HER MAJESTY, by and with
the advice and consent of the Legislative Assembly of Alberta, enacts as
follows:
Fraudulent transfers
1 Subject to sections 6 to 9, every gift,
conveyance, assignment, transfer, delivery over or payment of goods, chattels
or effects or of bills, bonds, notes or securities or of shares, dividends,
premiums or bonus in any bank, company or corporation, or of any other
property, real or personal, made
(a) by
a person at a time when the person is in insolvent circumstances or is unable
to pay the person’s debts in full or knows that the person is on the eve of
insolvency, and
(b) with
intent to defeat, hinder, delay or prejudice the person’s creditors or any one
or more of them,
is void as against any creditor or creditors injured,
delayed or prejudiced.
RSA 1980 cF‑18 s1
Intent to prefer
2 Subject to sections 6 to 9, every gift, conveyance,
assignment, transfer, delivery over or payment of goods, chattels or effects or
of bills, bonds, notes or securities or of shares, dividends, premiums or bonus
in any bank, company or corporation, or of any other property, real or
personal, made
(a) by
a person at a time when the person is in insolvent circumstances or is unable
to pay the person’s debts in full or knows that the person is on the eve of
insolvency, and
(b) to
or for a creditor with intent to give that creditor preference over the other
creditors of the debtor or over any one or more of them,
is void as against the creditor or creditors injured,
delayed, prejudiced or postponed.
RSA 1980 cF‑18 s2
Preferential effect
3 Subject to sections 6 to 9, every gift,
conveyance, assignment, transfer, delivery over or payment of goods, chattels
or effects or of bills, bonds, notes or securities or of shares, dividends,
premiums or bonus in any bank, company or corporation, or of any other
property, real or personal, made
(a) by
a person at a time when the person is in insolvent circumstances or is unable
to pay the person’s debts in full or knows that the person is on the eve of
insolvency, and
(b) to
or for a creditor and having the effect of giving that creditor a preference
over the other creditors of the debtor or over any one or more of them,
is, in and with respect to any action that within one year
after the transaction is brought to impeach or set aside the transaction, void
as against the creditor or creditors injured, delayed, prejudiced or postponed.
RSA 1980 cF‑18 s3
What constitutes
transaction
4(1) A transaction is deemed to be one that has the
effect of giving a creditor a preference over other creditors, within the
meaning of section 3, if by the transaction a creditor is given or realizes or
is placed in a position to realize payment, satisfaction or security for the
debtor’s indebtedness to that creditor or a portion of it greater
proportionately than could be realized by or for the unsecured creditors
generally of the debtor or for the unsecured portion of that creditor’s
liabilities out of the assets of the debtor left available and subject to
judgment, writ proceedings, attachment or other process.
(2) Independently of the intent with which the
transaction was entered into or of whether it was entered into voluntarily or
under pressure, the preferential effect or result of the impeached transaction
governs, and no pressure by a creditor or want of notice to the creditor
alleged to have been so preferred of the debtor’s circumstances, inability or
knowledge as aforesaid, or of the effect of the transaction, avails to protect
the transaction except as provided by sections 6 and 9.
RSA 1980 cF‑18
s4;1994 cC‑10.5 s126
Definition
5 In sections 2 to 4, “creditor” includes
(a) a
surety, and the endorser of a promissory note or bill of exchange, who would,
on payment by the surety or endorser of the debt, promissory note or bill of
exchange in respect of which the suretyship was entered into or endorsement was
given, become a creditor of the person giving the preference within the meaning
of sections 2 to 4, and
(b) a cestui que trust or other person to whom
liability is equitable only.
RSA 1980 cF‑18 s5
Bona fide transactions
6 Nothing in sections 1 to 5 applies to
(a) a
bona fide sale or payment made in the ordinary course of trade or calling to
innocent purchasers or parties, or
(b) a
payment of money to a creditor, or a bona fide conveyance, assignment, transfer
or delivery over of any goods, securities or property, of any kind as above
mentioned, that is made in consideration of a present actual bona fide sale or
delivery of goods or other property or of a present actual bona fide payment in
money, or by way of security for a present actual bona fide advance of money,
if the money paid or the goods or other property sold or
delivered bear a fair and reasonable relative value to the consideration for
it.
RSA 1980 cF‑18 s6
Payment to creditor
7 When there is a valid sale of goods, securities
or property and the consideration or part of it is paid or transferred by the
purchaser to the creditor of the vendor under circumstances that would render
the payment or transfer void if it were made by the debtor personally and
directly, the payment or transfer, even though valid as respects the purchaser,
is void as respects the creditor to whom it is made.
RSA 1980 cF‑18 s7
Restoration of security
to creditor
8 When a payment that is void under this Act has
been made and a valuable security has been given up in consideration of the
payment, the creditor is entitled to have the security restored or its value
made good to the creditor before or as a condition of the return of the
payment.
RSA 1980 cF‑18 s8
Saving of payment to
creditor
9 Nothing in this Act
(a) affects
a payment of money to a creditor when the creditor by reason or on account of
the payment has lost or been deprived of or has in good faith given up a valid
security that the creditor held for the payment of the debt so paid, unless the
value of the security is restored to the creditor,
(b) affects
the substitution in good faith of one security for another security for the
same debt so far as the debtor’s estate is not lessened in value to the other
creditors because of the substitution, or
(c) invalidates a security given to a creditor
for the pre‑existing debt when, by reason or on account of the giving of
the security, an advance is made in money to the debtor by the creditor in the
bona fide belief that the advance will enable the debtor to continue the
debtor’s trade or business and pay the debtor’s debts in full.
RSA 1980 cF‑18 s9
Proceedings by creditor
10(1) One or more creditors may, for the benefit of
creditors generally or for the benefit of those creditors who have been
injured, delayed, prejudiced or postponed by the impeached transaction, sue for
the rescission of, or to have declared void, agreements, deeds, instruments or
other transactions made or entered into in fraud of creditors or in non‑compliance
with this Act or by this Act declared void.
(2) If, in an action under subsection (1), an
amendment is made to the statement of claim, the amendment relates back to the
commencement of the action for the purpose of the time limited by section 3.
RSA 1980 cF‑18 s10
Proceeds of unlawfully
transferred property
11(1) If a gift, conveyance, assignment or transfer
of any property, real or personal, that in law is invalid against creditors,
was made to a person, and that person has sold or disposed of, realized or
collected the property or a part of it, the money or other proceeds or that
amount, whether further disposed of or not, may be seized or recovered in an
action by a person who would be entitled to seize and recover the property if
it had remained in the possession or control of the debtor or of the person to
whom the gift, conveyance, assignment, transfer, delivery or payment was made.
(2) The
right of seizure and recovery exists in favour of all creditors of the debtor.
(3) When
the proceeds are of such a character as to be seizable under writ proceedings,
they may be seized under the writ of any creditor and shall be distributed
among creditors under the Civil
Enforcement Act.
(4) Whether
the proceeds are or are not of such a character as to be seizable under writ
proceedings, an action may be brought for them or to recover the amount of them
by a creditor, whether a judgment creditor or not, on behalf of that creditor
and all other creditors, or any other proceedings may be taken that are
necessary to render the proceeds or the amount of them available for the
general benefit of the creditors.
(5) This section does not apply as against innocent
purchasers of any of the property.
RSA 1980 cF‑18
s11;1994 cC‑10.5 s126
Bankruptcy and
Insolvency Act
12 This Act shall be read and construed subject to
the Bankruptcy and Insolvency Act
(Canada).
RSA 1980 cF‑18
s12;1994 c23 s51
