A bankruptcy trustee sought relief under s. 96 of the Bankruptcy and Insolvency Act in relation to a transfer by an insolvent debtor of her 50% interest in a Toronto property to her business associate.
The court held, on the record before it, that the transferor and transferee were not dealing at arm's length and that one of the transferor's intentions was to defeat her principal creditors, given the surrounding circumstances, the impending bankruptcy, and the treatment of the asset.
However, the court found the valuation evidence insufficient to determine the fair market value of the property at the transfer date and therefore could not decide whether the transaction was a transfer at undervalue.
A summary trial was ordered limited to valuation.
