SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: 12-0677

DATE: 20140218

RE: MacLellan Enterprises Inc. O/A The Appliance Shack, Plaintiff

AND:

Laurie A. Longlad, Defendant

BEFORE: THE HON. MADAM JUSTICE M.E. VALLEE

COUNSEL:
M.E. Craig, Counsel for the Plaintiff

Laurie A. Longlad, appearing personally

HEARD: February 18, 2014

ENDORSEMENT

[1] The plaintiff brings this motion for a Mareva injunction to prevent the defendant from disposing of two properties, one located in Orillia being PIN 58577-0056 (LT) and one in Parry Sound being PIN 52092-0040 (LT).

Background

[2] The defendant was employed by the plaintiff for approximately 9 years. She was terminated for theft on June 9, 2010. The plaintiff states that the defendant sent a letter dated June 11, 2010 essentially admitting that she stole funds from the plaintiff. The letter states, “…with respect to the deposit discrepancies, I am advising you that I will work with you in any way possible for as long as possible in order to resolve this situation.” The defendant goes on to state that she is attempting to take out a second mortgage on her home and requested $20,000. The defendant now states that the signature on the letter is not hers. In her statement of defence, she denies that she stole money from her employer.

[3] The plaintiff arranged an examination for discovery for December 5, 2013. The notice was served on the defendant on November 22, 2013 by a process server. The defendant requested an adjournment of the date by letter dated November 27, 2013. She stated that she required longer notice to arrange to have time off work. She also stated that she needed additional time to review the materials. The plaintiff agreed to the adjournment on certain terms which were not acceptable to the defendant. The defendant attended the examination but stated that she would not answer any questions because she wanted to retain counsel. In her request for the adjournment, she did not advise the plaintiff that she wished to retain counsel prior to being examined. The discovery was aborted.

[4] The examination was re-scheduled and took place on January 24, 2014. During the discovery, the defendant stated that she would be transferring the Orillia property to her former common law spouse, Gordon McPherson, before the end of April, 2014. It should be noted that a title search dated February 5, 2013 discloses that they hold title to this property as joint tenants. The defendant refused to provide the plaintiff with 15 days’ notice prior to the transfer.

[5] The defendant also stated at examination that she did not hold title to the Parry Sound property. She said she had “signed off” on the transfer of this property in December, 2013. This occurred at approximately the same time as the defendant requested the adjournment of the first examination date. A title search dated February 5, 2014 discloses that the defendant and Mr. McPherson have held title to the Parry Sound property as joint tenants since 2004.

[6] At the January 24, 2014 examination, the defendant disclosed that she had received an RRSP transfer from Mr. McPherson. She had cashed the RRSPs to pay for debt. Aside from the Orillia and Parry Sound properties, the defendant has no significant assets. She is employed and earns approximately $20,000 per year.

The Test for a Mareva Injunction

[7] In order to obtain a Mareva injunction, the moving party must demonstrate that it has a strong prima facie case against the responding party, that there is a real risk that the responding party will dissipate assets prior to trial and that the balance of convenience favours the moving party. (See Chitel v. Rothbarts (1982), 1982 1956 (ON CA), 39 O.R. (2d) 513 (C.A.) paras. 56 – 59.)

Does the plaintiff have a strong prima facie case?

[8] The plaintiff relies on the letter sent by the defendant dated June 11, 2010 as an admission of the theft because in it, the plaintiff discusses the efforts that she was making to repay the funds. The defendant denies that her signature is on the letter. It should be noted that there is no evidence before the court that the defendant challenged the dismissal as being wrongful. A termination for theft is a serious matter. After being employed by the plaintiff for 9 years, the defendant might have demanded pay in lieu of notice for wrongful dismissal or have taken some other step had she believed that she wrongfully terminated.

[9] I find that the plaintiff has a strong prima facie case against the defendant.

Is there is a real risk that the responding party will dissipate assets prior to trial?

[10] At examinations, the defendant stated that she would transfer her interest in the Orillia house to Mr. McPherson prior to April, 2014. This matter will not be tried prior to the end of April. She also indicated that she had “signed off” on the Parry Sound property. She thought that she was not on title to the Parry Sound property. This is not true. At a minimum, she has indicated an intention to transfer that property as she states that she has “signed off.” The defendant seemed to be under the impression that she had to transfer these properties pursuant to terms in a co-habitation agreement. I reviewed the agreement. There are no terms requiring the transfers.

[11] I find that there is a real risk that the defendant will dissipate at least this asset prior to trial.

Does the balance of convenience favour the moving party?

[12] The plaintiff states that it will suffer irreparable harm if the injunction is not granted as the defendant is likely to dispose of assets so as to defeat satisfaction of a judgment which it expects to obtain. As noted above, the defendant has no significant assets other than the two properties. The defendant is employed. Her employment does not depend on the transfer of the assets. The defendant did not put forward any evidence that she will be prejudiced by the injunction sought. In fact, the defendant served on the plaintiff a statement of defence and an affidavit; however, the affidavit was not filed with the court. There was no evidence before the court of the defendant’s position beyond her oral submissions.

[13] I find that the plaintiff will likely suffer irreparable harm if the injunction is not granted. There appears to be no prejudice to the plaintiff if it is granted. Accordingly, I find that the balance of convenience favours the plaintiff.

Costs

[14] The plaintiff requests partial indemnity costs of $3,484.07 for the aborted examination on December 5, 2013 and $5,713.70 for this motion. The defendant states that the plaintiff should have agreed to adjourn the examination to allow her further time to prepare. The plaintiff did offer to adjourn the examination on terms, one of which was that the defendant would not dissipate assets in the interim. This was a reasonable request which the defendant refused. The plaintiff has been the successful party on this motion. Accordingly, the defendant shall pay to the plaintiff the sums of $3,484,07 and $5,713.70, being $9,197.77 in total as partial indemnity costs.

[15] An order shall issue as per the draft signed.

VALLEE J.

Date: February 18, 2014