Forjay Management Ltd. and Reliable Mortgages Investment Corp. ("Forjay") successfully challenged the mortgage and property transfer of a commercial strata property by 1052387 B.C. Ltd. ("105") as fraudulent, designed to defeat Forjay's recovery of costs from a judgment. The challenge was made under the Fraudulent Preference Act (FPA) and Fraudulent Conveyance Act (FCA).
The appellant, 105, contested the chamber judge's application of the FPA for determining the fraudulent conveyance claims since the transactions occurred before Forjay was a judgment creditor.
Issues/Main Discussion:
Whether Forjay, not a judgment creditor at the time of the impugned property transactions, could invoke the summary process under the FPA to determine the fraudulent conveyance claims.
Whether the matter was suitable for summary determination, given potential credibility issues that could be better resolved with oral testimony in a traditional trial.
Ruling:
Appeal dismissed. The Court of Appeal found that the appellant had initially raised but then expressly resiled from the standing issue in the underlying proceedings. It was not in the interests of justice to consider the appellant's new argument on appeal.
The court upheld the chamber judge's decision to proceed via summary trial, rejecting the appellant's claim that credibility issues required a traditional trial. The summary process provided sufficient opportunity for the appellant to prove their case.
Amount Awarded:
The appeal was dismissed, effectively upholding the lower court's decision to allow the fraudulent conveyance claims, leading to the sale of the property to satisfy Forjay's special costs judgment. No amount specified.
