Court File and Parties
COURT FILE NO.: CV-17-4160-00 DATE: 2017 11 21
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Jacqueline Marsland and Chad Marsland, Plaintiffs AND: Amandeep Kaur Hira, Defendants
BEFORE: Trimble J.
COUNSEL: J. Goldblatt, Counsel for the Plaintiffs B. Sarsh, Counsel for the Defendant
HEARD: October 6, 2017
Endorsement
[1] On September 28, 2017, Daley, RSJ. granted a Mareva injunction, ex parte, which allowed the plaintiffs to register a charge against the defendant’s property, 3300 Lakeshore Road West, Oakville, Ontario, for $510,000.00.
[2] On October 6, the motion returned before me, on a full record. This hearing is a hearing de novo, and is not dependent on the endorsement of Daley, RSJ.
Result
[3] For reasons that follow, the Mareva injunction shall remain in place. It may be lifted and discharged only when the defendant deposits $116,324.32 in trust with the solicitor for the plaintiff. That money will be held as security, in a separate, interest-bearing account, to the credit of the action, until further order of the court.
Facts
[4] The plaintiffs are husband and wife, and live at 284 Northshore Boulevard West in Burlington Ontario. The defendant, with her husband, is a joint owner of 3300 Lakeshore Road West, Oakville.
[5] On April 6, 2017, that the parties entered into an Agreement of Purchase and Sale whereby the defendant agreed to purchase the plaintiffs home for $1,899,900. The closing date was August 31, 2017. The defendant paid a deposit of $110,000. The agreement was unconditional.
[6] On August 28, 2007, the defendant’s real estate lawyer sought a one week extension of the closing date, because the defendant’s husband was in India, and, because of unrest and violence in their home town he could not execute closing documents. The defendant assured the plaintiff that they intended to complete the transaction. The next day, however the defendant’s lawyer advised the plaintiffs’ lawyer that she would not be closing the transaction. The plaintiffs tendered to the defendant but the tender was returned.
[7] The parties continued to discuss ways in which the transaction could be saved. In the course of these discussions, the defendant’s lawyer advised that on September 27 2017 the defendant was returning to India as the return portion of a round trip to Toronto from India that the defendant had booked much earlier. The defendant’s lawyer did not have a scheduled return date for the defendant but indicated to the plaintiffs that she intended to return. Further, the plaintiffs’ real estate agent advised that the MLS listing of the defendant’s property on Lakeshore Boulevard West, which had been on the market over the summer for almost $7 million, was no longer listed on the MLS listing. Since the house was no longer on the MSL system, the plaintiffs were afraid that the house would be sold without their knowing and the proceeds taken out of the country.
[8] In her affidavit, the defendant set out her connections to Ontario which included that she and her family have lived in Ontario for 20 years, that she and her children were Canadian citizens and her husband was a landed immigrant, the children were in private school in Oakville and Burlington, and that the family paid income tax in Canada albeit on her husband’s income earned in India.
[9] Her original plan was to finance the purchase of the plaintiffs’ property through the sale of her Lakeshore Road property and the sale of a property in India. In July, 2017, the sale of the property in India fell apart. The defendant’s banker, CIBC, told the defendant that before they would secure a line of credit to finance the purchase of the plaintiffs’ property, the defendant had to remove the Lakeshore Road property from the market. She did so. Until August 25, 2017, she honestly believed that she would obtain a line of credit that would enable her to close her purchase of the plaintiffs’ property. It was only on August 25, 2017, when the bank refused the line of credit, that she realized that she could not close her purchase of the plaintiffs’ property.
[10] The defendant said that while her husband paid income tax in Canada, all of his income was earned in India where he was a land developer. Her inability to close the purchase from the plaintiffs was due to the Indian government’s demonetization policy announced in November, which included restrictions on the flow of money out of the country beginning in July 2017. The defendant says that as a result of the Indian government’s monetary policy change, the sale of the Indian property collapsed. Inferentially, the limit on removing money or capital from India may also have limited the income the family received in Canada. Unfortunately, much of the detail concerning the family was contained in a letter from the defendant’s lawyer dated September 27, 2017, which is hearsay.
[11] The defendant also addressed her travel plans to India. Originally she was scheduled to travel to India on September 27, 2017 to help care for her husband who badly injured his knee on September 18, 2017. She was taking the youngest child out of school for a month so the child could travel with her. That trip had to be postponed to October 3, 2017 in order to address the lawsuit and the Mareva injunction.
[12] Accordingly, she and her family had no plans to leave the jurisdiction and there is no risk that they will remove assets from the jurisdiction.
The Position of the Parties
[13] The parties agree on the law that applies to issuing a Mareva injunction. Their difference lies in the potential risk that assets may flee the jurisdiction. The defendant says that there is no risk that assets will flee the jurisdiction. A Mareva injunction is an extraordinary remedy which does not apply in this case. This case is an ordinary action on a debt. There is no basis on which to grant an order of execution before judgment.
[14] The plaintiffs say that the defendant and her assets are highly mobile. Indeed, at the date of the hearing, she was in India. But for the injunction she would have gone to India with no fixed return date.
The Law
[15] The court’s power to impose a Mareva injunction is found in section 101 of the Courts of Justice Act. In considering a Mareva, the court must consider five factors:
A) the plaintiff must make full and fair disclosure of all material matters within his or her knowledge;
B) the plaintiff must give particulars of the claim against the defendant, stating the grounds of the claim, the amount thereof, and the points that could be fairly made against it by the defendant;
C) the plaintiff must give the basis for believing that the defendant has assets in the jurisdiction;
D) the plaintiff must give grounds for believing that there is a real risk of the assets being removed out of the jurisdiction, or disposed of within the jurisdiction, or otherwise dealt with so that the plaintiff will be unable to satisfy a judgment awarded to him or her; and
E) the plaintiff must give an undertaking as to damages.
See: Sibley & Associates v. Ross, (2011) 106 O.R. (3d) 495 (SCJ), SFC Litigation Trust v. Chan, 2017 ONSC 1815, para. 17, and Chitel v. Rothbart (1982) 513 (CA).
[16] The plaintiffs must also show that he or she has a strong prima facie case. Further, the factors outlined above are guidelines for the court to consider, as opposed to rigid criteria, each of which must be met before the Mareva will issue. The court, under Section 101 of the Courts of Justice Act, should ask whether it is just and equitable that a Mareva should issue: see SFC Litigation Trust, supra, para. 22.
Analysis
[17] As indicated, the parties agree as to the test. They disagree, however, whether the facts in this case indicate that an injunction should issue as requested. The parties both agree that the main issue in this case is whether there is a risk that the defendant’s assets may leave the jurisdiction. In my view the risk that the defendant’s assets will flee the jurisdiction is high, and the injunction should issue.
[18] A strong prima facie case – the plaintiffs have established more than a prima facie case. The defendant failed to close the purchase of the plaintiffs’ property. The plaintiffs tendered but the tender was returned. There is no doubt that the defendant is liable to the plaintiffs by her own admission and actions. The only issue to be determined is the quantum of the loss.
[19] Full and frank disclosure – the defendant says that the plaintiffs have not made full and frank disclosure. The plaintiffs rely on hearsay from the defendant’s lawyer, passed through the plaintiffs’ lawyer, concerning the defendant’s plan to travel to India. I disagree, for two reasons. First, in her affidavit, the defendant confirmed that her plan was to return to India. She gave no return date. Second, the requirement is that the plaintiffs show a strong prima facie case. In other words, the plaintiffs must only show a strong risk that assets will flee the jurisdiction. They have done so.
[20] A particularized claim – the plaintiffs have provided a particularized claim for damages setting their damages at $226,324.32, an amount considerably lower than the $510,000 set at the first return of the motion. Net of the deposit, the damages are $116,324.32, plus interest and costs.
[21] Assets in the jurisdiction – the defendant has assets within the jurisdiction. She owns a home on Lakeshore Road West in Oakville. The defendant advises that she has five bank accounts in Ontario. She does not say what the balances are. She says that she owns an automobile but does not say the make, model and year, or whether it is encumbered.
[22] Risk of removal of assets – the defendant says that she has a strong connection to Ontario. Based on the evidence that the defendant filed, I agree.
[23] The defendant says that she is not a flight risk. She explains the absence of a return trip booked from India to Toronto by saying that she books her round tickets from India, which, she says, being why she did not have a return ticket from India. She says that she booked her flight to India for September 27 because she needed to attend to her husband who, on September 18, badly injured his knee.
[24] I do not accept her evidence. She could have, but did not provide the next round trip ticket from India to Toronto to show her return date. She did not provide evidence to substantiate her husband’s injury except for an invoice for an x-ray and a photocopy of the x-ray itself. Interpreting x-rays requires expert evidence. No such opinion was provided. Further, the airplane ticket that the defendant produced to the plaintiffs’ lawyer, which showed a departure date for India of September 27, 2017, was booked, ostensibly, so that the defendant could care for her recently injured husband. This explanation for booking the trip to India cannot be true since the ticket was printed on August 19, 2017, a full month before the husband is said to have injured himself.
[25] There is no doubt that the defendant attempted to encumber her Lakeshore Road West home by securing a line of credit against it. She explained, however, that the purpose in doing so was to obtain funds to close the transaction with the plaintiffs. I do not accept this evidence, for two reasons. First she provides no evidence as to the amount of the line of credit as compared to the amount owing on the purchase of the plaintiffs’ property. Second, I infer from the defendant’s evidence concerning bringing money or capital from India that the line of credit may equally have been for the purpose of paying household expenses until the financial situation in India stabilized.
Conclusion
[26] Balancing all of the factors from Chitel, and considering the evidence in its totality, it is just and equitable that the Mareva injunction granting the plaintiffs leave to register a charge against the defendant’s property, issued by Daley, RSJ, on September 28, 2017 remain in effect.
[27] Given that the plaintiffs’ damages are now capped at $116,324.32 (net of the defendant’s deposit), plus interest and costs, the charge against the defendant’s home shall be removed and discharged upon the defendant posting security of $116,324.32. That security shall be paid to the plaintiffs’ solicitor and held in trust in a separate interest baring account, to the credit of the action, and is not to be paid out until further court order.
Costs
[28] If the parties cannot agree as to who should pay whom costs, and in what amount, I will address costs in writing. Submissions are limited to three double spaced pages, excluding bills of costs and attachments. The plaintiffs’ submissions shall be served and filed by November 30, 2017 and the defendants by December 14, 2017.