INTRODUCTION AND BRIEF DESCRIPTION
This section makes it a criminal offence to transfer or conceal property with the intent to defraud creditors.
SECTION WORDING
392 Every one who, (a) with intent to defraud his creditors, (i) makes or causes to be made any gift, conveyance, assignment, sale, transfer or delivery of his property, or (ii) removes, conceals or disposes of any of his property, or (b) with intent that any one should defraud his creditors, receives any property by means of or in relation to which an offence has been committed under paragraph (a), is guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.
EXPLANATION
Section 392 of the Criminal Code of Canada addresses fraudulent activities related to debts owed by an individual. The section outlines two specific scenarios in which such activities constitute an offense. The first scenario pertains to actions taken by an individual with the intention of defrauding their creditors. This includes making gifts, conveyances, assignments, sales, transfers, or deliveries of property with the intention of hiding assets from creditors or preventing them from gaining access to such assets. Additionally, any removal, concealment, or disposal of property with the same intention constitutes an offense under this section. The second scenario pertains to individuals who receive property that has been obtained through the actions described in the first scenario with the intention of aiding the individual who is attempting to defraud their creditors. Such activities also fall under the umbrella of this section and carry the same legal consequences. The offense outlined in Section 392 is considered an indictable offense, meaning it is a serious criminal offense. The maximum penalty for this offense is a term of imprisonment not exceeding two years. This section of the Criminal Code of Canada serves as a deterrent against fraudulent activities intended to avoid repaying debt, protect the rights of creditors, and ensure that individuals adhere to the principles of honesty and integrity in their financial dealings.
COMMENTARY
Section 392 of the Criminal Code of Canada deals with the offence of fraudulent disposition of property. This section criminalizes certain actions taken by individuals with the intent to defraud their creditors. The section has two subsections, (a) and (b). Subsection (a) deals with the actions an individual may take with the intent to defraud their creditors. An individual may take various actions, such as making a gift, conveyance, assignment, sale, transfer or delivery of property or removing, concealing or disposing of any of their property. These actions are considered fraudulent if they are done with the intent to defraud creditors, meaning that the individual is attempting to deprive their creditors of assets that should be available to satisfy their debts. An individual who takes such actions is guilty of an indictable offence and may be sentenced to up to two years in prison. Subsection (b) deals with individuals who receive property that has been obtained through an offence committed under subsection (a). An individual who receives such property with the intent that someone should defraud their creditors through these actions is also guilty of an indictable offence and may be sentenced to up to two years in prison. This section is important as it aims to prevent individuals from taking actions to defraud their creditors. Creditors have a legal right to be repaid the debt owed to them, and the actions prohibited in this section aim to ensure that individuals do not attempt to circumvent this right. It is illegal for individuals to take these actions and is punishable by imprisonment in order to enforce the seriousness of such offences. There are, however, several defences an individual may argue to avoid conviction under this section. For instance, if the individual took the actions with the intent of protecting their property from seizure by a creditor, or if it can be shown that the actions taken were not done with the intention of defrauding creditors, then that individual may not be found guilty of this offence. In conclusion, Section 392 of the Criminal Code of Canada is a section that criminalizes certain fraudulent actions taken by individuals with the intent to defraud their creditors. It is an important tool in ensuring that individuals do not circumvent their responsibilities to their creditors and aims to ensure that creditors are able to recover the debt owed to them.
STRATEGY
Section 392 of the Criminal Code of Canada deals with fraud committed against creditors by an individual who either makes fraudulent transactions or disposes of their assets with the intent to defraud their creditors. The section also criminalizes the actions of individuals who receive property obtained through these fraudulent means. In dealing with this section of the Criminal Code, there are several strategic considerations that need to be taken into account, and various strategies can be employed to protect the interests of the creditors. One of the primary strategic considerations in dealing with this section of the Criminal Code is identifying instances of fraudulent conduct. In some cases, fraudulent activities may be difficult to identify if they are carried out in a subtle or indirect manner. Therefore, it is essential to take a proactive approach to detecting fraudulent conduct to ensure that unlawful acts do not go unnoticed. Some of the strategies that can be employed to identify fraudulent conduct include conducting audits, investigating suspicious transactions, and monitoring financial statements closely. Another important consideration when dealing with this section of the Criminal Code is the appropriate legal action to take against individuals who commit fraudulent activities. In most cases, individuals found guilty of committing an offense under this section of the Criminal Code face up to two years in prison. Depending on the severity of the offense, the victims and their legal representatives may consider pursuing a civil case against the individual, seeking damages, and other forms of legal action for compensation. In pursuing legal action, it is crucial to consider the financial standing of the debtor and their ability to compensate their creditors. If the debtor has limited assets or is bankrupt, it may be difficult to recover the stolen funds, and taking legal action may come at a significant cost. Creditors may need to evaluate the likelihood of recovering funds through litigation and make strategic decisions accordingly. Another important strategy when dealing with this section of the Criminal Code is developing effective agreements and contracts. These agreements may include terms that help protect creditors against fraud or provide mechanisms to identify fraudulent transactions. For instance, agreements may stipulate that creditors require notification before significant financial transactions are made or include clauses that allow creditors to monitor the debtor's financial activity closely. In conclusion, section 392 of the Criminal Code of Canada presents significant challenges to creditors looking to protect their interests. In dealing with this section, it is essential to be proactive and vigilant in detecting fraud, pursue legal action when necessary, develop effective agreements and contracts, and carefully consider the likelihood of recovering funds through litigation. Ultimately, effective strategies and careful considerations can help protect the interests of creditors and prevent fraud.