Mareva Injunction
Supreme Court of Canada
The Manitoba Court of Appeal affirmed the trial Judge's order granting an injunction which restrained the appellant from transferring certain identified assets out of Manitoba to the appellant's offices in either Toronto or Montreal. This appeal raises squarely and simply the question of the availability of interlocutory orders restraining a defendant in a civil action from disposing of or handling assets in any specific way prior to trial. In England this is said to have originated in a proceeding now identified by the expression “Mareva injunction”.
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... it is ... still accepted that an injunction to preserve the very subject-matter of the action is not to be equated with an injunction of the Mareva variety.
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The gist of the Mareva action is the right to freeze exigible assets when found within the jurisdiction, wherever the defendant may reside, providing, of course, there is a cause between the plaintiff and the defendant which is justiciable in the Courts of England. However, unless there is a genuine risk of disappearance of assets, either inside or outside the jurisdiction, the injunction will not issue. This generally summarizes the position in this country ...
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While the Mareva injunction is undoubtedly in personam, it matters not that on occasion the Courts have classified it as in rem ... because the injunction affords no priority to the potential creditor ...
“Mareva” is a refinement made necessary to accommodate in the same laws the primary principle of [Lister & Co. v. Stubbs (1890), 45 Ch. D. 1] ...
Aetna Financial Services Ltd. v. Feigelman |
1985 CarswellMan 379 (S.C.C.) at para. 1, 15, 42, 44, 57 |
Estey J.
Federal
In Chitel v. Rothbart (1982), 69 C.P.R. (2d) 62... (Ont. C.A.), the requirements for a traditional “Mareva” injunctions were discussed. In the Chitel case the purpose of such injunction was also discussed, as set out in Barclay-Johnson v. Yuill[1980] 3 All E.R. 190 (C.A.) at p. 194:
It seems to me that the heart and core of the Mareva injunction is the risk of the defendant removing his assets from the jurisdiction and so stultifying any judgement given by the courts in the action. If there is no real risk of this, such an injunction should be refused; if there is a real risk, then if the other requirements are satisfied the injunction ought to be granted. If the assets are likely to remain in the jurisdiction, then the plaintiff, like all others with claims against the defendant, must run the risk common to all, that the defendant may dissipate his assets, or consume them in discharging other liabilities, and so leave nothing with which to satisfy any judgement. On the other hand, if there is a real risk of the assets being removed from the jurisdiction, a Mareva injunction will prevent their removal. It is not enough for such an injunction merely to forbid the defendant to remove them from the jurisdiction, for otherwise he might transfer them to some collaborator who would then remove them; accordingly, the injunction will restrain the defendant from disposing of them even within the jurisdiction.
Standal Estate v. Swecan International Ltd. |
1989 CarswellNat 519 (Fed. T.D.) at para. 19 |
Reed J.
... the use of a Mareva injunction is [not] limited only to cases where there is reason to fear that the assets will be removed from the jurisdiction ... such injunctions may also be applicable where there is danger of assets being dissipated. At p. 160 of [Aetna Financial Services Ltd. v. Feigelman (1985), 4 C.P.R. (3d) 145], the following is stated by the Supreme Court:
The gist of the Mareva action is the right to freeze exigible assets when found within the jurisdiction ... However, unless there is a genuine risk of disappearance of assets, either inside or outside the jurisdiction, the injunction will not issue.
... And at p. 162, quoting from Chitel v. Rothbart [ (1982), 69 C.P.R. (2d) 62 (Ont. C.A.) ]:
The applicant must persuade the court by his material that the defendant is removing or there is a real risk that he is about to remove his assets from the jurisdiction to avoid the possibility of a judgment, or that the defendant is otherwise dissipating or disposing of his assets ...
Reading & Bates Construction Co. v. Baker Energy Resources Corp. |
1988 CarswellNat 116 (Fed. T.D.) at para. 18 |
Reed J.
The guidelines, in respect of Mareva injunctions, were set out by Denning M.R. in ... [Third Chandris Shipping Co. v. Unimarine S.A.[1979] Q.B. 645 (C.A.) ] as follows [p. 668-9 Q.B.]:
(i) The plaintiff should make full and frank disclosure of all matters in his knowledge which are material for the judge to know ...
(ii) The plaintiff should give particulars of his claim against the defendant, stating the ground of his claim and the amount thereof, and fairly stating the points made against it by the defendant.
(iii) The plaintiff shoud give some grounds for believing that the defendant has assets here ...
(iv) The plaintiff should give some grounds for believing that there is a risk of the assets being removed before the judgment or award is satisfied. The mere fact that the defendant is abroad is not by itself sufficient ...
(v) The plaintiff must, of course, give an undertaking in damages — in case he fails in his claim or the injunction turns out to be unjustified. In a suitable case this should be supported by a bond or security; and the injunction only granted on it being given, or undertaken to be given.
I would add that the material in support should show a good cause of action against the defendant; and one falling within the jurisdiction of this Court.
Elesguro Inc. v. Ssangyong Shipping Co. |
1980 CarswellNat 604 (Fed. T.D.) at para. 47 |
Collier J.
British Columbia
... there is no merit to the position that the injunction is not a Mareva injunction. What it does is place the plaintiff in the position of securing in part the damages he alleges he has suffered by securing the assets of the defendants pending the final determination of the action, agreement, or further court order. The statement of counsel that it is not suggested that there is fear of the defendants removing assets from the jurisdiction does not ... assist the argument.
The order obtained is one which seeks to prevent the defendants from dealing with the assets pending the determination of this proceeding ... the order obtained is or is in the nature of a Mareva injunction to which the principles applicable to the review of ex parte Mareva injunctions apply.
Ma v. Nutriview Systems Inc. |
2011 CarswellBC 2037 (B.C. S.C. [In Chambers]) at para. 6, 7 |
Savage J.
I do not consider that the general approach to Mareva injunctions in British Columbia requires modification. It may ... require clarification and a reminder that it is a species of interlocutory injunction with special requirements. Those requirements relate to the general rule against pre-judgment execution and may vary depending on the nature of the exception into which the injunction fits (with reference to the four categories of exception given as examples in [Aetna Financial Services Ltd. v. Feigelman (1985), 1985 CarswellMan 379, 1985 CarswellMan 19, [1985] 1 S.C.R. 2, 15 D.L.R. (4th) 161, [1985] 2 W.W.R. 97, 56 N.R. 241, 32 Man. R. (2d) 241, 29 B.L.R. 5, 55 C.B.R. (N.S.) 1, 4 C.P.R. (3d) 145, [1985] S.C.J. No. 1 (S.C.C.)]). While the term “Mareva injunction” is used to denote any order impounding assets or freezing assets before judgment (outside of statutory remedies such as builders liens or garnishing orders), they are not all alike. Awareness of the root issue is helpful in sorting out the exercise of discretion.
Tracy v. Instaloans Financial Solution Centres (B.C.) Ltd. |
2007 CarswellBC 2392 (B.C. C.A.) at para. 44 |
Saunders J.A.
A Mareva injunction is not execution before judgment or a remedy in rem. It is granted to prevent dissipation of assets or their secretion or removal from the jurisdiction to avoid judgment, not to prevent their reasonable use in the ordinary course of a person's life or business.
Grenzservice Speditions GmbH v. Jans |
1995 CarswellBC 1041 (B.C. S.C.) at para. 28 |
Huddart J.
The order which the plaintiff seeks is commonly referred to as a “Mareva injunction” and may be granted under the authority of s. 36 of the Law and Equity Act, R.S.B.C. 1979, c. 224. It is an exception to the general rule that execution, including orders restricting a defendant's right to deal with or dispose of his property, cannot be obtained before judgment: Lister & Co. v. Stubbs(1890) ... [1886-90] All E.R. Rep. 797; Aetna Financial Services Ltd. v. Feigelman[1985] 1 S.C.R. 2... To obtain such an order, the applicant must satisfy the following conditions set down by Lord Denning M.R. in Third Chandris Shipping Corp. v. Unimarine S.A.[1979] Q.B. 645 at 655... (C.A.) and accepted by our Court in Sekisui House Kabushiki Kaisha (Sekisui House Co.) v. Nagashima(1982) ... 42 B.C.L.R. 1 (C.A.) :
1) The plaintiff must make full and frank disclosure of all material matters;
2) He must give particulars of his claim, the grounds of it and the amount thereof, and fairly state the points made against it by the defendant;
3) He must show some grounds for believing the defendant has assets within the Court's jurisdiction;
4) He must show some ground for believing there is a risk of the assets being removed or dissipated before judgment is satisfied;
5) He must give an undertaking in damages, supported by bond or security in suitable cases.
Atrill v. Makan |
1989 CarswellBC 510 (B.C. Co. Ct.) at para. 3 |
Skipp Co. Ct. J.
Manitoba
[In Barclay-Johnson v. Yuill[1980] 3 All E.R. 190 (Ch.D) , Megarry V.C. stated at p. 194:]
It seems ... that the heart and core of the Mareva injunction is the risk of the defendant removing his assets from the jurisdiction and so stultifying any judgment given by the courts in the action ... if there is no real risk of this, such an injunction should be refused; if there is a real risk, then if the other requirements are satisfied the injunction ought to be granted.
Aetna Financial Services Ltd. v. Feigelman |
1982 CarswellMan 136 (Man. C.A.) at para. 28 |
Matas J.A.
New Brunswick
... if there exists a substantive cause of action on which the plaintiff is suing or about to sue in this province and it appears that there is a danger that the defendant may abscond or remove or dispose of his assets so as to prevent satisfaction of any judgment the plaintiff may obtain ... for the reasons expressed in the Third Chandris Shipping Corp. v. Unimarine SA[1979] Q.B. 645 (C.A.) case and in the [Prince Abdul Rahman Bin Turki Al Sudairy v. Abu-Taha[1980] 3 All E.R. 409] case ... an interlocutory judgment [Mareva injunction] so as to prevent the defendant disposing of assets which might otherwise be available to satisfy a judgment obtained by the plaintiff.
... the injunction in this instance is against the sale of land, rather than the removal of money or goods as was the case in the Mareva line of decisions ... The ... lands had been listed for sale and could have been converted into money which ... could have been removed from the jurisdiction thus defeating [the plaintiff's] action before he could obtain judgment on his claims. In these circumstances ... a Mareva injunction could be issued provided the other requirements for obtaining the injunction are met.
Buraglia v. Humphreys |
1982 CarswellNB 40 (N.B. C.A.) at para. 38, 39 |
Stratton J.A.
Northwest Territories
... the Court of Appeal of England has affirmed its jurisdiction to grant an interlocutory [Mareva] injunction prior to trial so as to prevent a defendant absent from the jurisdiction from disposing of his assets within the jurisdiction.
B.P. Exploration Co. (Libya) v. Hunt |
1980 CarswellNWT 6 (N.W.T. S.C.) at para. 17 |
Tallis J.
Ontario
A Mareva injunction is an injunctive order that restrains the defendant from dissipating assets or from conveying away his or her own property pending the court's determination in the proceedings.
O2 Electronics Inc. v. Sualim |
2014 CarswellOnt 12203 (Ont. S.C.J.) at para. 66 |
Perell J.
What [Mareva injunctions] do is tie up the assets of the defendant, specific or general, pending any judgment adverse to the defendant so that they would then be available for execution in satisfaction of that judgment.
Chitel v. Rothbart |
1982 CarswellOnt 508 (Ont. C.A.) at para. 30 |
MacKinnon A.C.J.O.
The Mareva injunction gets its name from Mareva Compania Naviera S.A. v. Int. Bulkcarriers S.A.[1980] 1 All E.R. 213... (C.A.) ... wherein Lord Denning ... gave as his opinion [p. 215]:
If it appears that the debt is due and owing and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment, the court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets.
Canadian Pacific Airlines Ltd. v. Hind |
1981 CarswellOnt 119 (Ont. H.C.) at para. 8 |
Grange J.
In Barclay-Johnson v. Yuill... [1980] 3 All E.R. 190, the parties were in the business of renovating and selling houses; neither was a foreigner. Sir Robert Megarry said at p. 196:
The Mareva doctrine grew up in commercial surroundings, particularly in relation to ships. Much that was said in the judgments reflected that commercial background. On the other hand, I do not think that there is any authority for confining it to commercial matters, even if it were possible to define them at all accurately ... if, as I think, the foundation of the doctrine is the need to prevent judgments of the court from being rendered ineffective by the removal of the defendant's assets from the jurisdiction, then on principle I can see no reason for confining it to commercial cases ... It is now a quite general doctrine, free from any possible requirements of foreigness, commerce, or anything else; and in a proper case it depends only on the existence of a sufficient risk of the defendant's assets being removed from the jurisdiction with a consequent danger of the plaintiff being deprived of the fruits of the judgment that he is seeking.
I, therefore, find that a Mareva injunction does apply to an action for wrongful dismissal.
Quinn v. Marsta Cession Services Ltd. |
1981 CarswellOnt 132 (Ont. H.C.) at para. 9, 10 |
Montgomery J.
Saskatchewan
The principles and guidelines to be applied by the court in deciding whether or not a “Mareva injunction” ought to be granted were discussed and outlined by Lord Denning in Third Chandris Shipping Corp. et al. v. Unimarine SA et al.[1979] 2 All E.R. 972at p. 984:
In the Mareva case itself I said: “If it appears that the debt is due and owing — there is a danger that the debtor may dispose of his assets so as to defeat it before judgment — the Court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him from disposing of those assets.”
Sask-Workwear Inc. v. Ollinik |
1982 CarswellSask 218 (Sask. Q.B.) at para. 25 |
Vancise J.