Rule 45 of Ontario’s Rules of Civil Procedure contains mechanisms by which a party can freeze assets that are in issue or relevant to the proceeding.  However, this should be done prior to the close of pleadings because once the matter is set down for trial, Rule 48.04(1) applies.  Rule 48.04(1) requires that any motion brought after the close of pleadings have leave of the court.  Leave will only be available where there has been a substantial or unexpected change in circumstances.

A recent example of Rule 48.04(1) barring a motion for interim preservation occured in Trapukowitcz Estate v. Royal Bank of Canada.  In this case, an estate trustee was seeking an order that the proceeds of a GIC and a bank account be paid into court pending determination of ownership.  Justice Harris refused to grant leave to bring the motion because, on the basis of the admissible evidence, the estate trustee had not shown a substantial or unexpected change in circumstances. 

Justice Harris followed Machado v. Pratt & Whitney Canada Inc. (1993), 16 O.R. (3d) 250, which requires strong affidavit evidence to demonstrate a "substantial and unexpected change in circumstances to the extent that to refuse the order would be manifestly unjust".  The grounds in the moving estate trustee’s affidavit were unconvincing. 

As importantly, viva voce evidence given in submissions was not considered.  To do so would be unfair to the respondent, particularly since the evidence had been available since June 4, 2009 and the hearing took place in August 6, 2009.  Therefore, Justice Harris cited Rule 37.06(b), which stipulates that every notice of motion must state the grounds to be argued, and refused to consider the viva voce evidence. 

There is no requirement under Rule 45 to prove the assets are actually at risk, so a R. 45 freezing order is easier to get before the close of pleadings.

Enjoy your day,

Chris Graham

Christopher M.B. Graham – Click here for more information on Chris Graham.