Vern-View Investments Inc. v. Hale et al., (1991) 8 B.C.A.C. 17 (CA)

• Judge: Macfarlane, Locke and Taylor, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: May 14, 1991
• Jurisdiction: British Columbia
• Citations: (1991), 8 B.C.A.C. 17 (CA)

Vern-View Inv. Inc. v. Hale (1991), 8 B.C.A.C. 17 (CA);

    17 W.A.C. 17

MLB headnote and full text

Vern-View Investments Inc. (plaintiff/respondent) v. Andrew Hale, Angelo DeSimone, Ever-Krisp Wholesale Produce (1987) Ltd. and Ever-Krisp Wholesale Produce Ltd. (defendants/appellants)

(CA012418)

Indexed As: Vern-View Investments Inc. v. Hale et al.

British Columbia Court of Appeal

Macfarlane, Locke and Taylor, JJ.A.

September 10, 1991.

Summary:

A former landlord of one of the defendant companies sued the defendants for damages for civil conspiracy, inducing breach of contract and for relief under the Fraudulent Conveyance Act and the Fraudulent Preference Act. The defendants were two companies and their shareholders. The plaintiff was successful in obtaining summary judgment against all defendants. The defendants appealed.

The British Columbia Court of Appeal allowed the appeal. The court varied the judgment below by restricting the judgment to one under the Fraudulent Conveyance Act against the defendant companies only.

Company Law - Topic 2666

Shareholders - Liability of - To creditors of company - A landlord obtained a judgment against a former corporate tenant (the old company) - The tenant's shareholders caused a new company to be incorporated - The assets and business of the old company were transferred to the new company via a "buy sell" agreement - Since the landlord was unable to execute its judgment against the old company, the landlord sued both companies and their shareholders for damages for conspiracy and interference with contractual relations and for relief under the fraudulent conveyances and preferences legislation - The trial judge granted summary judgment in favour of the landlord - The British Columbia Court of Appeal held that shareholders could not, absent fraud, be held liable for the companies dealings - See paragraphs 1 to 13.

Fraud and Misrepresentation - Topic 1455

Fraudulent conveyances and preferences - Impeachable conveyances and preferences under modern statutes - Conveyance to defeat or prefer creditors - A landlord obtained judgment against a former corporate tenant (the old company) - The tenant's shareholders incorporated a new company and transferred the assets of the old company to the new company via a "buy sell" agreement - The landlord, unable to execute its judgment against the old company, sued both companies for relief under the fraudulent conveyances and preferences legislation - The British Columbia Court of Appeal held that the "buy-sell" agreement was a fraudulent conveyance and the landlord was entitled to proceed against the new company to attach assets acquired from the old company to satisfy the judgment against the old company - See paragraphs 14 to 23.

Statutes Noticed:

Fraudulent Conveyance Act, R.S.B.C. 1979, c. 142, sect. 1 [para. 19]; sect. 2 [para. 18]; sect. 4 [para. 19].

Fraudulent Preference Act, R.S.B.C. 1979, c. 143, sect. 7 [para. 22].

Counsel:

A.W. Steiner, for the appellants;

   B.K. Loewen, for the respondent.

This appeal was heard in Kamloops, B.C., on May 14, 1991, before Macfarlane, Locke and Taylor, JJ.A., of the British Columbia Court of Appeal. The following decision of the court was delivered by Taylor, J.A., on September 10, 1991.