SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Brotton v Corbett
BETWEEN: Melissa Brotton, Applicant and Tim Corbett and James Douglas McClement, Respondents
BEFORE: Honourable Mr Justice Martin James
COUNSEL: Aaron Heard for the Applicant Melissa Brotton
Thomas J. Prince for Respondent Tim Corbett
Tim Girard for Respondent Douglas McClement
ENDORSEMENT
1On consent Mr. Corbett is granted leave for late filing of his Answer and Financial Statement by December 31, 2017.
2On consent order to go dismissing the applicant’s claim against Commonwell Mutual Insurance Group (a.k.a. Bay of Quinte Mutual Insurance) without prejudice to the issuance of a Statement of Claim by the applicant against this party within 45 days.
3On consent Mr. Corbett’s affidavit of December 7, 2017 filed over the bench.
4Mr. Brotton has brought a motion to continue a certificate of pending litigation.
5Ms. Brotton has a long standing connection to the property against which she has registered a certificate of pending litigation (“CPL”), having lived there after it was built with a former husband. She lost the property through a power or sale proceeding while co-habiting with Mr. Corbett. The property was bought by Mr. Corbett and the two of them continued to reside there until they separated and Mr. Corbett moved out in December 2015, about a year after he bought the property.
6Ms. Brotton remained in possession of the house after Mr. Corbett moved out.
7By mid-2016, Ms. Brotton was under pressure from Mr. Corbett to vacate the premises.
8The house was badly damaged by fire in October 2016.
9Mr. Corbett settled with the insurer although the details are sparse. It seems to me that Ms. Brotton is entitled to disclosure of the details of the insurance claim and settlement if this has not already been provided to her.
10Mr. Corbett and the purchaser, Mr. McClement, say that the sale was made on commercially reasonable terms and that Mr. McClement was an arms-length purchaser without notice of any alleged improper intentions by Mr. Corbett. The purchase price was $35,000. There is some appraisal evidence which has been tendered to substantiate the reasonableness of the amount paid.
11Ms. Brotton’s claim to having an interest in the property, a necessary component to obtaining a CPL, is by means of an unproven constructive trust. This barely qualifies as an “interest in land” notwithstanding the fact that there is some flexibility regarding the nature of the claim bringing into question an interest in land.
12In addition to Ms. Brotton’s tenuous claim to an interest in the land, some of the better-known badges of fraud associated with fraudulent conveyances are not present here. For example, often there is no change in possession after the property has been transferred and the property is frequently transferred to a family member. In this case, the vendor and the purchaser are not related to each other, it is arguable there has been a change in possession (although the house remains uninhabitable) and valid, if not full, consideration was paid. This is not an exhaustive list of the badges of fraud that are usually associated with a fraudulent conveyance.
13I do not mean to be taken to be stating that there are no suspicious circumstances present in this case (for example the sale price seems quite low) but suspicion alone is not enough to prove fraudulent intent.
14On the issue of establishing the necessary fraudulent intent to have the conveyance set aside, in this case it may be necessary to prove fraudulent intent on the part of both the vendor and the purchaser because the purchase price was more than nominal. If so, this increases the burden of proof on Ms. Brotton.
15The apparent strength or lack of strength of the applicant’s claim is a valid consideration at this stage.
16After weighing the various factors, I have concluded that the certificate of pending litigation ought to be vacated. The responsibility to clear the title to the property rests with Ms. Brotton.
17This does not necessarily mean that Ms. Brotton doesn’t have a claim but any remedies in her favour will have to be advanced without restrictions on what Mr. McClement can do with the property pending trial or a further order.
18On the issue of costs, I have the parties’ costs outlines. If any party wishes to provide additional submissions, they may be delivered within 15 days.
James, J.
DATE: December 21, 2017
CITATION: Brotton v Corbett, 2017 ONSC 7386
COURT FILE NO.: 17-526
DATE HEARD: December 8, 2017
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Brotten v Corbett
BETWEEN: Melissa Brotten, Applicant and Tim Corbett and James Douglas McClement, Respondents
BEFORE: Honourable Mr Justice Martin James
COUNSEL: Aaron Heard for the Applicant
Thomas J. Prince for Respondent Tim Corbett
Tim Girard for Respondent Douglas McClement
ENDORSEMENT
James, J.
DATE: December 21, 2017