65(f) are engaged. Ms. Von Windheim has at all material times been solely responsible for the preservation, maintenance, and improvement of the Costa Rica and Burnaby Properties. The comments found in each of LeBlanc v. LeBlanc, [1988] 1 S.C.R. 217 at 222-223 and in the Day v. Day (1981), 29 B.C.L.R. 363 at 369, are relevant.

[127]     In addition, and importantly, since 1988, when Mr. Daemore was released from prison, Ms. Von Windheim has been wholly responsible for the expenses associated with raising their children. Admittedly, Sasha was 18 in 1998. Ms. Von Windheim, however, paid for her to attend a post-secondary school which taught computer web design. The cost of that program was approximately $25,000. Ashley Rose was 15 in 1998. After she graduated high school, Ms. Von Windheim paid approximately $20,000 to have her participate in an aesthetics and hair design program. Spencer was 9 in 1998. He suffers from various mild physical and learning disabilities. He attended a private school from grade 3 through to and including grade 10. The annual tuition at that school ranged from approximately $5,500 to $10,600 annually. Ms. Von Windheim then paid to have him attend a program at BCIT, which Spencer completed. The cost of that program exceeded $7,000.00. Spencer's disabilities, though modest in nature, impacted on his ability to sustain his employment in a competitive environment. Consequently, he enrolled at Langara College in a computer science program which he is not presently attending and which he has not yet completed.

[128]     From 1995 to 2000, when the College Highroad Home was acquired, Ms. Von Windheim rented a house at a monthly cost of approximately $2,400. Over five years these rental costs totalled almost $150,000. Ms. Von Windheim also gave evidence about further expenses, albeit without reference to specific dollar amounts, which she incurred for her children, and in particular for Spencer, which were associated with various sporting or recreational activities.

[129]     The various child-related or living expenses which Ms. Von Windheim was able to document or establish amount to between $250,000 and $300,000. This does not begin to address the additional and necessary expenses associated with the ongoing feeding, clothing, and raising of a family.

[130]     I am satisfied that the application of the various factors identified in s. 65 militate against an equal division of those family assets which Ms. Von Windheim holds. Instead, I am satisfied that a full reapportionment in favour of Ms. Von Windheim in the Costa Rica and Burnaby Properties is appropriate. I am satisfied that this conclusion and the factors which underlie it give rise to a result which is "fair" in all the circumstances.

[131]     At the same time, I would not grant Ms. Von Windheim any interest in the Kerrisdale Apartment or the Colombian Property to the extent that this latter property continues to be of any value. The theoretical premise which would grant her some interest in these properties was Mr. Daemore's failure to pay her any child support post-separation. I consider that I have fully accounted for that failure in reapportioning the family assets which Ms. Von Windheim holds to her.

Spousal Support

[132]     Section 15.2(4) of the Divorce Act sets out the criteria a court must consider in making an order for spousal support. That section provides:

Factors

(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c) any order, agreement or arrangement relating to support of either spouse.

[133]     The objectives of the spousal support order are set out in s. 15.2(6) of the Divorce Act:

Objectives of spousal support order

(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[134]     All four of the above objectives must be taken into account and no single objective is paramount: Moge, at 852.

[135]     Moge and Bracklow v. Bracklow, [1999] 1 S.C.R. 420, set out the basis for establishing a claim for spousal support. These various principles have recently been summarized in Chutter v. Chutter, 2008 BCCA 507 at paras. 50-61, leave to appeal refused [2009] S.C.C.A. No. 41.

[136]     Again, no claim for compensatory or contractual support on behalf of Mr. Daemore has been advanced or established. Mr. Daemore argues that the means and needs of the parties support the order he seeks. He points to Ms. Von Windheim's present financial circumstances, including the home in which she lives rent free, and compares this to his current circumstances. Mr. Daemore asserts that his only asset of value is the Kerrisdale Apartment and his car. He says that he lives on his OAP and CPP income. He also receives $600 monthly from a roommate.

[137]     The difficulties with Mr. Daemore's spousal support claim can perhaps first be expressed in non-legal terms and then addressed in a more conventional and principled way.

[138]     Mr. Daemore is an intelligent and educated man who has no interest in undertaking legitimate work which might provide him with a reasonable measure of financial security or self-sufficiency. Instead, he is a criminal and a spendthrift. He has at all times, including post-separation, chosen to gamble with his future self-sufficiency and has, in financial terms, lost that gamble. He now wrings his hands at his present financial circumstances and seeks to rectify his situation by asking that the woman he has been separated from for 16 years support him.

[139]     Ms. Von Windheim places much emphasis on the considerable passage of time between when the parties separated and when this claim was advanced. Her counsel also emphasizes those aspects of Moge which assert that the purpose of spousal support is to "relieve economic hardship that results from marriage and its breakup".

[140]     Neither of these principles necessarily constitutes a bar to Mr. Daemore's claim. Both, however, in the circumstances of this case support denying that claim.

a)       Passage of Time

[141]     There is no prescribed period in the Divorce Act for advancing a spousal support claim. Nevertheless, the court in Garilovich v. Garilovich (1978), 84 D.L.R. (3d) 553, 3 R.F.L. (2d) 255 (B.C.C.A.), concluded that it had jurisdiction to refuse such a claim absent the applicant advancing some reasonable explanation for his or her delay. Specifically, the court said at 556:

I agree with the views expressed in the Hughes and Vadeboncoeur cases, supra [Hughes v. Hughes (1976), 1 B.C.L.R. 234 (C.A.); Vadeboncoeur v. Landry, [1977] 2 S.C.R. 179], and hold that I do have a discretion to refuse this application if I find that there has been unreasonable delay in bringing it. In my respectful opinion, to hold otherwise might well render an injustice to a respondent on such an application.

[142]     The foregoing conclusion and test was confirmed in Hillhouse v. Hillhouse (1992), 20 B.C.A.C. 28 at para. 30, 74 B.C.L.R. (2d) 230.

[143]     Mr. Daemore raised a claim for spousal support in each of the 1998 and 2003 Actions. He chose not to proceed with those claims. I do not consider that he has advanced any reasonable explanation for his delay in pursuing this aspect of his claim.

[144]     A related set of principles is based on the failure of a spouse to take active steps towards economic self-sufficiency. In Olsson v. Olsson, [1992] B.C.J. No. 2516 (S.C.), the court denied an application for interim support made nine years after the parties separated from a seven-year marriage:

In my view it is not the mere fact of delay on the part of a spouse but rather what that spouse has done during the period of delay which is of the greatest significance. The court, in considering a support order, must bear in mind the obligations of the parties to take reasonable steps in an attempt to achieve economic self-sufficiency within a reasonable period of time. It is my opinion that if for a very long period of time following separation a spouse fails to make reasonable efforts towards economic self-sufficiency and is content to rely upon the support of others or upon social assistance that spouse may be denied support. I am further of the opinion that where the applicant has delayed bringing an application for support for a very long period of time, as in this case, she ought to put forward evidence as to what steps she has taken in an attempt to become selfsufficient and as to why she has been unable to do so.

[145]     The court in Olsson emphasized that "where the first application is brought many years after the parties separated the court should consider whether or not the spouse has achieved self-sufficiency or, if not, has failed to take reasonable steps towards that goal."

[146]     A similar result was reached in Archibald v. Archibald, 2000 BCSC 1219, where the wife sought support 16 years after the parties separated. The court concluded that the absence of any effort by the wife to become self-sufficient for the first nine years was not reasonable.

[147]     In late 1998, Mr. Daemore, after leaving prison, started to operate a moving business. Within a few years he left that business and chose to return to the lifestyle that had put him in prison. His ensuing activities cannot and do not constitute the type of effort to achieve self-sufficiency which was required of him. His protracted failure to pursue any proper and legitimate activity which might provide him with a reasonable measure of economic self-sufficiency, constitutes a further impediment to his claim for spousal support.

b)       Need Resulting from the Marriage or its Breakdown

[148]     There are several cases which establish that a plaintiff’s needs-based claim for spousal support is not required to be causally connected to the marriage. In each of Taylor v. Taylor (1998), 157 D.L.R. (4th) 701, 38 R.F.L. (4th) 408 (B.C.C.A.) and Coupar v. Coupar (1998), 57 B.C.L.R. (3d) 161, 43 R.F.L. (4th) 443 (B.C.C.A.), the courts dealt with ill or disabled claimants whose physical condition, though not caused by or related to the marriage, supported their respective needs-based claims.

[149]     Other than one part-time job, which Mr. Daemore held for a few months, he acknowledges that he has not worked since 2007. Mr. Daemore said he suffers from various physical difficulties. These include chronic plantar fasciitis, a shoulder problem, dizzy spells, and depression. No medical evidence was led in relation to any of these alleged difficulties. In Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, Binnie J., for the court, said at para. 28:

Clearly where incapacity is alleged some independent evidence, including medical evidence would be highly desirable. But it is not essential. ...

[150]     I do not accept Mr. Daemore's evidence about his present health conditions. He has historically been an avid tennis player. In his cross-examination he first said he had not played tennis for months prior to trial. In his cross-examination it was established that he had in fact played in a tournament in April of this year. Still further, the evidence of Mr. Lebevre, a long time tennis partner of Mr. Daemore, established that they played tennis together less than a month before the trial. I return to what I said earlier. Mr. Daemore’s evidence simply cannot be relied upon on any point of substance absent some form of independent and objective verification.

[151]     Instead, I find that the truth of the matter lies in Mr. Daemore's concession that he had not, with one exception, sought any recent employment or tried to get into any type of business. He said he "didn't feel motivated to go out and find a job".

[152]     I have addressed at some length the means by which Mr. Daemore has generated income post-separation. I wish to now turn to how much money he made through these endeavours. He says he made little money from late 1998 to about 2002. From 2002 to at least late 2007 he made significant sums of money. He denied he was making more than $200,000 annually, but the evidence suggests that this is not true.

[153]     There are at least two ways to address this issue. One can look directly at what Mr. Daemore “earned” or one can consider what Mr. Daemore acquired. The unreliability of Mr. Daemore's evidence and the dearth of relevant financial records make it necessary to consider both of these streams of information.

[154]     Mr. Daemore concedes that he generated revenue for his living expenses from the mortgage monies he received from his "creative financing" schemes. How much money he received was not addressed. He also received lesser sums for being a signatory, on behalf of others, to some of these transactions.

[155]     He generated significant profits from the sale of his various properties. His evidence for these amounts was largely unsubstantiated. This was so, in part, because Mr. Daemore was required to estimate what he had spent on renovating these various homes and then had to deduct those sums from the final sale prices he achieved. Nevertheless, he said he made $30,000 in profit from a property located on West 12th Street. He said he made $20,000 in profit from a property located on Triumph Street and $50,000 from another property on that same street. I observe that when Mr. Daemore corresponded with his lawyer in June 2008, he indicated that he had made $150,000 profit on one of the Triumph Street properties - showing yet again, how thoroughly unreliable his evidence is. On other properties he said he made more money. There were, for example, two separate instances where he said he split the profits of approximately $130,000 on each home between himself and each of his daughters. Sasha denied she received such monies.

[156]     Mr. Daemore also made considerable money from the grow-ops that operated out of his homes. He made between $6,000 and $8,000 monthly for each such grow-op. He split the rent money with his daughters in the homes where they lived. Sasha said she was responsible for the home’s mortgage and other expenses from her share. I accept that evidence. It is not clear whether Mr. Daemore received all of the rent money from the other homes he owned which housed grow-ops. While he did not own all of these homes concurrently, it is clear that he was making a significant sum of money from his receipt of these funds.

[157]     Mr. Daemore also made a number of significant purchases in a short time. The cost of the Kerrisdale Apartment and the Colombian Property totals almost $400,000. Mr. Daemore bought himself a car for $16,000. He bought his son a car which cost, with certain attendant expenses, approximately $30,000. He bought each of his daughters a car for an undisclosed amount. He says he gave each of his daughters $65,000. The Canada Revenue Agency garnished approximately $45,000 from his bank accounts in 2007. These various amounts, without more, total approximately $650,000. This amount does not in any way address Mr. Daemore's day-to-day living expenses over the same period of time. Those expenses were not addressed in evidence. Some insight into Mr. Daemore's lifestyle can, however, be gleaned from his fondness for travel. In 2007, the only year canvassed, Mr. Daemore traveled to Spain, Dubai, Hong Kong, Thailand, England, and Colombia.

[158]     I also note that subsequent to his discharge from bankruptcy, Mr. Daemore has continued to travel. In 2009, he went to Mexico and Colombia. He spent from November 2010 to March or April 2011 in Colombia. He says his plane ticket for this latter trip was paid for by a friend. How he could afford to live abroad for approximately five months was not directly addressed in evidence, but calls into question both his need for ongoing financial assistance and his physical inability to work and supplement his income.

[159]     Mr. Daemore's claim for spousal support, to the extent his evidence can be believed, does not ground a needs-based claim. The considerations raised in s. 15.2(6) are not properly engaged. The comments of the court in Bracklow, which addressed certain principles of social obligation that exist in determining issues of spousal support, are similarly not engaged. There is no reason, in the circumstances of this case, that Ms. Von Windheim should have any ongoing financial responsibility for Mr. Daemore.

Claim for Child Support

[160]     Ms. Von Windheim seeks both retroactive and prospective child support for Spencer. I consider that any claim for retroactive child support has been addressed by my having allocated both the Costa Rica Property and the Burnaby Property entirely to her. I also note that Ms. Von Windheim accepts that she did not ask Mr. Daemore to contribute to Spencer’s support. Still further, though Spencer has in the past been enrolled at Langara College, he has since at least late 2009 worked for Green Harvest. He earns $325 per week or $15,000 per year. He lives at home and pays no rent, though he is responsible for expenses such as his phone and his car. He is presently 21 years old. Under such circumstances, and having regard to the factors identified in Farden v. Farden (1993), 48 R.F.L. (3d) 60 at para. 15, and recognizing that not all of these factors need be present, even if he were to return to school as anticipated, I do not consider that there is a proper basis to require Mr. Daemore to pay child support for Spencer.

[161]     I leave for a more clear-cut case where there is a demonstrated need for child support any further discussion of the proper course to be adopted by the courts when faced with untrustworthy litigants and illegal sources of income; S.A.B. v. C.D.B., 2004 BCSC 314 at paras. 30-32.

Restraining Order

[162]     Both Mr. and Mrs. Von Windheim seek a restraining order which would prohibit Mr. Daemore from contacting or interacting with them. I do not consider that there is a principled basis upon which to make such order. Specifically, there is no real or reasonably apprehended risk of harm to either of them which would warrant making the order sought.

[163]     Mr. Von Windheim has had less than a handful of interactions, mostly over the phone, with Mr. Daemore in the last fifteen years. The threatening letter that Mr. Daemore authored and sent to Mr. Von Windheim was penned more than eight years ago.

[164]     Similarly, the most overtly concerning conduct relied on by Ms. Von Windheim is the threat she learned of indirectly more than a decade ago. She has since that time interacted regularly with Mr. Daemore without any incident whatsoever. This includes the period since Mr. Daemore commenced the instant action.

[165]     I will say that it would likely be prudent for Mr. Daemore to maintain some distance from Mr. and Mrs. Von Windheim on a go forward basis. There is simply no reason for him to interact with them in the future. Mr. Daemore can contact Spencer directly and arrange to meet with him away from the College Highroad Home. The prudence of a given course of conduct does not, however, justify making an order to achieve that same end.

Costs

[166]     Each of Mr. Daemore and Ms. Von Windheim are to bear their own costs. Mr. Von Windheim is to recover his costs of this action from the claimant.

“Voith J.”