October 08, 2018

Canada Provides Helpful Guidelines When Mareva Injunction Can Be Granted Without Notice

Authored by Eric (Rick) Rein

 in International Asset Recovery

Ontario's Divisional Court in 2092280 Ontario Inc. v. Voralto Group Inc., 2018 ONSC 2305, confirmed the requirements in obtaining an injunction on the dissipation of assets without notice. There, the Appellants were a landlord and contractor who had allegedly been defrauded in a scam involving the illegal dumping of waste. The court noted that where the five requirements for a Marevain junction that need to be met, wherein notice to the parties affected is not initially required.

  1. Make full and frank disclosure of all material matters within his or her knowledge
  2. Give particulars of the grounds of the claim and points that can be fairly made against it
  3. Give grounds for believing assets are in the jurisdiction
  4. Give grounds of believing there is real risk that the assets will be removed out of the jurisdiction or disposed of or otherwise dealt with so that the plaintiff will be unable to satisfy a judgment
  5. Give an undertaking as to damages

The court explained that "the law's reluctance to allow prejudgment execution must yield to the more important goal of ensuring that the civil justice system provides a just and enforceable remedy against such serious misconduct." The court decided that the requirement that there be a "real risk" of the removal or dissipation of assets can be established by inference. But, there remains the extraordinary burden to make full and frank disclosure.  

Hence, the court found a lower evidentiary burden on a plaintiff seeking a Marevain junction in fraud cases where there is a risk of dissipation of assets and notice may not be required.

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