In B&M Handelman Investments Ltd. v. Curreri, the Court of Appeal for Ontario held that a party that had already had a default judgment entered against it, and that had already paid funds into court under a Mareva injunction that were to be paid out to satisfy the judgment, could not access those funds for the purpose of legal and living expenses.
The appellant was a creditor of the respondents who impersonated a relative in order to secure a mortgage. The appellant also faced related criminal charges of fraud. After the initial default, the creditors obtained a Mareva injunction against the defendant's funds to be paid into court, for which a partial default judgement was entered. The court declined to apply the test for granting access to funds held under a Mareva injunction for legal and living expenses as set out in Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, noting that this test is premised on the
matter not having been finally adjudicated. Reasoning that, once default judgment is ordered, and no merits are disclosed for an appeal, there is no principled basis to allow depletion of assets that are in court "to the credit of the action”, the Court refused to release the funds.
May 20, 2011
Link to Decision
Grant Bishop, Steve Holinski & Kai Sheffield
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