SUPPLEMENTARY REASONS FOR DECISION

DIAMOND J.:

[1] On January 16, 2018, I released my Reasons for Decision (reported at Fortress Real Developments Inc. v Franklin, 2018 ONSC 296), granting Fortress’ request, in part, for injunctive relief restraining Franklin from making certain types of statements pending the trial of this proceeding.

[2] On January 18, 2018, I received correspondence from counsel for Fortress advising of Fortress’ position that there was an error in paragraph 51 of my Reasons, and requesting an in-person attendance to address that error.

[3] Counsel for Franklin responded quickly to that request and disagreed with Fortress’ position.

[4] By Endorsement released on January 19, 2018, I advised the parties that I was prepared to entertain brief written submissions on the issue of the alleged error, and set out a timetable for the exchange and delivery of those submissions.

[5] I have now received and reviewed the parties’ further submissions.

[6] In dismissing Fortress’ request to restrain Franklin from stating that the Law Society of Upper Canada (“LSUC”), or any individuals associated with the LSUC, RCMP, or any other regulatory or law enforcement authority, is investigating any of the plaintiffs or has determined that mortgages on title to Fortress projects are frauds or a Ponzi scheme, I held at paragraph 51:

“Further, counsel for the LSUC stated during Franklin’s examination of Stephen McClyment (an LSUC senior investigator) that the LSUC is apparently investigating Fortress as of November 2017. While the release of the LSUC’s Notice of Profession about independent legal advice and syndicated mortgages may just be a contemporaneous coincidence, Fortress’ case against Franklin with respect to the category #1 statements is simply not ironclad enough to warrant the exceptional injunctive remedy it seeks.”

[7] In its submissions, Fortress advised that the transcript from the examination of McClyment contained an error, and what MyClyment actually said was that the LSUC was not investigating Fortress. As such, a corrected transcript has been re-filed, and Fortress now renews its request that I grant category #1 injunctive relief against Franklin (as that term was defined in my Reasons), and in particular an Order restraining Franklin from stating that the LSUC has and is not investigating Fortress.

[8] Franklin properly concedes that the original transcript from McClyment’s examination was incorrect, and that McClyment did state under oath that the LSUC was not investigating Fortress. That said, Franklin submits that the dismissal of Fortress’ request for the category #1 injunctive relief should be maintained, as he in fact has never made any statement that the LSUC was investigating Fortress, but rather the LSUC was investigating “the Fortress investor mortgages”.

[9] Franklin relies upon various pieces of evidence in the record that, in his submission, confirm that Fortress mortgages have been under investigation by the LSUC, including excerpts from McClyment’s corrected transcript. Franklin submits that his own prior statements that the LSUC has and is investigating mortgages arranged by Fortress is true, and supported by the evidence.

[10] To begin, paragraph 51 of my Reasons needs to be corrected, and the contents of these Supplementary Reasons for Decision now address that error. The LSUC has and is not investigating Fortress itself.

[11] In my view, the corrected excerpt from McClyment’s examination was one of several factors upon which I relied in dismissing Fortress’ request to grant the category #1 injunctive relief. While the LSUC has no actual jurisdiction over Fortress, McClyment’s evidence did seem to confirm that Fortress mortgages would have to be included in any LSUC investigation into lawyers associated with Fortress’ mortgage transactions.

[12] I remain of the view that Fortress’ case against Franklin relating to his category #1 statements is still not ironclad enough to warrant the rare and exceptional relief Fortress seeks, and I am thus not prepared to further amend my Reasons.

[13] Finally, at paragraph 5 of his submissions, Franklin raised a potential issue of whether the injunctive relief granted against him (relating to category #2 and #3 statements) applies to his communications with (a) his clients and the Court, and (b) regulatory and/or law enforcement authorities, all in furtherance of his duty as counsel to his clients (see paragraph 3 of my Reasons).

[14] Presumably, category #2 and #3 statements made by Franklin to his clients (in the course of discharging his duties and obligations owed to his clients) would be protected by solicitor/client privilege and thus could not be defamatory. Similarly, category #2 and #3 statements made by Franklin on behalf of his clients (again, in the course of discharging his duties and obligations owed to his clients) to the Court, regulatory and/or law enforcement authorities could be protected by absolute and/or qualified privilege, and thus potentially not defamatory. However, as Fortress has not had an opportunity to respond to these additional issues, if the parties cannot come to an agreement I am prepared to set a timetable for the filing of additional submissions. Counsel may contact my assistant if necessary to arrange for the scheduling of such a timetable.

Diamond J.

Released: February 6, 2018

COURT FILE NO.: CV-17-580252

DATE: 20180206

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

FORTRESS REAL DEVELOPMENTS INC., JAWAD RATHORE and VINCE PETROZZA

Plaintiffs

– and –

DAVID FRANKLIN

Defendant

SUPPLEMENTARY REASONS FOR DECISION

Diamond J.

Released: February 6, 2018

Fortress Real Developments Inc. v Franklin, 2018 ONSC 874

Case Summary

SUPPLEMENTARY REASONS FOR DECISION

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Issues