Event Details: Tuesday, March 5, 2019, 12:30pm – 1:30pm (EST)
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Following our DPA roundtable in June and
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Same Facts, Different Badges – Sham Trusts and Fraudulent Conveyances
In McGoey (Re), 2019 ONSC 80, Justice Penny of the Ontario Superior Court of Justice found trusts over two properties held by a bankrupt were void as shams. In his decision, Justice Penny noted that had he not found the trusts to be sham trusts, he would still have set them aside as fraudulent conveyances, making us ask: “what is the difference between a sham trust and a fraudulent conveyance?”
A sham trust occurs where documents or acts give the appearance of creating legal rights that the parties have no intention of actually creating. In contrast, the documents and acts for a fraudulent conveyance accurately reflect the intentions of the parties and the legal rights that they want to create. The issue with a fraudulent conveyance is not that the transfer of rights is a sham, but that the transfer is being done for fraudulent purpose. With the evidence in front of him, Justice Penny was satisfied that, even if the McGoeys intended to transfer the properties, it was for a fraudulent purpose.
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Supreme Court to Rule on Conflicting Rights of Investors in Fraudulent Schemes
On November 15, 2018, the Supreme Court of Canada granted Christine DeJong Medicine Professional Corporation’s (“DeJong”) application for leave to appeal from the decision in DBDC Spadina Ltd. v. Walton, 2018 ONCA 60. By granting leave, Canada’s highest court will weigh in on the liability of “victims” of fraud as against one another.
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Piercing the Corporate Veil – the Need for Clear Fraudulent or Improper Conduct
Piercing the corporate veil remains a difficult feat in Ontario. Recently, in Cornerstone Properties v Southside Construction, Justice Hockin of the Ontario Superior Court of Justice refused to pierce the corporate veil to hold a corporation liable for a costs award against its subsidiary. This decision reaffirms that courts will only pierce the veil where a corporation is being abused to the point where it is not functioning as a bona fide corporate entity, and instead is being used as a vehicle to facilitate fraudulent or improper conduct.
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Consent judgment survives bankruptcy
In Water Matrix Inc. v Carnevale, Justice Sanfilippo found that a consent judgment may survive bankruptcy if it arises from a claim that is based in fraud. This allowed a company that was defrauded by a former employee to continue to enforce the company’s judgment after bankruptcy.
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Bank’s Duty of Care to victims of Ponzi Scheme
In 1169822 Ontario Ltd. v. Toronto-Dominion Bank 2018 ONSC 1631 Justice Dunphy of the Ontario Superior Court decided a case where investors in a failed Ponzi scheme sought recovery from the financial institution used by
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Fraudulent Conveyance Claim flounders on procedural shores
In Esfahani v. Samimi, 2018 ONCA 516 the Ontario Court of Appeal confirmed that a plaintiff pursuing a fraudulent conveyance or preference must recognize that the legal landscapes changes with a bankruptcy and that the
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The Competition Act and misleading advertising provisions
The general prohibition on false or misleading advertising under the Competition Act is somewhat unusual in that it contains two adjudicative regimes, criminal and civil, that can be used to address the same conduct –
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Deferred Prosecution Agreements are coming to Canada. Are you prepared?
Join Baker Mckenzie’s global practitioners on Thursday, June 14 for a Deferred Prosecution Agreement Roundtable to gain important insights on:
- The impact that Bill C-74 will have on corporate criminal law in Canada;
- How the
When Should a Defendant Bring a Motion for Summary Judgment in Fraud Proceedings?
This is our third and final post on the complex fraud carried out by Norma and Ronald Walton, and the Ontario Court of Appeal decisions arising from their scheme. In our earlier posts, we focused
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