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Victims of Fraud and Bankruptcy

Gregory Sidlofsky of our office represented a company that was deceived into loaning money to a company called Credifinance Securities Limited. After we were able to tie up part of the proceeds of the loan, Credifinance declared bankruptcy. In our efforts to recover what remained of the loan, we argued that a constructive trust ought to be imposed on $310,500 in the fraudster’s account that could be traced to the loan. The purpose of the constructive trust was to prevent the unjust enrichment of the bankrupt estate. This case went to Ontario’s Court of Appeal and a review of that decision is helpful to those facing a similar dilemma.
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Do Foreign Litigants Have To Come to Ontario To Be Examined?

Izzie Schwartz hired Selila Ness to work for his travel agency doing business in Israel and the United States called “Izzie Travels”. Soon, Izzie recognized Selila’s talent and delegated complete control of his business to her. He trusted her with his client lists, introduced her to his contacts and Selila managed the business Izzie built. After ten years Selila quit. She moved to Ontario and created her own Travel Agency. Selila used all of Izzie’s contacts, made use of his client lists and was a complete success. That success came at Izzie’s expense. Selila’s contract with Izzie provided that she would not complete with Izzie Travels in any similar activity for a period of three years. Since Selila was in Ontario he sued her in that jurisdiction.
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Are Ex Employees Allowed To Set Up A Competing Business?

In my last column we canvassed a fictional scenario of Izzie v. Selila. Izzie hired Selila Ness to work for his travel agency located in Israel and the United States called “Izzie Travels”. Soon, Izzie recognized her talent and took complete control of the business. Izzie trusted her with his client lists, introduced her to his contacts and Selila managed the business Izzie built. After ten years Selila quit. She moved to Ontario and created her own Travel Agency. Selila used all of Izzie’s contacts, made use of his client lists and was a complete success. That success came at Izzie’s expense. Selila’s contract with Izzie provided that she would not compete with Izzie Travels in any similar activity for a period of three years. Since Selila was in Ontario he sued her in that jurisdiction.
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Suing an Ontario Defendant – Security for Costs

Ontario courts order security for costs to protect local defendants from foreign litigants who launch frivolous or vexatious claims and do not have the money to cover a potential cost award against them. Foreign plaintiffs may have assets outside of Ontario and possibly defeat a security for costs motion if his assets are accessible to satisfy a judgment because of reciprocal enforcement legislation.
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But I incorporated…..

But I incorporated..... that is what Darren Convery must have thought when the judge found him personally liable for a company debt. Why do people incorporate companies? One of the main ones is that generally, if a company does business, no employee or officer of the corporation is personally liable for any act done within the scope of their duties on behalf of the corporation. Now there are some exceptions to that general rule that could result in personal liability even if the business is incorporated. Let’s take one example where a careless mistake may prove very costly
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Forum Non Conveniens

Private international law and forum non conveniens is complicated. It is really too complicated to properly address is a simple blog. But, let’s consider this as wetting your appetite on the subject. So let me tell you what happened and let’s see if you come to the same conclusion as Justice Hoilett of the Ontario Superior Court of Justice. In Towne Meadow Development Corp. v. Israel Development Bank the Ontario Superior Court of Justice had to determine the appropriate location for litigating a dispute. A Canadian construction company hoped to build in Israel. The Israeli bank granted it credit. A shareholder of the company allegedly pledged company assets to secure the loan. The bank then called in its line of credit for repayment wanting access to the assets. The builder suggested that Ontario law applied and that the court case should be heard in Ontario. The Israeli bank disagreed.
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Foreign Defendants – Legal issues and Strategies

Americans sued in Ontario are at risk. Sometimes these defendants ignore Ontario law suits because they have no assets in Canada. That may be unwise. Ontario courts, under certain circumstances, will assume jurisdiction and grant judgments against American defendants. Such judgments may be enforceable in the US under private international law and the principles of comity. Americans named as defendants in Ontario litigation should contact competent lawyers in both jurisdiction to strategize about how to deal with litigation commenced in a court in Canada.
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Contingency Fees in Ontario

Every week clients approach me to take their case on a contingency fee basis. I most often decline; let me tell you why. To begin with, let’s define our terms. A contingency fee is when the lawyer is paid if and only if the plaintiff wins or there is a settlement. If the client doesn't get any money then the lawyer doesn't get paid a fee.
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