CITATION: All-Terrain Track Sales and Service Ltd et al. v. 798839 Ontario Limited et al., 2026 ONSC 4384

COURT FILE NO.: CV-15-00539645-0000

DATE: 20260729

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ALL-TERRAIN TRACK SALES AND SERVICE LTD. and ANDRE BOUDREAU, Plaintiffs

AND:

798839 ONTARIO LIMITED, JACOBUS HANEMAAYER, 153078 CANADA INC., COMMUNITY EXPANSION INC., GREAT LAKES NICKEL LIMITED, ROBIN LOWE and RIO TINTO EXPLORATION CANADA INC., Defendants

BEFORE: Schabas J.

COUNSEL: R. Donald Rollo, for the Plaintiffs

Steven J. Gearing, for the Defendants Robin Lowe, Great Lakes Nickel Limited and 153078 Canada Inc.

HEARD: April 7 – 10, 13 – 15, 2026

reasons for judgMENT

Overview

[1] On January 31, 2014, following almost 25 years of litigation culminating in a 35-day trial in 2013, the plaintiffs in this action, All-Terrain Track Sales and Services Ltd. (“All-Terrain”) and Andre Boudreau (“Boudreau”, and, collectively with “All-Terrain”, the “plaintiffs”) obtained a judgment for $812,281.03 together with pre-judgment interest from 1993 totalling $873,267.08, to be paid by two of the defendants in this action, 798839 Ontario Limited (“39”) and Jacobus Hanemaayer (“Hanemaayer”): 798839 Ontario Limited v. Robert Platt; and Robert Platt v. Community Expansion Inc., 2014 CanLII 3405 (ON SC). The trial judge, Penny J., subsequently awarded costs to All-Terrain and Boudreau on a substantial indemnity scale of $795,000.00. Hanemaayer and 39 appealed that judgment, but Hanemaayer failed to post security for costs and the appeal was later dismissed as against All-Terrain and Boudreau.

[2] The action tried by Penny J. was known as the “China Wars” litigation as it related to a failed mining venture in northern Ontario related to a deposit of kaolin which was used for manufacturing porcelain. That litigation was commenced in 1990 by Hanemaayer, who had provided capital for the project, against Robert Platt, who owned the mining claims, and Boudreau and his company, All-Terrain, which were contractors specializing in mining field exploration and development. Boudreau and All-Terrain counterclaimed for unpaid work. Penny J. dismissed Hanemaayer’s action and allowed the counterclaim.

[3] In 2015, the plaintiffs Boudreau and All-Terrain commenced this action, among others, as part of their efforts to collect on the judgment against Hanemaayer and 39, which, with accumulated interest and costs, by then totalled approximately $2,700,000. In addition to Hanemaayer and 39, several other defendants were sued: Community Expansion Inc. (“CEI”), a corporation used by Hanemaayer as an investment vehicle; Great Lakes Nickel Limited “GLN”), a publicly traded company which owned patented mining claims in northwestern Ontario (the “Pardee Claims”) in which Hanemaayer, prior to February 2011 through CEI and 153078 Canada Inc. (“53”), held a controlling interest; Robin Lowe (“Lowe”), a shareholder in GLN who, on February 11, 2011, purchased 53 from CEI and Hanemaayer, thereby acquiring Hanemaayer’s shares in GLN; and Rio Tinto Exploration Canada Inc., a subsidiary of the large multi-national mining company, Rio Tinto, which in 2012 entered into an Option Agreement with GLN to acquire the Pardee Claims.

[4] The plaintiffs assert that the sale of 53, which held Hanemaayer’s controlling interest in GLN, by CEI to Lowe, which was formalized in a written agreement on February 11, 2011 and closed on February 18, 2011 (“the Transaction”), was a fraudulent conveyance by Hanemaayer, done with intent to defeat, defeat, hinder, delay or defraud his creditors, in particular the plaintiffs who would later become creditors and seek to enforce the judgment of Penny J. against Hanemaayer.

[5] On May 19, 2016, Hanemaayer was found to be in contempt of court by Goldstein J., as Hanemaayer had failed to comply with a court order requiring him to answer interrogatories as a judgment debtor of Boudreau and All-Terrain. The interrogatories had been designed to accommodate Hanemaayer’s poor health. The sentencing was adjourned several times to allow Hanemaayer to purge his contempt. However, as Goldstein J. put it, “[h]is attempts to comply have been characterized by obfuscation and manipulation.” As a result, Hanemaayer was prohibited from taking any steps “in any action to which he, Boudreau or All-Track are parties, or related parties” until he purged his contempt: 796839 Ontario Limited v. Platt, 2016 ONSC 7097 at paras. 1 -5.

[6] Hanemaayer subsequently died, and his contempt was never purged. Boudreau, now quite elderly, was unable to participate in the trial. The action has been continued by Boudreau’s son, Luc Boudreau, as Litigation Guardian.

Issues

[7] This action was tried before me in April 2026. There are two issues to be determined:

(a) whether the Transaction was a fraudulent conveyance and is therefore void pursuant to the Fraudulent Conveyances Act, RSO 1990, c F. 29 (the “FCA”); and

(b) whether the plaintiffs’ action is barred by the Limitations Act, 2002, SO 2002, c 24, Sch B.

[8] The plaintiffs also pleaded that the transaction was an unjust preference under the Assignments and Preferences Act, RSO 1990, c A.33; however, this was not pressed at trial as Hanemaayer and 39 were not insolvent at the time of the Transaction, nor were the plaintiffs creditors of them at that time.

The law on fraudulent conveyances

[9] Sections 2, 3 and 4 of the FCA provide as follows:

Where conveyances void as against creditors

2. Every conveyance of real property or personal property ... made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns.

Where s. 2 does not apply

3. Section 2 does not apply to an estate or interest in real property or personal property conveyed upon good consideration and in good faith to a person not having at the time of the conveyance to the person notice or knowledge of the intent set forth in that section.

Where s. 2 applies

4. Section 2 applies to every conveyance executed with the intent set forth in that section despite the fact that it was executed upon a valuable consideration and with the intention, as between the parties to it, of actually transferring to and for the benefit of the transferee the interest expressed to be thereby transferred, unless it is protected under section 3 by reason of good faith and want of notice or knowledge on the part of the purchaser.

[10] These provisions are intended to catch conveyances or transfers made with the intent to defeat, hinder, delay or defraud creditors, based on the substantial effect of the transaction at the time of the conveyance.

[11] Intention is often difficult to prove, as direct evidence of a debtor’s fraudulent intent is rarely provided or admitted. Instead, fraudulent intention must be inferred, if possible, from the suspicious facts or circumstances, often described as “badges of fraud.” Bank of Montreal v. Bibi, 2020 ONSC 2948 at para. 21; Conte Estate v. Alessandro, [2002] OJ No. 5080 (SCJ) at para 20, aff’d [2004] OJ No 3275(CA); Shoukralla v. Shoukralla, 2016 ONCA 128at para. 25.

[12] In Urbancorp Toronto Management Inc. (Re), 2019 ONCA 757 at para. 52, the Court of Appeal adopted the following explanation of the role that “badges of fraud” have in determining fraudulent intent under s. 2 of the FCA:

Whether the [fraudulent] intent exists is a question of fact to be determined from all of the circumstances as they existed at the time of the conveyance. Although the primary burden of proving his case on a reasonable balance of probabilities remains with the plaintiff, the existence of one or more of the traditional "badges of fraud" may give rise to an inference of intent to defraud in the absence of an explanation from the defendant. In such circumstances there is an onus on the defendant to adduce evidence showing an absence of fraudulent intent. Where the impugned transaction was, as here, between close relatives under suspicious circumstances, it is prudent for the court to require that the debtor's evidence on bona fides be corroborated by reliable independent evidence.

[13] Badges of fraud, as the Supreme Court has recently observed, are of “ancient vintage, dating back to Twyne’s Case in 1601 (Wood (2018), at p. 24; Twyne’s Case (1601), 3 Co. Rep. 80b, 76 E.R. 809)”: Aquino v. Bondfield Construction Co., 2024 SCC 31 at para. 44. The case law is replete with examples of “badges of fraud” that may be relevant in determining the intention of a debtor: Urbancorp at para. 155; Montor Business Corp. (Trustee of) v. Goldfinger, 2016 ONCA 406 at para. 73, leave to appeal denied [2016] SCCA No. 361; DBDC Spadina Ltd. v. Walton, 2014 ONSC 3052 at para. 67. In Aquino, the Supreme Court provided the following non-exhaustive list of badges of fraud at para. 45:

(a) the debtor had few remaining assets after the transfer;

(b) the transfer was made to a non-arm’s length party;

(c) the debtor was facing actual or potential liabilities, was insolvent, or was about to enter a risky undertaking;

(d) the consideration for the transaction was grossly inadequate;

(e) the debtor remained in possession of the property for their own use after the transfer;

(f) the deed of transfer had a self-serving and unusual provision;

(g) the transfer was secret;

(h) the transfer was made with unusual haste; and

(i) the transaction was made despite an outstanding judgment against the debtor

[14] The existence of badges of fraud is not conclusive; they must be considered against the entire record before any inference is drawn: Urbancorp at para. 53.

[15] The need to consider the circumstances at the time of the transaction was emphasized in Aquino at para. 46; in particular, that “[a] court must avoid analyzing the debtor’s actions with the benefit of hindsight; it ‘must resist the temptation to inject back into the circumstances surrounding the impugned transaction knowledge about how events unfolded after that time’”, citing the Court of Appeal in Goldfinger.

[16] An inference of fraud may also be rebutted by cogent evidence that the transfer was made for an honest purpose: DBDC at para 67.

[17] Further, even if an intention by the debtor to defeat, hinder, delay or defraud creditors is established, the conveyance is not voided if the recipient of the property provided good consideration “in good faith” without knowledge of the debtor’s intention: Goldfinger at para. 83, BMO v Bibi at paras. 19 – 20, citing Boudreau v. Marler, [2002] OJ No 5699 (SCJ) at paras. 13-15, aff’d 2004 CanLII 19333 (ON CA), 185 OAC 261 (CA) at para. 69 (another case involving the same plaintiff, Andre Boudreau, and arising from the same China Wars litigation).

[18] Accordingly, where fraudulent intent by the debtor is established, it is often necessary to consider the state of mind of the recipient to determine whether they were aware of the debtor’s intent or acted in “good faith.” That may also involve considering “badges of fraud” and the circumstances surrounding the impugned transaction.

Application to this case

The surrounding circumstances of the Transaction

[19] GLN is a public company which was incorporated in 1969. Its sole asset was the Pardee Claims in northwestern Ontario, acquired in 1974, which contained a nickel deposit. GLN had conducted some investigation and exploration of the deposit in the early 1970s. Those investigations disclosed a low-grade nickel deposit at a depth that would require underground development, making it challenging to develop from an economic standpoint.

[20] Hanemaayer, through his investment vehicle CEI, acquired 53 in 1988, which owned 45.63% of the shares of GLN, thereby obtaining control of GLN.

[21] Robin Lowe, a very successful owner of car dealerships in the Kitchener-Waterloo area, also invested in junior mining companies as a “sideline” or “hobby.” He held about 7% of the shares of GLN, which he had begun acquiring in the 1990s. He was appointed a director in 2001 after being approached by another director who was also a friend, Edward Verby, who worked in sales and marketing for Uniroyal. According to Lowe and Verby, the directors were thinking of selling GLN and thought Lowe might help with the sale.

[22] Hanemaayer was also a director and was President of GLN. Earl Orth, described as Hanemaayer’s “right hand man”, was a director and Secretary of the company. Orth was a friend of both Lowe and Verby. Their wives were all in the same bridge club and Orth and Lowe played bridge together regularly with their wives. Also on the Board was Markus Martin, who had been an employee of GLN.

[23] Lowe testified that he attended only two board meetings, in 2001 and 2002. Although Hanemaayer also lived in the Kitchener-Waterloo area, Lowe said he never met or spoke to Hanemaayer. Minutes of those meetings confirm Lowe’s attendance and that Hanemaayer did not attend. Verby also said he never met or spoke to Hanemaayer.

[24] On December 16, 2002, the Ontario Securities Commission (“OSC”) issued a Cease Trade Order (“CTO”) against GLN for failure to file financial statements. GLN was essentially dormant thereafter until the events leading to the Transaction began in 2010.

[25] The last trade in GLN shares before the CTO was issued occurred on October 25, 2002, when 2000 shares traded at $0.06 per share. Based on Hanemaayer’s share ownership, at that price his shares were worth about $159,000 at that time, and GLN’s total share value would have been about $350,000.

[26] In January or February of 2010, Lowe heard from Markus Martin, who had been an employee of GLN, that Jason Quigley of RTEC was interested in buying the Pardee Claims from GLN. Martin and Lowe met with Quigley at Toronto’s Pearson Airport. Quigley wanted to know if Hanemaayer would be interested in selling the asset.

[27] On March 2, 2010, Quigley sent a letter to Hanemaayer, in his capacity as CEO and President of GLN, offering to purchase the Pardee Claims for approximately $5,000,000 payable over time, with an initial payment of $250,000. This offer was made to GLN for the benefit of all shareholders on a pro rata basis. The offer was in the form of an option agreement common in the mining business. RTEC was prepared to pay $250,000 initially in order to obtain the right to investigate the asset and, if it wished to continue investigating and investing, it would pay $250,000 one year later, $500,000 the following year and then $4,000,000 on the third anniversary. In other words, a sale for $5,000,000 was far from certain. Hanemaayer did not respond to the RTEC offer.

[28] Quigley contacted Lowe prior to the Prospectors and Developers Association of Canada (“PDAC”) convention held in Toronto between March 6 and 10, 2010. He told Lowe he was “having trouble dealing with Hanemaayer.” Lowe spoke with Orth and Martin and then met with Quigley at PDAC. Discussions shifted from a corporate sale of the Pardee Property by GLN to the possibility of Lowe acquiring Hanemaayer's controlling interest in GLN, after which RTEC would negotiate directly with Lowe for the Pardee Claims.

[29] Lowe testified that he did not remember seeing the RTEC letter of March 2, 2010, but he was aware that the first payment was $250,000. Lowe said he told Quigley he would need more than that to cover his costs, including whatever he would have to pay Hanemaayer.

[30] Sometime later, in approximately June 2010, Lowe was introduced by Orth and Martin to Michael Bourassa, a very experienced mining lawyer at Fasken Martineau in Toronto. Bourassa had previously acted for Hanemaayer in aspects of the China Wars litigation. Lowe explained to Bourassa his interest in purchasing Hanemaayer’s shares in GLN in order to be able to negotiate an agreement with RTEC. Bourassa sought and obtained Hanemaayer’s consent to act for Lowe.

[31] By letter dated July 9, 2010, Bourassa wrote to Hanemaayer stating that Lowe was “prepared to make an all-cash offer” to acquire 53. However, as Lowe recalls, Bourassa told him he could not make an actual offer until the OSC lifted the CTO. Lowe said that they did not hear from Hanemaayer for “quite a while.” An email from Bourassa dated August 12, 2010, indicates that Bourassa spoke to Hanemaayer that day and told him they were working on an offer but that they first needed to deal with the OSC to lift the CTO. Bourassa wrote that Hanemaayer, who was in his 80s, was not well.

[32] On September 15, 2010, Bourassa submitted a detailed application to the OSC on Lowe’s behalf seeking a partial revocation of the CTO to permit Lowe to buy Hanemaayer’s shares in order that Lowe could then negotiate with RTEC.

[33] Bourassa wrote to Hanemaayer on October 14, 2010, reiterating Lowe’s interest in making an offer and reminding Hanemaayer that no offers could be made or entertained by Hanemaayer unless the CTO order was lifted.

[34] On November 2, 2010, the OSC issued a Partial Revocation Order permitting the Transaction subject to conditions, including requiring Lowe to obtain an independent valuation of the Pardee property, and upon completion of the Transaction to cancel an indebtedness of GLN to 53 of $975,823.00 contained in a promissory note. The OSC also required that the price to be paid by Lowe for Hanemaayer’s shares in GLN was not to exceed 115% of their value based on a valuation of the Pardee Claims to be obtained by Lowe. The Partial Revocation Order was exclusive to the Transaction; it did not permit any other dealings with GLN shares.

[35] In December 2010, Lowe learned from Orth that Hanemaayer needed heart surgery and was “unable to concentrate on business matters.” Lowe asked Bourassa if he thought he should contact the OSC to “let them know this offer is still pending, due to all the work you went through to clear the path?” Lowe said that if they “heard nothing from Jac [Hanemaayer] by Spring, that would be the time for us to decide our next step.”

[36] In January 2011, RTEC confirmed to Bourassa they were still interested in the Pardee Claims. On January 20, 2011, Hanemaayer’s lawyer, Eric Kraushaar, wrote to Bourassa saying that Hanemaayer was “prepared to accept a best offer on satisfactory terms”, including a “cash purchase price”, that the purchaser assume responsibility for all taxes, fees and other costs relating to the mining claims, and that the “mining claims and corporate entities” be accepted on an “as is” basis.

[37] On January 26, 2011, Bourassa wrote to Kraushaar attaching an offer to purchase 53 for $300,000. However, that offer contained conditions regarding the ownership of the shares in GLN. The offer also provided that the promissory note of GLN in 53’s favour would be cancelled, which had been required in the OSC’s Partial Revocation Order. The letter also informed Kraushaar and Hanemaayer, again, that the Partial Revocation Order from the OSC only permitted Hanemaayer to entertain offers from Lowe.

[38] Kraushaar responded promptly the next day, advising Bourassa in an email that “[t]he offer is not satisfactory. It does not meet the form of offer as requested.”

[39] According to an email written by Bourassa to Lowe on February 10, 2011, Kraushaar told Bourassa that the offer wasn’t accepted because of conditions. Bourassa told Lowe that Kraushaar did not “think it was because of the price (but he acknowledged with Jac Hanemaayer, one never knows).”

[40] The following day, Bourassa sent Kraushaar a new offer, removing the conditions relating to good title to the shares. This was accepted by Hanemaayer and the Transaction was completed on February 18, 2011. In short, Hanemaayer sold 53, which owned 45.63% of the shares in GLN to Lowe for $300,000. Further, as required by the Partial Revocation Order, the promissory note was cancelled.

[41] Lowe’s independent valuation of GLN was not finalized until May 31, 2011. The issue of how Lowe could comply with the term of the Partial Revocation Order limiting the price to be paid for 53 without the valuation was not addressed at trial. However, the valuation obtained in May stated that the market value of the property was “in the range of $2 million to $4 million”, so the price paid by Lowe did not exceed the limit contained in the Partial Revocation Order.

[42] Lowe’s valuator, Willam Roscoe of Roscoe Postle Associates, did not inspect the Pardee property. He looked at comparable market transactions which suggested a value between $1.9 million and $2.5 million. He also considered feasibility studies done on the property in the 1970s and reports completed in 2000 and 2001 by Hubacheck and Owen which contained estimates of the mineral resources on the property and which had estimated a minimum fair market value of the Pardee Claims at approximately $4 million.

[43] By letter dated July 7, 2011, Bourassa reported to the OSC on the completion of the Transaction and that Lowe was “in the process of”, among other things, retaining auditors for GLN, convening a meeting of the board of GLN to call a special meeting of shareholders, and negotiating with “Rio Tinto Group.” The letter also confirmed that a press release had been filed on February 15, 2011, on the System for Electronic Document Analysis and Retrieval (“SEDAR”) announcing the Transaction. As Bourassa explained, SEDAR is a public database so that the public, including shareholders, can be informed of a public company’s activities. The closing of the transaction was also posted in a material change report on February 18, 2011.

[44] A board meeting was held on August 12, 2011. A special meeting of the shareholders of GLN was then held on September 30, 2011, to, among other things, appoint auditors and to approve entering into an option agreement with RTEC. The Management Information Circular referred to the Partial Revocation Order and the sale of Hanemaayer’s interest in GLN to Lowe. It described in detail the “Proposed Transaction” with RTEC, which would be a 7-year option agreement over which time RTEC could pay $5,500,000 for the Pardee Claims, with a first payment of $375,000. This had previously been approved by the board on August 12, 2011.

[45] The Circular also explained that the first payment would be applied to reimburse Lowe for expenses and to finalize financial disclosure and to “eventually apply for a full revocation of the Cease Trade Order.” Lowe testified that his expenses exceeded $250,000.

[46] GLN and RTEC entered into the Option Agreement to sell the mining leases on the Pardee Claims on November 18, 2011. Bourassa explained that many of the leases were about to expire and needed to be renewed, which he undertook on behalf of Lowe. An amendment to the agreement shortly thereafter provided that RTEC’s first payment on signing the agreement would be $375,000. The Option Agreement contemplated payments thereafter as follows:

(a) a further $225,000 on or before the first anniversary of the Effective Date;

(b) a further $275,000 on or before the second anniversary of the Effective Date;

(c) a further $350,000 on or before the third anniversary of the Effective Date;

(d) a further $400,000 on or before the fourth anniversary of the Effective Date;

(e) a further $500,000 on or before the fifth anniversary of the Effective Date;

(f) a further $700,000 on or before the sixth anniversary of the Effective Date;

(g) a further $2,675,000 on or before the seventh anniversary of the Effective Date;

for total cash payments of $5,500,000.

[47] RTEC made the payments in (a) to (d), above. In 2016, the agreement was amended to provide that the final 3 payments would be spread out and extended to 2020 with payments of $250,000 in 2016 and 2017, $350,000 in 2018 and 2019, and the balance of $2,675,000 to be paid in 2020.

[48] Following his acquisition of control of GLN, Lowe assumed responsibility for the management and reporting obligations of the corporation. In 2015, GLN was again made subject to a cease-trade order by the OSC for failure to make required filings. This action was commenced in 2015 seeking to set aside the Transaction.

[49] On October 12, 2016, funds paid by RTEC pursuant to the Option Agreement were ordered to be paid into court in the amount $400,000. A further $500,000.00 from RTEC was paid into court in 2017. GLN remains subject to regulatory non-compliance, including a failure to maintain required filings with the OSC. GLN has not filed an annual return with the Ontario Companies Branch since 2019.

Did Hanemaayer sell 53 with intent to defeat, hinder, delay or defraud creditors?

[50] By all accounts, Hanemaayer was an unscrupulous character. In his Reasons for Judgment in 2014, Penny J. stated at para. 91:

I found Hanemaayer a thoroughly unreliable witness. His memory was highly selective. He was not forthcoming and became increasingly less and less forthcoming as his cross examination progressed. Hanemaayer was evasive in his answers, demonstrating an almost pathological fear of getting drawn into a discussion of any details. He frequently fell back on his “party line” or “canned” version of events, even when this approach was not responsive to the question. His evidence was often inconsistent with contemporaneous documentary evidence. “I don’t recall” was often what he said when he did not want to answer the question.

[51] Penny J. described other reasons to be concerned about Hanemaayer’s “forthrightness with the court”, including improperly putting another party in the original litigation, Robert Platt, into bankruptcy by filing false affidavits. This bankruptcy was ultimately set aside by the Court of Appeal: Platt v. Malmstrom, 2004 CanLII 14073 (ON CA). At paras. 55 – 56, Abella J.A. stated, “the bankruptcy proceedings were used as a tactic by 39 Ltd. and its owners to eliminate an adversary from the China Wars litigation… the bankruptcy was initiated for an improper purpose by 39 Ltd., Mr Kraushaar, and Mr. Hanemaayer.”

[52] In ordering Hanemaayer to post security for costs on the appeal from Penny J.’s decision, Simmons J.A. referred to Hanemaayer’s “unscrupulous tactics” and stated that “it is likely that Hanemaayer will make every effort to obstruct collection of the costs of the trial and the appeal, should he be unsuccessful on appeal”: 798839 Ontario Limited et al. v. Platt et al., Ontario Court of Appeal, December 17, 2014, at para. 53. She also concluded that it was likely that 39, which had not carried on any active business for many years, had likely liquidated its assets in the 1990s by distributing the proceeds of its asset sales to Hanemaayer: at paras. 55 – 56.

[53] Simmons J.A.’s prediction was accurate, as Hanemaayer refused to produce relevant records, provide responsive answers to questions, or comply with court orders in the enforcement process. Goldstein J. reviewed this in some detail in his contempt decision, noting that Hanemaayer failed to produce tax records, claimed not to remember what he did with a million-dollar grant to 39 received in 2010, and was “obfuscating.” As Goldstein J. put it, Hanemaayer “answered many of the questions put to him, but he did not answer the most important. He failed to provide key information”: 796839 Ontario Limited v Platt, 2016 ONSC 7097 at para. 44.

[54] These adverse comments about Hanemaayer, however, do not mean that he acted with intent to defeat his creditors in 2011 when he sold 53. One cannot infer an improper intention simply because someone has been dishonest in other circumstances. One must consider the Transaction and Hanemaayer’s state of mind at the time, including the circumstances of the Transaction and the existence of any badges of fraud, to determine whether they support an inference that Hanemaayer intended to defraud his creditors when he completed the Transaction in February 2011.

[55] The plaintiffs submit that Hanemaayer’s sale of his interest in GLN was part of a pattern of “asset stripping” prior to the China Wars trial which included transferring his interest in his home to his common law spouse for no consideration in 2010, the sale of a commercial property in Kitchener in late 2012 for $6,000,000, and the sale of a processing facility in 2011 in Foley, Ontario. The plaintiffs note that all of these transactions were handled by Eric Kraushaar, Hanemaayer’s lawyer who was also a defendant in the China Wars case. While perhaps suspicious, I cannot place much weight on these transactions as I have few details beyond what I have summarized about them.

[56] There is no evidence that Hanemaayer had creditors at the time of the Transaction or that he was in financial difficulty or insolvent. To the contrary, he appears to have had other much larger assets, such as the property in Kitchener that he sold for $6,000,000 in August 2012, eighteen months after the Transaction. Hanemaayer was elderly and in poor health and may have had other motivations to sell assets.

[57] The plaintiffs did not become creditors of Hanemaayer until they obtained Penny J.’s judgment in January 2014, almost three years after the Transaction. Although one can be found to have breached the FCA by intending to defraud future creditors, the conveyance cannot be too remote: One must consider what might reasonably have been in the contemplation of Hanemaayer having regard to the circumstances at the time of the Transaction: Aquino at para. 43.

[58] In my view, there is insufficient evidence to support the plaintiffs’ submission that in early 2011 the China Wars trial was imminent and its result was so certain that Hanemaayer knew he would be facing an adverse judgment and be a debtor to the plaintiffs, such that this was his motivation to sell his interest in GLN. At that time, no trial date had been set on a case that had been litigated for over 20 years. Indeed, Boudreau testified in 2019 that in 2009, 2010 and 2011, and even into 2012, he was hoping to reach a settlement with Hanemaayer. There were, I was told, at least 14 attendances at pre-trial or settlement conferences with judges in 2011 and 2012. These facts do not provide me with a basis to conclude that, in February 2011, Hanemaayer knew he was doomed to lose at a trial, which was far from imminent, and that he would be facing a large judgment such that he had a motive to divest his assets to be judgment-proof.

[59] The Transaction was not secret. The Partial Revocation Order had to be obtained, and the material filed in support of it informed the OSC that a producing issuer had expressed interest in the property. This information was posted on SEDAR which was available to be seen by all shareholders of GLN, which included Boudreau who had been a shareholder of GLN since the 1990s. Hanemaayer did not retain any interest in GLN; indeed, he required an unconditional sale and resigned as a director.

[60] The plaintiffs argued that the Transaction was made hastily, largely relying on the lack of due diligence by Lowe. But Hanemaayer did not move hastily, despite his advanced age and poor health. He showed no interest in the RTEC offer in March 2010. When Lowe approached Hanemaayer, through Bourassa, in the summer of 2010, Hanemaayer’s response did not suggest that things needed to move forward quickly, and he took no steps to advance the sale of his interest in GLN, leaving it to Lowe to obtain the Partial Revocation Order and make an offer thereafter. It took a few months to obtain the Partial Revocation Order and the sale of the GLN shares occurred a few months later, all these steps having been initiated by Lowe, not by Hanemaayer.

[61] I am unable to conclude that the sale price of $300,000 was below fair market value or grossly inadequate. RTEC’s offer in 2010 was lower, and it was for the benefit of GLN, not just the 46% shareholder. As Kraushaar put it in a letter to Quigley when Hanemaayer went back to RTEC in January 2011 to see if RTEC would make better offer, Hanemaayer “would require a significantly more attractive accompanying up front payment” than had been proposed in March 2010.

[62] There was no market for GLN shares, which had been subject to the CTO for 8 years. The last trade of shares in October 2002, was for $0.06 per share. At that price, Hanemaayer’s shares would have been worth $159,000.

[63] Little had been happening with GLN for decades. For almost 50 years, no mining, drilling or excavation had been undertaken. GLN’s only two employees were dismissed in 2002. Many of the mining leases were due to expire. No buyers had come forward until RTEC expressed interest. Even then, as occurred in 2011, RTEC’s interest was expressed in an option agreement, with no certainty that it would pay GLN beyond the first installment.

[64] The valuations are of limited assistance in assessing the value of such unique assets. They are based on estimates of the size of the mineral resource that is difficult to extract, while at the same time trying to give some value to prior expenditures. The Roscoe Postle Report was not rigorous. It relied heavily on the Hubacheck reports of 2001 and 2002 and made assumptions that were not supported or investigated.

[65] These types of properties have a limited number of potential purchasers who are willing to take on risks and invest large sums of money. The valuations in 2001 and 2011 both put the value at between approximately $2 million and $4 million. But as the RTEC Option Agreement showed, RTEC was not prepared to pay anywhere close to that amount until it had investigated and explored the deposit itself over several years. As William Roscoe, the valuator who wrote the Roscoe Postle Report in 2011 acknowledged, the only thing guaranteed in an option agreement is the first payment, and the longer the term of such an agreement the likelihood of the final balloon payment being made decreases.

[66] The Pardee Claims were also difficult to sell because of the CTO. Lowe testified he paid over $250,000 in legal and accounting fees, much of which was related to obtaining the Partial Revocation Order and complying with its conditions. Although Lowe was later reimbursed for these costs by GLN, that was not a certainty when they were incurred.

[67] The evidence also does not support a conclusion that Hanemaayer and Lowe were not at arm’s length. Lowe testified that he never met or spoke to Hanemaayer. This was not challenged by the plaintiffs. Although Lowe joined the board of GLN in 2001, that was understandable as he owned 7% of the company and was a successful businessman. He attended two meetings in late 2001, which Hanemaayer did not attend. The next meeting did not occur until August 2011, after the Transaction and when Hanemaayer was no longer a shareholder or director.

[68] Orth was on the board and was close to Hanemaayer. Orth was also a friend of Lowe’s. However, there is no evidence that he acted as a go-between to permit Lowe and Hanemaayer to act in concert with one another. The initiative for the Transaction came from RTEC. Orth introduced Lowe to Bourassa, who had previously acted for Hanemaayer, but there is no evidence that Hanemaayer was directing this either. Nor was there any suggestion that Bourassa acted improperly in handling the Transaction for Lowe.

[69] The email correspondence between Lowe and Bourassa, and the negotiations between Bourassa and Hanemaayer’s lawyer, Kraushaar, are consistent with parties operating at arm’s length to one another. The following email, from Kraushaar to Bourassa, illustrates this point:

I certainly understand the difficulty facing your client in responding with an offer in light of the requirements set by Mr. Hanemaayer. He wishes to have a certified non-refundable payment accompany an offer which is unconditional and at an acceptable price. This is his position at this time and it will not change. He has instructed me to advise that this is what he is prepared to consider for acceptance. We have your client's bank draft still in our vault, and not deposited same in our trust account. Please advise if your client wishes to retrieve it.

[70] In David Jonas in Trust et al. v. McConnell et al., 2014 ONSC 6169, in determining whether a person acted with intent to defraud his or her creditors, Penny J. stated that “[a]t the end of the day, however, the court must act on such a preponderance of evidence as to show whether the conclusion the plaintiff seeks to establish is substantially the most probable of the possible views of the facts; mere suspicion is not sufficient.” In this case, there is nothing more than suspicion, much of which is countered by the evidence, or at least is capable, based on the evidence, of other explanations. The evidence falls short of establishing, on a preponderance of the evidence, that Hanemaayer, in selling his interest in GLN in 2011 to Lowe, acted with intent to defeat, hinder, delay or defraud creditors, including Boudreau and All-Terrain.

Did Lowe pay good consideration, in good faith, without knowledge of Hanemaayer’s intent?

[71] In light of my finding that Hanemaayer did not breach s. 2 of the FCA, it is not necessary for me to address Lowe’s conduct or state of mind. However, even if Hanemaayer acted with illegal intent, the conclusions reached above about the nature of the Transaction and the absence of badges of fraud would defeat the plaintiffs’ claims under s. 3 of the FCA.

[72] Lowe paid “good consideration” for the shares. This does not require proof that Lowe paid fair market value or the full value of the shares, so long as it is “valuable consideration” and not “nominal or grossly inadequate”: Goldfinger at para. 53, citing Feher v. Stephen Healey, 2006 CanLII 29639 (ON SC) at paras. 44 – 45, aff’d 2008 ONCA 191.

[73] Lowe paid Hanemaayer $300,000 for shares that, ten years earlier, were worth, at most, about half that amount. $300,000 was more than double what Hanemaayer would have received from the proposed first installment of the RTEC offer made in March 2010.

[74] Lowe paid substantial fees to be able to buy the shares, all with the risk that RTEC would not sign an option agreement and, even if it did, that RTEC would exercise its options and GLN would receive enough to cover Lowe’s investment and related expenses. The mining leases also needed to be renewed, adding further uncertainty and expense.

[75] Although I did not hear much at trial about the promissory note which was cancelled as part of the Transaction, this was required by the OSC, and little weight can be placed on that obligation which was non-arm’s length between GLN and its controlling shareholder.

[76] In Peoples Department Stores Inc. (Trustee of) v. Wise, 2004 SCC 68, [2004] 3 SCR 461, the Supreme Court observed, at para. 86, that many factors can be relevant in assessing the appropriateness of consideration paid where it may not correspond to the “fair market value”, assuming that can be determined with some certainty. In these circumstances, I cannot find that Lowe failed to pay “good consideration” for Hanemaayer’s interest in the shares and the benefits obtained in the Transaction.

[77] Lowe also testified that he had no knowledge of any intent by Hanemaayer to defeat, hinder, delay or defraud creditors at the time of the Transaction. Even if Hanemaayer was insolvent at the time of the Transaction – and there is no evidence of that – and that Lowe knew that to be the case, it would not be sufficient proof of Hanemaayer’s fraudulent intent, let alone any complicity by Lowe: Meeker Cedar Products Ltd. v. Edge et al., 1968 CanLII 666 (BC CA), [1968] B.C.J. No. 164 (C.A.) at paras. 10 – 11, aff’d [1968] S.C.J. No. 124.

[78] Lowe acknowledged being aware of the China Wars litigation, but that does not make him complicit in an attempt to defraud potential creditors based on the theory that Hanemaayer knew he was going to lose at trial. Lowe was not questioned about how much he knew about that litigation, or when it might come to trial, or the likelihood of its outcome, or of whether he had any knowledge of Hanemaayer’s motivation to sell. It is just too remote. Further, Lowe came to the situation legitimately. He had owned shares in GLN for ten years prior to the Transaction. He was aware that Hanemaayer had rebuffed RTEC and saw an opportunity to realize some value for his own holdings, albeit not without risk – but risk is common with junior mining investments.

[79] It was argued that Lowe moved with haste, and Bourassa agreed that the Transaction proceeded quickly without due diligence of the mining leases. However, this was a risk Lowe was prepared to take, and Bourassa explained that, with some effort, GLN’s leases could be extended. It took almost one year from when Lowe was first approached by Quigley to complete the Transaction, and Lowe and Bourassa seemed prepared to wait longer to make a deal with Hanemaayer if necessary. In my view, there was no undue haste giving rise to an inference of knowledge or fraudulent intent by Lowe.

[80] The plaintiffs submit that Lowe was not a credible witness, unable to recall key events and demonstrating a “pattern of selective ignorance” when he testified. Lowe was 87 years old when he testified. His memory of events that occurred 15 years ago was, not surprisingly, uneven. However, much of Lowe’s evidence was corroborated by the contemporaneous documents. While I sometimes had concerns about whether Lowe was being selective in his memory, or his failure to recall was due to his age and the length of time that had passed since the events, on the whole I found him to be a credible witness in describing his involvement in the Transaction. Lowe is a wealthy businessman who was interested in and invested in junior mining ventures. He could afford to take risks on such ventures and did so.

[81] Much of the plaintiffs’ argument about Lowe’s credibility was based on Lowe’s conduct after the Transaction, as it appears that once Lowe acquired a majority interest in GLN he took all the financial benefits. This appears to be the case. No financial statements have been prepared for GLN since 2012, resulting in a renewed CTO from the OSC in 2015. Shareholders of GLN, such as Verby, have not received any benefits from the Transaction. But whether Lowe has acted improperly towards the other shareholders of GLN since the Transaction is not probative of whether he did not act in good faith, as that term is used, in s. 3 of the FCA, in completing the Transaction.

[82] Accordingly, had the plaintiffs proven that Hanemaayer breached s. 2 of the FCA, I am satisfied that s. 3 would apply to the Transaction. The claim that the Transaction was a fraudulent conveyance is therefore dismissed.

The limitations issue

[83] Lowe argued that Boudreau, as a shareholder in GLN, knew or ought to have known of the Transaction from SEDAR in 2011, yet failed to commence this action until 2015, well outside the two-year limitation period in s. 4 of the Limitations Act, 2002. In light of my findings above, it is unnecessary to address Lowe’s position that the action is barred by the Limitations Act, 2002. However, I would not have given effect to this argument.

[84] The plaintiffs did not have a claim for the funds Hanemaayer received for the sale of his interest in GLN until they obtained the judgment against Hanemaayer in 2014. The plaintiffs brought this action within two years of obtaining that judgment, which is when this proceeding became “legally appropriate”: Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218, 109 O.R. (3d) 652, at para. 34; Sosnowski v. MacEwen Petroleum Inc., 2019 ONCA 1009, 441 DLR (4^th) 393 at paras. 16 – 19.

[85] Lowe’s position seeks to have things both ways. On the one hand he argues that the Transaction is not a fraudulent conveyance because it occurred long before the plaintiffs became creditors, yet on the other hand he argues that the plaintiffs should have started the action within two years of the Transaction because they ought to have known that they would become creditors, even though that did not happen until almost three years after the Transaction.

[86] Accordingly, I would not have accepted Lowe’s position that the action is statute-barred.

Conclusion

[87] The action is dismissed. Should the parties be unable to resolve the issue of costs, they may contact my assistant to arrange a case conference to confirm a procedure to address the matter.

Paul B. Schabas J.

Date: July 29, 2026