“Section 2 of the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29 (“FCA”), states:
Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter 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.
Under s. 1 of the FCA, a “conveyance” includes a gift, grant, alienation, bargain, charge, encumbrance, limitation of use or uses of, in, to or out of real property or personal property by writing or otherwise.
The Applicant is a “creditor” within the meaning of the FCA given that a person that has commenced an application under the Divorce Act for corollary relief becomes a contingent creditor of the respondent: Purcaru v. Seliverstova, 2016 ONCA 610, para. 11, affirming 2015 ONSC 6679 (Myers J.).
In Purcaru, Myers J. stated:
11 It is very difficult for an applicant to prove a person’s hidden intention to defraud creditors. Therefore, the law provides that the court can infer the existence of a transferor’s fraudulent intention to defeat or delay creditors where there are recognized “badges of fraud” associated with a transaction. The badges of fraud are facts or fact patterns that courts have held to be indicative of fraudulent transactions. Facts such as: secrecy, transfer of property when an action or execution is pending, transfer of property to non-arm’s-length parties, transfers made with undue haste, and transfers for a conspicuously insufficient price, are all recognized examples of badges of fraud. There are others such as the breach of family law orders requiring a party to preserve his or her assets pending a trial. If the court draws the inference of fraudulent intent due to the existence of badges of fraud, then an evidentiary burden will fall to the respondents to explain their conduct to try to rebut the inference of fraudulent intent. Of course the ultimate persuasive burden remains on the applicant throughout.”
Sanvictores v. Sanvictores, 2023 ONSC 2473 (CanLII) at 36-39