ONTARIO
SUPERIOR COURT OF JUSTICE
Court File No.: 12-35386SR
Date: February 28, 2013
B E T W E E N:
TOP LIFT TERMINAL SERVICES INC.
S. Gill, Counsel for the Plaintiff
(Moving Party)
Plaintiff (Moving Party)
- and -
ALBERT POWELL, A.E. POWELL INTERNATIONAL LIQUIDATORS, ALBERT E. POWELL carrying on business as A.E. POWELL LIQUIDATORS and MONICA JANEY POWELL
A. Powell, Self-Represented
M. Powell, Self-Represented
(Responding Party)
Defendants (Responding Party)
Heard: January 7, 2013
PARAYESKI, J.
Reasons for Judgment
[1] The plaintiff moves for summary judgment declaring that a transfer of real property from the defendant Albert E. Powell and Monica Janey Powell to the latter alone is null and void as a fraudulent conveyance.
[2] The plaintiff obtained default judgment against “A.E.Powell International Liquidators, Albert E. Powell carrying on business as A.E.Powell Liquidators and Albert E. Powell” for $65,836.55, plus post judgment interest and costs on April 10th, 2010. Since that time, the above-named defendants have attempted on several occasions to have the default judgment set aside without success. Cavarzan J. dismissed the most recent, motion for that relief on May 15th, 2012. His dismissal order was appealed to the Ontario Court of Appeal. That court dismissed the appeal for delay on August 21st, 2012.
[3] Throughout the time period described above, the defendant Albert E. Powell has also attempted to negotiate a compromise of the judgment debt, which attempts have been rebuffed by the plaintiff, as is its right.
[4] On July 27th, 2011, Albert E. Powell and his wife Monica Janey Powell transferred their joint interest in real property located in Townsend, Ontario to her alone. The stated consideration for that transfer was $2.00 in cash with this “nominal” consideration being explained in the Land Transfer Tax statement as “inter-spousal transfer for natural love and affection”.
[5] The transfer took place approximately two months after Mr. Powell failed to attend at an examination in aid of execution scheduled for June 9th, 2011. Mr. Powell also failed to attend a further such examination scheduled for December 5th, 2011. Eventually, he did attend to be examined in aid of execution on May 17th, 2012. At that examination, Mr. Powell refused to answer a number of relevant questions, and took several more “under advisement”.
[6] Of particular relevance was his refusal to answer questions about the realty in question, save to admit that it was the home of him and Monica Janey Powell. He stated, at question 57 on page 11 of the transcript of his examination that the property had never been his, notwithstanding its title having plainly been held, prior to the subject transfer, in his name and that of Ms. Powell.
[7] The questions he did answer at the examination in aid of execution made it clear that he and the business he operated and operates (presently through a corporation), are insolvent and without assets save for some accounts receivable described as being in litigation.
[8] Conveyances, such as the one under consideration here, are void and may be set aside if they were made “…with intent to defeat, hinder, delay, or defraud creditors…”: see section 2 of the Fraudulent Conveyances Act, R.S.O. 1990, chapter F.29, as amended.
[9] If I understand the respondents’ factum and arguments correctly, it is their position that the transfer was for the legitimate purpose of protecting the transferee Monica Janey Powell in respect of her being a major creditor of the judgment debtors, rather than with an intention to hinder or delay execution efforts on behalf of the plaintiff.
[10] The onus rests on a creditor seeking to set aside a conveyance to prove the intention described in the Act referred to above on the balance of probabilities. Such a creditor may be aided in meeting that onus by proving the existence what are called “traditional badges of fraud”. Their being proven may give rise to an inference of the requisite intent in the absence of an explanation from the respondent. The onus then shifts to the respondent(s) to adduce evidence showing an absence of fraudulent intent. That proof of bona fides on their part should be corroborated by reliable, independent evidence: see Re: Fancy, reported at 1984 CarswellOnt 137, at paragraph 19.
[11] Here the conveyance was between close relatives for nominal consideration in suspicious circumstances. These facts have been recognized as being badges of fraud. The underlying indebtedness is not well or independently documented, although that in and of itself is not necessarily unusual or suspect in cases involving intra-family loans.
[12] Even if the indebtedness were perfectly proven, however, and the intention of the transfer is accepted as being other than to defeat or hinder the plaintiff, there remains the question of whether the transfer created an improper preference in favour of the transferee. The transfer took place in the context of insolvency. Its admitted purpose was to favour one creditor, i.e. the transferee, over others, including the plaintiff.
[13] Under these circumstances, I am satisfied that the transfer should be set aside, on the basis of it being either a fraudulent conveyance or an attempt to create an improper preference, or both. There is sufficient evidence and information for me to have what I believe to be a fulsome appreciation of the facts and issues. There is no issue that requires a trial for it to be addressed and adjudicated upon. Thus, summary judgment is appropriate.
[14] An order is to go in the terms of sub-paragraphs (i) and (ii) of paragraph (a) of the plaintiff’s request for relief in its notice of motion. The plaintiff has not adduced evidence that would warrant the granting of punitive damages, and none are awarded.
[15] If the parties cannot agree upon the costs of this motion, they may make brief, written submissions to me in that regard. Each set of such submissions shall not be more than 1 type-written page in length, not including a costs outline, and are to be submitted to my attention at the Sopinka Court House at Hamilton on or before April 15th, 2013.
PARAYESKI, J.
Released: February 28, 2013
COURT FILE NO.: 12-35386SR
DATE: February 28, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
TOP LIFT TERMINAL SERVICES INC.
S. Gill, Counsel for the Plaintiff
(Moving Party)
- and –
ALBERT POWELL, A.E. POWELL INTERNATIONAL LIQUIDATORS, ALBERT E. POWELL carrying on business as A.E. POWELL LIQUIDATORS and MONICA JANEY POWELL
A. Powell, Self-Represented
M. Powell, Self-Represented
(Responding Party)
REASONS FOR JUDGMENT
PARAYESKI, J.
MDP:mw
Released: February 28, 2013