Sheena Walker, 22, daughter of the accused Albert Walker, told the jury that the dead man Ronald Platt had been depressed prior to his body being dredged from the sea off Torquay by a fishing boat. She admitted telling police investigating the case that Mr Platt could have committed suicide.
She told the jury: "He was so disappointed at being back in this country. He was depressed about several things. He would go on and on about how he hated being in England. It was a huge disappointment that things didn't work out in Canada."
Miss Walker also said that Mr Platt disliked water, that he couldn't swim and that he did not like boarding boats, "even large ones".
Meanwhile Exeter Crown Court also heard that the trawler skipper who discovered the body had considered dropping it overboard instead of bringing it ashore - because he knew that he would be unable to sell fish caught in the net with the corpse if he alerted the authorities.
John Copik, skipper of the Malkerry, said: "I asked my son what we should do with the body. I said we could drop him back into the sea and forget about it or we could bring him in. My son said we should bring him in."
Mr Copik also admitted giving away a key piece of evidence in the investigation - an anchor, which the prosecution alleged was used to pin Mr Platt to the seabed.
The anchor had been trawled up in the net with the body, but the fisherman gave it to a colleague Derek Meredith on the Brixham quayside after mooring that day. "He said it would be handy for his speedboat," said Mr Copik.
Later Meredith's partner took the anchor to a car boot sale, but it was not sold and was later recovered by police.
Albert Walker, 52, from Woodham Walter, Essex, had assumed Mr Platt's identity to escape financial and marital problems in his own country, it has been claimed.
He befriended loner Mr Platt, 51, and partner Elaine Boyes and gave them air tickets to make a new life in Canada in 1993.
When Platt returned to Britain in 1995 after failing to make a go of things in his new country, Walker killed him, the Crown has alleged.