COURT FILE AND PARTIES

COURT FILE NO.: CV-15-2110-00

DATE: 20150610

SUPERIOR COURT OF JUSTICE – ONTARIO

B E T W E E N:

TRADE CAPITAL FINANCE CORP.

Plaintiff

• and -

PETER COOK also known as PETER WILLIAM COOK, MARC D’AOUST also known as JEAN MARC D’AOUST, THOMAS BARKER also known as THOMAS RICHARD BARKER (personally and carrying on business as LC EXCHANGE, GLOBAL MEDICAL and GREENLINK CANADA GROUP), ROCKY RACCA, BRUNO DIDIOMEDE also known as BRUNO DIAIOMEDE, ALAN KEERY also known as ALAN JOHN KEERY, CHRIS BENNETT JR. also known as CHRIS BENNETT also known as CHRISTOPHER BENNETT (personally and carrying on business as CJR CONSULTING), TODD CADENHEAD, DAYAWANSA WICKRAMASINGHE, BONNY LOKUGE also known as DON BONNY LOKUGE, VIRTUCALL INC., VIRTUCALL INTERNATIONAL LLC, DEBT RESOLVE-MORTGAGE FUNDING SOLUTIONS INC. carrying on business as DEBTRESOLVE INC., THE CASH HOUSE INC., 1160376 ONTARIO LIMITED operating as THE CASH HOUSE, 2242116 ONTARIO INC. carrying on business as SUPERIOR MEDICAL SERVICES INC. and SUPERIOR MEDICAL SERVICES, CARLO DE MARIA also known as CARLO VINCE DE MARIA also known as CARLO VINCENT DE MARIA also known as CARLO VINCENZO DE MARIA, MATTEO PENNACCHIO, FRANK ZITO also known as FRANCESCO ZITO, SIMONE SLADKOWSKI, JOBEC TRADE FINANCE INC., 1461350 ONTARIO INC., 2299430 ONTARIO INC., WF CANADA LTD., JOBEC INVESTMENTS RT LTD., GREEN LINK CANADA INC., 2339989 ONTARIO INC., 2252364 ONTARIO INC., 2224754 ONTARIO LTD., 6980023 CANADA INC. operating as LIVING BENEFITS

and MILLWALK ENTERPRISES INC.

Defendants

BEFORE: Ricchetti, J.

COUNSEL:
P. Carey, M. McWilliams and C. Lee for Trade Capital Finance Corp.

K. Borg-Olivier and A. Shore for Carlo De. Maria and 1160376 Ontario Ltd.

M. Marchioni for The Cash House Inc.

HEARD: June 1, 2015

ENDORSEMENT ON MOTION TO SET ASIDE THE MAREVA ORDER BY CARLO DE. MARIA, 1160376 ONTARIO LTD. AND THE CASH HOUSE INC.

THE MOTION

[1] This is a motion by Carlo De Maria ("De Maria"), 1160376 Ontario Ltd. ("116") and The Cash House Inc. ("Cash House") to set aside the Mareva Order of May 6, 2015 (“Mareva Order”) as against them.

The Position of the Parties

[2] De Maria and 116 submit that Trade Capital Finance Corp. ("Trade Capital") has failed to establish a prima facie case of fraud as against them and that there is no evidence of an intention to dissipate assets.

[3] Cash House adds to these submissions and states that this corporation is now owned by an innocent purchaser who had no involvement in the fraud and should be permitted to carry on its business unfettered by the Mareva Order.

[4] Trade Capital opposes the relief sought on the basis:

a) There continues to be a strong prima facie case of fraud by these moving defendants; and

b) there continues to be a serious risk and evidence of actual dissipation of assets by these moving defendants.

Was Fraud Pleaded against these Defendants?

[5] The moving defendants submit that Trade Capital has not pleaded fraud against them.

[6] I disagree. Any reading of paragraphs 1 (c) (iii) and 155 of the Statement of Claim quickly disposes of this submission. Besides, a reading of the entire Statement of Claim makes it abundantly clear that Trade Capital alleges that these moving Defendants were involved in a conspiracy to commit and, did commit, a fraud on Trade Capital.

The Evidence ON THE ORIGINAL MOTION THAT These Defendants were involved in the Fraud

Background

[7] Trade Capital is in the business of factoring. At the core of Trade Capital's action is that a fraud was perpetrated on it to finance fraudulent receivables, represented as valid third party payables, in the amount of approximately $6,500,000 ($5,051,721 CDN and $1,479,471 USD).

[8] The primary individuals and companies who have, so far, been identified as perpetrating this fraud included:

a) Mr. Cook, who was the then president of Trade Capital;

b) Mr. Barker, a principal of Virtucall;

c) Mr. D'Aoust, a principal of Superior;

d) Mr. Cadenhead, a principal of Greenlink; and

e) Mr. Kerry a principal of 2339989 Ont.

[9] Mr. Cook eventually confessed to the fraudulent scheme. Mr. Cook confessed that the receivables assigned to Trade Capital were false and that Trade Capital's money had been funded out into various accounts to the "bad people".

[10] Trade Capital’s funding of this fraudulent scheme was primarily paid to a specific number of companies in whose name bore the fraudulent receivables:

a) Virtucall;

b) Superior;

c) Greelink; and

d) 2339989.

[11] The details of the fraud are extensive and set out in the lengthy affidavits filed on the original Mareva Injunction motion. There is no doubt that this was a complex fraud involving numerous persons and companies and the extensive flow of funds through many persons and companies.

[12] Trade Capital in late 2013 obtained a Norwich Order to permit it to trace the fraudulent funds through various financial institutions.

The Case against the Moving Defendants

[13] Trade Capital established, from its funding of the fraudulent receivables:

a) That monies paid out for the fraudulent Superior receivables, upon receipt by Superior, were shortly thereafter paid out to Cash House (see Sept. 28, 2012, Jan. 10, 2012, March 12, 2012, April 1, 2013) - total $412,050);

b) that monies paid out for the fraudulent Greenlink receivables, upon receipt by Greenlink, were shortly thereafter paid out to Cash House (See Oct. 22, 2012, Sept. 11, 2012, Dec. 24, 2012, Dec. 31, 2012) - total $512,777.50; and

c) that monies paid out for the fraudulent 2339989 receivables, upon receipt by 2339989, were shortly thereafter paid out to Cash House (see Nov. 15, 2012, Nov. 16, 2012, Nov. 12, 2012) - total $246,956.00).

[14] In addition to the above monies, Trade Capital’s advances on the fraudulent receivables were transferred through several entities (including US accounts) to Virtucall and eventually paid to Cash House. In this manner alone, Cash House received $2,722,222.50 of these monies advanced made to others, then to Virtucall and eventually to Cash House.

[15] Clearly, Cash House was the recipient of substantial amounts of the fraudulently obtained monies from Trade Capital. Equally important, the monies received by Cash House were from most of the major fraudulent entities used to commit the fraud on Trade Capital. This fact defies coincidence.

[16] It was established that De Maria's companies, the Cash House and 116 were the largest recipients of Trade Capital's monies.

[17] However, receipt of the fraudulently obtained monies is not the only evidence that Cash House was involved in the fraudulent scheme:

Moving Monies from Cash House to De Maria’s other Companies

[18] In February 2013, Cash House closed its Scotiabank account and the Cash House cheques were deposited into 116, another of De Maria's company. A significant amount of the fraudulent monies that went to Cash House was eventually traced to Mr. De Maria's company, 116. Where these monies eventually ended up is not known. What is known is that these were not monies for Cash House’s operations or its profits but rather monies that De Maria treated as his and moved around to his own other companies. This creates difficulty with any tracing claim but also makes it easier for these defendants to have and continue to dissipate any fraudulent monies received by them.

The January 2013 emails

[19] Not many emails were uncovered by Trade Capital as Mr. Cook deleted his emails on a daily basis. However, there is an email from the Director of Operations at Cash House to Mr. Racca at Debt Resolve (a previous endorsement dealt with Mr. Racca’s significant involvement in the fraudulent scheme) where the Director of Operations demanded $298,000 by the next day from Mr. Racca. Mr. Racca confirmed he would do so to Cash House’s Director of Operations, which email was copied to Mr. D'Aoust and Mr. Cook – two of the main principals of the fraudulent scheme. This creates a connection, not just between an “employee” of Cash House but the Director of Operations with the individuals who were the main proponents of the fraudulent scheme.

Payments by De Maria’s 116 company to a person involved in the fraudulent scheme

[20] On two occasions in March 2013, while dealing with Mr. Racca at one of the Cash House locations, 116 made payments directly to 2252364 Ontario Inc., a Racca company. These third party cheques were paid directly to the company, Mr. Racca's company. The first payment was for $242,520. The payment on March 16, 2013 was for $310,000. These are substantial amounts of money being paid through De Maria’s company to a person who was moving and depositing fraudulently obtained cash regularly, sometimes many times at different banks on the same day.

Conclusion

[21] De Maria submits that there is no direct evidence he was involved or had knowledge of the fraud. However, there is no dispute that De Maria was the principal owner and operator of Cash House and 116. More importantly, De Maria admits he approved all of Mr. Racca’s dealings with the Cash House which is one of the strongest ties to the fraudulent scheme and receipt of the fraudulent monies.

[22] All of the above facts were set out in Trade Capital's affidavits with supporting documentation. I was satisfied based on this evidence that a strong prima facie case of fraud had been established against the moving defendants. As a result, I was satisfied that Trade Capital had established the pre-requisite requirements for a Mareva Injunction to issue.

[23] A return date of May 19, 2015 had been reserved to deal with any motions to set aside the Mareva Order. Such a motion was brought by the moving defendants.

The May 15, 2015 Affidavit of Mr. De Maria

[24] On the original return of the motion, De Maria filed a 13 page affidavit with no supporting documents or exhibits.

[25] De Maria advised that he “executed a share purchase agreement which effectively “sold” the Cash House on February 3, 2015 to Osman Khan. As will be seen below, this is either false or deceptive in that the agreement was executed by Linda De Maria and by a corporation not disclosed by De Maria.

[26] De Maria described Cash House’s business as a "money services business" and that Cash House's cheque cashing service was at issue in the case. He stated that each individual or corporation had an account which allowed him "to maintain a history of each customer's transaction." He described how a corporation might retain an "agent" to facilitate the corporation's dealings with the Cash House. Cash House would receive a third party cheque (i.e. the payee of the cheque had a cheque from a third party which he wanted to negotiate with the Cash House for cash), pay the party 97 per cent of the face value of the cheque to the payee, and the 3 per cent was the Cash House's fee. This business was lucrative, stating that the Cash House processed approximately $30,000,000 each month for its cheque cashing business. Using De Maria's own calculations, this would amount to approximately $900,000 of fees generated each month just for this line of its business at Cash House’s eight locations between 2011 and 2013.

[27] De Maria denied knowing many of the other persons involved in the fraud. However, he admitted that he knew Mr. Racca as "the primary agent" for Virtucall and agent for other companies. De Maria stated that the fact Cash House cashed cheques for Mr. Racca (five to ten cheques per day) is of no importance since that is the business they were in.

[28] De Maria disclosed his worldwide assets. His assets are listed and said to be worth a substantial amount of money mostly because of his other line of business real estate construction/development. It is interesting to note that he does not even show Cash House as an asset, not even the potential balance to be paid by Mr. Khan.

[29] What is missing from De Maria’s affidavit is any documentation responding to what happened to the monies Cash House received through or from the fraud. There is no detailed response to the allegations in Trade Capital’s materials. Not a single document was produced to show that 97 per cent had been paid out or to whom it had been paid out to. No business records. No customer accounts existed as De Maria explained. No explanation for the monies flowing from Virtucall. Nothing. His affidavit was nothing more than a bald denial that he was involved in the fraudulent scheme.

The May 15, 2015 Affidavit of Mr. Osman Khan

[30] Mr. Khan swore an eight paragraph affidavit. Essentially, he stated he bought the Cash House on February 3, 2015.

[31] The first issue with this affidavit was that De Maria swore he was the prior owner of the Cash House. Yet, the purchaser on the Agreement of Purchase and Sale is "Red Quest Holdings Inc.". Linda De Maria signed on behalf of Cash House. De Maria does not show Cash House or its sale proceeds as an asset. No explanation was provided for this.

[32] The purchase price for Cash House was stated as $1,000,000 but it is payable as follows: $20,000 deposit, $20,000 on closing, $40,000 annual instalments for four years and the balance on the fifth year. The purchaser is not Mr. Khan but a company to be incorporated by Mr. Khan. Hence, Mr. Khan acquired and closed his purchase of Cash House for $40,000 with no personal liability and a large balance to be possibly paid in the future.

[33] There were no appraisals, no valuations or any other indicia as to the value of Cash House at the time.

[34] Mr. Khan stated that the Cash House business had done in April (which he described as a slow month): $9,000,000 in cheque cashing, $500,000 in pay day loans and $6,500,000 in foreign exchange. The gross revenue from those activities was alleged to be $370,000 for the month (or approximately $4,400,000 per year).

[35] Even accepting Mr. Khan's numbers, it is difficult to fathom why someone would sell this business for an initial payment of $40,000, no personal liability for the balance, and only small amounts payable over the next five years when the business appears to be successful and continuing. This was not explained.

[36] Mr. Khan described the bank accounts that Cash House operated. This fact becomes significant later in these reasons as he failed to disclose one particularly important bank account.

Adjournment request by the moving defendants

[37] Not surprisingly, in its factum, Trade Capital questioned the validity and bona fides of the sale of Cash House to Mr. Khan.

[38] On May 19, 2015, Mr. Racca also brought a motion to dissolve the Mareva Order as against him and his company. He alleged he had no part in the fraudulent scheme.

[39] The moving defendants sought an adjournment as counsel indicated they were surprised at the position Trade Capital had taken that the sale of Cash House was highly suspicious and wished to file additional evidence. The moving defendants were granted the adjournment.

[40] A new date for the moving defendant’s motion was set for May 29, 2015. Unfortunately, the motion had to be put over until June 1, 2015, when it was heard.

[41] Mr. Racca’s motion to dismiss the Mareva Order against him and his company was heard and dismissed.

The May 22, 2015 Affidavit of Mr. De Maria

[42] Again, De Maria repeats that he was the former owner of the Cash House. Again he makes no explanation of “Red Quest”, the seller of Cash House to Mr. Khan.

[43] De Maria denies that there was anything suspicious about the sale of Cash House to Mr. Khan. He states that because of pending criminal charges, his bankers were withdrawing or limiting their support. He also expressed concerns whether his license would be renewed under the Payday Loans Act. As a result, he decided to sell Cash House. De Maria denied that the sale was in any way related to the allegations made by Trade Capital.

[44] De Maria explained that individuals and companies used Cash House's cheque cashing for two reasons: first, banks hold cheques until they clear and second, banks do not have enough cash to give the individual or corporation for the cheque. Clearly, a great deal of Cash House’s business was dealing with cash. In some cases, it might be understandable that an individual might want a cheque payable to him negotiated immediately and be prepared to pay a 3 per cent fee for this privilege. However, when it comes to large corporations with ongoing businesses, De Maria’s explanation makes little sense. Neither a 3 per cent charge for getting the cash a few days earlier (i.e. the few days it takes to clear a cheque) nor a 3 per cent charge because the bank does not have the cash that day makes any commercial sense to any significantly large company or for a company to engage in this practice repeatedly for large amounts of money. For example, on a $300,000 cheque the fee paid by the company would be $9,000!

[45] But by the date of this further affidavit, Mr. Racca’s motion had been dismissed. While no suggestion had been made in De Maria’s May 15, 2015 affidavit as to Mr. Racca’s role in the fraudulent scheme, now De Maria provided another explanation of Cash House’s dealings with Mr. Racca despite having already sworn an affidavit that cheques received from Mr. Racca were “processed in the ordinary course of business” – being cashing of cheques for payees for a fee.

[46] De Maria now stated that Mr. Racca would get a large cash advance in exchange for Mr. Racca's cheque payable to Cash House in the future. I note that this is not Cash House’s specific line of business. Mr. Racca would also provide third party cheques payable to Cash House (such as those referred to above from Superior and Greelink) in exchange for immediate cash. Again, this is not Cash House’s specific line of business. In other words, Mr. Racca would appear with a large cheque from some third party payable to the Cash House and Cash House would simply give Mr. Racca the cash. This makes little sense. Further, there are no records showing that this is what happened at the Cash House. As a financial services company, one would logically expect to see detailed records for these transactions if they were real. DeMaria event stated that Cash House kept historical accounts of customer dealings. Some documents (which were heavily redacted) were attached to De Maria’s second affidavit but, in my view, they do not substantiate the transaction he described.

[47] Next, De Maria now attempted to explain the substantial amount of cheques, some which were certified and bank drafts, from Mr. Racca to Cash House. Clearly, it would make no sense to cash these cheques or drafts at Cash House and pay the fee when a bank would cash these cheques for no fee. De Maria explained that a number of Mr. Racca's cheques were dishonoured (but copies of these NSF cheques are not included in his affidavit). De Maria states that Mr. Racca provided further third party cheques to cover the dishonoured cheques. Who were these cheques from? The same third parties whose cheques De Maria alleges had been dishonoured but this time the amounts of the cheques were much larger, one as high as $278,200 and in total these “replacement” cheques were approximately $1,400,000. No account was produced showing this shortfall by Mr. Racca. No reconciliation with dishonoured cheques was produced either. NOTHING.

[48] I note one other matter. Given the amounts of money involved and how these a prominently set out in Trade Capital’s affidavit, no explanation was given why this information was not in De Maria’s first affidavit.

[49] De Maria provided an explanation regarding the email from his Director of Operations that she was simply asking Mr. Racca for payment by the next day. However, none of the alleged repayments by Mr. Racca took place in January 2013. Further, this doesn’t explain why Mr. D’Aoust and Mr. Cook were copied. Again, there is no accounting information showing Mr. Racca's balance in January 2013 to explain why this amount was demanded by Cash House payable the next day.

[50] In summary, De Maria’s affidavit contains no further explanation of the sale to Mr. Khan (which had been the basis of the adjournment sought); contains many bald statements of denial; contains implausible explanations; and produces no documentation supporting his explanations.

The May 22, 2015 Affidavit of Mr. Osman Khan

[51] Mr. Khan states the price paid for the Cash House was excessive because of the risk the licenses might not be renewed.

[52] Mr. Khan admits he was not involved in the Cash House financial dealings prior to his purchase and, as such, his evidence as to the Cash House's transactions in question is nothing more than hearsay and has no probative value.

[53] Mr. Khan now allegedly controls Cash House but he too fails to produce any of the documentation and records to support what De Maria stated or he alleges in his affidavit.

The Cross examination of Mr. Khan

[54] Several significant facts come from the cross examination of Mr. Khan:

a) He has no experience in running a financial services firm, let alone one which operates a $30,000,000 per month in cheque cashing business, in addition to payday loans and foreign exchange. He has a psychology degree. He has no accounting or financing courses. He operated an armed transport business many years ago. He started to work at the Cash House in 2011 as a driver making approximately $50,000 plus bonus (up to $20,000). More importantly, this continued to be Mr. Khan’s job until he signed the share purchase agreement in 2015 – the result of which he now owns the company, all for a $40,000 payment!

b) He has deliberately breached the Mareva Order. Mr. Khan opened a new undisclosed bank account to operate the Cash House business and has continued to operate that business from that bank account in the normal fashion without regard to the Mareva Order. Mr. Khan failed to disclose this account in his affidavit when he listed the Cash House’s bank accounts in his May 15, 2015 affidavit where he stated he was “describing in detail the nature, value and location of all of The Cash House Inc.’s worldwide assets”. This information only came to light during his cross examination.

c) De Maria approached Mr. Khan to buy the Cash House business. Mr. Khan did not retain counsel on the purchase. Mr. Khan did not obtain a valuation or appraisal of the business or apparently do any analysis on its profitability. When asked where the $40,000 came from, Mr. Khan refused to answer.

d) Mr. Khan could not produce a shareholder register for his company that bought the Cash House.

THE ANALYSIS

[55] I accept that the onus remains on Trade Capital to establish its entitlement to the Mareva Order as against these moving defendants.

[56] The issue before me is whether, in light of the additional evidence now available to this court, do the requirements for the issuance of a Mareva Injunction continue to exist?

[57] The moving defendants raised two issues:

a) there is no strong prima facie case of fraud against the moving defendants;

b) there is no evidence of any intention to dissipate assets by the moving defendants.

[58] I will deal with those two issues.

Strong Prima Facie Case

[59] The first issue to be decided is whether, in light of all of the evidence now before this court, is whether Trade Capital has continued to establish a strong prima facie case of fraud against the moving defendants.

[60] I remain persuaded that a strong prima case of fraud has been made out by Trade Capital against the moving defendants.

[61] Trade Capital's evidence continues to show that Cash House participated in many highly unusual financial transactions, outside its usual business, which resulted in the Cash House and 116 receiving the largest portion of monies fraudulently obtained from Trade Capital.

[62] Further, these fraudulently obtained monies were received by Cash House from most of the companies and persons who participated in the fraud, making a coincidence highly unlikely.

[63] The monies were transferred to Cash House in a variety of ways: many which were not within its normal business operations; many which were in a circuitous route, eventually culminating in Cash House receiving the money. While De Maria described the Cash House business as cashing third party cheques (for a 3 per cent fee), there was almost $1,200,000 in cheques or bank drafts payable to Cash House that it cashed, all from Trade Capital's fraudulently obtained monies.

[64] De Maria’s affidavits do little to explain these transactions as reasonable commercial transactions. Explanations by De Maria were difficult to accept as reasonable commercial transactions and lacked any supporting documentation. These bald denials of involvement in the fraud have little persuasive value in the same manner that such statements have little value to respond to a summary judgment motion. See Bank of Montreal v. Abdel-Messih (2006) A.C.W.S. (3d) 380 (C.A.).

[65] I reject the submission that De Maria has not had sufficient time to fully respond to the allegations, does not have access to the documentation or has not had time to obtain the documentation. De Maria has had almost a month. Besides, no further adjournment was asked for by De Maria’s counsel. I can only presume this is the best record available at this time.

[66] I am also concerned about De Maria and Cash House’s delayed explanations after May 19, 2015. For example, it was only after Trade Capital raised the issue in its factum on May 19, 2015 that it made no commercial sense for someone to attend at Cash House with a bank draft or certified cheque to have this type of cheque/draft negotiated for a fee that De Maria responded with a subsequent affidavit that these were "repayments" and no fee was charged. Why wasn’t this explanation proffered in De Maria’s first affidavit? Was there any documentary proof of this bald assertion? No.

[67] De Maria attempts to deal with the over $1,100,000 which was paid from the Trade Capital advances through the companies used to perpetrate the fraud to the Cash House during the relevant period. What De Maria fails to deal with is the $2,722,222.50 which was paid to Cash House from Virtucall, which had circuitously come from Trade Capital. No explanation has been given for the receipt of payout of these monies.

[68] There are several other unusual transactions not dealt with by the Cash House. For example, a bank draft was purchased by 2242116 Ontario from a chartered bank payable to Virtucall on January 27, 2012. That same bank draft was subsequently deposited into the Cash House's bank account. There is no explanation for this or even any document showing who negotiated this cheque, who received the cash, whether a 3 per cent fee was retained. Nothing.

[69] For the reasons discovered during the cross examination of Mr. Khan set out above, I am satisfied that the transfer of Cash House to Mr. Khan has all the indicia of a “fake” transaction.

[70] Given Cash House’s complete disregard for the Mareva Order, I am not prepared to dissolve the Mareva Order as against Cash House.

[71] I am not persuaded that the additional evidence of DeMaria or Mr. Khan detracts from the strong prima facie case of fraud involving these moving defendants.

Evidence of Dissipation of Assets

[72] Given the strong prima facie case of fraud, the vast amounts of cash, the lack of documentation disclosed by the moving defendants, an inference can be drawn that there is a significant risk of removal or dissipation of assets by the moving defendants.

[73] I agree with Trade Capital’s submission that there is actual evidence of dissipation of assets by the moving defendants:

a) The alleged sale of Cash House by De Maria to Khan (and possibly to Red Quest) in circumstances which are highly questionable that this is a bona fide transaction;

b) The use of another undisclosed bank account by Cash House to carry on business despite the Mareva Order; and

c) Despite the many millions of dollars of business through Cash House each month, it appears that Cash House has little or no assets besides some leasehold improvements.

CONCLUSION

[74] The motion by the moving defendants to dissolve the Mareva Order as against them is dismissed.

Motion for Living/Business expenses

[75] In the alternative, De Maria seeks to exempt certain expenses for himself, 116 and one of his other businesses.

[76] The applicable test the moving defendants must meet to gain access to the frozen funds and assets for the payment of expenses is set out Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, supra at paragraph 26 and affirmed by the Court of Appeal in Waxman v. Waxman, [2007] O.J. No. 1688 as follows:

(i) Has the defendant established on the evidence that he has no other assets available to pay his expenses other than those frozen by the injunction?

(ii) If so, has the defendant shown on the evidence that there are assets caught by the injunction that are from a source other than the plaintiff, i.e., assets that are subject to a Mareva Order, but not a proprietary claim?

(iii) The defendant is entitled to the use of non-proprietary assets frozen by the Mareva Order to pay his reasonable living expenses, debts and legal costs. Those assets must be exhausted before the defendant is entitled to look to the assets subject to the proprietary claim.

(iv) If the defendant has met the previous three tests and still requires funds for legitimate living expenses and to fund his defence, the court must balance the competing interests of the plaintiff in not permitting the defendant to use the plaintiff's money for his own purposes and of the defendant in ensuring that he has a proper opportunity to present his defence before assets in his name are removed from him without a trial. In weighing the interests of the parties, it is relevant for the court to consider the strength of the plaintiff's case, as well as the extent to which the defendant has put forward an arguable case to rebut the plaintiff's claim.

[77] No specific oral submissions were made with respect to the relief sought by the moving defendants or Trade Capital. In particular, there is no evidence regarding what the amounts set out in paragraph 105 of the De Maria factum are for or why those amount reasonably necessary for these defendants.

[78] This relief is adjourned sine die and may be brought back before me, on notice to Trade Capital, to permit a more complete evidentiary record and submissions.

COSTS

[79] Any party seeking costs shall serve and file written submission on entitlement and quantum within two weeks of the release of these reasons. Written submissions shall be limited to three pages, with attached Costs Outline and any authorities.

[80] Any responding party shall have one week thereafter to serve and file responding submissions. Written submissions shall be limited to three pages with any authorities relied on attached.

[81] There shall be no reply submissions without leave.

Ricchetti, J.

Date: June 10, 2015