The plaintiff bank obtained a without-notice Certificate of Pending Litigation (CPL) against a property transferred from a guarantor to his former spouse, alleging a fraudulent conveyance to defeat enforcement of a loan guarantee.
The trustee in bankruptcy moved to extend the CPL, while the defendants sought its discharge.
The Superior Court of Justice held that the plaintiff did not fail to make full and frank disclosure.
Applying the Grefford test, the Court found a high probability the plaintiff would establish default, sufficient badges of fraud to raise a triable issue of fraudulent conveyance, and that the balance of convenience favoured extending the CPL.
The motion to extend was granted and costs were ordered in the cause.
