Paull N. Leamen

Investors sued a chartered accountant and his consulting corporation alleging breach of fiduciary duty and negligence after losing money in complex domestic and offshore investment structures connected to an investment club and related entities.

The court found the advisor promoted the investments, failed to disclose commissions, and reassured the investors about the legitimacy of the structure despite serious regulatory concerns and structural deficiencies in the investment scheme.

The relationship involved trust, reliance, and vulnerability sufficient to create a fiduciary duty.

The advisor breached that duty by failing to disclose conflicts, failing to warn about regulatory issues, and misrepresenting the diligence performed.

Liability was imposed for the plaintiffs’ investment in the domestic issuer but not for later investments made after regulatory warnings, which the court held the plaintiffs unreasonably failed to mitigate.

The plaintiffs sought costs on a substantial indemnity basis following a motion for directions on how to implement a Consent Judgment.

The responding party argued that no costs should be awarded because the original Minutes of Settlement and Consent Judgment were deficient and failed to include necessary terms.

The court found that because the Consent Judgment was unclear and both parties failed to include terms on how to implement it, the motion was necessary.

The court ordered that both parties bear their own costs.

The parties, equal shareholders in a corporation and former spouses, signed Minutes of Settlement and a consent Judgment to distribute the corporation's assets.

The Judgment did not address the capital gains taxes and other liabilities incurred by transferring properties to the shareholders.

The plaintiffs brought a motion under Rule 59.06(2)(c) to carry the Judgment into operation, arguing the corporation must pay all taxes and creditors before distributing the remaining assets.

The defendant argued he should receive his share without the corporation first paying taxes.

The court held it had jurisdiction to give directions and ordered that the corporation must pay all taxes and creditors before distributing the balance of its assets equally to the shareholders, as required by the Business Corporations Act.

The defendant's motion for contempt was dismissed.

The plaintiff real estate brokerage brought an action against the vendor, its principal, and the purchaser for an unpaid real estate commission.

The vendor and purchaser had entered into an agreement of purchase and sale during the listing period, which was later revived and closed under a different corporate purchaser name at the vendor's insistence to avoid paying the commission.

The court found that the commission was earned and payable under the listing agreement.

The court also held the vendor's principal and the corporate purchaser liable for intentional interference with contractual relations for their bad faith conduct in attempting to circumvent the commission.