The plaintiff, Shanghai Lianyin Investment Co., Ltd. (SLIC), brought a motion for an interim preservation order under Rule 45.01(1) of the Rules of Civil Procedure concerning two Ontario properties registered in the name of the defendant Lichun Guo, alleging they were held in resulting trust for her husband, Charles Lu, against whom SLIC held a CAD$233 million arbitral award.
Concurrently, Ms. Guo brought a cross-motion for security for costs.
The court dismissed SLIC's preservation order motion, ruling that Rule 45.01 is not the appropriate mechanism for preventing asset dissipation before judgment where the plaintiff does not assert a legal right to the specific assets, but rather seeks to satisfy a general monetary judgment.
Such relief requires meeting the stricter test for a Mareva injunction or a certificate of pending litigation.
The court granted Ms. Guo's motion for security for costs, finding that SLIC, as an out-of-province corporation with insufficient Ontario assets, did not demonstrate a "good chance of success" on the merits of its complex resulting trust claim, particularly given the unsettled legal question in Ontario regarding a creditor's ability to enforce a judgment against property held by a spouse in resulting trust without an allegation of fraudulent conveyance.