Ceili Andrew

Maryann Kutlesa initiated an action under the Fraudulent Conveyances Act to set aside the transfer of a 50% interest in a cottage lot from her ex-husband Jozo Kutlesa's company (1349241 Ontario Inc.) to his uncle, John Kotsiou.

She also sought a constructive trust over the interest.

John Kotsiou counterclaimed against Maryann for post-transfer expenses and cross-claimed against Jozo Kutlesa for indemnification.

The court found that Jozo Kutlesa's intent in making the conveyance was fraudulent, but John Kotsiou was protected under section 3 of the Act due to good faith and lack of notice.

Consequently, Maryann's claims were dismissed.

John's counterclaim against Maryann for past operational costs and mortgage payments was dismissed due to his exclusive possession of the property and Jozo's partial contribution.

John's cross-claim against Jozo for outstanding mortgage indemnification was granted.

The moving defendants sought dismissal of the plaintiffs’ action for delay under Rule 24.01(c) of the Rules of Civil Procedure.

The court examined whether the delay was inordinate and inexcusable and whether it created a substantial risk that a fair trial was no longer possible.

The action had been commenced in 1987 and had not been set down for trial for more than 25 years, with long periods of inactivity attributable to the plaintiffs.

The court held the explanations offered, including related insolvency proceedings, settlement discussions, and financial constraints, were insufficient.

Presumed prejudice was not rebutted and actual prejudice was established due to unavailable key witnesses.

The action was dismissed for delay.