Assignments and Preferences Act, R.S.O. 1990, c. A.33

• Jurisdiction: Ontario

Assignments and Preferences Act

R.S.O. 1990, CHAPTER A.33

Consolidation Period: From March 1, 2022 to the e-Laws currency date.

Last amendment: 2021, c. 4, Sched. 3, s. 19.

CONTENTS

Definition

1 In this Act,

“judges” means a judge of the Superior Court of Justice. R.S.O. 1990, c. A.33, s. 1; 2001, c. 9, Sched. D, s. 14.

Section Amendments with date in force (d/m/y)

2001, c. 9, Sched. D, s. 14 - 29/06/2001

If judge disqualified

2 If a judge is disqualified to act in a matter under this Act, another judge may do so. R.S.O. 1990, c. A.33, s. 2.

Nullity of certain confessions of judgment, etc.

3 Every confession of judgment, cognovit actionem or warrant of attorney to confess judgment given by a person, being at the time in insolvent circumstances or unable to pay his, her or its debts in full or knowing himself, herself or itself to be on the eve of insolvency, voluntarily or by collusion with a creditor with intent thereby to defeat, hinder, delay or prejudice creditors wholly or in part, or to give one or more creditors a preference over other creditors or over any one or more of them, is void as against the creditors of the person giving the same and is ineffectual to support any judgment or execution. R.S.O. 1990, c. A.33, s. 3.

Nullity of gifts, transfers, etc., made with intent to defeat or prejudice creditors

4 (1) Subject to section 5, every gift, conveyance, assignment or transfer, delivery over or payment of goods, chattels or effects, or of bills, bonds, notes or securities, or of shares, dividends, premiums or bonus in any bank, company or corporation, or of any other property, real or personal, made by a person when insolvent or unable to pay the person’s debts in full or when the person knows that he, she or it is on the eve of insolvency, with intent to defeat, hinder, delay or prejudice creditors, or any one or more of them, is void as against the creditor or creditors injured, delayed or prejudiced. R.S.O. 1990, c. A.33, s. 4 (1).

Unjust preferences

(2) Subject to section 5, every such gift, conveyance, assignment or transfer, delivery over or payment made by a person being at the time in insolvent circumstances, or unable to pay his, her or its debts in full, or knowing himself, herself or itself to be on the eve of insolvency, to or for a creditor with the intent to give such creditor an unjust preference over other creditors or over any one or more of them is void as against the creditor or creditors injured, delayed, prejudiced or postponed. R.S.O. 1990, c. A.33, s. 4 (2).

When there is presumption of intention if transaction has effect of unjust preference

(3) Subject to section 5, if such a transaction with or for a creditor has the effect of giving that creditor a preference over the other creditors of the debtor or over any one or more of them, it shall, in and with respect to any action or proceeding that, within sixty days thereafter, is brought, had or taken to impeach or set aside such transaction, be presumed, in the absence of evidence to the contrary, to have been made with the intent mentioned in subsection (2), and to be an unjust preference within the meaning of this Act whether it be made voluntarily or under pressure. R.S.O. 1990, c. A.33, s. 4 (3).

Idem

(4) Subject to section 5, if such a transaction with or for a creditor has the effect of giving that creditor a preference over the other creditors of the debtor or over any one or more of them, it shall, if the debtor within sixty days after the transaction makes an assignment for the benefit of the creditors, be presumed, in the absence of evidence to the contrary, to have been made with the intent mentioned in subsection (2), and to be an unjust preference within the meaning of this Act whether it be made voluntarily or under pressure. R.S.O. 1990, c. A.33, s. 4 (4); 1993, c. 27, Sched.

“Creditor” for certain purposes to include surety and endorser

(5) The word “creditor” when used in the singular in subsections (2), (3) and (4) includes any surety and the endorser of any promissory note or bill of exchange who would upon paying the debt, promissory note or bill of exchange, in respect of which the suretyship was entered into or the endorsement was given, become a creditor of the person giving the preference within the meaning of those subsections. R.S.O. 1990, c. A.33, s. 4 (5).

Section Amendments with date in force (d/m/y)

1993, c. 27, Sched. - 31/12/1991

Assignments for benefit of creditors and good faith sales, etc., protected

5 (1) Nothing in section 4 applies to an assignment made to the sheriff for the area in which the debtor resides or carries on business or, with the consent of a majority of the creditors having claims of $100 and upwards computed according to section 24, to another assignee resident in Ontario, for the purpose of paying rateably and proportionately and without preference or priority all the creditors of the debtor their just debts, nor to any sale or payment made in good faith in the ordinary course of trade or calling to an innocent purchaser or person, nor to any payment of money to a creditor, nor to any conveyance, assignment, transfer or delivery over of any goods or property of any kind, that is made in good faith in consideration of a present actual payment in money, or by way of security for a present actual advance of money, or that is made in consideration of a present actual sale or delivery of goods or other property where the money paid or the goods or other property sold or delivered bear a fair and reasonable relative value to the consideration therefor. R.S.O. 1990, c. A.33, s. 5 (1).

Transfer to creditor of consideration for sale invalid

(2) In case of a valid sale of goods or other property and payment or transfer of the consideration or part thereof by the purchaser to a creditor of the vendor under circumstances that would render void such a payment or transfer by the debtor personally and directly, the payment or transfer, even though valid as respects the purchaser, is void as respects the creditor to whom it is made. R.S.O. 1990, c. A.33, s. 5 (2).

Effect of assignment not in accordance with Act

(3) Every assignment for the general benefit of creditors that is not void under section 4, but is not made to the sheriff nor to any other person with the prescribed consent of creditors, is void as against a subsequent assignment that is in conformity with this Act, and is subject in other respects to the provisions thereof until and unless a subsequent assignment is executed in accordance therewith. R.S.O. 1990, c. A.33, s. 5 (3).

Security given up upon void payment to be returned

(4) Where a payment has been made that is void under this Act and any valuable security was given up in consideration of the payment, the creditor is entitled to have the security restored or its value made good to him before, or as a condition of, the return of the payment. R.S.O. 1990, c. A.33, s. 5 (4).

Exceptions:

(5) Nothing in this Act,

wages

(a) affects the Wages Act or prevents a debtor providing for payment of wages due by him or her in accordance with that Act;

surrender of securities

(b) affects any payment of money to a creditor where the creditor, by reason or on account of the payment, has lost or been deprived of, or has in good faith given up, any valid security held for the payment of the debt so paid unless the security is restored or its value made good to the creditor;

exchange of securities

(c) applies to the substitution in good faith of one security for another security for the same debt so far as the debtor’s estate is not thereby lessened in value to the other creditors; or

certain securities to be valid

(d) invalidates a security given to a creditor for a pre-existing debt where, by reason or on account of the giving of the security, an advance in money is made to the debtor by the creditor in the belief that the advance will enable the debtor to continue the debtor’s trade or business and to pay the debts in full. R.S.O. 1990, c. A.33, s. 5 (5).

Residence of assignee

6 No person, other than a permanent resident of Ontario, shall be assignee under an assignment within this Act, nor shall any assignee delegate the duties as assignee to or appoint as deputy any person who is not a permanent resident of Ontario, and no charge shall be made or recoverable against the assignor or his estate for any services or other expenses of any such assignee, deputy or delegate of any assignee who is not a permanent resident of Ontario. R.S.O. 1990, c. A.33, s. 6.

Form of assignment for general benefit of creditors

7 Every assignment made under this Act for the general benefit of creditors, if the property is described in the words “all my personal property that may be seized and sold under execution and all my real estate, credits and effects”, or in words to the like effect, vests in the assignee all the real and personal estate, rights, property, credits and effects, whether vested or contingent, belonging to the assignor at the time of the assignment, except such as are by law exempt from seizure or sale under execution, subject, however, as regards land, to the Registry Act and the Land Titles Act. R.S.O. 1990, c. A.33, s. 7.

All assignments for general benefit of creditors to be subject to this Act

8 Every assignment for the general benefit of creditors, whether it is or is not expressed to be made under or in pursuance of this Act and whether the assignment does or does not include all the real and personal estate of the assignor, vests the estate, whether real or personal or partly real and partly personal, thereby assigned in the assignee therein named for the general benefit of creditors, and the assignment and the property thereby assigned is subject to all the provisions of this Act, and the same applies to the assignee named in the assignment. R.S.O. 1990, c. A.33, s. 8.

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