Weilers LLP

Credit Proofing Made Difficult

Credit Proofing Made Difficult

February 22, 2024

By Jonathon Clark 

People starting a risky business venture – which is pretty much everyone starting a new business- are frequently to protect their assets.


One popular method is putting the family home in the name of your spouse (or adult child). The doctrine of presumption of trust could protect you if you want the property returned, but creditors could not have it sold.


The Ontario Court of Appeal has rained on that parade in a decision called Ontario Securities Commission v. Camerlengo Holdings Inc. .  The Securities Commission had a judgment against Mr. Camerlengo but the home had been transferred into Mrs. Camerlengo’s sole name many years before that debt existed. The Commission sued under the doctrine of fraudulent conveyance, which says that a transfer of property to a close relative without receiving value in return is presumed to be intended to defeat or hinder creditors, and could be declared void by the creditor.

A superior court judge had done what judges have done for decades (or longer) and ruled that the Camerlengo’s home was protected from a judgment because the transfer had taken place long before the debt existed, so it could not have been for the intent to defeat that creditor.

The Court of Appeal overturned that ruling. Since a subsequent creditor can attack the fraudulent conveyance, a general intent to defraud creditors in the future at the time of the transfer may be attacked. Taking steps to judgment proof yourself at the time you start a new business venture may be enough to declare a conveyance a fraud upon creditors. It does not matter whether any specific future creditor can be identified at the time of the transfer.

The Commission’s action to obtain the property is allowed to proceed. The onus will be on the Camerlengos to disprove fraudulent intent – a difficult proposition.


This case fundamentally alters how most clients, and lawyers, view credit proofing. It will take time to adjust to the new reality.

There are other credit proofing techniques. None are as popular as transferring the house, but they are all that safely remain.


Weilers LLP has spent 75 years helping business owners arrange their affairs. We act for creditors who want to get paid, and alleged debtors who do not want to pay. We do everything legal and ethical to advance our client’s position, regardless of their objective.

If you are in either category, give us a call and see if we are the right lawyers for you.