Creditors May Invalidate Debtor Fraudulent Transfers Occurring Long Before Any Debtor-Creditor Relationship Established

Introduction

The Ontario Court of Appeal ("ONCA") in Ontario Securities Commission v Camerlengo Holdings Inc.¹ has arguably expanded the scope of what may be a fraudulent conveyance under s. 2 of the Fraudulent Conveyances Act ("FCA"). The FCA gives a court the discretion to invalidate transfers of property carried out to avoid effective enforcement by creditors and contingent creditors. In its decision, the ONCA ruled that a creditor may still pursue the invalidation of a transaction as a fraudulent conveyance under the FCA even if the creditor had no commercial or contractual relationship with the debtor at the time that the debtor had effected a transfer to insulate their assets or property.