Endorsement – Recusal and Mistrial Reasons

Court File No.: CV-11-537576
Date: 2013-10-10

Hazelton Lanes Inc and Stephen Chan

v

1707590 Ontario Limited, John Faraci, et al

[1]. Pursuant to a notice of motion on behalf of the defendants, 1707590 Ontario Limited and John Faraci (the “Faraci defendants”), returnable before me on April 25, 2013, an order was sought that I disqualify myself from continuing as the presiding judge in this action and that I declare a mistrial. The motion was supported by counsel for all of the other defendants.

[2]. After the hearing of the motion, I dismissed the motion and advised counsel that written reasons would follow. These are those reasons.

[3]. Counsel for the defendants relied on many grounds to support their respective motions. The principal ground was a statement that I had included in an endorsement by which I outlined my decision to grant a Mareval injunction against the Faraci defendants. In that statement I referred to “Faraci’s fraudulent scheme” and went on to say that “without the immediate intervention of this Court, there is a high likelihood that Faraci would continue to dissipate or conceal his assets…”

[4]. This statement was made on the basis of Faraci’s testimony that, although he was a lawyer, he had divested himself of all of his assets, had no bank accounts and relied on friends to provide money to him whenever he needed it”.

[5]. In retrospect, it might well have been better had I used different language to dispel any inference that I had made a finding of fraud against Faraci. My intention was to convey only that there was “strong prima facie evidence” of a fraudulent scheme by Faraci.

[6]. Throughout this very complex and difficult trial, which still continues approximately one and one-half years since it commenced, I have been called upon to make numerous interlocutory orders and give numerous directions with respect to the conduct of the trial. The Faraci defendants have been the recipients of many such orders and directions that were in their in their favour Throughout, I have remained fair and impartial and intent on maintaining an atmosphere and appearance of fairness and impartiality so that the parties and members of the public would have confidence in the integrity of the Court.

[7]. In my view, no informed person, viewing this trial realistically and practically, and having considered the allegations made, would consciously or unconsciously conclude that I had not conducted this trial fairly or would not continue to do so.

[8]. All claims for costs in relation to this motion will be heard at a time to be fixed by me.

Matlow, J.

October 10, 2013.