Fibabanka A.Ş. Appellant (Plaintiff/Respondent) v. Hüseyin Arslan, Mahmut Arslan, Hasan Arslan and, 2023 SKCA 13

Court of Appeal for Saskatchewan Citation: Fibabanka A. Ş . v Arslan , 2023 SKCA 13 Date: 2023-01-24 Docket: CACV3423 Between: Fibabanka A.Ş. Appellant (Plaintiff/Respondent) And Hüseyin Arslan, Mahmut Arslan, Hasan Arslan and Murad Al-Katib Respondents (Defendants/Applicants) Docket: CACV3424 Between: Sardes Faktoring A.Ş. Appellant (Plaintiff/Respondent) And Hüseyin Arslan and Murad Al-Katib Respondents (Defendants/Applicants) Docket: CACV3422 Between: Alternatifbank A. Ş.

Appellant (Plaintiff/Respondent) And Hüseyin Arslan, Mahmut Arslan, Hasan Arslan and Murad Al-Katib Respondents (Defendants/Applicants) Before: Jackson, Caldwell and Schwann JJ.A. Disposition: Appeals dismissed Written reasons by: The Honourable Madam Justice Schwann In concurrence: The Honourable Madam Justice Jackson The Honourable Mr. Justice Caldwell On appeal from: 2019 SKQB 94 , Regina Appeal heard: April 11, 2022 Counsel: Peter Bergbusch, K.C., for all the Appellants Kevin Mellor and Sharon Fox for all the Arslan Respondents Deron Kuski, K.C., and Shawna Sparrow for Murad Al-Katib Schwann J.A. I.

INTRODUCTION [ 1 ] Three Turkish financial institutions [appellants] brought separate actions in Saskatchewan to set aside the transfer of shares in AGT Food and Ingredients Inc. [AGT] to a trust established by the respondents, asserting that the transfer was a fraudulent conveyance within the meaning of The Fraudulent Preferences Act , RSS 1978, c F-21 [ FPA ]. By consent, in accordance with Rule 7-1 of The Queen’s Bench Rules , the parties asked a Chambers judge to determine whether the appellants’ claims were statute barred pursuant to The Limitations Act , SS 2004, c L-16.1 .

The Chambers judge found all three claims were statute barred and ordered that they be struck: Fibabanka A.Ş. v Arslan , 2019 SKQB 94 , [2020] 2 WWR 131 [ Chambers Decision ]. [ 2 ] The appellants appeal from that ruling. For the reasons set out below, I find their respective appeals must be dismissed. II. THE PARTIES AND THEIR CLAIMS A. The Arslans and Murad Al-Katib [ 3 ] Hüseyin Arslan, Mahmut Arslan and Hasan Arslan are brothers who each reside in Turkey.

For ease of reference, I will refer to these individuals by their first names throughout my decision. [ 4 ] At the operative time, Hüseyin was a director and substantial shareholder in Arbel Bakliyat Hububat Sanayi ve Ticaret Anonim Sirketi [Arbel], a Turkish pulse and grain trading corporation. Mahmut and Hasan were on the board of Arbel and were also significant shareholders in that entity. Hüseyin, Mahmut and Hasan were also involved in Asya Akaryakit Ticaret ve Sanati Anonim

Sirketi [Asya], another Turkish corporation. Hüseyin was the principal shareholder of Asya. Other companies that the three Arslan brothers were involved in included Alfa Petrol ve Kimyevi Ürünler Depoculuk Tic A.Ş. [Alfa] and HTM Turizm [HTM]. [ 5 ] Murad Al-Katib [Al-Katib] is a resident of Saskatchewan and the chief executive officer of AGT, a Saskatchewan based pulse trading company. At the material time, Hüseyin was a director of AGT and the three Arslan brothers together held approximately 27% of the shares in AGT as of May of 2012. B.

The financial institutions [ 6 ] Alternatifbank A.Ş. [Alternatifbank] and Fibabanka A.Ş. [Fibabanka] are both large financial lending institutions that operate in Turkey. Sardes Faktoring A.Ş. [Sardes] is a small boutique lender of just 15 employees.

Its business model is factoring, which, as the Chambers judge described, is a form of lending transaction whereby a financial institution provides financing to a company by purchasing their accounts receivables at a discount rate in return for the right to enforce and collect on those debts. [ 7 ] Between February of 2011 and August of 2012, Alternatifbank made loans to Asya, Alfa and HTM totalling $63M TRY (Turkish Lira). In that same time frame, Fibabanka entered into eight loan agreements (bonds) with Asya and the other corporate entities.

The value of the issued bonds exceeded $28.89M TRY by September of 2012. In August of 2012, Sardes entered into a general factoring agreement with Asya pursuant to which Sardes received $4.2M TRY in receivables from Asya. This initial factoring arrangement grew to $15M TRY by October of 2012. After attempts to secure repayment, Sardes claimed to be owed $13.66M TRY as of May 18, 2016.

Asya defaulted on the contract in 2013. [ 8 ] Although each of the lending instruments utilized by the three financial institutions varied in form and functionality, for ease of reference I will refer to them as loans in my decision.

The loans were defaulted upon as follows: Default Date Financial Institution Loan Amounts May 7, 2013 the Alternatifbank loans $63M TRY April 30, 2013 Sardes receivables loans >8.46M TRY March 30, 2013 the Fibabanka loans (bonds), with a further default date of February 20, 2016 >$28.89M TRY [ 9 ] Hüseyin, Mahmut and Hasan were guarantors of the loans that were made to the debtor corporations by the three financial institutions. [ 10 ] All three financial institutions began enforcement proceedings against the debtor corporations and the guarantors in Turkey by May of 2013. [ 11 ] As it turned out, another Turkish financial institution — Şekerbank T.A.Ş [Şekerbank] — had advanced funds to Turkish corporations that were part of the Arbel group, with Hüseyin and other members of the Arslan family guaranteeing some of those loans “because of their substantial shareholding in Arbel”.

When the corporate debtors defaulted, Şekerbank engaged Dr. Ozgun Öztunc to enforce and collect on the debts against the debtor corporations and Hüseyin. Dr. Öztunc deposed as follows about his next steps: “After I was engaged, I started to review the Turkish trade registry gazette concerning Arbel. During my review of the trade registry gazette dated January 2013, I realized that the members of the Arslan family were no longer listed as shareholders of Arbel and some Saskatchewan companies were listed in the trade registry record as the shareholders and directors of Arbel”.

Dr. Öztunc subsequently discovered that AGT held the Arbel shares and that Hüseyin held substantial shares in AGT. C. The Saskatchewan connection and related legal proceedings [ 12 ] As mentioned, at some point prior to December of 2012, ownership of the Arbel shares was transferred to a number of Canadian corporations. Pursuant to the terms of a written trust indenture dated May 31, 2013, Carme Trust [Trust] came into existence in Saskatchewan.

The Trust acquired 5,182,601 of the common shares in AGT from the Arslan brothers on June 3, 2013, as well as some shares in another Canadian corporation that was controlled by the Arslans. Hüseyin was the settlor of the Trust and Mr. Al-Katib served as its trustee. The beneficiaries are the Arslan children, the Arlsan brothers personally, and Mr. Al-Katib’s children. [ 13 ] In May of 2013, Şekerbank engaged Dr. Öztunc to enforce and collect upon its outstanding loans to Arbel.

The Chambers judge described how Dr. Öztunc went about that process, “Dr. Öztunc reviewed the Turkish Registry Gazette to ascertain the status of Arbel. He did so because of the fact that Mr. Arslan [Hüseyin] held a significant interest in Arbel at a time relevant to when the guarantees were signed. From this review, Dr. Öztunc learned that, as of January 2013, the members of the Arslan family were no longer shareholders in [Arbel sic] AGT. Instead, Arbel’s shares were, as of that time completely owned by AGT and other Saskatchewan companies” (at para 22).

This body of information caused Dr. Öztunc to retain legal counsel in Saskatchewan [SK lawyer] for purposes of investigating AGT and the other Saskatchewan corporations that were involved and for advice on how to obtain a preservation order in this jurisdiction. In the course of his work with the SK lawyer Dr. Öztunc learned about the existence of the Trust. [ 14 ] Upon discovering the existence of the Trust, Dr. Öztunc instructed the SK Lawyer to commence an action in Saskatchewan against Hüseyin and Mr. Al-Katib.

To that end, a statement of claim was filed in December of 2013, alleging that the share transfer from AGT to the Trust was a fraudulent conveyance. In due course, and pending determination of its claim (which is still ongoing), Şekerbank obtained a preservation order that prohibits Hüseyin and Mr.

Al-Katib “from disposing of, transferring or undertaking any transaction with respect to 850,000 shares … of [AGT] transferred by Hüseyin Arslan to Murad Al-Katib, as trustee of The Carme Trust, on about June 3, 2013” ( Şekerbank T.A.Ş v Arslan (9 January 2014) Regina, QBG 2314 of 2013 (Sask QB)). [ 15 ] On learning of the existence of other Turkish creditors, Dr. Öztunc met with representatives from each of the appellant institutions, which, in due course, also commenced fraudulent conveyance actions in Saskatchewan on the same basis as the Şekerbank claim.

The following chart sets out the dates on which the appellants met with Dr. Öztunc and when they commenced their respective actions in this province.

Appellant Institution Met with Dr. Öztunc Issued Statement of Claim Alternatifbank June 11, 2015 December 22, 2016 Fibabanka February 26, 2016 February 16, 2017 Sardes May 10, 2016 February 16, 2017 [ 16 ] The respondents applied to strike the appellants’ claims for being statute barred pursuant to The Limitations Act . III. THE CHAMBERS DECISION [ 17 ] The issue before the Chambers judge was narrow: Did the limitation period for the appellants’ actions expire before they filed their statements of claim?

The Chambers judge began his analysis by orienting himself to ss. 5 and 6 of The Limitations Act , noting that a claim must be brought within 2 years from the date of its discovery, and that a claim is discovered “on the day when the claimant knew, or in the circumstances ought to have known about it” (at para 58). Given the dates on which the appellants’ claims were filed, he concluded that (

a) Fibabanka’s claim (filed on December 22, 2016) would be statute barred if it was discovered before December 21, 2014, and (

b) Alternatifbank and Sardes’ claims (each filed on February 16, 2017) would be statute barred if those institutions had discovered their claims before February 15, 2015. [ 18 ] The Chambers judge found the claims had “crystallized” with the discovery of the transfer of the Arslan brothers’ shares in AGT to the Trust, which took place on June 3, 2013 (at para 76). He went on to say that, as per s. 6(2), “the [appellants] are presumed to have known that this transaction took place on June 3, 2013, unless the contrary is proved” (at para 76).

Based on the evidence of when Dr. Öztunc met with the representatives from each financial institution, the Chambers judge was satisfied that the appellants had rebutted the presumption that they knew about the share transfer on June 3, 2013. [ 19 ] With the s. 6(2) presumption rebutted, the Chambers judge turned his attention to the elements of s. 6(1) and framed the inquiry as not being a question of when the appellants had acquired actual knowledge but when they ought to have known of the existence of their claim.

The phrase “ought to have known”, he said, must mean “when the material facts on which it is based ought to have been discovered by the plaintiff with reasonable diligence” (at para 81). He went on to note that proving reasonable diligence is a burden borne by the party asserting it, which is to say, they must prove that “even with the exercise of due diligence, their claims were not discoverable within the limitation period” (at para 82).

In practical terms, as the Chambers judge explained, a plaintiff must “adduce evidence explaining the steps they took to investigate the claim prior to commencing it, when they took such steps (or why they failed to take such steps) and explain why it was reasonable to proceed as they did” (at para 82). [ 20 ] The Chambers judge noted that his analysis of the discoverability/due diligence issue was fact specific, and that the exercise of due diligence must be undertaken from the perspective of a “reasonable person in the shoes of the prospective plaintiff” (at para 83).

He then set out a number of considerations to guide him in assessing the question of whether a claim was discoverable within the limitation period through the exercise of due diligence, including the following: [86] … • The sophistication of the parties; • Whether the plaintiff is a person, a business, or some other entity; • Where there is a business relationship between the parties, and the claim arises out of that business relationship, the standard practices of parties associated with or involved in that type of business relationship; and • What steps were actually required to gather the information necessary to ascertain the material facts giving rise to the claim, and when the plaintiff took those steps. [ 21 ] Also relevant to the assessment of discoverability where multiple plaintiffs are involved is the action of a “similarly situated plaintiff” and if the act or omission giving rise to the claim occurred on foreign soil.

Taking specific direction from Yugraneft Corp. v Rexx Management Corp. , 2010 SCC 19 , [2010] 1 SCR 649 [ Yugraneft ] and Independence Plaza 1 Associates LLC v Figliolini , 2017 ONCA 44 , 410 DLR (4th) 747 [ Figliolini ], the Chambers judge concluded on that point by stating that a claim is not discoverable in a foreign jurisdiction “until a judgment creditor knew or ought to have known that the judgment debtor had exigible assets in the jurisdiction” (at para 89).

He accepted the suggestion that news of the Trust would not have received much publicity in Turkey and that pursuing a debtor’s assets outside of Turkey is not a common experience for these particular plaintiffs. [ 22 ] With that framework for analysis firmly in place, and in the context of the matter at hand, the Chambers judge determined that the appellants’ claims were not discoverable “until they knew or ought to have known through the exercise of reasonable diligence that the Arslan brothers’ shares in AGT had been transferred to the Carme Trust” (at para 90).

In assessing the evidence pertaining to that issue, he made the following findings of fact: (

a) The appellants are sophisticated parties, and as he put it “this is not their first rodeo as it relates to dealing with debtors and large-scale financial transactions” (at para 93); (

b) Each appellant has in-house legal departments or access to lawyers for purposes of debt collection; (

c) These were large, commercial loans. The appellants knew that the Arslans were major players and/or shareholders in a number of those corporate entities, including Arbel; (

d) The information that led Dr. Öztunc to the Trust was not concealed. “The fact that the ownership of Arbel’s shares had been

transferred to AGT and other Saskatchewan companies was information that was available through a publicly accessible source, namely the Turkish Corporate Registry” (at para 95); (

e) Lawyers and financial institutions in Turkey have access to the Turkish Corporate Registry [Registry] information; (

f) Checking the Registry is a common practice for lawyers who practice in debt collection involving significant loans to corporate entities secured by individual guarantors. Conversely, the Chambers judge found himself unable to accept that “lawyers in Turkey who regularly practice debt collection would be unaware that the Turkish Corporate Registry exists” or that “experienced lawyers who practice in that area would fail to realize that such a registry would be a source of information that should be searched to ascertain the status of the debtor’s holdings” (at para 99); (

g) It would be prudent to check the status of a guarantor’s assets; (

h) The information about the change in ownership of Arbel pointed Dr. Öztunc in the direction of AGT and eventually to the Trust, which meant that: “In the hands of a knowledgeable person, it was not difficult to use this information to learn that the transfer of shares from AGT to the Carme Trust had occurred on June 3, 2013” (at para 96); (

i) The appellants knew that the Arslans were officers of Arbel and that Hüseyin was a major shareholder in that corporation, yet none of the appellants investigated the corporate holdings of the guarantors even after the debtors’ defaults; and (j) Şekerbank is similarly situated to the appellants as a plaintiff.

Using the Registry, it was able to learn that Hüseyin’s holdings in Arbel had changed and that subsequent reasonable inquiries enabled Şekerbank to “connect the dots, liaise with foreign counsel, and learn of the transaction in Saskatchewan that gave rise to the claim” (at para 101). [ 23 ] Based on those findings and the reasoning that followed, the Chambers judge concluded that each of the claims brought by Fibabanka, Sardes and Alternatifbank were statute barred and should be struck.

He stated: [98] In this case, all the plaintiffs were aware, at the time of the financial transactions in Turkey, that the defendants were officers of Arbel and that Huseyin Arslan, in particular, was a major shareholder. None of the plaintiffs, either at the time of entering the loan agreements, or in the aftermath of the defaults, investigated the corporate holdings of the guarantors.

In my view, given the nature of the transactions, and the amounts involved in the loans, reasonable diligence would have required the plaintiffs, at the time the companies for which the Arslan brothers guaranteed loans defaulted, to investigate the status of any exigible assets of the guarantors.

In the circumstances of this case, this would include investigating the nature and extent of the defendants’ holdings in Arbel. … [104] Accordingly, I am satisfied that the claims against the defendants in the three actions to which this application relates ought to have been discovered, with reasonable diligence on the part of the plaintiffs, on a timeline similar to when Sekerbank discovered its claim, namely the summer of 2013.

In any event, in my view, the plaintiffs ought, with reasonable diligence, to have discovered their claim long before December 21, 2014, which is two years before Fibabanka filed its claim. [ 24 ] The appellants appeal from that result. IV. THE LIMITATIONS ACT [ 25 ] The sole issue on this appeal is whether the Chambers judge erred in striking the appellants’ claims for being statute barred pursuant to The Limitations Act .

Before turning to the appellants’ specific arguments, I find it useful to set out the applicable sections of the Act that bear on my analysis: Basic limitation period 5 Unless otherwise provided in this Act, no proceedings shall be commenced with respect to a claim after two years from the day on which the claim is discovered. Discovery of claim 6

(1) Unless otherwise provided in this Act and subject to subsection (2), a claim is discovered on the day on which the claimant first knew or in the circumstances ought to have known: (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage appeared to have been caused by or contributed to by

an act or omission that is the subject of the claim; (

c) that the act or omission that is the subject of the claim appeared to be that of the person against whom the claim is made; and (

d) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.

(2) A claimant is presumed to have known of the matters mentioned in clauses (1)(

a) to (

d) on the day on which the act or omission on which the claim is based took place, unless the contrary is proved. … Burden of proof

18 If, in a proceeding, a limitation period is raised against a claimant, the claimant has the burden of proving that: (

a) the limitation period has not expired; or (

b) there is no limitation period that applies to the claim. [ 26 ] Pursuant to s. 5, the general limitation period for all actions in Saskatchewan begins to run 2 years from the day when a claim is discovered. In accordance with the criteria set out in s. 6 , a claim is said to be discovered on the day on which a claimant becomes aware of the claim or the date when it ought to have known about it . [ 27 ] Section 6(1)(a)–(

d) codifies the elements of discoverability, which are to be interpreted conjunctively ( Longo v MacLaren Art Centre Inc ., 2014 ONCA 526 at para 41 , 323 OAC 246 [ Longo ]). A prospective claimant must act with due diligence in determining if a claim exists. In investigating a claim, a prospective claimant must act reasonably, while the nature and extent of the required action will depend on the circumstances of each case ( Longo at para 42 ). At bottom, determining when a claim has been discovered requires a judge to make findings of fact with respect to the s. 6(1) criteria. ( GHC Swift Current Realty Inc. v BACZ Engineering

(2004) Ltd ., 2022 SKCA 38 at para 35 ( BACZ )). A plaintiff who failed to serve its statement of claim within an applicable limitation period bears the burden of proving that the cause of action was not discoverable within the limitation period through the exercise of due diligence ( Langenburg (Town) v Gamey , 2010 SKCA 11 at para 34 , [2010] 8 WWR 273). V. THE STANDARD OF REVIEW [ 28 ] The standard of review for questions of law is correctness. ( Housen v Nikolaisen , 2002 SCC 33 at paras 8 , 10, and 19, [2002] 2 SCR 235).

A decision determining whether a limitation period had expired prior to the issuance of a statement of claim is a question of mixed fact and law ( Saskatchewan (Highways and Infrastructure) v Venture Construction Inc ., 2020 SKCA 39 at para 33 , 447 DLR (4th) 316 [ Venture ]; Longo at para 38 ).

Ascertaining when a claim was discovered or became discoverable within the meaning of the Act , involves a “heavy factual component” ( Venture at para 33 ). [ 29 ] For standard of review purposes, this means that, absent a discrete error of law, appellate intervention is only warranted where the decision is grounded in a palpable and overriding error. This is a highly deferential standard. “Palpable means an error that is obvious and “overriding” means an error that goes to the very core of the outcome of the case”. ( Benhaim v St. Germain, 2016 SCC 48 at para 38 , [2016] 2 SCR 352; Venture at para 34 ).

A palpable and overriding error has been described as a “beam in the eye”. ( J.G. v. Nadeau , 2016 QCCA 167 at para 77 ). VI. ANALYSIS A. General [ 30 ] The appellants do not take issue with the Chambers judge’s finding that they acquired actual knowledge of the potential for an action to be brought in Saskatchewan when Dr. Öztunc met with officials from their respective institutions (see paragraph 15 above). For obvious reasons, neither do they challenge the determination that the presumption contained in s. 6(2) (that they were presumed to have known of the matters in ss. 6(1)(a)-(

d) on the day on which the act or omission took place) was rebutted. The appellants’ argument, rather, rests on the proposition that the Chambers judge made multiple errors of fact and law in his assessment of the constructive knowledge component of s. 6(1). I will deal with each of their submissions in turn. 1. Did the Chambers judge err by applying an unduly onerous standard for foreign creditors? [ 31 ] The appellants contend the Chambers judge applied an excessively onerous standard with regard to the conduct of a foreign creditor in a collection matter.

That error, they say, led the Chambers judge to incorrectly conclude that a reasonable creditor in the circumstances of the appellants could and should have learned of the basis for their fraudulent conveyance claim in Saskatchewan prior to their involvement with Dr. Öztunc. They rely on Yugraneft for the proposition that foreign creditors face practical difficulties in attempting to locate assets in another jurisdiction and that a foreign creditor cannot be expected to know the location of a debtor’s worldwide assets.

The appellants suggest, therefore, that the time should run from the date when a foreign creditor learns or should have learned that the debtor has exigible assets in the foreign jurisdiction. [ 32 ] In assessing this argument, the Chambers judge expressly referred to Figliolini and Yugraneft in his reasons. Although Yugraneft was a case about whether the enforcement of a foreign arbitral award in Canada was subject to provincial limitations legislation, the Chambers judge found aspects of Yugraneft generally applicable to judgment creditors and debtors.

He referred specifically to paragraph 61 of Yugraneft , which provides: [61] Section 3(1)(a)(iii) therefore allows the courts to consider aspects of an arbitral creditor’s circumstances that would lead a reasonable person to conclude that there was no reason for the arbitral creditor to know whether proceedings were warranted in Alberta. For example, it is not infrequent for the parties to an international arbitration to have assets in a number of different states or jurisdictions within a federal state. An arbitral creditor cannot be presumed to know the location of all of the arbitral debtor’s assets.

If the arbitral creditor does not know, and would have no reason to know, that the arbitral debtor has assets in a particular jurisdiction, it cannot be expected to know that recognition and enforcement proceedings are warranted in that jurisdiction. Thus, in my view, recognition and enforcement proceedings would only be warranted in Alberta once an arbitral creditor had learned, exercising reasonable diligence, that the arbitral debtor possessed assets in that jurisdiction. (Emphasis added)

[ 33 ] As I read his decision, the Chambers judge adopted the general principles of Yugraneft , as reflected by the following passage: [89] This passage from Yugraneft would apply equally to judgment debtors and judgment creditors. In Figliolini , the Ontario Court of Appeal followed Yugraneft, and held, in such circumstances, a claim was not discoverable in a foreign jurisdiction until a judgment creditor knew, or ought to have known, that the judgment debtor had exigible assets in that jurisdiction [ 34 ] I see no error of law in the Chambers judge’s reasoning.

Facing a situation not previously addressed in the jurisprudence, he identified the governing legal principles in analogous circumstances and, finding no reason to distinguish that law, applied those principles to the facts at hand. In my assessment, he understood the hurdles faced by foreign creditors in enforcing a money judgment in Canada and took that into account in his analysis of the question before him.

At root, this argument is little more than an indirect challenge to the application of those legal principles to the facts at hand in an attempt to sidestep the deferential palpable and overriding error standard of review. 2. Did the Chambers judge err in failing to assess the appellants’ knowledge of the transfer to the Trust by focusing on it as a share transaction rather than as a fraudulent conveyance action? [ 35 ] The appellants statements of claim allege that the transfer of the AGT shares to the Trust was a fraudulent conveyance.

In very general terms, for a claim of this nature to be made, out there had to have been a conveyance of property (

a) by a person who is insolvent, (

b) done with intent to prejudice or defeat creditors, and (

c) with the plaintiff being a creditor of the person who made the transfer. [ 36 ] The appellants argue that, not only did they have to know or ought to have known that the appellants had exigible assets in Saskatchewan, but that the Arslans formerly had assets and that such assets had been fraudulently conveyed to the Trust. This meant, the appellants say, that the Chambers judge was required to assess discoverability from the point in time when they ought to have discovered the material facts sufficient to support an action to set aside the alleged fraudulent conveyance of the AGT shares.

This means further, the appellants say, that the test for whether the limitations period has expired must be considered in light of fraudulent conveyance law.

Section 3 of the FPA states that: 3 Subject to sections 8, 9, 10 and 11 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 a bank, company or corporation, or of any other property real or personal, made by a person at a time when he is in insolvent circumstances or is unable to pay his debts in full or knows that he is on the eve of insolvency, with intent to defeat, hinder, delay or prejudice his creditors or any one or more of them, is void as against the creditor or creditors injured, delayed or prejudiced. [ 37 ] The Chambers judge held that, because the appellants knew that a share transaction had occurred with regard to Arbel, that was important and useful information that would have led to the discovery of the transfer of shares to AGT.

He framed the issue in this way: [96] While the information that Dr. Oztunc gathered regarding the change in ownership of Arbel did not lead directly to information regarding the Carme Trust, it pointed him in the direction of AGT and its holdings in Saskatchewan.

In the hands of a knowledgeable person, it was not difficult to use this information to learn that the transfer of shares from AGT to the Carme Trust had occurred on June 3, 2013 . (Emphasis added) [ 38 ] Relying on this Court’s decision in Venture , the appellants submit that the Chambers judge erred by failing to appreciate that different causes of action may engage different starting points and by applying the wrong standard for discoverability because an action under the FPA requires knowledge that a fraudulent transaction had occurred.

At bottom, the appellants assert that, for the limitation period to be triggered in this case, they had to have had knowledge that the transaction in question was fraudulent, in addition to the other necessary factors under s. 6(1). This point is summarized in Fibabanka’s factum as follows: [70] … The Chambers Judge erred in law by conflating the discovery of the transfer of AGT shares to the Carme Trust (a transaction) with the requirements for a fraudulent conveyance action.

Pursuant to Moody and Caprara , a fraudulent conveyance action requires a plaintiff to know more than that a transaction has occurred. [71] Moreover, the Appellant submits that the expert evidence of Mr. Yilmaz relied upon by the Chambers judge did not assist the Chambers judge in overcoming this primary error. The Yilmaz evidence outlined, inter alia, Turkish Registry searches that could have been performed by the Appellant to allow the Appellant to discover the Arbel share transfer.

As noted above, a fraudulent conveyance action requires a plaintiff to know more than that a transaction has occurred. [72] There was no evidence before the Chambers Judge to indicate how Fibabanka ought to have determined, independent of Dr. Öztunç, the names of the direct or beneficial shareholders of the Carme Trust, or other “badges of fraud” that Fibabanka might have used to assess whether the AGT share transfer was a fraudulent conveyance. [73] There was no evidence before the Chambers Judge to show how Fibabanka ought to have determined, independent of Dr. Öztunç, that the transfer of the AGT shares to the Carme Trust were transfers for no value.

Fibabanka was not able to determine that the AGT share transfer was a fraudulent conveyance based upon the Press Release or the SEDAR materials filed by AGT. These documents in evidence before the Chambers Judge did not specify the amount, if any, paid by the Carme Trust for the AGT shares, nor did they specify the particulars of the transaction by which the Carme Trust came to hold the AGT shares. [ 39 ] The issue of whether the Chambers judge erred by framing his discoverability analysis around the occurrence of a “transaction” rather than a “fraudulent transaction” is a new issue on appeal.

From my reading of the Brief of Law filed by the appellants in the Court of Queen’s Bench, this specific argument was not put to the Chambers judge. In fact, it appears as though the appellants had argued the opposite position in the lower court, as reflected by the following passages from their Brief of Law: 37. The issue is when these Plaintiffs discovered the gift or transfer of shares to the Carme Trust or in the circumstances ought to have

discovered the transfer and, having regard to the gift or transfer of shares to the Carme Trust, a proceeding to set aside the fraudulentconveyance was an appropriate means to seek to remedy it. . . . 39.

The only issue for the Court to determine on these applications, therefore, is whether these Plaintiffs ought to have discovered that theArslans had transferred their shares to the Carme Trust on or about June 3, 2013, when the gift or transfer occurred and whether theyought to have known at that time that a proceeding to set aside the fraudulent conveyance was an appropriate means to remedy it. (Emphasis added) 44.

The key information that the Plaintiffs needed to have in order to determine whether to commence an action to set aside a fraudulentconveyance was knowledge of the transfer of shares to the Carme Trust. That information was only disclosed in a short press release,issued in Toronto, published on-line in English on June 3, 2013.

It was not issued in Turkish and there is no evidence that it was publishedin Turkey in any manner. [40] As such, the distinction between the knowledge of the transfer of the AGT shares and the knowledge of the alleged orpotentially fraudulent nature of that transfer is a distinction that was not before the Chambers judge and therefore constitutes a new issueon appeal. [41] As a matter of settled law, this Court is loathe to entertain a new argument on appeal (see: Meier v Saskatchewan Institute ofAgrologists, 2016 SKCA 116 paras 28-35, 405 DLR (4th) 506) [Meier]; Yashcheshen v Saskatchewan (Ministry of Health), 2022 SKCA68 at para 65; and A.M. v Ministry of Social Services, 2020 SKCA 114 at para 183).

The rule is grounded in the self-evident propositionthat it would be unfair to allow a fresh argument to be introduced on appeal in circumstances where the opposing party would have wantedto introduce additional evidence in the court below if it had been aware of the issue (see Meier at para 29). That said, the principle is notabsolute and admits of some exceptions; however, the discretion to hear new arguments on appeal is narrow and must be exercisedsparingly. [42] I see no principled basis to permit the appellants to raise this issue for the first time on appeal.

Answering questions concerningthe elements of a fraudulent conveyance claim and when those elements were discovered by the appellants is a fact dependant exercise forwhich the respondents may have adduced additional evidence in response.

That said, even if I were to consider the appellants’ argumenton its merits, it cannot succeed for the simple reason that the appellants have, in my view, conflated the discovery of the fact of the sharetransfer with the discovery of what they needed to know to commence a fraudulent conveyance action. [43] As a matter of law, the principle of discoverability provides that “a cause of action arises for the purposes of a limitation periodwhen the material facts on which it is based have been discovered or ought to have been discovered by the plaintiff by the exercise ofreasonable diligence” (Nadeau v Nadeau, 2021 SKCA 69 at para 34, citing with approval Fehr v Sun Life Assurance Company, 2018ONCA 718 at para 169, 84 CCLI (5th) 124; see also Central Trust Co. v Rafuse, (SCC), [1986] 2 SCR 147 at para 224;Tender Choice Foods Inc. v Versacold Logistics Canada Inc., 2013 ONSC 80 at para 20, affirmed 2013 ONCA 474).

It is the facts, notthe law, that must be known or ought to have been known by the plaintiff for the clock to start running (see Luscar Ltd. v PembinaResources Ltd., 1994 ABCA 356 at para 129, [1995] 2 WWR 153 [Luscar], citing with approval Hill v South Alberta Land RegistrationDistrict, 1993 ABCA 75, [1993] 5 WWR 57 [Hill]). Moreover, as the Alberta Court of Appeal in Hill went on to say “error or ignorance oflaw, or uncertainty of the law, does not postpone any limitation period” (at para 9).

Knowledge of the viability of a legal claim is notrequired; but simple knowledge of the facts, or facts that could have been ascertained with reasonable diligence, is what matters(Dickieson v Dickieson, 2010 ABQB 227 at para 21, 28 Alta LR (5th) 310 [Dickieson]). [44] The argument that the limitation period ought to have been delayed because the appellants were unaware that the transfer mightbe fraudulent in nature cannot be supported by the legal principles identified above.

The appellants did not need to know the extent or typeof loss resulting from the transfer of the AGT shares or the array of available remedies that were open to them. Seeking to interfere withthe transfer of shares to the Trust is one remedy available under the FPA.

As stated above, the appellants did not need to know all the legalaspects of their potential claims against the respondents arising from the transfer; they only needed to know that “having regard to thenature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it” (The Limitations Act, s. 6(2)(d)).As such, I see no error in principle capable of justifying appellate intervention. [45] In

summary, the appellants’ submission that a plaintiff would need to know that a fraudulent transaction — including itsconstituent elements— as opposed to the fact that a transaction, occurred was not raised before the Chambers judge. It is therefore a newissue on appeal, which need not be addressed. Nonetheless, having addressed it, I conclude that it must fail. The question of when thelimitation period began to run is a question of fact and thus subject to the palpable and overriding error standard of review.

The appellantshave failed to establish an error of this sort in the Chambers judge’s reasoning on this point. I also conclude that he did not apply thewrong standard for discoverability. Since s. 3 of the FPA offers a remedy to the appellants for a breach of contract, they did not need toknow that a fraudulent transaction might have occurred; it was sufficient to know that a transaction had occurred for which “a proceedingwould be an appropriate means to seek to remedy it”. 3.

Did the Chambers judge err in comparing the appellants situation to that of Şekerbank? [46] The appellants assert the Chambers judge too readily compared what they did or did not do to the enforcement effortsundertaken by Şekerbank in Saskatchewan. This, they say, caused the Chambers judge to become sidetracked and to treat Şekerbank as ifit was a reasonable creditor that was “similarly situated” to their circumstance.

Given the factual differences with their respective financingarrangements, they say that was the wrong yardstick by which to measure their awareness of the Trust. [47] As a starting point, I see nothing in the appellants’ arguments that challenges the principle of law that, in assessingdiscoverability, a judge may consider the actions of a similarly situated plaintiff. The Chambers judge made this point at paragraph 87,where he said:

Where multiple claims have arisen against certain defendants, the question of when a claim is first discovered by a similarly situated plaintiff is not necessarily determinative of the issue, but is certainly relevant in the due diligence analysis: see Roberts v E. Sands & Associates Inc. , 2014 BCCA 122 . [ 48 ] To be clear, the Chambers judge did no more than say that assessing the discoveries made by a similarly situated plaintiffs against the same defendant is a relevant consideration. He did not say it was determinative.

While it is uncertain how much weight the Chambers judge assigned to this consideration, I find it noteworthy that he referenced it only once after itemizing a host of other factors that played into his discoverability analysis, including whether the act that underpinned the claim occurred in a foreign jurisdiction.

That was the extent of his discussion on the similarly situated creditor point. [ 49 ] The appellants next argue the factual differences between their situation and those faced by Şekerbank made their respective situations distinguishable and thus the comparison drawn by the Chambers judge was unwarranted and improper.

Those distinguishing features, the appellants say, are twofold. [ 50 ] First, the Şekerbank proceedings in Saskatchewan involved a court application pursuant to The Enforcement of Money Judgments Act , SS 2010, c E-9.22 [ EMJA ], for a pre-judgment preservation of assets order while its Turkish action remained extant. It was during the process of preparing material for a preservation order that Şekerbank, through its Canadian legal counsel, became aware of the Trust.

This caused Şekerbank to make a slight adjustment to its legal strategy i.e., to apply for an order restraining the respondents from disposing of the shares in the Trust. The appellants say the difference is material because Şekerbank would not have discovered the Trust and Hüseyin ’s share transfer to AGT but for its pursuit of a pre-judgment remedy in this province. The appellants describe the grant of pre-judgment relief as extraordinary and far from routine.

Further, they point to the fact that, in contrast, they were mired in and occupied by the underlying debt action in Turkey. [ 51 ] I do not accept this argument. The EMJA is a comprehensive legislative scheme intended to coordinate and facilitate the law with respect to the enforcement of money judgments. Preservation orders are housed under

Part II of the Act . It provides for an asset preservation remedy that balances the need to ensure that assets are not out of reach for judgment creditors before judgment enforcement measures can be invoked, with the need to protect a defendant’s and third party’s property rights. (Ronald Cuming and Donald Layh, The Saskatchewan Enforcement of Money Judgments Act: Commentary and Analysis (Regina: Queen’s Printer, 2012 at 61). The availability of a preservation order is limited to two types of actions: (

a) an action that, if successful, would lead to a money judgment; and (

b) an action that, if successful, would result in an order declaring void a fraudulent conveyance or preference (s. 5(5)). To obtain a preservation order, an applicant must convince the court that its claim is a recognized cause of action and is not groundless. An application can be brought even though the action underpinning it has been commenced in another jurisdiction so long as the action “would, if successful, result in a judgment that is enforceable as a judgment of the court” (s. 5(2)).

On this footing, pre-judgment relief under the EMJA is neither extraordinary nor far from routine. [ 52 ] How Şekerbank came to pursue a preservation order in Saskatchewan was explained by this Court in Arslan v Şekerbank T.A.S. , 2018 SKCA 77 , 38 CPC (8th) 311 [ Arslan ] in this way: [1] The appellant, Hüseyin Arslan, guaranteed loans owing to the respondent, Şekerbank T.A.Ş. [Şekerbank], in the Republic of Turkey.

Sometime later, he transferred shares of a Canadian corporation into a trust of which the appellant, Murad Al-Katib, is the sole trustee. [2] The Turkish debtors defaulted on their loans and Şekerbank commenced proceedings against Mr. Arslan in Turkey. In reliance on the Turkish litigation, Şekerbank obtained a preservation order under The Enforcement of Money Judgments Act , SS 2010, c E-9.22 [ EMJA ], restraining Messrs.

Arslan and Al-Katib from disposing of the shares held in the trust. Şekerbank next commenced an action in Saskatchewan alleging that the transfer of the shares into the trust had been a fraudulent conveyance. They sought a preservation order in connection with that action as well. This led to a consent order prohibiting Messrs. Arslan and Al-Katib from disposing of some 850,000 shares transferred by Mr.

Arslan to the trust. [ 53 ] The important takeaway from Arslan is that Şekerbank not only began enforcement measures against Hüseyin in Turkey but it also did so in Saskatchewan and before those foreign proceedings had concluded. In reliance on the Turkish litigation, Şekerbank obtained a pre-judgment preservation order under the EMJA in Saskatchewan. Şekerbank doubled down on its enforcement measures in Saskatchewan by commencing a fraudulent conveyance action and by seeking a preservation order in connection with that local action as well. There is nothing magical or far reaching in any of this.

Like the appellants, the original action was commenced in Turkey, but unlike the appellants, Şekerbank took steps to seek pre-judgment protection in Saskatchewan by freezing assets pending the outcome of the litigation in the other jurisdiction. Following its discovery of the transfer of shares, Şekerbank commenced an action to set aside that transfer as a fraudulent conveyance. To be clear about this, there has been no ruling in this jurisdiction that the transfer of the shares to the Trust was fraudulent. [ 54 ] The second point of distinction advanced by the appellants is factual in nature.

They analogize their discovery of the Trust to finding a “needle in a haystack” because, unlike Şekerbank, the corporate debtor was Asya, not Arbel, and, further, the appellants did not advance loans to Asya on the strength of the Arslans’ shareholdings in Arbel. In contrast, they assert Şekerbank knew of Hüseyin’s shareholdings in Arbel when it advanced financing to that corporation. According to the appellants, this “gave Şekerbank a baseline against which to compare the January 2013 Turkish Trade Registry Gazette shareholdings”.

The failure to appreciate those key distinctions, the appellants say, caused the Chambers judge to undertake a superficial, if not flawed, “compare and contrast” exercise without regard to the facts that distinguished the two situations. In appellate terms, they assert the Chambers judge’s misunderstanding of the evidence caused him to fall into error. [ 55 ] The alleged errors are said to be found in the following passages from the Chambers Decision : [94] … The defendants all signed as guarantors for large corporate loans.

The plaintiffs all knew that the defendants were major players and/or shareholders in a number of those corporate entities, including Arbel, at the time the guarantees were signed. The loans in question were not small. They ran into the tens of millions of Turkish Lira in each instance.

… [98] In this case, all the plaintiffs were aware, at the time of the financial transactions in Turkey, that the defendants were officers of Arbel and that Huseyin Arslan, in particular, was a major shareholder. None of the plaintiffs, either at the time of entering the loan agreements, or in the aftermath of the defaults, investigated the corporate holdings of the guarantors. … (Emphasis added) [ 56 ] I do not share the appellants’

interpretation of those two passages as suggesting that the appellants had lent money to Arbel. The Chambers judge simply made the point that the appellants knew the Arslans were players and/or shareholders in a number of corporate entities , including Arbel, when they signed the guarantees, and that Hüseyin was a major shareholder. Contrary to the appellants’ submission, the Chambers judge did not assess the discoverability issue from the perspective that they had loaned money to Arbel. (For examples of this, see paragraphs 11 and 12 of the Chambers Decision ). [ 57 ] This

interpretation is consistent with the evidence from the officers of the appellant institutions. Gercek Onal, the Executive Vice President and Corporate Secretary of Fibabanka, provided an affidavit deposing that, while the Fibabanka loans were advanced to the corporate entity Asya, Hüseyin, Hasan, and Mahmut had all entered into the loan agreements as joint debtors and guarantors. Mr. Onal went on to say that Hüseyin, Hasan and Mahmut all had shares in a “prominent Turkish company called Arbel”, which he described as “one of the world’s leading legume exporting companies”. Mr.

Onal also deposed that, as of June of 2009, Hüseyin and Mahmut each held in excess of 12,000 shares in Arbel. The affidavit does not clarify when he acquired that information. [ 58 ] Mr. Onal was cross-examined on his affidavit, from which the following exchange has relevance to the argument Fibabanka advances on appeal: Q In that application process to provide those loans or bonds, do you find out financial information in relation to your debtors and their guarantors? A By granting the loans, you -- you mean? Q Yes. A Yes, of course.

Q You would secure from them financial information in order to ascertain whether you wanted to advance those loans, correct? A That's correct. You are take -- we are taking the financials -- I mean that kind of paperwork, we can say. Q Right. And in that paperwork with respect to the Arslan family, there would be reference to their holdings in Arbel? A I don't know this because we granted the credit to Asya Akartakit. It's a different company from Arbel. Q Right. And then in terms of the actual wherewithal of Mr.

Arslan and the Arslan family, you would have secured information in relation to their ability to meet their obligations should they have to be called? A Sorry, can I have it again? Q Yeah. You would have secured financial information from your guarantors -- A Yes. Q -- to give you some comfort that they would be able to meet the obligations should they be called upon to do so? A Yeah, that's correct. [ 59 ] While Mr.

Onal attempted to resile from that answer later in his cross-examination, he spoke in generalities and stated that some of the detail — including steps initiated to investigate the company and the guarantors — was undertaken by the Fibabanka in-house collection department. In other words, I understand him to say that he had no firsthand knowledge. Mr.

Onal later conceded that Fibabanka gained its knowledge of the impugned share transfer in Saskatchewan from Dr. Öztunc and that apart from Dr. Öztunc, he did not know of anyone capable of doing “those sorts of transactions” in Turkey. [ 60 ] Cenk Tulumen, the CEO of Sardes, also swore an affidavit in these proceedings. Mr. Tulumen was quite certain that Sardes had not obtained financial information from the guarantors at the time the factoring agreements were signed.

However, as was clear from his affidavit, Sardes had commenced default proceedings in Turkey against Asya in April of 2013 and initiated enforcement proceedings against Hüseyin (among others) in May of 2013 to seize and preserve assets for what was by then a substantial debt. Under cross- examination Mr. Tulumen confirmed that Sardes had taken steps to realize on the assets of Hüseyin at that time but, as he explained, Sardes only took “local legal action” against the guarantors and did not pursue anything on the international level. [ 61 ] Affidavit evidence was also filed by Alternatifbank.

Its Branch Director in Mersin, Turkey, Can Tulay Erdal, provided similar evidence to that given by Mr. Tulumen and Mr. Onal. In the cross-examination of Musa Kerim Mutluay, Executive Vice-President of Alternatifbank, he conceded that it was common practice in Turkey to check land registries and the Chamber of Commerce to ascertain what assets a guarantor has in Turkey. [ 62 ] To conclude on this point, I see no palpable and obvious error arising from the impugned passages. The evidence of Messrs. Onal, Tulumen and Erdal was imprecise, vague, ambiguous, and lacking in detail.

Their obtuse responses and absence of precision was

significant because, as the Chambers judge aptly pointed out, when the discoverability rule is invoked, “the plaintiffs bear the burden of establishing that, even with the exercise of due diligence, their claims were not discoverable within the limitation period” (at para 82). Discharging that burden required the appellants to adduce evidence explaining what, if any, steps they had taken to investigate their claims prior to commencing an action in Saskatchewan, when they took those steps and why those steps were reasonable.

And as the Chambers judge went on to observe, “a limitation period will not be tolled while a plaintiff sits idle and takes no steps to investigate. Where there is a need for inquiry, some steps must be taken” (at para 85). [ 63 ] Based on the evidence before him, the Chambers judge determined the appellants did not take reasonable efforts to investigate the Arslans’ holdings after the corporate debtors had defaulted even though a prudent lawyer entrusted with debt collection responsibilities would have checked the public registries to determine the status of a guarantor’s assets.

Bearing in mind the weak evidence filed by the appellants and the burden they bore in response to the respondents’ application, these were findings of fact that were open to the Chambers judge. As I see it, the appellants’ complaint with the Chambers judge’s findings of fact is, at most, a request for this Court to re-weigh the evidence; however, absent palpable and overriding error, appellate intervention is not warranted. [ 64 ] The appellants’ argument also ignores the evidence of Basar Yilmaz, a lawyer who practices in both Belgium and Turkey. Mr.

Yilmaz provided affidavit evidence about the accessibility of information in the Registry and other public registries in other countries along with debt collection practices and the expectations of financial instructions in Turkey. The Chambers judge accepted the vast majority of Mr. Yilmaz’s affidavit as being “first-hand experience in an area about which he is knowledgeable” (at para 53) and that it was relevant, probative and necessary. [ 65 ] Moreover, even if the Chambers judge did err in his assessment of this body of evidence, the alleged error was not overriding.

As I explain below, the discoverability findings were based on the entirety of the evidence, including the opinion of Mr. Yilmaz which the Chambers judge accepted, and the assessment of the reasonableness of the appellants’ action. Those conclusions did not turn on the appellants’ knowledge of Hüseyin’s shareholdings in Arbel. To warrant appellate intervention, the error must not only be palpable, but must also be overriding in the sense that if affected the result. In my view, even if an error was made out, it did not rise to that level. 4.

Did the Chambers judge err in his assessment of the appellants’ reasonable diligence? [ 66 ] The appellants’ assert that the Chambers judge erred in finding that they had failed to exercise reasonable diligence. [ 67 ] The Chambers judge began his analysis on this point with this proposition: the determination of whether a party has discovered a claim is a question of fact that requires a fact-based, contextual analysis. He understood the central consideration in any given case to be whether any of the prospective plaintiffs [appellants] knew “enough facts to realize that he or she has a claim” (at para 79).

As noted above, the question is not restricted to when a plaintiff had actual knowledge but, as per the language of s. 6(1) of The Limitations Act , includes situations where “the plaintiff ought to have known of the existence of the claim” (at para 80).

As outlined above, the Chambers judge went on to explain that a cause of action arises and a claim is discoverable, “when the material facts on which it is based ought to have been discovered by the plaintiff with reasonable diligence” (at para 81) and a plaintiff who claims to have exercised reasonable diligence bears the burden of proving it to be so. [ 68 ] As the Chambers judge went on to observe, discharging that burden “requires the plaintiffs to adduce evidence explaining the steps they took to investigate the claim prior to commencing it, when they took such steps (or why they failed to take such steps), and explain why it was reasonable to proceed as they did” (at para 82).

Further, the exercise of due diligence, he said, is assessed from the point of view of the “reasonable person in the shoes of the prospective plaintiff” (at para 83), which necessarily entails an examination of the facts.

The Chambers judge was keenly aware of the fact that the underlying claim arose in a foreign jurisdiction, which he understood to mean that “a claim was not discoverable in a foreign jurisdiction until a judgment creditor knew, or ought to have known, that the judgment debtor had exigible assets in that jurisdiction” (at para 89). [ 69 ] Those points made, the Chambers judge turned to the following facts that favoured the appellants’ position: (

a) as the actions and parties were in Turkey, not Canada, the appellants’ focus on Turkish assets was reasonable; (

b) advertisement in Canada of the Arslans’ conveyance of the AGT shares may not have received the same level of publicity in Turkey as it did in Canada; and (

c) pursuing assets outside of Turkey was not a common experience for these appellants. [ 70 ] On the other side of the ledger, the Chambers judge found that (

a) the appellants were sophisticated parties; (

b) this was a commercial relationship; (

c) the respondents were the guarantors of large corporate loans; (

d) the appellants knew the Arslans were major players and/or shareholders in a number of those corporate entities, including Arbel, at the time the guarantees were signed; and (

e) the information that led Dr. Öztunc to the Trust was not concealed and was available through the Registry. [ 71 ] The Chambers judge also made several findings based on the unchallenged evidence of Dr. Öztunc and Mr. Yilmaz. Dr. Öztunc’s evidence is discussed in paragraphs 12 and 14 above and will not be repeated. According to Mr. Yilmaz’s affidavit evidence, the Registry can be monitored on the Official Gazette, which is a very quick and simple way to gain online access to a vast range of information about Turkish companies.

In his opinion, a prudent lawyer entrusted with debt collection responsibilities should check public registries – including the Registry – to determine how to proceed regarding a guarantors’ assets. Mr. Yilmaz went on to depose that, if a guarantor’s assets are located in a foreign jurisdiction, a prudent Turkish lawyer should consult with their client for the purposes of retaining a lawyer in the jurisdiction where those assets are located. This, he said, is standard practice. [ 72 ] Based on that body of evidence, the Chambers judge found or inferred that (

a) information that Arbel’s shares had been transferred to AGT was available from the Registry (as shown by how a knowledgeable person like Dr. Öztunc had been able to discern information that eventually pointed in the direction of AGT), (

b) the information that led Dr. Öztunc to the Trust was not concealed, and (

c) the appellants did not investigate the corporate holdings of the guarantors. None of those findings are challenged on appeal. [ 73 ] While the Chambers judge did not hold the appellants to the unrealistic expectation of having to “scour every corner of the earth” to determine if and where a debtor has assets, he nonetheless concluded that due diligence requires creditors to “take reasonable steps to investigate what assets the debtor might have” (at para 97), especially where the debts are large, as they were in this case. In that regard, the Chambers judge found Dr. Öztunc’s evidence persuasive and flatly rejected the appellants’ suggestion that Şekerbank had got

“lucky” (at para 102). [ 74 ] Applying the law to the facts as found, the Chambers judge reached this conclusion: “They [the appellants] did not make reasonable efforts to investigate the [respondents] holdings, even after the corporate debtors defaulted and, as a result, they did not learn of the publicly available and readily accessible information that would have led them to have knowledge of their claim. In my view, given the circumstances, the nature of the parties, the nature of the business transaction involved, and the magnitude of the loans in question, reasonable diligence required more” (at para 103).

Accordingly, he concluded the appellants, exercising reasonable diligence, ought to have discovered their claim before December 21, 2014. [ 75 ] To warrant appellate intervention in relation to the reasonableness assessment, the Chambers Decision had to be tainted by a reviewable error. As discussed above, I see no legal error. Neither am I persuaded that the decision is tainted by a palpable and overriding error with respect to the central finding that the appellants had failed to exercise reasonable diligence.

It is trite to say, but no less legally accurate and important to note, that it was up to the Chambers judge to assess and weigh the evidence on this key issue. 5. Did the Chambers judge err by failing to consider the status of the Turkish proceedings? [ 76 ] The appellants raise two additional grounds in their respective factums.

Although neither were pressed in their oral submissions, I will briefly address each of them. [ 77 ] First, the appellants submit that it was not legally appropriate for them to have pursued a fraudulent conveyance action in Saskatchewan until the Turkish Court had finally determined that they were creditors of the respondents. They assert the Chambers judge erred by failing to consider that litigation respecting Asya’s underlying debts and payment orders was still ongoing in Turkey.

They rely on Prima Technology Inc. v Yang , 2018 BCSC 94 and Figliolini in support of that proposition. [ 78 ] Second, the appellants argue that, even if they had discovered that the Arbel shareholdings had changed, that fact alone would not have led them to conclude that they ought to have immediately retained foreign legal counsel to conduct the appropriate searches of AGT.

They argue further that it would not have been apparent from the Registry whether the Arslans had an interest in a Saskatchewan corporation, and further, that it was reasonable for a creditor to pursue standard remedies in Turkey before taking extraordinary steps outside of that jurisdiction. [ 79 ] I am not persuaded by either argument. To place things in perspective, the appellants provided no evidence that they had purposefully delayed commencing their fraudulent conveyance actions in Saskatchewan pending a final determination in Turkey.

The fact is, all three institutions commenced actions in Saskatchewan shortly after they met with Dr. Öztunc. In any event, much of this argument is eroded by Fibabanka’s concession that a creditor could commence a fraudulent conveyance action in a foreign jurisdiction while the debt claim in the home jurisdiction is pending. For its part, Alternatifbank had obtained judgment against the Arslans in May of 2013 and Sardes had entered into a Settlement and Debt Liquidation Protocol with Hüseyin and the corporate debtors in 2013.

There was no evidence before the Chambers judge that Sardes delayed bringing an action in Saskatchewan because of the Settlement. [ 80 ] Second, despite the significant amount of money owed to each creditor, the evidence revealed that they consciously chose to pursue enforcement action against the corporate debtor Asya and the guarantors in Turkey. That was a strategic choice on their part. Further, as the testimony of Mr. Onal tellingly reveals, Fibabanka (at least) did not have the wherewithal to pursue a more aggressive collection strategy because they did not have someone like Dr. Öztunc under retainer.

According to Mr. Onal, only Dr. Öztunc or someone with similar credentials would have had the requisite experience and ability to pursue collection on an international level. The decision to defer legal action against the guarantors beyond the borders of Turkey was a strategic option pursued by the appellants. [ 81 ] Moreover, as noted by Mr. Tulumen, Sardes opted to pursue its remedies through in-house counsel rather than reaching out to someone with the skill and knowledge of a Dr. Öztunc.

As noted in Luscar at paragraph 129 , citing from Hill with approval: “Error, ignorance or uncertainty of the law, which may require a potential claimant to diligently obtain legal or other expertise to interpret the facts, does not postpone any limitation period”. See also Salna v Awad , 2011 ABCA 20 , 499 AR 264. [ 82 ] On the evidence before him, and as explained above, the Chambers judge determined that, had the appellants exercised reasonable diligence at the time of the corporate default, that would or should have caused them to investigate the status of exigible assets in the hands of the guarantors.

That inquiry, he found, would have led them to discover first, that the Arslans had assets in Saskatchewan and second, that those assets had been transferred to the Trust. The evidence of Dr. Öztunc and Mr. Yilmaz was central to that finding. There is no basis to interfere with it.

Furthermore, as the Chambers judge observed, the appellants offered no evidence that they, either individually or collectively, had experienced any practical difficulty or impediment in attempting to locate assets sufficient to satisfy the outstanding debts or had delayed an investigation of assets or their claims in Saskatchewan because they were awaiting a determination in Turkey. In the result, the Chambers judge found the appellants inaction was unreasonable. VII. CONCLUSION [ 83 ] The appeals are dismissed, with one set of costs to each of the respondents in the usual way. “Schwann J.A.” Schwann J.A.

I concur. “Jackson J.A.” Jackson J.A. I concur. “Caldwell J.A.” Caldwell J.A.