The Good, The Bad And The Ugly: Candour In Ex Parte Applications

Co-authored by Raphael Jacob, Articling Student

A recent decision by the Alberta Court of Appeal (ABCA) reminds us that counsel must take care to provide a balanced view of both sides and not overreach in their asks when seeking an ex parte application, lest the court set aside the sought orders entirely. In Secure 2013 Group Inc v Tiger Calcium Services Inc, 2017 ABCA 316 [Secure 2013 Group], the ABCA set aside a number of ex parte Mareva injunctions, attachment orders and Anton Piller orders against 14 parties for issues related to disclosure, overreaching terms and delay in seeking relief.

In Secure 2013 Group, the plaintiffs commenced an action against six individuals and seven corporations following their acquisition of a 67% controlling interest in Tiger Calcium Services Inc [Tiger]—one of the largest manufacturers of calcium chloride products in Western Canada. Smokey Creek, owned by two of the defendants, continued to own the remaining 33% interest of Tiger.

The plaintiffs sought relief under multiple causes of action including: material misrepresentations resulting in the plaintiffs overpaying for Tiger shares by $44.3 million, that problems with an industrial-scale plant were concealed from Tiger's board of directors by the defendants, misappropriation of Tiger labor for personal benefit and collusion by the defendants to have Tiger lease equipment from a company they partially owned at above-market rates while hiding their involvement in said company.

The plaintiffs sought Mareva injunctions (a temporary injunction freezing the assets of a party to an action) and Anton Piller orders (which allow a party to search premises and seize evidence). The plaintiffs also sought attachment orders, which would prevent the selling of assets until resolution of the action, which were considered by the chambers judge in conjunction with the Mareva injunctions. On November 30, 2016, the chambers judge granted the orders which were the subject of the appeal in this case.

Strekaf JA had several issues with the various orders sought by the plaintiffs that can be categorized under three broad headings.

1. Disclosure Issues

   The ABCA primarily took issue with the plaintiffs' disclosure and candour. Strekaf JA noted that while the plaintiffs had provided almost 2000 pages of evidence, they failed to include the complete Share Purchase Agreement that was at the heart of this disputeonly 14 highly-redacted pages had been included. She considered the...