COURT OF APPEAL FOR ONTARIO
WINKLER C.J.O., MACPHERSON and ROULEAU JJ.A.
BETWEEN:
ANDREW FEHER
(Plaintiff) Appellant
and
JAMES MICHAEL STEPHEN HEALEY and MARIA PALOMA MAGDELENA SOFIA HEALEY
(Defendants) Respondent
Harvey J. Ash for the appellant
Bruce Jaeger and Chantel Beaupre for the respondent
Heard: March 14, 2008
On appeal from the judgment of Justice Edward Belobaba of the Superior Court of Justice dated August 29, 2006.
ENDORSEMENT
Background and Issue
1The appellant, Andrew Feher, appeals the judgment of Belobaba J. dated 29 August 2006 dismissing his fraudulent conveyance action against the respondent Maria Paloma Healey. The defendant James Healey, the husband of Paloma, did not defend the action. In January 2004, the appellant obtained judgment in Windsor for $554,131 plus costs of $6500. However, James Healey is judgment proof and the appellant has recovered no money from him.
2The sole issue in the trial before Belobaba J. was whether a transfer by James to Paloma in 1997 of the matrimonial home was a fraudulent conveyance that should be set aside so that the appellant could look to it as a means of enforcing his judgment against James. The trial judge found against the appellant on two bases which he summarized near the end of his judgment:
In sum, I have found that Feher has not established, under s. 2 of the Act, that the disputed conveyance was made with the intent to defeat, hinder, delay or defraud existing or potential creditors. And even if I had found otherwise, I am satisfied that Paloma as the transferee is protected under s. 3 of the Act – the property was conveyed to her for good consideration, in good faith and without notice or knowledge of any fraudulent intent.
3The appellant challenges both aspects of the trial judge’s decision.
Section 2 of the Fraudulent Conveyances Act
4The appellant contends that the trial judge erred in his application of s. 2 of the Fraudulent Conveyances Act, R.S.O. 1990, c.F. 29, which provides:
- Every conveyance of real property… made with intent to defeat, hinder, delay or defraud creditors… of their just and lawful actions … are void as against such persons….
5We disagree. The trial judge accepted the evidence of Paloma about the reason for the transfer of the matrimonial home to her in 1997 – the marriage of Paloma and James had broken down and the property transfer was part of a comprehensive settlement of all financial matters involving the couple and their young children. In addition, the trial judge noted that the transfer took place in 1997 – a year before the appellant inquired about the money he had given to James, his nephew, three years before he made a formal demand for the money, and five years before he commenced legal proceedings. These factors – and several others – make it impossible, in our view, for the appellant to establish that the trial judge made a palpable and overriding error in his assessment of the evidence on this issue.
Section 3 of the Fraudulent Conveyances Act
6The appellant submits that the trial judge erred in his application of s. 3 of the Fraudulent Conveyances Act, which provides:
- Section 2 does not apply to an estate or interest in real property … conveyed upon good consideration and in good faith to a person not having at the time of the conveyance to the person notice or knowledge of the intent set forth in that section.
7The appellant contends that there was no consideration on Paloma’s part for the transfer to her of the matrimonial home and that, in any event, Paloma never signed the separation agreement in which the transfer was set out.
8The trial judge dealt with both of these points. He found that Paloma had given up something substantial – support payments for herself and the children – in return for sole ownership of the matrimonial home. Moreover, the fact that Paloma did not sign the separation agreement did not vitiate their oral agreement “that was immediately and almost fully performed by both parties” (James transferred title to Paloma). We can see no error in either of these conclusions, both of which, again, are anchored in the trial judge’s assessment of the evidence which invites genuine deference from an appeal court.
Fresh Evidence
9On consent, the appellant filed fresh evidence to the effect that the respondent has not paid back to her mother-in-law the $69,000 loan that was part of the consideration for the matrimonial home. We do not see that this development affects the judgment at trial.
Disposition
10The appeal is dismissed. The respondent is entitled to costs fixed at $3,000 inclusive of disbursements and GST. This amount and the costs owing on the trial may be taken out of the $20,000 currently held in the court as security for costs.
“Winkler C.J.O.”
“J.C. MacPherson J.A.”
“Paul Rouleau J.A.”
