The defendants moved to set aside an ex parte order that granted the plaintiff, Kevin Fernandes, leave to issue a Certificate of Pending Litigation (CPL) against a property.
The plaintiff had previously sued Mohammad Salman Khalid for failing to complete a property purchase.
Mohammad later declared bankruptcy after transferring property interests to his wife and mother.
The plaintiff then initiated a second action to set aside these transfers as fraudulent conveyances and obtained the CPL.
The court considered two tests for CPLs in fraudulent conveyance actions: a prima facie case of fraud and a higher threshold test.
The court found numerous "badges of fraud," including unexplained property transfers, inconsistent separation dates, misleading addresses, and continued co-habitation, which raised compelling suspicions of intent to defeat creditors.
The court maintained the CPL, concluding that the plaintiff had demonstrated a prima facie case of fraud and that the balance of convenience favored preserving the CPL to prevent asset dissipation.