Fraud Awareness – we publish Fraud Awareness blog posts as large-scale frauds continue unabated in Canada.  Our firm often reminds fraud victims that they cannot reasonably rely on Canada’s criminal system for recovery or justice in fraud matters. The criminal courts govern prosecutions by what is in the public interest, not private interests, and by what the Crown assesses as a “reasonable prospect of conviction”. Victims should assess whether their interests are better served with civil court injunction processes as opposed to relying on the criminal system for justice or recovery.

Case Summary

Allen et al v. Brian Anish Kumar, (unreported – Toronto Court File No. CV-19-00615736-0000)

Judgment: July 14, 2025

Prior to this case, the rule on post-judgment Mareva injunctions was that they were restricted to six months to allow for execution on judgment. In this Kumar case we did not make a recovery within six months post judgment; the rogue Kumar refused to disclose income or assets, and there was no available information from third parties, even through six years the Mareva was in force.

This blog post summarizes the Court’s rationale for extending a Mareva injunction past the six-month post judgment rule. This decision is important as the ‘source of funds’ reporting requirements under a Mareva injunction are far more onerous than the Rule 60 judgment enforcement provisions.

Background

This action commenced in 2019 as a typical investment fraud case. Six investors provided Brian Kumar (“Kumar”) with funds for trading. The investors’ trust was obtained by way of having known Kumar for years as well as their belief that he was a CPA and licensed investment professional. In fact, at the time that Kumar solicited their funds, his CPA and investment advisor licensing had been revoked, and he was in the midst of divorce proceedings and other litigation. A Mareva injunction (asset freeze) and Anton Piller order (evidence preservation) were issued.

After the injunctions were issued, Kumar moved to set them aside. This did not work out well for him. As a result of cross-examinations on Kumar’s affidavits, the judge hearing the set-aside motion held that the case against Kumar was stronger than it had been when it was started. The judge ordered Kumar to pay $100,000 in costs. Kumar refused to pay anything and failed to properly comply with the monthly reporting of his ‘source of funds’ as required by the Mareva injunction.

Ultimately, Kumar’s defence was struck: see Allen et al v. Kumar, 2022 ONSC 4223. The decision included the following statements:

[14] The initial Mareva order issued by Archibald J…. provided that “before spending any money on living or legal expenses, the defendant Kumar must advise the Plaintiffs’ solicitors in writing of the intended source of funds, and provide a monthly expenditure log with receipts and expenditures” (para. 4). Those orders were restated by Faieta J. in his order extending the Mareva injunction. They remain in effect through subsequent extensions of that injunction obtained by the plaintiffs.

[15] … despite that court-ordered obligation, Mr. Kumar’s responding materials fail to provide any real explanation for how he is living. In my view, his position has been aptly described by plaintiffs’ counsel as “unexplained welfare.”

The decision to strike Kumar’s defence was upheld on appeal: Allen et al v. Kumar, 2023 ONSC 6239. The Divisional Court decision included the following statements:

[28] … The Appellant submits that the Associate Judge erred in finding that he did not comply with the order that he provide expenditure logs until the hearing of the motion because he provided such logs in July 2021 and the motion was not heard until February 2022. However, the motion was first before the Associate Judge in July 2021. He therefore made no error in finding that the Appellant only produced expenditure logs in response to the motion. Moreover, the Appellant disregards that he was in non-compliance with the Mareva Order for over two years.

Kumar again appealed, but the Court of Appeal dismissed his case when he failed to post security for costs. Kumar was intent on not disclosing his ‘source of funds’. The result was that an uncontested motion for judgment took place. Judgment for fraud and breach of fiduciary duty was issued.

The Court’s unreported January 16, 2025, decision for judgment contained the following statement about the extension of the Mareva injunction post judgment:

[21] The earlier orders freezing the defendant’s assets were made based on findings that the defendant’s property includes or consists of converted property belonging to the plaintiffs. The purpose of the orders could be defeated if the[court] were to lift the injunctions and allow the defendant to place assets beyond reach before the plaintiffs take reasonable measures to realize on the judgment. The plaintiffs asked that I follow the result in Coast to Coast Against Cancer v Sokolowski, 2016 ONSC 170, at para. 11. I agree with the reasoning [in Coast] and order that the injunctions shall be extended to a period of six months from the date of the release of this endorsement.

Extending Mareva Injunctions Post Judgment

There were only a few cases that we were aware of that addressed the issue of extending a Mareva injunction post judgment. In Tabrizi v. Majesty Development Group Inc. et. Al., 2022 ONSC 2665, the court decided to keep the injunction in place post judgment in light of its finding that there was a real risk that the defendant would dissipate his assets in such a way that the plaintiff would be unable to recover on his judgment debt. The Court in Tabrizi referred to the Coast to Coast case for authority.

In the case of Coast to Coast Against Cancer v. Sokolowski, 2016 ONSC 170, the court held that while “normally, an interlocutory order merges into a final judgment” (which would include interlocutory injunctions like a Mareva injunction), a post-judgment Mareva injunction in aid of execution was appropriate because fraud was present. The court therefore inferred a risk of assets being dissipated or removed post judgment. The court ordered that the post-judgment Mareva injunction in aid of execution would be in effect for six months from the date of the release of the endorsement.

June 25, 2025, was our first attempt in Allen et al v. Kumar to extend the Mareva injunction post judgment. This attempt was met with opposition. In an unreported decision, the court held that there was no precedent for extending a Mareva injunction more than six months post judgment. The court did not care that Kumar had not disclosed any assets, income or source of funds at his judgment debtor examination. What the court cared about was that the order to extend the Mareva injunction was not brought back before the same judge who issued the judgment.

At this June 25, 2025, hearing we raised as a precedent the case of Ernst & Young v. Aquino, 2025 ONSC 3101, which had been released on June 3, 2025. In the Aquino case a monitor had commenced an application to assign Mr. Aquino into bankruptcy and to continue a Mareva injunction against him post judgment. Mr. Aquino submitted that the Mareva order was spent and merged into the judgment. The Court in Aquino held that the Mareva continued post judgment on the basis that the monitor became the judgment creditor and had powers afforded to a trustee in bankruptcy.

The court, at the June 25, 2025, hearing, held Aquino was not a sufficient precedent because in Aquino the Mareva was not time-limited and because the monitor in Aquino played a greater role than just a judgment creditor. Again, we were told to go back to the judge who issued the judgment.

The problem with the June 25, 2025, decision in Kumar was that it essentially let Kumar get away with non-compliance with the Mareva injunction. It set a precedent that if a rogue simply engages in non-compliance long enough, that Mareva injunctions are useless. Accordingly, our clients issued contempt of court proceedings against Kumar and brought their motion to extend the Mareva injunction back before the judge who issued the judgment and the post-judgment Mareva order.

Extension of a Mareva Six Months Post Judgment

On July 14, 2025, in an unreported decision, the judge that issued the judgment against Kumar extended the Mareva injunction more than six months post judgment on the following basis:

[3] As is well known, Mareva injunctions are extraordinary equitable remedies and amount to execution pending judgment. For that reason, a post-judgment Mareva should be rare and limited. Certainly, it should be limited to the extension of injunctions already made and whose purpose remains unfulfilled after judgment.

Post-judgment Mareva injunctions should not be used as a form of enforcement: Alfano v. Piersanti, 2012 ONCA 612, at para. 15. Judgment enforcement is covered by execution procedures under rule 60.

This statement underlies the decisions in Ernst & Young Inc. v. Aquino, 2025 ONSC 3101, at para. 55, and the referenced Tabrizi v. Majesty Development Group Inc. et. al., 2022 ONSC 2665, at para. 21. I am therefore reluctant to extend the order.

[4] However, there are two factors in the plaintiffs’ favour: the fact that the proceeding remains pending and a potential complication on the contempt motion.

[5] Since my judgment was a partial one, there remains a live action for the punitive damages. That means the court’s jurisdiction is not functus officio. Interlocutory relief may still be made. This alone would not be determinative, because the detention of the defendant’s assets is tied to the funds acquired from the plaintiffs, not future execution on a punitive damages award.

[6] The more persuasive point is that if the injunction is permitted to expire, the defendant could argue that his past breaches are not subject to sanction at the time of the contempt hearing: Jackson v Jackson, 2016 ONSC 3466, at para 49.

If the defendant has flouted the order (an issue that can only be decided on a properly constituted contempt motion), such conduct could warrant serious penalties, including incarceration. If the defendant were permitted to ride out the interlocutory injunction in the hope of evading penalties for breach, the court’s process could be brought into disrepute.

I am therefore prepared to extend the order pending the resolution of the contempt motion. Associating the duration of the extension with the contempt motion also provides a rational timeline for the expiry of the Mareva that is unconnected with judgment execution.

Our commentary: effective fraud recovery is a combination of awareness of the relevant case law, the rules and processes of the court, experience in handling such cases, and sometimes – most importantly – persistence. There is no “one strategy fits all” solution for fraud victims.

There is no “guarantee” that persistence will pay off in this case. In the end, it may not. That said, a precedent on the consequence of failing to comply with ‘source of funds’ reporting pursuant to a Mareva injunction is necessary, as the Rule 60 remedies with respect to Kumar are impotent. 

Ultimately the court recognized on equitable grounds that “If the defendant were permitted to ride out the interlocutory injunction in the hope of evading penalties for breach, the court’s process could be brought into disrepute.”  To state otherwise, the equitable remedy to extend a Mareva injunction is only warranted when it is just and convenient pursuant to the Courts of Justice Act.

Perhaps in some further blog post we can report on the outcome of the contempt proceedings and whether there is a consequence to Mareva non-compliance.

Inquiries: At Investigation Counsel, we only act for victims. We are Canada’s only boutique victim-focused fraud recovery firm. We investigate and litigate fraud recovery cases each and every day.

If you discover you are a victim of fraud, contact us to have your case assessed and a strategy for recovery mapped out before contacting police or alerting the fraudster. The Courts grant tracing and freezing orders much more quickly through the civil process than the criminal process, and even if a criminal complaint is made, the police most often do not disclose their findings to victims.

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