Trustee of Estate of David Podollan v. David Podollan
Trustee of Estate of David Podollan
Law Firm / Organization
Lawson Lundell LLP
David Podollan
Leah Podollan

Background:
David Podollan transferred substantial assets to his estranged wife, Leah Podollan, just before a creditor sought to appoint a receiver over his business. This included real property, an aircraft, and boats. A few months later, David was adjudged bankrupt, and the assets were contested by the bankruptcy trustee.

Legal Issues:

  1. Arm's Length Dealing:
    The court determined whether David and Leah dealt with each other at arm’s length when transferring assets. The court found they did not, given their marital status and lack of negotiation.

  2. Transfer Undervalue:
    The court examined if the asset transfers constituted a "transfer at undervalue" under the Bankruptcy and Insolvency Act (BIA). It concluded that David transferred assets worth millions in exchange for no consideration, making the transfer void under section 96(1)(b) of the BIA.

  3. Family Law Entitlement:
    Leah argued her entitlement under the Family Law Act should override the trustee’s claims. The court held that the trustee's right to the assets took precedence until Leah’s entitlements were fully determined.

  4. Suitability for Summary Trial:
    The court found the matter suitable for summary trial as all necessary evidence was available, and there was urgency due to the potential dissipation of assets.

Outcome:
The court voided the transfers and ordered the assets be held in trust. Leah and David Podollan were jointly and severally liable for the Trustee’s costs, awarded on a solicitor and own client scale. The exact cost amount was not specified in the summary.

Supreme Court of British Columbia
S202923
Bankruptcy & insolvency
Plaintiff