Court File and Parties
COURT FILE NO.: CV-20-636605 DATE: 20200917 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: 1805753 ONTARIO INC. and ANTONY CHAU, Plaintiffs AND: EDEN FELDMAN a.k.a. IDAN FELDMAN, HEIDI TAN, JOHN DOE, JANE DOE AND DOE CORPORATIONS, Defendants
BEFORE: Pinto J.
COUNSEL: Norman Groot, for the Plaintiffs
HEARD: September 3 and 10, 2020
ENDORSEMENT
[1] On September 3 and 10, 2020, I heard the plaintiffs’ urgent motion via Zoom on an ex-parte basis seeking Mareva, Anton Piller and Certificate of Pending Litigation (CPL) orders.
[2] The motion was originally to be heard in March 2020 but did not proceed due to the suspension of the courts’ regular operations in mid-March due to COVID-19.
[3] On August 18, 2020 Kimmel J. directed that the motion proceed on an urgent basis and, due to the nature of the motion, did not require the motion materials to be served in advance on the defendants.
[4] Upon reviewing the motion materials, I was satisfied that the motion should proceed on an ex-parte basis.
[5] By way of three separate orders (Mareva, Anton Piller, CPL), all dated September 11, 2020, I granted the relief sought for reasons to follow. These are those reasons.
[6] The plaintiffs assert that between 2016 and 2018 they directed millions of dollars in investment funds and personal loan arrangements to the defendant Eden Feldman, or to his designates, on the basis of what they now believe to be Feldman’s fraudulent misrepresentations.
[7] After failing to recover the funds from Feldman, the plaintiffs successfully obtained a Norwich order from Pollak J. in January 2020. Based on being able to discern Feldman’s banking activities through the Norwich order, the plaintiffs claimed that Feldman had engaged in fraudulent activity including providing false banking and other information to the plaintiffs to persuade them to continue to advance funds.
[8] The plaintiffs provided extensive motion materials demonstrating or alleging that, inter alia:
a) Feldman was subject to a Mareva order in a separate action, CV-18-604977, which relates to a similar allegedly fraudulent “parking spaces” investment scheme, and that Feldman appears to be ignoring that Mareva injunction.
b) Feldman has not applied the funds he has received from the plaintiffs for the purposes for which they were advanced.
c) Feldman has no identifiable employment or legitimate source of income, and has misrepresented his financial net worth and equity position in the residence he claims to own.
d) Feldman has claimed a variety of excuses for failing to return the plaintiffs’ funds including his owing money to criminal gangs.
e) Feldman has used extortion tactics to discourage the plaintiff from seeking judicial relief.
f) Feldman operates expensive vehicle(s) although he is a permanently suspended driver.
g) Feldman is the surreptitious creator of, or has arranged for the creation of websites that directly or indirectly disparage the plaintiffs who operate in the financial investment industry.
[9] The plaintiff Chau has given an undertaking in damages and understands his obligation to disclose all material facts on this ex-parte motion.
Mareva Injunction
[10] The test for a Mareva injunction is well established, see Sibley & Associates LP v. Ross, 2011 ONSC 2951, at paras. 11 and 12:
- the plaintiff must make full and frank disclosure of all material matters within his or her knowledge;
- the plaintiff must give particulars of the claim against the defendant, stating the grounds of the claim and the amount thereof, and the points that could be fairly made against it by the defendant;
- the plaintiff must give grounds for believing that the defendant has assets in the jurisdiction;
- 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
- the plaintiff must give an undertaking as to damages.
[11] It is a condition-precedent to the order that the plaintiff demonstrate a strong prima facie case.
[12] I am satisfied based on the evidence put before me that there is a strong prima facie case against the defendants and that a Mareva-type injunction should be granted.
[13] In particular, I find that there is a significant risk of asset flight or dissipation with respect to Feldman’s assets or property, and those of the other defendants who are associated with Feldman. There is strong evidence of fraud based on text, email and other documentary evidence presented on this motion.
Anton Piller
[14] The plaintiffs also seek an Anton Piller order directed against Feldman for the seizure and preservation of documents, electronic evidence and cash located at residential premises. The test for an Anton Piller order and its exceptional nature was described by Perell J. in 2298679 Ontario Inc. et al. v. Northern Homecare Solutions Inc. et al., 2019 ONSC 3055 (footnotes removed):
[35] An Anton Piller order is a very intrusive and exceptional interlocutory order. It authorizes the plaintiff to enter the premises of the defendant to seize evidentiary material or the property that is claimed by the plaintiff in the proceedings. The form of the order is that the defendant is ordered to permit entry to his or her premises at the risk of being held in contempt for refusing permission. The purpose of the order is to prevent property from being lost, destroyed or removed, and to preserve relevant evidence, but it does not authorize access to privileged communications of documents. An Anton Piller order is at the extremity of the court’s powers and is granted only when there is no alternative way to ensure that justice may be done.
[36] The requirements for an Anton Piller order are: (1) there must be an extremely strong prima facie case; (2) the damage, potential or actual, must be very serious for the plaintiff; (3) there must be convincing evidence that the defendant has in his or her possession incriminating documents or objects; and (4) there is a real possibility that the material may be destroyed or secreted before the parties may put their respective rights before the court. An Anton Piller order is an exceptional remedy and should be granted only on clear and convincing evidence.
[15] Based on the material before me, I am satisfied that the Anton Piller test has been met. In particular, I find that there is a convincing evidence that Feldman has cash, electronic and other documentation at the property relevant to the action and that there is a real possibility that Feldman may destroy, delete or hide such evidence before the merits of this action are put before the court.
[16] I am also satisfied that the proposed Anton Piller order contains sufficient safeguards to protect the rights of the defendants including by providing them with the opportunity to obtain independent legal advice, requiring an Independent Supervising Solicitor (ISS), video recording the attendance at the premises, reporting back to the court and engaging in COVID-19 Safety precautions.
Certificate of Pending Litigation (CPL)
[17] The rules for obtaining a CPL are based on Rule 42 of the Rules of Civil Procedure, section 103 of the Courts of Justice Act, and case law, see Perruzza v. Spatone, 2010 ONSC 841), also see Sagebrush Building Limited v. Harris et al, 2010 ONSC 3676 at para 61. A CPL may be obtained on an ex-parte basis: Rule 42.01(3).
[18] Here the nexus to the subject property is that Feldman allegedly extracted over $1.0M from the plaintiff on the basis of misrepresentations that the investment funds would be secured against title to Feldman’s property, and that Feldman indicated that once he acquired the subject property and then “flipped it”, the plaintiff Chau would share in the proceeds.
[19] I am satisfied that the test for a CPL has been met, and that the plaintiffs have an interest in the property in question.
Return Dates
[20] The Mareva order requires the parties to report to the court on September 21, 2020 via Zoom to advise on the service of the order, and the terms for extending or setting aside the order.
[21] The Anton Piller order is only in force for 10 days from September 11, 2020 and shall terminate unless the plaintiffs return to court on or before September 21, 2020.
[22] I am seized of this matter.
Pinto J.
Date: September 17, 2020