An Ontario judge ordered a driver and his wife to pay $150,000 in punitive damages for conveying a home to dodge an insurer's judgment.
The Ontario Superior Court of Justice ruling, from Justice Mathen, stems from a 2000 accident in which the driver, then uninsured, struck a pedestrian with his vehicle. The pedestrian was covered under her father's policy with Primmum Insurance Company, which paid out $238,750 in compensation. Primmum secured a default judgment against the driver on July 26, 2006, for that amount, plus 6% interest and $10,000 in costs.
Over the following years the driver paid only $3,500 toward the debt, mostly in $100 cheques. When Primmum renewed its enforcement efforts in 2013 and moved toward a writ of seizure and sale against the couple's home, the driver transferred his ownership interest in the property to his wife on March 26, 2015 - the same day the enforcement motion was returnable in court, in what the court later ruled was a fraudulent conveyance.
The couple argued the transfer carried out a 2014 separation agreement, written in Arabic and translated into English using Google Translate, under which the wife paid the driver $38,000 cash for his share. The court rejected that explanation. The Arabic version could not be admitted without a certified translation, and the judge found neither defendant credible, pointing to shifting accounts of when they separated, inconsistent evidence about the cash payment, and no supporting paper trail from their real estate lawyer.
The judge applied the established badges of fraud. The transfer was between non-arm's-length parties - the couple were still legally married at the time - and the consideration fell well short of the property's value. The couple had paid $870,000 for the house and cleared a $652,500 mortgage on it, while the driver stood to receive at most $188,000 for his half. He also kept living at the property after the transfer, and the timing lined up with the insurer's renewed collection push. Surveillance footage, a skip-trace investigator's report and a private investigator's testimony supported the finding that the driver continued residing at the address for years after the paperwork changed hands.
The court also found the wife knew of the outstanding judgment before agreeing to take sole title, making her a co-conspirator in the fraud and jointly liable with her husband. It set aside the March 2015 transfer as void against Primmum and confirmed the couple held the property as equal 50-50 joint tenants.
On punitive damages, the judge found the couple's conduct throughout the case "high-handed, careless, and in utter disregard of the truth," reprehensible enough to justify an award above the $100,000 Primmum had sought. The judge noted that the couple had been able to pay off their mortgage within a few years, showing the underlying judgment alone would not punish or deter the conduct.
The court also confirmed and continued the writ of seizure and sale Primmum had sought, and gave the parties 30 days to reach agreement on costs before filing further submissions.
