Fraudulent Conveyances in BC: A Powerful Tool for Judgment Creditors
Obtaining judgment against a defendant does not guarantee recovery. Frequently, the greater challenge is enforcing the judgment and locating realizable assets. Accordingly, it is important for judgment creditors to be aware of the tools available to them.
One of those tools is the Fraudulent Conveyance Act, RSBC 1996, c 163, which empowers the court to set aside transfers of property that were made with the intent to put the property out of reach of the transferor’s creditors. Notably, as recently confirmed in 1046056 B.C. Ltd. v Liang, 2026 BCSC 132, the Fraudulent Conveyance Act can permit a judgment creditor to register a certificate of pending litigation even where the impugned transfer was not made directly by the judgment debtor.
Non-exhaustively, the facts of 1046056 B.C. Ltd. v Liang, 2026 BCSC 132 include:
- The plaintiffs were judgment creditors of several defendants, including He Xing Liang (“Mr. Liang”).
- Among other things, the plaintiffs alleged:
(a) Mr. Liang held a 50% interest in a corporation called JPV Real Estate Capital (Cambie48) Ltd. (“JPV Cambie”).
(b) In turn, JPV Cambie indirectly held a 50% interest in real property.
(c) In breach of the Fraudulent Conveyance Act, RSBC 1996, c 163, JPV Cambie divested itself of its interest in the real property to defeat the judgment creditors’ just and lawful remedies against Mr. Liang.
3. As a result, the plaintiffs filed a certificate of pending litigation against the real property.
4. The defendants applied to have the certificate of pending litigation against the real property discharged, including on the basis that Mr. Liang had no direct ownership in the real property (i.e.: he merely owned shares in JPV Cambie, and JPV Cambie was not a debtor of the plaintiffs).
On the strength of the Fraudulent Conveyance Act and section 215(b) of the Land Title Act, RSBC 1996, c 250,Justice Kirschner found that the plaintiffs’ claim was capable of supporting a certificate of pending litigation, notwithstanding that Mr. Liang did not hold a direct ownership interest in the real property. More particularly:
[69] Section 1 of the Fraudulent Conveyance Act invalidates “a disposition of property” that is made to delay, hinder or defraud creditors. It does not specify that the debtor must have been the direct owner of that property. Nor does it exclude on its face a disposition of property by a company that is closely held by a debtor…
…
[75] I therefore find the CPLs were properly registered against the three Park Station properties under s. 215(1)(b) … because the transactions of the corporate entities controlled by Mr. Liang are alleged to have been done to delay, hinder or defraud the plaintiffs from realizing on their judgment. The plaintiffs are entitled to execute against the shares that Mr. Liang owns in his corporate entities in an effort to satisfy their judgment against him but those shares lost their value when Mr. Liang caused the corporation to divest its interest in the Park Station lands. In my view, that disposition is open to challenge under s. 1 of the Fraudulent Conveyance Act and is an action “in respect of land” under s. 215(1)(b) of the Land Title Act.
As a result, when enforcing a judgment, judgment creditors should not only consider assets registered directly in a judgment debtor’s name, but also whether the judgment debtor has caused related corporate entities to dispose of real property in a manner that contravenes the Fraudulent Conveyance Act.
Disclaimer: This content is provided solely for informational purposes and is not intended for use in any legal proceeding. You should consult a qualified lawyer for advice tailored to your specific circumstances.
