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Michael Nowina’s litigation practice focuses on a broad range of commercial disputes including advising on the recovery from fraudulent investment schemes, mortgage fraud and credit fraud. Michael’s fraud-related and investigations experience includes representing victims of a Canada-wide investment fraud and ultimately securing recovery of a majority of the proceeds from the fraud, advising numerous creditors in proceedings commenced to recover fraudulent conveyances and preferential payments in multi-jurisdictional litigation, and representing financial institutions in identity fraud cases and in proceedings to recover funds from fraudulent borrowers. Michael also frequently advises clients on insolvency matters involving fraud.

David Holden was recently convicted of defrauding Canadian investors in Seaquest Corporation and Seaquest Capital Corporation of more than $54-million in a complex ponzi-scheme. In related civil proceedings our team acted to obtain significant recoveries for some of Holden’s victims. Sadly, this was not the first time that Holden had defrauded investors.
Continue Reading Ponzi Mastermind Sentenced to 12 Years – $54 Million Payment Ordered

In the recent decision Anisman v. Drabinsky, 2020 ONSC 1197 Justice Morgan voided a transfer of a $2.625 million Toronto home for the nominal sum of $2 by Garth Drabinsky to his wife as a fraudulent conveyance as against Drabinsky’s former lawyer and other creditors. This summary judgment decision provides important guidance for creditors on how to approach issues relating to discoverability and limitation periods in the context of real property that may have been fraudulently conveyed.
Continue Reading Understanding a Creditor’s Duty to Investigate: Recent Guidance from the Ontario Superior Court in Anisman v. Drabinsky, 2020 ONSC 1197

When a plaintiff obtains a judgment from the court, that party is normally precluded from starting another lawsuit seeking the same judgment debt from the defendant. However, in Royal Bank of Canada v Kim, 2019 ONSC 798, Justice Broad of the Ontario Superior Court made an exception because the bank had discovered evidence of fraud after it obtained summary judgment against the defendant. The bank sought to pursue a second action for a judgment in fraud so that the judgment would survive and be enforceable after the bankruptcy of the defendant who, in turn,  vigorously resisted the second action arguing that  the plaintiff had already obtained judgment against him and could not reconstitute the judgment after the fact.
Continue Reading Bank allowed to allege fraud in second ‘Kick at the Can’

In McGoey (Re), 2019 ONSC 80, Justice Penny of the Ontario Superior Court of Justice found trusts over two properties held by a bankrupt were void as shams. In his decision, Justice Penny noted that had he not found the trusts to be sham trusts, he would still have set them aside as fraudulent conveyances, making us ask: “what is the difference between a sham trust and a fraudulent conveyance?”

A sham trust occurs where documents or acts give the appearance of creating legal rights that the parties have no intention of actually creating. In contrast, the documents and acts for a fraudulent conveyance accurately reflect the intentions of the parties and the legal rights that they want to create. The issue with a fraudulent conveyance is not that the transfer of rights is a sham, but that the transfer is being done for fraudulent purpose. With the evidence in front of him, Justice Penny was satisfied that, even if the McGoeys intended to transfer the properties, it was for a fraudulent purpose.
Continue Reading Same Facts, Different Badges – Sham Trusts and Fraudulent Conveyances

Square Rect - red and greyThe decision in SFC Litigation Trust (Trustee of) v. Chan, 2017 ONSC 1815 represents a step toward a more flexible approach when our courts are asked to consider whether a Mareva injunction should be granted. In this case, the appellant, Mr. Chan, the former Chief Executive Officer of Sino-Forest Corporation (“SFC”), appealed an order confirming a Worldwide Mareva injunction that had been granted against him, ex parte.

SFC was a Canadian corporation and had an office in Ontario, a head office in Hong Kong, and assets predominately located in China. It carried out a sale process through the Companies’ Creditors Arrangement Act, R.S.C. 1985 c. C-36 (the “CCAA”), which ultimately failed.  SFC then applied under the CCAA for an order approving a plan of compromise and reorganization, which was subsequently sanctioned.  A Litigation Trust was assigned the litigation rights of SFC.
Continue Reading Mareva Injunctions – Ontario Court of Appeal Signals a More Flexible Test for Granting Worldwide Mareva Injunctions

According to Statistics Canada, 84% of Canadians aged 15 and over, or just under 24 million people, reported making at least one financial donation to a charitable or non-profit organization when the last survey on gift giving was conducted in 2010. With over $10 billion in yearly donations, it is unsurprising that there are those that seek to take advantage of Canadians’ spirit of giving. In a recent sentencing decision, R v Raza, 2016 BCSC 1030, the British Columbia Supreme Court sentenced two brothers, Fareed Raza and Saheem Raza, to over four (4) years for their roles in orchestrating a charitable donation scheme.
Continue Reading Court rules “culpability is not a finite” in charitable donation scheme