“Provincial fraud provisions are remedial in nature and their purpose is to ensure that creditors may set aside a broad range of transactions involving a broad range of property interests, where such transactions were effected for the purposes of defeating the legitimate claims of creditors (Ramgotra (Trustee of) v. North American Life Assurance Co., 1996 CanLII 219 (SCC), [1996] 1 S.C.R. 325, at para. 59).
The relevant legislative provisions applicable to Ms. Van Westerop’s motion for relief are found in the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, and more specifically in sections 1 to 4:
Definitions
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- In this Act,
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“conveyance” includes 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;
“personal property” includes goods, chattels, effects, bills, bonds, notes and securities, and shares, dividends, premiums and bonuses in a bank, company or corporation, and any interest therein;
“real property” includes lands, tenements, hereditaments and any estate or interest therein.
Where conveyances void as against creditors
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- 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.
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Where s. 2 does not apply
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- 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.
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Where s. 2 applies
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- 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.
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Were the transfers of Mr. Van Westerop’s ownership interests in Policies no. 159-7, 670-3 and 579-5 fraudulent conveyances?
The cash surrender value in each of the three policies owned by Mr. Van Westerop on the lives of his children (“the children’s policies”) is personal property as defined by s. 1 of the Act. The transfer of each of these policies by Mr. Van Westerop to each of his children was a conveyance as defined in s. 1 of the Act. No consideration was paid by any of the children, who were fully aware, at the time they received ownership of these policies, that their mother was seeking to enforce her judgements against them.”
Van Westerop v. Van Westerop et al., 2022 ONSC 5406 (CanLII) at 27-29