Legal Blog

Fraudulent Conveyance/Oppression

2081451 Ontario Ltd. v. 2221306 Ontario Inc. 2016 Ont SCJ

Corporate vendor sold convenience store to corporate purchaser, owned by husband. Money was due on the purchase and the purchaser ultimately defaulted. Wife incorporated another corporation (Newco) and took over the convenience store for no consideration; wife did not work in the convenience store, only husband for a mere $1,700 per month. Husband went bankrupt and vendor obtained a judgment against the purchaser for $320,000. Vendor commenced an application against Newco claiming a fraudulent conveyance and against wife under the oppression remedies of the Business Corporations Act. Vendor was successful against both. Wife was liable because, as a director and officer of Newco, she acted in a manner that was oppressive and unfairly prejudiced or disregarded the interests of the purchaser as a creditor.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.