Canadian Fraud Law

Canadian Fraud Law

Commentary, News and Updates

Employee’s Silence about Fraud Leads to $20 Million Civil Judgment for Employer

Jennifer Bernardo By Jennifer Bernardo on Posted in Employment Related Fraud

A recent decision from the Ontario Superior Court demonstrates the overlap between civil and criminal findings, and how an employer can use a criminal verdict to recover additional damages in a civil claim. In Atlas Copco Canada Inc. v. David Hillier 2018 ONSC 1558, rendered March 7, 2018, an employer “piggybacked” off of a criminal court decision to recover an additional $20 million from an ex-senior employee who accepted payments and benefits in return for allowing a fraud to continue.

This decision highlights an employer’s possible options for fraud recovery, as well as the steep costs for employees of participating in fraudulent schemes. Continue Reading

B.C. Court finds Civil Fraud by Omission in Wang v Shao

Brendan O'GradyJohn Pirie By Brendan O'Grady and John Pirie on Posted in Fraud Recovery

We previously reported in an article last August that Ontario Courts are increasingly finding civil fraud on the basis of material omissions, as in the United Kingdom. This trend has continued in a recent decision by the Supreme Court of British Columbia in Wang v Shao, 2018 BCSC 377.

The case involved the aborted sale of a home in Vancouver’s upscale Shaughnessy neighbourhood for a purchase price of $6.138 million. After viewing the home, the purchaser specifically inquired through real estate agents why the vendor was selling it. The vendor’s daughter (who held power of attorney) claimed that she was selling the home because her daughter had changed schools. The purchaser was satisfied with this answer, and executed an agreement of purchase and sale. However the answer was found to be incomplete. In fact, she was also selling the home because her husband (who was alleged to be associated with a criminal gang) had been murdered outside the home two years earlier and there were concerns about the safety of the family. Continue Reading

Constructive Trust as a Remedy for Breach of Fiduciary Duty: Court of Appeal Clarifies Test for Granting Proprietary Remedies

John PirieGlenn Gibson By John Pirie and Glenn Gibson on Posted in Fraud Recovery

This is our second of three posts on the Ontario Court of Appeal’s recent decision in DBDC Spadina Ltd. v. Walton 2018 ONCA 60 arising out of a complex fraud scheme perpetrated by Norma and Ronauld Walton. This post discusses the finding by the Court of Appeal that it was inappropriate for the application judge to have granted a constructive trust as a remedy for breach of fiduciary duty. The Court of Appeal set aside the constructive trust because a fiduciary’s wrongful acts must give rise to an identifiable asset (there was no such asset), and it was inequitable to “leapfrog” one class of victims over other victims of the fraud in the circumstances of the case. Continue Reading

Stranger Danger: When Companies associated with a Fraudster should be Liable for the Fraudster’s Breach of Fiduciary Duty

Glenn GibsonJohn Pirie By Glenn Gibson and John Pirie on Posted in Fraud Recovery

The decision in DBDC Spadina Ltd. v. Walton, 2018 ONCA 60 provides insight on when corporations that are de facto under control of a fraudster can be held liable for claims of knowing assistance in the breach of fiduciary duty and knowing receipt of trust property. This is the first of three posts in which we will report on recent decisions by the Ontario Court of Appeal arising out of a fraud that was found to have been perpetrated by Norma and Ronauld Walton. Both the appellants and the respondents in this appeal were victims of the Waltons who had convinced numerous people to invest in commercial real estate properties. The Waltons then moved the invested funds through various shell corporations to further their personal interests. Our previous post on these long-running proceedings can be found here. Continue Reading

Double Jeopardy Argument fails for the Magic Lady

Glenn GibsonMichael Nowina By Glenn Gibson and Michael Nowina on Posted in Investment Fraud

Dubbed the ‘Magic Lady’ by the media for perpetrating a $100 million Ponzi scheme, Rashida Samji faced administrative proceeding brought by the BC Securities Commission (“Commission”) as well as criminal charges. The Commission found in 2014 that she perpetrated a fraud, imposing a disgorgement order of almost $11 million and a $33 million administrative monetary penalty (“AMP”) to serve as “a specific deterrent to [Samji] and as a general deterrent to others who would engage in similar fraudulent schemes.” On December 1, 2017, the British Columbia Court of Appeal affirmed the lower court decision refusing to stay the criminal charges against Rashida Samji on the basis that the AMP was a “true penal consequence.” After refusing to stay the charges, the trial judge found her guilty of theft and fraud under the Criminal Code. Continue Reading