Today’s blog discusses a fine point of law regarding the required evidence in cases involving allegations of fraud before a Mareva injunction (or, in common parlance, a freezing order) can be granted.
The legal prerequisites of a 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.
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 from the jurisdiction, disposed of within the jurisdiction, or otherwise dealt with so that the plaintiff will be unable to satisfy a judgment awarded.
e) The plaintiff must give an undertaking as to damages.
In the recently published case Sibley & Associates LP v. Ross,* the plaintiff alleged that the defendant, a former employee in the accounting department, had been making periodic unauthorized payments to his mother amounting to at least $310,160.32.
The plaintiff satisfied all criteria above but one. There was no evidence of a real risk that the defendant might dissipate his assets.
The Ontario Superior Court was thus confronted with the question of whether an injunction may be issued in absence of clear evidence that the defendant will likely dissipate his assets where there is allegation of fraud.
Unfortunately, the existing jurisprudence isn’t clear on the point.
One school of jurists takes the position that there should be a “fraud exception.” These jurists believe that if there is allegation of fraud, a Mareva injunction ought to be issued regardless of whether there is a risk that the assets will be dissipated.+
Another school of jurists disagrees, insisting that a Mareva injunction is akin to “execution before judgment” (a matter to be taken very seriously).# Therefore, these jurists hold, such an injunction should not be granted unless all five elements above are satisfied, except under very limited circumstances, regardless of whether fraud is alleged.^
It appeared to the court that both schools have had their own supporters in decisions on this matter. However, at present, there is no definitive answer as to whether a “fraud exception” categorically exists in contemporary Canadian law.
The court declined to carve out an “exception” for fraud. Rather, the judge adopted a programmatic approach, stating that the risk of removal or dissipation can be established not only from direct evidence, but also by inference from surrounding circumstances, including the circumstances of the fraud itself.
In the end, the judge concluded that the evidence of fraud was so strong that, coupled with the surrounding circumstances, it gave rise to an inference of a real risk of dissipation or removal of assets.
*[2011] ONSC 2951; (2011) 106 O.R. (3d) 494
+see e.g. Campbell v. Campbell [1881] O.J. No. 201 (Ct. Ch.); Mills v. Petrovic (1980), 30 O.R. (2d) 238 (H.C.J.)
#Lister & Co. v. Stubbs (1890), 45 Ch. D. 1
^see e.g. Cital v. Rothbart (1982), 39 O.R. (2d) 513
This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.
Can “Too Much” Medical Care Amount to Child Abuse?
When most people think of child abuse and neglect, a certain grim picture comes to mind. The neglected or abused child may be malnourished or suffering from psychological, physical, or sexual abuse.
The recent case involving a family featured on the popular reality TV series Extreme Makeover: Home Edition raises an issue not commonly seen in child protection proceedings: unnecessary and excessive medical treatment that amounts to child abuse.
The Cerda family, living in Las Vegas at the time, pleaded with the producers of the show for rescue from their mould-filled house. The toxic environment was making life very difficult for the mother and the two daughters, who suffered from serious immune disorders.
The Cerdas’ story seemed to have struck a chord with the producers of the show.
The producers paid to demolish the Cerda family’s old house and built, from the ground up, an opulent new home equipped with a top-grade air filtration system, an elevator, a solar-heated swimming pool, and a gourmet kitchen, to name just a few of the highlights.
Alas, because of “the increased cost” of operating the home, the family put up their new-and-improved place for sale and moved to Oregon.
But as fate would have it, after the move, the Cerda family’s high profile attracted the attention of the child welfare agencies. Several doctors and social workers began to question the mother’s insistence on the chronic medical conditions of her daughters in the face of contradictory lab results.
In February 2011, the State of Oregon took temporary custody of the two children. In the legal proceeding that ensued, six doctors testified on the State’s behalf that the two children did not live in constant medical peril as claimed by the mother.*
The court was told by one expert witness, called by the State, that the children suffered from medical abuse, namely excessive and unnecessary medical interventions that could result in psychological and emotional harm.
The family’s lawyer called the mother to testify about the medical history of the children. However, no doctors were called by the defense.
Judge Norby of the Clackamas County Circuit Court in Oregon found the mother unconvincing. She called the mother’s conduct “excessive and unjustifiable.” Nevertheless, the judge ruled that the father was a capable parent and could take care of the children’s medical needs. She ordered that the two children be returned to the parents.
This case took place in Oregon and not Ontario; therefore, it may or may not be relevant to Ontario cases. However, it reminds us that abuse can take many forms, including too much medical care.
* Citation currently unavailable.
This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.