Estate litigation often involves complex emotional and financial disputes, particularly when there is concern that a party might dispose of assets improperly. In such cases, Ontario courts have an important tool at their disposal: the Mareva injunction. A recent decision of the Ontario Superior Court of Justice, Wilson v. Mayers, underscores the significance of this powerful remedy in safeguarding estate assets.
What Is a Mareva Injunction?
A Mareva injunction is an equitable remedy that serves as a pre-trial measure to freeze assets. Its primary purpose is to prevent a party from disposing of, diminishing, or dealing with their assets in such a way that would defeat a party’s claim before a judgment can be obtained. This type of injunction is named after the English case Mareva Compania Naviera S.A. v. International Bulkcarriers S.A. and was first issued by Lord Denning in the case of Nippon Yusen Kaisha v. Karageorgis.
While traditionally associated with commercial disputes, Mareva injunctions are now frequently invoked in estate litigation in Ontario, particularly when credible concerns exist that a party might attempt to dissipate estate assets.
The Test for a Mareva Injunction in Ontario
Ontario courts will only grant Mareva injunctions when certain strict criteria are satisfied. The test for granting a Mareva injunction is more stringent than that for other interlocutory injunctions. The key elements courts consider include:
- A strong prima facie case:
The party seeking the injunction must show a compelling case against the other party. - Existence of Assets within the jurisdiction: It must be shown that the defendant holds assets within Ontario.
- Serious risk of dissipation:
There must be credible evidence or inference that the defendant may move, conceal, or dissipate the assets. - Potential Irreparable harm and balance of convenience:
The claimant must demonstrate that without the injunction, irreparable harm would occur, and that the inconvenience caused to the defendant is outweighed by the need to preserve assets for litigation.
Insights from Wilson v. Mayers- 2025 ONSC
In this case, the court considered allegations that Denise Mayers, the surviving spouse, improperly obtained a Certificate of Appointment of Estate Trustee Without a Will, despite knowing a Will existed. The applicants argued she immediately transferred assets, including real estate, into her own name, creating significant risk of dissipation of estate property.
The court found that:
- There was a strong prima facie case because Denise knowingly filed false declarations when applying for the Certificate of Appointment Without a Will.
- Denise’s immediate actions in transferring the Deceased’s real estate solely to herself demonstrated a real risk of dissipation.
- Given the substantial assets involved, including valuable real property and financial accounts, the balance of convenience clearly favoured granting the injunction to protect estate assets.
Consequently, the court issued a Mareva injunction restricting Denise from dissipating estate assets, ensuring their preservation until the litigation could be resolved.
Practical Takeaways
Mayers highlights critical considerations for anyone involved in contested estates:
- Act quickly: If there’s credible concern about asset dissipation, parties must act quickly to seek an injunction.
- Supporting Evidence is Crucial: Mere suspicion isn’t enough. Courts require solid evidence, whether direct or inferential, showing a clear risk of asset dissipation.
- Honesty and Transparency: Courts view any form of misrepresentation or fraud harshly, especially in estate matters. Honest disclosure is vital to avoid adverse rulings or severe cost consequences.
Estate disputes often become contentious, especially when substantial assets and strong emotions are involved. Mareva injunctions, while not granted lightly, provide vital protection by preserving estate assets until claims are resolved. The Wilson v. Mayers decision reinforces the importance of swift, transparent, and evidence-supported action when assets are at risk.
Thank you for reading!
Sumit Malhotra