Where the proceedings are focused on the protection and management of property or assets, as is often the case in estate litigation, a party may wish to seek an order for “injunctive relief,” that is, an order that either requires or prevents action on the part of the opposing party. This injunctive relief is often in the form of an order that freezes assets or registers a Certificate of Pending Litigation (“CPL”) against real property.
Where there is some urgency in obtaining that relief, a party may seek an order on an interim or interlocutory basis, pending the final outcome of the proceedings. There are three tests for the granting of injunctive relief on an interlocutory motion: the applicant must have a prima facie case (to establish that the claim is not frivolous or vexatious), the applicant must evidence a likelihood that he or she will suffer irreparable harm if the injunction is refused, and the applicant must evidence that the harm suffered by the respondent as a result of the injunctive relief will not outweigh the harm suffered by the applicant if the order is not granted.1
In exceptional cases, a party may wish to obtain interlocutory injunctive relief without notifying the opposing party that they intend to do so. This approach is likely preferred where the opposing party may take steps to obstruct the order by transferring or dissipating property or assets. A proceeding without notice to the opposing party is called an “ex parte” proceeding. The responding party is denied the opportunity to address the allegations against him or her and, for this reason, ex parte proceedings are only appropriate in particular circumstances:
As the jurisprudence of [the Ontario Superior Court of Justice] consistently has held, proceeding with an application (or a motion) on an ex parte basis is an extra-ordinary way of proceeding and only should occur (i) where there is good reason to believe that the responding party, if given notice, will act to frustrate the process of justice before the motion can be decided or (ii) where there is simply not the time and/or means to provide notice.2
Estate litigation matters are often characterized by an absence of trust between the parties, which can be exacerbated by attendant imbalances in power, the inability to access information, and the lack of control of an estate’s assets. It can be tempting in these circumstances for parties to seek injunctive relief on an ex parte basis, especially when the issues giving rise to mistrust have been ongoing for some time or have arisen in already strained family dynamics.
The perils of ex parte proceedings for injunctive relief were discussed in the July 8, 2013 issue of Law Times.3 David Gruber reports on the recent decision, K.A. v. Michael Paul Mitchell (unreported), in which Justice Chapnik sets aside a moving party’s ex parte order. This case is not an estate matter, but it is illustrative of the interests at stake in ex parte proceedings for interlocutory injunctive relief. The ex parte order had been granted in January of 2013 and included a CPL against the responding party’s property and a freezing order against his assets.4
As Mr. Gruber explains, the Rules of Civil Procedure provide that a an order granting injunctive relief on a motion without notice must dissolve after 10 days, but that order can be renewed until the responding party is able to mount an effective challenge.5 This process can and does take months. In K.A. v. Michael Paul Mitchell, the responding party was not able to return the motion until May 4, 2013 and, in the meantime, his assets remained frozen.
Full and fair disclosure is a key requirement of the affidavit evidence presented by a moving party on an ex parte motion; his or her affidavit must include facts which may explain the defendant’s position if known to the plaintiff.6 According to Mr. Gruber’s article, Justice Chapnik found that the moving party failed to evidence the risk of “imminent dissipation” with respect to the property in question, and set aside the Order on the basis that the plaintiff had not been truthful in her affidavit and failed to provide full and fair disclosure.7
The moving party in K.A. v. Michael Paul Mitchell is now bound by her undertaking, pursuant to the Rules, to compensate the responding party for any damages that the court finds were caused by the order.8 It is not clear from the article whether the responding party sought, or intends to seek, such damages or costs.
Justice Chapnik’s decision echoes Justice David Brown’s obiter in Sprott. In this decision, Justice Brown reminds counsel and their clients that ex parte motions are perhaps not a panacea, always able to satisfy one’s sense of urgency in matters of litigation:
Judges learn from experience that most stories have two sides to them, thus the great reluctance of judges to deal with requests for orders on an ex parte basis. Parties and their counsel can never lose sight of the obligation to make the fullest and most frank disclosure on ex parte applications or motions. Such applications mark a radical departure from the adversarial approach to truth-finding upon which our common law system is built and an exception to the general transparency and openness of our courts when they make orders which affect other parties.9
In Ignagni Estate (Re), Justice David Brown goes so far as to suggest in obiter that, in his view, ex parte motions may not be appropriate in estates matters where the dispute arises between family members.10 Justice Brown writes:
Many estate disputes arise in the context of strained family relationships, or out-and-out family battles. Courts should exercise great caution before granting an order that imposes obligations on one side in a family dispute. Unless some extraordinary urgency exists, prudence and the principles of natural justice require a moving party to give notice of the order requested so that the respondent enjoys the opportunity of placing the rest of the story before the court.11
Justice Brown found that the moving party failed to evidence extraordinary urgency; in fact, almost two years had passed since the testator died.12 He found that there was no apparent difficulty in serving the motion record and no evidence that the respondents would take steps to frustrate the process of justice before the motion is heard.13
Ignagni Estate (Re) did not pertain to injunctive relief, but rather an order for assistance under Rule 74.15. Justice Brown’s view on the appropriateness of ex parte proceedings between family members, and in estates matters in particular, has not been tested in subsequent reported decisions, and it is unclear whether his decision would have been different had the moving party sought injunctive relief on evidence of a prima facie case and imminent dissipation. Regardless, parties seeking to test Justice Brown’s view regarding ex parte motions in estates matters should proceed with caution.
These two cases, considered together, suggest that parties seeking injunctive relief in estates matters on an ex parte basis should do so having regard to the exceptional requirements and obligations that flow from that procedural approach: they must establish a prima facie case, provide full and fair disclosure, evidence the risk that the responding party would attempt to frustrate the process if provided with notice, evidence risk of imminent dissipation, and undertake to compensate the responding party for damages associated with the order in the event that the court deems it necessary.
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1. RJR MacDonald Inc. v. Canada, [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385, 54 C.P.R. (3d) 114.
2. Sprott Resource Lending Corp. (Re), 2013 ONSC 4350 (CanLII) 9 citing Robert Half Canada Inc. v. Jeewan 2004 CanLII 1532 (ON SC), (2004), 71 O.R. (3d) 650 (S.C.J.); Ignagni Estate (Re), 2009 CanLII 54768 (ON SC), 2009 CanLII 54768 (ON SC).
3. David Gruber, “Court warns of dangers of ex parte orders”, Law Times (July 8, 2013), page 2 (“Law Times”).
4. Law Times.
5. Rule 40.01, 40.02; Law Times.
6. Chitel v. Rothbart et al., (1982), 39 O.R. (2d) 513, 141 D.L.R. (3d) 268 (ON CA).
7. Law Times.
8. Rule 40.03; Stonehocker v. King, 1998 CanLII 7187 (ON CA).
9. Sprott 11.
10. Ignagni Estate (Re), 2009 CanLII 54768 (ON SC).
11. Ignagni Estate (Re) at 14.
12. Ibid. at 15.
13. Ibid.
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Written by: WEL Partners
Posted on: July 22, 2013
Categories: Commentary
Where the proceedings are focused on the protection and management of property or assets, as is often the case in estate litigation, a party may wish to seek an order for “injunctive relief,” that is, an order that either requires or prevents action on the part of the opposing party. This injunctive relief is often in the form of an order that freezes assets or registers a Certificate of Pending Litigation (“CPL”) against real property.
Where there is some urgency in obtaining that relief, a party may seek an order on an interim or interlocutory basis, pending the final outcome of the proceedings. There are three tests for the granting of injunctive relief on an interlocutory motion: the applicant must have a prima facie case (to establish that the claim is not frivolous or vexatious), the applicant must evidence a likelihood that he or she will suffer irreparable harm if the injunction is refused, and the applicant must evidence that the harm suffered by the respondent as a result of the injunctive relief will not outweigh the harm suffered by the applicant if the order is not granted.1
In exceptional cases, a party may wish to obtain interlocutory injunctive relief without notifying the opposing party that they intend to do so. This approach is likely preferred where the opposing party may take steps to obstruct the order by transferring or dissipating property or assets. A proceeding without notice to the opposing party is called an “ex parte” proceeding. The responding party is denied the opportunity to address the allegations against him or her and, for this reason, ex parte proceedings are only appropriate in particular circumstances:
Estate litigation matters are often characterized by an absence of trust between the parties, which can be exacerbated by attendant imbalances in power, the inability to access information, and the lack of control of an estate’s assets. It can be tempting in these circumstances for parties to seek injunctive relief on an ex parte basis, especially when the issues giving rise to mistrust have been ongoing for some time or have arisen in already strained family dynamics.
The perils of ex parte proceedings for injunctive relief were discussed in the July 8, 2013 issue of Law Times.3 David Gruber reports on the recent decision, K.A. v. Michael Paul Mitchell (unreported), in which Justice Chapnik sets aside a moving party’s ex parte order. This case is not an estate matter, but it is illustrative of the interests at stake in ex parte proceedings for interlocutory injunctive relief. The ex parte order had been granted in January of 2013 and included a CPL against the responding party’s property and a freezing order against his assets.4
As Mr. Gruber explains, the Rules of Civil Procedure provide that a an order granting injunctive relief on a motion without notice must dissolve after 10 days, but that order can be renewed until the responding party is able to mount an effective challenge.5 This process can and does take months. In K.A. v. Michael Paul Mitchell, the responding party was not able to return the motion until May 4, 2013 and, in the meantime, his assets remained frozen.
Full and fair disclosure is a key requirement of the affidavit evidence presented by a moving party on an ex parte motion; his or her affidavit must include facts which may explain the defendant’s position if known to the plaintiff.6 According to Mr. Gruber’s article, Justice Chapnik found that the moving party failed to evidence the risk of “imminent dissipation” with respect to the property in question, and set aside the Order on the basis that the plaintiff had not been truthful in her affidavit and failed to provide full and fair disclosure.7
The moving party in K.A. v. Michael Paul Mitchell is now bound by her undertaking, pursuant to the Rules, to compensate the responding party for any damages that the court finds were caused by the order.8 It is not clear from the article whether the responding party sought, or intends to seek, such damages or costs.
Justice Chapnik’s decision echoes Justice David Brown’s obiter in Sprott. In this decision, Justice Brown reminds counsel and their clients that ex parte motions are perhaps not a panacea, always able to satisfy one’s sense of urgency in matters of litigation:
In Ignagni Estate (Re), Justice David Brown goes so far as to suggest in obiter that, in his view, ex parte motions may not be appropriate in estates matters where the dispute arises between family members.10 Justice Brown writes:
Justice Brown found that the moving party failed to evidence extraordinary urgency; in fact, almost two years had passed since the testator died.12 He found that there was no apparent difficulty in serving the motion record and no evidence that the respondents would take steps to frustrate the process of justice before the motion is heard.13
Ignagni Estate (Re) did not pertain to injunctive relief, but rather an order for assistance under Rule 74.15. Justice Brown’s view on the appropriateness of ex parte proceedings between family members, and in estates matters in particular, has not been tested in subsequent reported decisions, and it is unclear whether his decision would have been different had the moving party sought injunctive relief on evidence of a prima facie case and imminent dissipation. Regardless, parties seeking to test Justice Brown’s view regarding ex parte motions in estates matters should proceed with caution.
These two cases, considered together, suggest that parties seeking injunctive relief in estates matters on an ex parte basis should do so having regard to the exceptional requirements and obligations that flow from that procedural approach: they must establish a prima facie case, provide full and fair disclosure, evidence the risk that the responding party would attempt to frustrate the process if provided with notice, evidence risk of imminent dissipation, and undertake to compensate the responding party for damages associated with the order in the event that the court deems it necessary.
—
1. RJR MacDonald Inc. v. Canada, [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385, 54 C.P.R. (3d) 114.
2. Sprott Resource Lending Corp. (Re), 2013 ONSC 4350 (CanLII) 9 citing Robert Half Canada Inc. v. Jeewan 2004 CanLII 1532 (ON SC), (2004), 71 O.R. (3d) 650 (S.C.J.); Ignagni Estate (Re), 2009 CanLII 54768 (ON SC), 2009 CanLII 54768 (ON SC).
3. David Gruber, “Court warns of dangers of ex parte orders”, Law Times (July 8, 2013), page 2 (“Law Times”).
4. Law Times.
5. Rule 40.01, 40.02; Law Times.
6. Chitel v. Rothbart et al., (1982), 39 O.R. (2d) 513, 141 D.L.R. (3d) 268 (ON CA).
7. Law Times.
8. Rule 40.03; Stonehocker v. King, 1998 CanLII 7187 (ON CA).
9. Sprott 11.
10. Ignagni Estate (Re), 2009 CanLII 54768 (ON SC).
11. Ignagni Estate (Re) at 14.
12. Ibid. at 15.
13. Ibid.
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