“Where parties are married and on separation one spouse claims an equalization of net family property, the court has jurisdiction under s. 12 of the Family Law Act to make an order for the preservation of the spouses’ property pending a determination of the claim. The jurisdiction includes an order “for the possession, delivering up, safekeeping, and preservation of the property”: see s. 12(b). What is the jurisdiction where the parties were not married?
In Dimartino v. Dimartino, 2016 ONSC 7461, the parties were married for 45 years and had two adult children. The husband was in the business of buying and selling properties. The wife claimed that the husband had transferred a property to his son, who was also in the building business, for nominal consideration. The wife claimed that the transfer was fraudulent. She brought a motion for a preservation/non-dissipation order against the son.
Charney J. confirmed that the Family Law Act, s. 12(b), does not permit the court to make an order against a third party to the proceeding. The express language of s. 12 of the Family Law Act is directed to property owned by a spouse and not property owned by a third party. The wife had to rely on the equitable jurisdiction of the court to grant a Mareva injunction. In para. 32, Charney J. articulated the test relating to Mareva injunctions by reference to a 2014 decision of Perell J. as follows:
In O2 Electronics Inc. v. Sualim, 2014 ONSC 5050 (Ont. S.C.J.) (CanLII), at para. 67, Perell J. summarized the law relating to Mareva injunctions as follows:
For a Mareva injunction, the moving party must establish: (1) a strong prima facie case; (2) that the defendant has assets in the jurisdiction; and (3) that there is a serious risk that the defendant will remove property or dissipate assets before the judgment. A Mareva injunction should be issued only if it is shown that the defendant’s purpose is to remove his or her assets from the jurisdiction to avoid judgment. The moving party must also establish that he or she would suffer irreparable harm if the injunction were not granted and that the balance of convenience favours granting the injunction. Absent unusual circumstances, the plaintiff must provide the undertaking as to damages normally required for any interlocutory injunction.
Although the facts in Dimartino are different than the facts before me, the analysis is the same. The Family Law Act, Part One, applies only to spouses who were married. As the applicant cannot request a preservation order under s. 12 of the Family Law Act, he is limited to requesting relief in the form of a Mareva injunction.
The test for a Mareva injunction presents a higher hurdle than the test for a non-dissipation order: see Price v. Price, 2016 ONSC 728, and there is good reason for that. A Mareva injunction is akin to execution before judgment. A Mareva injunction is exceptional relief and can only be granted in extraordinary circumstances. When ordered, such extraordinary relief ties up the assets of the respondent before there has even been a determination on the merits of the case and before any judgment adverse to the respondent has been rendered. A request for such extraordinary relief imposes a considerable burden on the moving party.”