Bauco was the senior manager of D.S.B. Systems, which installed security systems. Bauco resigned and set up a competing security installation company. Naturally DBS said that Bauco stole D.S.B. customer lists and was competing against D.S.B.
D.S.B. obtained a Mareva injunction freezing, inter alia, the proceeds of sale of the matrimonial home.
Bauco successfully set the Mareva aside by explaining that his decision to sell the matrimonial home was taken one month before the statement of claim was issued, and that it was difficult to buy a new home with the prior-sale proceeds frozen.
Before setting aside the injunction, the motion judge makes reference to the leading case on Mareva injunctions:
[14] The test for granting a Mareva injunction was summarized by Perell J. in O2 Electronics Inc. v. Sualim, 2014 ONSC 5050 (CanLII), at para. 67:
- Because procedural law disfavours pre-judgment execution, to obtain a Mareva injunction, a plaintiff must satisfy the normal criteria for an injunction and also several additional criteria. For a Mareva injunction, the moving party must establish: (1) a strong prima facie case; (2) that the defendant has assets in the jurisdiction; and (3) that there is a serious risk that the defendant will remove property or dissipate assets before the judgment. 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 to avoid judgment. The moving party must also establish that he or she would suffer irreparable harm if the injunction were not granted and that the balance of convenience favours granting the injunction. Absent unusual circumstances, the plaintiff must provide the undertaking as to damages normally required for any interlocutory injunction.
Comment:
- Neither of these defendant set-aside points (listed house earlier than claim + hard to buy another house) seem persuasive. A sale of an asset any time around the time of the claim is prima facie suspicious. The defendant, having set up a competing business, must have expected some blowback long before a claim was issued.
- The defendant’s purchaser-inconvenience in the real estate market, while technically a ‘balance of convenience’ fact, would not be persuasive if the plaintiff were showing that it was stolen monies quo monies. (in other words, if DSB could have traced Bauco’s house money back to DSB’s bank account). In this case, the monies were merely being made available as damages against a future finding that the customer lists had been stolen.
- Most glaring is the absence (in the record) of any non-compete, non-solicitation claim by the plaintiff. It may have been in the claim but Charney J. made no mention of it. If there was such, the plaintiff’s prima facie injunctive claim is much stronger
