Court File and Parties

COURT FILE NO.: CV-22-00683894-0000

DATE: 2022-11-30

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ALBERT CARBONE and CATHY HORVATH, Plaintiffs

– and –

SALVATORE BOCCIA, ROSANNA BOCCIA, 215 HOLDING CORP., JANE DOE, JOHN DOE, and DOE CORP, Defendants

BEFORE: Justice E.M. Morgan

COUNSEL: Helen Richards and Alisha Kapur, for the Plaintiffs Ewa Krajewska and Katrina Crocker, for the Defendant, Rosanna Boccia Salvatore Boccia, in person

HEARD: November 21, 2022

INJUNCTION MOTION

[1] The Plaintiffs seek a Mareva injunction and a Norwich Order against the Defendants, whom they alleged have perpetrated fraud and misappropriated their life savings by deceiving the Plaintiffs into lending them money for a business that they did not own or control.

[2] The Defendants acknowledge that they borrowed money from the Plaintiffs. The evidence in the record indicates that the funds have disappeared without being accounted for.

[3] In early 2021, the Plaintiffs, who are retirees, were introduced to the Defendant, Salvatore Boccia, who was seeking investors for his cannabis business, Sustainable Growth Strategic Capital Corp. (“Sustainable”). Mr. Boccia explained that Sustainable was producing creams, oils, and other cannabis products for pain relief. He told the Plaintiffs that Sustainable was owned by another company, 215 Holding Corp. (“215 Hold Co.”). The President, Secretary, and sole director of 215 Hold Co. is Mr. Boccia’s mother, the Defendant, Rosanna Boccia.

[4] In February and March of 2021, Mr. Boccia took a number of further steps to convince the Plaintiffs of the legitimacy of Sustainable and its operations. These included: a) producing documents, such as a cannabis license issued by Health Canada and a contract to sell product to a supposed veterans organization in Nova Scotia), b) taking one of the Plaintiffs on a tour of a facility in North York which Mr. Boccia claimed was being rented by Sustainable; during this time, Mr. Boccia showed off some equipment that he said belonged to Sustainable and introduced the male Plaintiff to a man who was described as a leading chemist working for Sustainable, and c) taking one of the Plaintiffs on a tour of a facility in Scarborough which was described as Sustainable’s newest production facility.

[5] Based on these representations, the Plaintiffs were persuaded to invest with the Defendants. They provided Mr. Boccia a cheque in the amount of $60,000 dated February 12, 2021, and another cheque in the amount of 290,000 dated March 21, 2021. Both cheques were payable to 215 Hold Co. In return, 215 Hold Co. and the Plaintiffs entered into a Stock Option Agreement dated March 16 2021 in which the Plaintiffs obtained the right to purchase 10% of the shares of 215 Hold Co. in exchange for the $350,000 they had just paid.

[6] The Plaintiffs subsequently made two more loans to 215 Hold Co. and/or Sustainable: $175,000 on March 23, 2021 and $250,000 on May 2, 2021. Mr. Boccia assured the Plaintiffs that these two loans would be repaid by the end of May 2021.

[7] It has become apparent that Sustainable was never operating out of the facilities that Mr. Boccia showed to the Plaintiffs. Moreover, 215 Hold Co. never owned Sustainable; rather, a company called Agra Ventures Inc. purchased Sustainable in March 2020. It then sub-let Sustainable’s assets and its Health Canada cannabis license to an unrelated company. Accordingly, 215 Hold Co., Mr. Boccia, and Ms. Boccia never had the authority to grant Sustainable stock or stock options to the Plaintiffs. In addition, the purchase order from the veterans association in Nova Scotia turned out to be fake.

[8] Despite repeated requests, none of the funds have ever been returned to the Plaintiffs, nor have they been accounted for in any way. The Plaintiffs have brought an action in fraud, fraudulent misrepresentation, conversion, and unjust enrichment against Mr. Boccia, Ms. Boccia, 215 Hold Co. and other currently unidentifiable actors who were involved in the scheme.

[9] In support of their request for a Mareva injunction, the Plaintiffs have produced a record containing strong prima facie evidence for their claim. The Plaintiffs have also established that there is a serious risk that Defendants are likely to dissipate their assets.

[10] As explained in Noreast Electronics Co. Ltd. v Danis, 2018 ONSC 879, at para 37, “To obtain a Mareva injunction, a court must find that the defendant might otherwise dispose of or dissipate their assets, or remove them from the jurisdiction. In other words, unless the order is issued, the applicant may lose any ability to ever execute an eventual judgment. This is again a form of irreparable harm.”

[11] Along the same lines, in OPFFA v. Atkinson, 2019 ONSC 3877, at para 19, the court reasoned that both irreparable harm and balance of convenience can be determined in light of a finding that there is a serious risk the responding party will dissipate assets. Here, there is a real risk that the Plaintiffs will forever lose $775,000 if an injunction freezing the Defendants’ accounts and assets is not granted.

[12] In an observation relevant to the current circumstances, Justice Perell stated in Neville v. Sovereign Management Group Corp., 2022 ONSC 3466, at para 31, that, “The risk of removal or dissipation of assets can be established by inference and the defendant’s prior fraudulent activities and improper conduct and the circumstances of the fraud itself including concealment, deception, evasion, and clandestine behaviour may support an inference that the defendant will remove or dispose of property.”

[13] Mr. Boccia appeared in person at the hearing before me but filed no materials in response to the record put forward by the Plaintiffs, despite having ample time to do so. He indicated that he does not have money for a lawyer to represent him in this proceeding, but he has not explained where the Plaintiffs’ money has gone. His only explanation at the hearing was to relay a fantasy-like tale about having bought equipment with the Plaintiffs’ money and how he was about to get the money back when another associate of his disposed of the equipment to someone with a possible criminal background, but that he now has an unnamed person helping him to finance a re-purchase of it. In other words, nothing that Mr. Boccia says, even when addressing the court, makes enough sense for anyone to believe him.

[14] Ms. Boccia is represented by counsel. Her position is that while she is the sole director of 215 Hold Co. and signed documents given to her by her son, Mr. Boccia, she did not really know what was going on. That said, she has not removed herself from her corporate position and, in addition, the record shows that she received some of the funds personally from 215 Hold Co. She has not brought a cross-claim against Mr. Boccia, although her entire position is that “others” in the company – i.e. Mr. Boccia, presumably – committed the fraud. The Statement of Claim pleads that Ms. Boccia is a joint tortfeasor, along with her son, Mr. Boccia, and her company, 215 Hold Co.

[15] Ms. Boccia’s professed ignorance of the scheme that she facilitated is not a response that assists her in a motion such as the one before me. A fraud has allegedly been perpetrated by a company for which she signs and through accounts for which she is the signing officer. If anyone has information that will assist the Plaintiffs and the court in tracing the funds and piecing together the fraudulent scheme, she does; and that is the case even if she does not realize it.

[16] I make no finding here with respect to Ms Boccia’s credibility. But I do find that she is at best Mr. Boccia’s unthinking agent and will do his bidding without hesitation. Her accounts and records are bound to be enlightening. A Mareva injunction is to be issued as against Ms. Boccia and 215 Hold Co. as well as against Mr. Boccia.

[17] In addition to a Mareva injunction, the Plaintiffs also seek a Norwich Order requiring the Defendants to produce documents from the financial institutions that the record shows they have used: Royal Bank of Canada (“RBC”), the Bank of Montreal (“BMO”), Meridian Credit Union (“Meridian”), and any other financial institutions subsequently identified as being used by them. This is necessary in order to trace the funds obtained by the Defendants from the Plaintiffs and to identify others involved in the scheme. This need to identify and trace is, under the circumstances, a “legitimate objective” on which a Norwhich Order can be based: GEA Group AG v. Ventra Group Co., 2009 ONCA 619, at paras 75, 91.

[18] In general, in assessing a request for a Norwich Order, the court will consider:

a) whether the Plaintiff has provided evidence sufficient to raise a valid, bona fide or reasonable claim,

b) whether the Plaintiff has established a relationship with the third party from whom the information is sought such that it establishes that the third party is somehow involved in the acts,

c) whether the third party is the only practicable source of the information,

d) whether the third party can be indemnified for costs to which the third party may be exposed because of the disclosure, and

(e) whether the interest of justice favour the granting of the Order.

Isofoton S.A. v. Toronto Dominion Bank, 2007 CarswellOnt 2741, at para 40 (SCJ).

[19] Each of these factors is present in the case before me. The Plaintiffs have adduced evidence sufficient to raise a valid, bona fide, or reasonable claim against Mr. Boccia and Ms. Boccia. The threshold for this is rather low; the Plaintiff must only show that the claim is not frivolous or vexatious. In establishing what is really a strong prima facia case, that threshold is easily met: Ibid., at paras 46-47.

[20] Further, Mr. Boccia has conceded that he has banked at BMO, while Ms. Boccia has conceded that she opened an account at RBC (though she could not remember whether it was in 215 Hold Co.’s name or her own name). Ms. Boccia also acknowledged that she conducts her personal banking at Meridian. This information, together with the underlying facts of the fraud contained in the record, is sufficient to establish a relationship with these banks. Courts have previously determined that “…a bank in receipt of funds allegedly procured by a fraud on the applicant is a typical "innocently involved" third party against which a Norwich Order will be sought…” Ibid., at para 50.

[21] Moreover, the Defendants have refused to provide the requested bank records. As such, the banks may not be the only source of information relevant to the Plaintiffs’ claim, but in the circumstances, they are the only practicable source of information: Ibid., at para 52. This finding, together with the fact that the Plaintiffs have submitted an undertaking as to damages, establishes grounds for the Order sought.

[22] The Plaintiffs shall have a Mareva injunction and a Norwich order, as set out in the draft Order submitted by Plaintiffs’ counsel and appended as Schedule ‘A’ hereto.

[23] The parties may make written submissions on costs. I would ask counsel for the Plaintiffs to send brief written submissions by email to my assistant within two weeks of the date hereof, and for Mr. Boccia and counsel for Ms. Boccia and 250 Hold Co. to send equally brief submissions by email to my assistant within two weeks thereafter.

Date: November 30, 2022 Morgan J.

SCHEDULE ‘A’

Court File No. CV-22-00683894-0000

ONTARIO SUPERIOR COURT OF JUSTICE

THE HONOURABLE JUSTICE

MONDAY, THE 21st DAY OF NOVEMBER, 2022

B E T W E E N:

ALBERT CARBONE and CATHY HORVATH Plaintiffs

and

SALVATORE BOCCIA, ROSANNA BOCCIA, 215 HOLDING CORP., JANE DOE, JOHN and DOE CORP Defendants

ORDER

THIS MOTION, made by the Plaintiffs on notice, for a Mareva injunction and Norwich order, was heard this day by video conference.

ON READING the Motion Record, the Responding Record, the Reply Record, and the Supplementary Responding Record and on hearing the submissions of the lawyers for the Plaintiffs, lawyers for Rosanna Boccia and 215 Holding Corp., and of Salvatore Boccia for himself:

1. THIS COURT ORDERS that the defendants, Salvatore Boccia, Rosanna Boccia, and/or 215 Holding Corp., not sell, transfer, or otherwise dispose of any assets, including but not limited to, money, investments, cars, or houses, held in their name, whether solely or jointly, or on their behalf, until such further Order of this Court.

2. THIS COURT ORDERS that any person, bank, trust company, credit union, other financial institution, account firm, brokerage and investment house, or insurance company having knowledge of this order must not permit withdrawals, transfers, or payments out from accounts held by or on behalf of the defendants, Salvatore Boccia, Rosanna Boccia, and/or 215 Holding Corp., whether those accounts are held solely or jointly, until such further Order of this Court, subject to the following terms:

(a) Salvatore Boccia may withdraw up to $10,000 per month for legal fees and $1000 per month for living expenses;

(b) Rosanna Boccia may withdraw up to $10,000 per month for legal fees and $2000 per month for living expenses.

3. THIS COURT ORDERS that the defendants, Salvatore Boccia, Rosanna Boccia, and 215 Holding Corp., each provide the plaintiffs with an affidavit listing all of their assets within seven days of this Order and submit to an examination under oath on their affidavits within thirty days.

4. THIS COURT ORDERS that any person, any bank, trust company, credit union, other financial institution, account firm, brokerage and investment house, or insurance company having knowledge of this order must forthwith provide to plaintiffs’ counsel particulars of any and all bank accounts or other accounts held by the defendants, Salvatore Boccia and/or Rosanna Boccia.

5. THIS COURT ORDERS that any bank, trust company, credit union, other financial institution, account firm, brokerage and investment house, or insurance company must provide to plaintiffs’ counsel copies of bank statements, cheques, deposit slips, and other records, as the plaintiffs may require, in respect of any cheques or bank drafts deposited by or on behalf of the defendants, Salvatore Boccia and Rosanna Boccia, and/or in respect of any bank accounts or other accounts held by or on behalf of the defendants, Salvatore Boccia and Rosanna Boccia, whether those accounts are held solely or jointly, from February 2021 until the date of trial.

6. THIS COURT ORDERS that the plaintiffs will be responsible for costs associated with a non-party providing documents as required by paragraphs 4 and 5 of this Order, without prejudice to their ability to seek reimbursement for any amounts paid as costs from the defendants in the future.

7. THIS COURT ORDERS that the defendants are jointly and severally liable for the costs of the plaintiffs in the amount of and those costs are to be paid forthwith.

____________________________________ (Signature of judge, officer or registrar)