No Mareva Injunction Granted Where Evidence is Merely Suggestive
Eli Lilly Canada Inc. v. Novopharm Limited, 2010 FC 241 (Zinn, J.)

March 2, 2010

Anthony Creber and John Norman for the Plaintiff, Eli Lilly Canada Inc. (“Eli Lilly”)
Jonathan Stainsby Neil Fineman for the Defendant, Novopharm Limited (“Novopharm”)

Novopharm sought an interlocutory order for a Mareva injunction enjoining Eli Lilly from transferring its revenues to its U.S. parent company. In dismissing the motion, the Court reviewed the general and long-standing rule that there should be no execution before judgment and, more specifically, the test for the granting of the exception to that rule, namely a Mareva injunction. Under a Mareva injunction, there are strict requirements that need to be satisfied:

1. The plaintiff must establish a strong prima facie case for potential success at trial;
    
2. The plaintiff must meet the following five guidelines, namely (a) full and frank disclosure, (b) provide particulars of the claim, (c) provide grounds for believing that defendant has assets within the jurisdiction, (d) show risk of removal or dissipation of assets in order to frustrate judgment and (e) provide an undertaking as to damages; and
    
3. The plaintiff must satisfy the tripartite test for an interlocutory injunction (namely, serious question, irreparable harm, balance of convenience).

Novopharm was unable to quantify its damages with any particularity. The harm must be established with credible and non-speculative evidence. The evidence did not establish that Eli Lilly was at risk of removing its assets from Canada or that it was about to send its profits to its parent, apart from acting in the ordinary and usual course of business.  Novopharm did not provide an undertaking as to damages and the Court refused to waive this requirement because it was not certain that Eli Lilly would have to pay Section 8 damages to Novopharm.  Novopharm also failed to establish on a balance of probabilities that Eli Lilly would be unable to satisfy a judgment.

By: Mala Joshi, Ridout & Maybee LLP