Executive Summary – Key Legal and Evidentiary Issues

• Dispute over whether informal loans were legally binding and enforceable.

• Alleged transfer of assets to relatives and corporations to evade repayment.

• Inference of civil conspiracy based on coordinated actions among defendants.

• Examination of financial records to trace loaned funds and asset ownership.

• Questions surrounding the authenticity and timing of repayment documents.

• Assessment of witness credibility amid conflicting versions of events.

Facts of the Case

The case involves a financial dispute between the plaintiff, Randhawa, and the defendant, Khaira, along with his associated individuals and companies. Over a number of years, Randhawa advanced approximately $2.2 million in informal loans to Khaira to support real estate ventures and other investments. These transactions were primarily verbal, based on personal trust and longstanding friendship, with limited or no formal documentation.

When the business relationship broke down and the loans remained unpaid, Randhawa attempted to recover his money. During this time, Khaira and his associates began transferring properties and business interests to family members and corporations. Randhawa claimed these transfers were made to avoid repayment and to frustrate any legal judgment against them.

He sued for breach of contract, fraudulent conveyance, civil conspiracy, and unjust enrichment, seeking to enforce repayment and set aside the transfers.

Arguments and Court’s Analysis

Randhawa argued that the loans were legitimate, and the defendants’ asset transfers were designed to prevent collection. He relied on financial records, testimony, and documentation showing a history of loaned amounts and the timing of suspicious property transfers.

The defendants disputed the nature of the loans, suggested some amounts were investments or gifts, and claimed the asset transfers were unrelated to the legal dispute. They also relied heavily on the absence of formal loan agreements.

The court sided with Randhawa on several grounds:

• Found that the informal loans were enforceable, supported by consistent financial patterns and credible evidence.

• Determined the defendants had engaged in a fraudulent conveyance, with transfers made for the primary purpose of shielding assets from lawful debt recovery.

• Accepted the theory of civil conspiracy, concluding that Khaira and others coordinated their actions with intent to defeat Randhawa’s claims.

• Disregarded much of the defendants’ testimony due to inconsistencies and credibility issues, including missing or incomplete financial records.

The court concluded that legal and equitable remedies were warranted to reverse the effect of the transfers and allow Randhawa to recover what he was owed.

Outcome of the Case

The British Columbia Supreme Court awarded Randhawa over $2.2 million in damages, plus legal costs. It also voided or set aside certain property transfers under the Fraudulent Conveyance Act, effectively unravelling the defendants’ attempts to place assets out of reach.