COURT FILE NO.: CV-21-00655418-00CL
DATE: 2021 05 28
SUPERIOR COURT OF JUSTICE – ONTARIO
(Commercial List)
RE: SAKAB SAUDI HOLDING COMPANY, ALPHA STAR AVIATION SERVICES COMPANY, ENMA AL ARED REAL ESTATE INVESTMENT AND DEVELOPMENT COMPANY, KAFA’AT BUSINESS SOLUTIONS COMPANY, SECURITY CONTROL COMPANY, ARMOUR SECURITY INDUSTRIAL MANUFACTURING COMPANY, SAUDI TECHNOLOGY & SECURITY COMPREHENSIVE CONTROL COMPANY, TECHNOLOGY CONTROL COMPANY, NEW DAWN CONTRACTING COMPANY and SKY PRIME INVESTMENT COMPANY, Plaintiffs
- and -
SAAD KHALID S AL JABRI, DREAMS INTERNATIONAL ADVISORY SERVICES LTD., 1147848 B.C. LTD., NEW EAST (US) INC., NEW EAST 804 805 LLC, NEW EAST BACK BAY LLC, NEW EAST DC LLC, JAALIK CONTRACTING LTD., NADYAH SULAIMAN A AL JABBARI, KHALID SAAD KHALID AL JABRI, MOHAMMED SAAD KH AL JABRI, NAIF SAAD KH AL JABRI, SULAIMAN SAAD KHALID AL JABRI, HISSAH SAAD KH AL JABRI, SALEH SAAD KHALID AL JABRI, CANADIAN
GROWTH INVESTMENTS LIMITED, GRYPHON SECURE INC., INFOSEC GLOBAL INC. , QFIVE GLOBAL INVESTMENT INC., Defendants
BEFORE: Master Todd Robinson
COUNSEL: A. McLachlan and D. Fenton, for the plaintiffs (moving parties)
L. Ritacca, P. Le Vay and Z. Al-Khatib, for the defendant, Saad Khalid S Al Jabri (responding party)
HEARD: May 18, 2021 (by videoconference)
REASONS FOR DECISION
Overview
[1] On January 22, 2021, the plaintiff companies obtained an ex parte order for a Mareva injunction against Dr. Saad Al Jabri in respect of his worldwide assets, among other relief. In the action, the plaintiffs allege that Dr. Al Jabri orchestrated an extensive international fraudulent scheme by which he misappropriated at least USD 3.5 billion from the plaintiffs with assistance of or through the co-defendants. The Mareva order required that Dr. Al Jabri prepare and provide a sworn statement detailing the nature, value and location of his assets worldwide. It further required that he submit to an examination under oath after delivering that statement. Both a declaration of assets and supplementary declaration of assets were provided to the plaintiffs, with a cross-examination proceeding on February 11, 2021.
[2] During the cross-examination, a dispute arose between counsel for the plaintiffs and counsel for Dr. Al Jabri regarding the scope of permissible examination. Given the number of refusals and questions taken under advisement, the cross-examination was adjourned so that directions from the court could be obtained. Since that adjournment, Dr. Al Jabri has provided answers to various undertakings, matters under advisement and even some refusals.
[3] The plaintiffs seek directions in three disputed areas, namely:
(a) questions related to assets held by Dr. Al Jabri, directly or indirectly, prior to the date of the Mareva order from January 1, 2013;
(b) questions related to assets transferred to Dr. Al Jabri’s son, Mohammed Al Jabri, pursuant to a gift deed; and
(c) questions related to any other assets that Dr. Al Jabri may have transferred to other individuals or entities before the date of the Mareva order from January 1, 2013.
[4] The crux of the motion is the scope of proper cross-examination on the declaration of assets ordered as part of the Mareva injunction. The plaintiffs argue that Dr. Al Jabri is frustrating their legitimate efforts to test the accuracy, completeness, and veracity of his two declarations. Dr. Al Jabri disagrees, arguing that his objections are only to the plaintiffs’ improper attempt to use the cross-examination to pursue lines of inquiry and tracing that are only appropriately pursued, if at all, after pleadings are closed and productions exchanged. Dr. Al Jabri maintains that the questions asked in the disputed areas being pursued by the plaintiffs extend well beyond permissible examination on Dr. Al Jabri’s assets as outlined in his declarations or the potential dissipation of his assets.
[5] Although Dr. Al Jabri sought to characterize this motion as a refusals motion, the plaintiffs do not agree. They are not seeking an order compelling answers to specific refused questions. They seek only parameters for continuation of the asset examination through clarification on the scope of proper examination in the three areas identified above. I have understood the refusals identified during this motion to be examples of the types of disputes requiring directions, rather than refusals on which the plaintiffs are specifically seeking relief or will ultimately seek relief.
[6] In my view, it is appropriate to provide directions on the three disputed areas without ruling on the relevance of specific refused questions. Based on the arguments made before me, I have little doubt that a refusals motion will inevitably follow completion of the cross-examination. However, clarification on the general scope of permissible cross-examination at this juncture may allow the parties to resolve, at least in part, their disputes over refused questions. That may, in turn, permit a smoother completion of the cross-examination and reduction in the number of disputed questions that require rulings by the court. With the benefit of my directions, it will be for the plaintiffs to determine what planned questions should still be asked and on which refusals they intend to seek relief, while it will be for Dr. Al Jabri to determine if existing refusals will be maintained and any further questions refused.
Background
[7] Affidavit evidence filed by the plaintiffs and Dr. Al Jabri, sworn by a law clerk and a legal assistant, does not directly address the factual background to their dispute. The affidavits address only procedural matters since commencement of this litigation. Both sides nevertheless argued that the context in which the parties’ dispute arose and continues is relevant to this this motion. They simply do not agree on the lens through which the factual background should be viewed.
[8] The “facts” argued were derived from Gilmore J.’s reasons for granting the Mareva injunction and for dismissing Dr. Al Jabri’s motion to set that order aside, as well as Dr. Al Jabri’s notices of motion to set aside the Mareva order and for leave to appeal the dismissal of that motion to the Divisional Court (leave was not granted). It is evident that many factual disputes between the parties remain to be resolved, although certain facts appear to be largely undisputed. For the purposes of this motion, though, it is not necessary to review the factual background giving rise to the current dispute in great detail.
[9] Dr. Al Jabri served for decades as a senior civil servant in the security and intelligence agencies of the Kingdom of Saudi Arabia, including serving as a Minister of State and as a Special Advisor to the former Crown Prince and Minister of the Interior, Mohammed bin Nayef. From 2007 to 2015, Dr. Al Jabri was involved in establishing and, at least to some extent, managing or directing certain operations of the plaintiff companies, which are all state-owned companies operating legitimate business in strategic industries, such as aerospace and cybersecurity, but which also funded covert operations and served as commercial fronts for counterterrorism operations.
[10] In September 2015, Dr. Al Jabri was removed from office at the instance of then-Deputy Crown Prince, Mohammed bin Salman (Mohammed bin Nayef’s cousin). The reason for that removal is in dispute. Dr. Al Jabri subsequently left Saudi Arabia. His position is that he fled out of fear for his own safety. The plaintiffs’ position is that it was tied to Dr. Al Jabri’s fraudulent scheme by which at least USD 3.5 billion was misappropriated from the plaintiffs.
[11] In June 2017, a palace coup occurred in which Mohammed bin Nayef was deposed as Crown Prince and Mohammed bin Salman was named Crown Prince. Two of Dr. Al Jabri’s children have been prevented from leaving Saudi Arabia, and Dr. Al Jabri has asserted that his assassination was planned by Mohammed bin Salman, but was stopped when Canada Border Services intercepted the agents.
[12] As noted, on January 22, 2021, the plaintiffs commenced this action and moved ex parte before Gilmore J. to obtain the subject Mareva order. The plaintiffs also concurrently sought and obtained a separate Mareva order against QFive Global Investment Inc., a certificate of pending litigation against a property in Toronto, a receivership order to preserve certain real estate properties in the United States alleged to be beneficially owned by Dr. Al Jabri, and a Norwich order affecting various banking, legal, and accounting firms.
[13] Voluminous and detailed tracing and factual evidence was placed before Gilmore J., which was held to support the plaintiffs’ position, on a prima facie basis, that at least USD 480 million flowed directly to Dr. Al Jabri (or companies under his control) as part of the overall alleged scheme claimed to involve USD 3.5 billion in misappropriated funds. The plaintiffs rely on an investigation performed by Deloitte (discussed in Gilmore J.’s reasons dated January 27, 2021), which was argued during the ex parte motion to support that family members and close business associates were installed as directors and officers of companies and as “nominee” shareholders, through which funds were paid as “profit”, all to hide Dr. Al Jabri’s own ultimate control of those entities. Misappropriated funds are alleged to have been used to acquire significant other assets worldwide, ownership of which has been purportedly structured to mask Dr. Al Jabri’s control and beneficial ownership.
[14] The Mareva injunction granted against Dr. Al Jabri is broadly worded, extending to any of Dr. Al Jabri’s assets and any assets in which he has any type of interest, whether or not they are in his own name or whether they are solely or jointly owned. The breadth of the injunctive relief is particularly evident from para. 2 of the order, which provides as follows:
- THIS COURT ORDERS that paragraph 1 applies to all of Al Jabri's assets whether or not they are in his own name and whether they are solely or jointly owned. For the purpose of this Order, Al Jabri's assets include, but are not limited to:
(a) any asset which he has the power, directly or indirectly, to dispose of or deal with as if it were his own. Al Jabri is to be regarded as having such power if a third party holds or controls the assets in accordance with his direct or indirect instructions;
(b) anything regarded in law or equity as property or as an interest in property, any right or interest that can be transferred for value from one person to another, any right, including a contingent or future right, to be paid money or receive any other kind of property, and any cause of action in which Al Jabri has any interest;
(c) any bank, investment or other account of Al Jabri at any bank, financial or other institution;
(d) any motor vehicle, trailer, or other vehicle registered to Al Jabri;
(e) any real property in which Al Jabri has any interest; any and all other personal property of Al Jabri; and
(g) any and all share certificates, negotiable instruments and the like of Al Jabri.
[15] Pursuant to para. 5 of the Mareva order, Dr. Al Jabri was required to prepare and provide to the plaintiffs, within ten days of service of the order, “a sworn statement detailing the nature, value, and location of his assets worldwide, including all assets referred to in paragraph 2 herein, whether in his own name or not and whether solely or jointly owned or whether held in trust for any other party.” Dr. Al Jabri was thereafter obliged to submit to examination under oath pursuant to para. 6 of the Mareva order.
[16] On February 3, 2021, following service of the order, Dr. Al Jabri provided the plaintiffs with a sworn declaration of assets, comprising a total of 33 pages, including exhibits. The declaration discloses assets held in seven countries, including land and vehicle holdings in Saudi Arabia over which Dr. Al Jabri says he no longer has any control.
[17] On February 11, 2021, prior to his cross-examination scheduled for that day, Dr. Al Jabri provided a supplementary declaration of assets, comprising a further 52 pages, including exhibits. The supplementary declaration discloses additional information and supplementary documentation regarding certain assets.
[18] During the cross-examination, Dr. Al Jabri was examined on several assets not disclosed in his asset declarations, including:
(a) his interest in Dreams International Advisory Services Ltd. (“Dreams International”), in which Dr. Al Jabri appears to have had a prior beneficial ownership and into which the plaintiffs allege that USD 193 million was transferred by Dr. Al Jabri;
(b) real estate assets held by New East (US) Inc., New East 804 805 LLC, New East Back Bay LLC and New East DC LLC (collectively, the “New East Companies”);
(c) investment in New East Family Foundation, a not-for-profit entity purportedly established by Dr. Al Jabri;
(d) settlement and ongoing management of the Black Stallion Trust, a trust located in Jersey in the Channel Islands in which Dr. Al Jabri’s family are beneficiaries;
(e) interest and involvement in an entity known as the “Family Office”, located in Bahrain;
(f) banking and other accounts that Dr. Al Jabri may have had; and
(g) assets in Turkey that may have been sold or disposed of prior to the Mareva order.
[19] Also, during cross-examination, Dr. Al Jabri disclosed that he had gifted all of his worldwide assets (save his personal bank accounts) to his son, Mohammed Al Jabri, pursuant to a gift deed dated June 21, 2017. That evidence was subsequently corrected in writing after the examination was adjourned to clarify that the gift was made orally on June 21, 2017 “in accordance with customary Islamic law”, and committed to writing in December 2018 for tax purposes.
[20] Subsequent to the cross-examination, on February 19, 2021, Dr. Al Jabri moved to set aside the Mareva order, primarily on the basis of material non-disclosure by the plaintiffs. For reasons released on March 11, 2021, Gilmore J. dismissed the motion and ordered that the Mareva order against Dr. Al Jabri continue until further variation or order of the court.
Analysis
[21] Both parties have put forward competing narratives. The plaintiffs seek to paint a picture of Dr. Al Jabri as orchestrator of the substantial and far-reaching international fraudulent scheme that has resulted in the USD 3.5 billion in claimed losses. They argue his credibility is squarely in issue and that Gilmore J. has already made numerous findings regarding Dr. Al Jabri’s conduct in granting the Mareva injunction. Conversely, Dr. Al Jabri seeks to paint a picture of political persecution and politically motivated attacks against him by the current Crown Prince, who having failed to assassinate him is now using the Canadian legal system to commit “an economic hit job”.
[22] In my view, the competing narratives are not relevant to disposition of this motion. Ultimately, it is for the trial judge to determine whether Dr. Al Jabri defrauded the plaintiffs in any manner, or whether this action is nothing more than a politically driven economic attack.
[23] My starting point on this motion is that the Mareva order was issued and subsequently upheld in response to Dr. Al Jabri’s motion to have it set aside. I agree with the plaintiffs that Gilmore J.’s reasons for granting the Mareva order in the first place, and for upholding it, are both relevant for this motion. They outline the context in which the court granted and has continued the Mareva order.
[24] Disposition of this motion requires consideration of the proper scope of cross-examination on Dr. Al Jabri’s particular asset declarations in the particular context of the specific Mareva order granted against him. Put another way, the issue before me is whether the categories of questions on which the plaintiffs seek directions are within the intended scope of the examination ordered in para. 6 of the Mareva order.
[25] There is also a dispute regarding whether Dr. Al Jabri’s disclosure has been compliant with the letter and spirit of the Mareva order. However, although the plaintiffs suggest that compliance is at issue on this motion, I do not agree. I need not make any determination on Dr. Al Jabri’s compliance (or non-compliance) to dispose of the motion before me.
Relevant principles
[26] Asset disclosure is ordered as part of a Mareva injunction to provide a meaningful picture of the financial position of the defendant and, further, to “breathe life” into the injunction so that the plaintiffs have knowledge of the assets subject to the freezing order: Sekisui House Co. Ltd. v. Nagashima, 1982 CanLII 800 (BC CA), 42 BCLR 1 (BCCA) at para. 10; First Majestic Silver Corp. v. Santos, 2014 BCSC 1564 at para. 68.
[27] Cross-examination on asset disclosure serves to test the truthfulness, accuracy and completeness of the sworn list of assets: Trade Capital v Peter Cook, 2015 ONSC 7776 at para. 37. There is no dispute that cross-examination on Dr. Al Jabri’s two asset declarations is for the purpose of ensuring that he has actually disclosed all of his assets and that he is not dissipating those assets. Where the parties differ is on the scope of permissible examination to test those matters.
[28] Both sides cite Ontario v. Rothmans, 2011 ONSC 2504 for principles regarding the scope of permissible cross-examination of a deponent. The following oft-cited principles are outlined at para. 143 of that decision:
(a) the scope of a cross-examination of a deponent for an application or motion is narrower than an examination for discovery;
(b) a cross-examination is not a substitute for examinations for discovery or for the production of documents available under the Rules of Civil Procedure;
(c) the examining party may not ask questions on issues that go beyond the scope of the cross-examination for the application or motion;
(d) the questions must be relevant to: (a) the issues on the particular application or motion; (b) the matters raised in the affidavit by the deponent, even if those issues are irrelevant to the application or motion; or (c) the credibility and reliability of the deponent’s evidence;
(e) if a matter is raised in, or put in issue by the deponent in his or her affidavit, the opposite party is entitled to cross-examine on the matter even if it is irrelevant and immaterial to the motion before the court;
(f) the proper scope of the cross-examination of a deponent for an application or motion will vary depending upon the nature of the application or motion;
(g) a question asked on a cross-examination for an application or motion must be a fair question;
(h) the test for relevancy is whether the question has a semblance of relevancy;
(i) the scope of cross-examination in respect to credibility does not extend to a cross-examination to impeach the character of the deponent;
(j) the deponent for an application or motion may be asked relevant questions that involve an undertaking to obtain information, and the court will compel the question to be answered if the information is readily available or it is not unduly onerous to obtain the information; and
(k) the deponent for a motion or application who deposes on information and belief may be compelled to inform himself or herself about the matters deposed.
[29] I agree with Dr. Al Jabri that there is a distinction between examining on current assets and examining for the purpose of tracing former assets or investigating facts relevant to demonstrating the illegitimacy of asset transfers. However, particularly in a case of alleged fraud such as this one, the demarcation is not always a bright line. Questions relating to the underlying merits of the allegations in a plaintiff’s claim, which also relate to the existence, location or quantum of assets that a defendant owns directly or indirectly, are not necessarily improper: SFC Litigation Trust v. Chan, 2015 ONSC 939 at para. 10.
[30] Dr. Al Jabri points out that Mareva orders have been held to be “draconian” and “constitute a serious interference with the defendant’s affairs”: Noreast Electronics Co. Ltd. v. Danis, 2018 ONSC 879 at para 22; Gold Star Renovations Inc. v. Vinnik, 2012 ONSC 6575 at para 25. Given their intrusive nature, Dr. Al Jabri argues that there must be strict limits on pre-discovery examinations that occur pursuant to Mareva orders. In my view, the case law placed before me supports that an appropriate cross-examination is framed by the purpose for which asset disclosure has been ordered.
[31] In the seminal case of A.J. Bekhor & Co. Ltd. v. Bilton, [1981] 2 All ER 565 (CA), Ackner LJ. did hold that a Mareva plaintiff stands in a privileged position, that the privilege “must not be carried too far”, and that “courts must be vigilant to ensure that the Mareva defendant is not treated like a judgment debtor.” However, Ackner LJ. also acknowledged that, having established the existence of assets, it may be appropriate in a particular case to require a defendant to provide information about that asset to enable the court to “decide on what the Mareva injunction should bite.” Although Dr. Al Jabri points to the ultimate determination of the majority that examination on past assets was not relevant, that determination turned on the facts and is not, in my view, a general proposition applicable in all Mareva cases.
[32] In Sekisui House Co. Ltd., supra, while the British Columbia Court of Appeal acknowledged the admonitory words in A.J. Bekhor about not treating a Mareva defendant akin to a judgment debtor (para. 9), the court went on to order production of a list of assets and, if unsatisfactory to the plaintiff, noted that a chambers application for a cross-examination could be brought. In doing so, the court acknowledged that a Mareva injunction “has little value if one does not know either the amounts or whereabouts of these assets” and that it would be “untenable” both for a litigant to be granted an order that is impossible to enforce and for third parties to be put in the position of breaching an order due to lack of specificity (para. 10).
[33] In Trade Capital, supra, although Ricchetti J. was addressing a motion to vary a Mareva injunction for release of funds, the examination at issue occurred pursuant to the Mareva order with similar language to that at issue in this case. The court held that the purpose of asset disclosure pursuant to the Mareva order was “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” (para. 34) and that examination on assets beyond solely the date of the Mareva order was appropriate to test the truthfulness, accuracy and completeness of the sworn list of assets (para. 37).
[34] The foregoing are principles that I have applied in assessing the scope of asset examination contemplated by para. 6 of the subject Mareva order and in disposition of this motion.
Appropriate scope of directions
[35] Various specific directions have been proposed by the plaintiffs in each of the three categories, as outlined further below. Dr. Al Jabri argues that, if I grant the plaintiffs’ motion, the directions proposed by the plaintiffs are insufficient to avoid further disputes, and that I should be providing as specific and clear directions as possible. For that reason, Dr. Al Jabri argues that specific refusals must be reviewed.
[36] To my mind, the plaintiffs are already seeking directions that are, in many cases, too specific for the court to order in a prospective manner. Dr. Al Jabri is asking for even more specificity. Although neither side seems to view it as such, both sides are, in essence, asking the court to define with particularity the questions that may be asked before they have actually been asked.
[37] In my view, it is inappropriate for the court to instruct parties on what specific questions should be answered, if asked. Rather, the role of the court on a motion such as this one is to clarify a framework for appropriate examination, or provide categories of permissible examination. It is the role of examining counsel to pose relevant questions framed to exclude objectionable content. It is the role of opposing counsel to assess each question asked and determine if it is one that should properly be answered.
[38] Nevertheless, the specific directions sought by the plaintiffs, as well as Dr. Al Jabri’s positions on why related questions were appropriately refused, are of assistance in clarifying certain categories of appropriate examination within the disputed areas.
Assets held prior to Mareva order
[39] With respect to questions about assets held prior to the date of the Mareva order, the plaintiffs seek an order directing Dr. Al Jabri to:
(a) answer any question necessary to establish the nature, value and location of any “former” asset;
(b) disclose the ownership structure for any “former” asset and identify any individual or entity involved in managing the asset;
(c) produce documents necessary to substantiate the nature, value, location and ownership structure for any former asset (including, as appropriate, bank account statements, financial statements, share registers, minute books, partnership agreements, investment agreements, and trust deeds);
(d) answer questions relevant to establishing why the “former” asset is not identified in Dr. Al Jabri’s asset declarations, including providing details of any transactions in respect of the former asset; and
(e) produce documents necessary to substantiate that any former asset has been sold, transferred or otherwise disposed of in a bona fide transaction with an arm’s length third-party (including, as appropriate, share purchase agreements, share registers, deeds of purchase and sale, treasury directions, banking directions, and wire confirmations).
[40] In my view, to give meaningful effect to the Mareva order, the plaintiffs must be entitled to test whether Dr. Al Jabri has continuing legal or equitable ownership or other interests in or direct or indirect control over any assets that were previously owned or controlled by him, but are not disclosed in his asset declarations. This includes assets that were transferred or gifted to others prior to the Mareva order being issued, and confirmation regarding whether asset transfers were arm’s length transactions.
[41] I note that para. 1(a) of the Mareva order specifically includes assets in which Dr. Al Jabri “has any type of interest, wherever situate” and para. 2(a) captures assets held by third parties over which Dr. Al Jabri “has the power, directly or indirectly, to dispose of or deal with as if it were his own” including where “a third party holds or controls the assets in accordance with his direct or indirect instructions”. The extent to which Dr. Al Jabri retains any interest in former assets or to which former assets may remain subject to his direct or indirect instructions is thereby relevant.
[42] I agree with the plaintiffs that they are not required to accept Dr. Al Jabri’s position that he has no ownership interest in or control over any assets other than those he has acknowledged in his asset declarations. Examinations would be unnecessary if all deponents were telling the truth and disclosing all assets when subject to a Mareva order, since there would be nothing to test: Trade Capital, supra at para. 37.
[43] Nevertheless, I also agree with Dr. Al Jabri that the scope of questions captured by the plaintiffs’ proposed directions appears overbroad and may well extend beyond examination on the extent of Dr. Al Jabri’s current interests in or control over assets. My difficulty with the orders sought by the plaintiffs is that they presuppose relevance of various matters that cannot fairly be assessed or determined in the abstract. They require specific questions on specific assets.
[44] For example, the fact that Dr. Al Jabri formerly had an interest in an asset does not itself make the nature, value and location of that asset relevant. It may be appropriate at this stage to examine on the timing and circumstances under which a former asset was disposed, and whether Dr. Al Jabri has any continuing interest in or control over that asset despite its transfer, gifting or other disposition. However, in my view, absent some evidence to support that there is likely a continuing interest in or control over a former asset, further inquiry into the nature, location and current value of that asset may cross the line from asset examination into merits examination and tracing. Although not argued before me, I note that, in the context of a motion to compel a further and better affidavit of documents, a moving party must tender evidence that specific documents exist and have not been produced, with evidence simply amounting to intuition, speculation and guesswork being insufficient to justify a production order: Bow Helicopters v. Textron Canada Ltd., [1981] OJ No 2265 (SCJ – Master).
[45] The plaintiffs argue that questions contemplated by this category do not constitute tracing, since tracing involves following an asset to its conclusion or ultimate end. I do not agree. In my view, the dominant aim or purpose of the question asked must be considered. If it predominantly supports a broader tracing exercise, rather than seeking confirmation of the state of Dr. Al Jabri’s current and continuing interests in and control over assets, it is more likely to be beyond the scope of proper cross-examination on the asset declarations. Such an analysis may well vary from asset to asset.
[46] Using an example underscores the point. The plaintiffs seek a direction that Dr. Al Jabri disclose the ownership structure for any former asset and identify any individual or entity involved in managing the asset. While I cannot say that the ownership structure for a former asset and identification of the persons managing it will be irrelevant for all assets, I also cannot say in the abstract that it is clearly a proper line of questioning for all former assets. Determining whether the inquiry is intended to identify assets remaining under ownership or control of Dr. A Jabri and thereby properly captured by the Mareva order, or is intended to permit tracing for other purposes (such as seeking relief or recovery from current non-parties, as argued by Dr. Al Jabri to be an aim of some objectionable questions), is a fact-specific exercise. While there is an inherent element of tracing in a “who owns it now” line of questioning, the specific questions posed and context in which they are asked may support legitimate queries about Dr. Al Jabri’s continued interests, or may instead support overbroad or over-reaching aims.
[47] In this particular case, the plaintiffs have undertaken extensive forensic tracing and accounting work. They are well-positioned to ask Dr. Al Jabri about his interests in and/or control (whether direct or indirect) over the entities controlling assets that were previously transferred, gifted or otherwise disposed or those assets in their current form if they have been converted since disposition.
[48] I agree that, if the plaintiffs are not permitted to ask questions about Dr. Al Jabri’s former assets (or interests in assets) in the course of probing the truthfulness, accuracy and completeness of his asset disclosure, the purpose of the Mareva order may well be frustrated. If there has been non-disclosure of a continuing interest in or control over certain assets (irrespective of whether such non-disclosure is intentional or unintentional), those assets could be depleted, transferred or disposed of despite being legally frozen by operation of the Mareva order, but neither the plaintiffs nor the court would know about them. As argued by the plaintiffs, a worldwide Mareva injunction has little utility if the plaintiffs cannot identify the assets that are frozen by the order.
[49] Permitting questions on the nature, value and location of former assets, the circumstances under which they ceased to be owned or controlled by Dr. Al Jabri, and whether he retains any interest in those assets or their successor assets is consistent with the purpose for which the Mareva order was granted: to freeze all of Dr. Al Jabri’s worldwide assets, including those assets not held by him but that are under his control, pending further order. All assets over which Dr. Al Jabri has continued ownership or control or in which he had any interest are expressly captured by the Mareva order.
[50] Nevertheless, the foregoing does not mean that the plaintiffs have carte blanche to ask in detail about every asset that was formerly owned or controlled by Dr. Al Jabri. Inasmuch as there is a distinction between an asset examination and asset tracing, there is also a distinction between testing the evidence and proceeding on the presumption that there has been material non-disclosure in Dr. Al Jabri’s sworn asset declarations. I agree that the method by which the plaintiff approached questions was in some instances overbroad, leading to what appear to be legitimate refusals. I note the following examples:
(a) The plaintiffs asked as series of questions about use of a private banker with HSBC, Sobhi Tabbara, and the role of Mr. Tabbara on behalf of Dr. Al Jabri, particularly in respect of a transfer of USD $6,075,000 to New East (US) Inc. Many of these questions, as framed, seem irrelevant Dr. Al Jabri’s interest in or control over assets.
(b) The plaintiffs asked questions throughout the cross-examination regarding both the source of various funds that appear to have been under Dr. Al Jabri’s control and why funds were being held by certain third parties. In my view, where Dr. Al Jabri obtained assets in which he had an interest or over which he had control, and why such assets were held in certain accounts or with certain third parties, are separate inquiries from whether he has any continued interest in or control over the assets. There may be instances where such questions are relevant to testing the asset declarations, but a clear foundation for relevance would be needed.
(c) Requests were made for production of corporate minute books and share registries for various corporations in which Dr. Al Jabri appears to acknowledge having a continued interest in his asset declarations. Given the broad language of the Mareva order, acknowledged continued interest in the corporations would appear to bring them within the scope of the freezing order, calling into question the need and relevance of minute books and share registries to test the asset disclosure.
[51] I am mindful that I have not been asked by the plaintiffs to make determinations on the relevance of refused questions or propriety of specific refusals. I have not heard argument on the specific questions, which would need to be reviewed in context during a refusals motion. However, in general terms, the above examples assist in illustrating examination topics for which the primary aim does not appear to be testing the asset disclosure or identifying undisclosed assets that are properly captured by the Mareva order. Rather, the primary aim appears to be pursuing evidence on the underlying merits of allegations in the plaintiffs’ claim.
Assets gifted to Mohammed Al Jabri
[52] With respect to questions about the assets subject to the gift deed, the plaintiffs seek an order directing Dr. Al Jabri to:
(a) produce a listing of the nature, value and location of every entity, asset, or interest therein in which Dr. Al Jabri had a direct or indirect interest which Dr. Al Jabri claims was gifted to Mohammed Al Jabri pursuant to the gift deed (whether an interest in a corporate entity, partnership, trust or other asset);
(b) produce the documentation relating to any transfer of assets to Mohammed Al Jabri (including, as appropriate, any gift deed, transfer agreement, share purchase agreement, share register, deed of purchase and sale, treasury direction, and/or wire confirmation); and
(c) answer any question relevant to testing whether Mohammed Al Jabri holds any of the “gifted” assets subject to Dr. Al Jabri's ultimate control and direction (including, for example, whether Dr. Al Jabri continues to have authorization over the bank accounts or assets, continues to provide directions in respect of the property, and continues to enjoy benefits derived from the "gifted' assets).
[53] There is no question that the plaintiffs are entitled to examine on Dr. Al Jabri’s gifting of substantially all of his worldwide assets to his son for no consideration. If nothing else, the plaintiffs must be able to test the legal validity, genuineness, and completeness of the non-arm’s length asset transfer.
[54] Dr. Al Jabri does not take the position that the plaintiffs cannot examine on the gift deed, and has already provided, or undertaken to provide, some of the information outlined above. However, given the breadth of the Mareva order, I am satisfied that the plaintiffs are entitled to full disclosure of all assets and interests purportedly transferred to Mohammed Al Jabri, their value and location at the time of transfer, and documentation supporting transfer of those assets and interests (i.e., documentary support for the transfers actually being effected). I am also satisfied that the plaintiffs are entitled to ask questions about whether Dr. Al Jabri continues to have any direct or indirect control over the gifted assets or retains any beneficial or other interest in them, including whether he continues to enjoy any benefits derived from them.
Assets transferred to others prior to Mareva order
[55] With respect to questions about other assets transferred prior to the date of the Mareva order, the plaintiffs seek an order directing Dr. Al Jabri to:
(a) produce a listing of the nature, value and location of any entity, material asset, or interest therein which Dr. Al Jabri gifted or otherwise transferred to his children and/or any entity controlled by Dr. Al Jabri, any of his children, Jonathan Wainwright (a US attorney who was a director and officer of companies allegedly controlled by Dr. Al Jabri), or Leonard Toenz (a lawyer based in Zurich who was also a director and officer of companies allegedly controlled by Dr. Al Jabri);
(b) produce the documentation relating to any transfer or gift of assets by Dr. Al Jabri to his children and/or any entity controlled by Dr. Al Jabri, any of his children, Jonathan Wainwright, or Leonard Toenz (including, as appropriate, any gift deed, transfer agreement, share purchase agreement, share register, deed of purchase and sale, treasury direction, and wire confirmation); and
(c) answer any question relevant to testing whether any of the gifted or transferred assets subject to Dr. Al Jabri’s ultimate control and direction (including, for example, whether Dr. Al Jabri continues to have authorization over the bank accounts or assets, continues to provide directions in respect of the property, and continues to enjoy benefits derived from the assets).
[56] I see nothing improper in the plaintiffs examining Dr. Al Jabri on whether he transferred his interest in or control over assets to family members or specific individuals of concern involved in or connected to the alleged fraudulent scheme and, if so, which assets, in what amounts, and when and how such transfers were effected. The same is true for whether any interest in assets was gifted. Requesting production of relevant documents supporting the validity of such transfers or gifts is also appropriate. These questions are generally about testing the circumstances under which Dr. Al Jabri says he divested himself of his interest in or control over assets. The earlier discussion regarding assets held prior to the Mareva order is largely applicable to this category of questions as well.
[57] I also see nothing improper in examining Dr. Al Jabri on whether he retains any direct or indirect control over the transferred assets, or any beneficial or other interest in either the assets themselves or the benefits derived from them.
Date for questions on former assets
[58] The plaintiffs argue that the starting point for questions about former assets should be January 1, 2013, which is a date prior to transfers said to have been made by Dr. Al Jabri to the Family Office, Dreams International, and to the New East Companies to facilitate real estate purchases. Alternatively, the plaintiffs argue that they should at least be able to go back to immediately before the asset gifting to Mohammed Al Jabri in June 2017. Dr. Al Jabri’s position is that historic asset holdings are generally not relevant to assessing current assets.
[59] In the statement of claim, transfers of funds from the plaintiffs to Dr. Al Jabri and asset acquisitions by or on behalf of Dr. Al Jabri are pleaded back to early 2013. In the cross-examination, the date of January 1, 2013 was used for requests. However, I was directed to nothing in the record supporting that relevant transactions were, in fact, occurring in early 2013. The documents shown to Dr. Al Jabri during his examination from that time period appear to have been in the plaintiffs’ motion record on the ex parte motion, which is not before me.
[60] I am satisfied regarding the relevance of the state of Dr. Al Jabri’s assets and control of assets, as well as disposition of such assets or their control, from June 2017. However, on the record before me, I cannot determine whether asset inquiries reaching back to January 1, 2013 are genuinely relevant to testing Dr. Al Jabri’s asset disclosure. Although questions about the use of funds in 2013 appear relevant based on the pleadings, and are thereby likely to be relevant for discovery purposes, the scope of the asset examination is narrower than an examination for discovery.
[61] For these reasons, I am not satisfied that it is appropriate at this time to provide a general direction that questions pertaining to Dr. Al Jabri’s asset holdings, interests, and control dating back to January 1, 2013 are relevant for the purposes of the examination contemplated in para. 6 of the Mareva order, although that determination does not foreclose future argument on relevance of refused questions in the pre-June 2017 time period.
Additional Issues
[62] Whether the plaintiffs are entitled to examine on Dr. Al Jabri’s legal fee arrangements is an issue raised in the parties’ facta and briefly in oral argument. Solicitor-client privilege is asserted by Dr. Al Jabri. Privilege issues cannot be determined in the abstract. Disputes over privilege claims are more properly addressed with reference to specific questions refused with argument on the specific claims of solicitor-client (or other) privilege.
[63] Dr. Al Jabri also submitted that he is not the proper party to ask for some of the requested information. Whether another party or person may have relevant information on assets disposed of by Dr. Al Jabri is, in my view, irrelevant. The plaintiffs are entitled to ask Dr. Al Jabri about the circumstances of disposition of his assets within the framework outlined above. This includes questions about the asset gifting to Mohammed Al Jabri.
[64] Whether certain production requests are properly refused on the basis that the documents are available to the plaintiffs through other means, such as the Norwich order, cannot be addressed in the abstract. As with privilege issues, these must be addressed with reference to specific refused questions for specific types of document production sought.
Undue burden
[65] Both in Dr. Al Jabri’s responding factum and in argument, submissions were made regarding the undue burden and unduly onerous nature of some of the production requests and “historic” inquiries made by the plaintiffs. Although I have not been asked to rule on proportionality of such requests, and have not done so, I have no doubt that the exercise inherent in a cross-examination on asset disclosure has been and will be intrusive to Dr. Al Jabri. However, a broad and sweeping Mareva order has been issued. The Mareva order required Dr. Al Jabri to provide “a sworn statement detailing the nature, value, and location of his assets worldwide” (emphasis added). The plaintiffs are entitled to test if the extent of asset details that have been provided is complete. The limits on cross-examination proposed by Dr. Al Jabri would, in my view, unduly curtail the right of examination on Dr. Al Jabri’s assets provided in para. 6 of the Mareva order.
[66] The plaintiffs have given an undertaking for damages, which was accepted as being sufficient by Gilmore J. in her reasons dated January 27, 2021 (para. 33). If this litigation is truly a politically motivated form of witch hunt, as suggested by Dr. Al Jabri, then he will be entitled to compensation for any damages suffered from the intrusion and interference. However, if Dr. Al Jabri did orchestrate the extensive fraudulent scheme alleged by the plaintiffs, and has intentionally failed to comply with his disclosure obligation, failing to permit a fulsome examination on his potential continuing interests in former assets could have the effect of rendering the Mareva order effectively moot. Having been granted by the court, the court must also give effect to it.
Costs
[67] Costs have been agreed in the amount of $15,000, inclusive of disbursements and HST, to the successful party. The plaintiffs and Dr. Al Jabri agreed that, in the event of divided success, costs up to that amount are in my discretion.
[68] The ultimate disposition does represent some divided success. Dr. Al Jabri was unsuccessful insofar as the motion has not been dismissed outright, but the plaintiffs were not successful in obtaining the full scope and specificity of directions they sought. However, in my view, the plaintiffs have been substantially successful. Considering that, in my view, the agreed amount of costs is quite reasonable given the complexity of this motion, the extent of materials before me, the number of lawyers involved, and the evident preparations made in advance of the long motion hearing, the extent of divided success is not such that the plaintiffs’ costs recovery should be reduced.
Disposition
[69] For the foregoing reasons, I accordingly order as follows:
(a) The following topics shall be relevant for the purposes of cross-examination on Dr. Al Jabri’s declaration of assets sworn February 3, 2021 and supplementary declaration of assets sworn February 11, 2021, without prejudice to Dr. Al Jabri’s rights pursuant to Rule 34.12 in respect of any individual question that may be asked:
(i) the nature, value and location of former assets owned, controlled or in which Dr. Al Jabri had any interest prior to the date of the Mareva order at least since June 2017;
(ii) the circumstances under which such former assets ceased to be owned or controlled by Dr. Al Jabri, or under which he ceased to have an interest, including whether such assets were gifted and whether transfers/gifts were arm’s length transactions;
(iii) whether Dr. Al Jabri transferred his interest in or control over assets to specific individuals of concern involved in or connected to the alleged fraudulent scheme and, if so, which assets, in what amounts, and when and how such transfers were effected;
(iv) full disclosure of all assets and interests purportedly transferred by Dr. Al Jabri to Mohammed Al Jabri, their value and location at the time of transfer, and any documentation supporting actual transfer of those assets and interests;
(v) whether Dr. Al Jabri continues to have any direct or indirect control over transferred assets or interests in assets (including those assets gifted to Mohammed Al Jabri), or their successor assets; and
(vi) whether Dr. Al Jabri retains any beneficial or other interest in transferred assets or interests in assets (including those assets gifted to Mohammed Al Jabri), or their successor assets, including whether he continues to enjoy any benefits derived from them.
(b) Dr. Al Jabri shall re-attend to complete his cross-examination within ten (10) days hereof, subject to either a later date being agreed or further court order.
(c) Dr. Al Jabri shall pay costs of this motion to the plaintiffs in the amount of $15,000, inclusive of HST and disbursements.
(d) This order is effective without further formality.
[70] Given the time invested in assessing this motion and since the cross-examination will be completed pursuant to my directions, I proposed seizing myself of any refusals and undertakings motion arising from the cross-examination. Counsel for each of the plaintiffs and Dr. Al Jabri agreed. I am accordingly seizing myself of any such motion, but am not otherwise seized of future motions in this action within the jurisdiction of a master.
MASTER TODD ROBINSON
DATE: May 28, 2021