Law Times

Law Times • sepTember 11, 2017 Page 3 www.lawtimesnews.com Suspension of lawyer remains in place $4.6 million sought in negligence lawsuit BY ALEX ROBINSON Law Times A lawyer who is already under investigation by the Law Society of Upper Canada for a $3-million deficiency in his trust account is now facing al- legations of negligence over how he represented a former client in loan transactions. The former client and plain- tiff, 4381840 Canada Inc., brought 48 civil claims against Rockland, Ont. lawyer Steph- ane Langlois, his Ottawa firm, Charron Langlois LLP, and two other lawyers, as well as alleged loan recipients. The plaintiff is seeking more than $4.6 million through the claims, 38 of which are in the Ontario Superior Court and the other 10 in the Small Claims Court. Each claim concerns a dif- ferent loan that Langlois al- legedly facilitated and that the plaintiff issued as a private lender. The claims in 4381840 Can- ada Inc. v. Charron, Langlois LLP et al. involve allegations related to a variety of causes of action, including breach of contract, negligence, breach of fiduciary duty and vicarious li- ability. Yanik Guilbault, the lawyer representing the plaintiff, says there are no allegations of fraud at this point in time but that Langlois was negligent in his handling of the transactions. Guilbault says some of the defendants in the claims are listed as Jane or John Doe, as the plaintiff is unsure how many of the loans Langlois arranged were real. "We don't know at this point in time how many loans are fic- titious," he says. David Debenham, a lawyer representing defendants who were third-party clients that al- legedly received loans, says his clients never heard of the trans- action and had no part in the loan at all. "The judge will tell us wheth- er it was a fraud or not, but on its surface, there appears to be fraud, [and] that the lawyer sim- ply was borrowing on his own behalf and he purported to be borrowing on other parties' be- half in some of the cases," De- benham says. In 2016, a law society hear- ing panel issued an interlocu- tory suspension to Langlois, barring him from practising while the regulator investigat- ed a $3-million hole in his trust accounts. The deficiency came to the law society's attention when some of Langlois' colleagues filed a complaint after finding the bank had discontinued one of the firm's trust accounts. Langlois admitted to an LSUC investigator in 2016 that he had used around $1 mil- lion of the trust monies to pay personal and general office ex- penses, according to the deci- sion to suspend the lawyer in Law Society of Upper Canada v. Langlois. A spokeswoman for the LSUC said the suspension re- mains in place, pending the completion of the law society's investigation and any hearing that may arise as a result. In addition to the suspen- sion, the Ontario Superior Court appointed the law society as trustee of Langlois' profes- sional business in 2016, and the trusteeship remains active. The 48 lawsuits concern loans that Langlois allegedly facilitated over the course of a number of years, says Guilbault. He says Langlois would ar- range the loans and the pay- ment of the loans through him. He says a number of loans were repaid completely throughout the years, resulting in a huge amount of trust that had been built up between his client and Langlois. Guilbault says that a crimi- nal investigation is underway into Langlois, but the Ottawa Police Services declined to con- firm that was the case. Ontario Superior Court Justice Pierre Roger decided to consolidate 37 of the actions into one, meaning they would all be heard at the same time because their issues are closely connected. He also consolidated the 10 actions in the Small Claims Court. Roger allowed the 38th re- maining action in the Superior Court to continue separately, as a separate law firm is represent- ing the plaintiff in the matter because of a conf lict of interest that Guilbault has. Stephen Cavanagh, Langlois' lawyer in the matter, declined to comment on the case. Guilbault says consolidating the actions was premature be- cause the main defendants have not provided defences yet. "If we find out that there are 12 real loans, that means we have to amend our claim, put the correct name, serve that defen- dant and then pursue our claim against that defendant separate- ly, irrespective of the fact that there may be negligence or not on the part of Mr. Langlois and his law firm," he says. Roger, however, found it was not premature to consider such a request as the issues were suffi- ciently laid out in the statements of claim. While the claims were con- solidated procedurally, it re- mains to be determined wheth- er they would be separate claims under LawPRO's policy, says Guilbault. He says there was also a sec- ond insurer involved in addi- tion to LawPRO. He says he hopes there might be enough money to pay every- one "and close the book on this." Debenham says the plain- tiff 's counsel made a "monu- mental tactical mistake" by commencing the 47 different proceedings as he has. "He's created this ocean liner that will never get through the court system," he says. "That's why class actions are instituted, because the court system simply can't deal with lawsuits of that size in any way, shape or form that's efficient." Debenham says he expects the lawsuit will be bogged down in procedural issues for a long time. The bigger the lawsuit, the slower it goes and the less re- maining money there will be for a payout, he says. He compared the size of the lawsuit to an ocean liner. "Instead of waiting for a ship of 400,000 to save the people in Dunkirk, you could send over speedboats and get it done one boat at a time and that's the same theory with lawsuits," he says. "You use speedboats to get your lawsuit done, not ocean liners." Guilbault says he decided it was necessary to file 37 in- dividual actions because they are dealing with separate and different loan transactions in- volving potentially more than 40 different borrowers over the course of around three years. He adds that if the plaintiff was an institutional lender such as a bank, it similarly would have commenced separate claims against each different borrower. Guilbault says he is hop- ing for some form of resolution within a reasonable period of time. "A lot of peoples' lives have been affected and I think it would not be in the interest of the general public to drag this on for years," he says. Lawyers involved in the case say Langlois faces at least a fur- ther seven lawsuits pending from other plaintiffs. Guilbault says the LawPRO defendants have said in court that there may be 50 to 60 law- suits pending on top of the orig- inal 48. Guilbault stressed that his client has not been ordered to file fresh pleadings and that Roger's order simply consoli- dates the 37 claims in one book. He says the defendants will have to address each claim sepa- rately in their defences, which are due by Oct. 1. Brad Phillips, the lawyer who is representing LawPRO in the proceeding, declined to com- ment. Martin Black, a lawyer rep- resenting a defendant in the one separate lawsuit, and Craig Bater, a lawyer representing the plaintiff in that lawsuit, both de- clined to comment. Colin Dubeau, who is repre- senting the other lawyers in the lawsuit, said he was not in a po- sition to comment. LT NEWS A lawyer under investigation by the Law Society of Upper Canada is now facing more legal trouble. ORDER YOUR COPY TODAY! Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS Ontario Lawyer's Phone Book is your best connection to legal services in Ontario with more than 1,400 pages of essential legal references. You can depend on the accuracy of this trusted directory that includes the most up-to-date names, phone numbers, mailing addresses and emails so you don't have to search anywhere else. 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(prices subject to change without notice) ONTARIO LAWYER'S PHONE BOOK 2017 Untitled-2 1 2017-09-06 2:02 PM That's why class actions are instituted, because the court system simply can't deal with lawsuits of that size in any way, shape or form that's efficient. David Debenham

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