Jonathan Shepherd successfully represented three of the Defendants, Joe Barranca (“Mr. Barranca”), 2567609 Ontario Inc. (“2567609”), and 1000232418 Ontario Inc., c.o.b. as Carpe Trading (“Carpe Trading”), in resisting a preservation order under Rule 45.01 of the Rules of Civil Procedure.
Two operating companies, Apex Custom Fabrication Inc. (“Apex”) and City Marble Inc. (“City Marble”), have been involved in a dispute since 2020. City Marble is owned 2/3 by Apex and 1/3 by one of the Defendants, Mr. Barranca, through his holding company, 2567609. The Plaintiffs alleged that Carpe Trading was conducting business activities similar to those of City Marble and gave evidence that the Defendants concealed its incorporation and activities from them.
As a result of the ongoing dispute, the Plaintiffs sought a preservation order on the basis that City Marble had asked certain clients to pay cash for work done, that the incorporation of Carpe Trading suggested efforts to abandon or devalue City Marble, and that another Defendant had improperly utilized corporate credit cards and had undisclosed HST debts which could affect one of the Plaintiffs personally.
In deciding not to grant the preservation order, the Court noted that preservation orders are a discretionary remedy. However, a precondition to the remedy is that the impugned property must be “in question in a proceeding or relevant to an issue in the proceeding”. Regarding the corporate Defendant, since the Plaintiffs did not assert a legal interest in Carpe Trading, nor did they seek preservation of Carpe Trading as an asset that could be evidence in a proceeding, the order was refused. Regarding the individual Defendants, the Court noted that the relief sought was not targeted at a particular asset over which there was a dispute, and therefore, the relief requested was inappropriate in this case.