2022 QCCA 1544, 2022 QCCA 1544

O'Connor c. Giancristofaro 2022 QCCA 1544 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-029576-212 ( 500-11-056049-196 ) MINUTES OF HEARING DATE: November 11, 2022 CORAM: THE HONOURABLE MARTIN VAUCLAIR, J.A. STÉPHANE SANSFAÇON, J.A. PETER KALICHMAN, J.A. APPELLANT daniel f. o'connor ABSENT AND Unrepresented RESPONDENTS ezio giancristofaro branislava malobabic ASBENT AND Unrepresented IMPLEADED PARTY publication officer for the land registry office of montreal ABSENT and unrepresented On appeal from a judgment rendered on May 31, 2021 by the Honourable Thomas M.

Davis of the Superior Court , District of Montreal . NATURE OF THE APPEAL: Paulian action, Motion to amend and application to supplement the respondent’s brief for ruling on the question “are the Respondent denied fundamental and natural Justice by the Hon. Justice Geneviève Marcotte and for correcting errors in the judgment of the hon. Justice Stéphane Sansfaçon dated October 7, 2022 (Articles 9, 49, 377 C.C.P. ,

Section 7 of the Canadian Charter of rights and freedoms ,

Section 2 of the Canadian Bill of Rights , S.C. 1960,

article 23 of the Quebec Charter of human Rights and freedoms respondents ).

Clerk at the hearing : Lesly Ramos Courtroom: Pierre-Basile-Mignault HEARING Continuation of the hearing held on November 9, 2022. BY THE COURT: Judgment – see page 4. Lesly Ramos, Clerk at the hearing JUDGMENT [ 1 ] This is an appeal from a judgment of the Superior Court (the honourable Mr.

Justice Thomas Davis) rendered on May 31, 2021 [1] dismissing a Paulian action brought by the appellant. [ 2 ] The Court is also seized with an application by the appellant for permission to amend his conclusions and an application by the respondents who seek permission to raise additional arguments and to add additional conclusions. Both of these applications will be dealt with below. *** [ 3 ] The appellant, an attorney, rendered services for Monroi Inc. ( Monroi ), a company controlled by the respondent, Branislava Malobabic.

It was agreed that part of the payment for those services would be a 1% interest in Monroi. [ 4 ] The appellant did not receive his 1% interest. Along with several other disgruntled stakeholders of Monroi, he brought oppression proceedings against Ms. Malobabic and Monroi in 2006, seeking to have the shares issued to him. [ 5 ] By the time the oppression case was ready for trial in 2018, the appellant was the only plaintiff left, the others having settled their claims. On the first day of the trial he amended his proceedings.

In view of the fact that shares in Monroi appeared to be worthless, he instead sought compensation from both Monroi and Ms. Malobabic along with damages for moral prejudice and abuse of procedure. [ 6 ] After 38 days of trial, the appellant’s oppression action was granted and Ms. Malobabic was ordered to pay him various amounts which total, before interest, roughly $350,000. [2] [ 7 ] In satisfaction of that judgment, which is now final, the appellant attempted to seize Ms. Malobabic’s interest in a home she had purchased in 2001 with respondent, Ezio Giancristofaro.

After discovering that she had transferred her interest in the home to Mr. Giancristofaro in 2010, the appellant brought a Paulian action, alleging that the sale had been carried out in fraud of his rights and asking for a declaration that it not be set up against him. [ 8 ] The judge dismissed the action. His decision was based on two key findings. [3] First, while he agreed with the appellant that the transfer of Ms. Malobabic’s interest in the home was gratuitous, he was not convinced that she was insolvent at the time or had become insolvent as a result of the transfer.

Accordingly, he refused to apply the legal presumption that the transfer had been carried out with fraudulent intent. Second, while the judge agreed that the appellant was a creditor of Ms. Malobabic in 2010 when the transfer was carried out - ostensibly because she would be required to issue to him 1% of the shares in Monroi – it was only eight years later, in 2018 that she could have known she was the subject of a monetary claim.

He thus concluded that she could not have been presumed to know that the transfer would be prejudicial to the appellant. [ 9 ] The appellant raises two grounds of appeal. [ 10 ] First, he argues that the judge erred in concluding that he had not suffered a prejudice by virtue of the impugned transfer. According to the appellant, the fact that he amended his claim in 2018 should have had no impact on the judge’s analysis since he was recognized as having been a creditor at the time of the transfer. In his view, even without a monetary claim, the transfer clearly caused him prejudice and Ms.

Malobabic could not have been unaware of this. [ 11 ] Second, the appellant maintains that the judge erred in concluding that the proof was insufficient to establish that Ms. Malobabic was insolvent at the time of the transfer. Accordingly, he argues, Ms. Malobabic should have been presumed to be acting with fraudulent

intent when she transferred her half of the home to Mr. Giancristofaro. [ 12 ] While they have not filed an incidental appeal, the respondents raise several issues related to procedure and procedural fairness, including that the transcripts filed by the appellant should be stricken because they are unsigned and replete with errors.

They also raise arguments that indirectly attack decisions rendered by the Superior Court which are not at issue in appeal, including that the Paulian action should have been declared discontinued and that they should have been given access to information from the Land Registry in order to further their argument of prescription. * * * [ 13 ] For the reasons that follow, the appeal will be dismissed. [ 14 ] In order to succeed in first instance, the appellant was required to demonstrate that he suffered injury because the transfer of Ms. Malobabic’s interest in the home was made in fraud of his rights.

The judge concluded that fraudulent intent could not be presumed and had not been proven. There is no reviewable error in either of these conclusions. [ 15 ] In order for the presumption of fraudulent intent to apply, the appellant had to establish that the transfer was gratuitous and that Ms. Malobabic was either insolvent at the time it was made or became insolvent as a result of it. [4] The judge concluded that the transfer was indeed gratuitous but that the appellant had failed to establish insolvency.

The appellant suggests that the judge erred in reaching this conclusion because he failed to fully take account of Ms. Malobabic’s financial situation, including the eventual judgment against her in the oppression proceedings. [ 16 ] The judge’s assessment of solvency is a question of fact which merits considerable deference on appeal. [5] Absent a palpable and overriding error, the Court will not intervene. No such error has been demonstrated here. Although Ms. Malobabic appeared to have little in the way of assets at the time of the impugned transfer in 2010, she also had no personal debts, as the judge noted.

Furthermore, he rejected the appellant’s suggestion that the judgment rendered against Ms. Malobabic in the oppression proceedings should be considered. The judge clearly committed no error in refusing to include a debt that only came into existence in 2018 when assessing Ms. Malobabic’s solvency in 2010. [ 17 ] The appellant maintains that the judge also erred in failing to consider the claim as it was amended in 2018 when assessing whether or not the transfer was made in fraud of his rights. In his view, Ms.

Malobabic knew or should have known that the claim could be amended and that, at any rate, she was potentially liable for costs and damages for abusive conduct. [ 18 ] The judge determined that at the time the transfer was made, there was no reason for Ms. Malobabic to consider that it was prejudicial to the appellant. The essence of his reasoning is set out in paragraphs 47 and 48 of the judgment: [47] Mr. O’Connor suggests that the situation be considered through the prism of his action as it was amended in 2018.

With respect, the Court cannot agree, as the situation as it existed at the time of the impugned transaction is relevant to a proper understanding of the likely intentions of the debtor, both whether she knew that the transaction was prejudicial to Mr. O’Connor and whether her actions made it impossible for Mr. O’Connor to recover what was owing to him. [48] Given the absence of a personal monetary claim against Ms. Malobabic in 2010, the possibility of the immovable becoming an asset seizable by Mr. O’Connor or any of the other plaintiffs in the event of a positive judgment was inexistent.

Based on the action’s conclusions in 2010, the only things that Ms. Malobabic might have been ordered to do were essentially in relation to the promised shares and other corporate matters. The transfer of her 50% share in the home did not eliminate the chance for the plaintiffs to pursue their ongoing action or even execute it. Nor can Ms.

Malobabic be presumed to have known that the transfer of the home was prejudicial to a creditor in the absence of a monetary claim against her. [ 19 ] The judge’s conclusion regarding fraudulent intent is a question of fact or, at best for appellant, a mixed question of fact and law. Either way, the Court can only intervene in the face of a palpable and overriding error. [6] There is no such error here. On the contrary, the judge’s reasoning appears to be perfectly sound. All that was claimed from Ms. Malobabic in 2010 was that she issue shares in Monroi to the appellant.

Transferring her interest in the home to Mr. Giancristofaro would have had no impact on her ability to respect such an obligation. It was not until the oppression proceedings were amended eight years later to add monetary conclusions against her that the transfer became prejudicial. However, prejudice without fraudulent intent does not satisfy the requirements of a Paulian action. [ 20 ] Given the Court's decision, both the appellant's motion for permission to modify the conclusions of his appeal and the respondents' application to supplement their brief will be dismissed since they are moot.

For the same reason, there is no need to address the conclusions sought by the respondents. FOR THESE REASONS, THE COURT: [ 21 ] DISMISSES the appeal with legal costs; [ 22 ] DISMISSES as moot, the appellant's motion to amend, without legal costs; [ 23 ] DISMISSES as moot, the application to supplement respondent's brief, without legal costs. MARTIN VAUCLAIR, J.A.

STÉPHANE SANSFAÇON, J.A. PETER KALICHMAN, J.A.