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ONTARIO’S FRAUDULENT CONVEYANCES ACT: EXPLORING ESSENTIAL REAL ESTATE LIMITATION PERIODS

fraudulent conveyances act
fraudulent conveyances act

Fraudulent Conveyances Act: Introduction

In this Brandon’s Blog, we discuss the Ontario Fraudulent Conveyances Act, R.S.O. 1990, c. F.29 and its elaborate implications within the substantial world of real property transactions. We will navigate the labyrinthine provisions of the Act, and enhance your understanding using a real-world example. We will also clarify the connection between the Fraudulent Conveyances Act, fraudulent conveyances and Ontario limitation periods in the realm of real estate transactions.

We will also check out the interaction between the Fraudulent Conveyances Act and limitation periods in realty transactions. Limitation periods play a considerable duty in determining when lawsuits can be brought forward, and comprehending just how they associate with fraudulent conveyances is important in navigating the intricacies of the property landscape. We will check out a recent decision of the Court of Appeal for Ontario released on August 4, 2023, which clears up this whole issue.

How the Fraudulent Conveyances Act works

The Ontario Fraudulent Conveyances Act is a stunning piece of Ontario provincial law that stands as a guardian of creditors’ legal rights versus the treacherous schemes of debtors. With unfaltering willpower, this Act has been made to ward off any and all efforts by debtors to slither out of their financial obligations by slyly moving their properties to others.

In its noble search for justice, the Fraudulent Conveyances Act makes sure that creditors are protected from the conniving strategies of debtors who look to avert their obligations. This legislation supplies a strong structure for creditors to attack any kind of potentially uncertain transactions and obtain the return of any type of funds or properties that may have been cunningly relocated.

Within the realm of Ontario’s legal landscape, the Fraudulent Conveyances Act tackles the extensive duty of guarding the position of creditors versus the shrewd maneuvers entailing the surreptitious change of ownership of property, either personal or real, by individuals or corporations trying to move their assets away from the responsibility of their debt obligations through webs of deceit.

Operating as a linchpin of justice, this Fraudulent Conveyances Act plays a crucial duty in the upkeep of equity and also moral integrity within the realm of property dealings. It possesses the power to nullify those transactions that arise from the indelible mark of deceit, thereby fortifying the bedrock concepts of fairness and equity.

fraudulent conveyances act
fraudulent conveyances act

Definition of fraudulent conveyance

Within the province of Ontario, the concept of a fraudulent conveyance takes shape as the orchestration of a maneuver wherein one or more assets, akin to pawns on a strategic board, are relocated, driven by the very purpose of ensconcing these assets beyond the reach of creditors. This type of transfer garners the label of fraudulent, a designation reflecting a means to veil and shroud property, rendering it escaping the reach of creditors.

This legislative framework, known as the Ontario Fraudulent Conveyances Act, unveils a list of specific benchmarks, all for the recognition of a transfer swathed in the cloak of deception and thus null and void. A transfer imbued with an intent to stall and thwart creditors’ aspirations or, alternatively, the transfer is one with a price tag significantly below fair market valuation. Upon a court determining that a transfer is a fraudulent conveyance, the property is undone, returning back to the debtor owner’s estate for the benefit of its creditors.

Who is covered by the Fraudulent Conveyances Act and what actions are prohibited under the Act?

The Fraudulent Conveyances Act applies to the affairs of both individuals and corporate entities. This legislation stands as a guardian, shielding the vested interests of creditors. Its purpose is to undo the webs of illicit property transfers aimed at moving property out of the reach of creditors.

Any transaction found by the court to violate the Act will be reversed. The heart of this Act aims to maintain integrity in transactions and remedy those designed to be deceitful.

fraudulent conveyances act
fraudulent conveyances act

Importance of understanding limitation periods in business transactions

Understanding limitation periods within the world of transactions is very important in comprehending everybody’s rights. An astute grasp of limitation periods is extremely vital for any person pondering initiating a lawsuit. This is particularly true in the world of attempting to turn around deals as being in breach of the Fraudulent Conveyances Act.

As you will certainly see below, this is the essence of the recent decision of the Court of Appeal for Ontario entailing a real estate deal that a bank was attempting to obtain reversed as contravening the Fraudulent Conveyances Act.

Time Period for fraudulent conveyance actions: Limitations Act vs Real Property Limitations Act

The problem needing a decision from the Court of Appeal for Ontario when it comes to Bank of Montreal v. Iskenderov, 2023 ONCA 528 (CanLII) discussed below, is, when it comes to a potentially fraudulent conveyance involving real estate, what is the limitation period?

Under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, the restriction duration, or time period to bring a fraudulent conveyance action in Ontario is 2 years from the date of the transfer or disposition of property. However, the Real Property Limitations Act, R.S.O. 1990, c. L.15 (RPLA) states:

“4. No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.”

When it comes to real estate, if a creditor wishes to challenge a fraudulent transfer under the Fraudulent Conveyances Act, do they have a two-year window from the date of the transfer to initiate legal proceedings or a ten-year window? That is the question the Court of Appeal for Ontario answered in Bank of Montreal v. Iskenderov.

fraudulent conveyances act
fraudulent conveyances act

The Bank of Montreal was embroiled in a legal conflict before the Court of Appeal for Ontario. The plaintiff, or respondent, is the Bank of Montreal, while the defendants, or applicants in the appeal, are Roufat Iskenderov and Elena Lazareva. At issue is the transfer of property from Mr. Iskenderov to his spouse, which the bank claimed was a fraudulent conveyance.

Initially, the motion court found in favour of the Bank of Montreal, specifying the ten-year duration applies in their litigation under the Fraudulent Conveyances Act and allowing the case to proceed. Nonetheless, the applicants appealed, suggesting that a two-year period should apply.

To totally resolve the legal concern bordering which statute and limitation period applies to an action to reserve a fraudulent conveyance of real property, the appeal court assembled a five-judge panel.

In 2008, Mr. Iskenderov transferred his share of a jointly owned home to Ms. Lazareva as part of a separation agreement. In 2008, Mr. Iskenderov fraudulently defaulted on a $400,000 line of credit with the Bank of Montreal. After legal proceedings, Mr. Iskenderov filed for bankruptcy in 2009 and was discharged in 2012.

The Bank began its legal action to challenge the home transfer as fraudulent in 2013. The motion judge considered several issues, including the applicable limitation period and the discharge of a pending litigation certificate.

Here are the key points of this case:

  1. The case involves a dispute related to a transfer of real property deemed fraudulent. The issue arises about whether the appellant should be bound by a previous court decision (*Anisman v. RPLA*) regarding the applicable limitation period.
  2. The motion judge determined that the ten-year limitation period applies, and the action was filed within that time. There was no violation of the limitation period.
  3. The motion judge considered the discoverability of the claim, referencing *Grant Thornton LLP v. New Brunswick*, stating that if the two-year limitation period applied, there was a potential issue regarding when the appellant had knowledge of liability. Summary judgment might not have been granted in this case.
  4. The motion judge decided not to discharge the certificate of pending litigation for the delay due to several reasons: a lack of evidence that the appellant had thwarted intentions to deal with the property, most of the delay caused by the appellants, the risk of prejudice to the Bank due to previous fraudulent transfer, absence of security offered to the Bank, and the Bank’s readiness for trial.
  5. The appellants raised three issues on appeal, including whether the motion judge’s reliance on *Anisman (ONCA)* for the ten-year limitation period was a legal error. They also questioned the dismissal of the action for delay, but the motion judge ruled in favour of the Bank, extending the time for trial.

    fraudulent conveyances act
    fraudulent conveyances act

In a separation agreement dated January 10, 2008, Mr. Iskenderov transferred his interest in their jointly held matrimonial home to Ms. Lazareva. On April 28, 2008, Mr. Iskenderov defaulted on a $400,000 line of credit to the Bank of Montreal, which he had obtained fraudulently.

After the Bank obtained a judgment against Mr. Iskenderov for $483,449.89 on January 14, 2009, he made an assignment into bankruptcy on March 24, 2009. He received his bankruptcy discharge in November 2012. The stay of proceedings arising from the bankruptcy was lifted by the court to enable the Bank of Montreal to proceed to pursue its judgment against him under s. 178 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (“BIA”), being a claim not discharged by his discharge from bankruptcy.

The Bank started its litigation to declare the transfer of the home a fraudulent conveyance and to set it aside under the Fraudulent Conveyances Act on June 18, 2013. On February 17, 2015, under s. 38 of the BIA, the Bank acquired from the Trustee the right to commence this action and on March 4, 2015, the Bank obtained an Assignment of Claim from the Trustee. The Bank also successfully obtained a certificate of pending litigation against the property in March 2015. The litigation “moved sluggishly along”, with delay by both parties.

The motion court needed to deal with numerous crucial concerns in the case, including whether a previous decision made by the Court of Appeal for Ontario would bind the current case. In that case (Anisman, Re) the appellate court had formerly ruled that the ten-year period under s. 4 of the RPLA related to an activity to declare a fraudulent conveyance of real property against creditors.

Additionally, the judge had to figure out whether the two-year limitation period under the Limitations Act should be used in the Fraudulent Conveyances Act action as well as if there was an authentic issue for trial regarding when the Bank first had knowledge of the transfer. There was additionally the matter of whether the certificate of pending litigation ought to be discharged because of delay and whether the entire case itself needs to be rejected for the very same reason.

The motion court was not tasked with establishing whether the contested transfer was a fraudulent conveyance; that issue was scheduled for trial if the matter was not discharged either as statute-barred or for delay.

The motion judge found that:

  1. The ten-year limitation period in the RPLA applies and the action was commenced well within that time.
  2. If the two-year limitation period had applied, there was a triable issue regarding when the Bank had the knowledge to give it the “plausible inference” of liability. Therefore summary judgment would not have been granted but the issue would have gone for trial.
  3. He would exercise his discretion not to lift the certificate of pending litigation.
  4. The appellants were more responsible than the Bank for the litigation delay. The matter was ready to be set down for trial, and there is potential merit to the action. For those reasons, the motion judge declined to dismiss the action for delay and granted the Bank’s motion to extend the time to set the action down for trial.

Considerations when evaluating liability and the applicable limitation period: The Court of Appeal for Ontario analysis

During the appeal, the appellants presented three points of contention. Firstly, they challenged the motion judge’s decision to follow the Anisman (ONCA) principle, which upholds the RPLA ten-year limitation period over the Limitations Act’s two-year limitation period in an action to declare a fraudulent conveyance of real property void against creditors. Secondly, they contested the motion judge’s finding of a triable issue regarding when the Bank actually discovered that it may have a claim if the shorter Limitations Act time period applies to its action under the Fraudulent Conveyances Act. Lastly, they raised concerns about the motion judge’s factual findings regarding the delays in the action, which they believed amounted to palpable and overriding errors.

The Court of Appeal for Ontario first looked at the origin of the present RPLA can be traced back to the Real Property Limitation Act, 1833, 3 & 4 Will. 4, c. 27 (U.K.), which has been in existence virtually unchanged since 1833. It was incorporated into the Ontario statutes in 1834 through an Act to amend the Law respecting Real Property, 1834, (U.C.) 4 Will. IV, c.

The wording of the limitation period for actions to “recover any land” in England and Ontario has remained the same over the years, although the duration of the limitation period has varied. In 1910, the provisions were moved from the Real Property Limitation Act, 1833, to form Part I of the Limitations Act, S.O. 1910, c. 34, where they remained until 2004. Parts II and III of the old Act were revoked, and Part I was renamed as the RPLA.

The appeal court held that before the enactment of the new Act, s. 4 of the RPLA or its equivalent provisions were never applied to an action for a fraudulent conveyance of land.

After reviewing appropriate case law, the five appellate judges unanimously agreed on all points of law, including:

  1. The Fraudulent Conveyance Act doesn’t revert property to the grantor; it removes obstacles to the creditor’s recovery and allows additional remedies.
  2. Successful creditors in a fraudulent conveyance action don’t necessarily need property return; a court declaration of conveyance as “void against” them suffices
  3. An Order under the Fraudulent Conveyances Act doesn’t change property title, but creditors can treat the transferee’s property as liable for debts.
  4. Fraudulent conveyance actions do not result in the recovery of land rights; the conveyance is voided.
  5. The Fraudulent Conveyances Act statute aims to enable creditors to execute against the land for debts owed by the transferor.
  6. The interpretation of “an action to recover any land” in the RPLA differs from its application in fraudulent conveyance cases.
  7. “To recover any land” doesn’t mean to regain lost property, but to obtain land by court judgment.

Therefore, the conclusion is that the Limitations Act, 2002 and not the RPLA applies to fraudulent conveyance actions. Therefore, the Court of Appeal for Ontario allowed the appeal by Roufat Iskenderov and Elena Lazareva and made the following orders:

  • The applicable limitation period for the fraudulent conveyance action under the Fraudulent Conveyances Act is two years from the date of discovery of the claim by the respondent under s. 4 of the Limitations Act, 2002.
  • The discoverability issue shall be tried together with the fraudulent conveyance issue and set down for trial in accordance with the order of the motion judge.
  • Costs of the appeal to the appellants in the agreed amount of $7,500.00 inclusive of disbursements and HST.

So there is now going to be a trial of the issue of whether the Bank of Montreal was on time or not in bringing its action under the Fraudulent Conveyances Act, now that it has been settled that the limitation period for bringing the action under the Fraudulent Conveyances Act is a two-year time limit.

Fraudulent Conveyances Act: Conclusion

I hope you enjoyed this Fraudulent Conveyances Act Brandon’s Blog. It is important for everyone to understand what constitutes a fraudulent conveyance of property, either personal property or real estate, especially when the person or company transferring the property is insolvent. Problems with making ends meet are a growing concern in Canada, affecting individuals of all ages and income levels.

Creating a solid financial plan can be the key to unlocking a brighter and more prosperous future. By taking control of your finances, you can prioritize your expenses, set clear financial goals, and build a strong foundation for your dreams to come true. With the right mindset and approach, financial planning can empower you to regain control, eliminate this issue as a source of stress in your life and find peace of mind.

Individuals must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

fraudulent conveyances act
fraudulent conveyances act
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STATUTE OF LIMITATIONS: IS STATUTE BARRED DEBT A BASIC PROPER BANKRUPTCY CLAIM IN ONTARIO?

statute of limitations
statute of limitations

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon Blog, please scroll to the very bottom and click play on the podcast.

Know Your Limitations: The Basic Limitation Period in Ontario

The basic limitation period in Ontario is 2 years from the date knowledge of the claim arises. The phrase “statute of limitations” is used to describe this time period. This is the time period between when you discover you have a claim and when you are legally permitted to bring that claim forward in a court of law. If you do not file your lawsuit within the 2-year limitation period, your right to sue will be extinguished and your claim will be forever lost. This is known as your claim being statute barred.

Statute of limitations: Limitations Act, 2002, S.O. 2002, c. 24, Sched. B

Each province has its very own rules, but the policies are comparable throughout the nation. In Ontario, the period is set by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (Act). The Act sets out a time limit as to when legal proceedings might be commenced by suing. It defines the time in which an aggrieved person can start a claim developing from any type of injury, loss, or damage that happened as a result of an act or an omission.

The Act sets out the two-year limitation period as follows:

“Basic limitation period

4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. 2002, c. 24, Sched. B, s. 4″

This is where the 2-year statute barred period of time is set in Ontario limitations law.

Can Your Debt Be Eliminated by the Statute of Limitations in Ontario?

Most people don’t realize that their debts can expire, just like the milk at the back of your fridge. In fact, while you can’t get rid of your debt by throwing it in the garbage, it can be eliminated by the basic statute of limitations under the Act. Debt is not considered timeless in Ontario.

There are two other main concepts under the Act also, which are not part of the discussion in this statute of limitations Brandon Blog. The two other main concepts are:

  • Ultimate limitation period (Section 15 of the Act).
  • The different proceedings in respect of for which limitation periods do not apply and therefore there are no time periods or time limits to worry about (Section 16 of the Act).

To keep it simple, when it comes to unsecured debt, the proceeding in respect of trying to recover on a debt by initiating legal action, and the focus of this blog, the applicable limitation period is the 2 year time statute of limitations period.

statute of limitations
statute of limitations

Statute of Limitations: How long can a debt collector pursue an old debt in Ontario

Last week I wrote a blog on various experts predicting that as the economy reopens, there will be increased activity by collection agencies and debt collectors. In that blog, I discuss the role of the debt collection agency and that they are all governed by provincial law. I also highlighted that they get their work either by trying to collect on the debts of their clients or they purchase accounts in default for less than the total amount owed and then try to collect as principal. Outstanding credit card debt is fertile ground for debt collectors and the debt collection process.

What do you do when a debt collector is pursuing you for an old debt? If it’s one you know you can’t pay, your first step should be to contact the agency and inform them of your situation. It’s important, to be honest, and precise when you tell them why you can’t pay what you owe.

Debt can be a very scary thing. When you owe money, you can feel like your life is one big bill you need to pay. It’s easy to want to hide from your creditors, but the more you avoid them, the more likely they will be to take drastic measures to collect their money. If you find yourself in such a situation, the best thing you can do is to face the music and get the matter settled. If you are in Ontario and have questions about your debt, or how to get it resolved, you can contact a Licensed Insolvency Trustee.

Statute of limitations: What does Ontario limitations law say about making a claim on debts even if I can’t sue?

In Ontario, there used to be substantial support for the interpretation that the right to be paid is not extinguished by the Act, but only the remedy of starting legal action in respect of the debt was eliminated. Various other provinces in Canada have passed provisions in their legislation that expressly states that upon the expiration of a limitation period, civil liberties are extinguished.

However, Ontario has not. In Ontario, the old way of thinking was that a financial obligation is snuffed out if an action on the financial debt is not brought within two years of its being due. Instead, the financial obligation continues to be owed.

There was even Ontario judicial authority for this position in:

But that is now in doubt given the recent decision of Master J. E. Mills (as she then was) who is now Justice J.E. Mills (the Registrar in Bankruptcy). Her decision released on March 8, 2021, In re: John Trevor Eyton, 2021 ONSC 1719 (CanLII), may have changed that. I say may, because the Temple and Duca cases were decided by a judge in the Ontario Superior Court of Justice. The Registrar in Bankruptcy sits below the Justices. However, she distinguished the Eyton case before her from the above two judicial decisions.

As you will read below, that decision may very well lead to a great statute of limitations period in respect of defence against any debts that a debt collector is trying to recover on, either by themselves or through legal action, where the debt went into default 2 years or more before.

Statute of limitations: Time limits, collections and bankruptcy

So what is the Eyton bankruptcy decision all about? The issue was a creditor appealing the Trustee’s decision disallowing the creditor’s proof of claim pursuant to s. 135(4) of the Bankruptcy and Insolvency Act (Canada) (BIA) (Form 77—Notice of Disallowance of Claim). The basis of the disallowance was that the Trustee took the position that the claim was statute barred.

The claim was for an unsecured loan where the last payment made was more than 2 years before the date of bankruptcy. Although there may have been some security agreement entered into, it was not perfected under Ontario law at the time of the bankruptcy. Therefore, there was no valid and enforceable security agreement in place.

The Trustee decided that the creditor, being a reasonable person, would have known about the default on the unsecured loan when the next scheduled payment was missed. That was more than 2 years before the bankruptcy and they did not take any action, including legal action. The Trustee went on to say that if the claim in respect of this unsecured loan could no longer be made, then the debt no longer exists.

statute of limitations
statute of limitations

Limitations analysis by the Court

It was indisputable by the creditor that the financial obligation owed by the bankrupt person was statute-barred under the Act and was not enforceable by way of legal action. The creditor relied upon the Temple and Duca cases listed above. They said that it stood for the proposition that although there was finality in respect of the fact that the creditor could not sue in court, the liability in respect of this unsecured debt remained.

The Trustee countered with a long background of case law which has held that in order to be a provable claim in bankruptcy, the financial obligation must be recoverable by legal process. If the financial obligation is statute-barred at the date of bankruptcy, the proof of claim is not sustainable. This principle was adopted by the Privy Council in 1943, the Alberta Court of Appeal in 1988 and the Court of Appeal for Ontario in 1996.

The court considered both lines of cases and decided that the cases cited by the Trustee, especially the 1996 Ontario Court of Appeal decision, bound the Registrar in Bankruptcy. She decided that the Temple and Duca cases could be distinguished and did not bind her decision.

Therefore, the creditor’s appeal was dismissed and the Trustee’s decision that if you can’t sue the debt is no longer a valid one was the correct interpretation.

What the Eyton statute of limitations analysis by the Court means for bankruptcy proceedings

There are some crazy results flowing from this Eyton decision which I am sure will result in more court decisions down the road.

First, the Registrar in Bankruptcy’s decision was in line with the Ontario Court of Appeal, but not certain judges’ decisions as decided in the Temple and Duca cases. The Temple and Duca cases were decided in a court lower than the Court of Appeal for Ontario but higher than the court in which the Registrar in Bankruptcy sits. So until a judge adopts her reasoning that the Temple and Duca cases are distinguishable, the first crazy result is that you have the various levels of the Ontario court system misaligned on this issue.

As a result of this decision in Eyton, we now have a second anomaly. In Temple, one of the judge’s findings was that a debt that is statute barred because of the statute of limitations can be used as the basis for qualification to launch a Bankruptcy Application against a debtor.

The Registrar in Bankruptcy noted that the line of cases relied upon by the Trustee in Eyton was not put before Justice Newbould (as he then was) when he heard Temple. Justice Newbould found in Temple that there was no Canadian authority for the suggestion that a statute barred debt could not support an application for a Bankruptcy Order.

The Registrar in Bankruptcy said that declaration was appropriate in the Temple case. As a result of these decisions, the legislation as it presently stands in Ontario is that a debt that is statute barred due to the statute of limitations, can be used in support of a Bankruptcy Application but after that could not constitute a provable claim in that same bankruptcy. This of course makes no sense.

Statute of limitations for unsecured debts and bankruptcy – What next?

My understanding is that the Eyton decision is being appealed. The appeal must be heard by a judge. Whatever the outcome of the appeal is, it will hopefully do away with these anomalies that currently exist.

UPDATE: THE APPEAL DECISION HAS BEEN RELEASED. TO READ OUR DISCUSSION ABOUT THE APPEAL RESULT, CLICK HERE.

The things to further consider are:

  • Has the debtor given written confirmation of the existence and enforceability of the debt prior to the expiration of the limitation period and before the date of bankruptcy? If yes, then it is a valid debt and is a provable claim in bankruptcy.
  • The disclosure of a statute barred financial obligation in the sworn Statement of Affairs by the insolvent debtor does not make up a recognition of the debt or the waiver of any limitation period for Limitations Act purposes.
  • In respect of claims, the debtor is unsure of and the debtor has not given the written confirmation identified above, then the best treatment would be to include the creditor on the Statement of Affairs but as a contingent creditor. This will give that creditor notice of the bankruptcy and they can decide whether or not to file a proof of claim with backup. If filed, the Trustee will then review the claim and make a determination as to its validity and amount.

    statute of limitations
    statute of limitations

Statute of limitations summary

I hope that you found this statute of limitations Brandon Blog interesting. If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

 

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CREDIT REPORTING BODY: WILL THE STATUTE OF LIMITATIONS ERASE MY DEBT?

What is a credit reporting body?

A credit reporting body is also known as a credit bureau or credit reporting agency. It collects, saves, makes use of and reveals personal credit scores about individual consumers. The bureau refines these details to report on the credit rating or creditworthiness of a person. Businesses considering extending credit to people subscribe to and make use of such a credit reporting body.

One thing the bureaus do is report a listing and condition of your debts. More on this below. People with financial problems who come to see me many times are confused as to how a credit reporting agency operates. Many times people are confused between the credit reporting agency’s reporting of debts where the creditor can no longer sue. The reason they can’t sue is because of the statute of limitations in Ontario (again, more on this below). Yet, the debt is still listed by the credit bureau.

I recently came across an Ontario court decision, that describes perfectly why debts can still be listed on your credit report, even though the creditor has run out of time to sue you.

What are the major credit reporting agencies in Canada?

In Canada, there are 2 such reporting companies for consumers: Equifax and TransUnion. For companies, one of the most prominent credit reporting company is Dun & Bradstreet Canada.

How do I get a free copy of my credit file?

You are able to get your complimentary credit report once every 12 months from each of the two nationwide rating companies. If you need a current report more often than that, you can pay TransUnion or Equifax to get it. You can get your credit report by phone, fax, online or in person. Each credit bureau provides instructions on how to do it.

There are also two online services that will provide you with your credit score and report for free. They are Borrowell and Credit Karma Canada.

The Court case

This court case was somewhat unique in that it was a small claims court case. The 10-page decision clearly shows that a statute of limitations will not erase the debt. The case is Harvey v Capital One Bank, 2019 CanLII 69716 (ON SCSM).

Mr. Harvey sought $25,000.00 against Capital One Bank for purportedly posting to the credit reporting body firms, defamatory details impacting his professional reputation. Mr. Harvey admits he owed money to Capital One however asserts the debt can no longer be pursued, as it is beyond the 2 year limitation period for enforcement according to the Ontario Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. Capital One Bank confessed it reported the debt but was fully justified in doing so according to the Consumer Reporting Act, RSO 1990, c. C.33.

The agreed statement of facts

Mr. Harvey and Capital One Bank submitted an Agreed Statement of Facts:

  1. Mr. Harvey had two Capital One Bank accounts. The account concerned was opened up on or about March 5, 2009. The second account was opened on or around June 2018.
  2. Mr. Harvey was contacted by collection firms acting on behalf of Capital One from 2015 to 2018 in an attempt to collect the debt.
  3. Capital One provided disclosure regarding the terms of the account when Mr. Harvey was originally authorized. He received duplicates of the account statements created, which were accurate, consisting of the balance owing, repayments, interest and fees or charges. All rates of interest and various other fees were correctly applied.
  4. Mr. Harvey was advised many times that his failure to pay the outstanding balance would be reported to the credit reporting body companies and it can adversely affect his credit rating.
  5. Mr. Harvey paid $200.00 on the account in question on October 27, 2014. He failed to make the minimum payment due on December 4, 2014. He as well failed to make any type of subsequent repayment, other than for a $200.00 payment around August 20, 2018.
  6. When Capital One charged off Mr. Harvey’s very first account on June 2015, the balance owing was $841.78.
  7. All details about the Capital One debt in the credit reports generated by Mr. Harvey were accurate and true, with the exception of one amount of $1,449.00 for a different Capital One account which Mr. Harvey would not admit to. In his testimony, he deposed that he has no particular memory of the components of that account or any understanding of the accuracy of the information.
  8. Other non-Capital One credit accounts referenced in Mr. Harvey’s credit record included unfavourable credit history reports. Some of his other non-Capital One credit rating accounts had actually been charged off and sent to a debt collector.
  9. Mr. Harvey acquired a brand-new Canadian Tire Bank MasterCard around January 2019 with a $300.00 credit line, a brand-new FIDO cell phone account around September 2019, a brand-new credit line for a car loan of $22,465.00 around September 2019 and also a new Capital One MasterCard with a credit line of $300.00 around June 2018.

Capital One Bank’s evidence

Capital One’s evidence was straight forward. Credit cards revolve and are reported to the credit reporting body companies on a regular monthly basis. There is a standard conventional rating system used by all financial institutions when reporting to the reporting agencies:

Rating scoreMeaning
R1Indicates settlement on time or 1 to 30 days delinquent.
R231 to 60 days delinquent
R361 to 90 days overdue
R4120 days overdue
R5121 to 150 days overdue
R6Does not exist
R7Used only for credit counselling and bankruptcy
R8Repossessions
R9Account has been charged off

Mr. Harvey’s Capital One debt was reported to the credit bureaus in conformity with the legislation. By April 9, 2015, the account, 5 months overdue, was completely limited, meaning it cannot be re-opened to make purchases. An R5 score was reported to the credit reporting body companies. By May 9, 2015, it was 6 months overdue. R5 was reported once again.

Once it is 180 days past due, the account is charged off and also an R9 rating is reported. When an account is charged off, it is still reported to the credit reporting agencies and remains an R9 score. After the account was charged off, Capital One engaged various collection companies as normal to attempt to collect the debt.

As the account remains overdue, Capital One continues to report to the credit bureaus up until reporting becomes statute-barred after seven years, based upon the date of the very first payment missed. That was December 4, 2014.

This 7-year reporting period is based on legislative provisions for credit report coverage. After seven years, Capital One makes one final entry in the record which erases the entire line from the credit bureau history. The credit reporting body companies have a similar procedure so they will remove this information also.

The Court’s analysis

The Court’s analysis was simple. It rejected all of the plaintiff’s submissions. The Court stated that the plaintiff never even produced any evidence in support of his claim that he has suffered damages through a loss of reputation.

The Court correctly analyzed the situation. The Deputy Judge found that by Mr. Harvey’s own admission the debt was never paid and stays outstanding. Capital One is not insisting on a claim to title; it is asserting its right to report an unpaid debt throughout the 7-year reporting period under the Ontario Consumer Reporting Act. The Ontario Limitations Act and Consumer Reporting Act serve completely different legislative purposes. They are also not in conflict.

The Court sided with Capital One’s position that the case relied upon by Mr. Harvey entails an argument concerning a right vs. a remedy. In Ontario, the limitation period acts to limit the remedy to sue but not the right to be repaid.

The Court’s decision

Capital One Bank lost the right to sue Mr. Harvey after the 2-year period expired. However, on a mutually exclusive basis, it had the right to report the outstanding amount owing for a 7-year period under different provincial legislation.

The Court further stated that the ramifications to companies extending credit to others might be harmed if such information was inaccessible, merely because the creditor did not commence legal proceedings for repayment of the debt prior to the 2-year limitation period. A person’s failure or refusal to pay their debts is vital details for other creditors, to whom that very same borrower has looked to for more credit.

The Court, therefore, found in favour of Capital One Bank and awarded costs against Mr. Harvey.

Summary

This case perfectly answers the question many people ask me when they come for their free consultation. The question is either: (1) Why is this debt still showing up on my credit report because it is too late for the credit card company to sue me?; or (2) Does the statute of limitations erase my debt? As seen in Mr. Harvey’s case, the limitation period and the reporting period are two different and separate issues.

Do you have way too much debt? Prior to you getting to the phase where you can’t make ends meet and your credit report looks awful, reach out to a licensed insolvency trustee (previously called a bankruptcy trustee). In fact, if you understand that you can’t pay your financial debts, contact us.

We understand the pain and stress excessive financial debt can trigger. We can aid you to get rid of that discomfort as well as address your financial problems offering prompt action and the ideal plan.

Call Ira Smith Trustee & Receiver Inc. today. Make an appointment with one of the Ira Smith Team for a free, no-obligation consultation and you can be on your way to enjoying a carefree retirement Starting Over, Starting Now. Give us a call today so that we can help you get back to stress and pain-free life, Starting Over, Starting Now.

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Brandon Blog Post

BANKRUPTCY TRUSTEE IN ONTARIO: REMARKABLE CARE NEEDED TO TAKE OVER A CLAIM

bankruptcy trustee in ontario
bankruptcy trustee in ontario

If you would prefer to listen to an audio version of this bankruptcy trustee in Ontario Brandon’s Blog, please scroll to the bottom and click on the podcast.

Bankruptcy trustee in Ontario: Introduction

As a bankruptcy trustee in Ontario (now called a licensed insolvency trustee ), there are many times where our investigation indicates that the bankrupt (usually a bankrupt corporation) has a claim against another party. The claim may very well be a good one worthy of pursuing. However, like with any potential litigation, there could be not enough funds to pay for pursuing that claim in the Court, or it may be unwise for a bankruptcy trustee in Ontario (Trustee) to assume the litigation risk.

In cases like this, the licensed insolvency trustee can offer up the opportunity to the creditors to take on the action in their own name. One or more creditors can get an order under s. 38 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (BIA) from the Registrar in Bankruptcy, authorizing the assignment to them by the licensed insolvency trustee of the bankrupt company‘s right to advance that claim and if necessary, sue.

Without going into all the finer details and circumstances, any creditor or group of creditors who obtain that right can keep any amount collected under that claim up to the total of their claim against the bankrupt company plus the costs they spent in obtaining that award. Any surplus must be paid over to the bankruptcy trustee in Ontario.

A recent decision of the Court of Appeal for Ontario highlights an interesting issue regarding the interplay between advancing such a claim by a creditor and the limitation period in Ontario.

Bankruptcy trustee in Ontario case background information

The Ridel family used an investment and stock brokerage company called e3m Investments Inc. (e3m). In December 2006, the Ridels issued a Statement of Claim versus their account representative, as well as his employer, e3m. The action was for negligence, breach of contract and violation of fiduciary obligation in the monitoring of their financial investment accounts.

After a ten-day court hearing, judgment was issued against e3m as well as the account representative in Ridel v. Cassin, 2013 ONSC 2279. The judgment was especially scathing of both the account rep and e3m. The judgement, in the amount of $1,036,245.85, was upheld on appeal. As a result, the account representative needed to make an insolvency filing. My Firm administered the successfully completed Division I restructuring Proposal of the account representative. Given the judgement, he needed to do an insolvency filing and it was in his best interests to attempt to restructure to avoid bankruptcy. The Ridel family controlled the voting in his successful Proposal. e3m filed for bankruptcy on January 20, 2015.

The bankruptcy trustee in Ontario case before the Court of Appeal

On July 31, 2019, the Court of Appeal for Ontario released its decision in Ridel v. Goldberg, 2019 ONCA 636. The underlying claim was one the bankrupt company may have had against its Director and majority shareholder.

On October 25, 2016, the Ridels, as an unsecured creditor of e3m, got an order under s. 38 of the BIA. They obtained an assignment of the claim of e3m against its sole Director, a Mr. Goldberg. Since e3m was found liable under the Ridel judgement, e3m could have a claim and institute proceedings against its Director, Mr. Goldberg.

The s. 38 order supplied the Ridels with the legal authority to assert e3m’s claim against Mr. Goldberg “to recover the damages for which e3m became liable pursuant to [the 2013 Judgment, as amended] in their own name and at their own expense and risk, based on Mr. Goldberg’s failure to fulfil his obligations as a director and officer of e3m by abdicating his responsibility to supervise the Ridels’ accounts at e3m”.

The Ridels launched their lawsuit proceedings in the lower Court against Mr. Goldberg the day they obtained the s. 38 order, October 25, 2016. The Ridels were trying to get a summary judgement. Mr. Goldberg raised several defences, including, the Ridels’ claim was statute-barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (Limitations Act).

The lower court judge dismissed the Ridels’ action on two fronts. First, the judge found that there were concerns about needing a trial. Second, the lower court judge agreed that the claim should be dismissed because of the expiration of a two-year limitation period The Ridels appealed the lower court’s decision to the Court of Appeal for Ontario.

bankruptcy trustee in ontario
bankruptcy trustee in ontario

The fascinating part (for me anyway) of the Court of Appeal’s decision

The unanimous Court of Appeal ruling agreed with the lower court judge’s decision that the action the Ridels took by way of an assignment document from e3m’s licensed insolvency trustee was statute-barred under the Limitations Act. However, the appeal court review of the lower court decision disagreed with the reasons given by the lower court. Upon agreeing that the Ridel’s action should be dismissed based on it being barred by the Limitations Act, the appeal court did not wade into whether or not the lower court judge’s decision was correct that summary judgement should not be granted as there was a triable issue.

The arguments given for the limitation period are somewhat complex. I will attempt to summarize them here so as not to be confusing. The lower court judge held that the Ridels as applicants knew of the existence of the potential claim of e3m against its Director as early as in July 2006. Since they did not launch the e3m claim in a court action until October 2016. Hence, the limitation period of 2 years made that claim statute-barred.

The Ridels state that the limitation period cannot have actually begun up until after e3m was bankrupt. Before then, they could not take an assignment of any claim from e3m’s licensed insolvency trustee, especially a potential claim by the company against its Director (and Officer).

They also stated it is impossible to get an s. 38 order before the company actually is bankrupt.

The lawyer for the Ridels did not argue the testing of the timing of their very own understanding of the Director’s misdeed in regard to e3m. Rather, he focussed on the fact that the Ridels were not in a place to do anything concerning it, at a minimum, until the bankruptcy of e3m.

The appeal court went through a detailed analysis of the relevant statutes and case law. The Court of Appeal confirmed that the action launched was not a claim by the Ridels personally, but rather the company’s claim of which they took a court-approved assignment. So the appeal court agreed substantially with the Ridels that they could not have started their action until they took the assignment from the e3m licensed insolvency trustee.

When was e3m’s knowledge of its claim?

So the appeal court said what is important, since it is e3m’s claim and not the claim of the Ridels, when did e3m first become aware of the potential claim against its Director? The appeal court stated it fully understood why the Director would not have had e3m sue him or otherwise enjoin him in the original claim against the account rep and e3m. However, when did e3m first become aware of the potential of its claim?

On the proof in this matter, regardless of the Ridels’ or Goldbergs’ understanding of the case or his aversion to act against himself in support of e3m, at the very least, by April 2013, every one of the other e3m investors/shareholders had received a copy of the Reasons for Decision and Judgment against the account rep and e3m. It included different referrals to the Director’s misbehaviour. Those investors had the capacity to make e3m file a claim against the Director.

The Court of Appeal for Ontario judges determined that e3m recognized that: 1. an injury had actually happened; 2. its loss was brought on by an act or omission; 3. the act or omission was purportedly that of the Director, and 4. an action against the Director was a proper way to treat it. Regardless of the Director’s control to protect against such a lawsuit, the investors might have taken control of e3m’s board of directors and cause e3m to make such a case versus Goldberg.

So the appeal court decided that e3m first recognized that it may have a claim against the Director in April 2013, but the action was not commenced until October 2016. Accordingly, it was outside of the 2 year limitation period and the action was statute-barred.

So what does this mean for a bankruptcy trustee in Ontario?

As the bankruptcy trustee in Ontario in either a corporate bankruptcy or personal bankruptcy, many times we find as a result of our investigation that the bankrupt may have a claim against another party. More often than not, we either do not have sufficient funds or are not prepared to risk the funds in the Estate to the litigation risk. So, what we do is communicate with all known creditors to advise of the potential claim and that the licensed insolvency trustee is either unwilling or unable to act upon it. Accordingly, we are giving the creditors a chance to apply to the Court to take an assignment of such action under s.38 of the BIA.

Creditors seriously considering taking over the bankrupt’s claim must seriously consider the issue of whether or not launching a court action will be met with a defence that the claim is statute-barred, amongst other defences that may be available to the defendant(s). The Court of Appeal for Ontario has clearly communicated that the creditor taking an assignment of the bankrupt’s claim, cannot be in a better position than the bankrupt itself. The first knowledge that a claim exists will be when the bankrupt first had the knowledge, not the date that the creditor obtained the right to sue or any other date.

Bankruptcy trustee in Ontario Canada conclusion

The business world contains normal daily risks. This case clearly shows that. Are your company’s viability and solvency being threatened by claims against it, or for any other reason?

Is your company experiencing financial problems and requires debt relief? Are you on the brink of filing for bankruptcy just like e3m was because of your debts? Or are you an individual that has too much debt and you are looking at personal bankruptcy as your solution? Don’t wait until it is too late to properly restructure your company’s financial affairs. You don’t have to be another one filing bankruptcy in Canada. We can show you the various alternatives to bankruptcy.

As a licensed insolvency trustee, we are the only professionals who have met the requirements of the Office of the Superintendent of Bankruptcy Canada to obtain a trustee licence. One of those requirements to be trustees in bankruptcy is to pass an oral board of examination.

Insolvency trustee’s operations are licensed, authorized and their duties supervised by the federal government to offer insolvency advice and to implement solutions under the Bankruptcy and Insolvency Act (Canada). We are a licensed insolvency trustee operating in Ontario Canada and we will help you to select what is best for you to free you from your debt issues.

Contact the Ira Smith Team today so we can use our qualifications to get you or your company the debt relief that you deserve. We will eliminate the anxiousness, tension, discomfort and pain from your life that your bills and your cash problems have caused. With the unique roadmap, we develop just for you, you can eliminate your debts and we will promptly return you right into a healthy and balanced problem-free life.

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Brandon Blog Post

CREDIT REPORT ONTARIO COMPANIES CAN REPORT EVEN IF YOU CAN’T BE SUED!

Credit report Ontario: Introduction

My Brandon’s Blog describes a Court decision that if you owe money, even if it is too late for you to be sued, it can still show up on your credit report Ontario. This is a very interesting case from the Court of Appeal for Ontario for consumers and consumer reporting.

The case was an attempt by Mr. Grant to have the credit reporting agencies Equifax and TransUnion remove from his credit report debts that were more than two years old on the basis that because he can’t be sued anymore, the most accurate reporting would be to cut those debts from his credit report. He argued that since the Ontario Limitations Act provided for a two-year limitation for when he could be sued on certain debts, therefore, any debts more than two years old for which you haven’t been sued should be removed from his credit report.

Limitations Act vs. Consumer Reporting Act

The credit reporting agencies successfully argued against that as the lower court ruled against Mr. Grant. He was now appealing to the Court of Appeal for Ontario. The Ontario Consumer Reporting Act states that debts up to seven years old can be reported and there lies the discrepancy. The Court of Appeal for Ontario agreed with the lower court and said that just because the Limitation Act says that you can’t be sued after two years that has no application to the Consumer Reporting Act that says all valid debts can be reported for up to seven years.

What the Court of Appeal said

The Court of Appeal went on to say just because a creditor misses the deadline or chooses not to sue within the two-year period it doesn’t mean that the debt still isn’t owed. The Court of Appeal also went on to say that under the Consumer Reporting Act people have the right to communicate with Equifax and TransUnion to have errors removed from their credit report. Unfortunately for Mr. Grant in his case, this was not an error.

What should you do if you have too much debt?

Do you have too many debts causing you discomfort on your credit report? Is your credit report creating a bigger hardship for yourself? For help with your debt issues contact Ira Smith Trustee & Receiver Inc. We’re your best defence against debt. Make an appointment for a free, no-obligation consultation and you can be well on your way to a debt free life Starting Over, Starting Now. Give us a call today.

credit report ontario

Credit Report Ontario: The decision of the Court of Appeal for Ontario

COURT OF APPEAL FOR ONTARIO

 

CITATION: Grant v. Equifax Canada Co., 2016 ONCA 500

DATE: 20160623

DOCKET: C61664

Rouleau, van Rensburg and Benotto JJ.A.

BETWEEN

Gary Grant

Applicant (Appellant)

and

Equifax Canada Co., Trans Union of Canada,

Ministry of Government Services and Consumer Services

Respondents (Respondents in Appeal)

Gary Grant, acting in person

Stephen Schwartz, for Equifax Canada Co.

Alan Melamud, for Trans Union of Canada

Domenico Polla, for the Ministry of Government Services and Consumer Services

Mahmud Jamal and Raphael Eghan, for the intervener Canadian Bankers Association

Heard: June 21, 2016

On appeal from the judgment of Justice Kofi N. Barnes of the Superior Court of Justice, dated November 2, 2015.

ENDORSEMENT

[1] The appellant brought an application in the Superior Court seeking an order that two consumer reporting agencies remove debts over two years old that were shown on his credit report, where no legal action had been commenced or judgment obtained in respect of the debts. He relied on the provisions of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, and in particular the basic limitation period of two years applicable to the commencement of a proceeding in respect of a claim.

[2] The appellant argued in the court below, and on appeal, that this two year limitation period should apply in interpreting the provisions of the Consumer Reporting Act, R.S.O. 1990, c. C.33 (the “CRA”). He asserts that, in requiring consumer reporting agencies to adopt all procedures reasonable for ensuring accuracy and fairness in the contents of their consumer reports (s. 9(1) of the CRA), the Act anticipates that debts will not be listed where a limitation period for their enforcement through legal action has expired. The most accurate record of a debt, he says, is one that has been or can be confirmed by an order or judgment of the court. When debts are included in consumer reports, where no legal action is possible, consumers are adversely impacted in their efforts to borrow money and to conduct other business.

[3] The respondents assert that the application judge did not err in his dismissal of the appellant’s application, on the basis that the basic limitation period has no application to the statutory framework for consumer credit reporting in Ontario, and that there was no violation by the consumer reporting agencies of the requirements of the CRA.

[4] We agree.

[5] The CRA provides for a regulatory scheme for the fair reporting of information regarding an individual’s history of credit activities. The CRA requires the registration of consumer reporting agencies, permits consumer reporting information to be provided only for certain prescribed purposes, and sets out standards for consumer reporting.

[6] The Limitations Act, 2002, by contrast, applies to bar “claims pursued in court proceedings” that are commenced outside the applicable limitation period. The Act does not apply to the CRA, whether expressly or by implication. Indeed, the CRA contains its own specific provisions prohibiting the inclusion of certain information in consumer reports, including debts or collections more than seven years old, unless confirmation that the debt or collection is not barred has been obtained. The CRA expressly contemplates that debts not reduced to judgment that are up to seven years old may be reported (see s. 9(3)(f)). This makes sense, as the passing of a limitation period does not extinguish a debt; it only precludes the commencement of a court proceeding for its enforcement. As such, the reporting of debts after a limitation period has passed, is not inconsistent with the purposes of the CRA, and is expressly contemplated by its terms.

[7] Under the Act, consumers, such as the appellant, have access to the information contained in their files, and a mechanism by which they can dispute information contained in a report to the consumer reporting agency, and to the Registrar of Consumer Reporting Agencies, with a right to apply to the Licence Appeal Tribunal for a hearing if they are aggrieved by a Registrar’s decision.

[8] The appellant availed himself of the right to dispute information, and was able to have certain stale information removed from his consumer reports. There was no basis, however, for requiring the removal of information concerning debts simply because they were more than two years old.

[9] For these reasons, the appeal is dismissed.

“Paul Rouleau J.A.”

“K. van Rensburg J.A.”

“M.L. Benotto J.A.”

CREDIT REPORT ONTARIO

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