COURT FILE AND PARTIES
COURT FILE NO.: CV-15-2110-00
DATE: 20151211
ONTARIO
SUPERIOR COURT OF JUSTICE
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 MR. DE MARIA also known as CARLO VINCE DE MARIA also known as CARLO VINCENT MR. DE MARIA also known as CARLO VINCENZO MR. 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 for Trade Capital Finance Corp.
K. Borg-Olivier for Carlo De Maria
HEARD: December 9, 2015
ENDORSEMENT ON CARLO VINCE DE MARIA MOTION TO VARY THE MAREVA ORDER
THE MOTION
[1] This is a motion by Carlo Vince De Maria ("Mr. De Maria) to vary the Mareva Order of May 6, 2015 ("Mareva Order).
[2] In particular, Mr. De Maria seeks a variation which permits:
a) release of $200,000 to permit a corporation (not one of the defendants to this proceeding) to make a restitution order as part of a proposed settlement in an unrelated criminal proceeding;
b) release of $60,000 for the legal firm acting on the unrelated criminal proceeding; and
c) release of $25,000 to Messrs. Paliare Roland Rosenberg Rothstein LLP counsel to Mr. De Maria in this proceeding.
THE POSITION OF THE PARTIES
[3] Mr. De Maria submits that:
a) these funds are not needed to be “frozen” because the damages Trade Capital seeks against Mr. De Maria and his companies are less than the amount of monies received by Mr. De Maria and his companies from the alleged fraud; and
b) the funds requested are necessary, reasonable, and consistent with the purpose of the Mareva Order.
[4] Trade Capital opposes the relief sought on the basis:
a) The amounts claimed by Trade Capital against Mr. De Maria and his companies are substantially more than the known frozen assets of Mr. De Maria;
b) There is no admissible evidence that these monies are required or necessary; and
c) Mr. De Maria has not made full and frank disclosure of his assets.
[5] Trade Capital does not oppose varying the Mareva Order to permit $25,000 to be paid to Messrs. Paliare Roland Rosenberg Rothstein LLP.
OVERVIEW
[6] At the heart of Mr. De Maria's motion is that Mr. De Maria has made full disclosure of his frozen assets and the frozen assets exceed Trade Capital's claim.
[7] I reject both submissions and conclude that Mr. De Maria's motion must be dismissed with one exception.
BACKGROUND
Trade Capital's Claim
[8] Trade Capital's claim is summarized in my prior reasons of June 6, 2010. 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. Let me repeat portions of these reasons on Mr. De Maria's earlier motion to set aside or vary the Mareva Order:
[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) Greenlink; 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 Mr. 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 Mr. 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 Mr. De Maria's company. A significant amount of the fraudulent monies that went to Cash House was eventually traced to Mr. 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 Mr. 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 Mr. 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 Mr. 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.
The Proceedings involving Mr. De Maria
[9] The Mareva Order was issued on May 6, 2015.
[10] Paragraphs 4 and 5 of the Mareva Order provide:
Disclosure of Information
THIS COURT ORDERS that each Mareva Defendant prepare and provide to the Plaintiff's counsel of record within ten (10) days of the date of service of this Order, a sworn statement describing, in detail, the nature, value, and location of all assets worldwide, whether in his/its own name or not and whether solely or jointly owned, whether owned directly or indirectly and including any assets held in trust for the Mareva Defendant providing the sworn statement.
THIS COURT ORDERS that each Mareva Defendant submit to examinations under oath within thirty (30) days of the delivery by such Mareva Defendant of the aforementioned sworn statements or by such later date as may be confirmed by the Plaintiff's counsel of record. The Mareva Defendant shall bring to the said examination all original books, records and other documents relating to all financial affairs and assets of the said Mareva Defendant.
[11] In accordance with paragraph 4 of the Mareva Order, Mr. De Maria provided an affidavit on May 15, 2015 setting out his assets. ("May 15, 2015 List of Assets")
[12] On June 1, 2015 Mr. De Maria brought a motion to set aside the Mareva Order or in the alternative, to vary the Mareva Order. The motion was dismissed.
[13] I should add two points:
a) Mr. De Maria's June 1, 2015 motion also sought a variation of the Mareva Order to permit various expenses to be paid. However, no oral submissions were made with respect to this relief and the materials were deficient at that time. As a result, this portion of the motion was adjourned sine die;
b) On consent, two orders have previously issued permitting Mr. De Maria to access $100,000 for legal fees relating to this proceeding.
[14] There are conflicting explanations why the examination on Mr. De Maria's assets pursuant to paragraph 5 has not previously taken place.
[15] On November 17, 2015 a conference call was held for scheduling purposes including the scheduling this motion. An issue was raised regarding the examination of Mr. De Maria on his sworn statement of assets. While Mr. De Maria's counsel submitted that there were sufficient assets frozen to cover Trade Capital's claim, the examination of Mr. De Maria would have to take place in advance of the motion being heard. The concern, expressed by Mr. De Maria's counsel, was that the examination be limited to Mr. De Maria's assets. I endorsed the record as follows:
Mr. DeMaria's counsel's suggestion that there are sufficient assets to cover Trade Capital's claim can only be determined after this examination. To be clear, this examination is only to inquire about Mr. DeMaria's assets frozen by the Mareva (which included the accuracy and completeness of his list of assets covered by the Mareva Injunction")....
[16] Mr. De Maria was examined on November 25, 2015.
[17] Mr. De Maria's motion was heard on December 9, 2015.
THE LAW
[18] There is no dispute regarding the law applicable on a motion to vary a Mareva order.
[19] The leading case is Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, 2003 2003 12916 (ON SC), [2003] OJ No 40 (ON SC). Justice Molloy set out at paragraph 26 of Credit Valley a four-part test for the variation of a Mareva order to allow for the payment of living and legal expenses:
[26] Accordingly, the test to be applied is 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.
[20] This test has been cited with approval by the Ontario Court of Appeal in B & M Handelman Investments Ltd. v. Curreri, 2011 ONCA 395. and in Waxman v. Waxman, 2007 ONCA 326.
[21] Before the test is applied, it would appear to me that several principles are self evident (see Credit Valley paragraphs 23 -26):
a) The moving party bears the onus on such a motion;
b) A Mareva injunction is an equitable remedy granted under the Superior Court’s inherent jurisdiction when it is just and convenient to grant such an order (see s. 101 of the Courts of Justice Act). As an equitable remedy, the granting of a Mareva order is subject to the exercise of discretion of the court applying the appropriate legal principles. Therefore, varying a Mareva order is also discretionary relief. Where full disclosure has not been made of relevant and material evidence, this court retains the jurisdiction to exercise its discretion to dismiss the motion. In this case, the obligation is on the moving party seeking the relief to make full disclosure of his assets and liabilities as this is fundamental to a proper consideration of the merits of this motion. This principle is self-evident because the analysis in Credit Valley can only be undertaken when the moving party has provided full disclosure of the moving party's assets and liabilities. The court should not have to speculate on the moving party’s assets and liabilities;
c) The moving party must prove that he has no assets, other than those frozen, to pay the liabilities he seeks to have released from the effects of the Mareva order. This must mean the moving party's current assets and current liabilities at the time of the motion. Any other interpretation makes the application of the Credit Valley four part analysis simply impossible. What assets the moving party had months ago is not particularly relevant to such a motion – it is the current assets that are relevant.
ANALYSIS
Mr. De Maria's supporting affidavits
[22] There are two affidavits filed by Mr. De Maria on this motion. The first is an affidavit of Alysha Shore, a law associate at Defence counsel’s office. The second is an affidavit of Scott Bergman, a partner at Cooper, Sandler, Shime & Bergman, counsel for Mr. De Maria in criminal proceedings. Mr. De Maria filed no affidavit on this motion.
[23] With respect to Ms. Shore's affidavit, it is clear that she has no personal knowledge of the matters set out in the supporting affidavit. However, a review of the contents of the affidavit persuades me that there is nothing controversial in her affidavit.
[24] What is surprising is that there is no statement, under oath or otherwise, that unless the Mareva Order is varied to release these funds, the amounts sought cannot be and will not be paid. It is difficult to imagine that a motion such as this could succeed without such a statement under oath by someone with personal knowledge of these facts. The failure to present such evidence to this court, despite Mr. De Maria being in the courtroom during submissions, raises an inference that such evidence is not available to be put before this court.
[25] Mr. De Maria's materials also failed to disclose the name of Mr. De Maria's company that would be making the restitution payment if the settlement is concluded. This was only disclosed at the hearing as being "Vicar" - one of Mr. De Maria's companies. There is no other information regarding the criminal proceedings. Are there other accused? Is the proposed restitution payment being paid entirely by Vicar or are there other accused, who are not wholly owned by Mr. De Maria or are their other individual accused(s)? Are the legal fees sought by Cooper, Sandler, Shime & Bergman all relating to Mr. De Maria and Vicar or do they represent other accused as well? These and other questions remain unanswered yet significant, if not pivotal, to the motion before me.
[26] This evidentiary shortcoming alone would be a basis for the dismissal of this motion.
Has Mr. De Maria Made Full Disclosure of his current assets and liabilities?
[27] I am not persuaded that Mr. De Maria has made full disclosure of his current assets and liabilities.
[28] The position taken by Mr. De Maria’s counsel at the examination was that Trade Capital could only examine Mr. De Maria on the May 15, 2015 List of Assets. The above endorsement made no such limitation. It did limit Trade Capital's ability to ask about other issues, such as the liability issues in these proceedings, but did not limit examination on the completeness of the list of assets provided by Mr. De Maria to be tested in the examination.
[29] When asked by this court how this limitation on the examination would establish the assets available at this date to pay the expenses, the Defence counsel's response was that all of Mr. De Maria’s assets were frozen so there was no reason to believe that the May 15, 2015 List of Assets were not still frozen.
[30] Mr. De Maria appears to have been able to carry on with his life without any difficulties to date. The examination of Mr. De Maria clearly demonstrates a failure to disclose the current status of the frozen assets.
[31] Why then not simply allow the examination on the current frozen assets or confirm under oath that the May 15, 2015 List of Asset remained accurate was not answered satisfactorily? The answer lies in the fact that there are and have been changes to the May 15, 2015 List of Assets. Despite the limitation on Trade Capitals’ examination of Mr. De Maria, this fact became apparent from Mr. De Maria’s answers.
[32] Let me provide some examples:
a) Mr. De Maria refused to produce updated documents regarding his bank accounts. See question 39 to 41 of Mr. De Maria’s examination;
b) Mr. De Maria refused to provide an update on what assets Mr. De Maria’s corporations hold currently. See questions 301 to 303 of Mr. De Maria’s examination;
c) Mr. De Maria refused to answer questions regarding mortgage statements for properties he owns, his company(s) own or he owns jointly. Further he refused to answer questions whether or who was making mortgage payments on these properties and whether the bank has taken any mortgage default actions. For example, see questions 84 to 91 of the Mr. De Maria’s examination;
d) Mr. De Maria owns rental properties. Mr. De Maria refused to answer to whom and where the rent was being paid. For example, see questions 120 to 125; questions 383 to 391 and questions 404 to 405. When asked who the rental management company was, Mr. De Maria couldn’t remember the name. Most importantly, Mr. De Maria stated he couldn't remember what the management company did with the rental income. See questions 375 to 397 of the Mr. De Maria’s examination. I find this very difficult to believe Mr. De Maria wouldn't know what was happening to the rental income from his various rental properties;
e) There is a home under construction by Vicar Homes, (a company wholly owned by Mr. De Maria). Mr. De Maria refused to produce the mortgage statement for the property subsequent to May 31, 2015. Mr. De Maria wouldn't answer if there were any liens registered on title. There is no information how this construction project was completed, what debts are owed or any other information that would assist as to its current status or the value of this developed property at this time;
f) Mr. De Maria is the sole shareholder of Do You Know Inc. Mr. De Maria refused to answer questions regarding how this company has paid its rent since May 2015, how many employees the company currently has, how the company's employees are paid or any other information regarding its operations. See questions 447 to 462 and questions 474 to 482 of Mr. De Maria’s examination. Bank statements for this company were not provided subsequent to May 2015; and
g) Mr. De Maria couldn’t remember details of a deposit of $400,000 or fully explain a payment to one of his companies d in the amount of $330,000 shortly after the alleged sale of Cash House. See questions 331 to 335 of Mr. De Maria’s examination. The $330,000 payment from Cash House is also problematic as it was paid to Mr. De Maria's company several months after the alleged sale of Cash House.
[33] There are other significant omissions regarding Mr. De Maria’s financial affairs:
a) When asked whether the $100,000 prior variance of the Mareva Order to permit his/his company’s legal fees for this proceeding had been used and for proof of the payment(s), Mr. De Maria refused to answer this question or provide this information. See Question 505 and 506 of Mr. De Maria’s examination;
b) Mr. De Maria had stated that he owned Cash House but had sold it to Mr. Khan earlier in 2015. However, the sale of the Cash House was from Red Quest Holdings Inc. to Mr. Khan’s company. Red Quest is not a company on Mr. De Maria's May 15, 2015 List of Assets. When Mr. De Maria was asked about Red Quest and the funds received for the sale of Cash House, Mr. De Maria refused to answer any questions relating to this subject. See questions 487 to 493 of Mr. De Maria’s examination; and
c) Of the few undertakings given or questions taken under advisements on Mr. De Maria’s examination, none had been answered by the hearing of the motion, albeit 2 weeks had elapsed.
[34] I do not accept Mr. De Maria’s counsel that the examination of Mr. De Maria was limited to the assets existing on May 15, 2015. The purpose of paragraphs 4 and 5 of the Mareva Order were to ensure that, within a very short time, detailed lists of assets were produced and the defendant be examined on the completeness of the list of assets.
[35] It is clear from my reading of the transcript of the examination of Mr. De Maria that Trade Capital was prevented from asking questions with respect to Mr. De Maria's assets prior to May 15, 2015 AND subsequent to May 15, 2015. As a result, the examination was limited to Mr. De Maria's disclosed assets on a particular day with no ability to test the completeness of the disclosed assets by what occurred before or after May 15, 2015.
[36] Such a limitation in the examination prevented Trade Capital from ascertaining the completeness of Mr. De Maria's frozen assets. This limitation on the scope of the examination makes no sense, particularly, in the context of a motion by Mr. De Maria who seeks a variance of the Mareva Order to release funds where Mr. De Maria must establish that he requires the release of funds to pay identified current expenses and that has no other means of paying the expenses unless the Mareva Order is varied.
[37] The submission that the Mareva Order has frozen all of Mr. De Maria's assets, so that there is no need to establish that Mr. De Maria has no other assets to pay the expenses, fails to recognize that if this were true in all cases, no examinations would be necessary as all deponents would be telling the truth and disclosing all their assets. Human nature tells us that that is not the case. The examination is to test the truthfulness, accuracy and completeness of the sworn list of assets. The limitation imposed in Mr. De Maria's examination prevented the proper testing of the May 15, 2015 List of Assets.
[38] Without full disclosure of Mr. De Maria's current assets, Mr. De Maria cannot possibly satisfy this court that he has no other assets available to pay these expenses other than those frozen by the injunction. I give but a few examples; how much is the rental income from Mr. De Maria’s properties, where is it and is it sufficient to pay the expenses sought to be released from the Mareva Order? How much money has Do You Know Inc. earned, how much does it have in its current bank account and can it pay these expenses sought to be released from the Mareva Order?
[39] There is one other difficulty. Mr. De Maria does not propose exactly which specific assets the expenses are to be paid from so that a reduction of asset value can be monitored for future reconciliation.
[40] And there is a further difficulty. The Mareva Order permits living expenses and legal costs to be released from the effects of the Mareva Order. Neither the proposed fine nor criminal legal fees fall within this category. While it was disclosed at the hearing that the restitution order is to be paid by "Vicar", I am not certain that which "Vicar" company would be obliged to pay this amount. There were two “Vicar” companies disclosed for the first time during Mr. De Maria’s examination. At one point Mr. De Maria stated that one of the Vicar companies had $471,000 in its bank account from dividends but the company didn’t own or hold any shares. When Trade Capital asked further questions as to how this is possible since dividends are paid to shareholders, then Mr. De Maria stated it was past bonuses. To put it simply, Mr. De Maria has the obligation to make his financial affairs clear to this court for this motion to success and he has failed to do so.
[41] I am not persuaded that Mr. De Maria’s current assets are fully known or disclosed. For the reasons set out above, I would exercise my discretion to dismiss this motion on this basis alone.
Does the value of the assets frozen exceed Trade Capital's Claim?
[42] There is no dispute that the assets disclosed by Mr. De Maria in the May 15, 2015 List of Assets and frozen by the Mareva Order are in excess of $5,100,000.
[43] There is no dispute that the Trade Capital monies which were directly traced from Trade Capital through to Cash House or through Virtucall are approximately $4,200,000.
[44] Counsel for Mr. De Maria submits that there is no need for all of Mr. De Maria's frozen assets to remain frozen and that the proposed expenses would not prejudice Trade Capital’s ability to recover on any judgment it might recover against Mr. De Maria and its companies.
[45] Trade Capital’s counsel submits that its claim exceeds $10,000,000 (which include damages in addition to the direct financial losses from the fraud). It submits that its claim greatly exceeds the value of Mr. De Maria’s frozen assets. Even without the additional damages, the amount of monies which were directly advanced by Trade Capital as part of this fraud exceeds the amount of Mr. De Maria’s frozen assets.
[46] I cannot accept the very narrow view take by Mr. De Maria’s counsel regarding Mr. De Maria (and his company's) potential liability in this case. As can be seen from the above portions of the prior endorsement, there appears to be a much broader connection between Cash House (when Mr. De Maria admits he owned it) and the other conduits used to commit the fraud on Trade Capital. Given the singular manner of obtaining funds as advances for fictitious invoices and the involvement of Cash House with all of the major recipients of the alleged fraudulent funds, there appears, based on the allegations in the Statement of Claim, a reasonable basis for the claim for joint and several liability of Mr. De Maria and his companies for Trade Capital’s entire claim.
[47] If there is joint and several liability established by Trade Capital with Mr. De Maria or his companies, I am satisfied May 15, 2015 List of Assets will be considerably less than the amount of a judgment.
Credit Valley Analysis
[48] Without the full disclosure of Mr. De Maria’s financial affairs, a proper analysis is not possible. As the onus is on Mr. De Maria, this motion must fail.
CONCLUSION
[49] Mr. De Maria’s motion is dismissed save and except for the following variance of the Mareva Order.
[50] Upon:
a) The production to Trade Capital copies of the cheques or wire transfers in the amount of $100,000 showing the source of funds; and
b) which cheques or wire transfers pre-date December 1, 2015 (the date this motion was brought); and
c) which cheques or wire transfers were paid or wired to counsel of record in this proceeding; and
d) counsel of record provides written confirmation that these funds were received by the law firm to be used in connection with legal fees incurred or to be incurred in connection with this proceeding (no detail as to how these funds were used is required),
then and only then, the Mareva Order will be varied so as to permit Mr. De Maria a further $25,000 for legal fees in connection with this proceeding from a frozen asset to be identified by Mr. De Maria.
[51] These conditions were necessary given Mr. De Maria’s failure to answer questions regarding the prior orders permitting the release of legal fees. The response by Mr. De Maria’s counsel in reply submissions was too late and still failed to provide any evidence of the payment of these funds for the purpose released.
COSTS
[52] 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 3 pages, with attached Costs Outline and any authorities.
[53] Any responding party shall have one week thereafter to serve and file responding submissions. Written submissions shall be limited to 3 pages with any authorities relied on attached.
[54] There shall be no reply submissions without leave.
Ricchetti, J.
Released: December 11, 2015
COURT FILE NO.: CV-15-2110-00
DATE: 20151211
ONTARIO
SUPERIOR COURT OF JUSTICE
TRADE CAPITAL FINANCE CORP.
– and –
PETER COOK also known as PETER WILLIAM COOK, et. al
ENDORSEMENT ON CARLO Vince DE MARIA MOTION TO VARY THE MAREVAN ORDER
Ricchetti J.
Released: December 11, 2015