



COURT OF APPEAL FOR ONTARIO

CITATION: 2057552 Ontario Inc. v. Dick, 2016 ONCA 7

DATE: 20160106

DOCKET: C60608

Doherty, MacPherson and van Rensburg JJ.A.

BETWEEN

2057552 Ontario Inc.

Plaintiff (Appellant)

and

Charles Dick, Esther Dick, Meir Dick,
Jacqueline Milevsky (nee Dick)
,
Joel
    Dick
,
8800383 Canada Inc.
, ABC Variety
    Services Inc. and ABC Variety

Defendants (
Respondents
)

Eliezer Karp, for the appellant

Fred Tayar and Colby Linthwaite, for the respondents

Heard: December 18, 2015

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated May 19, 2015.

ENDORSEMENT

[1]

The personal respondents, Jacqueline Milevsky and Joel Dick, lent money
    to an ATM business run by their parents, Charles and Esther Dick, in exchange
    for third and fourth mortgages on the parents home.

[2]

The appellant 2057552 Ontario Inc. was a partner in a second ATM
    business with the Dicks. It alleged that Charles and Esther Dick
    misappropriated funds from the partnership business. The appellant moved for
    summary judgment against the respondent Dick adult children and 8800383 Canada
    Inc., a company created by the children. The appellants principal argument was
    that the mortgages received by the respondent children from their parents were
    fraudulent conveyances under the
Fraudulent Conveyances Act
(
FCA
).

[3]

The motion judge dismissed the appellants motion. He also granted
    summary judgment in favour of the respondents and dismissed the appellants
    action against the respondents, leaving intact the action against Charles and
    Esther Dick.

[4]

The appellant appeals on three grounds.

[5]

First, the appellant contends that the motion judge erred by dismissing
    the fraudulent conveyance summary judgment motion. It says that where there are
    suspicious transactions between family members, the burden shifts to the party
    seeking to justify the transaction. In short, says the appellant, a transfer of
    a property interest between family members is a badge of fraud and, in this
    case, the respondents did not rebut this inference.

[6]

We do not accept this submission. The motion judge made findings of fact
    relevant to a determination of whether there had been a fraudulent conveyance
    under the
FCA
. He found that there was good consideration for the
    mortgages and no intent to defeat, hinder or defraud creditors. There was
    documentary evidence relating to the money advanced to the senior Dicks by the
    respondents from their personal funds and borrowed from several third parties
    to support these conclusions. In our view, the motion judges factual findings
    on these issues, made in a Rule 20 context, are entitled to substantial
    deference: see
Hryniak v. Mauldin
, 2014 SCC 7, at paras. 80-81.

[7]

Second, the appellant asserts that the motion judge erred in dismissing
    its entire action against the respondents because there were still outstanding
    claims not dealt with at the summary judgment motion.

[8]

We disagree. The appellants notice of motion for summary judgment made
    it clear that the only claim against the respondents was the claim under the
FCA
:

THE MOTION IS FOR:

1.

An order granting Summary Judgment of the claims of the Plaintiffs
    against 8800383 Canada Inc., Jacqueline Milevsky, and Joel Dick (the Mortgage
    Defendants) and declaring that
the Mortgages of the Mortgage Defendants
    against the Property are void as fraudulent conveyances
. [Emphasis added.]

[9]

The appellant was alive to the full range of claims available to it
    against the various defendants. In its Statement of Claim, the appellant
    advanced claims of conversion, misappropriation and unjust enrichment against
    Charles and Esther Dick, but not against the respondents. Having made a tactical
    decision to proceed to summary judgment against the respondents on a claim of
    fraudulent conveyance, the appellant cannot now seek to add new claims that
    were not included in the Statement of Claim in the first place. In short, the
    motion judge dealt, appropriately, with what was in front of him.

[10]

Third,
    the appellant relies on the
Assignments and Preferences Act
(
APA
)
    to support a contention that the challenged mortgages are void against
    unsecured creditors.

[11]

We
    do not accept this submission. Before the motion judge, as well as in the Statement
    of Claim, the appellant proceeded on the basis of the
FCA
alone. It
    cannot now start over with the
APA
.

[12]

The
    appeal is dismissed. The respondents are entitled to their costs of the appeal
    fixed at $5,000, inclusive of HST and disbursements.

Doherty
    J.A.

J.C.
    MacPherson J.A.

K. van
    Rensburg J.A.


