Law Times

Page 2 July 8, 2013 Law Times • NEWS Court warns of dangers of ex parte orders Judge calls for notice after man's assets frozen for five months BY DAVID GRUBER For Law Times T he case of a woman who got significant restrictions placed on her former boyfriend through a misleading affidavit is proof of the need for extra caution around ex parte orders, according to an Ontario Superior Court judge. "This case shows why restrictive, all-encompassing injunctive relief should rarely be given without notice to the affected or interested parties," wrote Justice Sandra Chapnik in K.A. v. Michael Paul Mitchell last month. The circumstances of the case caused Chapnik to warn about the dangers of "ex parte orders against one party based only on the story told by the other party." According to the ruling, the plaintiff, known only as K.A., became involved in the sex trade with her then-boyfriend, Mitchell. K.A. claimed Mitchell pushed her into prostitution when she was 19. She accused him of being abusive as well as acting as her pimp and keeping "all her prostitution earnings for his own uses," according to Chapnik's judgment. Authorities arrested Mitchell and charged him with 11 offences. He had no previous criminal record. While he admitted to helping her with transport and security, 22-year-old Mitchell denied he was a pimp. He maintained they had agreed to enter the sex trade as a "joint enterprise" in order to "build a life together." The Crown applied ex parte for a criminal restraint order on Mitchell's home based on two interviews K.A. had given to police. K.A. also sued Mitchell and his mother, Ruth Mitchell, for "considerable" damages, claiming he had bought and renovated his Toronto home with ill-gotten money and that his mother encouraged him and helped him launder the funds. Mitchell claimed he was planning to repay her contribution. Adding her own sworn affidavit, she applied for another ex parte order for "sweeping interim relief." She sought an anonymity order, a certificate of pending litigation, an asset freeze, and forced disclosure of documents. Justice Wailan Low of the Ontario Superior Court of Justice granted the interim relief. That was in January. The defendant challenged the order, but it remained in effect until he got to court in May. In the meantime, Mitchell and his mother had their assets frozen. His lawyer said he was only able to access a few thousand dollars each month. The Rules of Civil Procedure state that an order made on a motion without notice must dissolve after 10 days. But it can take longer than that to mount an effective challenge. "What routinely happens is that the court renews the order but now it's not for 10 days, it's for the entire time it's going to take for the parties to get their acts together, file their affidavits, and do their cross-examinations," says Jonathan Rosenstein, who practises with Pape Barristers Professional Corp. and teaches civil procedure at the University of Toronto Faculty of Law. On May 4, upon receiving the defendant's materials, the plaintiff withdrew the motion for all relief except for the certificate of pending litigation, which Mitchell then sought to have removed from the title to his property. If an order stems from a phoney ARE YOU PREPARED FOR THE KEY ISSUES IN ESTATES AND TRUSTS LAW? NEW EDITION KEY DEVELOPMENTS IN ESTATES AND TRUSTS LAW IN ONTARIO, 2012 EDITION EDITOR: MELANIE A. YACH Gain insight into the latest estates and trusts law issues that will have an impact on your practice and your clients. 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But in this case, Mitchell's primary asset was his home in Toronto. "What do you do?" Milton Davis, Mitchell's counsel, asks rhetorically. "It's a house. How do you dissipate a house?" As Chapnik noted, "there was and is little or no imminent risk of dissipation" required for an ex parte order. In fact, the plaintiff "produced no evidence indicating that risk," she wrote. "The deal that the court makes with people is that if you're going to go ex parte, you must make full disclosure of all material facts," says Davis, who practises at litigation firm Davis Moldaver LLP. "This particular case was one of the more egregious violations of that rule." Chapnik agreed. She found that the plaintiff's affidavit was misleading and often plainly untrue. "She repeatedly lied to the court by creating a one-sided narrative with reckless disregard for the truth," wrote Chapnik. While claiming Mitchell kept all of her earnings, the plaintiff failed to disclose nearly $100,000 she had stashed in her own private bank account and failed to mention that she had full access to the safe where much of the prostitution money remained. She claimed a $20,000 advance she had received from a client went towards the house when in reality she had kept most of it. The judge concluded the plaintiff's affidavit was "deficient, untrue, and lacking in full and fair disclosure." The court set aside the order, but it had been in effect for nearly five months before the defendant contested any of the claims in court. So how does the law protect the absent party? Generally, any material nondisclosure will get an ex parte order set aside, says Rosen. As well, the court can order costs against the plaintiff and damages may be available in extreme cases. And if the affidavit features blatant lies, there's the issue of perjury. But until the court hears a challenge, the judge can only rely on whoever brought the motion. In Rosen's view, then, the courts should reserve ex parte orders for situations where a delay could have serious consequences or cause irreparable damage. LT

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