Court of Appeal for Ontario
Citation: 2057552 Ontario Inc. v. Dick, 2016 ONCA 7
Date: 20160106
Docket: C60608
Before: Doherty, MacPherson and van Rensburg JJ.A.
Between
2057552 Ontario Inc.
Plaintiff (Appellant)
and
Charles Dick, Esther Dick, Meir Dick, Jacqueline Milevsky (nee Dick), Joel Dick, 8800383 Canada Inc., ABC Variety Services Inc. and ABC Variety
Defendants (Respondents)
Counsel:
Eliezer Karp, for the appellant
Fred Tayar and Colby Linthwaite, for the respondents
Heard: December 18, 2015
On appeal from the order of Justice Paul M. Perell of the Superior Court of Justice, dated May 19, 2015.
ENDORSEMENT
[1] The personal respondents, Jacqueline Milevsky and Joel Dick, lent money to an ATM business run by their parents, Charles and Esther Dick, in exchange for third and fourth mortgages on the parents’ home.
[2] The appellant 2057552 Ontario Inc. was a partner in a second ATM business with the Dicks. It alleged that Charles and Esther Dick misappropriated funds from the partnership business. The appellant moved for summary judgment against the respondent Dick adult children and 8800383 Canada Inc., a company created by the children. The appellant’s principal argument was that the mortgages received by the respondent children from their parents were fraudulent conveyances under the Fraudulent Conveyances Act (“FCA”).
[3] The motion judge dismissed the appellant’s motion. He also granted summary judgment in favour of the respondents and dismissed the appellant’s action against the respondents, leaving intact the action against Charles and Esther Dick.
[4] The appellant appeals on three grounds.
[5] First, the appellant contends that the motion judge erred by dismissing the fraudulent conveyance summary judgment motion. It says that where there are suspicious transactions between family members, the burden shifts to the party seeking to justify the transaction. In short, says the appellant, a transfer of a property interest between family members is a badge of fraud and, in this case, the respondents did not rebut this inference.
[6] We do not accept this submission. The motion judge made findings of fact relevant to a determination of whether there had been a fraudulent conveyance under the FCA. He found that there was good consideration for the mortgages and no intent to defeat, hinder or defraud creditors. There was documentary evidence relating to the money advanced to the senior Dicks by the respondents from their personal funds and borrowed from several third parties to support these conclusions. In our view, the motion judge’s factual findings on these issues, made in a Rule 20 context, are entitled to substantial deference: see Hryniak v. Mauldin, 2014 SCC 7, at paras. 80-81.
[7] Second, the appellant asserts that the motion judge erred in dismissing its entire action against the respondents because there were still outstanding claims not dealt with at the summary judgment motion.
[8] We disagree. The appellant’s notice of motion for summary judgment made it clear that the only claim against the respondents was the claim under the FCA:
THE MOTION IS FOR:
- An order granting Summary Judgment of the claims of the Plaintiffs against 8800383 Canada Inc., Jacqueline Milevsky, and Joel Dick (the Mortgage Defendants) and declaring that the Mortgages of the Mortgage Defendants against the Property are void as fraudulent conveyances. [Emphasis added.]
[9] The appellant was alive to the full range of claims available to it against the various defendants. In its Statement of Claim, the appellant advanced claims of conversion, misappropriation and unjust enrichment against Charles and Esther Dick, but not against the respondents. Having made a tactical decision to proceed to summary judgment against the respondents on a claim of fraudulent conveyance, the appellant cannot now seek to add new claims that were not included in the Statement of Claim in the first place. In short, the motion judge dealt, appropriately, with what was in front of him.
[10] Third, the appellant relies on the Assignments and Preferences Act (“APA”) to support a contention that the challenged mortgages are void against unsecured creditors.
[11] We do not accept this submission. Before the motion judge, as well as in the Statement of Claim, the appellant proceeded on the basis of the FCA alone. It cannot now start over with the APA.
[12] The appeal is dismissed. The respondents are entitled to their costs of the appeal fixed at $5,000, inclusive of HST and disbursements.
“Doherty J.A.”
“J.C. MacPherson J.A.”
“K. van Rensburg J.A.”