CITATION: Alexander v. 5048941 Ontario Inc., 2026 ONSC 2360

COURT FILE NO.: CV-25-00000389-0000

DATE: 20260421

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MARVIN ALEXANDER and RHONDA ALEXANDER

Plaintiffs

– and –

5048941 ONTARIO INC., COLIN ANDREW CAMPBELL, 5048940 ONTARIO LTD., CAMPBELL REAL ESTATE TEAM INC., 16945 LESLIE STREET PROPERTIES INC., EMPIRE REALTY CENTRES INC., 117 WELLINGTON STREET HOLDINGS LTD. and 2855041 ONTARIO CORP.

Defendants

Joshua Valler and Nicolas Guevara-Mann, for the Plaintiff

Gwendolyn Adrian, for the Defendants

HEARD: April 10, 2026

REASONS FOR DECISION

CHARNEY J.:

Introduction

[1] The Plaintiffs, Marvin Alexander and Rhonda Alexander (the “Plaintiffs”), bring this motion on notice for a Mareva Injunction to restrain the Defendants from selling, removing or dissipating any of their assets “in a manner not within the ordinary course of the Defendants’ business”. The proposed injunction will not apply “so long as the total unencumbered value of the Defendants’ assets remains above $1,200,000”.

Facts

[2] On May 20, 2021, the Plaintiffs sold their real estate brokerages in Aurora and Newmarket to the Defendant 5048941 Ontario Inc., which is controlled by the Defendant Colin Campbell. These purchases were made through two share purchase agreements involving the various corporate defendants.

[3] The two share purchases were funded by three sources: a $9,025,000.00 loan from Business Development Bank of Canada (“BDC”) which was secured by a first mortgage over two properties (the “Leslie Street Property” and the “Wellington Street Property”), a vendor take back mortgage (“VTM”) in favour of the Plaintiffs in the amount of $1,200,000.00 which was secured by a second mortgage over the same two properties along with a promissory note, a guarantee, and general security agreements.

[4] Additionally, Mr. Cambell put $1,000,000.00 into the purchase and paid just over an additional $64,000.00 in expenses related to the purchase out of his own funds.

[5] This case relates to the VTM for $1.2 million, which is the only amount still owing to the Plaintiffs. It was for a term of five years, with interest on the principal at a rate of 5% per year, payment of interest only ($5,000 per month) to be made on the first day of each month, commencing on June 30, 2021 until May 31, 2026. Payment of all principal and accrued interest was to be due on June 30, 2026.

[6] The Plaintiffs allege that the Defendants defaulted in several of their obligations under the loan as well as other agreements made pursuant to the loan. The Plaintiffs commenced this action for breach of contract in January 2025. The Defendants issued a Statement of Defence and Counterclaim in March 2025.

[7] There is no dispute that the Defendants have made all interest payments ($5,000 per month) to the Plaintiffs. There is no dispute that the mortgage matures on May 31, 2026 – just over one month from now – and the principal $1.2 million must be paid back by June 30, 2026 – just over two months from now.

[8] The estimated combined value of the Wellington Street Property and the Leslie Street Property “is at least $8,750,0000”. While these properties are also subject to a first mortgage to BDC, the outstanding principal owed to BDC is not in the evidence on this motion. The Defendants’ evidence is that the equity in these properties “is sufficient to cover a significant portion of the secured debt”. The Defendant was not cross-examined.

[9] The Plaintiffs allege that the Defendants defaulted on the loan in several respects:

a. Failing to provide evidence of life insurance policies indicating the Plaintiffs as loss payees;

b. Failing to provide evidence of property insurance policies indicating the Plaintiffs as loss payees;

c. Permitting 117 Wellington Street Holdings Ltd. to fall into tax arrears;

d. Permitting 16945 Leslie Street Properties Inc. to fall into tax arrears;

e. Permitting Empire Realty Centres Inc. to fall into tax arrears;

f. Failing to maintain the first mortgages on 117 Wellington Street East, Aurora and Units 27-29, 16945 Leslie Street, Newmarket in good-standing with the Business Development Bank of Canada (“BDC”), the first mortgagee; and

g. Failing to provide fulsome and timely documentary production as requested.

[10] The Defendants deny that there is any default in the loan agreement, and, in the alternative, any default has been cured and does not merit the imposition of a Mareva Injunction prior to trial.

[11] In particular, the evidence of the Defendants is:

a. The Guarantor’s life insurance is in place. The policy runs until 2065 and is paid to date. The Plaintiffs’ consent is required to change the assignee for the life insurance.

b. The property is fully insured.

c. Any late payment of taxes has been cleared. Specifically, the property tax statement for the Wellington Street Property shows that all 2025 taxes are paid and taxes will not be due until February 2026. The property tax statements for the Leslie Street Property shows all 2025 taxes paid and that taxes will not be due until late February 2026. All HST and all payroll remittance are similarly paid except for a nominal amount of $1,686.87 related to the final remittance of 2025. It was paid on January 14, 2026.

d. BDC has provided a “Tolerance Letter” stating that it intends to tolerate any technical breaches of the Letter of Offer.

[12] The Plaintiffs allege that the Defendants’ brokerage businesses were reporting substantial losses, and that a number of real estate agents have left the brokerage. The business reported a loss of $323,323 in 2024. The Plaintiffs allege that since purchasing the companies from the Plaintiffs, the Defendants have lost over $800,000.

[13] The Plaintiffs are also concerned that Mr. Campbell refinanced his residential property, 27 Thoroughbred Drive, Coldwater in August of 2025 to place a $1,320,000 charge in favour of the Bank of Montreal, replacing the prior $700,000 charge in favour of the Toronto-Dominion Bank. The Plaintiffs argue that Mr. Campbell’s residential property is now encumbered to the point where there is very little, if any, equity remaining.

[14] Mr. Campbell’s affidavit states that he is not divesting himself of any property, but is “invested and investing in the jurisdiction”. He does not provide any details about how he used the funds borrowed from the Bank of Montreal. Counsel for the Plaintiffs ask the Court to draw an adverse inference from this lack of details. I note that Mr. Cambell was not cross-examined on his affidavit. I will not draw an adverse inference against a witness whose evidence was not tested by cross-examination.

[15] The Plaintiffs’ counsel suggested that these mortgage funds may have been used by Mr. Campbell “to unsuccessfully salvage his declining business and hide improper trust account dealings”. Counsel may not speculate as to other uses of these funds without having put those allegations to the Defendant on cross-examination.

Test for Mareva Injunction

[16] In Neville v. Sovereign Management Group Corp., 2022 ONSC 3466, at para. 32, Perell J. summarized the purpose of the Mareva injunction:

A Mareva injunction is an extraordinary remedy because as a general policy of civil procedure, a remedy that allows prejudgment execution against the defendant’s assets is not favoured, but where there is a strong case that the defendant has defrauded the plaintiff the law's reluctance to allow prejudgment execution yields to the more important goal of ensuring that the civil justice system provides a just and enforceable remedy against such serious misconduct.

[17] For a Mareva injunction to be granted, the plaintiff must establish the following:

(1) a strong prima facie case, meaning that the plaintiff will probably prevail or is likely to succeed at trial;

(2) the defendants have assets in the jurisdiction;

(3) there is a serious risk that the defendants will remove or dissipate their assets to avoid judgment;

(4) the plaintiff will suffer irreparable harm if the injunction is not granted;

(5) the balance of convenience favours granting the injunction, in the sense that the harm suffered if the injunction is not granted will exceed the harm that will be suffered if it is allowed; and

(6) the moving party must also give a meaningful undertaking as to damages.

[18] See: Chitel et al. v. Rothbart et al. (1983), 39 O.R. (2d) 513 (C.A.); Sibley & Associates LP v. Ross, 2011 ONSC 2951, at para. 11, Kiosk Design Inc. v. El-Riffaey, 2024 ONSC 2373, at para. 27 and cases cited therein; Li v. Bai et al., 2026 ONSC 1442, at para. 50 and cases cited therein.

[19] A strong prima facie case is one “that will probably prevail at trial or is likely to succeed at trial”: Neville v. Sovereign Management Group Corp., 2022 ONSC 3466, at para. 33.

[20] Mareva injunctions are most frequently granted in cases where the asset being frozen by the interlocutory injunction is the subject matter of the litigation or cases where there is a strong prima facie case of fraud.

[21] To satisfy the dissipation of assets element, the plaintiff must establish, by direct or circumstantial evidence, that the responding party is removing or dissipating assets in an attempt to defeat creditors or avoid judgment (see Ghaeinizadeh v. Ku De Ta Capital Inc., 2010 ONSC 4169, at paras. 51, 66; 10390160 Canada Ltd. et al. v. Casey et al., 2022 ONSC 628, at para. 43; RBC Dexia Investor Services Trust v. Goran Capital Inc., 2016 ONSC 1138, at para. 11(b); and Securitas Technology Canada v. North West Construction, 2023 ONSC 4430, at para. 36). 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.), at para. 23). The Court may infer the risk that assets will be dissipated where the moving parties put forth strong prima facie evidence of fraud: Sibley & Associates, at para. 63.

[22] A Mareva injunction should be issued only if it is shown that the defendant’s purpose is to remove his or her assets from the jurisdiction or dissipate assets in order to avoid judgment: O2 Electronics Inc. v. Sualim, 2014 ONSC 5050, at para. 67. A Mareva injunction is not granted simply to provide the plaintiff with additional security before judgment.

[23] The irreparable harm to the plaintiff is tied to the balance of convenience and the risk that the defendant will remove property or dissipate assets before judgment: OPFFA v. Paul Atkinson et al, 2019 ONSC 3877, at para. 19. “[U]nless the order is issued, the applicant may lose any ability to ever execute an eventual judgment”: Northeast Electronics Co. Ltd. v. Danis, 2018 ONSC 879, at para. 37.

[24] As explained by Mathai J. in Li, at para. 52:

In the context of a Mareva injunction, the first and third elements are intertwined with the fourth and fifth element. Where the plaintiff has a strong prima facie case, their inability to enforce judgment obtained at trial due to the removal or dissipation of assets is the irreparable harm that a Mareva injunction is designed to protect against…Similarly, the balance of convenience will generally favour granting the injunction where the plaintiff has established the first and third elements of the test … [Citations omitted.]

Analysis

[25] In the present case, I will not spend much time on the first step of the analysis: Is there a strong prima facie case, meaning that the Plaintiffs will probably prevail or are likely to succeed at trial?

[26] The reason for this is that the loan matures in just over one month, and there is no dispute that the principal amount of $1.2 million dollars must be repaid in just over two months, by June 30, 2026. As a result, this action – which seeks immediate repayment of the loan - will be moot on June 30, 2026, and this case will never go to trial. The principal amount will have to be repaid by June 30, 2026 whether the Defendants were in prior breach of the loan agreement or not. There is no dispute that the Defendants have made their monthly loan payments on time, and no other damages are claimed in the Statement of Claim.

[27] The real issue on this motion is whether the Plaintiffs have proven that there is a serious risk that the Defendants will remove or dissipate their assets to avoid judgment. In my view, they have not.

[28] In this case, the Plaintiffs made a loan to the Defendants with various security, the most significant being a second mortgage in favour of the Plaintiffs secured against the Defendants properties at 117 Wellington Street and 16945 Leslie Street. It is unusual for a Plaintiff with a loan secured by a mortgage to also claim a Mareva injunction, since the secured property is already available to satisfy the loan if not repaid. This is particularly true when there has been no default in mortgage payments to the mortgagee, as in this case.

[29] In this case, the Plaintiffs are concerned that the equity in the mortgaged properties is not sufficient to cover the value of the loan. The Plaintiffs now want to improve their original agreement and ask the Court to give them additional security by means of a Mareva injunction over the Defendants’ other properties. These other properties include:

a. Colin Campbell’s principal residence, 27 Thoroughbred Drive, Coldwater;

b. 121 Rush Road, Aurora;

c. 132 Kirkvalley Crescent, Aurora;

d. 15 Albany Street, Collingwood; and

e. 60 Beechwood Crescent, East Gwillimbury.

[30] There is no evidence that the Defendants are attempting to remove any assets from the jurisdiction, and apart from the increased mortgage on Mr. Campbell’s principal residence, there is no evidence that the Defendants have made any attempt to dissipate assets. Even the increased mortgage on the principal residence has been explained by Mr. Campbell in his affidavit, which was not cross-examined. The principal residence was not part of the security pledged to the Plaintiffs in the May 2021 loan agreement, and Mr. Campbell remains free to use, mortgage or sell that property without restriction. The Defendants are still in business, reside in Ontario, and continue to operate in Ontario.

[31] Mr. Campbell acknowledges that his business has been declining recently but explains that this is a result of the current downturn in the real estate market. In the absence of evidence of fraud, a Mareva injunction is not available simply because the Defendants’ business is in decline. There is no evidence that the Defendants have committed fraud.

Conclusion

[32] For the foregoing reasons, the motion for a Mareva injunction is dismissed.

[33] If the parties cannot agree on costs, the Defendants may file costs submissions of no more than 3 pages, plus costs outline and any offers to settle, within 20 days of the release of this Decision. The Plaintiffs may file responding submissions on the same terms within a further 15 days. Costs submissions should be uploaded to Case Center and forwarded to my Judicial Assistant at Robyn.Pope@Ontario.ca.

Justice R.E. Charney

Released: April 21, 2026

CITATION: Alexander v. 5048941 Ontario Inc., 2026 ONSC 2360

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

MARVIN ALEXANDER and RHONDA ALEXANDER

Plaintiffs

– and –

5048941 ONTARIO INC., COLIN ANDREW CAMPBELL, 5048940 ONTARIO LTD., CAMPBELL REAL ESTATE TEAM INC., 16945 LESLIE STREET PROPERTIES INC., EMPIRE REALTY CENTRES INC., 117 WELLINGTON STREET HOLDINGS LTD. and 2855041 ONTARIO CORP.

Defendants

REASONS FOR DECISION

Justice R.E. Charney

Released: April 21, 2026