Ontario Mareva Injunctions: Asset Freezing Orders, Requirements, and Worldwide Relief

The Purpose of a Mareva Injunction

A Mareva injunction is designed to prevent a defendant from rendering a prospective judgment worthless by disposing of, hiding, or removing assets before the plaintiff can enforce a judgment. Without such relief, a dishonest defendant could transfer assets to related parties, move assets offshore, or dissipate assets through lavish spending in the knowledge that litigation would take years to resolve.

The remedy is exceptional — it operates in personam against the defendant, restraining their conduct, and does not create a security interest or charge over specific assets. The plaintiff remains an unsecured creditor despite the order, which is why Mareva relief is often pursued in conjunction with other security-obtaining remedies.

The Test for a Mareva Injunction in Ontario

Ontario courts apply a more stringent test for Mareva orders than for ordinary interlocutory injunctions. The leading Ontario authority is Chitel v Rothbart (1982) 39 OR (2d) 513 (CA), which requires the plaintiff to establish:

1. A Strong Prima Facie Case

For a Mareva injunction, courts require more than a "serious question to be tried" — the standard for ordinary interlocutory injunctions under American Cyanamid Co v Ethicon Ltd [1975] AC 396 (adopted in Ontario). The plaintiff must establish a strong prima facie case — a higher threshold reflecting the extraordinary nature of the remedy.

A strong prima facie case requires more than mere arguability. The plaintiff must adduce evidence that, if accepted at trial, would demonstrate a clear cause of action. Courts will review the underlying merits to assess whether there is substantial evidence supporting the claim, not merely an arguable case.

2. A Real Risk of Asset Dissipation

The plaintiff must demonstrate a real risk — not a speculative or theoretical risk — that the defendant will remove or dissipate their assets before judgment can be executed. A mere concern that the defendant might not have assets to satisfy a judgment is insufficient; there must be positive evidence of a real and not merely fanciful risk of dissipation.

Evidence establishing a real risk of dissipation may include:

• Past conduct of the defendant — prior fraud, prior dissipation, or prior attempts to evade creditors
• Evidence that the defendant has begun transferring assets since learning of the claim
• The nature of the defendant's assets — predominantly cash or liquid assets easily moved offshore
• International connections that would facilitate asset removal
• Evidence of dishonesty or fraudulent conduct underlying the claim
• Corporate structures designed to shield assets

Courts are cautious about granting Mareva relief based on mere insolvency risk or a defendant who appears to be in financial difficulty — financial difficulty alone is not equivalent to a real risk of dissipation. The risk must be of deliberate conduct by the defendant to put assets beyond the plaintiff's reach.

3. The Balance of Convenience

Even where the first two elements are established, the court must be satisfied that the balance of convenience favours granting the relief. The court weighs:

• The harm to the plaintiff if the order is refused and assets are dissipated
• The harm to the defendant if the order is granted but the plaintiff ultimately fails
• The degree to which the plaintiff's undertaking as to damages will adequately compensate the defendant if the order turns out to have been wrongly granted

The Undertaking as to Damages

A condition of any Mareva order is that the plaintiff gives a cross-undertaking in damages. The plaintiff undertakes to pay any damages the defendant suffers if the order turns out to have been wrongly granted — including lost business opportunities, financing costs, and reputational harm caused by the order.

Courts will scrutinize the plaintiff's ability to satisfy the undertaking. Where a plaintiff is a corporation of modest means, the court may require security — a bank guarantee, cash into court, or a letter of credit — to secure the undertaking. An undertaking by a financially precarious plaintiff may be treated with skepticism.

The undertaking as to damages is not a formality — plaintiffs have faced substantial damages claims when Mareva orders were ultimately set aside or when the underlying claim failed. Counsel advising plaintiffs must carefully assess exposure on the undertaking before seeking Mareva relief.

Standard Terms of a Mareva Order

Ontario Mareva orders typically include:

• Asset freeze: The defendant is restrained from disposing of, encumbering, or dealing with specific assets (or assets generally up to the amount of the claim) pending the outcome of the proceeding.
• Disclosure obligation: The defendant is required to provide a sworn statement disclosing all assets within and outside Ontario above a threshold value, including the nature, location, and value of each asset.
• Living expenses carve-out: The defendant is permitted to spend a specified amount per week for ordinary living expenses.
• Legal fees carve-out: The defendant is permitted to use funds for their reasonable legal fees in the proceeding.
• Ordinary business expenses: For corporate defendants, a carve-out for ordinary course of business payments may be included.
• Third party notification: Banks and financial institutions holding the defendant's assets may be required to be notified of the order.

Ex Parte (Without Notice) Applications

Mareva orders are frequently sought on an ex parte basis — without notice to the defendant. The justification is that giving advance notice would defeat the purpose of the order: a defendant forewarned would immediately dissipate the assets the order is designed to protect.

On an ex parte application, the plaintiff must make full and frank disclosure of all material facts — including facts adverse to their position. Failure to make full and frank disclosure is grounds for the court to set aside the order even if the plaintiff would otherwise have been entitled to the relief. The duty of candour on ex parte applications is absolute.

An order obtained ex parte is typically returnable within a short time — 3 to 10 days — when the defendant has notice and can attend to contest it. The defendant can also move immediately to set aside the order.

Worldwide Mareva Orders

Ontario courts have jurisdiction to grant Mareva orders extending to assets located outside Ontario and even outside Canada. The leading Ontario authority on worldwide Mareva orders is Mooney v Orr (1994) 100 BCLR (2d) 335 and subsequent Ontario Court of Appeal decisions affirming the jurisdiction.

Worldwide Mareva orders are exceptional relief. The plaintiff must satisfy a more exacting standard:

• A domestic Mareva would be insufficient to protect the plaintiff's position because the defendant's assets are primarily held outside Ontario
• There is a real risk of dissipation of the foreign assets
• The court should be satisfied that enforcement in the relevant foreign jurisdiction is reasonably practicable

Worldwide Mareva orders include a "Babanaft proviso" — a carve-out preventing the order from affecting non-parties outside Ontario unless and until the order is confirmed by the courts of the relevant jurisdiction. This prevents Ontario courts from overreaching into the jurisdiction of foreign courts.

Setting Aside a Mareva Order

A defendant who has been subject to a Mareva order may apply to set it aside on the following grounds:

• Failure of full and frank disclosure: The plaintiff failed to disclose material facts on the ex parte application — even if the plaintiff would have been entitled to the order on full disclosure, the court has discretion to discharge it as a sanction for non-disclosure.
• No strong prima facie case: The underlying claim does not meet the elevated threshold for Mareva relief.
• No real risk of dissipation: The defendant can demonstrate that the risk of dissipation was speculative or that they have substantial fixed assets in Ontario not at risk of dissipation.
• Balance of convenience: The hardship to the defendant from the order outweighs the benefit to the plaintiff.
• Changed circumstances: Events since the order was granted have changed the balance of convenience.

Anton Piller Orders: Search and Seizure in Civil Proceedings

Anton Piller orders (now called civil search orders) are a related category of extraordinary injunctive relief. Named after Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55, an Anton Piller order authorizes the plaintiff (and their solicitor) to enter the defendant's premises to inspect and seize documents and other evidence that the defendant might otherwise destroy.

The three requirements for an Anton Piller order are:

• An extremely strong prima facie case
• The potential or actual damage to the plaintiff is very serious
• There is clear evidence that the defendant has relevant documents or articles and there is a real possibility that they might destroy or conceal them

Anton Piller orders are most commonly sought in intellectual property proceedings (trade secret theft, copyright infringement) and commercial fraud. They are subject to the same duty of full and frank disclosure on ex parte application as Mareva orders.

Important procedural safeguards on execution include: the supervising solicitor (independent of the plaintiff's solicitors) must be present; the defendant must be given an opportunity to seek legal advice before permitting entry; and the order must be executed carefully to minimize disruption.

Mareva Injunctions and Contempt

A defendant who breaches a Mareva order may be held in contempt of court. The test for contempt of a Mareva order follows the standard three-part test for civil contempt: the order must have been clear and unambiguous, the defendant must have had actual knowledge of the order, and the defendant must have intentionally done the act that breached the order — though no intent to defy the court is required:Carey v Laiken 2015 SCC 17.

Sanctions for contempt of a Mareva order can include fines, imprisonment, and — in appropriate cases — an adverse inference at trial that the defendant breached the order because the assets were used to frustrate the plaintiff's claim.

Practical Considerations for Ontario Civil Litigators

When advising a client on whether to seek a Mareva order, counsel should consider:

• The strength of the underlying merits — a Mareva requires a strong prima facie case, so weak cases should not be brought on an emergency basis on the strength of bare allegations.
• The concrete evidence of dissipation risk — identify specific conduct or circumstances that establish a real risk beyond financial difficulty.
• The client's ability to satisfy the undertaking as to damages — assess realistically whether the client could pay damages if the order is wrongfully obtained.
• The defendant's assets — identify the specific assets to be frozen, their location, and which financial institutions hold them.
• The duty of full and frank disclosure — prepare an affidavit that discloses all material facts, including those adverse to the plaintiff.

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