Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff alleged that property and asset transfers were executed to frustrate a loan repayment.

• The court assessed whether the transfers were fraudulent under the Fraudulent Conveyances Act.

• Defendants argued the transfers were legitimate and made for valid family or business reasons.

• Evidence showed several badges of fraud, including transfers without consideration and secrecy.

• The court also evaluated whether the transactions amounted to oppressive conduct under the OBCA.

• Relief was granted by setting aside the transfers and ordering restitution for the plaintiff's losses.

Background and facts

In Chuhan v. Soundrarajan, 2025 ONSC 3288, the plaintiff, Mr. Gurmit Singh Chuhan, brought a civil action against Mr. Subramaniam Soundrarajan and several related individuals and corporate entities, alleging that they orchestrated a series of transfers to avoid repaying loans owed to him. Mr. Chuhan had lent a total of $150,000 to Mr. Soundrarajan and associated entities over the course of several years. These loans were not repaid, and Mr. Chuhan eventually obtained a judgment in 2021 for the full amount plus interest.

Following the judgment, Mr. Chuhan discovered that the defendants had transferred significant assets—primarily a commercial property located in Scarborough, Ontario—to family members and shell corporations. These transfers occurred at or near the time the debts were due and when the defendants were experiencing financial pressure. Mr. Chuhan claimed that these transfers were fraudulent conveyances intended to frustrate collection efforts, and he also pursued claims under the oppression remedy provisions of the Ontario Business Corporations Act (OBCA), as well as for unjust enrichment.

Fraudulent conveyances analysis

The court focused on whether the property transfers were made with the intent to defeat or hinder creditors, as prohibited by the Fraudulent Conveyances Act. Justice Sanfilippo reviewed the circumstances of the transfers and found multiple “badges of fraud,” such as the lack of adequate consideration, the timing of the transfers relative to the outstanding debts, secrecy in execution, and the close family relationships between the transferor and transferee. These indicators, taken together, strongly supported an inference of fraudulent intent.

The court rejected the defendants’ argument that the transfers were part of legitimate restructuring or estate planning. There was no documentary evidence of a plan, and the timing aligned closely with Mr. Chuhan’s judgment and efforts to collect. The property continued to be used in the same manner post-transfer, with Mr. Soundrarajan still involved in its operation, further undermining the legitimacy of the transactions.

Oppression and equitable remedies

In addition to the fraudulent conveyance claim, the court also considered the plaintiff’s oppression remedy under the OBCA. Justice Sanfilippo found that Mr. Chuhan, while not a shareholder, was a creditor with a legitimate interest in the financial conduct of the corporate defendant, and that the stripping of corporate assets to related parties amounted to oppressive conduct. The court held that the actions unfairly disregarded Mr. Chuhan’s interests as a creditor and were undertaken in bad faith to shelter assets.

Although the court also acknowledged the plaintiff’s unjust enrichment argument, it found that the fraudulent conveyance and oppression findings provided sufficient basis for the relief granted.

Outcome and remedy

The court granted judgment in favour of Mr. Chuhan. It set aside the impugned transfers of property and ordered the return of assets or their equivalent value to enable enforcement of the original debt judgment. The defendants were found jointly and severally liable, and costs were awarded to the plaintiff. The court emphasized that equity and statutory law both support the reversal of transactions designed to insulate debtors from their lawful obligations to creditors.