Written by: Irvin Schein

In the interesting case of Indcondo Building Corporation v. Sloan, released July 18, 2012, the Ontario Court of Appeal dealt with a situation in which a couple attempted to use the bankruptcy process to avoid an action attacking the husband’s transfer of his matrimonial home to his wife as a fraudulent conveyance.

In 2001, Indcondo Building Corporation obtained a judgment against one David Sloan for about $8 million.  After obtaining the judgment, Indcondo found out that Mr. Sloan had transferred title to his home to his wife about 45 days after having been served with the Statement of Claim issued by Indcondo.

A couple attempted to use the bankruptcy process to avoid an action attacking the husband's transfer of his matrimonial home to his wife as a fraudulent conveyance.

As a result, in 2002, Indcondo sued the Sloans to set aside that transfer as a fraudulent conveyance.

Two years later, Mr. Sloan declared bankruptcy.  That had the effect of bringing Indcondo’s action to a halt.

Shortly thereafter, Indcondo asked the Trustee in Bankruptcy whether or not he planned to continue the attack on the conveyance of the matrimonial home.  The Trustee indicated that because the estate had no money, any such action would have to be undertaken by Mr. Sloan’s creditors.

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