2020 QCCA 1542, 2020 QCCA 1542

Syndic de Carriero 2020 QCCA 1542 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027962-182 ( 700-11-018427-189 ) MINUTES OF HEARING DATE: November 19, 2020 CORAM: THE HONOURABLE GENEVIÈVE MARCOTTE, J.A. PATRICK HEALY, J.A. GUY COURNOYER, J.A.

IN THE MATTER OF THE BANKRUPTCY OF : ANTONIO CARRIERO APPELLANTS SArah Carriero Aysha Carriero ABSENTS AND UNREPRESENTED RESPONDENT COUNSEL Le Groupe Serpone Me TOMY MARKAKIS ( De Louya Markakis ) Absent IMPLEADED PARTY COUNSEL Officier de la publicité DES DROITS DE LA circonscription foncière de Terrebonne ABSENT AND UNREPRESENTED On appeal from a judgment rendered on November 15, 2018 by the Honourable Donald Bisson of the Superior Court , District of Terrebonne . NATURE OF THE APPEAL: Bankruptcy and insolvency – Transaction subject to review or annulment.

Clerk at the hearing : Anne Dumont Courtroom: Antonio-Lamer

HEARING 9:31 Commencement of the hearing. Continuation of the hearing held on November 17, 2020. The parties were excused from appearing in Court. BY THE COURT : Judgment – see page 4. Conclusion of the hearing. Anne Dumont, Clerk at the hearing JUDGMENT [ 1 ] The appellants are asking this Court to set aside the Superior Court judgment rendered orally on November 15, 2018 , [1] which granted the trustee’s application to declare the transfer in their favour of an immoveable property of the debtor at undervalue and void pursuant to section 96(1) (

b) of the Bankruptcy and Insolvency Act [2] and

article 1631 of the Civil Code of Québec . [ 2 ] The judge concluded that: (

i) the debtor owed money to the Canada Revenue Agency and was made aware of this debt in April 2016; (ii) the appellants did not pay any amount to acquire the property from the debtor, who is their father; (iii) the value of the property was $630,000.00 at the time of transfer in July 2016; and (iv) there was no “credible explanation” for the sale at undervalue ($270,750.00) and the granting to the debtor of a right to continue residing on the property for a period of three years, other than the debtor’s intention to avoid the payment of his debts.

The judge also noted that the appellants were not dealing at arm’s length with the debtor at the time of the transfer, which occurred less than 5 years prior to the bankruptcy. [ 3 ] Given that the conditions of section 96(1) (b)(ii)(

B) BIA were met, the judge granted the application with legal costs and declared the transfer of the immoveable property null and unopposable to all. He ordered that the property be returned to the debtor’s patrimony for the benefit of the mass of creditors. He declared that the property was valued at $630,000 as at July 5, 2016.

He also ordered that his judgment be published in the land register. [ 4 ] The appellants claim that they were denied a fair hearing following the trial judge’s refusal to postpone the matter to allow them to seek legal representation and that the judge failed to properly assist them at trial.

They also argue that the evidence adduced was not sufficient to declare the property at undervalue, or to recognize the existence of a debt or their father’s intention to defraud the Canada Revenue Agency. [ 5 ] In dismissing their request for a postponement, the trial judge explained that the proceedings had been initiated in July 2018 and had been postponed on two occasions at the appellants’ request for the very same reason that was raised on the morning of the trial: the need to seek legal counsel.

Additionally, he pointed out that the property was scheduled to be sold for unpaid taxes the following week, on November 22, 2018: [2] This proceeding is dated July 18, 2018 and is presented by the Syndic Groupe Serpone against respondents Mrs. Sarah and Aysha Carriero, who are the daughters of the bankrupt Mr. Anthonio Carriero. [3] Earlier today, the Court dismissed a Motion of respondents to postpone the case. The Court acknowledges the position of the respondents here who argued against proceeding today on the ground that they allege not really knowing what is going on.

However, this case had already been postponed once in September 2018 in order to be heard in October 2018 but instead, it was postponed a second time when a trial date was set for today, November 15, 2018. On those occasions, the respondents raised the exact same issues as those raised today, namely the issue of finding a new lawyer to try to get a new evaluation of the house because “we do not know what is going on”. This proceeding is dated in July 2018.

It is now November 2018, so the Court is of the view that the respondents had ample time to deal with the matter and find out “what is going on” or finding an attorney who will inform them of “what is going on”. […]

[13] One fact to mention here is that next week, on November 22, 2018, the house is scheduled to be put on sale for municipal unpaid taxes and therefore, there is here an additional ground to deny the postponement sought by respondents. It is also a ground to act rapidly before that sale for taxes which is basically next week. [ 6 ] The decision to refuse a postponement is discretionary in nature and is subject to deference.

To convince this Court to set aside such a decision on appeal, the appellants must show that the refusal was unreasonable or that the judge’s discretion was not exercised judicially. [3] They have failed to do so. [ 7 ] Two years have gone by since the judgment and the appellants are still self-represented as they argue the merits of their appeal.

The alleged search for legal counsel appears to have been a constant excuse which was raised on at least two other occasions to seek additional delays before this Court. [4] The appellants have failed to demonstrate that the judge’s decision to refuse to postpone the hearing was unreasonable under the circumstances mentioned in his judgment. [ 8 ] Insofar as the alleged inadequate assistance on the part of the trial judge is concerned, it must be pointed out that the appellants chose not to file the transcripts of the hearing, making it impossible for this Court to evaluate the merits of their contentions of improper or hostile behaviour on the part of the trial judge. [5] [ 9 ] On the other hand, the hearing minutes that were filed on appeal show that the appellants had the opportunity to cross-examine the witnesses presented by the trustee and that they were also given the opportunity to testify and to argue before judgment was rendered. [ 10 ] The argument of the language of the hearing, which the appellants claim should have been conducted in English in its entirety, must also be set aside.

The appellants were not entitled to impose their language on the parties. They could have retained the services of an interpreter at their leisure, if they so required. They chose not to. There was no indication in the hearing minutes of any issue regarding language.

Given the appellants’ admission in their brief and again before this Court that they have a “good understanding” of French in general, they have failed to convince us that the judge had any reason to suspect that they required the services of an interpreter or should be reminded of their right to seek such services. [ 11 ] The arguments related to the lack of evidence supporting the judge’s findings on the value of the immoveable property and the existence of the bankrupt’s debt towards the Canada Revenue Agency are also groundless and must be set aside. [ 12 ] The judge made no reviewable error by concluding that the notice of assessment was presumed valid, as per section 152(8) of the Income Tax Act . [6] The notice of assessment was filed as Exhibit S-5 and admitted into the Court record pursuant to the minutes of the hearing, the veracity of which has not been challenged.

The appellants claim that no such admission ever took place to their knowledge. However, as indicated previously, the appellants chose not to file the transcripts of the hearing, making it impossible again for this Court to assess the merits of their argument. [ 13 ] The appellants take issue with the fact that the evaluation report filed into the Court record provides an evaluation of the property as at June 6, 2018 rather than as at the time of the alleged transfer on July 5, 2016.

At trial, the appellants did not challenge this value other than by arguing that it was “highly exaggerated” and the judge concluded that their arguments were unsubstantiated. [ 14 ] The evaluation report was prepared in June 2018, as noted by the judge. This was not, however, the only evidence that he considered. He referred as well to the hypothec that was registered on the property in 2013 for an amount of $625,000.

He wrote that “[i]t would be very curious that this house decreased by an amount of $400,000 in the matter of three years”. [ 15 ] Moreover, the municipal valuation of the property, as stated in the valuation report filed as Exhibit S-4, showed a valuation of the land at $167,790 and a building valuation at $548,400 as at July 1, 2014, for a total value of $716,380 in anticipation of the triennial property assessment rolls for the years 2016-2017-2018, an amount well over the value of $630,000 determined by the trial judge. [ 16 ] As far as the content of the deed of transfer itself is concerned, the respondent was not required to formally contest the deed in order to contradict the statements of fact that it contained.

As stated by our Court in Saindon c. Lotbinière , société mutuelle d'assurance générale : [7] Aucune inscription en faux n'est nécessaire pour contredire les termes d'un acte quand la véracité des déclarations faites par les parties est en cause et il est possible, sans inscription en faux, de faire la preuve que les montants dont on a accusé réception n'ont jamais été payés. [ 17 ] The amount of $270,000 indicated as a consideration for the transfer of the property in the deed of transfer is not evidence of its fair market value.

Moreover, the fact that the deed refers to a payment of “$54 750, paid by the transferee to the transferor, partly today, and partly prior to the execution of these presents, whereof quit in full ” does not serve to establish that such payment was made. [ 18 ] After hearing the testimony of appellant Sarah Carriero, the judge concluded that such payment had not been made. He wrote: [18] Another factual element is that the sale of July 2016 has not been challenged.

What we know however, is that the price for the sale of the house was $270,750 and that the portion of that sale was supposed to be paid in cash money for an amount of $54,750 by the two daughters to the father. As the evidence shows, this last was not paid; the testimony of Mrs. Sarah Carriero on what was paid to the father was unclear, so the Court cannot conclude anything from that testimony.

It is not clear what has been paid and the daughters said it might have, but it is impossible to conclude in their favor on the balance of probabilities. [19] Therefore, the Court concludes that no amount was actually totally or partially paid for by the daughters to the father for the house.

[ 19 ] Without the benefit of the transcripts, the appellants cannot challenge the judge’s findings of fact in this respect nor convince this Court that he committed any overriding and palpable error in concluding as he did. [ 20 ] In fact, based on the findings of fact that are detailed in his judgment, the judge was justified in concluding that the debtor had the intention to defraud, defeat or delay the payment of his debt towards the Canada Revenue Agency and that the conditions of section 96(1)(

b) BIA had been met, so as to support his conclusion to declare that the transfer of the immoveable property was null and unopposable to all and that the property valued at $630,000 at the time of the transfer be returned to the debtor’s patrimony for the benefit of the mass of creditors. [ 21 ] The appellants have failed to demonstrate that they were denied a fair hearing or that the judge committed any reviewable error that could justify this Court’s intervention. FOR THESE REASONS, THE COURT: [ 22 ] DISMISSES the appeal, with legal costs. GENEVIÈVE MARCOTTE, J.A. PATRICK HEALY, J.A. GUY COURNOYER, J.A.