Court of Appeal for Ontario
Before: Hoy A.C.J.O., Gillese and Brown JJ.A.
Between
Stewart Jared Kent Wilson
Appellant
(Respondent)
and
Paddon & Yorke, Trustees in Bankruptcy
Respondent
(Applicant)
Counsel:
Paul Alexander Robson, for the appellant Wilson
Brandon Jaffe, for the respondent Paddon & Yorke
Heard: November 16, 2015
On appeal from the order Justice L. Pattillo of the Superior Court of Justice, dated April 10, 2015.
ENDORSEMENT
1The appellant appeals the preservation order of the motion judge, ordering that the appellant deliver up the possession of certain luxury vehicles to the respondent trustee in bankruptcy or, if he no longer has possession of the vehicles, deliver up particulars concerning their sale and any bank accounts into which any monies received for the sale were deposited. The motion judge also ordered that the appellant’s bank accounts be frozen but provided that the appellant could return to court to rescind or vary the order once he provided the respondent with the requested information.
2The appellant argues that the motion judge made multiple errors. In our view, his arguments are without merit. We address only two arguments, as they are dispositive of this appeal.
3The appellant’s underlying argument is that the motion judge erred in finding that the appellant had a beneficial interest in the vehicles at the time of his bankruptcy, based on a June 8, 2010 trust agreement. He argues that but for that error, the motion judge would not have made the preservation order. The appellant says he only acquired an interest in the vehicles on March 3, 2015, when Gray J. declared that that the trust agreement was valid and the appellant was the true owner of the vehicles. He deposes that before that date, he received no benefit from his alleged “beneficial ownership” of the vehicles: his estranged spouse would not even let him drive any of the vehicles.
4We reject this argument.
5The trust agreement – signed less than a year before the appellant made an assignment in bankruptcy – provided that the assets of 2246519 Ontario Inc. (“Ontario”) were “the sole and exclusive ownership of [the appellant] and although held in the name of Ontario, Ontario has no right or ownership of the said assets.” The appellant did not disclose the trust agreement or his interest in the vehicles in his statement of affairs on his bankruptcy. The appellant’s estranged spouse subsequently claimed that she had an interest in the vehicles and the trust agreement was invalid. The appellant successfully opposed her application. On March 3, 2015, Gray J. found that the trust agreement was valid and that the appellant was the beneficial owner of the vehicles. However, he directed that a copy of his endorsement be sent to the respondent, who brought a motion before the motion judge for preservation of the vehicles and ancillary relief.
6The motion judge’s finding that the appellant had a beneficial interest in some of the vehicles at the time of his bankruptcy is unassailable. The appellant’s interest in the vehicles is affirmed by the trust agreement. It did not arise as a result of Gray J.’s declaration several years later. The fact – if true – that the appellant’s estranged wife would not even let him drive the vehicles before Gray J. made his order does not mean that he was not, at law, the beneficial owner of the vehicles.
7The appellant also argues that the terms of the preservation ordered by the motion judge are “heavy handed”. The appellant points to no error in principle. We note that the motion judge provided that the appellant could return to court to rescind or vary the order once he provided the respondent with the requested information. We are not persuaded that the motion judge erred in the exercise of his discretion.
8This appeal is accordingly dismissed.
9The respondent shall be entitled to its costs of the appeal, fixed at $7450, inclusive of disbursements and HST. We are advised that pursuant to the May 22, 2015 order of Lauwers J.A., the appellant paid $10,000 into court as security for costs. The parties agree that such amount shall be paid out the respondent, first, in satisfaction of the costs of this appeal, and, as to the balance, in partial satisfaction of the outstanding costs ordered by this court (Lauwers J.A., on May 22, 2015; Hourigan J.A. on June 30, 2015; and Sharpe J.A. on August 31, 2015.).
“Alexandra Hoy A.C.J.O.”
“E.E. Gillese J.A.”
“David Brown J.A.”
