Learn how Mareva injunctions freeze assets, when they’re used, and how they help protect your rights in Ontario disputes.
Introduction
Mareva injunctions (also known as freezing orders) are a powerful remedy and instrument of fraud recovery, preventing a defendant from disposing of assets before a court judgment is enforced. For instance, if you are suing someone and worry that they might transfer property, empty their bank accounts, or move assets out of the country, a Mareva injunction essentially stops them in their tracks – which is why it is aptly named a “freezing order”.
History Behind Mareva Injunctions
It is commonly used in fraud cases, contractual disputes and asset recovery claims, and, like several other instruments, was adopted from the 1975 English case of Mareva Compania Naviera S.A. v. International Bulkcarriers Ltd, surrounding a dispute between shipowners (Mareva) and the carriers (Bulkcarriers). In short, the carriers couldn’t pay the full hire fee, and Mareva was concerned they would not pay for the damages and remaining debt. Mareva consequently applied to the court to stop the carriers from moving these funds before the lawsuit was settled.
The Legal Requirements
On an application for an interim Mareva injunction, a moving party must:
- Make full and fair disclosure of all material matters within his or her knowledge;
- Show that he or she has a strong prima facie case;
- Show that the defendant has assets in the jurisdiction;
- Show that there is a serious risk that the defendant will remove property or dissipate assets before judgment or otherwise dealt with so that the plaintiff will be unable to satisfy a judgment awarded to him or her;
- Prove the plaintiff will suffer irreparable harm if the junction is not granted; and
- Show that the balance of convenience favours granting the injunction.
Getting a Mareva Injunction
The process starts with an urgent motion to court. These applications are often made without notice to the defendant (known as ex-parte) where you go to court without informing them. This way, it prevents them from moving assets once they know the plaintiff is seeking to freeze them.
Alternatives And Related Orders
Mareva injunctions are frequently sought alongside Norwich-type orders, another legal mechanism borrowed from the United Kingdom, which is a third-party disclosure order. Norwich orders oblige third parties like banks to hand over information or documents that the plaintiff would otherwise have no means of accessing.
Anton Piller orders are also commonly sought alongside a Mareva. They are a form of a civil search warrant which allows the plaintiff to enter the defendant’s premises to search for and seize documents or evidence that might otherwise be destroyed or hidden before the case can proceed.
These orders often require complex and time-sensitive legal work. Contact Nadine Esaid, Associate Lawyer at Boardwalk Law to learn more: [email protected] / 365.747.3614
