What is the "common sense" approach to an exclusion from a spouse’s account?

In Townshend v. Townshend, 2012 ONCA 868, Simmons J.A. allowed an exclusion, even though the husband lacked the documentary evidence to prove his claim. Although she did not specifically label it as such, her approach resembles the “common sense” one. At ¶ 35, she characterized the wife’s argument as “overly formalistic” and said that a “compelling inference” arose that the funds in an account could be traced to excluded funds. Their existence in the account was proximate in time to the time of the gift.

In Ludmer v. Ludmer, 2013 ONSC 784, Penny J. adopted the “common sense” approach too, and allowed an exclusion for the entire proceeds of sale of a property. Like Perkins J., Penny J. also discussed the caliber of the evidence needed. At ¶ 85-86 of Ludmer v. Ludmer, Penny J. held that the tracing principle is not limited by the number of transactions, or changes in form of the asset, but the ability to trace may come to an end when the asset is spent or dissipated, or when it otherwise becomes co-mingled with other assets such that the original property can no longer be discerned.