Court File and Parties

COURT FILE NO.: CV-20-649106 DATE: 2021-09-17

ONTARIO SUPERIOR COURT OF JUSTICE

RE: RACHELLE LONNEBERG, YVONNE MILLS, ALIA EL-MOWAFY, Plaintiffs -and- SIGE ARSENE ONCA (a.k.a. SIGE ARSENE MIERANTSA ONCA, a.k.a. ARSENE MIERANTSA ONCA, a.k.a. SIGE MIERANTSA ONCA, a.k.a ARSENE ONCA, a.k.a. SIGE ONCA, a.k.a. SIGE MIERANTSA, a.k.a. ARSENE MIERANTSA, a.k.a. SIGE ARSENE), ONCA CAPITAL INC, LEADING WAY PERFORMANCE INC, INOVANTAGE INC., PAULINE RADZIKOWSKI, Defendants

BEFORE: F.L. Myers J.

COUNSEL: Tanya Walker and Alana Spira, for the plaintiff Alia El-Mowafy Daniel Rizzi, for the plaintiffs Rachelle Lonneberg, Yvonne Mills Sige Arsene Onca, in person

HEARD: September 14, 2021

ENDORSEMENT

Background

[1] The plaintiffs move to hold Mr. Onca in contempt of court. For the reasons that follow, I find that the plaintiffs have proven beyond a reasonable doubt that Mr. Onca has knowingly violated several orders of the court and that this is a proper case in which to hold him in contempt of court.

[2] Accordingly, an order will issue holding Mr. Onca in contempt of court. Counsel for the plaintiffs are to schedule a case conference on notice to Mr. Onca to schedule a sentencing hearing.

This Litigation

[3] On October 26, 2020, Ramsay J. granted a Mareva injunction prohibiting Mr. Onca and his companies from dissipating or moving their assets. The plaintiffs established to the satisfaction of the judge that Mr. Onca and his companies misappropriated hundrsds of thousands of dollars that he had induced the plaintiffs to send him money for investment purposes.

[4] A very similar case has already advanced through the court on very similar claims against Mr. Onca made by plaintiff H. Morris.

[5] Mr. Onca was initially represented by counsel using funds made available under the Mareva injunction.

[6] On October 30, 2020, the Mareva injunction was continued by order of Schabas J.

[7] On November 17, 2020, just a few weeks after the initial Mareva injunction order was made, the parties settled.

[8] In a written settlement agreement, Mr. Onca and his companies agreed to repay $382,050.24 as claimed due by the plaintiffs.

[9] The parties agreed that the Mareva injunction would continue until Mr. Onca paid the settlement amount. By order dated Nov. 20, 2020, the order was continued by Leiper J. on consent.

[10] On March 5, 2021, Ramsay J. extended the order to May 25, 2021. On May 21, 2021, I extended it to trial or further order.

[11] Unfortunately, all that has happened since November 17, 2021 is that Mr. Onca has failed to perform both his promise to pay and his court ordered obligations. Moreover, as will be seen below, while swearing he has no assets and buying time with promises to pay, he moved substantial amounts of money out of the plaintiffs’ reach. Mr. Onca brought to reality the risk of dissipation feared by Ramsay J. last October.

Non-Disclosure and transfers of assets

[12] Para. 1 of the Mareva injunction granted by Ramsay J. prohibited Mr. Onca and his companies from,

… removing from Ontario or in any way disposing of or diminishing the value of any of their assets wherever located anywhere in the world, whether held in their own name or not, up to a value of $500,000.

[13] Para. 2 of the order prohibited them from “disposing or diminishing the value of, or removing from Ontario” funds held in various listed bank accounts and

“Funds held in any other bank accounts, investment accounts, or other types of accounts, wherever located.

[14] Para. 6 of the order required Mr. Onca and his companies to provide to the plaintiffs within seven calendar days,

…a sworn affidavit listing and describing the nature, value, and location of their assets worldwide, Wrongful refusal to provide this information referred to in paragraph 6 herein is contempt of court and may render the Mareva Defendants liable to be imprisoned, find, or have their assets seized”

[15] The order also required Mr. Onca’s bankers to provide the plaintiffs with information concerning his assets and accounts.

[16] In Justice Ramsay’s order dated March 5, 2021, she once again required Mr Onca to disclose his assets. Para. 1 of the order provides,

THIS COURT ORDERS that the Defendant Mr Onca shall provide an Affidavit of Assets to the Plaintiffs by March 19, 2021.

[17] Mr Onca provided the following affidavit sworn March 18, 2021:

I hereby declare that I Sige Arsene Onca do not have asset on my name. I had bank accounts with TD Bank that were closed due to inactivity and a checking account with Scotia Bank. I do not have any assets, stocks, options on my name or my company names.

[18] Counsel for the plaintiffs immediately followed up with Mr Onca reminding him that in the litigation brought by Ms. Morris, he had sworn under oath in the first quarter of 2020 that he owned two condominiums in the pre-construction phase, an apartment in Paris, stock, and that he had a beneficial interest in a trust in France. He also swore under oath that he had expensive electronic home equipment and that he owned paintings and other art.

[19] Mr Onca has never amended his affidavit.

[20] In response to the Mareva injunction, Questrade, an online brokerage, disclosed account opening forms provided to it by Mr Onca on December 3, 2020. I am satisfied from the common addresses, passport number, telephone numbers, and other identifying characteristics, that these documents were indeed provided by Mr. Onca as sworn.

[21] In his account opening forms, Mr Onca represented to Questrade that his annual income was $250,000, he had total assets worth $1,100,000 and a total estimated net worth of $900,000.

[22] Mr Onca’s account statements showed that he bought $1,200 in stock in March, 2021 and that he withdrew $1,000 from the Questrade account. Mr Onca did not disclose his shares or the account in his affidavit.

[23] In response to the Mareva injunction, The Bank of Nova Scotia disclosed account opening forms provided to it by Mr. Onca in November, 2020. I am satisfied from the common addresses, passport number, telephone numbers, Mr. Ciarabellini’s unchallenged evidence, and other identifying characteristics, that these documents were indeed provided by Mr. Onca as sworn.

[24] Since opening this account just a few weeks after receiving the Mareva injunction, and just days before he signed the settlement agreement, Mr. Onca has moved approximately $265,000 into and out of the account. There currently remains $2,400 in the account. It is not disclosed in Mr Onca’s affidavit

Failure to Prove his Illness

[25] This motion originally came on for hearing on July 27, 2021. A few days earlier, Mr Onca wrote to the court to say that he was in rural Ivory Coast and had taken ill. He therefore could not attend the hearing.

[26] I adjourned the hearing to a scheduling case conference to be held August 13, 2021. As a term of the adjournment I ordered, among other things,

Before the case conference, Mr. Onca shall tell the plaintiffs his precise location and contact details. In addition, he shall provide precise and detailed medical evidence to support his claim to be ill in his letter dated July 27, 2021;

[27] Mr Onca had knowledge of this order as he purported to respond to it. However, he provided no further details of his location or any medical evidence. He offered to provide counsel for the plaintiff a doctor's note but has not done even that.

The Test for Contempt of Court

[28] The plaintiffs bear the burden to prove the elements of contempt of court beyond a reasonable doubt. They must show that the orders on which they rely are clear and unequivocal. They need to show that Mr. Onca had knowledge of the orders. And they need to show that Mr. Onca violated the order intentionally. See: Carey v Laiken, 2015 SCC 17, at paras. 32 to 35.

[29] Mr Onca chose to exercise his right to remain silent and offered no evidence in response to the motion despite being offered several opportunities to do so before and during the hearing. There is no burden on Mr. Onca to say anything. The burden lies completely on the plaintiffs

[30] There is no doubt that Mr. Onca knew of the Mareva injunction as he signed a settlement agreement weeks later which consented to its extension. He knew of the March order reiterating his obligation to provide an affidavit of his assets as he purported to comply with it one day before its deadline. As noted above, he knew of my order dated July 27, 2021 as he purported to comply with it.

[31] All of these orders are clear and unequivocal in expressing in simple declarative terms what Mr Onca was obliged to do and prohibited from doing.

[32] I find that his withdrawal of funds from the undisclosed account at The Bank of Nova Scotia and the undisclosed Questrade account amount to breaches of the Mareva injunction.

[33] I find that Mr. Onca has not provided a sworn affidavit of his assets listing and describing all of his assets as required by the Mareva injunction and the March 5, 2021 order. The one paragraph affidavit provided was patently false in light of the two investment accounts in evidence. Moreover, I infer and accept that Mr Onca has significant other assets as he himself swore in the Morris litigation and told Questrade just a few months ago. The fact that he was living at luxury accommodations in Toronto during the relevant time bolsters these conclusions.

[34] Mr Onca also failed to comply with the July 27, 2021 order requiring him to provide evidence to justify his failure to appear that day.

[35] In violating these orders Mr. Onca has not only committed contempt of court but he has treated the parties and the court with contempt.

[36] Mr Onca has admitted that he owes the plaintiffs the funds that he misappropriated from them. He has repeatedly promised to pay them back and accepted voluntarily his ongoing obligations under the Mareva injunction until he had done so. At the very time that he was agreeing to hold all his assets until he paid, he was moving money out of reach through a new account at The Bank of Nova Scotia. He used the settlement and his consent to extend the Mareva injunction as a stall while he moved money in flagrant breach of the order.

The Imperative to Enforce Mareva Injunctions

[37] On finding a defendant liable for contempt of court, the court is required to adjourn the hearing to determine an appropriate penalty. The plaintiff seeks an order jailing Mr Onca for a time pending his compliance with the court orders.

[38] In 2092280 Ontario Inc. v. Voralto Group Inc., 2018 ONSC 2305, the Divisional Court recognized the need for victims of fraud to have access to pre-trial orders freezing the fraudster’s funds. At para. 28 of Voralto, the Divisional Court wrote:

Fraud is a serious crime which threatens unwitting victims with substantial and often devastating financial losses. The Mareva injunction is an important tool for Plaintiffs to try and recover their losses due to fraud or theft. A requirement to notify the perpetrators of a fraud in advance of an impending Mareva injunction would significantly water-down an important remedy for protecting innocent victims. Judgments for damages cannot reasonably be expected to be affordable or collectable against fraudsters. If funds cannot be frozen in advance, a vital arrow in the civil law’s quiver to address serious fraud will be lost. This is a narrow exception to the general rule against prejudgment execution. It is therefore a remedy that is not readily available. However, where evidence discloses a strong prima facie case that Defendants perpetrated a premeditated, substantial fraudulent scheme against innocent victims, the law’s reluctance to allow prejudgment execution must yield to the more important goal of ensuring that the civil justice system provides a just and enforceable remedy against such serious misconduct.

[39] Today, money can be moved a half a world away at the click of an app. If funds are not frozen and trapped in Canada, the civil law provides no effective remedy for victims of fraud.

[40] For all the same reasons, Mareva injunctions must be rigorously enforced. A fraudster is not likely to be dissuaded from his greed and criminal bent by a piece of paper or a computer screen displaying a fancy red seal. If victims are to be able to obtain the enforceable remedies and compensation that the law promises, the court’s Mareva injunctions freezing assets and requiring asset disclosure must be enforced with the court’s full arsenal of authority and power. Otherwise, Canadians are sheep waiting to be fleeced.

[41] The law is not so feckless.

[42] Mr. Onca is required to comply with all of this court’s orders. Finding him in contempt is the first step to compel him to do so. A sentencing hearing will follow shortly.

Mr. Onca can Purge his Contempt

[43] One reason for separating the liability hearing from the sentencing hearing is to provide Mr. Onca with an opportunity to “purge” his contempt. That means, he has another chance to apologize and to comply with the court orders before he is sentenced.

[44] The principal goal of civil contempt proceedings is to coerce compliance with the court’s orders. If Mr Onca complies before the sentencing hearing, that important issue will be resolved.

[45] Under the terms of the parties’ settlement, if Mr. Onca pays the amount that he owes, the Mareva injunction will be vacated on consent. The contempt will still need to be addressed, but there will not longer be any need for future compliance. That is another alternative for Mr Onca. I wish to be clear however, that Mr Onca’s failure to pay the settlement amount is not an act in contempt of court. Contempt of court is not used to compel payment of money. The acts in contempt of court are Mr. Onca’s failure to disclose his assets fully, his movement of funds despite orders requiring him not to do so, and his failure to prove the reasons for his non-attendance at the contempt hearing on July 27, 2021.

[46] Mr Onca is acting as if the court's orders do not apply to him or that he is above the law. Neither is the case.

[47] The plaintiffs’ counsel are directed to schedule a case conference before me on notice to Mr Onca for the purpose of scheduling a sentencing hearing.

[48] Mr Onca previously had legal counsel and has requested time to retain counsel numerous times throughout this case. He has had many months in which to do so. Now would be a very good time for Mr Onca to retain counsel. He has been found to have committed and to be continuing to commit serious breaches of important orders.

[49] Mr. Onca is facing a very serious risk of being sentenced to a jail term (or terms) until he complies with the court’s orders. He should retain counsel immediately.

[50] In light of his recent travel to Ivory Coast, his brazen movement and non-disclosure of assets, and his access to property and money in France, I agree with the plaintiffs’ counsel that Mr. Onca is a flight risk. Pending sentencing, Mr. Onca should be required to provide his original passports and all original governmental travel documents to counsel for the plaintiffs. The plaintiffs’ counsel shall retain a law firm in Vancouver as their agent and advise Mr. Onca and the Court of counsel’s identify and address. Mr. Onca is required and, within 24 hours of being advised by email of counsel’s name and address, Mr. Onca shall go to the counsel’s office during business hours and give to the counsel all of his original passports and all original governmental travel documents from any and all countries. Counsel is to hold Mr. Onca’s documents for safekeeping pending further order of the court.

[51] If Mr. Onca does not comply with this order, the court will consider an application by the plaintiffs for the issuance of a warrant for Mr. Onca’s immediate arrest under Rule 60.11 (4) without further notice to Mr. Onca.

[52] Costs are reserved to the sentencing hearing.

F.L. Myers J.

Date: September 17, 2021