K. Borg-Olivier

The Bank of Montreal brought an action to collect moneys due under a line of credit agreement.

The only issue was whether the defendant, Joseph Ieradi, entered into the agreement personally or on behalf of his corporations.

The court found that the agreement was personal, not corporate, and that the defendant was personally liable for the debt, despite the absence of the original written agreement.

The court relied on secondary evidence and the parties' conduct to reach its conclusion.

The moving defendant sought to vary a Mareva injunction to release funds for restitution in an unrelated criminal matter, criminal defence legal fees, and additional civil legal fees.

Applying the four-part test for variation of a Mareva order set out in Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, the court held that the moving party failed to provide full and frank disclosure of his current assets and liabilities and did not establish that no other assets were available to pay the requested expenses.

The examination of the moving party revealed significant gaps, refusals to answer questions, and unexplained financial transactions, preventing the court from properly applying the governing test.

The court also noted that the proposed restitution payment and criminal defence fees were not clearly within the categories of living or legal expenses typically permitted under a Mareva order.

The motion was largely dismissed, with a limited variance permitting potential release of $25,000 for civil legal fees subject to strict proof of prior payments.

The moving defendants sought to set aside a Mareva injunction freezing their assets in a civil fraud action involving alleged fraudulent factoring transactions worth approximately $6.5 million.

The court considered whether the plaintiff continued to demonstrate a strong prima facie case of fraud and a real risk of asset dissipation.

Evidence showed that the moving defendants’ companies received substantial funds from entities involved in the fraud, that explanations for the transactions were unsupported by documentation, and that the alleged sale of a business appeared suspicious.

The court also noted conduct inconsistent with the injunction, including the use of undisclosed bank accounts.

The court held that the plaintiff continued to meet the requirements for a Mareva injunction.

The parties sought clarification on the settlement of an order following a judgment declaring a bulk sale void for non-compliance with the Bulk Sales Act.

The applicant trustee argued that the respondent purchaser's liability to account for the 'value of the stock in bulk' under s. 16(2) of the Act included the HST paid on the transaction.

The court applied the modern principle of statutory interpretation and held that the plain and ordinary meaning of 'value of the stock in bulk' does not include value-added taxes like HST.

The respondent's maximum liability was therefore capped at the purchase price excluding HST, less amounts paid to secured creditors.