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In the Courts: ‘$1, and natural love and affection’ not worth $2M property

The B.C. Supreme Court in Vancouver | Rob Kruyt, BIV

B.C.’s top court sided with creditors in finding that the transfer of a Kootenay farm from a man to his alleged ex-wife for “$1, and natural love and affection” was part of a fraudulent attempt to shield the property from the man’s creditors as he went into receivership.

Gurmeet Brar went into receivership in May 2016 on a $1.5-million loan for an Osoyoos motel he operated with his sister-in-law through their company MP Hospitality Ltd. (MP Hospitality), and he applied for a receiver-manager over the property.

Meanwhile, Gurmeet and Navdeep Brar sought to sell the farm property to their children for $2.2 million, but that fell through, as the children couldn’t get financing.

And in March 2017, the pair added two separate mortgages to the property, one for $300,000 and the other for $700,000, each issued “by a consortium of individuals rather than a former lender,” according to the Feb. 13 B.C. Court of Appeal decision, penned by Justice J. Christopher Grauer with unanimous assent from the panel of three judges.

Shortly after Gurmeet’s receivership in May 2016, Navdeep filed a family claim stating they had been separated since September 2008 and had signed a separation agreement in 2010, further arguing that they had entered into a verbal agreement that she would be the sole owner of the farm property in 2009, according to an earlier B.C. Supreme Court decision quoted in the Appeal Court ruling.

In her 2016 divorce filings, Navdeep claimed sole ownership of a Huntingdon Road property in Abbotsford, where they operated a blueberry farm under the company name Brar Berry Farms Ltd. (Brar Berry Farms), according to the B.C. Supreme Court decision.

In October 2016, Gurmeet officially removed himself as a director of the Brar Berry Farms and transferred his 50 per cent interest in the company to their son, Mavin.

In November 2017, the farm property was officially transferred from a joint ownership between Navdeep and Gurmeet to a joint ownership between Navdeep and their two daughters, Jasrevan and Mauveen. The price stated for the transfer was “$1 and natural love and affection,” while the declared market value of the property was $2 million, according to the Appeal Court decision.

Navdeep and Gurmeet argued to the court that their marriage failed when Gurmeet began a relationship with Harjinder Saran, his sister-in-law with whom he operated the Osoyoos motel. 

But Kootenay Savings Credit Union, the plaintiff in the case, argued the farm transfers were done to “insulate it from the ongoing collection efforts against Gurmeet,” seeking an order declaring the transfer void.

The B.C. Supreme Court sided with the credit union in October 2021, but the family appealed the decision, arguing the judge erred in his assessment of the parties’ credibility, in whether Gurmeet’s family was aware of his debt to the credit union, and in failing to find that the 2017 property transfer was made in good faith.

The B.C. Court of Appeal dismissed that appeal, however, finding that the lower court decision was “amply supported by the evidence, and no palpable and overriding error or extricable error of law has been demonstrated.”

The higher court further found the B.C. Supreme Court judge properly exercised his jurisdiction in finding that the divorce filings were “another step in the family’s fraudulent conveyance scheme” to transfer the farm away from Gurmeet.