COURT FILE NO.: CV-19-00632873 DATE: 20210304 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Pliny Li, Plaintiff/Responding Party AND: Darren Hendren, Delaxan Ithayaneesan, Royal Bank of Canada, McLaren Vancouver, Pfaff Auto, HJ Pfaff Motors Inc., HJ Pfaff Motors, John Doe and Jane Doe, Defendants/Moving Parties

BEFORE: Mr. Justice Chalmers

COUNSEL: I. Book for the Plaintiff/Responding Party S. Toole for the Defendants/Moving Parties

HEARD: February 18, 2021, by videoconference

ENDORSEMENT

OVERVIEW

[1] On June 15, 2020, I granted an interpleader Order on consent, ordering $240,000 (less costs of $1,500) held by the Defendants, McLaren and Pfaff to be paid into court for the benefit of this action. I also ordered $260,000 in a bank account in the name of Deli Ithayaneesan (“Deli”) and in the control of the Royal Bank of Canada be frozen pending the return of the motion. Finally, I ordered the Mercedes vehicle registered to Darren Hendren (“Darren”) and the Audi vehicle registered to Deli not be disposed of or further encumbered pursuant to their personal undertakings, pending the return of the motion.

[2] The Plaintiff brought a motion to continue the interim consent Order made on June 15, 2020. The motion was heard on August 20, 2020. By endorsement dated September 20, 2020, I continued my Order dated June 15, 2020. I ordered that the $240,000 remain in court and that the money in the control of the RBC be paid into court for the benefit of this action. I also released Darren and Deli from their personal undertakings to not dispose of or otherwise encumber their vehicles.

[3] On the motion heard on August 20, 2020, Darren and Deli took the position that they require the use of the frozen assets to pay their costs of defending the action and for reasonable living expenses. I was not satisfied that this was a valid basis for refusing the Order sought by the Plaintiff. I stated as follows:

[51] Darren and Deli submit that they require the use of the assets to pay their costs of defending the action. As noted above, the consent order applies only to the $500,000 paid by the Plaintiff and deposited into the joint RBC account. Darren and Deli have available the income and profits from their businesses, which they state is significant. If Darren and/or Deli have difficulty paying the costs of their defence, a further application may be brought before me to vary the terms of the order to allow for the release of sufficient assets to allow for the defence of the action or for reasonable living expenses.

[4] Darren and Deli bring this motion to vary my Order to permit them access to the frozen assets to pay for ongoing living expenses and defence costs. They argue that the COVID-19 pandemic has dramatically reduced their incomes and, as a result, they have no funds to pay their defence costs or to cover their normal monthly living expenses. For the reasons that follow, I dismiss the Defendants’ motion.

BACKGROUND FACTS

The Dispute

[5] As I noted in my endorsement dated September 20, 2020, the action involves a “complex factual dispute”. My findings with respect to the factual dispute are set out in my endorsement. For the purposes of this motion, I provide the following summary:

• The Plaintiff, Pliny Li (“Pliny”), paid the sum of $200,000 to Darren. According to Pliny, the payment was for an investment in a condominium unit. Darren admits receiving this sum, but states that Pliny asked that he invest it on his behalf with “Gary”, a friend of Darren and Deli. Darren and Deli do not know Gary’s last name or contact information. Pliny denies that he knew Gary or that he agreed to invest with him.

• Pliny made the first installment of $100,000 on June 11, 2019. On June 17, 2019, Darren paid $20,000 cash as a down payment on a 2018 Mercedes Benz AMG 63S Coupe. On June 25, 2019, Deli paid $50,000 as a down payment on a 2017 Audi RS7 Sedan.

• Darren and Deli deny that the money provided by Pliny for investment with Gary was used by them to make down payments on their vehicles. They say the money was given to Gary. They also state that they invested their own money with Gary; Deli says he invested $50,000. According to Darren and Deli, their investments with Gary were made in cash. There is no documentary evidence to support Darren and Deli’s claims that they transferred Pliny’s money to Gary. There is no investment agreement or receipt from Gary.

• Pliny alleges that he wanted a return on the money he thought had been invested in the condominium unit. Darren and Deli told him he had to borrow $1,200,000 to establish that he had the liquidity necessary to purchase the unit. Deli advised Pliny that he knew a loan facilitator known only as the “Bank Guy” who could loan him the money. Darren and Deli say they do not know the Bank Guy’s name or contact information.

• Pliny agreed to pay the Bank Guy $458,000. There is conflicting evidence as to the reason for the payment. Pliny states that it was for late charges and interest with respect to the original loan of $1,200,000. According to Darren and Deli, the additional sum was a finder’s fee because Pliny wanted to borrow an additional $3,600,000.

• According to Pliny, he expected to meet with the Bank Guy on November 15, 2019 to pay the $458,000. The meeting was to take place on a residential street in the Stouffville/Gormley area. Deli and Darren state that Pliny was there when the Bank Guy arrived. Pliny denies that the Bank Guy was there when he arrived. He says he was told by Deli that before Pliny arrived, Deli paid $458,000 in cash to the Bank Guy. The payment was comprised of two contributions of $229,000, one from each of Deli and Darren. There was no receipt provided.

• Deli and Darren demanded that Pliny reimburse them for the amounts they paid to the Bank Guy. Pliny obtained the amount from his friend, Morgan He. Pliny admits that he misappropriated this amount. He deposited $500,000 into his personal bank account at the RBC and then transferred the money to a joint RBC account in the names of Pliny and Darren. On December 4, 2019, Darren transferred $260,000 to Deli. On the same day, he ordered a bank draft payable to McLaren Vancouver in the amount of $240,000 to purchase a McLaren vehicle.

Darren and Deli’s Business Ventures

[6] Darren and Deli are self-employed entrepreneurs. Darren, in his affidavit sworn June 30, 2020, states that he has been “relatively successful at a variety of business ventures of the past several years”. He says that he earned approximately $500,000 from his ventures. Deli, in his affidavit sworn June 30, 2020, states that the business model used by Deli and Darren “has been and continues to be successful.” Darren and Deli only did business in cash. They did not keep any financial records or use bank accounts. They did not pay taxes.

[7] The business model used by Darren and Deli involved buying and selling second-hand camera and photography equipment and consumer electronic goods. Prior to March 2020, the items would be placed for sale on platforms such as Kijiji or Facebook Marketplace. The potential buyer would contact Darren or Deli through the sale platform, and they would agree on the terms of sale. They would arrange a place and time to meet to exchange the item. They would typically meet in a safe and well-populated place like a Tim Hortons restaurant to complete the sale. In addition to the sale of second-hand items, Darren also traded in cryptocurrencies.

[8] The Defendants state that this business model is no longer sustainable for the following reasons:

a. As a result of the provincial lockdown for COVID-19, many retail businesses selling consumer goods are limited to online sales, making some of the items the Defendants sell more difficult to obtain;

b. The Defendants are unable to meet with customers in coffee shops to conduct sales; and

c. The Defendants experienced a decrease in demand for consumer goods, which they attribute to the overall economic decline.

[9] The Defendants say that they are in the process of pivoting their businesses. Deli seeks to use the funds frozen by the injunction to reinvest in his business ventures. He is looking into operating a high-end autobody detailing business. Darren is going into the hand sanitizer market with his business partner, Ravin Wong. According to the Defendants, the new ventures have not generated any income. They argue that they need access to the frozen assets to pay their living expenses and legal fees while they try to generate income from the new endeavours.

Darren’s Finances

[10] Darren states that he has transitioned into the business of buying and reselling collectibles. He changed his business model. Instead of getting cash from his customers at a coffee shop, he is paid via PayPal in both Canadian and U.S. dollars. The U.S. funds are paid to his friend, James Bogart, who resides in Italy. After Mr. Bogart receives the funds from PayPal, he transfers them to Darren. PayPal pays the Canadian dollar amounts to Darren’s mother, who deposits the money into her account at the Bank of Nova Scotia. After she receives the funds, she transfers them to Darren. There was no evidence from either Darren’s mother or Mr. Bogart on the motion to vary the injunction.

[11] I reviewed the transcript from Darren’s cross-examination. I found his evidence with respect to the payments from PayPal to be less than satisfactory:

216. Q. And PayPal has to remit the money to you, right? A. I would send the money to my friend and they give me cash.

217. Q. Tell me that again. A. So I would send the balance, like, whenever I want to cash out the PayPal, I would usually either send it to like my mom or my friend and they give me money.

218. Q. They don't send it to you directly. They don't pay you directly. A. It's in the PayPal account.

219. Q. You have a PayPal account, right? A. Yeah.

220. Q. Well, if someone buys something from you and pays through PayPal, then you want to realize the cash so you can buy another item and sell it, how do you get that cash? How do you realize it? A. So if it's U.S. dollars, I would send it to my friend because he carries U.S. dollar cash or if it's Canadian dollars, I send it to my mom's bank account and then she would give me cash.

221. Q. All right. And that's because you don't use banks, right? A. I guess so.

243 Q. How does he send you that money, by e-mail? A. Well, he used to live here but then he goes to school in Italy so he's not here anymore.

244. Q. All right. So if he got the U.S. cash from PayPal, does he give you the equivalent of U.S. cash or --- A. No. He gives me physical U.S. dollars.

245. Q. Okay and where do you keep those US dollars? A. Like anywhere, I don't know, beside me, on the table. […]

[12] Darren testified on his cross-examination that he has five bank accounts in his name, one of which is a U.S. dollar account with the Bank of Montreal. This led to the following exchange:

404. Q. All right. Well, if you have a U.S. bank account with the Bank of Montreal, why do you need someone in Italy to collect the PayPal money for you when you could just have it transferred into your U.S. bank account at the Bank of Montreal in Toronto? A. Because I don't use banks.

405. Q. Pardon? A. I don't use banks.

406. Q. Well, you don't want to have a record in Canada of that money; is that right? A. No. I just prefer cash.

407. Q. I know but if you're getting U.S., if you're getting U.S. money from PayPal, why do you have somebody in Italy collect it for you and remit it to you as opposed to just putting right into your U.S. account to take the cash out? A. Because using U.S. dollar cash is so much easier to do business with. Like, people want U.S. dollars cash. If I get U.S. dollars into my BMO account, then I have to go through all of the currency converting fees, all the banking fees. It's just so much more complicated.

408. Q. And it creates a paper trail; is that right? A. I guess so, yeah.

[13] Darren states that he has resumed trading in cryptocurrencies. As of the date of the motion, his cryptocurrency account had a positive balance of $6,945.79.

[14] In addition to selling collectibles, Darren invested between $25,000-30,000 into a new venture with his business partner, Mr. Wong, which involves the development and sale of hand sanitizer. The investment was made after the injunction was granted. Particulars with respect to this new venture were not provided. Darren states that he signed a non-disclosure agreement with Mr. Wong that prevents him from disclosing any details of this business. There was no evidence from Mr. Wong on the motion.

[15] Darren claims a current monthly income of $7,500 and current expenses of $5,509.86. These include a monthly payment of $3,000 for his car. He states that he spends $650 on groceries each month. No receipts were provided. Darren also says that he is paying $1,800 a month to rent a studio located at 276 Carlaw Ave., Toronto. He pays this money in cash to Mr. Wong. The lease is in Mr. Wong’s name. The lease for the studio is not in evidence.

[16] At the time of the motion, Darren had a positive balance at the end of the month of almost $2,000. Darren recently moved into a condominium located at 35 Mariner Terrace, Toronto. The condominium is owned by his mother. He is not currently paying rent but says he expects to begin doing so in the amount of $1,500 starting March 1, 2021. The lease was not produced. There was no evidence on the motion from Darren’s mother with respect to charging her son rent.

[17] In my endorsement dated September 20, 2020, I released Darren from his personal undertaking to not sell or encumber his vehicle. On June 17, 2019, Darren paid $20,000 cash as a down payment on a 2018 Mercedes Benz AMG 63S Coupe. Since the injunction on June 15, 2020, he has upgraded to a 2019 Mercedes Benz AMG 63C Coupe, which costs $30,000 more than his previous vehicle. He paid $18,000 for the 2019 vehicle at the time of purchase. Darren states that this amount was a gift from Mr. Wong to be used as a down payment. There is no documentation with respect to the “gift”. There was no evidence on the motion as to the current equity in the vehicle. Darren has not produced the bill of sale for the purchase of the upgraded vehicle.

[18] On his cross-examination, Darren was asked why he continues to operate an expensive vehicle if he is having financial difficulties:

342. Q. That's interesting. All right. Well, if you're having trouble -- it cost you -- if the numbers are correct, it costs you around $3,000 a month to drive this car, right? Add them up. A. Yeah.

343. Q. So is there a reason you have to drive a 2019 Mercedes as opposed to a small Toyota or maybe take the TTC, the better way? If you're having trouble financially, why do you have to pay $3,000 a month to operate a high-end car? A. I don't know.

344. Q. You don't know. Don't you ever take the TTC or the bus? A. Well, I could afford it before this lawsuit, so...

345. Q. Well, this is only three months before your motion and you upgraded. Even though it's the same price, you upgraded. When you got rid of the car, the old 2018 and your equity went with it, it would have been the end of it and you would save 3,000 a month. A. No. The old car, even the old car, I would be spending 3,000, if not more, because gas was way more because it was faster. This car is slower.

346. Q. Let's take a look at what -- what did they give you for a trade-in on the old car? Do you remember? A. No. I don't remember .

[19] Darren received a payment of $48,500 from Deli for Deli’s initial car purchase. It was not clear from the evidence when the payment was made or what happened to the money. Darren did not disclose this payment in his affidavit.

Deli’s Finances

[20] Deli states that he introduced the Plaintiff to the Bank Guy and to Gary. He says that he personally invested $50,000 with Gary. This amount was paid in cash and there was no receipt. Deli apparently does not have an agreement with Gary. He does not know Gary’s last name or contact information. Deli confirms that this amount is an asset and he is confident that Gary will repay him. He has not taken steps to locate Gary to obtain this asset.

[21] Deli claims to be transitioning out of online sales into e-commerce. He says that his partners in the e-commerce business asked that he not disclose any information about the business plans. One of Deli’s plans is to open a car detailing garage. However, as a result of an agreement with his business partners, he is not able to provide any information about this business, either. For the last two to three months, Deli has been selling jewelry online under the name of Dr. Posh. He buys the product second-hand and then resells it online. The money generated from these sales is paid to his PayPal accounts. PayPal deposits the money to the Bank of Nova Scotia account that he has jointly with his mother.

[22] Deli continues to own the 2017 Audi RS7. The vehicle cost $96,247.13, including taxes. He paid $50,000: $1,500 on his AMEX and $48,500 borrowed from Darren. He has since paid Darren back in cash. It is not clear from the financial disclosure where Deli obtained the money to pay Darren back. I found Deli’s evidence with respect to the purchase of the vehicle and repayment of the loan to Darren to be evasive:

296. Q. All right. And you paid $85,053 for this car. That was the purchase price, right? A. To the best of my ability, I remember that was it.

297. Q. Well, the total purchase price when you add up all the taxes and extras and this and that and the warranties and the Audi car and everything else that went with it, the total cost to you was $96,247.13, right? A. Correct.

298. Q. And you put in a $1,500 deposit on American Express? A. Correct.

299. Q. And you came up with $48,500 in cash as a deposit. A. It was a cheque.

300. Q. Correct? A. Correct.

301. Q. My recollection is, you can help me here because you lived it, that was a loan from Darren. A. Correct.

302. Q. All right. So have you paid any of that money back to Darren? A. Just bits but obviously I'm not making any money right now.

303. Q. How much have you paid Darren back of the $48,500? A. I can't recall.

304. Q. Why haven't you sold the car then, so you can get whatever you can, pay off the loan and pay Darren back? A. Are you talking about the money he gave to put a down payment?

305. Q. Didn't Darren --- A. I paid that back already.

306. Q. You paid Darren back the $48,500? A. Yeah, yeah.

307. Q. When did you pay that back? A. I can't recall the exact date, but it was a while ago in cash.

308. Q. You paid him in cash, $48,500? A. Yeah.

309. Q. Well, was it recently? Do you have any records of this? A. We don't have any records. It was a long time ago.

310. Q. I can't hear you. A. I don't have any records of it.

311. Q. Well, can you tell me when you paid him? Did you pay him a month ago, six months ago, what? A. I can't recall the exact date. Probably a few months after the car. I really don't know to be honest.

312. Q. So you paid him a few months after you bought the car? A. Yeah. He also took profits from our sales.

313. Q. I'm missing this. I don't understand what you're saying. A. I paid him back a few months after I got the car and then I paid him back, he also a little bit of a larger chunk from our sales that we did together.

[23] Although Deli has equity in the vehicle, he has not sold it. He states that he requires the car to market the prospective car detailing business. His largest single monthly expense is the ongoing payments for his 2017 Audi RS7. With gas and insurance, the cost of operating the vehicle is $1,972.13.

[24] Deli states that he has monthly income of $2,000. He has not produced financial records to support this figure. He says his expenses include $200 for groceries and $250 for dog food. There is no information provided on the motion as to the number of dogs Deli has or why dog food would exceed groceries each month. No receipts with respect to these expenses were provided.

Legal Fees

[25] Darren and Deli retained Horlick Levitt Di Lella LLP to represent them in this dispute. As of the date of the motion, they jointly owed $77,669.36 to their lawyers for outstanding fees and work in progress. Counsel for the Defendants advised in argument on the motion that the current amount is in excess of $100,000.

ANAYLSIS

Legal Principles

[26] Darren and Deli bring this motion to vary the Mareva injunction to release some of the funds to pay for ongoing living expenses and legal fees.

[27] The intention of a Mareva injunction is not to put defendants in an economic straitjacket. If the defendant has no other money available to pay their day to day living expenses or the costs of defending the action, the Mareva injunction may be varied: see Regency Interiors 2000 Inc. v. Rabiae, 2000 CarswellOnt 4980 (S.C.), at para. 21.

[28] The test to be satisfied by a party seeking to vary a Mareva injunction is not seriously in dispute. In CIBC v. Credit Valley Institute of Business & Technology, at para. 15, Molloy, J. drew a distinction between proprietary assets (in which the plaintiff claims a proprietary interest) and non-proprietary assets (in which the plaintiff does not claim a proprietary interest):

It is important at the outset to distinguish between the proprietary injunction and the Mareva injunction. A proprietary injunction is granted to preserve an asset in the possession of a defendant, which the plaintiff says belongs to the plaintiff, or is subject to a trust in favour of the plaintiff. It is typically sought in cases of alleged theft, conversion or fraud where the defendant, by some wrongdoing, comes into the possession of the plaintiff's property.

[29] Here, the Plaintiff claims that the money belongs to him and that the Defendants came into possession of the funds because of their wrongdoing. The Defendants deny any wrongdoing but agree that the money frozen by the injunction is a proprietary asset.

[30] On a motion to unfreeze proprietary assets frozen by an injunction, the test is as follows:

a. The defendant must establish on the evidence that they have no other assets available to pay their expenses other than those frozen by the injunction;

b. If the defendant has established that they require the funds for legitimate living expenses or to fund their defence, the court must balance the competing interests of the plaintiff in not permitting the defendant to use the plaintiff’s money and of the defendant in ensuring that they have a proper opportunity to present their defence: see CIBC, at para. 26.

[31] The onus is on the defendants to prove that they have no assets to pay their ordinary living expenses or legal fees other than the assets frozen by the injunction: see Waxman v. Waxman, 2007 ONCA 326, at para. 39. In the case of proprietary assets, the motions court judge should scrutinize the request to unfreeze assets more closely than would be the case for funds that are not subject to a proprietary injunction: see CIBC, at para. 39. To satisfy the onus, defendants are required to make frank disclosure and demonstrate that there are no other assets available to them. Defendants are required to be candid about their ability to obtain funds from various sources: see International Offtake Corp. v. Incryptex Ltd, 2017 ONSC 7537, at paras. 42 and 45.

No Other Assets

[32] As I noted in my endorsement dated September 20, 2020, the injunction did not apply to the Defendants’ businesses. Darren and Deli have available the income and profits from those businesses. In their affidavits sworn June 30, 2020, they stated that their business ventures were successful, and the income earned was significant.

[33] Darren and Deli take the position on this motion that the COVID-19 pandemic has negatively impacted their business model. They are unable to meet with customers at Tim Hortons. They have been required to move to payment by PayPal rather than in cash. The evidence from Darren with respect to the PayPal payments is not credible. He has a U.S. dollar account at the BMO and yet he has a complicated scheme for payment from Mr. Bogart in Italy. Darren does not use his bank accounts and does not pay tax. As a result of the way in which he has structured his affairs, there is insufficient documentary evidence with respect to the income he earns from this venture.

[34] I am not satisfied on the evidence before me that the Defendants have made frank disclosure of their assets, income, and expenses. There is insufficient detail with respect to their business ventures. Although Deli is involved in an e-commerce venture and an auto detailing business, he did not provide any details of such. He stated he was unable to provide details because of agreements made with his business partners. There was no evidence from his business partners. Similarly, Darren did not provide any details with respect to his business ventures with Mr. Wong. There was no evidence from Mr. Wong.

[35] Both Darren and Deli provided very little evidence with respect to their monthly expenses. Although Darren states that he pays rent of $1,800 to Mr. Wong and may have to pay rent to his mother in the amount of $1,500, no leases are in evidence. Darren claims grocery costs of $650 a month, and Deli claims dog food costs in the amount of $250 and groceries of $200. No receipts were provided with respect to these expenses. The largest single monthly expense for both Darren and Deli is their luxury automobiles. The monthly cost for Darren to operate his Mercedes Benz AMG is $3,000. The monthly cost for Deli to operate his Audi RS7 is close to $2,000. If, in fact, the Defendants are having financial difficulties, there is no reason for them to operate high-end, luxury automobiles. I am satisfied that significant savings could be made if the Defendants moved to more modest means of transportation.

[36] The evidence supports a finding that the Defendants have assets or the ability to borrow money. Both Defendants own expensive cars. Neither has sold or encumbered their vehicle to raise cash to pay their expenses. In addition, Deli invested $50,000 with Gary. Deli confirmed that this is an asset, but he has not taken any steps to locate Gary to obtain this asset. Deli also stated that he repaid Darren the $48,500 he borrowed to purchase his vehicle. This amount was not disclosed by Darren in his affidavit and there is no evidence as to what happened to these funds. Darren has a positive balance of $6,945.79 in his cryptocurrency account, which could be used to pay his expenses.

[37] There is limited evidence with respect to the Defendants’ ability to borrow money. Darren confirms that his mother lent him money to finance the hand sanitizer business. Mr. Wong gifted Darren $18,000, which he used to upgrade his vehicle. There is no evidence from either Darren’s mother or Mr. Wong as to whether Darren could borrow money from them. Deli borrowed money from several individuals. He does not state in his affidavit that those individuals are not prepared to lend further amounts. There is no evidence from the individuals who lent money to Deli. Deli has demonstrated an ability to obtain money. Notwithstanding his evidence that his expenses exceed his income, he was able to recently spend $4,000 to renovate the basement of his mother’s home and contribute $4,975 to mortgage payments. In addition, he was able to repay $48,500 to Darren.

[38] I am of the view that the Defendants have not shown that they have no assets other than those frozen by the injunction. Very little evidence has been provided with respect to the Defendants’ current business ventures or their monthly incomes and expenses. There is no evidence with respect to their ability to borrow money. The Defendants’ luxury vehicles and Deli’s investment with Gary are assets that could be used to pay the Defendants’ expenses.

[39] I conclude that the Defendants have failed to establish that they have no assets available to pay their expenses other than those frozen by the injunction. The Defendants do not meet the first part of the test to vary the proprietary injunction and are therefore not entitled to the relief sought.

Balancing the Competing Interests

[40] Had I not found that the Defendants failed to meet their onus to show that they have no assets available to pay their expenses other than those frozen by the injunction, I would have concluded that a balancing of interests favours the Plaintiff.

[41] In my endorsement dated September 28, 2020, I concluded that the Plaintiff had a strong prima facie case. It is uncontroverted that Pliny gave money to Darren and Deli and that he has not received the money back. Darren and Deli state that the money was given to Gary and the Bank Guy. There is no documentary evidence to support their position. Darren and Deli argue that the amounts were paid in cash. They did not obtain a receipt. They say they do not know the full names of Gary or the Bank Guy. They do not have their contact information. It is simply inconsistent with common sense that Darren and Deli would hand over such large sums of cash in these circumstances.

[42] In my endorsement, I also found that there was a risk, if the injunction was not granted, that Darren and Deli would dispose of their assets or put them out of reach before trial. By their own admission, Darren and Deli only do business in cash. They do not use bank accounts. They do not keep records. There is no way to trace assets to determine whether payments are made for legitimate business purposes. I was satisfied that the Plaintiff would suffer irreparable harm if the injunction was not granted.

[43] Under the balancing test, I must determine whether the injustice of permitting the Defendants the use of the proprietary funds is outweighed by the injustice of depriving them the use of the funds: see Canadian Tire Corp. v. Offenbacher, at para. 20. In light of my finding of a strong prima facie case and the risk the assets will be dissipated, it is my view that the injustice of permitting the Defendants the use of the funds outweighs the injustice of depriving them of the funds.

[44] I therefore conclude that a balancing of interests does not support varying the order.

DISPOSITION

[45] I dismiss the Defendants’ motion to vary the injunction.

[46] The Plaintiff is entitled to his costs of the motion. The Plaintiff is seeking costs on a substantial indemnity basis. He argues that the motion was wholly without merit. The Plaintiff also takes the position that the Defendants obfuscated and misled the court with respect to their true income, expenses, and assets. I carefully reviewed the transcripts of the cross-examinations of Darren and Deli. I found much of their evidence to be evasive and argumentative. In bringing this motion, it was incumbent upon them to provide full and frank disclosure of their business activities. Instead, they both took the position that full particulars of their business ventures could not be provided because of non-disclosure agreements with their business associates. Although they claimed that their monthly income was not sufficient to meet their expenses, they provided little or no supporting documentation with respect to either their income or their expenses.

[47] At the conclusion of the argument and before I released my decision, I asked counsel to provide their Bills of Costs. Counsel for the Plaintiff submitted a Bill of Costs in the amount of $18,678.51 on a substantial indemnity basis and $14,886.65 on a partial indemnity basis. These amounts include disbursements of $2,110 for the cost of the cross-examination transcripts and HST. Counsel for the Defendants submitted a Bill of Costs in the amount of $6,393.88 for the counsel fee on a partial indemnity basis. On a substantial indemnity basis, the Defendants’ claim for the counsel fee is approximately $9,500.

[48] I order the Defendants to pay the Plaintiff his costs of the motion to vary the injunction, fixed in the amount of $12,500, inclusive of counsel fee, disbursements and HST. The costs are payable within 30 days of the date of this endorsement.

[49] The Plaintiff is also seeking his costs to bring the motion for the Interpleader Order. The Defendants take the position that they consented to the Order and therefore costs are not appropriate. Based on the evidence before me, there was an issue with respect to the form of the Interpleader Order. A number of e-mails were exchanged between counsel as to the wording. I am not satisfied that there was excessive delay. Also, I am of the view that in light of the Defendants’ consent and the fact that the money was being held by the RBC the motion was not necessary. In the circumstances, I make no Order as to the costs of the interpleader motion.

Date: MARCH 4, 2021