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Legal Blog:
Feb
09
2018
Mareva
A debtor is about to sell his only known asset and move halfway around the world. The creditor knows about the impending sale, but has not filed a writ of seizure and sale and, indeed, does not even have a judgment. Can the creditor do anything? The answer is yes. The creditor can seek a Mareva injunction. Even if the creditor obtains a Mareva injunction, does that give the creditor a priority over other creditors who have filed writs of seizure and sale? This question was answered in Trade Capital Finance Corp. v. Cook, a 2017 decision of the Ontario Superior Court of Justice.
What Is It
A Mareva injunction, named after one of the parties in an English case, is an exceptional form of interlocutory relief (i.e. before the action has been determined on the merits) designed to freeze the assets of a defendant pending determination of the plaintiff’s claim. This is in contrast to execution, allowing a successful plaintiff to enforce a judgment after a court has declared that the debtor owes money to the creditor.
Unlike the enforcement of a judgment, a plaintiff obtaining a Mareva injunction is required to give an undertaking to pay damages if the plaintiff is unsuccessful on the merits and the defendant suffers damages from his inability to deal with the property in the interim.
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09
2018
Drafting
The Supreme Court of Canada informed us in Creston Moly Corp v. Sattva Capital Corp (2014) that, in contract interpretation, the overriding concern is to determine the intent of the parties and the scope of their understanding, giving words their ordinary grammatical meaning consistent with the surrounding circumstances known to the parties at the time of the contract formation. That is all well and good, assuming that the contract is properly drafted. Unfortunately, we see many contracts, some drafted by laymen and some, unfortunately, drafted by lawyers, that are almost incomprehensible. Looking at the ordinary grammatical meaning of words does not help much when the contract drafter can barely put together a sentence. What does one do when a provision in a contract makes no sense? The judge in Mohamed v. Information Systems Architects Inc. 2017 ONSC 5708 had to answer that question.
Background
An employer hired an employee (who was classified as an independent contractor, but could just as easily have accepted employment as an employee) to work as an information technology consultant for the employer’s clients.
Before the parties entered into an agreement, the employee informed the employer that, 17 years ago when in high school, he had been convicted of assault with a weapon. This information did not dissuade the employer from giving the employee a 6-month, fixed term services agreement, with a particular client in mind. The employee consequently resigned from his previous full-time job.
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