Clark et al. v. Nucare plc, 2006 MBCA 101

• Judge: Scott, C.J.M., Kroft and Steel, JJ.A.
• Court: Court of Appeal (Manitoba)
• Case Date: December 13, 2005
• Jurisdiction: Manitoba
• Citations: 2006 MBCA 101;(2006), 208 Man.R.(2d) 102 (CA)

Clark v. Nucare (2006), 208 Man.R.(2d) 102 (CA);

      383 W.A.C. 102

MLB headnote and full text

Temp. Cite: [2006] Man.R.(2d) TBEd. SE.018

Paul Clark, Wendy Clark, Darren Chalus, Peter Clark, Edmond Huot, The Paul and Wendy Clark Family Trust and WSF Partners Ltd. (plaintiffs/respondents) v. Nucare plc (defendant/appellant)

(AI 05-30-06238; AI 05-30-06239; 2006 MBCA 101)

Indexed As: Clark et al. v. Nucare plc

Manitoba Court of Appeal

Scott, C.J.M., Kroft and Steel, JJ.A.

September 18, 2006.

Summary:

The plaintiffs owned two Manitoba companies that sold prescription drugs to Americans over the internet. The defendant, Nucare PLC, was a distributor of pharmaceutical products in the United Kingdom. The plaintiffs sued Nucare for breach of a contract wherein Nucare agreed to purchase shares in the plaintiffs' companies. The plaintiffs claimed an attaching order or a Mareva injunction respecting trust funds on deposit with Nucare's solicitors payable on the purchase of shares, the deposit being Nucare PLC's only asset in Canada. A Mareva injunction was granted ex parte. Nucare sought to have the injunction set aside, alleging a failure by the plaintiffs to make full and fair disclosure.

The Manitoba Court of Queen's Bench, in a decision reported 196 Man.R.(2d) 1, refused to set aside the injunction. Subsequently, the plaintiff applied for continuation of the Mareva injunction and for an attaching order, both of which were granted by the motions judge. Nucare appealed.

The Manitoba Court of Appeal allowed the appeals, setting aside both the Mareva injunction and the attaching order.

Creditors and Debtors - Topic 2101

Seizure or attachment of debtors' property - General - The Manitoba Court of Appeal discussed the history of attachment orders - See paragraphs 56 to 78.

Creditors and Debtors - Topic 2104

Seizure or attachment of debtors' property - General - Setting aside attachment order - The plaintiffs owned two Manitoba companies that sold prescription drugs over the internet - The defendant, Nucare, was a distributor of pharmaceutical products in the United Kingdom - The plaintiffs sued Nucare for breach of a contract to purchase shares in the plaintiffs' companies - The plaintiffs claimed an attaching order or a Mareva injunction respecting trust funds on deposit with Nucare's solicitors for the share purchase - A Mareva injunction was granted ex parte - Nucare sought to have the injunction set aside, alleging a failure by the plaintiffs to make full and fair disclosure - The motions judge refused to set aside the injunction - Subsequently, the plaintiff applied for continuation of the Mareva injunction and for an attaching order, both of which were granted by the motions judge - Nucare appealed - The Manitoba Court of Appeal allowed the appeal - The court held that a Mareva injunction ought not to have been granted in this case where the grounds for granting exceptional relief in the form of a Mareva injunction simply did not exist - No risk of non-payment was shown - The motions judge erred in placing an onus on Nucare to disprove harm, rather, it was incumbent upon the applicants to demonstrate irreparable harm to themselves - There was also a lack of disclosure by the plaintiffs upon the return of the ex parte application for the injunction - Further, an attachment order should not have been granted where the amount claimed could not be calculated with a reasonable degree of precision given the absence of sufficient or of any indicia of reliability - See paragraphs 1 to 78.

Injunctions - Topic 1164

Ex parte injunctions - Dissolution and setting aside - Grounds - General - [See Creditors and Debtors - Topic 2104 ].

Injunctions - Topic 1612

Interlocutory or interim injunctions - Mareva injunctions - Preservation of property pending or after judgment - The Manitoba Court of Appeal discussed the requirements for obtaining a Mareva injunction and an attachment order under s. 60 of the Court of Queen's Bench Act and the distinction between the two remedies - See paragraphs 51 to 78.

Injunctions - Topic 1612

Interlocutory or interim injunctions - Mareva injunctions - Preservation of property pending or after judgment - The Manitoba Court of Appeal noted the difference in approach to Mareva injunctions taken by the provincial appellate courts in Canada - The court concluded that the preponderance of authority supported the view that Mareva injunctions were unavailable against defendants who did not evidence an intention to frustrate the plaintiff's potential judgment - However the court also stated that in the absence of improper intention, an injunction could still be granted where there was a very compelling and strong claim - The court rejected the notion that a Mareva injunction could be available simply as a form of security - See paragraphs 36 to 49.

Injunctions - Topic 1612

Interlocutory or interim injunctions - Mareva injunctions - Preservation of property pending or after judgment - [See Creditors and Debtors - Topic 2104 ].

Injunctions - Topic 4581

Operation of injunctions - Dissolution - General - [See Creditors and Debtors - Topic 2104 ].

Injunctions - Topic 7845

Setting aside injunctions - Grounds - Failure to disclose relevant facts on application - [See Creditors and Debtors - Topic 2104 ].

Statutes - Topic 2417

Interpretation - Interpretation of words and phrases - "May" and "shall" - The Manitoba Court of Appeal discussed the meaning of the word "may" as it was used in s. 60(1) of the Court of Queen's Bench Act (i.e., respecting attachment orders) - See paragraphs 64 to 69.

Words and Phrases

May - The Manitoba Court of Appeal discussed the meaning of this word as it was used in s. 60(1) of the Court of Queen's Bench Act, S.M. 1988-89, c. 4; C.C.S.M., c. C-280 - See paragraphs 64 to 69.

Words and Phrases

Payment of money is claimed - The Manitoba Court of Appeal discussed the meaning of this phrase as it was used in s. 60 of the Court of Queen's Bench Act, S.M. 1988-89, c. 4; C.C.S.M., c. C-280 - See paragraphs 60 to 62.

Cases Noticed:

Pulse Microsystems Ltd. et al. v. Safesoft Systems Inc. et al. (1996), 110 Man.R.(2d) 163; 118 W.A.C. 163 (C.A.), refd to. [para. 22].

Feigelman et al. v. Aetna Financial Services Ltd., Lax and Burke, [1985] 1 S.C.R. 2; 56 N.R. 241; 32 Man.R.(2d) 241, refd to. [para. 27].

Lister & Co. v. Stubbs, [1886-1990] All E.R. 797 (C.A.), refd to. [para. 28].

Mareva Compania Naviera SA v. International Bulkcarriers SA, [1980] 1 All E.R. 213 (C.A.), refd to. [para. 29].

Rasu Maritima SA v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) et al., [1977] 3 All E.R. 324 (C.A.), refd to. [para. 30].

Chitel v. Rothbart (1982), 39 O.R.(2d) 513 (C.A.), refd to. [para. 35].

663309 Ontario Inc. v. Bauman (2000), 190 D.L.R.(4th) 491 (Ont. Sup. Ct.), refd to. [para. 36].

United States of America v. Yemec et al., [2003] O.T.C. 877; 233 D.L.R.(4th) 169 (Sup. Ct.), refd to. [para. 36].

Silver Standard Resources Inc. v. Joint Stock Co. Geolog et al. (1998), 115 B.C.A.C. 262; 189 W.A.C. 262; 168 D.L.R.(4th) 309 (C.A.), refd to. [para. 38].

Mooney v. Orr, [1994] B.C.J. No. 2652 (S.C.), refd to. [para. 38].

International Association of Science and Technology for Development et al. v. Hamza (1997), 200 A.R. 342; 146 W.A.C. 342; 29 R.F.L.(4th) 460 (C.A.), refd to. [para. 39].

R. v. Consolidated Fastfrate Transport Inc. (1995), 83 O.A.C. 1; 125 D.L.R.(4th) 1 (C.A.), refd to. [para. 41].

Marine Atlantic Inc. v. Blyth et al. (1993), 168 N.R. 317; 113 D.L.R.(4th) 501 (F.C.A.), refd to. [para. 41].

Scotia Wholesale Ltd. and Flynn v. Magliaro (1987), 81 N.S.R.(2d) 201; 203 A.P.R. 201 (C.A.), refd to. [para. 41].

Leaton Leather & Trading Co. v. Ngai et al., [1997] B.C.T.C. Uned. A47; 32 B.C.L.R.(3d) 14 (S.C. Master), refd to. [para. 44].

Newton v. Bergman (1901), 13 Man.R. 563 (Q.B.), refd to. [para. 48].

Safety Freight Ltd. v. Orr (1954), 63 Man.R. 32 (C.A.), refd to. [para. 48].

Connecticut v. Doehr (1991), 111 S. Ct. 2105 (S.C.), refd to. [para. 56].

Hime v. Coulthard (1910), 20 Man.R. 164 (Q.B.), refd to. [para. 58].

Russia (Emperor) v. Proskouriakoff (1908), 8 W.L.R. 461 (Man. C.A.), refd to. [para. 58].

Fields et al. v. Northland Co. et al. (1933), 41 Man.R. 200 (C.A.), refd to. [para. 58].

Steingard v. Grigg, [1979] M.J. No. 241 (Q.B.), refd to. [para. 58].

Lechow v. A.E.I. Telecommunications (Canada) Ltd. (1991), 73 Man.R.(2d) 109; 3 W.A.C. 109 (C.A.), refd to. [para. 68].

Nova Scotia Power Inc. v. AMCI Export Corp. (2005), 238 N.S.R.(2d) 316; 757 A.P.R. 316; 2005 NSCA 152, refd to. [para. 69].

Westmills Canada Inc. v. Harvey & Pulton Whse. Carpet Sales Ltd. (1989), 94 A.R. 57 (C.A.), refd to. [para. 70].

Stanley v. Acan Windows Inc. (1995), 135 Nfld. & P.E.I.R. 29; 420 A.P.R. 29 (Nfld. C.A.), refd to. [para. 72].

Statutes Noticed:

Court of Queen's Bench Act, S.M. 1988-89, c. 4; C.C.S.M., c. C-280, sect. 60(1) [para. 53].

Rules of Court (Man.), Queen's Bench Rules, rule 46.02(1) [para. 54]; 46.13(1) [para. 55].

Authors and Works Noticed:

Deane, Robert J.C., Varying the Plaintiff's Burden: An Efficient Approach to Interlocutory Injunctions to Preserve Future Money Judgments (1999), 49 Univ. of Toronto L.J. 1, generally [para. 42].

Sharpe, Robert J., Injunctions and Specific Performance (2005 Looseleaf Supp.), pp. 2-58, 2-59 [para. 34]; 2-60 [para. 36].

Tetley, William, Arrest, Attachment and Related Maritime Law Procedures (1999), 73 Tulane L. Rev. 1895, generally [para. 76].

Counsel:

G.P.S. Riley and J.A. Myers, for the appellant;

B.L. Gorlick, Q.C., for the respondents.

These appeals were heard on December 13, 2005, and February 28, 2006, by Scott, C.J.M., Kroft and Steel, JJ.A., of the Manitoba Court of Appeal. The following decision of the court was delivered by Scott, C.J.M., on September 18, 2006.