DATE: 20050524

DOCKET: C42560

COURT OF APPEAL FOR ONTARIO

RE:

SAM LAUFER (Plaintiff/Respondent) -and- DOMINIQUE P. MONARDO and BARRY HOWARD KASMAN (Defendants/Appellants)

BEFORE:

CATZMAN, LABROSSE and MOLDAVER JJ.A.

COUNSEL:

D. Gregory Flude

for the appellant

Sam Laufer

the respondent in person

HEARD AND RELEASED ORALLY:

May 20, 2005

On appeal from the order of Justice Janet M. Wilson of the Superior Court of Justice dated September 30, 2004.

E N D O R S E M E N T

[1] The appellants appeal the dismissal of their motion by Wilson J. to strike the statement of claim on the basis of res judicata, issue estoppel and abuse of process.

[2] The appellants are former directors and one is a former officer of the now bankrupt Rampart Securities Inc. (“Rampart”), formerly Merit Investment Corporation (“Merit”).

[3] The issue before the motion judge was whether or not these appellants should have been sued in an action brought by the respondent in 1998 in which the respondent recovered judgment against Merit and a co-defendant.

[4] The motion judge found that res judicata and issue estoppel would apply but for the failure of the appellants to disclose material evidence. In particular:

a) the failure to disclose their appointment to the executive committee set up to cause Rampart to comply with its industry-mandated regulatory compliance, and the failure of the committee to do anything;

b) the failure to disclose material information that led to the settlement agreement with the Investment Dealers Association of Canada; and

c) the existence of an insurance policy that might have covered the respondent for his losses.

[5] There is also an allegation in the pleadings that the appellants deliberately orchestrated tactical delays so as to frustrate the respondent’s rights.

[6] The motion judge concluded that “it appeared that relevant documentary information implicating the personal defendants [the appellants] was deliberately withheld.”

[7] This is a motion that was brought at the pleading stage of this action. The facts pleaded by the respondent must be accepted as true for the purpose of the motion.

[8] The appeal is dismissed with costs fixed at $6,000, inclusive of disbursements and G.S.T.

Signed: “M.A. Catzman J.A.”

“J.-M. Labrosse J.A.”

“M.J. Moldaver J.A.”