COURT OF APPEAL FOR ONTARIO
CITATION: Mitchell Jenner & Associates Inc. v. Saunders, 2012 ONCA 290
DATE: 20120502
DOCKET: C53896
Before: Blair, Lang and Hoy JJ.A.
BETWEEN
Mitchell Jenner & Associates Inc.
Plaintiff (Respondent)
and
Maxine Caroline Saunders
Defendant (Appellant)
Counsel:
M. Paul Downs and Paula Downs, for the defendant (appellant)
Brian Daly, for the plaintiff (respondent)
Heard and released orally: April 26, 2012
On appeal from the judgment of Justice L.C. Leitch of the Superior Court of Justice, dated May 25, 2012.
ENDORSEMENT
[1] The appellant is the wife of Michael Saunders, a judgment debtor of the respondent Mitchell Jenner & Associates Inc. The respondent obtained judgment against Mr. Saunders on December 5, 2007 for an unpaid commission of $110,000 plus interest at 12% per annum in accordance with the commission agreement.
[2] The respondent commenced this action against Maxine Saunders to recover the amount of the judgment from the appellant on the grounds that on January 12, 2005, the Saunders fraudulently conveyed their matrimonial home on Oxford St. to the appellant. The circumstances leading up to that impugned transaction, briefly described are as follows:
[3] On November 18, 2004, Mrs. Saunders signed an agreement to sell the property on Oxford St. with a closing date of March 31, 2005. On the same day, the Saunders together entered into a $500,000 mortgage commitment in relation to the Oxford St. property that required as a condition of the advancing of funds that both Mr. and Mrs. Saunders be on title. Pursuant to that arrangement, on December 10, 2004, Mrs. Saunders transferred the Oxford Street property to herself and to Mr. Saunders jointly, and the mortgagee advanced the funds to them. On January 12, 2005, Mrs. Saunders and Mr. Saunders transferred the property into the name of Mrs. Saunders alone for no consideration.
[4] Mrs. Saunders completed the sale of the Oxford property on March 31, 2005. After the payment of certain debts from the mortgage proceeds, the sum of $194,611.87 remained and it was deposited into the joint bank account of the Saunders. The trial judge concluded that the conveyance was fraudulent within the meaning of the Fraudulent Conveyance Act, R.S.O. 1990, c. F.29.
[5] Mrs. Saunders appeals arguing that
the trial judge erred in holding that Mr. Saunders acquired a beneficial interest in the Oxford Street property when the property was transferred by Mrs. Saunders to the two of them jointly, in order to satisfy the condition in their mortgage commitment and;
the trial judge erred in finding that the reconveyance of the Oxford Street property on January 12, 2005 contravened s. 2 of the Fraudulent Conveyances Act.
[6] The appellant also submits that the trial judge erred in awarding interest starting April 1, 2005 at the rate of 1% per month on the judgment against the appellant.
[7] We see no basis for interfering with the trial judge’s finding that Mr. Saunders acquired a beneficial interest in the property when the title was taken in their joint names. There was ample evidence to support that finding, including compliance with the mortgagee’s condition that title for the property be in their joint names, the fact that Mr. Saunders’ funds were the primary source of the purchase price, and that the subsequent sale proceeds were deposited into Mr. and Mrs. Saunders’ joint account and used in part to pay both individual and joint debts. Other evidence also supported this finding as well, and, while another judge may have come to another conclusion, it was open to the trial judge on the record overall to draw the inference that the Saunders’ intention at the time title was placed in their joint names was that they would be joint beneficial owners. We are not persuaded that the trial judge made any palpable and overriding error in making the finding she did.
[8] This is not a case like Bank of Nova Scotia v. Leifer, [1978] O.J. No. 2620 or Gulf Oil Canada Ltd. v. O’Rourke (1978), 1978 CanLII 1291 (ON CA), 21 O.R. (2d) 30 (C.A.), where there were clear grounds for the finding of a resulting trust in favour of the spouse who had transferred property in joint names.
[9] Nor would we interfere with the trial judge’s finding that in the circumstances of this case, the transfer was a fraudulent conveyance contrary to s. 2 of the Fraudulent Conveyances Act. The trial judge found, after a review of all the evidence, that the intention of both Mr. and Mrs. Saunders at the time when the property was conveyed to Mrs. Saunders alone was to make sure the property was not available to Mr. Saunders’ creditors – that is, “to defeat, hinder, delay or defraud” such creditors.
[10] Mr. Jenner’s firm was one of those creditors. Its action claiming a commission that would ultimately result in the judgment now representing more than $350,000 with interest, was pending and in the discovery stage at the time. Each case depends upon its own facts and in the circumstances of this case, it was open to the trial judge to find that the intention of the Saunders at the time for the re-conveyance was to defeat existing and future creditors. We would therefore not interfere with the trial judge’s finding and conclusion in that regard.
[11] We do not accept in the circumstances of this case, however, that the interest rate applicable as between the respondent and Mr. Saunders is the appropriate bench mark for interest on the judgment against Mrs. Saunders. What is being restored by the judgment is an asset against which the respondent may seek to recover. There is nothing to indicate that that asset could have, or should have grown at the rate of interest agreed to between the respondent and Mr. Saunders in the commission contract, to which Mrs. Saunders was not a party. While there may be other cases on different facts, on the facts of this case, we think that prejudgment interest and post judgment interest should be fixed at the rate of 3.3% per annum, the applicable rate under the Courts of Justice Act.
[12] Moreover, interest should be recalculated from December 5, 2007, as that is the date from which the respondent sought interest in its statement claim, and not April 1, 2005.
[13] Accordingly, the appeal is allowed in part by varying the judgment to provide for pre-judgment and post-judgment interest at the rate of 3.3% per annum, in accordance to the Courts of Justice Act commencing December 5, 2007. The appeal is otherwise dismissed.
[14] We agree with counsel that in the circumstances of this case, success being divided, there should not be order as to costs.
“R.A. Blair J.A.”
“S.E. Lang J.A.”
“Alexandra Hoy J.A.”