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Must Have Legal Claim Before Death, Before It’s Fraudulent Conveyance

Legal Claim Before Death

Todays case discussion is Hossay v Newman 1998 BCJ 3289

The plaintiff was adult son of the testator.

The Testator placed his major assets in joint tenancy with one of defendants shortly before his death with result that assets passed to that defendant by operation of law and did not form part of testator’s estate .

The son sued to set aside the Joint tenancies on the basis they were Fraudulent conveyances meant to defeat his claim as a creditor under the Wills Variation act.

The court dismissed the claim.

Section 1 of Fraudulent Conveyance Act does not apply to claims that arise solely on death of debtor/testator but rather contemplates situation where the claimant had some legal or equitable claim against debtor during debtor’s life.

Where claim arises solely on death under Wills Variation Act, claimant does not come within “creditors or others” within meaning of s. 1 of Fraudulent Conveyance Act.

As the plaintiff’s claim under Wills Variation Act arose solely on testator’s death, s. 1 of Fraudulent Conveyance Act did not apply to the inter vivos transfer by testator to the defendants.

 

If there is no legal or equitable claim which pre-exists the death of the testator, then the claim is solely one arising on death under the Wills Variation Act. Without any prior foundation, the claimant does not have the status of creditor or others within the meaning of s. 1 of the Fraudulent Conveyance Act.

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