



COURT OF APPEAL FOR ONTARIO

CITATION: Midland Resources Holding Limited
    v. Bokserman, 2022 ONCA 73

DATE: 20220128

DOCKET: C69468 & C69481

Pardu, Roberts and Miller JJ.A.

BETWEEN

Midland
    Resources Holding Limited

Plaintiff (Respondent)

and

Eugene Bokserman and Elena
    Krasnov

Defendants (Appellants)

Gregory Sidlofsky, for the appellants

Kayla Theeuwen and Ken Prehogan, for
    the respondent

Michael Shtaif, acting in person as
    intervenor

Heard: January 18, 2022 by video conference

On
    appeal from the order of Justice Edward M. Morgan of the Superior Court of
    Justice, dated May 3, 2021 and the costs order dated May 25, 2021.

REASONS FOR DECISION

[1]

On February 19, 2014, the appellant Bokserman learned that judgment
    would soon issue against him for $1,500,000 in favour of Midland Resources
    Holding Limited [Midland Guernsey]. On March 4, 2014, Bokserman and his wife
    Krasnov transferred their jointly held home [Rollscourt] into her name alone.
    The home was Boksermans only significant asset.

[2]

In 2018, Midland Guernsey started a fraudulent conveyance action against
    Bokserman and his wife, after discovering that the transfer of title had
    occurred, apparently for no consideration.

[3]

In 2019, Midland Guernsey assigned its rights to the original judgment
    to a British Virgin Islands company, Midland Resources Holding Limited, [Midland
    BVI]. Midland BVI obtained an order in this action to continue the proceedings
    in late 2019 and served the order on Bokserman and Krasnov. Midland Guernsey was
    wound up and dissolved in accordance with an order of the Royal Court of
    Guernsey dated November 13, 2019.

The motion judges decision

[4]

The respondent moved successfully for summary judgment. At the hearing,
    the summary conviction judge refused to admit fresh evidence proffered by the appellants
    The appellants attempted to demonstrate that Midland Guernsey had not complied
    with the legal requirements of its home jurisdiction, Guernsey, to validly
    transfer its interest in the judgment to Midland BVI because it had failed to
    give notice of the assignment to the judgment debtors.

[5]

The summary judgment motion had been set for an earlier date, but the
    appellants fired their lawyers on the eve of that hearing and moved for an
    adjournment, which Pinto J. granted on the condition that they not file any
    additional material on the summary judgment motion.

[6]

The motion judge found that the Rollscourt conveyance
    was fraudulent and granted Midland BVI a tracing order and constructive trust
    over a portion of a new property purchased by Krasnov with proceeds from a
    later sale of Rollscourt. He found that Krasnov must have known that the
    conveyance was intended to defeat Midland BVIs claim; this was clear from her
    instructions to her lawyer to complete the conveyance quickly and her failure
    to advise the lawyer of the 2014 judgment. The motion judge held there was no
    proof Krasnov actually paid Bokserman $391,625 as she claimed, and there was no
    proof that any money paid was not simply returned to their joint family funds.
    The land transfer tax document claimed the consideration was for $2.00 and
    natural love and affection.

Arguments on appeal

[7]

The appellants argue that the motion judge erred
    by:

1.

Granting summary judgment despite conflicting
    evidence on whether the Rollscourt conveyance was fraudulent;

2.

Dismissing the appellants motion to file
    additional evidence;

3.

Determining that Midland BVIs claim was not
    statute-barred; and

4.

Awarding Midland BVI $175,000 in costs on a substantial indemnity
    basis.

[8]

We do not accept these arguments.

Did the motion judge err in concluding on the
    summary judgment motion that the transfer was fraudulent?

[9]

Despite the contents of the land transfer tax
    documents, Krasnov produced an agreement and promissory note purporting to
    record that she purchased Boksermans interest in the property for $391,625,
    calculated on the basis of 50% of the 2012 appraised value of the property less
    the amount owing on encumbrances. The promissory note required Krasnov to pay
    Bokserman $20,000.00 per month until the total was paid. She said she did not
    want to fund his appeal from the original judgment. Krasnov told the lawyer retained
    for the transfer that she wanted the transaction completed quickly. Neither
    Bokserman nor Krasnov told the lawyer of the 2014 judgment. Krasnov claimed
    that it never occurred to her that the transfer would frustrate Midland BVIs
    ability to collect on the judgment, although she knew the judgment would be
    enforceable and that Bokserman had no other assets.

[10]

The appellants argue that the motion judge made
    findings of credibility on contested evidence and disregarded supporting
    documents filed by the appellants. They say he ought to have ordered a trial.

[11]

In
Purcaru v. Seliverstova
,
    2016 ONCA 610, 80 R.F.L. (7th) 28, at para. 5, this court held that a plaintiff
    challenging a transaction as fraudulent has the burden of proving on the
    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
, R.S.O. 1990, c. F.29. If the plaintiff
    establishes, however, that the transaction is tainted by one or more badges of
    fraud that could 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: para. 5. Badges of fraud
    may include such matters as non-arms length transactions or transactions
    without consideration: para. 6. Here the defendants conceded that there were
    badges of fraud which were associated with the transfer of property to Krasnov
    alone.

[12]

Rule 20.04(a) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194, provides that a court shall grant summary judgment if:

(a)
the court is satisfied that there is no
    genuine issue requiring a trial with respect to the claim or defence[.]

[13]

Rule 20.04(2.1) enables a summary judgment
    motion judge to weigh the evidence, evaluate the credibility of a deponent, and
    draw any reasonable inference from the evidence unless it is in the interests
    of justice for such powers to be exercised only at trial:
Rules of Civil
    Procedure
.

[14]

This was not a trial requiring assessment of
    competing narratives of an event or of opposing parties credibility. The
    appellants failed to satisfy the motion judge that they lacked a wrongful
    intent. They had full opportunity to advance any evidence about their intent
    that was relevant. They were cross-examined and the motion judge was well
    equipped to evaluate their evidence. A summary judgment motion was a
    proportionate and efficient way to deal with the dispute.

[15]

The motion judges conclusion that Krasnov had
    not proven that she really paid Bokserman for the transfer and that the
    impugned transfer was intended to shield Boksermans interest in Rollscourt
    from enforcement of the judgment against him was amply supported by the
    evidence, and no error on his part has been shown. Although the agreement stated
    that [t]he parties are signing this separation agreement voluntarily the parties
    never separated. This lends further support to the motion judges conclusion
    that the agreement did not reflect reality.

Did the motion judge err in refusing to admit
    the fresh evidence?

[16]

Authorized by an order of the Royal Court of
    Guernsey dated August 13, 2019, Midland Guernsey assigned all its rights in the
    judgment against Bokserman to Midland BVI. On October 9, 2019 Midland Guernsey
    moved in this action for an Order to Continue this action on behalf of Midland
    BVI. The order was issued and entered on December 16, 2019, and then served on
    the appellants. The order recites the fact of the assignment and provides on
    its face that a party who wishes to set aside or vary this order must make a
    motion to do so immediately after the order comes to the partys attention.

[17]

On January 11, 2021, despite the order of Pinto
    J. stipulating that no further material could be filed on the summary judgment
    motion, the appellants served a motion for leave to admit fresh evidence. They
    say the assignment of the judgment was not validly signed because it was not
    witnessed and in any event was ineffective because it did not comply with
    Guernsey law requiring notice to the judgment debtors.

[18]

The motion judge discounted the evidence of a
    former romantic partner of a signing party to the assignment, saying she did
    not witness the document, contrary to her purported signature on the assignment.
    There was an undisclosed history between the signing party and his romantic
    partner as well as ongoing legal feuding; the motion judge concluded that it
    was inappropriate to give any weight to the romantic partners testimony.

[19]

Further, the motion judge refused to admit the
    evidence concerning Guernsey law and the validity of the assignment of the
    judgment in that jurisdiction. He saw no basis upon which an Ontario court
    could rule on the validity of a transfer authorized by a Guernsey court for
    assets within that jurisdiction, particularly when no steps had been taken in
    that jurisdiction to set aside the assignment or authorization.

[20]

Midland BVI resurrected Midland Guernsey to give
    the required notice of the assignment the appellants say was lacking. The fresh
    evidence from the appellants Guernsey counsel indicated that the restoration
    of Midland Guernsey on February 5, 2021 enabled that corporation to validly
    give notice of the assignment of the judgment to Midland BVI. The fresh
    evidence also indicated that the assignment had been perfected and taken effect
    as of February 2021.

[21]

The motion to introduce fresh evidence was
    served over a year after the Order to Continue was obtained and less than a
    month before the date fixed for argument of the summary judgment motion. The
    appellants filed the motion in spite of the endorsement of Pinto J. stipulating
    that no further evidence could be filed. There was thus a sufficient basis to
    refuse to admit the fresh evidence.

[22]

One of the purposes of giving notice when a
    corporation divests itself of assets or dissolves is to ensure that creditors
    of a company are not left without recourse. The appellants are not creditors
    but were debtors of Midland Guernsey.

[23]

Dealing with the possibility of prejudice from
    the debtors point of view, there were no payments on the judgment made to
    Midland Guernsey because Bokserman did not have notice of the assignment to
    Midland BVI.

[24]

There is no indication that failure to give
    Bokserman notice in August 2019 prejudiced him in any way, especially as the
    Order to Continue, advising of the assignment, was served some four months
    later.

[25]

In any event, given that any procedural flaws
    associated with the earlier assignment have been corrected, there is no doubt
    that a new order to continue could validly be issued. An order to continue,
    signed by the Registrar, is in the nature of an administrative action. If
    necessary, it would have been reasonable to issue a new order to continue:
Outfront Media
    Canada LP v. Clarity Outdoor Media Inc.
, 2017 ONSC 2136, at para. 68.

[26]

This discretionary decision to refuse to admit
    the fresh evidence is entitled to deference. Informed by the context, and
    reading the reasons as a whole, we are not persuaded that the motion judge
    erred in principle or misapprehended the evidence, or that his decision to
    refuse to admit the evidence was unreasonable. In the absence of the fresh
    evidence and of an order setting aside the order to continue, his conclusion
    that Midland BVI had standing to continue the action was appropriate.

Did the motion judge err in concluding that
    the action was not barred by the expiry of a limitation period?

[27]

The appellants took the position before the
    motion judge that the respondent commenced its action after the expiry of the
    two-year limitation period stipulated by the
Limitations Act
,

2002
, S.O. 2002, c. 24, Sch. B,
    s. 4.

[28]

The judgment against Bokserman was issued and
    entered on April 14, 2014. The respondent obtained a writ of seizure and sale
    against Bokserman and filed it on May 2, 2014. Bolstered by the affidavit of a
    lawyer indicating that it was his practice to conduct title searches of
    property owned by judgment debtors frequently, even if there was nothing to
    indicate that a creditor ought to do so, the appellants argued that the
    respondent ought to have performed a title search when it filed the writ of
    seizure and sale and would have discovered the impugned transfer had been registered
    on March 5, 2014. The respondent issued the Statement of Claim in this action
    on April 12, 2018, nearly four years after the writ of seizure and sale was
    filed.

[29]

The respondent points out that Bokserman took
    the position that the original judgment was not enforceable until his appeals
    and requests for reconsideration of the appeals were completed in January 2018.
    He refused to attend a judgment debtor examination before that date.

[30]

The motion judge stated that the 10-year
    limitation period under s. 4 of the
Real Property Limitations Act
,
    R.S.O. 1990, c. L.15, was applicable to claims under the
Fraudulent
    Conveyances Act
to set aside a conveyance of real property, citing
Anisman v.
    Drabin
sky
, 2020 ONSC 1197,
    76 C.B.R. (6th) 230 (
Anisman (ONSC)
), affd 2021 ONCA 120 (
Anisman
    (ONCA)
).

[31]

In any event, the motion judge held that the
    claim was not discoverable until this court dismissed Boksermans request for
    reconsideration of the dismissal of his appeal on January 15, 2018. He
    concluded that nothing could have alerted the respondent of the need to search for
    title to any properties known to be associated with Bokserman before that date,
    as the latter took the position that there was nothing to enforce.

[32]

Here the argument turned upon a finding as to
    when the respondent ought to have known of the material facts upon which a
    plausible inference of liability on the part of the appellants could be drawn:
Grant Thornton
    v. New Brunswick
, 2021 SCC 3, 461 D.L.R. (4th) 613, at para.
    3.  This was not a determination made upon an assessment of the actual
    subjective intention of a party, but rather was founded on largely uncontested
    facts. Moreover, the motion judge was not obliged to accept the evidence of a
    lawyer that the respondent ought to have begun a title search for any
    properties in which Bokserman may have had an interest as soon as it filed a
    writ of seizure and sale against him.

[33]

This determination was suitable for a summary
    judgment motion, and the motion judge did not err in dealing with the issue.

[34]

We have not had the benefit of full argument on
    the issue of whether the
Real Property Limitations Act
applies to
    proceedings under the
Fraudulent Conveyances Act
. Under these
    circumstances, prudence dictates that we refrain from opining on that issue. In
    any event, as in
Anisman (ONCA)
,
the further
    conclusion that the claim was not discoverable until the judgment was final
    because the appeal process was exhausted was reasonable and was not tainted by
    palpable and overriding error.

Should leave to appeal costs be granted?

[35]

We would not grant leave to appeal the award of
    substantial indemnity costs in the sum of $175,000 against the appellants. A
    successful prosecution of an action to set aside a fraudulent conveyance is by
    its nature suitable for an award of substantial indemnity costs. We are not
    persuaded that there are strong grounds upon which this court could find that
    the motion judge erred in exercising his discretion:
McNaughton
    Automotive Ltd. v. Co-operators General Insurance Co.
, 2008
    ONCA 597, 95 O.R. (3d) 365, at paras. 23-26.

[36]

Nor would we accede to the intervenors request
    that we grant leave to appeal the $30,000 in costs ordered against him. The
    arguments he made before the motion judge were lengthy and went well beyond
    what was in issue in this case.

[37]

Over $8 million (U.S.) remains unsatisfied on
    the original judgment against Shtaif. No payments have been made towards the
    judgment. The core of  Shtaifs argument in this court and before the motion
    judge is that Certificates of Judgment issued on October 15, 2019 and February
    5, 2020 by the Registrar of the Superior Court of Justice should be set aside
    on the ground that Midland BVI was not a valid assignee of the judgment, had no
    standing to obtain those certificates, and failed to make full and fair
    disclosure in obtaining them. His real concern is the use that might be made of
    those certificates in Alberta where Midland BVI is taking steps to register
    that judgment.

[38]

Obtaining a certificate of a court document is
    not a step in a court proceeding. Anyone may obtain a certified copy of a court
    document without standing or explanation. Rule 4.03 of the
Rules of Civil
    Procedure
provides that [t]he registrar shall provide a certified copy of
    a document that is in the court file to a person who is entitled to see the
    document under s. 137 of the
Courts of Justice Act
,

if the person files a requisitionand
    pays the prescribed fee, if any. Section 137 of the
Courts of
    Justice Act
, R.S.O. 1990, c. C.43
,
provides that a person is entitled to see any document filed in a civil
    proceeding in a court, unless other legislation provides otherwise or there is
    a sealing order.

[39]

A nosy neighbour, a business competitor, a
    journalist, or an ex-spouse can all get certified copies of court documents
    without explanation or standing. There is no basis to set aside the certified
    copies of the judgments issued here.

[40]

The issue of a certificate of judgment is an
    administrative act which simply attests that judgment was in fact granted in
    Ontario. There can be no doubt here that the certificates reflect that
    judgment.

[41]

The intervenor makes an argument about the
    viability of proceedings against him in Alberta. He is not a party to the
    present action. The Alberta courts will make their own assessment of the
    proceedings against the intervenor, based on the evidence and arguments before
    them. Nothing in this decision binds or precludes the Alberta courts from
    proceeding as they see fit.

[42]

It does not appear that any order was made
    granting Shtaif leave to intervene in this court. Nonetheless his factum was
    filed and we permitted him to make his legal argument. His arguments in this
    court extended well beyond what was in issue in this case. An order granting
    intervenor status in the trial court does not mean that status continues to an
    appellate court. The issues may be quite different on appeal.

[43]

The appeal is accordingly dismissed, with costs
    payable by the appellants to the respondent in the sum of $16,777 on a partial
    indemnity basis, and costs payable by the intervenor in favor of the respondent
    in the sum of $8,000.00.

G. Pardu J.A.

L.B. Roberts J.A.

B.W. Miller J.A.


