7.3: Summary Judgment (Application and decision)
9.24: Fraudulent preferences and fraudulent conveyances

Case Summary

The Plaintiff obtained a Consent Judgment as against the Defendants and subsequently learned that one of the Defendants had been using his wife’s bank account to divert funds that would otherwise be subject to enforcement proceedings. The Plaintiff sought Judgment against the Defendant’s wife, who was not a party to the Action. The Plaintiff argued that the Fraudulent Preferences Act, RSA 2000, c F-24, or the Statute of Elizabeth, 13 Eliz I, C-5 (UK) allowed for a Judgment against a non-party recipient of assets who no longer had possession of the assets and received little or no benefit from them.

Shelley J. noted that Rule 9.24 only permitted the Court to order a non-party to an Action who received wrongfully conveyed property to sell that property to pay the debt owed pursuant to the Action. The Statute of Elizabeth did not give the Plaintiff the right to damages or compensation as that statute only allowed the Court to set aside a conveyance. Further, as the Plaintiff did not bring an Application for Summary Judgment under Rule 7.3, the Court was not permitted to grant Judgment against the Defendant’s wife as a non-party.

After examining the impugned transactions, the Court concluded that there was a fraudulent conveyance by the Defendant to his wife; therefore, the Plaintiff was required to commence an Action against the Defendant’s wife, since Rule 9.24 and the Statute of Elizabeth only provided for seizing and selling the transferred asset.

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