



COURT OF APPEAL FOR ONTARIO

CITATION: Caja Paraguaya De Jubilaciones v. Obregon, 2019
    ONCA 198

DATE: 20190311

DOCKET: M50127 (C66070)

Nordheimer J.A. (In Chambers)

BETWEEN

Caja Paraguaya De Jubilaciones y Pensiones Del
    Personal De Itaipu Binacional

Respondent (Respondent)

and

Eduardo Garcia Obregon a.k.a. Eduardo Garcia
    a.k.a. Eddie Obregon, Claudia Patricia Garcia a.k.a. Patricia Garcia a.k.a.
    Claudia Patricia De Garcia a.k.a. Claudia Santisteban, Ligia Ponciano, Managed
    (Portfolio), corp., Genesis (la), corp. (Ontario Corporation Number 1653094, Genesis
    (la), corp. (Alberta Corporate Access Number 2013145921), FC int, corp., First
    Canadian int, corp.,
Union Securities Limited, Scott Colwell, Marty
    Hibbs, Hibbs Enterprises ltd., Columbus Capital Corporation, Antonio Duscio, Leanne
    Duscio, Leanne Duscio carrying on business as the Queen St. Conservatory, Catan
    Canada Inc., Vijay Paul, Greg Baker, Bradley F. Breen, Lou Maraj, 2138003 Ontario
    Inc., Mackie Research Capital Corporation, First Canadian Capital Markets ltd.,
    First Canadian Capital corp., FC Financial Private Wealth Group Inc., Jason C.
    Monaco, Daniel Boase, Paolo Abate, Nikolaos Sylianos Tsimids, Genesis Land Development
    Corporation, Limited Partnership Land Pool (2007), and GP LPLP 2007 Inc.

Applicants
(
Appellants
)

David Milosevic, for the applicants

Jacqueline King, for the respondent

Christopher Feeman, for Union Securities Limited

Heard: March 8, 2019

ENDORSEMENT

[1]

The applicants seek an order permitting them access to certain funds for
    the purpose of funding past and future legal fees. The respondent opposes the
    request on the basis, in essence, that any monies used by the applicants to
    fund their legal fees are monies that will not be available to the respondent
    to satisfy the judgment that it has against the applicants. Union Securities
    joins in the respondents opposition to this motion.

[2]

The applicants are appealing the trial judgment of Dunphy J. He found
    that the applicants had engaged in fraudulent conduct and ordered them to pay just
    over $20 million to the respondent. Union Securities also obtained judgment on
    a crossclaim but for a much smaller amount. No appeal has been taken from the
    Union Securities judgment.

[3]

In addition to awarding judgment in favour of the respondent, the trial
    judge also made an order that restrained the applicants from selling,
    removing, dissipating, alienating, transferring, assigning, encumbering or
    dealing with any assets, whether solely or jointed owned, wherever situated in
    the world . This order would, consequently, deny the applicants access to any
    and all of their funds or assets that could be used to fund their appeal.

[4]

The applicants first brought this motion before the trial judge. He
    dismissed the motion: see
Caja Paraguaya De Jubilaciones Y Del Personal De
    Itaipu Binacional v. Garcia
, 2018 ONSC 6569. In doing so, the trial judge
    applied the four-part test outlined in
Canadian Imperial Bank of Commerce
    v. Credit Valley Institute of Business & Technology
, [2003] O.J. No.
    40 (S.C.J.), at para. 26, namely:

(i) Has the defendant established on the evidence that he has
    no other assets available to pay his expenses other than those frozen by the
    injunction?

(ii) If so, has the defendant shown on the evidence that there
    are assets caught by the injunction that are from a source other than the
    plaintiff, i.e. assets that are subject to a
Mareva
injunction, but
    not a proprietary claim?

(iii) The defendant is entitled to the use of non-proprietary
    assets frozen by the
Mareva
injunction to pay his reasonable living
    expenses, debts and legal costs. Those assets must be exhausted before the
    defendant is entitled to look to the assets subject to the proprietary claim.

(iv) If the defendant has met the previous three tests and
    still requires funds for legitimate living expenses and to fund his defence,
    the court must balance the competing interests of the plaintiff in not
    permitting the defendant to use the plaintiff's money for his own purposes and
    of the defendant in ensuring that he has a proper opportunity to present his
    defence before assets in his name are removed from him without a trial. In
    weighing the interests of the parties, it is relevant for the court to consider
    the strength of the plaintiff's case, as well as the extent to which the
    defendant has put forward an arguable case to rebut the plaintiff's claim.

[5]

The trial judge ultimately dismissed the applicants motion, but did so
    without prejudice to the applicants bringing a motion for similar relief before
    this court. He found, on the first test, that the applicants had access to
    other sources of funds that were not subject to his non-dissipation order. On
    the fourth test, the trial judge concluded that he would not exercise his
    discretion to permit the applicants to have access to any funds.

[6]

Before me, the respondent submits that the
Credit Valley
test
    does not apply because it concerned a variation to a pre-trial
Mareva
injunction whereas, in this case, the relevant order is a post-trial
    non-dissipation order. That distinction does not accord with this courts
    decision in
Waxman v. Waxman,
2007 ONCA 326, 223 O.A.C. 375 which adopted
    essentially the same test in considering a similar request in the context of an
    appeal from a post-judgment order.

[7]

In my view, the first test is met. I reach that conclusion based on the
    plain wording of the non-dissipation order that the trial judge made. It is
    about as broad an order as could be envisaged. It covers all of the applicants
    assets with the result that even if, as the respondent contends, there are
    other assets under the ownership or control of the applicants (e.g. a house in
    Guatemala), those assets would also be subject to the order.

[8]

In terms of the second test, there was an express finding by the trial
    judge that $143,000 of the down payment made on the family home in Kitchener were
    monies to which the respondent has not established a proprietary claim.

[9]

In terms of the third test, because of the broadly worded
    non-dissipation order, the applicants do not have access to the $143,000. It is
    these monies to which the applicants seek access precisely because the
    respondent has no proprietary claim to them.

[10]

In
    terms of the fourth test, I do not intend to embark on a detailed analysis of
    the merits of the applicants appeal. It is sufficient to say that I do not
    agree with the respondent that the appeal is devoid of merit. It is generally
    recognized that the test for the merits of an appeal, on this form of
    preliminary pre-appeal motion, establishes a very low bar. As Doherty J.A. said,
    albeit in a different context, in
R. v. Bernardo
(1997), 105 O.A.C.
    244, 121 C.C.C. (3d) 123 (C.A.), at para. 22:

The merits inquiry should not, however, go any further than a
    determination of whether the appeal is an arguable one.

[11]

I
    am satisfied that, in this case, there are arguable grounds of appeal. I would
    add that any suggestion that Mr. Garcia could argue this case, on his own,
    fails to recognize the complexity of this case and the nature of some of the
    arguments to be made, including corporate identity and limitations issues. A
    party has the right to meaningfully participate in their appeal. In this case,
    meaningful participation cannot be achieved with the applicants unrepresented.

[12]

In
    the end result, the applicants have a right to appeal the trial judgment. The
    applicants need access to some monies to pay counsel for that purpose. As the
    trial judge found, the respondent has no proprietary claim to the monies from
    the down payment on the home (which is in the process of being sold). The
    respondents only claim to those monies is as a judgment creditor. The same is
    true with respect to any claim by Union Securities, as a judgment creditor, to
    those monies. In my view, those claims must take second place to the need of
    the applicants to fund their reasonable legal expenses relating to their right
    of appeal.

[13]

All
    of that said, I am not satisfied that the applicants need access to the entire
    $143,000. That is an amount that would exceed what would be reasonable fees to
    be incurred for this appeal. I would add that the applicants are not entitled
    to access to these funds to pay for past legal fees. In terms of past legal
    fees, the lawyers stand in the same position as the respondent and Union
    Securities. The lawyers would be, at most, execution creditors if they pursued
    their clients for the payment of those fees.

[14]

In
    the end, I grant an order permitting the applicants to have access to $100,000
    of the proceeds of the sale of the house in order to fund their reasonable
    legal fees for the appeal. These monies are to be paid directly to the applicants
    lawyers, Milosevic Fiske LLP, and are to be held by those lawyers in trust.
    These monies are only to be used to fund the reasonable costs of the
    applicants appeal, including the costs of obtaining the trial transcripts. The
    applicants lawyers are to account for the expenditure of these funds by
    providing to counsel for the respondent, and counsel for Union Securities, accounts
    for the fees charged, including details of the work done in support of those
    fees, summarized in a fashion that does not reveal any privileged material.

[15]

I
    should note, before concluding, that the applicants have given a clear and
    unequivocal undertaking that they will not seek any further monies for the
    purposes of their appeal.

[16]

There
    will be no order as to the costs of this motion.

I.V.B. Nordheimer
    J.A.


