mareva injunctions in commercial litigation

Mareva Injunctions in Commercial Litigation

Date: June 9, 2026

In commercial litigation, winning at trial means nothing if the defendant has already emptied their accounts and transferred assets beyond reach by the time judgment is delivered. A Mareva injunction addresses this risk directly: it freezes the defendant's assets before judgment, ensuring they remain available to satisfy whatever order the court ultimately makes.

It is one of the most powerful remedies available in Ontario commercial litigation, and one of the most demanding to obtain. This article explains what a Mareva injunction is, the legal test courts apply, how ex parte applications work, the defendant's right to challenge the order, and when to act. For a broader overview of the remedies available in commercial disputes, see our guide to court orders in commercial litigation.

What is a Mareva injunction?
A Mareva injunction is a court order that prevents a party from transferring, concealing, dissipating, or otherwise dealing with their assets pending the outcome of litigation. It preserves the assets available to satisfy a future judgment.

It can be obtained urgently and without notice to the defendant where notifying them would defeat the purpose of the order. The applicant must meet a demanding legal test including full and frank disclosure of all material facts and a formal undertaking to compensate the defendant if the injunction is later found to have been wrongly granted.

What a Mareva injunction does and does not do

Understanding what a Mareva injunction actually achieves is important before pursuing one. Courts grant them with caution precisely because their effect on a defendant can be severe.

A Mareva injunction prevents the defendant from dealing with assets up to the value of the claim. It does not give the applicant a security interest in the frozen assets, and it does not give the applicant priority over other creditors. The applicant must still obtain and enforce a judgment to actually recover what they are owed. The injunction simply ensures that assets will be available when that judgment is obtained.

The order typically contains exceptions allowing the defendant to pay ordinary living expenses, legal fees, and legitimate business expenses. Courts are careful not to shut down a functioning business simply because litigation is pending. The order is calibrated to preserve assets up to the value of the claim, not to paralyze the defendant entirely.

A Mareva injunction is a procedural remedy, not a substantive one. It does not mean you have won your case or that you have a security interest in the frozen assets. It means the defendant cannot move assets while the case is resolved. You still need to win at trial or reach a settlement to recover the amounts owed.

The legal test for a Mareva injunction in Ontario

Courts apply a demanding test before granting a Mareva injunction. The requirements are more stringent than for an ordinary interlocutory injunction, reflecting the severity of the remedy and its potential impact on the defendant.

Strong prima facie case The applicant must demonstrate a strong prima facie case on the merits, not merely a serious issue to be tried. This is a higher threshold than for an ordinary injunction and requires convincing evidence that the substantive claim will likely succeed.
Real risk of asset dissipation There must be evidence of a real risk that the defendant will remove, dissipate, transfer, or conceal assets before judgment can be obtained and enforced. Mere suspicion is insufficient: there must be objective grounds for believing the risk is real.
Balance of convenience The court weighs the harm to the applicant if the injunction is refused against the harm to the defendant if it is granted. The applicant must show the balance tips in their favour, accounting for the disruption the order will cause to the defendant's affairs.
Full and frank disclosure Because Mareva applications are typically made without notice, the applicant has a heightened duty to disclose all material facts, including those that might favour the defendant. Failure to make full disclosure can result in the order being set aside even if the applicant would otherwise have been entitled to it.
Undertaking as to damages The applicant must provide a formal undertaking to compensate the defendant for any loss caused by the injunction if it is later found to have been wrongly granted. Courts assess the applicant's ability to honour this undertaking, which may require evidence of financial capacity.
Assets within the jurisdiction The court must be satisfied that the assets to be frozen are within the court's jurisdiction or that the order can effectively reach them. Courts can grant Mareva orders with extra-territorial reach in appropriate cases, but this requires additional justification.

When Mareva injunctions are most commonly sought

Not every commercial dispute warrants a Mareva injunction. The remedy is most appropriate where the specific risk of asset dissipation is real and demonstrable, not merely theoretically possible. Common situations where Mareva injunctions are sought include:

  • Fraud and misappropriation of funds, where the defendant has already demonstrated a willingness to deal dishonestly with money
  • Breach of fiduciary duty cases involving senior employees or partners who have diverted corporate funds
  • Situations where the defendant has begun transferring assets to related parties or offshore following the commencement of a dispute
  • Cases where the defendant's financial position is deteriorating rapidly and assets may be dissipated before trial
  • Commercial disputes where the defendant has a history of evading legal obligations or judgment enforcement
  • Breach of contract cases involving large sums where the defendant's conduct suggests they are preparing to make themselves judgment-proof

The evidence of dissipation risk must be specific and concrete. The fact that a defendant might theoretically move assets is not enough. There must be actual evidence: transfers already made, suspicious financial activity, assets being moved offshore, or conduct that demonstrates an intent to put assets beyond reach.

Suspect the other party is moving or concealing assets right now?

Every hour of delay increases the risk that assets will be beyond reach before an order can be obtained. A Mareva injunction can be granted within hours in urgent cases. Act immediately.

Call: 1-800-771-7882 Speak With a Commercial Litigator

Ex parte applications: obtaining a Mareva injunction without notice

The defining feature of most Mareva injunction applications is that they are made ex parte, meaning without notice to the defendant. This is deliberate: if the defendant knows the application is coming, they will transfer or conceal assets before the order is granted, defeating the entire purpose of the remedy.

Obtaining an order ex parte places heightened obligations on the applicant. Because the court is only hearing one side of the argument, the applicant must act as the defendant's advocate as well as their own. The duty of full and frank disclosure requires the applicant to:

  • Disclose all material facts, including facts that might weigh against granting the order
  • Identify any defences the defendant might raise
  • Disclose any prior dealings with the defendant that might be relevant
  • Present the defendant's likely position fairly and accurately to the court

Courts take the duty of full and frank disclosure seriously. An applicant who obtains a Mareva injunction by suppressing material facts or presenting a misleadingly one-sided picture risks having the order set aside and facing adverse costs consequences, even if they would otherwise have been entitled to the relief.

After an ex parte Mareva order is granted, the defendant must be served promptly and given an opportunity to appear before the court to challenge the order. The applicant cannot rely on an ex parte order indefinitely.

Challenging a Mareva injunction as a defendant

A defendant served with a Mareva injunction is not without recourse. Courts recognize that these orders can cause significant disruption and harm, and defendants have several avenues to challenge or limit the order.

Motion to set aside for non-disclosure

If the applicant failed to make full and frank disclosure on the ex parte application, the defendant can bring a motion to set aside the order on that basis. Courts treat non-disclosure seriously: even if the applicant would have been entitled to the order had they disclosed everything, material non-disclosure can be grounds for setting aside the order entirely.

Challenging the merits of the application

The defendant can challenge whether the applicant has a strong prima facie case, whether there is genuine evidence of dissipation risk, and whether the balance of convenience actually favours the order. At the return hearing after service of the order, the defendant can present their evidence and legal arguments to the court.

Applying to vary the order

Even where the Mareva injunction is properly granted, the defendant can apply to vary its terms. Common variations include allowing specific transactions to proceed, increasing the allowance for living expenses or legal fees, or narrowing the assets covered by the order to those directly connected to the dispute.

Providing alternative security

In some cases, a defendant can obtain a discharge of the Mareva injunction by providing alternative security of equivalent value, such as a letter of credit, a bank guarantee, or a payment into court. This allows the defendant to free up the frozen assets while ensuring the applicant's interest in recovery is protected.

Need a Mareva injunction urgently or have one been served on you?

Both pursuing and defending against a Mareva injunction require immediate action and specialized expertise. Achkar Law handles urgent Mareva applications and defence motions in commercial litigation across Ontario and BC.

Speak With a Commercial Litigator Or call us: 1-800-771-7882

Mareva injunctions in British Columbia

BC courts have the same jurisdiction to grant Mareva injunctions as Ontario courts, and the same legal test applies. The remedy is available under the inherent jurisdiction of the BC Supreme Court and is used in the same types of commercial disputes: fraud, asset dissipation, breach of fiduciary duty, and large commercial claims where enforcement risk is real.

The procedural requirements in BC differ in their specifics from Ontario. Ex parte applications proceed under BC's Supreme Court Civil Rules and require the same standard of full and frank disclosure. As in Ontario, defendants served with a Mareva order have the right to apply urgently to have the order reviewed, varied, or set aside.

Practical takeaways

A Mareva injunction freezes assets to ensure they are available to satisfy a judgment. It does not give the applicant a security interest in the frozen assets or priority over other creditors.
The legal test is demanding: strong prima facie case, real risk of asset dissipation, favourable balance of convenience, full and frank disclosure, and an undertaking as to damages.
Most Mareva applications are made ex parte without notice to the defendant. This imposes a heightened duty on the applicant to disclose all material facts, including those that favour the defendant.
Delay is fatal. Courts treat delay as evidence that the harm is not truly urgent. If you need a Mareva injunction, act immediately. Every hour of delay increases the risk that assets will be moved.
Defendants have strong rights to challenge Mareva orders, including on grounds of non-disclosure, absence of dissipation risk, and overbreadth. A well-argued defence motion can have the order set aside or significantly varied.
Providing alternative security such as a letter of credit or payment into court can sometimes obtain a discharge of a Mareva injunction while preserving the applicant's protection. This is worth exploring in appropriate cases.

Frequently asked questions

What is a Mareva injunction?

A Mareva injunction, also called a freezing order, is a court order that prevents a party from transferring, concealing, dissipating, or otherwise dealing with their assets pending the outcome of litigation. It preserves assets so that a successful judgment can actually be enforced. It can be obtained urgently and without notice to the defendant in appropriate cases.

What is the legal test for a Mareva injunction in Ontario?

The applicant must establish: a strong prima facie case on the merits; assets within the jurisdiction at real risk of being removed, dissipated, or concealed; a favourable balance of convenience; full and frank disclosure of all material facts including those that favour the defendant; and an undertaking as to damages agreeing to compensate the defendant if the order is later found to have been wrongly granted.

Can a Mareva injunction be obtained without notice to the other party?

Yes. Mareva injunctions are frequently obtained on an ex parte basis without notice to the defendant, precisely because notifying the defendant would allow them to transfer or conceal assets before the order is granted. Ex parte applications impose heightened disclosure obligations: the applicant must disclose all material facts, including those that might favour the defendant, because the court is only hearing one side of the argument.

What is an undertaking as to damages?

An undertaking as to damages is a formal commitment by the applicant to compensate the defendant for any loss caused by the Mareva injunction if it is later found to have been wrongly granted. Courts require this undertaking before granting any injunction. If the main claim fails or the injunction is set aside, the defendant can seek compensation under the undertaking for losses caused by the asset freeze.

How can a Mareva injunction be challenged or set aside?

A defendant can bring a motion to set aside the order on grounds of material non-disclosure by the applicant, absence of a strong prima facie case, no genuine risk of asset dissipation, or an unfavourable balance of convenience. The defendant can also apply to vary the order's terms or to discharge it by providing alternative security of equivalent value.

Does a Mareva injunction give the applicant priority over frozen assets?

No. A Mareva injunction is a procedural remedy that prevents the defendant from dealing with assets pending judgment. It does not create a security interest or give the applicant priority over other creditors. The applicant must still obtain and enforce a judgment to recover what they are owed. The injunction ensures assets are available when that judgment is obtained.

Need a Mareva injunction or facing one in Ontario or BC? Act immediately.

Mareva injunctions are time-critical on both sides. If you need to freeze assets, delay means they may be gone before the order is obtained. If you have been served with a Mareva order, acting quickly to challenge it limits the disruption to your business and finances. Achkar Law handles urgent Mareva applications and defence motions across Ontario and British Columbia. We have the experience to move quickly when the situation demands it.

See our overview of commercial litigation services at Achkar Law for more on how we can help.

Call us at 1-800-771-7882 or fill out the form below and we will be in touch.