Note: Bruno Appliance and Furniture, Inc. (Victim) was persuaded to invest US$1 million with Robert Hryniak's (Fraudster) company, with the expectation that Fraudster would use the funds to make trades in metals, equities, and bonds. Victim's funds were never used to make trades, and Fraudster claimed that the funds had been stolen by the vicepresident of the bank in which they had been deposited. However, Fraudster offered no credible evidence that he had ever operated a trading program or that the funds had been stolen.

The Ontario Superior Court of Justice, Grace, J., granted summary judgment against Fraudster in favour of Victim on claims of fraud and conspiracy. Victim was awarded US$1 million in damages. Fraudster served a notice of appeal, which, pursuant to Rule 63.01 of the Ontario Rules of Civil Procedure, automatically stayed execution of the judgment.

Fraudster brought a motion in the Ontario Court of Appeal to extend his time to perfect his appeal, and Victim brought a cross-motion seeking to have the stay lifted, and to require Fraudster to provide security for the damages granted by the summary judgment. The court, Weiler, J., granted Fraudster's motion for an extension on the condition that Fraudster "post an irrevocable letter of credit with the court in the amount of CAN$950,000". Because the condition effectively granted the relief sought by Victim, the court dismissed Victim's motion. Fraudster posted the LC before the deadline set by the court.

Victim then brought a motion in the Ontario Superior Court of Justice, seeking a ITALICS Mareva injunction that would freeze Fraudster's assets. Perell, J., dismissed the motion, holding that the Superior Court did not have the jurisdiction to grant such an injunction in the face of a stay of execution pending the outcome of an appeal, and any further relief should be sought from the Court of Appeal.



The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.