CITATION: Maxium Financial Services Inc. v. Sidhu, 2017 ONSC 461
COURT FILE NO.: CV-16-0054-00
DATE: 2017 01 19
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Maxium Financial Services Inc.
Plaintiff
v.
Anjna Sidhu
Defendant
BEFORE: Bloom, J.
COUNSEL: Wojtek Jaskiewicz, for the Plaintiff
Richard Quance for the Defendant
HEARD: January 18, 2017
E N D O R S E M E N T
I. INTRODUCTION
[1] The Plaintiff brings a motion for summary judgment under Rule 20 for the sum of $217,500.00 based on a cause of action under the Bankruptcy and Insolvency Act assigned to the Plaintiff by the trustee in bankruptcy of the spouse of the Defendant.
II. FACTS
[2] Most of the facts are not in dispute.
[3] The Plaintiff was a creditor of Gurpreet Singh Sidhu (“Gurpreet”), the spouse of the Defendant. The trustee in bankruptcy of Gurpreet allowed in full the Plaintiff’s claim of over 8 million dollars. Further, the trustee assigned to the Plaintiff its right to take action against the Defendant to recover Gurpreet’s share of the proceeds from the sale of 173 Morwick Drive in Ancaster, Ontario (“Morwick”).
[4] Morwick was a property owned in equal shares by the Defendant and Gurpreet. It was sold on May 10, 2013 for $ 435,000.00 of which Gurpreet’s, $217,500.00, was used to pay down the mortgage on a property purchased by the Defendant. That property was 82 Sulphur Springs Road, Ancaster, Ontario (“Sulphur Springs”).
[5] On April 17, 2016 Gurpreet filed a Notice of Intention to Make a Proposal pursuant to the BIA.
III. ANALYSIS
[6] The relevant provisions of the BIA are:
s.2 In this Act,
transfer at undervalue means a disposition of property or provision of services for which no consideration is received by the debtor or for which the consideration received by the debtor is conspicuously less than the fair market value of the consideration given by the debtor;
Definition of related persons
(2) For the purposes of this Act, persons are related to each other and are related persons if they are
(a) individuals connected by blood relationship, marriage, common-law partnership or adoption;
s.96 (1) On application by the trustee, a court may declare that a transfer at undervalue is void as against, or, in Quebec, may not be set up against, the trustee — or order that a party to the transfer or any other person who is privy to the transfer, or all of those persons, pay to the estate the difference between the value of the consideration received by the debtor and the value of the consideration given by the debtor — if
(b) the party was not dealing at arm’s length with the debtor and
(i) the transfer occurred during the period that begins on the day that is one year before the date of the initial bankruptcy event and ends on the date of the bankruptcy.
[7] Further, it is not in dispute that paragraph (i) of s. 96 (1)(b) applies to the facts and that “ a transfer at undervalue” within s. 96 (1) occurred. The only issue raised by the Defendant in respect of which it is contended that there is a “genuine issue requiring a trial” within Rule 20.04 is whether the Defendant was dealing at arm’s length with Gurpreet.
[8] The Defendant argues that, while it is presumed that spouses are not acting at arm’s length, that presumption is rebutted by the Defendant’s affidavit evidence. That evidence asserts that the Defendant received the benefit of the pay down of the mortgage as recognition of the Defendant’s contribution to the household shared with Gurpreet; and further that the Defendant did not know of Gurpreet’s insolvency at the date of the sale of Morwick and the date of the mortgage pay down.
[9] The Plaintiff argues that s. 2(2) of the BIA conclusively determines that there was not an arm’s length dealing. Alternatively, the Plaintiff argues that on the facts there was not arm’s length dealing; as an aspect of this alternative argument the Plaintiff argues that the Defendant’s affidavit evidence does not create a genuine issue requiring trial because it is simply bald assertion without supporting detail.
[10] In Juhasz (Trustee of) v. Cordeiro, 2015 ONSC 1781 Justice Wilton-Siegel stated:
[41] Section 96 [of the BIA] is directed at transfers by insolvent persons for a consideration that is materially or significantly less than the fair market value of the property. In this context, the concept of a non-arm’s length relationship is one in which there is no incentive for the transferor to maximize the consideration for the property being transferred in negotiations with the transferee. It addresses situations in which the economic self-interest of the transferor is, or is likely to be, displaced by other non-economic considerations that result in the consideration for the transfer failing to reflect the fair market value of the transferred property.
[11] In Cameron Estate, Re, 2011 ONSC 6471 Justice Mesbur states:
[16] For the purposes of this motion, the provisions of s. 96(1)(b) [of the BIA] are relevant, since there is no question that both widows were not dealing at arm's length with their late husbands, the debtors. Unlike the situation under the old s. 100, the Bank need not show the transaction was a "reviewable" transaction. The Bank need not show any intention on the bankrupts' part to prefer their wives over other creditors.
[17] In its most basic terms, therefore, the Bank must show that there was a transfer at undervalue and it occurred within one year of the date of the bankruptcy. If it can do so, s. 96 of the BIA will apply.
[12] In Guarantee Company of North America v. Gordon Capital Corp., 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423 at para 31 Justices Iacobucci and Bastarache speaking for the Court stated:
We would add that the trial judge’s ruling on this point is entirely consistent with previous decisions holding that a self-serving affidavit is not sufficient in itself to create a triable issue in the absence of detailed facts and supporting evidence. See Rogers Cable TV Ltd. v. 373041 Ontario Ltd. (1994), 1994 CanLII 7367 (ON SC), 22 O.R. (3d) 25 (Gen. Div.); Confederation Trust Co. v. Alizadeh, [1998] O.J. No. 408 (QL) (Gen. Div.).
[13] Applying the principles articulated in those cases, I find that the Plaintiff has satisfied me that there is no genuine issue requiring a trial. The Defendant and Gurpreet were clearly not dealing at arm’s length when the money was transferred to pay down the mortgage. They were spouses and, therefore, at the very least are presumed not to be acting at arm’s length. Moreover, the bald assertions in the Defendant’s affidavit do not establish that they were acting at arm’s length. The affidavit lacks the supporting detail contemplated by Guarantee Company of North America, supra.
[14] I find on the evidence before me that there is no genuine issue requiring trial as to proof of the existence of the elements of s. 96(1)(b)(i) of the BIA. Accordingly, I grant the Plaintiff’s motion for summary judgement in the amount of $217,500.00.
IV. COSTS
[15] I will receive costs submissions in writing. They are to be no more than 3 pages in length, excluding a bill of costs. The Plaintiff is to serve and file its submissions within 14 days of release of this endorsement. The Defendant is to serve and file costs submissions within 14 days after service of the Plaintiff’s. There shall be no reply.
Bloom, J.
DATE: January 19, 2017
CITATION: Maxium Financial Services Inc. v. Sidhu, 2017 ONSC 461
COURT FILE NO.: CV-16-0054-00
DATE: 2017 01 19
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Maxium Financial Services Inc.
v.
Anjna Sidhu
BEFORE: Bloom, J.
COUNSEL: Wojtek Jaskiewicz, for the Plaintiff
Richard Quance for the Defendant
ENDORSEMENT
Bloom, J.
DATE: January 19, 2017