Good advice.

Good advice.

NEED ASSETS FROZEN? A MAREVA INJUNCTION CAN HELP

DBM Law Blog

As your local law firm in Coquitlam, we are here to provide clear answers to your questions and help you understand available options when it comes to legal matters. In this blog, we are covering what happens if you are involved in litigation and are concerned that the opposing party may dispose of certain assets. The Mareva injunction is a useful tool to ensure those assets do not vanish. Let’s dive in! 

What Is A Mareva Injunction?

The Mareva injunction gets its name from the SS Mareva, a floating asset that tried to sail away from Britain and thus frustrate any lawsuit against its owner.  Since then, the Mareva injunction has been recognized by Canadian courts as a method to freeze a party’s assets.  This is useful where a party in a proceeding wishes to prevent the opposing side from transferring their assets while a trial is pending.  For example, in the corporate context, a person claiming they have an interest in company shares may wish to prevent an opposing party from selling those shares.  Mareva orders are also common in fraud cases where a party wishes to freeze the defendant’s funds gained by fraud.  It is important to note that the Mareva injunction is not a coercion tactic and is only used where there is a possible asset that may dissipate.

How To Receive A Mareva Injunction

Injunctions are remedies granted by the courts to prevent a party from carrying out a certain action or to force a party to carry out a certain action.  Due to the nature of a Mareva injunction, courts pay careful attention to the facts when deciding whether to grant this order and therefore, an applicant must disclose all relevant facts—both good and bad—that can affect the outcome of the application.  Importantly, the applicant’s entitlement to a Mareva injunction depends on whether the following two steps can be established:

  1. The applicant shows a strong prima facie case or good arguable case; and
  2. The balance of convenience must favour granting the injunction. 

 

Essentially, the applicant must demonstrate why the Mareva injunction is necessary, and since the freezing of a person’s assets is an extraordinary measure, the convenience of the injunction must be balanced with justice.  Finding this balance is flexible, but requires consideration of factors such as a risk of irreparable harm to either party, whether the defendant’s assets are in British Columbia, and if there is evidence that illustrates a risk that the assets may be disposed of. 

DBM Law Firm Is Here To Help You

If you have any questions regarding litigation  or concerns over the possibility of assets dissipating, do not hesitate to contact our law firm in Coquitlam for a consultation.  Check out our recent success on a Mareva injunction application in RBD Victoria Homes Inc. v. 0717227 B.C. Ltd., 2021 BCSC 774.

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