Overview Of The Fraudulent Preference Act

The Fraudulent Preference Act provides protection to creditors prejudiced by debtors conveying their property so as to favour one or more creditors over another or others. The Act should be read in conjunction with the Fraudulent Conveyance Act.

GENERAL EFFECTS ON LAND TITLE PRACTICE

The Act provides that various dispositions of property by a debtor are void as against creditors. In accordance with s. 9 of the Act, it is not necessary for a creditor to institute an action to set aside such dispositions; rather, an application may be made to the Supreme Court calling on the debtor to show cause why the property should not be sold to realize an amount payable under a judgment or why a disposition should not be set aside. The court may order that a judgment creditor is entitled to register their judgment against the land in respect of which the application is made or against the judgment debtor’s or another person’s interest in the land. Under s. 11 of the Act the court may issue a certificate for registration of an order made under s. 9.

CROSS REFERENCES AND OTHER SOURCES OF INFORMATION

Certificates of Pending Litigation

See s. 215(8) of the Land Title Act, which specifically entitles a judgment creditor who applies under s. 9 of the Fraudulent Preference Act to register a certificate of pending litigation.