ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-15-2110-00
DATE: 2015-08-28

B E T W E E N:

TRADE CAPITAL FINANCE CORP.

Michael B. McWilliams,
for the

Plaintiff/Respondent

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.

Alysha Shore,
for the Defendant/Appellants, Carlo De Maria and 1160376 Ontario Limited

HEARD: August 24, 2015

RULING

M. J. Donohue, J.

[1] This motion for leave to appeal was heard by way of written submissions.

[2] The defendants, Carlo De Maria and 1160376 Ontario Limited, seek leave to appeal to the Divisional Court from a motion involving the interlocutory order of Ricchetti, J. dated June 10, 2015. He dismissed the Appellants’ motion to set aside a Mareva order issued against them on May 6, 2015.

[3] Trade Capital’s claim is that it was a victim of fraud perpetrated by its former President, the defendant, Peter Cook. The appellant De Maria and numbered company are two of the defendants named in connection with the alleged fraud.

[4] Pursuant to a Norwich order a trace of the fraudulent funds determined that a number of companies who received such funds cashed cheques at “Cash House”. Cash House had been owned by the defendant/appellant De Maria. His company 116, the corporate defendant/appellant, had acted as a guarantor of Cash House for a time and it’s bank account had been used to operate Cash House.

[5] Justice Ricchetti granted a Mareva order on a motion without notice on May 6, 2015. These two defendant/appellants brought a motion to have the Mareva order as against them set aside. Justice Ricchetti dismissed their motion on June 10, 2015.

Test for Leave to Appeal to Divisional Court

[6] The test for granting leave to appeal is set out under Rule 62.02(4) and is not easily granted. Leave shall not be granted unless either Rule 62.02(4)(a) or Rule 62.02(4)(b) are satisfied. Each involves a two-part test and in each case, both aspects of the two-part test must be met before leave is granted.

[7] Rule 62.02(4)(a) allows for leave where there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted. A conflicting decision exists where a court chooses different legal principles to decide a comparable legal problem or to guide the exercise of the court’s discretion. McDonald v. The United States of America 2014 ONSC 5819 at para. 30.

[8] Rule 62.02(4)(b) allows for leave where there appears, to the judge hearing the motion, good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[9] In considering whether there is good reason to doubt the correctness of the decision the court is to “ask itself whether the correctness of the decision is open to “very serious debate” and, if so, is it a decision that warrants resolution by a higher level of judicial authority”. See Brownhall v. Canada 2006 7505 (ON SC), 80 O.R. (3d) 91 para 30.

Analysis

[10] The defendant appellants argue that the motion judge relied on a “fraud exception” which excuses a moving party on a Mareva motion from proffering evidence of dissipation of assets. The defendant appellants offered that there were two conflicting lines of authority on whether evidence of dissipation of assets is required even in cases of fraud.

[11] On review of the motion judge’s decision, although he stated he inferred dissipation of assets by the strong prima facie case of fraud, he went on to find evidence of such dissipation of assets.

[12] Justice Ricchetti found Cash House’s cheque cashing service to be a lucrative asset. As a fee, Cash House received three per cent of the face value on each payee’s cheque. He found that Cash House could generate 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.

[13] De Maria sold Cash House to Mr. Khan for a price that Justice Ricchetti found to be far below its value.

[14] Justice Ricchetti found no documentation of sale to support any of De Maria’s explanations about the transaction.

[15] I am not satisfied, therefore, that the motion judge relied on a fraud exception. His decision, accordingly, does not fall within the conflicting lines of authority, as noted above

[16] The defendant/appellants, therefore, fail to satisfy the test under Rule 62.02(4)(a).

[17] The second test pursuant to Rule 62.02(4)(b) is whether there is good reason to doubt the correctness of the decision and it involves matters of general importance.

[18] The defendant/appellants point to several errors made by the motions judge:

(a) that the plaintiff evidence showed Cash House had participated in unusual financial transactions, outside its usual business; when Trade Capital proffered no evidence as to Cash House’s usual business;

(b) that the Statement of Claim sets out allegations of fraud against these two defendants; when there are no particulars of specific allegations of wrongdoing against these two defendants;

(d) that there was dissipation of assets by Mr. De Maria and 116; when the majority of the assets are in the form of real property and had not been sold; and

(e) that the sale of Cash House amounted to dissipation of an asset; when Cash House remains a named defendant in any event and so would not affect the plaintiff’s ability to recover against either defendant.

[19] Although the motion’s judge may have misstated some points, his decision as a whole is supported by the evidence and the inferences he was entitled to draw from the evidence provided.

[20] In considering the second part of the test under Rule 62.04(b) the defendant/appellants again refer to whether the fraud exception should excuse the moving party on a Mareva motion from the burden of proffering actual evidence of dissipation of assets as being the issue of general importance.

[21] As noted above, I find that the motion judge did not rely on the exception and did find as a fact that there was dissipation of assets.

[22] The defendant/appellants have not satisfied the test that this matter is of general importance.

Conclusion

[23] Accordingly, leave to appeal is denied.

Costs

[24] Neither party filed costs submissions. The Plaintiff may file written costs submissions limited to one page with an attached costs outline and any authorities within ten days. The Appellant/Defendants shall have one week thereafter to file responding submissions.

M. J. Donohue, J.

Released: August 28, 2015

COURT FILE NO.: CV-15-2110-00
DATE: 2015-08-28

SUPERIOR COURT OF JUSTICE – ONTARIO

TRADE CAPITAL FINANCE CORP.
Plaintiff

and -

Defendant

RULING

M.J. Donohue, J.

Released: August 28, 2015

Trade Capital Finance Corp. v. Cook et al., 2015 ONSC 5409

Case Summary

ONTARIO

SUPERIOR COURT OF JUSTICE

RULING

Test for Leave to Appeal to Divisional Court

Analysis

Conclusion

Costs

This Proceeding

Judge

Counsel

Parties

Areas of Law