General requirements

To obtain any type of injunction, generally, the applicant (the person asking for the injunction) must prove to the Court that:

1. The issue is serious;
2. The applicant would suffer irreparable harm that could not be compensated for by damages awarded at trial; and
3. The harm that the applicant would suffer from not getting the injunction, is more than the harm the fraudster would suffer from it. This is usually called the balance of convenience test.

Additional requirements for a Mareva injunction

To obtain a Mareva injunction, often called a freezing order, as well as any ancillary (supporting) orders, the applicant must comply with special requirements, which are in addition to the general requirements listed above.

The applicant must prove:

1. A strong and obvious (Prima facie) case

In fraud situations, the seriousness of fraud itself, often arising out of a breach of trust, is enough to prove that there is a case. In addition, the amount of the fraud and the relationship of the parties will determine how serious the Court will consider the case to be. The applicant (victim) will need to provide the Court with documents, such as affidavits, contracts and financial records. If the victim is afraid that the fraudster will dissipate the assets, they may bring the application for a Mareva injunction without notifying the fraudster. This is called an ex parte application. In such cases, the Court requires that the applicant provide what is referred to as full and frank disclosure, and means showing all the evidence that the victim has.

2. Assets are in the Court’s jurisdiction

The applicant must show that the fraudster has assets in the jurisdiction where the Court is located, or if the assets are situated elsewhere, that the Court still has legal jurisdiction over the assets.

3.  Likelihood of dissipation of assets

Mareva injunctions are usually sought where there is a serious risk that the fraudster will spend or hide the assets, referred to as dissipation of assets. The risk of the dissipation of assets is often implied by the fact of the fraudsters deceitful actions in committing the fraud. Also, the victim will usually show the irreparable harm that would be caused if the Court did not grant the injunction.

Victim’s promise to pay damages

Before issuing any of the three types of injunctions available, the Courts require the applicant (victim) to give an undertaking to pay damages.  An undertaking is essentially a promise. This promise is required because injunctions are ordered before the actual trial. Therefore, if during the trial the Court finds that the victim’s claims are not proven, and that the injunction caused the alleged fraudster financial harm, the Court has the power to order the victim to pay for such harm.

In most cases, the victim does not need to prove they have the money to pay damages, or to deposit money with the Court.  Sometimes however, if the risk of harm to the fraudster is great, and/or the victim does not have any assets with which to pay potential damages, the Courts may require the victim to pay a security deposit.

If you discover you are a victim of fraud, it is a good idea to contact a fraud recovery expert for advice.

If you a have a criminal record due to fraud-related charges (or for any other criminal offence), and wish to erase your record, call toll-free 1-888-808-3628 or learn more at Pardon Partners. It’s easier than you think.

								
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