CANADA Trends and Developments Contributed by: Carey Veinotte, Bojm Funt & Gibbons
case of a well-founded fear of the dissipation of assets pre-trial. Mareva injunctions are often sought on an ex parte basis – no notice is given to the target, as immi - nent harm will result if the target realises its assets are under threat by the giving of notice. As with any ex parte application in Canada, the practice is that the applicant must make full and frank disclosure to the court when seeking the injunction. Counsel are required to present all known facts to the court, both favourable and unfavourable. The general rule in Canada is that court orders do not extend beyond the territorial boundaries of the issuing court. So it was with Mareva orders, until the Canadian courts’ decision in Google Inc v Equustek Solutions Inc , 2017 SCC 34. In that case, the plaintiff Equustek argued that it was the victim of a whole range of busi - ness torts suffered at the hands of its erstwhile dis - tributor, Datalink. Datalink had fled the jurisdiction and abandoned the litigation. There was some evidence that Datalink continued to peddle its allegedly pirated wares on the internet. Equustek argued that an order restricted to British Columbia would be ineffective with a worldwide enterprise such as Google. The British Columbia Chambers Judge agreed with Equustek and granted a “worldwide Mareva ”, enforce - able against any person and any entity the world over (2014 BCSC 134). The British Columbia Court of Appeal disagreed (2015 BCCA 265) and vacated the worldwide Mareva injunction. The SCC restored the Chambers Judge’s decision (2017 SCC 34). Post-judgment execution Examinations in aid of execution Once a trial judgment is obtained, the debtor can be subpoenaed under pain of contempt to attend an examination in aid of execution. A representative of the debtor is required to attend before a court reporter for the examination, or a deposition as it is called in the USA. The representative of the debtor is required to bring with him or her all relevant financial records, including financial statements, corporate tax returns, bank statements, payroll records, etc.
Sherriffs Sheriffs in Canada work for the relevant provincial judicial administration. They fulfil many functions, including running provincial jails, enforcing security in courthouses and, for the purposes of this paper, executing orders issued by the courts for the seizure of goods and chattels (personal property). Seizure of shares If the target is an individual, they may own shares. Those shares may be valuable. If the debtor is a com - pany, and the creditor owns the shares, and the seized shares are a majority of the company shares, then the creditor controls the company. Section 58 of the British Columbia COEA empowers a sheriff or other authorised court personnel to seize money and securities for money. Post-judgment garnishment If a monetary judgment is obtained after a trial or a hearing, the judgment may be garnished upon. Garnishing orders do not require a hearing. In British Columbia, strict adherence to the COEA is required (see the above discussion about being “meticulous, not ridiculous”). When the registrar approves the order, it may be served upon any entity that may owe funds to the debtor. This includes banks with accounts containing the target’s money or brokerage houses holding securities belonging to the target. Receivers pursuant to the Bankruptcy and Insolvency Act (BIA), RSC 1985, Chapter B-3 The BIA is one of two major laws that govern bankrupt - cy in Canada, the other being the Companies Credi - tors Arrangement Act, RSC Chapter C-36 (CCAA). The CCAA is reserved for those companies with debts in excess of CAD5 million. In the context of executing upon a judgment, an option for the successful creditor is to bankrupt the debtor pursuant to the BIA or the CCAA. In summary, the creditor makes demand upon the debtor to pay the judgment, and the debtor fails or refuses to pay. The creditor then hires a receiver, who is a licensed trustee in bankruptcy (there is a registry of such individuals
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