Most BC family lawyers in BC have never used the powerful injunction over the person and assets called the Mareva Injunction. Jennifer Lin and Lorne MacLean recently obtained such an order for their delighted client and Jennifer Lin is now kind enough to explain how this powerful tool works for experienced BC family lawyers and their high net worth clients.Call us at 604 602 9000 if you need immediate help on assets that may be hidden or disposed of as any delay by you may hurt your case.
S. 67 of the Family Relations Act allows a B.C. court to provide injunctive relief for the protection of property and the new BC Family Law Act that has been proclaimed will continue to allow for orders to restrain parties and their property when it is within British Columbia and where at least either the person or the asset is here and in only their name. This means that at any time during ongoing family law proceedings, a court can make an order restraining a party from disposing of a family asset, such as real estate, bank accounts, or shares in a company. The new Family law Act contains section 91 which carries forward the powers currently available under section 67 as follows:
- 91 (1) On application by a spouse, the Supreme Court must make an order restraining the other spouse from disposing of any property at issue under this Part or Part 6 [Pension Division] until or unless the other spouse establishes that a claim made under this Part or Part 6 will not be defeated or adversely affected by the disposal of the property.
However, a court is unlikely to make an order under s. 67 to restrain a party from disposing of family assets or property at issue when the party and the property are outside the jurisdiction. Rather, the appropriate remedy in such circumstances may be a Mareva injunction.
A Mareva injunction, named after a seminal case in this area, Mareva Compania Naviera SA v. International Bulkcarriers SA [1975] 2 Lloyd’s Rep 509 (C.A.), was a civil remedy initially developed by the British courts to prevent defendants from removing assets out of the jurisdiction in an effort to defeat the legitimate claims of creditors.
Over time, the Mareva injunction has been adopted and expanded by the Canadian courts not only to prevent dissipation of assets out of the court’s jurisdiction, but also to prevent dissipation of assets that are already out of the court’s jurisdiction. This so-called “worldwide” Mareva injunction has since been granted in numerous situations by various Canadian courts to freeze both out-of-province Canadian assets, as well as assets outside of Canada. As Madam Justice Newbury stated in Mooney v. Orr (1994), 98 B.C.L.R. (2d) 318 (S.C.), additional reasons (1994), 100 B.C.L.R. (2d) 335 (S.C.):
“The reasons for extending Mareva injunctions to apply to foreign assets are valid in British Columbia no less than in England and Australia – the notion that a court should not permit a defendant to take action designed to frustrate existing or subsequent orders of the court, and the practical consideration that in this day of instant communication and paperless cross-border transfers, the courts must, in order to preserve the effectiveness of their judgments, adapt to new circumstances.”
In Ontario, the Mareva injunction has been used to freeze assets of third parties in a family law proceeding. In Ho v. Ho, 2003 CanLii 2315 (ON SC), Dr. Michael Ho, a prominent member of the Chinese Canadian community and a chiropractor best known for selling his health care products on the Shopping Channel through his company Dr-Ho’s Inc., owed his wife over 2.5 million dollars in spousal support. His wife was unable to locate Dr. Ho or his assets in order to claim the money she was owed. Consequently, she applied to the court to freeze the assets of Dr. Ho’s sister Donna Ho, whose company No Pain Tech Inc. had recently begun marketing Dr. Ho’s products. Dr. Ho’s wife suspected Dr. Ho’s family members of hiding his assets from her. The Ontario Supreme Court determined that Ontario’s Family Law Act did not enable the court to freeze assets of third parties and therefore resorted to a Mareva injunction. The court ordered that Donna Ho and No Pain Tech Inc. were not dispose of assets over $10,000 and were to advise Dr. Ho’s wife in writing of any amounts being disposed of that exceed $2000.
A recent example of a Mareva injunction granted against worldwide assets in a B.C. family law case is described in Jose v. Riz, [2010] B.C.J. No. 1827 (BCCA), where the British Columbia Court of Appeal noted how a lower court judge in related proceedings granted a worldwide Mareva injunction in 2008 which froze the ex-husband’s worldwide assets, including the sale proceeds of a property in California. The ex-husband had subsequently attempted to bring an action in California to set aside the injunction, only to be dismissed as the Canadian court’s order was upheld by the California court as being a valid injunction with extra-territorial effect.
A Mareva injunction is a powerful remedy with far-reaching consequences, and as such the test for granting this injunction is high. Speak with our experienced and high net worth family lawyers who are familiar with Mareva injunctions in order to determine whether this remedy should be sought for your particular family law matter.
You can call us at any of our 4 offices in BC or toil free to our head office at 1 877 602 9900 or email [email protected] or [email protected]
