Superior Court of Justice - Ontario
RE: SUSAN MARY ATKINSON, Plaintiff
AND:
MICHAEL DOWNIE CAMPBELL, MONICA OCHOA ESCOBAR, CAMAT INC., THE TORONTO-DOMINION BANK OF CANADA and JOHN DOE, being the unidentified employee of the Toronto-Dominion Bank of Canada, Defendants
BEFORE: Cavanagh J.
COUNSEL: Douglas J. Spiller, for the Plaintiff Raymond Boggs, for the Defendants
HEARD: June 15, 2017
ENDORSEMENT
1The plaintiff Susan Mary Atkinson (“Atkinson”) and the defendant Michael Downie Campbell (“Campbell”) were business partners who co-founded the corporate defendant Camat Inc. (“Camat”). They are each 50% shareholders. The business of Camat was performing maintenance for condominiums. The defendant Monica Ochoa Escobar (“Escobar”) is Campbell’s wife.
2Atkinson’s claims arise from her concerns with respect to the manner in which Campbell was operating the business of Camat and Camat’s failure to repay amounts that she had invested in the business of Camat. According to her evidence, the amount owed to Atkinson is approximately $174,500 together with the amount of $59,514 for services that she provided to Camat. According to her evidence, Atkinson was effectively frozen out of the business and she resigned as a director and treasurer of Camat on September 29, 2015 but remains a 50% shareholder of the company. Atkinson has claimed that Campbell is diverting company funds to himself and to Escobar and that a portion of such funds have been used to pay for deposits/upgrades to a townhouse located at 1370 Main Street East, Unit 101, Milton, Ontario (the “Milton Townhouse”).
3Atkinson commenced this action claiming damages from Campbell for breach of contract, breach of constructive trust and unjust enrichment, conversion and/or misappropriation, theft, and fraud in the amount of $237,615.10, together with other relief, including a Mareva injunction freezing all the assets of Campbell, Escobar and Camat.
4Atkinson brought a motion for interim relief, including a Mareva injunction, which first came before me on November 21, 2016. On that day, I adjourned Atkinson’s motion on terms that included delivery to Atkinson of documents relating to the business and affairs of Camat including bank account statements, income tax returns, business records, financial statements and contracts. Campbell, Escobar and Camat were required to notify Atkinson of payments to be made by Camat, (to be limited to payments in the ordinary course of business) in amounts equal to or greater than $500, for approval by Atkinson, and to notify Atkinson of all deposits to be made to Camat accounts.
5Atkinson’s motion for interim relief including a Mareva injunction came back before me on May 10, 2017. Counsel for Campbell, Escobar and Camat had advised that he had suffered head injuries from an accident and was unable to intend in court that day. I granted a short adjournment of the motion and declined to order additional terms that go further than my November 21, 2016 order.
6I heard Atkinson’s motion on June 15, 2017 and, at the conclusion of the hearing, I advised the parties that I was not satisfied that Atkinson had met the requirements for the relief she was seeking in the nature of a Mareva injunction on the evidence before me, and I declined to grant such an order. I invited counsel to consult with each other concerning any additional information concerning the Camat business that Atkinson reasonably required, and to arrange a case conference with me, if needed, to resolve any issues in this regard. These are my reasons for my decision not to grant the additional interim relief sought by Atkinson.
7Atkinson moves for an interim and interlocutory injunction, in the nature of a Mareva injunction, restraining Campbell, Escobar and Camat from dealing with their assets in the Province of Ontario, including the Milton Townhouse, and related relief.
8In support of her motion, Atkinson provided affidavit evidence in which she challenged whether the responding parties had complied with my November 21, 2016 order and in which she expressed alarm that the business activity of Camat appears to be suffering from a significant downturn in comparison with prior years. Atkinson also provided affidavit evidence with respect to the events leading up to her resignation as a director of Camat on September 29, 2015, her attempts to obtain information concerning the Camat business, and her attempts to obtain repayment of amounts owing to her.
9The responding parties provided evidence through affidavits from Campbell, Escobar and a non-party, Joe Da Silva. Campbell’s evidence is that Campbell, Escobar and Camat have produced the information required by my November 21, 2016 order, that they have not failed to disclose payments by Camat, and that there have not been further Camat receipts after January 2017. According to Campbell’s evidence, the breakdown of his business relationship with Atkinson, who was supposed to handle the business aspects of Camat, left him unable to manage the Camat business alone. His evidence is that the Camat business has continually declined since Atkinson left the business, and that it has become impossible him to continue the business. Campbell’s evidence is that he has been forced to take employment as a salesperson for a cabinetmaker, and that he has also taken part-time employment at a retail store. Campbell disputes that he diverted funds from the Camat to himself, Escobar, or any other person, and he maintains that he did not use Camat funds to purchase the Milton Townhouse or to make improvements to it.
10Campbell, in his affidavit, offered that Atkinson can have all of the assets of Camat, including the truck that was used for the Camat business. This offer was repeated in the submissions of counsel for the responding parties at the hearing of the motion. In his submissions, counsel for the responding parties stated that Atkinson would be given full access to financial records of Camat.
11Escobar provided affidavit evidence that she sold her home in Colombia and applied the proceeds towards a down payment for the Milton Townhouse. Escobar denies that she received any money for her private use from Camat, and stated that she would occasionally be reimbursed for supplies that she bought for Camat in order to help her husband, Campbell, run the business.
12Da Silva provided affidavit evidence that he loaned Campbell and Escobar $12,000 for kitchen upgrades at the Milton Townhouse, and he provided supporting evidence in the form of a bank draft from Royal Bank of Canada in this amount.
13In order to obtain a Mareva injunction, the plaintiff must show a strong prima facie case on the merits. The plaintiff must establish that there are assets of the defendants within the jurisdiction. The plaintiff must also establish that the defendants are removing, or there is a real risk that they are about to remove, assets from the jurisdiction to avoid the possibility of a judgement, or that the defendants are otherwise dissipating or disposing of assets in a manner distinct from the usual and ordinary course of business so as to render the possibility of future tracing of assets remote, if not impossible, in fact or in law: Chitel et al. v. Rothbart et al. (1983), 1982 1956 (ON CA), 39 O.R. (2d) 513.
14The evidence of the responding parties is that Camat is no longer actively carrying on business. As noted, Campbell has offered to Atkinson that she can have all of the assets of Camat, including the tools and the truck that was used for Camat’s business.
15On the evidence before me on this motion, I am not able to conclude that Atkinson has shown a strong prima facie case that the responding parties are removing, or are about to remove, assess from the jurisdiction or that they are otherwise disposing of assets in a manner that would render the possibility of future tracing of such assets remote or impossible. The fact that Campbell has offered to Atkinson all of the assets of Camat is, in my view, compelling evidence to the contrary. I am also not satisfied that Atkinson has shown a strong prima facie case that Campbell and Escobar used funds from Camat to purchase the Milton Townhouse or to pay for upgrades or improvements to the Milton Townhouse. The evidence provided by Escobar and Da Silva in this regard is to the contrary. I am also not satisfied that Atkinson has shown that the responding parties have failed to comply with my November 21, 2016 order. The responding parties offered to make any and all financial records relating to Camat available to Atkinson.
16In refusing to grant to Atkinson the additional interim and interlocutory relief that she seeks on this motion, I do not make any findings with respect to the underlying merits of Atkinson’s claims against Campbell and the other defendants in the action.
17For these reasons, I conclude that Atkinson has failed to satisfy the requirements for the additional interim and interlocutory relief that she seeks, and her motion for such additional relief is dismissed.
18I may be spoken to concerning costs, if necessary.
Cavanagh J.
Date: October 4, 2017