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Rueters LLP lawyers to argue before Court of Appeal concerning worldwide Mareva injunctions

In May 2016, Rueters LLP lawyers Robert Rueter and Malik Martin successfully obtained leave to appeal to the Divisional Court from a decision of the Superior Court of Justice concerning the Court’s power to grant Mareva injunctions against non-resident defendants, the requirement that a party seeking a Mareva injunction provide an undertaking as to damages, and the adequacy of a non-resident, non-party’s indemnification as security for costs of an action.  See Borelli v. Chan, 2016 ONSC 3226 (CanLII).

On appeal, the Divisional Court upheld the Motion Judge’s decision on the grounds that a Mareva injunction is an evolving equitable remedy which the Motion Judge had discretion to fit the circumstances, notwithstanding precedent of the Ontario Court of Appeal in Chitel v. Rothbart.  Respecting the undertaking, the Divisional Court upheld the Motion Judge on the grounds that the sufficiency of the undertaking as to damages and the motion for security for costs was a matter of judicial discretion.

In dissent, L.A. Pattillo J. held that Chitel articulates the judicial principles upon which the court exercises its discretion to issue a Mareva injunction and that Chitel was binding precedent which the Divisional Court was bound to follow.  He was also of the view that the Motion Judge’s decision respecting the sufficiency of the undertaking as to damages and security for costs was clearly wrong, in light of the evidence that both the Plaintiff and the party giving the undertaking were non-residents with no assets in the jurisdiction.  See SFC Litigation Trust (Trustee of) v. Chan, 137 O.R. (3d), 2017 ONSC 1815 (Div. Ct.).

On September 22, 2017, the Court of Appeal granted leave to appeal the Divisional Court decision.  Oral argument in the Court of Appeal is scheduled for March 28, 2018.

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