![]() ![]() In 2018, certain creditors (Judgment Creditors) of the Principal and the Principal’s spouse obtained two judgments in their favour from the United States District Court for the Eastern District of Pennsylvania, each for more than US$26 million (the Pennsylvania Judgments). The Court of Appeal was required to examine whether the claimants, who were creditors of the Principal of the mortgagor corporations but not creditors of the mortgagor corporations themselves, fell within the scope of the statutory phrase “creditors or others” within the meaning of section 2 of the FCA for the purpose of challenging the impugned mortgages. In Stevens v Hutchens, 2022 ONCA 771, the Court considered whether mortgages on six Ontario properties, which were granted by mortgagor corporations that held the properties, could be attacked as fraudulent conveyances under the FCA by judgment creditors of the sole shareholder of the mortgagor corporations (the Principal). While the statute has a lengthy history, the Ontario Court of Appeal was recently faced with a novel question concerning the scope of potential claimants under the FCA. The Ontario Fraudulent Conveyances Act 1 (the FCA), a concise statute of long-standing that traces its history to an English statute of 1571, is intended to prevent conveyances of property made with the intent to defeat, hinder, delay or defraud “creditors or others” of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures. ![]()
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