Viva Developments et al v. Icarus Properties et al

Viva Developments et al v. Icarus Properties et al

The court found multiple badges of fraud surrounding the June 5, 2000 mortgage (post-judgment timing, insolvency, inflated amount, non-arm's length approvals and lack of new consideration) such that the mortgage was a fraudulent conveyance and void; s.2 of the Fraudulent Conveyance Act did not protect the mortgage...

Source-derived case information.

Citation
2004 BCSC 1176
Parties
Plaintiff: Viva Developments Inc.; Plaintiff: Char Enterprises Inc.; Defendant: Icarus Properties Ltd.; Defendant: Hans Heringa; Defendant: Cidalia Plavetic; Defendant: Jessie Bernier
Court
Supreme Court of British Columbia
Jurisdiction
Canada
Judgment Date
9 September 2004
Procedural Posture
Civil Action: Fraudulent Conveyance and Fraudulent Preference; Property Dispute / Summary Trial Under Rule 18 a
Outcome
Declarations granted: June 5, 2000 mortgage void as fraudulent conveyance; March 29, 2001 transfer of duplex void as fraudulent conveyance and fraudulent preference and set aside; conspiracy claim against Heringa dismissed; order to list and sell properties with plaintiffs to conduct sale; special costs awarded to...
Legal Topics
Voidable Transactions, Badges of Fraud, Directors' Duties and Conflicts, Setting Aside Transfers, Registration of Charges, Special Costs
Source Language
english
Fraudulent Conveyance Fraudulent Preference Company Law Property Law Insolvency Civil Procedure Tort Law (conspiracy) Voidable Transactions +5 more

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Parties

Viva Developments Inc.

Plaintiff

Char Enterprises Inc.

Plaintiff

Icarus Properties Ltd.

Defendant

Hans Heringa

Defendant

Cidalia Plavetic

Defendant

Jessie Bernier

Defendant

Procedural Posture

Civil Action: Fraudulent Conveyance and Fraudulent Preference; Property Dispute / Summary Trial Under Rule 18 a

Legal Issues

  1. 1 Whether the June 5, 2000 second mortgage granted by Icarus was a fraudulent conveyance
  2. 2 Whether the June 5, 2000 mortgage constituted a fraudulent preference
  3. 3 Whether the March 29, 2001 transfer of the duplex to Heringa was a fraudulent conveyance or fraudulent preference

Ratio Decidendi

The court found multiple badges of fraud surrounding the June 5, 2000 mortgage (post-judgment timing, insolvency, inflated amount, non-arm's length approvals and lack of new consideration) such that the mortgage was a fraudulent conveyance and void; s.2 of the Fraudulent Conveyance Act did not protect the mortgage because no fresh consideration was provided; the March 29, 2001 transfer of the duplex constituted both a fraudulent conveyance and a fraudulent preference because the dominant intent was to prefer shareholders and extract the companys only equity rather than to salvage the company; the conspiracy claim against Heringa failed for lack of pleaded particulars and was dismissed.

Court Disposition

Declarations granted: June 5, 2000 mortgage void as fraudulent conveyance; March 29, 2001 transfer of duplex void as fraudulent conveyance and fraudulent preference and set aside; conspiracy claim against Heringa dismissed; order to list and sell properties with plaintiffs to conduct sale; special costs awarded to...

Orders

  • Declare the June 5, 2000 mortgage granted by Icarus void as a fraudulent conveyance and set it aside
  • Declare the March 29, 2001 transfer of the duplex from Icarus to Heringa void as a fraudulent conveyance and fraudulent preference and set it aside