CITATION: Dunn et al. v. TD Waterhouse and Eagan, 2017 ONSC 5805
COURT FILE NO.: 15-64760
DATE: 2017/09/29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Linda F. Dunn, Michael Kidd and Jennifer Tomlin
Applicants/Moving Parties
– and –
TD Waterhouse Canada Inc. and Conrad Thomas Eagan
Defendants/Responding Parties
Helmut R. Brodmann, for the Moving Parties
No one appearing for the Responding Parties
HEARD: September 19, 2017
endorsement
COrthorn J.
[1] The applicants are the beneficiaries of the Estate of Joan Kidd. The applicants bring this motion for an order for payment to them from monies currently held by the Accountant of the Superior Court of Justice.
[2] The monies were paid by TD Waterhouse Canada Inc. to the Accountant in compliance with the August 2015 order of Justice Sheard in this proceeding (the “Order”). The preamble of the Order describes it has being made pursuant to an application heard at the time. The preamble identifies that submissions were made by counsel for the applicants and counsel for TD Waterhouse. No one appeared on behalf of Eagan on the return of the application in August 2015.
[3] Pursuant to the Order, TD Waterhouse was required to liquidate all securities in Direct Investment Account #397816E (the “DIA”) and pay the monies from the liquidation into court by way of interpleader. TD Waterhouse complied with the Order in that regard. As a result, a total of $137,397.87 in funds traceable to the Estate of Joan Kidd was paid into court.
[4] Paragraph 5 of the Order provides as follows, “This Court orders that the monies paid into court shall be held pending further order of the Court, to be paid out upon notice to the parties and without prejudice to the claims of any non-parties who may be entitled to assert a claim against these monies.”
Motion Made Without Notice
[5] The motion before me for payment out of Court, of the sum of $137,397.87, was brought without notice to either TD Waterhouse or Eagan. Neither of them was served with the motion record or the factum filed on behalf of the applicants.
[6] Two matters need to be addressed before consideration can be given to the relief requested. The first matter arises from the fact that TD Waterhouse was not served with the motion record and factum. The Order specifically requires that they be served. In an effort to see this matter move forward efficiently, and to avoid the necessity of yet another return date on this matter, the applicants are to (a) serve the motion materials on TD Waterhouse, and (b) secure the consent of TD Waterhouse to the relief requested, and (c) file the requisite document with the Court.
[7] I am less concerned about the lack of notice to Eagan. He did not respond to the original application pursuant to which the Order was made. He is alleged to have misappropriated funds from the Estate of Joan Kidd in an amount close to $1,000,000. Counsel for the applicants informed the Court that Eagan was recently sentenced to five years imprisonment. The sentence follows a finding of guilt on charges arising from the misappropriation of funds from the Estate of Joan Kidd and from other individuals (or estates).
[8] Assuming that a consent from TD Waterhouse, to the relief requested, is filed, I am prepared to include in the order to be made a term dispensing with the requirement to serve Eagan with the motion record and factum.
Other Potential Claimants
[9] The second matter is the potential for other individuals, like Geoffrey Simpson, in his capacity as the Estate Trustee of the Estate of Joan Ridley, to be entitled to share in the funds paid into Court. In his capacity as Estate Trustee, Mr. Simpson is the plaintiff in Simpson v. Eagan, Desjardins Financial et al. (Ont. S.C.J. Court File No. 16-70006, Ottawa).
[10] A motion for payment out of court of funds related to the Estate of Joan Ridley was heard at the same time as the motion on behalf of the applicants in this matter. An endorsement in the Simpson matter is being separately released.
[11] An investigation of Eagan’s conduct was carried out by the Mutual Fund Dealer’s Association of Canada (“MFDA”). The investigation led to a hearing before the Central Regional Council of the MFDA. In February 2016 the Council released its Decision and Reasons. The Council found that Eagan “committed a gross misappropriation of money that did not belong to him”.
[12] Based on the contents of the MFDA investigation report, it appears that Eagan misappropriated funds from at least six individuals or estates. The six individuals or estates include the Estate of Joan Kidd and the Estate of Joan Ridley.
a) Judith Girling
[13] The six individuals or estates also include Judith Girling. In 2013, by way of application, Ms. Girling obtained an order requiring TD Waterhouse to liquidate certain assets and pay to her the sum of $160,000 (the “2013 Order”). Ms. Girling was represented by counsel on the application.
[14] Counsel for the applicants in the matter before me advised that TD Waterhouse complied with the 2013 Order. Counsel for the applicant understands that no further steps were taken on behalf of Ms. Girling to secure payment of additional funds. He also understands that the Girling matter is at an end because Ms. Girling recovered all of the funds misappropriated by Eagan and traceable to her.
[15] The 2013 Order provides that upon payment to Ms. Girling of the $160,000 the application on her behalf is dismissed without costs.
[16] For me to make a finding that Ms. Girling no longer has any interest in funds paid into Court by TD Waterhouse, evidence is required that (a) she was paid the $160,000, and (b) her application was dismissed without costs.
b) Linda Allen
[17] The six individuals or estates also include Linda Allen. Counsel who represented Ms. Girling also represented Ms. Allen. An order was obtained in 2014 on behalf of Ms. Allen (the “2014 Order”). The terms of that order include that (a) Eagan owes Ms. Allen at least $120,657.69, (b) TD Waterhouse is to liquidate funds from the DIA, and (c) TD Waterhouse is to pay Ms. Allen the aforementioned sum directly.
[18] The 2014 Order also requires TD Waterhouse to pay to Ms. Allen’s counsel in trust the sum of $50,000, “without prejudice to the amount found due at the trial of the issue, and not to be disbursed by McMillan LLP without a further Order of the Court, or on the written consent of Mr. Eagan and the Applicant.” The 2014 Order provides that upon fulfilment of the aforementioned terms, all claims against TD Waterhouse are dismissed without costs.
[19] For me to make a finding that Ms. Allen no longer has any interest in funds paid into Court by TD Waterhouse, evidence is required that the terms of the 2014 Order were complied with and Ms. Allen’s application was dismissed without costs as against TD Waterhouse.
c) Other Potential Claimants
[20] Two other individuals or estates whose funds were misappropriated are identified, by initials only, in the MFDA investigation report. They are “the estate of PL” and “the estate of YC”. Counsel for the applicants in the matter before me, advised that his office conducted a search of the court records in an effort to identify any other actions or applications in which Eagan was named as a defendant or respondent, respectively. Counsel further advised that the search revealed no actions or applications, other than those for Ms. Girling and Ms. Allen.
[21] Either as part of that search or subsequently, counsel became aware of the Simpson action.
[22] For me to conclude that the applicants in the matter before me and in the related Simpson action are the only individuals entitled to payment from the funds remaining in court, I require evidence that a search of the court records was conducted and evidence as to the results of the search.
Summary
[23] My decision on the applicants’ motion is reserved pending the applicants filing the following documents:
a) An affidavit from counsel for Ms. Girling and Ms. Allen:
i) With respect to the status of the applications on behalf of those two individuals; and
ii) Confirming that neither of those individuals has any further interest in the monies currently held by the Accountant pursuant to the Order;
b) An affidavit of service with respect to service of the motion materials on TD Waterhouse Canada Inc.;
c) A consent signed on behalf of TD Waterhouse Canada Inc. to the relief requested; and
d) An affidavit attesting to the search conducted of the Court records and the outcome of the search.
Madam Justice Sylvia Corthorn
Released: September 29, 2017
CITATION: Dunn et al. v. TD Waterhouse and Eagan, 2017 ONSC 5805
COURT FILE NO.: 15-64760
DATE: 2017/09/29
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Linda F. Dunn, Michael Kidd and Jennifer Tomlin
Applicants/Moving Parties
– and –
TD Waterhouse Canada Inc. and Conrad Thomas Eagan
Respondents/Responding Parties
Endorsement
Madam Justice Sylvia Corthorn
Released: September 29, 2017