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Fraudulent Conveyance

Equity - Unjust Enrichment

Palkowski v. Ivancic (Ont CA, 2016)

In this case the Court of Appeal upheld a trial level finding of unjust enrichment against parties who had entered into a real estate conveyance to avoid creditors. The court held that there was no juristic reason for the resulting enrichment and deprivation, since the transaction was a 'sham':
[8] The trial judge found that the appellant had been enriched and that there was a corresponding deprivation on the part of the respondents. He concluded that there was no juristic cause to justify the enrichment. The appellant submits that in this respect the trial judge erred because the existence of a contract can constitute a juristic reason for an enrichment. (See: Garland v. Consumers’ Gas Co. 2004 SCC 25 (CanLII)). The existence of the agreement of purchase and sale, they argue, constitutes an absolute bar to a claim for unjust enrichment.

[9] This submission ignores the trial judge’s unchallenged finding with respect to the agreement of purchase and sale. The trial judge found that the agreement was a “sham” transaction. Thus, as between the appellant and respondent, there was no contract to bar the claim for unjust enrichment.

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