Court of Appeal of Quebec

Desjardins Assurances générales inc. v. Malo

500-09-028415-198

Duval Hesler, Hamilton, Sansfaçon

Appeal from a judgment of the Superior Court dismissing an application for ancillary orders to a Mareva order.  Allowed.

The trial judge dismissed the appellants’ application for ancillary orders to a previously issued Mareva order. The appellants sought authorization to publish the Mareva order against the respondents' immovables. According to the appellants, a Mareva order is admissible for publication since its essence is to restrict a person's right to dispose of his or her property, including immovables. Mareva orders would thus be characterized as one of the “[r]estrictions on the right to dispose of property, other than purely personal restrictions”, which, according to article 2939 of the Civil Code of Québec, SQ 1991, c 64 (C.C.Q.), “may be published”. The judge did not accept this approach. Relying on Aetna Financial Services v. Feigelman (S.C. Can., 1985-01-31), SOQUIJ AZ-85111017, J.E. 85-192, [1985] 1 S.C.R. 2 and Empire Life Insurance Company c. Thibault (C.A., 2008-10-21), 2008 QCCA 1975, SOQUIJ AZ-50517156, J.E. 2008-2098, which characterize Mareva orders as personal actions, he concluded that the criteria allowing for advance registration were not met. Last, since the principal application is an action for damages under article 1457 C.C.Q., and therefore a purely personal action, the judge concluded that the prohibition attached to the order to freeze assets was not subject to publication under article 2939 C.C.Q.

Article 2939 C.C.Q. allows for the publication of Mareva orders. Such orders order a person not to dispose of property. They are therefore directed against a person and not an immovables. Even if it does not create rights in favour of the person who obtains such an order in relation to the property of the person against whom it is directed, such an order still has an indirect effect on that person's property and on third parties who might acquire it. Just like orders of seizure before judgment, Mareva orders undoubtedly restricts the right to dispose of property. Contrary to the conditions for the application of article 2966 C.C.Q., those set out in article 2939 C.C.Q. do not require that the scope of the judicial application be qualified. The only thing that matters is the qualification of the restriction on the right to dispose, whose registration in the land register is desired, a restriction which must not be purely personal. In this case, the Mareva order is not purely personal to the appellants since it affects not only the named respondents, but also any potential acquirer who is aware of the order and therefore, by ricochet, the respondents' property which is, by its effect, “frozen”. This order is not subject to, but may be admissible for, publication, as set out in article 2939 C.C.Q. Its restrictions on the right to dispose may therefore be published as soon as the order is made. Its registration in the land register with respect to the respondents’ property, while it does not grant any particular right in favour of the appellants with respect to that property, allows it to be set up against third parties who might acquire it, hence the usefulness of its publication.

Legislation interpreted: article 2939 C.C.Q.

*Summary by SOQUIJ
Text of the decision: Http://citoyens.soquij.qc.ca

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