Court File and Parties

Court File No.: CV-22-2757
Date: 2025-04-07
Court: Superior Court of Justice - Ontario

Between:
Slave Paunovski, Plaintiff
and
Danny Risteski, Mara Risteski, Donco Investments Ltd. and John Doe, Defendants

Before: S. Mathai

Counsel:
Justin Anisman, Counsel for the Plaintiff
Fabian Otto, Counsel for the Defendants

Heard: 2025-04-02

Endorsement

Introduction

[1] The plaintiff brings an ex parte motion seeking a Mareva injunction against the defendants. Regrettably, due to administrative inadvertence, the motion was heard ex parte but with submissions from counsel for the defendants. What follows below is a summary of the events that led to the motion being heard in such a manner.

[2] While vetting the short motions list, I was advised by counsel for the defendants, Mr. Otto, that he received a Case Center notification regarding that day’s appearance but without any further information. Counsel for the plaintiff, Mr. Anisman, advised that the appearance was in respect of a Mareva injunction he was seeking on an ex parte basis. Mr. Anisman was unsure how it was that Mr. Otto received notice of the appearance and asked for an order prohibiting Mr. Otto from advising the defendants about the nature of the motion.

[3] Considering this unusual circumstance, and to prevent rendering the motion moot, I ordered Mr. Otto not to communicate the nature of the motion to the defendants and asked that the matter return to me later in the day so that I could hear submissions on how to address this issue.

[4] Upon its return, I received submissions and ultimately determined that I would grant an Interim Interim Mareva injunction on terms that were far narrower than those sought by the plaintiff in their draft order. Specifically, the order applied only to the defendants’ bank accounts and permitted the defendants to access funds for ordinary business and living expenses without prior notice and approval.

[5] Once the wording of the Interim Interim Order was finalized, I released Mr. Otto from my order prohibiting him from communicating with the defendants. To be clear, Mr. Otto did not consent to the order as he was prohibited from seeking instructions from his clients.

[6] After addressing that issue, I ordered that the ex parte motion proceed. Mr. Anisman asked that Mr. Otto only be permitted to observe the motion, without making submissions. I did not view this approach to be practical and decided it best to treat the motion as ex parte but with permission for Mr. Otto to make submissions.

[7] I advised counsel that I would release a decision on the interim motion by Friday April 4, 2025. Regrettably, given my own schedule and the size and state of the materials, I notified the parties that I would release my decision by noon on Monday, April 7, 2025.

[8] For the reasons detailed below, I grant the motion against Danny Risteski and Mara Risteski, and dismiss the motion against Donco Investments Ltd.

A. Summary of Evidence

(i) Pleadings

[9] The action was first commenced in August 2022 when the plaintiff was self-represented. Upon retaining counsel, the plaintiff filed a Fresh as Amended Statement of Claim which seeks, amongst other things, damages in the amount of $359,492.90 as against the defendants. The individual defendants, Danny Risteski (“Mr. Risteski”) and Mara Risteski (“Ms. Risteski”) are married (collectively, “Risteskis”). The corporate defendant, Donco Investments Ltd. (“Donco”), is incorporated in Ontario and its sole officer and director is Ms. Risteski.

[10] The claim alleges that Mr. Risteski induced the plaintiff to invest more than $350,000 in what turned out to be a fraudulent investment scheme. Overall, the plaintiff alleges that he was induced to invest his life savings with Mr. Risteski because: (a) the two were cousins and enjoyed a close personal relationship; (b) Mr. Risteski presented himself as a successful business man; (c) Mr. Risteski told the plaintiff that while he could not guarantee an exact return on investment, the return would be a “good amount”; (d) despite the previous representation, Mr. Risteski advised the plaintiff that the expected return on a $200,000 investment would be $1,000,000; and (e) the investment was “risk free” because Mr. Risteski would return the plaintiff’s money if the investment failed.

[11] Based on these representations, the plaintiff alleges that he withdrew $200,000 from a line of credit and delivered the funds to Mr. Risteski. The funds were deposited into the Risteskis’ joint account. The plaintiff alleges that these funds were then transferred out of the joint account into unknown accounts.

[12] From the end of 2015 to February 2021, the plaintiff alleges that Mr. Risteski made ongoing representations on the safety of the initial investment and that the return on the investment would be more than the interest that the plaintiff was paying on his line of credit. Based on these additional representations, the plaintiff invested an additional $159,492.90 with Mr. Risteski. Again, the funds were deposited in the Risteskis’ joint account.

[13] At the end of 2021, the plaintiff became concerned about his investments. To assuage his concerns, he alleges that he and Mr. Risteski agreed to a promissory note, dated March 2, 2022, which required the defendant to repay the plaintiff $330,000 by May 31, 2022.

[14] The plaintiff pleads the following causes of actions as against Mr. Risteski: fraud, breach of contract, breach of fiduciary duty, fraudulent misrepresentation, and unjust enrichment.

[15] With respect to Ms. Risteski and Donco, the claim alleges that these defendants knowingly assisted Mr. Risteski in his fraudulent endeavours and were in knowing receipt of the plaintiff’s funds. The claim also alleges that the defendants collectively engaged in a conspiracy to misappropriate or convert the plaintiff’s funds.

[16] The defendants’ Statement of Defence admits that the plaintiff advanced funds to Mr. Risteski to be invested outside of Canada. The defence also admits that these investments did not result in “quick profits” and that the plaintiff’s funds were “re-invested” into more profitable investment vehicles. The defendants deny that Ms. Risteski and Donco had any involvement with the plaintiff’s investments and deny executing a promissory note. The defendants plead that Mr. Risteski agreed to return any available money to the plaintiff during a July 2022 meeting.

(ii) Procedural History

[17] In seeking the Mareva injunction, the plaintiff alleges that the defendants have concealed relevant documents, making it otherwise impossible to trace his investment funds. The plaintiff also alleges that the defendants have breached three court orders with respect to their discovery obligations. Because of these allegations, it is necessary to briefly review the procedural history of this matter.

[18] On January 6, 2023, R.S.J. Edwards ordered a timetable that required the exchange of affidavit of documents on or before January 20, 2023, and that examinations for discovery were to be completed before April 30, 2023. On the record before me, it appears that the defendants did not comply with the court ordered timetable in two ways. First, the defendants only served an unsworn affidavit of documents from Mr. Risteski. The defendants claimed that Ms. Risteski and Donco had no documents in its power, possession, or control. Second, the defendants failed to attend at a scheduled examination for discovery on April 17, 2023 (a certificate of non-attendance was obtained). During this time, the plaintiff was self-represented.

[19] On March 28, 2024, the parties appeared before Fraser J. for a case conference. The plaintiff was now represented by Mr. Anisman. On the consent of the parties, Fraser J. ordered the parties to deliver sworn affidavits of documents and Schedule “A” productions by April 29, 2024, and to attend examinations for discovery by June 14, 2024. The defendants served unsworn affidavits some time after April 29, 2024. The plaintiff argued that the unsworn affidavits were deficient and brought a motion to compel a further and better affidavit of documents.

[20] That motion was heard before A.J. Jolly on February 5, 2025. A few days before the hearing of the motion, the defendant, Mr. Risteski, served his sworn affidavits of documents. After the hearing of the motion, A.J. Jolly ordered the following as against the individual defendants: (a) the delivery of a further and better affidavit of documents by March 7, 2025; (b) attendance at examinations for discovery on or before April 7, 2025; and (c) payment of costs on a substantial indemnity basis in the all-inclusive amount of $6,000.00. In her reasons, A.J. Jolly found as follows:

Despite admitting receiving the plaintiff’s money and despite pleading that Danny invested the plaintiff's money in various investments, they have produced no documents about the investments, what they were, what the terms were, where the funds went, etc. All they have produced are heavily redacted bank statements with a few withdrawals to MoneyMart and a few bank wire transfers.

Before bringing this motion, the plaintiff advised the defendants that their affidavits of documents were missing any documents which address the issues of the money received from the plaintiff, the use the money was put to; the alleged written representations made by the defendants about the investments; the corporate and financial records of the corporate defendant; details of the alleged project the plaintiff was investing In [sic]; where the money was deposited after it was allegedly transferred through Moneymart/Moneygram/etc. and all communications between the parties in 2021 and 2022.

I am advised that the defendants promised to rectify these issues. They were served with the plaintiff's motion record in July 2024. They did not respond until five days before the motion when Danny and Mara each served an affidavit adding 13 new documents, each of which is only an entry showing a payment of euros. It does not disclose to whom the funds were paid. There are no accompanying documents to support the reason for the payment.

The defendants have sworn that they have no documents about any of the issues set out in paragraph 4, above. This is simply not credible. The defendants ask the court to believe that [they] sent the plaintiffs funds to third parties without a shred of paper. If that turns out to be true, they will likely have larger issues to address in this litigation. While I accept there needs to be "some evidence" that a document exists before it should be ordered produced, the pleadings themselves attest to the fact that the defendants were to invest the plaintiff's funds, that they did invest the plaintiff’s money in "investments", that the funds were moved to different "investments", that they had information about the returns and concluded that they did not "result in quick profits". Even in respect of what was produced, the defendants did not produce the bank statements for the period covering the plaintiff’s investment, i.e. 23 December 2015, to date. They did not list any of the bank accounts in schedule C, so presumably they all remain available and in their power, possession or control.

The court need not accept a blanket denial of documents where they so obviously should exist and where they are explicitly or implicitly referenced in the pleadings.

(See A.J. Jolly’s endorsement, dated February 5, 2025, at paras. 3-7).

[21] The defendants delivered supplementary affidavits of documents on March 7, 2025. The plaintiff alleges that the supplementary affidavits are deficient and fail to include: (a) banking records prior to July 1, 2016 (as of July, 2016, there is no trace of the initial investment funds); (b) banking records to show the deposit, movement or current whereabouts of the initial investment funds; and (c) banking records after August 2022, which would show what the defendants did with the funds obtained from the sale of the Greenwood property (transaction described below). With respect to this last category of documents, it is unclear whether A.J. Jolly’s order applied to banking records that are unrelated to the plaintiff’s investment funds.

(iii) The Sale of 1025 Greenwood Avenue (“Property”)

[22] On January 16, 2025, the Risteskis sold the property for $1,060,000. A charge had been registered on the property in the amount of $880,000, which was discharged on February 21, 2025. On the property’s transfer documents, the Risteskis’ address is listed as their son’s address in Markham, Ontario. The son’s residence was purchased on January 31, 2025, for $1,531,816. The plaintiff alleges that the Risteskis purchased the Markham property for their son using the proceeds from the sale of the property.

[23] During oral argument, Mr. Otto advised that the proceeds from the sale of the property were used to discharge an outstanding mortgage in the amount of $849,000.52 and to pay off a $94,800.06 loan. After paying these debts, the Risteskis were left with $32,733.21. Mr. Otto also advised that the Risteskis’ son purchased the Markham property with his own funds. While I have no doubt about the sincerity of Mr. Otto’s submission, it is not evidence.

B. Analysis and Findings

(i) Governing Legal Principles

[24] A Mareva injunction is an extraordinary remedy as it is an exception to the general principle that there should not be execution before judgment. As a result, Mareva injunctions are more onerous than that required for granting injunctive relief generally (see Laliberte v. Monteith, 2018 ONSC 7032, para 32; and Bradley J. Grant Investments Inc. v. Nestig Inc., 2023 ONSC 4373, para 37). A Mareva injunction should be granted sparingly and only in the clearest of cases.

[25] The factors to be considered on an ex parte Mareva injunction are well established:

a. the plaintiff must make full and frank disclosure of all material matters within his or her knowledge;
b. the plaintiff must give particulars of the claim against the defendant, stating the grounds of the claim and the amount thereof, and the points that could fairly be made against it by the defendant, and demonstrate that it has a strong prima facie case;
c. the plaintiff must give grounds for believing that the defendant has assets in the jurisdiction;
d. the plaintiff must give grounds for believing that there is a real risk of the assets being removed out of the jurisdiction, or disposed of within the jurisdiction or otherwise dealt with so that the plaintiff would be unable to satisfy a judgment awarded to him or her; and
e. the plaintiff must give an undertaking as to damages.

(See Sibley & Associates LP v. Ross, 2011 ONSC 2951, para 11; Sherif Gerges Pharmacy Professional Corporation et al. v. Niam Pharmaceuticals Inc. et al., 2025 ONSC 970, para 16; Aetna Financial Services Ltd. v. Feigelman, [1985] 1 SCR 2).

(a) Full and Frank Disclosure

[26] The Ontario Court of Appeal described the basic obligation of full and frank disclosure as follows:

There is no necessity for citation of any authority to state the obvious that the plaintiff must, in securing ex parte interim injunction, make full and frank disclosure of the relevant facts, including facts which may explain the defendant's position if known to the plaintiff. If there is less than this full and accurate disclosure in a material way or if there is a misleading of the court on material facts in the original application, the court will not exercise its discretion in favour of the plaintiff and continue the injunction.

(Chitel et al. v. Rothbart et al., para 18)

[27] The full and frank disclosure principle is codified in Rule 39.01(6) of the Rules of Civil Procedure, RRO 1990, Reg 194, which provides:

Where a motion or application is made without notice, the moving party shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.

[28] Material facts are those of which the court must be made aware in arriving at a decision, a non-disclosure of which may affect the outcome of the motion. Mere imperfections in an affidavit or failure to disclose inconsequential facts will not be fatal to a motion for an ex parte order (see Chicago Title Insurance Company v. Nova Diamonds Inc. et al., 2023 ONSC 6971, para 35; Hazelton Homes Corporation v. Mehta, 2020 ONSC 849, para 21; Two-Tyme Recycling Inc. v. Woods, [2009] O.J. No. 4894 (Ont. S.C.), para 21; United States v. Friedland, [1996] O.J. No. 4399 (Ont. Gen. Div.), paras 27-28).

[29] In oral submissions, Mr. Otto pointed to omissions in the plaintiff’s motion materials. Mr. Otto’s submissions were based on his limited understanding of the record as he did not have access to the Case Center bundle for the motion. Specifically, Mr. Otto argues that full and frank disclosure was not satisfied as the plaintiff failed to provide the court with the following documents and information: (a) the plaintiff’s affidavit of documents; (b) a copy of Mr. Risteski’s affidavit, sworn March 7, 2025, that was referenced in Schedule “C” of his supplementary affidavit of documents; and (c) the fact that the plaintiff sent money to a third-party in North Macedonia and that this is the same person that Mr. Risteski sent money to.

[30] Subject to one caveat, that being the omission of the March 7, 2025, affidavit referenced in Mr. Risteski’s supplementary affidavit of documents, it is not clear how the omitted documents and information have any bearing on the requirements for a Mareva injunction.

[31] As noted above, the plaintiff alleges that the defendants have not complied with A.J. Jolly’s February 5, 2025, order and rely upon that breach in support of this motion. The March 7, 2025, affidavit may explain why banking records that date back to the first investment (i.e. 2015 banking records) were not produced. This information is material to the motion and could impact my assessment of this allegation. I will have more to say on this later.

[32] In oral submissions, Mr. Anisman advised that the March 7, 2025, affidavit was mistakenly omitted. I have no reason to doubt him. The plaintiff’s motion record includes Mr. Risteski’s supplementary affidavit of documents which references the missing affidavit. If the plaintiff was trying to keep the contents of the March 7, 2025, affidavit from the court, then it would make little sense to have included the supplementary affidavit of documents in the motion record.

[33] In light of the above, I am satisfied that the plaintiff has made out the full and frank disclosure requirement.

(b) Strength of the Plaintiff’s Claim

[34] A strong prima facie case is one that will probably prevail at trial or is likely to succeed at trial (see Neville v. Sovereign Management Group Corp., 2022 ONSC 3466, para 33; 1910878 Ontario Inc. v. 2551204 Ontario Inc., 2020 ONSC 3415, para 15).

[35] This is a motion based on limited evidence. The parties exchanged documentary production but examinations for discovery have not been conducted nor has the plaintiff been cross-examined on his affidavit. Despite these limitations, my task is to make findings on the current state of the evidence.

[36] Based on the record before me, I am satisfied that the plaintiff has a strong prima facie case against Mr. Risteski on the fraud claim. I only focus on this cause of action as it is the primary claim, and its success alone would entitle the plaintiff to the damages he seeks.

[37] Before detailing my findings, I feel obligated to note that the plaintiff’s factum was of little assistance in determining the strength of the plaintiff’s claim. The factum only addresses this issue briefly, simply asserting that the plaintiff’s affidavit sets out the particulars of his claim and the position of the defendants. While I understand that the plaintiff’s materials were drafted in urgency, they were not as helpful as they should have been. I would have expected the plaintiff’s factum to detail the evidence, circumstantial or direct, that the plaintiff is relying upon to satisfy each element of the causes of action he pleads. Regrettably, it did not.

[38] A plaintiff must establish four things to make out a claim in civil fraud: (a) the defendant made a false representation; (b) the defendant had some level of knowledge that the representation was false; (c) the false representation caused the plaintiff to act; and (d) the plaintiff’s actions resulted in a loss (see Bruno Appliance and Furniture v. Hryniak, 2014 SCC 8, para 21).

[39] On the record before me, I am satisfied that the plaintiff is very likely to establish that Mr. Risteski made significant false representations to induce him to invest. In particular, the plaintiff’s affidavit makes it clear that Mr. Risteski was induced to invest because Mr. Risteski falsely presented himself as a successful businessman, that the plaintiff’s investments would be “risk free”, and that the plaintiff would make lots of money. After the initial investment, Mr. Risteski told the plaintiff that the investments were “earning good money” and that they had been reinvested into other projects. Based on these representations, the plaintiff made a further investment in 2021.

[40] On the basis of this record, I am satisfied that the plaintiff will likely succeed in establishing that the defendant had some knowledge that the representations were false. I come to this conclusion in the absence of evidence from Mr. Risteski because: (a) no money was ever returned to the plaintiff (I note that the plaintiff’s affidavit does not explicitly state that no money was paid to the plaintiff, but the parties do not dispute this fact); (b) the defendants’ productions do not provide any insight into how the plaintiff’s funds were invested or where the funds went; and (c) the defendants appear to be reluctant to provide a complete accounting, through Schedule “A” productions, of where the plaintiff’s funds were invested and to whom the money was sent.

[41] On this last point, I return to the effect of the plaintiff’s omission of the March 7, 2025, affidavit. The plaintiff argues that the defendants are in breach of A.J. Jolly’s order and that this breach is circumstantial evidence that supports his allegation of fraud. In the absence of the March 7, 2025, affidavit, I am not prepared to find that the defendants breached A.J. Jolly’s discovery related orders. However, it is clear from A.J. Jolly’s reasons and the record before me, that the defendants have not fully complied with the orders of R.S.J. Edwards and Fraser J. and have taken their time in complying with the Rules of Civil Procedure.

[42] I am also satisfied that the plaintiff will likely succeed at trial in establishing the last two elements of fraud. Those being that in the absence of the representations, the plaintiff would not have invested his money with Mr. Risteski, and that he has suffered a loss of at least $350,000.

[43] The claims against Ms. Risteski and Donco are different from the claims against Mr. Risteski. The plaintiff does not allege fraud directly against Ms. Risteski nor does he claim that she made any representations to induce him to invest. Rather, the central claim against Ms. Risteski and Donco are framed as being knowing receipt of the fraudulent funds.

[44] A recipient of defrauded funds may be liable to return them under the doctrine of knowing receipt where he or she receives the funds for their own benefit, has actual or constructive knowledge of facts which would put a reasonable person on inquiry, but fails to inquire as to the possible fraudulent misappropriation of the funds. Liability for knowing receipt is restitution-based and is concerned with correcting the unjust enrichment of one party to the detriment of another (see Citadel General Assurance Co. v. Lloyds Bank Canada, paras 48-49).

[45] Again, the plaintiff’s factum provides little assistance in evaluating the strength of his claim against Ms. Risteski or Donco. The plaintiff’s affidavit does not state that his funds were deposited into the Risteskis’ joint account even though it is asserted in the factum with no citation and is pleaded in the Fresh as Amended Statement of Claim. That said, it is not contested that the plaintiff deposited approximately $350,000 into the Risteskis’ joint account. Based on the uncontested nature of this assertion, I am satisfied that Ms. Risteski received the funds for her and her husband’s benefit. Based on the quantum received, I find that the plaintiff will likely succeed in establishing that Ms. Risteski should have made inquiries about the deposits. I infer that Ms. Risteski did not make those inquiries because no money was returned to the plaintiff.

[46] On the record before me, I do not find that the plaintiff is likely to succeed in a knowing receipt claim against Donco. There is no evidence that any of the plaintiff’s investments were deposited into Donco’s bank account nor is there any evidence that the Risteskis transferred the plaintiff’s funds to Donco. The only evidence of Donco’s involvement is the plaintiff’s bare assertion, contained in his affidavit, that Mr. Risteski told the plaintiff that the plaintiff’s investments would be made through Donco. This evidence is not enough to establish that Donco was in knowing receipt of fraudulent funds or that it knowingly assisted the fraud. While I appreciate that the litigation is still in the early stages, this does not alleviate the plaintiff from its burden of establishing a strong prima facie case against Donco. It has not. As a result, the plaintiff’s motion for a Mareva order against Donco is dismissed.

[47] Finally, I find that the plaintiff has not established a strong prima facie case in conspiracy. There is no evidence to establish Donco’s or Ms. Risteski’s active involvement in the fraud.

[48] As noted above, my findings are based on the limited record before me. The record will be developed in the fullness of time. The findings I make on this motion may well be different from findings made by another judge that is called upon to review a more complete record that includes the defendants’ evidence.

(c) Assets in the Jurisdiction and Dissipation of Assets

[49] The plaintiff has established that the Risteskis have assets in Ontario, namely two bank accounts. Statements from those two bank accounts are included in the defendants’ Schedule “A” productions.

[50] To satisfy the dissipation of assets element, a plaintiff is not required to adduce direct evidence showing that the defendants are actively dissipating their assets or removing assets from the jurisdiction. A serious risk may be inferred by the surrounding circumstances of the fraud (see 2092280 Ontario Inc. v. Voralto Group Inc., 2018 ONSC 2305 (Div. Ct.), para 23).

[51] I am satisfied that there is a serious risk that the Risteskis’ assets will be removed from the jurisdiction or further dissipated. I make this finding based on the following: (a) the Risteskis sold the property shortly before the hearing before A.J. Jolly. The timing of this sale is suspicious and gives rise to an inference that the Risteskis were concerned that they would soon be required to trace the use of the plaintiff’s funds; (b) the Risteskis have been delinquent in providing sworn affidavits of documents and records dating back to the initial investment in 2015 and did not fully comply with two court orders; (c) the defendants have not satisfied A.J. Jolly’s costs order; (d) the prima facie strength of the fraud claim against Mr. Risteski and the knowing receipt claim against Ms. Risteski; and (e) the Risteskis’ Schedule “A” documents detail numerous money transfers outside of Canada.

(d) Balance of Convenience and Irreparable Harm

[52] I am satisfied that the plaintiff will suffer irreparable harm and that the balance of convenience also favours the plaintiff because of the strong evidence of fraud and knowing receipt. The risk of dissipation of and/or removal of the Risteskis’ assets could render any judgment meaningless.

(e) Undertaking as to Damages

[53] The plaintiff has provided an undertaking as to damages.

C. Conclusion

[54] I grant the plaintiff’s ex parte motion as against the Risteskis and dismiss the motion as against Donco. Given that my order will be limited to a ten-day duration, I am satisfied that any possible harm to the Risteskis is limited.

[55] I have made annotations to the plaintiff’s draft order. Counsel for the plaintiff may incorporate my annotations into an order and send it to my assistant Monica Mayer at monica.mayer@ontario.ca. Once the order is issued and entered, my Interim Interim order will expire.

[56] I am not seized of this matter. The return date for the extension of the ex parte interim order or any other motion may be made to any judge in the Central East region.

S. Mathai
Date: April 7, 2025