Yesterday, the Supreme Court of Canada dismissed Dennis Mawdsley’s application for leave to appeal from the BC Court of Appeal’s decision in Mawdsley v. Meshen.
In Mawdsley, the deceased had taken various estate planning steps prior to her death that had the effect of reducing the size of her estate. The common law spouse of the deceased attempted to have these transfers of property set aside as contrary to the Fraudulent Conveyance Act (“FCA”). In dismissing the action, the BC Court of Appeal noted that for a transaction to be a fraudulent conveyance, the transfer must be made with an intent to delay, hinder or defraud someone. Accordingly, it was possible for the deceased to make legitimate transfers of property that had the effect of decreasing the size of her estate and minimizing the assets available to satisfy a Wills Variation Act claim. The Court of Appeal also confirmed earlier decisions of the Supreme Court that unless spouses are separated at the time of death, a spouse is not a “creditor or other” under the FCA, and thus has no standing to bring a claim under the FCA.