Décision

[1]           The Plaintiffs are requesting the resolution ab initio of the Distribution Agreements and verbal agreement with Duo-Regen Technologies Canada Inc. (DR Canada) and Duo-Regen Technologies LLC (DR, U.S.A.) since their consent would have been vitiated by fraud. The Plaintiffs also contend that Djalloul Drissi (Drissi) and Leila Ouanadi (Ouanadi), his wife, are the alter ego of numerous Duo-Regen companies worldwide, some of which are dissolved.

[2]           The action refers to a modus operandi by Drissi of disregarding contractual obligations and termination of contracts, notably in Mexico, Chile and Thailand. The action also refers to falsified labels, falsified Safety Data Sheet (“MSDS”) information and lies in customs declarations concerning Duo-Regen Technology (DRT) products. The Plaintiffs also invoke falsified customs documents in Canada. Finally, the Plaintiffs invoke that the DRT products are i) unpatented, though they are falsely advertised as such, ii) uncertified and thus, cannot be sold in the North American market and iii) dangerous.

[3]           There is the appearance of a serious right on behalf of Plaintiffs to obtain the resolution of the agreements on the basis of their consent having been vitiated by fraud.

[4]           A Mareva type injunction was issued ex parte by this Court on July 7, 2011 and three renewals were granted on July 18, 2011, July 28, 2011 and August 10, 2011.

[5]           Judge Jean-Yves Lalonde in Québec (Sous-ministre du Revenu) c. Weinberg[1] expresses himself as follows:

“[19]      L'injonction de type Mareva n'est prononcée que dans des cas exceptionnels où il est démontré qu'il existe un risque réel de voir disparaître clandestinement les biens d'un débiteur potentiel, au détriment du créancier qui exerce un recours contre lui. Contrairement à la saisie avant jugement prévue au Code de procédure civile du Québec (art. 733), l'injonction de type Mareva est un moyen procédural qui s'applique à la personne visée et non à ses biens.

[20]        Pour conclure à l'émission d'une telle injonction mandatoire préventive, le Tribunal appelé à l'émettre doit se convaincre qu'à moins d'imposer des restrictions sévères à la liberté du défendeur de disposer de ses actifs, pendant l'instance, il est raisonnable de craindre que celui-ci cherche à déjouer l'exécution d'un jugement éventuel par la commission d'actes trompeurs (ex: en camouflant les biens de son patrimoine) de nature à causer un préjudice irréparable au demandeur.”

[6]           What is the situation in this case?

[7]           On May 17, 2011, Plaintiffs sent a demand letter to DR Canada, DR U.S.A. and Drissi, requesting the payment of the sum of $1,101,338.44, to which the attorneys for DR Canada and DR U.S.A. responded on June 6, 2011.

[8]           In the examination of Drissi on his affidavit of assets, Drissi stated that he had had cognizance of the letter of demand around May 20, 2011.

[9]           On May 24, 2011, there was a withdrawal of $145,100.00 from account #[…] in the name of a/s Djalloul Drissi/Duo-Regen Technologies Canada Inc. at Banque Nationale du Canada in Montréal, leaving a balance of $5,463.22.

[10]        On the same day, there was a further withdrawal of $100,100.00 from account #[…] in the name of a/s Djalloul Drissi/Duo-Regen Technologies Canada Inc. at Banque Nationale du Canada in Montréal, leaving a balance of $49,857.05.

[11]        In the examination of Drissi on his affidavit of assets, Drissi stated that he had had cognizance of Justice Michel Déziel's Mareva order of July 7, 2011 around July 12, 2011.

[12]        On July 22, 2011, Drissi and Ouanadi each filed an affidavit of assets. Drissi did not declare his personal bank account # […] at HSBC in France, which was opened by him on June 21, 2011.  On July 11, 2011, a transfer of 50,000 euros was made to this account and on July 15, 2011, a transfer of 40,000 euros was made out of this account to the account of Drissi at the Caisse d'épargne, Côte d'Azur, in contravention of the Mareva order which was in place.

[13]        In his affidavit, Drissi declared having, on July 22, 2011, a personal account at La Caisse d'épargne in France, with a balance of approximately 140 euros. The statement from the Caisse d'épargne Côte d'Azur concerning Drissi's account 04333071640 shows an Internet connection at 20:39 on July 22, 2011 and a balance of 10,758.77 euros. The statement also shows two transfers to this account on July 15 and 21, 2011 in the amount of 40,000 and 5,000 euros respectively and on July 19, 2011, five Internet transfers of 6,000 euros each out of the account. The transfers out of the account were made in contravention of the Mareva order issued by Justice Michel Déziel and renewed by Justice Lucie Fournier, of which Drissi had cognizance. On August 2, 2011, there was an Internet transfer of 1,000 euros from the said account also in contravention with the Mareva order in place.

[14]        In paragraph 170 of Jean Prévost's affidavit in support of the action, he alledges that on July 6, 2011, Drissi had left his Nun's Island condo and put it up for sale and that nobody was currently living on the premises. The affidavits of third parties filed by Defendants show that the condo was furnished and inhabited at the end of July 2011, Drissi having come back to Canada around July 13, 2011. The condo is however up for sale and it is alledged that on June 6, 2011, Drissi would have mortgaged it for $273,000.00. It is to be noted that Drissi had cognizance of the letter of demand around May 20, 2011.  It is also to be noted that there is no accepted offer to purchase another residence.

[15]        On May 10, 2011, the Plaintiffs learned that DR Canada's only office and warehouse in Canada were vacant.

[16]        All these elements are sufficient to show that there is a serious risk that Plaintiffs will never be able to execute a judgment on the merits and gives rise to the Mareva interlocutory injunction.  The prejudice to Plaintiffs would be irreparable.

[17]        Even if the Court is not obliged to analyze the balance of inconvenience, seeing the serious right, the conclusion permitting Drissi and Ouanadi to apply to the Court in regards to the funds necessary for future support and expenses attenuates the prejudicial effect of the Mareva injunction.

[18]        The Court will therefore grant the requested Mareva interlocutory injunction to be valid until the hearing on the merits.

[19]        Defendants have asked verbally for a $750,000.00 surety. Representations of counsel for Plaintiffs were made that a $50,000.00 surety had been deposited in trust with Robic LLP. The Court considers the said amount sufficient and will order that it be retained as surety.

FOR THESE REASONS, THE COURT :

[20]        ISSUES an interlocutory Mareva injunction to remain in full force until the hearing on the merits;

[21]        ORDERS Djalloul Drissi, Leila Ouanadi, Duo-Regen Technologies Canada Inc., Duo-Regen Technologies LLC, Duo-Regen Technologies LLP, Duo-Regen Europe (collectively the “Defendants”) not to mortgage, pledge, encumber, transfer, dispose, cede, assign, sell, donate, bestow, remove or alienate in any form, manner of fashion, any and all of their assets and property wherever situated worldwide, among others in Canada, United States of America, France, United Kingdom or elsewhere, known or unknown to Plaintiffs, whether held directly or indirectly through the intermediary of other persons, whether they be physical, moral or legal persons, including in particular, however by no means restricting the generality which precedes, the following moveable and immoveable property and interest and/or rights in the following;

a.      The immoveable porperty situated at 2 Place des Jardins-des-Vosges, apt 309, Verdun/Île-des-sœurs (Montréal), Province of Québec, H3E 2B2, Canada;

b.      All automobiles, namely,

i.       BMW 535xi (2008) serial number WBANV935X8CW55714;

c.      All funds, securities, investments, proceeds, interests payments, dividends or all other assets held on the part of the:

i.          National Bank  of Canada located at 600, rue de la Gauchetière O., Montréal, (branch no. 00011) in accounts number […] and […] registered in the name of Duo-Regen Technologies Canada Inc. or any other accounts in the name of any of the Defendants;

ii.        Royal Bank of Canada located at International Trade Center, 335 8th Avenue, SW, Calgary, Alberta, in any account in the name of Duo-Regen Technologies Canada Inc. or any other of the Defendants;

iii.       Royal Bank of Canada located at Place Ville-Marie, Montréal, in account number […] in the name of Duo-Regen Technologies Canada Inc. or any other accounts in the name of any of the Defendants;

iv.       Bank of Montreal located at 4010, rue Tupper, Westmount in account number […] in the name of Duo-Regen Technologies or any other account in the name of any Defendant;

v.         Toronto Dominion Bank, at 38 Place du Commerce in Nun's Island, Montreal, in account number […] in the name of Duo-Regen Technologies or any other account in the name of any Defendant;

vi.       Bank of America located at 2551 Tarpon Woods Blvd, Palm Harbor, 34685 Florida, USA, in accounts number […] and […] in the name of Duo-Regen Technologies LLC or any other account in the name of any Defendant;

vii.      HSBC Bank located in Pont des Gabres, 6 bis, rue Latour Maubourg, 06400, Cannes, France, account number […] in the name of Drissi and/or Duo-Regen Europe or any other account in the name of any Defendant;

[22]        ORDERS the Defendants to fully collaborate with the Plaintiffs, 4463251 Canada Inc. and Battlife Laval Inc., by answering all questions in relation to the locations where assets are held as well as in collaborating in helping Plaintiffs obtain documents and information not in the possession of Defendants but rather in the possession of third parties;

[23]        ORDERS the Defendants not to destroy, alter, modify, or purposely dispose of documents herein below requested by Plaintiffs, 4463251 Canada Inc. and Battlife Laval Inc., or give instructions to third persons, in possession of certain documents requested, to refuse access of provide copies of such documents:

a.      All bank statements, namely since April 2010, for accounts held by Defendants personally or jointly in any Bank and by no means restricting the generality which precedes, the following bank accounts;

i.          National Bank of Canada located at 600, rue de la Gauchetière O., Montréal, (branch no. 00011) in accounts number […] and […] registered in the name of Duo-Regen Technologies Canada Inc. or any other accounts in the name of any of the Defendants;

ii.        Royal Bank of Canada located at International Trade Center, 335 8th Avenue, SW, Calgary, Alberta, in any account in the name of Duo-Regen Technologies Canada Inc. or any other of the Defendants;

iii.       Royal Bank of Canada located at Place Ville-Marie, Montréal, in account number […] in the name of Duo-Regen Technologies Canada Inc. or any other accounts in the name of any of the Defendants;

iv.       Bank of Montreal located at 4010, rue Tupper, Westmount in account number […] in the name of Duo-Regen Technologies or any other account in the name of any Defendant;

v.         Toronto Dominion Bank, at 38 Place du Commerce in Nun's Island, Montreal, in account number […] in the name of Duo-Regen Technologies or any other account in the name of any Defendant;

vi.       Bank of America located at 2551 Tarpon Woods Blvd, Palm Harbor, 34685 Florida, USA, in accounts number […] and […] in the name of Duo-Regen Technologies LLC;

vii.      HSBC Bank located in Pont des Gabres, 6 bis, rue Latour Maubourg, 06400, Cannes, France, account number […] in the name of Drissi and/or Duo-Regen Europe or any other account in the name of any Defendant;

b.      Registration and automobile insurances for all vehicles, namely;

i.       BMW 535xi (2008) serial number WBANV935X8CW55714;

c.      Any other information pertaining to any other property belonging to Defendants personally or jointly;

[24]        ALLOWS Djalloul Drissi and Leila Ouanadi to apply to the present Court for a Motion in regards to the funds necessary for future support and expenses, which Motion Plaintiffs will have the right to contest;

[25]        ALLOWS Plaintiffs, 4463251 Inc. and Battlife Laval Inc., to serve the present Order by delivering said Order by Bailiff to the immoveable property situated at 2 Place des Jardins-des-Vosges, apt 309, Verdun/Île-des-Sœurs (Montréal), province of Québec, H3E 2B2, Canada;

[26]        RESERVES Plaintiffs' right to amend the Motion for Interlocutory Mareva Injunction And Motion to Institute Proceedings as information is provided in due course, namely by adding new facts and/or Defendants and detailing the extent of Plaintiffs' monetary prejudice;

[27]        GIVES acte to the Plaintiffs' deposit of $50,000.00 as surety at Robic LLP in trust and orders the said amount of $50,000.00 to be held in trust until further order of the Superior Court;

[28]        THE WHOLE with costs to follow suit.