Mareva orders, also known as freezing orders, may be granted when there is a risk that a defendant might move its assets out of reach of the court’s jurisdiction. Mareva orders can freeze assets owned
Continue Reading Creditors seeking enforcement of claims to a Mareva defendant must come with clean hands
In Ontario, as a general rule, partial indemnity, which ranges from approximately 40-60% of the actual costs incurred by a party, is awarded to the successful litigant. Full indemnity, which comprises 100% of the costs
Continue Reading Failure to make full and fair disclosure can result in a full indemnity costs
In Li et al. v. Barber et al., the Ontario Superior Court of Justice dismissed a motion by two “Freedom Convoy” organizers to release $200,000 of previously frozen funds needed to retain legal
Continue Reading Access Denied: Ontario Court Rejects “Freedom Convoy” Organizers’ Request to Access Frozen Funds for Legal Fees
In Thrive Capital Management Ltd. v. Noble 1324, 2021 ONCA 722, the Ontario Court of Appeal reversed a Superior Court’s judgment against Noble 1324 Inc. for contempt of court for the failure to disclose their assets and account for money paid in respect of real estate investments. The Superior Court ordered two alleged fraudsters to repay at least $9 million to investors as a sentence for being found in contempt of court, notwithstanding that the trial on the merits had not been heard. In allowing the appeal, the Ontario Court of Appeal offered important guidance on strategic considerations and remedies when a party is dealing with a party who refuses to comply with court orders.
Continue Reading Judgment is not a Sanction for Contempt: Ontario Court of Appeal Offers Guidance on the Enforcement of Orders in Fraud Proceedings
In Amphenol Canada Corp v. Sundaram, 2020 ONSC 328 (“Amphenol Canada“), the Ontario Divisional Court confirmed that a prima facie showing of fraud and dissipation in the context of a Mareva injunction may have additional consequences for defendants, including presumed prejudice in terms of that defendant’s ability or inclination to satisfy future cost awards.
Continue Reading Impact of Mareva injunctions on alleged fraudsters
On November 15, 2018, the Supreme Court of Canada granted Christine DeJong Medicine Professional Corporation’s (“DeJong”) application for leave to appeal from the decision in DBDC Spadina Ltd. v. Walton, 2018 ONCA 60. By granting leave, Canada’s highest court will weigh in on the liability of “victims” of fraud as against one another.
Continue Reading Supreme Court to Rule on Conflicting Rights of Investors in Fraudulent Schemes
The decision in SFC Litigation Trust (Trustee of) v. Chan, 2017 ONSC 1815 represents a step toward a more flexible approach when our courts are asked to consider whether a Mareva injunction should be granted. In this case, the appellant, Mr. Chan, the former Chief Executive Officer of Sino-Forest Corporation (“SFC”), appealed an order confirming a Worldwide Mareva injunction that had been granted against him, ex parte.
SFC was a Canadian corporation and had an office in Ontario, a head office in Hong Kong, and assets predominately located in China. It carried out a sale process through the Companies’ Creditors Arrangement Act, R.S.C. 1985 c. C-36 (the “CCAA”), which ultimately failed. SFC then applied under the CCAA for an order approving a plan of compromise and reorganization, which was subsequently sanctioned. A Litigation Trust was assigned the litigation rights of SFC.
Continue Reading Mareva Injunctions – Ontario Court of Appeal Signals a More Flexible Test for Granting Worldwide Mareva Injunctions
In DBDC Spadina Ltd et al v Norma Walton et al, Justice Newbould of the Ontario Superior Court recently granted a motion for summary judgment on the basis that there was sufficient evidence to justify a finding of fraud. The decision reflects the guidance set out in the landmark Supreme Court Canada decision Hyrniak v. Mauldin, 2014 SCC 7, which recognized that the adjudicative process can be fair and just without requiring the expense and delay of a trial.
Continue Reading No trial required: Summary Judgment granted in fraud case
One of the most powerful pre-judgment remedies available to a plaintiff is a Mareva injunction freezing the defendant’s assets before trial. The Mareva injunction is a powerful tool for levelling the playing field when dealing with those who, left to their own devices, would dissipate their assets in order to frustrate the claims of their creditors. Due to its extraordinary effect, the parties to such an injunction can seek to thaw the freezing order to access funds or assets. As recent case law has shown, the tests to be met differ for defendants and plaintiffs, and a number of factors ought to be considered before a request is made to thaw assets frozen under a Mareva.
Continue Reading Thawing out an asset freeze
The Mareva injunction is a powerful tool for levelling the playing field when dealing with those who, left to their own devices, would dissipate their assets, with a view to frustrating the claims of their creditors. While the commencement of litigation is the traditional juncture to seek such extraordinary relief, based in part on the idea that a defendant might then take steps to dissipate assets, it is not the only stage of the process at which such an order is available. If a Mareva was either not granted, or not sought, at the front end of the process, but then a money judgment is obtained, some defendants might then take steps to remove, conceal or consume assets, while an appeal is pending, thereby exploiting the automatic stay of execution imposed.
Continue Reading Mareva injunctions: They’re not just for pre-judgment anymore