



COURT OF APPEAL FOR ONTARIO

CITATION: Purcaru v. Seliverstova, 2016 ONCA 610

DATE: 20160804

DOCKET: C61335

Sharpe, Lauwers and Miller JJ.A.

BETWEEN

Felicia Purcaru

Applicant (Respondent)

and

Anna Seliverstova
,
Marina Seliverstova
,
Mircea Purcaru, Redina Inc., Daribo Consulting Inc., and
Dan Purcaru

Respondents (
Appellants
)

Gary S. Joseph and Kenneth Younie, for the appellants

Morris Cooper, for the respondent

Heard: June 22, 2016

On appeal from the order of Justice F.L. Myers of the Superior
    Court of Justice, dated October 29, 2015, with reasons reported at 2015 ONSC
    6679.

Miller J.A.:

Background

[1]

This appeal is from an order awarding relief to the respondent under
    provisions of the
Fraudulent Conveyances Act
, R.S.O. 1990, c. F-29.
    The respondents ex-husband, Don Purcaru, and the appellant Marina Seliverstova,
    who had been in a relationship with Mr. Purcaru, were found to have acted in
    concert to convey property to Ms. Seliverstova with the intention of defeating
    Mr. Purcarus creditors, chiefly the respondent.

[2]

Mr. Purcarus financial obligations to the respondent were a consequence
    of the end of their marriage. The respondent applied in 2004 for an order for divorce
    and corollary relief. After a trial in 2009, Mr. Purcaru was ordered by Paisley
    J. to pay the respondent in excess of $1 million in arrears of spousal and
    child support and for equalization of net family property, in addition to on-gong
    child support and awards of costs.

[3]

In the current proceedings, the trial judge made an order voiding
    transfers of funds from Mr. Purcaru to Ms. Seliverstova that had enabled Ms.
    Seliverstova to purchase two residential condominium units in 2006 and 2008,
    one of which was purchased in the name of her daughter, the appellant Anna
    Seliverstova.

[4]

For the reasons set out below, I would dismiss the appeal. The appeal is
    largely an attack on the trial judges determinations of credibility and factual
    findings related to the impugned transactions. The trial judge rejected much of
    Ms. Seliverstovas testimony as a pack of lies, found her explanations for
    the impugned transactions to be lacking of cogency and credibility, and found
    that she shared Mr. Purcarus intention to defeat, hinder, delay or defraud his
    creditors. These determinations of credibility and factual findings were open
    to the trial judge, are entitled to deference, and there is no basis upon which
    this court could interfere with them. These findings are dispositive of most of
    the appellants four grounds of appeal, which are addressed below.

Ground 1: The trial judge shifted the burden of proof to the
    appellants

[5]

The appellants argue that the trial judge erred by impermissibly
    shifting the burden of proof to them, requiring that they disprove the
    respondents allegations. I do not accept this submission. The trial judge
    correctly stated the law with respect to burden of proof where there is an
    allegation of fraudulent conveyance. It is up to the challenger of a
    transaction to establish on a balance of probabilities that a conveyance was
    made with the intent to defeat, hinder, delay or defraud creditors or others,
    within the meaning of s. 2 of the
Fraudulent Conveyances Act
. Whether
    Mr. Purcaru had that intention is a question of fact, to be determined from the
    circumstances at the time of the transactions. If a challenger raises evidence
    of one or more badges of fraud that can give rise to an inference of an
    intent to defraud, the evidential burden then falls on those defending the
    transaction to adduce evidence showing the absence of fraudulent intent (
Re
    Fancy
, (1984), 46 O.R. (2d) 153 (H.C.J.)),
Nuove Ceramiche

Ricchetti
    S.p.A. v. Mastrogiovanni
, [1988] O.J. No. 2569 (H.C.J.), pp. 4, 5).

[6]

Among the badges of fraud identified by the trial judge in this case
    are: (1) the transactions between Mr. Purcaru and Ms. Seliverstova were not at arms
    length, (2) the transactions were not only secretive, they were in violation of
    Mr. Purcarus disclosure obligations under the
Family Law Rules
, and
    (3) the transactions were made without consideration.

[7]

The evidential burden then fell on Ms. Seliverstova to adduce evidence
    to show that the purpose of the transactions was not to defeat Mr. Purcarus
    creditors. Both Ms. Seliverstova and Mr. Pucaru testified at trial, and their
    explanations were found to be lacking in cogency and credibility. Ms.
    Seliverstovas explanation of the transactions  that funds transferred to her
    from Mr. Purcaru were repayments of significant unsecured and undocumented
    loans that she had previously made to Mr. Purcaru  was rejected because it was
    not supported by documentary evidence and ran contrary to the evidence of how
    Ms. Seliverstova otherwise conducted her financial affairs. The trial judge
    found that she was very careful with her funds, moving funds around to take
    advantage of modest improvements in interest rates, borrowing from credit cards
    with low introductory rates, and protecting her financial interest by
    registering a mortgage from her daughter when she purchased a residence in her
    daughters name. He therefore found it incredible that someone who was so careful
    and cautious in all her financial dealings, would make large, unsecured, and
    undocumented loans. The trial judge found the documentary evidence proffered by
    Ms. Seliverstova to be incomplete and unpersuasive. He did not believe the account
    she gave as to the source of the funds that she used for the purchases of the
    two condominiums, including her evidence that funds that she had received from
    a bank account in Cyprus originated with her mother in Russia, rather than Mr.
    Pucaru. He concluded that she was acting as a conduit to put Mr. Pucarus
    assets beyond the reach of the respondent.

[8]

In short, the trial judge found the transactions to have been
    fraudulent, based on inferences that he made from the factual record. As this
    court held in
FL Receivables Trust 2002-A (Administrator of) v. Corbrand
    Foods Ltd.
, 2007 ONCA 425, such findings are entitled to deference, and
    there is no basis upon which we could interfere with them. There was no
    reversal of the burden, as argued by the appellants, or requirement that they
    prove a negative. The trial judge found facts that supported an inference of
    fraud. The explanations provided by the appellants were simply not believable.

Ground 2: The trial judge erred by not assessing the intent at
    the time of the transactions

[9]

The appellants argue, rightly, that the requisite fraudulent intent is
    to be assessed at the time of the impugned transactions:
Business
    Development Bank of Canada v. Samarsky
, 2012 ONSC 3002, para. 22. They
    contend that the trial judge erred by attributing to the appellants knowledge,
    in 2006 and 2008, of the outcome of the family law proceedings between Mr.
    Purcaru and the respondent that culminated in the order of Paisley J. in 2009.

[10]

The
    appellants argue that until that order was made, neither Ms. Seliverstova nor
    Mr. Purcaru could have known that Mr. Purcaru would have such a substantial liability
    to the respondent. Therefore, in 2006 and 2008 when the condominiums were
    purchased, they could not have formed the intent to defeat the claims of the
    respondent.

[11]

I
    reject this argument for the reasons given by the trial judge, who found that
    once the applicant commenced her application for divorce and corollary relief,
    the applicant became a contingent creditor of Dan Purcaru with 100% likelihood
    of obtaining some award or settlement. Additionally, the trial judge found, on
    the evidence, including Ms. Seliverstovas attendances in court during the
    proceedings, that Ms. Seliverstova also knew of the divorce proceedings at the
    time of the transactions and engaged in the transactions with the intent to defeat
    the respondents claims against Mr. Purcaru:

The extensive efforts to which they went to launder Dan
    Purcarus funds and hide the truth of the transactions that they conducted in
    light of the multiple badges of fraud surrounding the transactions especially,
    in light of Marina Seliverstovas knowledge of the divorce proceedings, leads
    me to readily conclude that Marina Seliverstova was an active and knowing
    participant in Dan Purcarus effort to defeat the rights of the applicant.

[12]

I
    reject this ground of appeal.

Ground 3: Trial judge erred by speculating and making
    impermissible inferences

[13]

The
    appellant argues that the trial judge erred in law by engaging in speculation
    in order to make factual findings that were not supported by the evidence.

[14]

I
    do not agree. The trial judge surveyed the records of the financial dealings of
    Mr. Purcaru and Ms. Seliverstova that were available to him. He did not, on his
    reckoning, have a complete picture of their dealings. He concluded that this
    was deliberate:

It was painfully obvious during the trial that Dan Purcaru and
    Marina Seliverstova created an impenetrable web of transactions and made only
    partial disclosure to try to support Marina Seliverstovas story.  While
    Marina Seliverstova has made some disclosures which she characterized as
    extensive, in almost every case there are breaks or discontinuity in the line
    of transactions so that one can never be sure as to precisely where money
    originated, was mixed around, and then ended up.  It might be as she claims. 
    But it may not be so.  For the reasons stated in the specific situations
    below, I do not accept the credibility of Marina Seliverstovas evidence. 
    In short, I do not believe her.

[15]

The
    trial judge made findings of fact from the evidence that was before him and drew
    inferences from those findings. The appellants have not identified any impermissible
    speculation.

Ground 4: Error in fixing prejudgment interest rate

[16]

The
    appellants argue that the trial judge erred in exercising his discretion to fix
    a rate of prejudgment interest other than the rate prescribed by s. 127 of the
Courts
    of Justice Act
, R.S.O. 1990, c. C.43. This argument was not strenuously
    pursued in the oral hearing, and I see no merit in it.

Fresh evidence

[17]

The
    appellants sought leave to introduce as fresh evidence on the appeal an
    affidavit from Ms. Seliverstova providing additional bank records from Bank of
    Montreal and Hellenic Bank in Cyprus, in support of her argument that the funds
    she received from Hellenic Bank had come from her mother in Russia and not Mr.
    Purcaru.

[18]

I
    would deny leave to introduce fresh evidence. This evidence does not satisfy
    the
Palmer
test for the admissibility of fresh evidence. It does not
    show the source of the funds that were in the account, and is thus of no
    assistance in resolving the matters in dispute in this litigation. Neither am I
    persuaded that it could not have been discovered previously by Ms.
    Seliverstova, exercising due diligence.

Disposition

[19]

I
    would deny leave to introduce fresh evidence, and would dismiss the appeal. I
    would award costs to the respondent on a partial indemnity basis in the amount
    of $25,000, inclusive of disbursements and HST.

Released: PDL  AUG 2 2016

B.W. Miller J.A.

I agree. Robert J.
    Sharpe J.A.

I agree. P. Lauwers
    J.A.


