Law Times

Page 2 SePtember 1, 2014 • Law Times www.lawtimesnews.com these purchasers. In fact, I highly doubt it. So you got to go for other avenues because she personally doesn't have that money." Ross says he believes the money is in Korea, where Lee reportedly resides. He adds he'll continue the civil action against "Cho and those around her," al- though he declined to disclose who those other people are. "ere are other people in- volved in how this unfolded. I re- ally can't comment on that," he says. With several civil actions un- derway in the matter and about 40 others threatened, part of the concern for lawyers represent- ing the purchasers is the likeli- hood of recovery for everyone. "We're going aer a limited pie, and of course it's a concern," says Ross. Purchasers who bought resi- dential units are also turning to Tarion Warranty Corp., which administers the Ontario New Home Warranties Plan Act. "Part of that warranty in- cludes deposit protection on homes and condo units," says Amy Lewis, senior manager of stakeholder relations at Tarion. e protection covers a maxi- mum of $20,000, according to Lewis, who says Centrium pur- chasers who placed a deposit on condo units should contact Tari- on's office to make a claim. Lawyer Jonathan Keslassy of Garfin Zeidenberg LLP says that's part of his plan to recover another purchaser's deposit fees. Aer the Tarion coverage, his client will still have a balance of $64,000, he says. "We're going to approach it in one of two ways. One is make a claim to the law society com- pensation fund or make a claim against Meerai Cho with negli- gence," he says. Keslassy notes he's hoping to recover some of his client's money through Cho's LawPRO coverage. "ere's always a concern when your client has to chase the funds that they put in, but we're dealing with LawPRO on the other side and they're more than capable of dealing with this type of case," he says. For its part, LawPRO says its insurance policy covers lawyers and not their clients. Each law- yer's coverage has a limit of $1 million per claim, says Duncan Gosnell, executive vice president and secretary at LawPRO. Under LawPRO's policy, a claim doesn't represent every indi- vidual client's loss. Instead, it refers to the "single or related error(s), omission(s) or negligent act(s) in the performance of or failure to perform professional services." Gosnell says he can't say whether Cho has made a claim. Cho's law society hearing on a motion for an interlocutory sus- pension took place on Aug. 26, just a couple of hours aer her arrest. Her lawyer, Bill Trudell, requested an adjournment of the hearing but offered to consent to an order suspending Cho's licence in the interim. Trudell told the panel, chaired by Laura Donaldson, that Cho was willing to suspend her practice and co-operate fully with the law society. "She feels that it's difficult for ongoing clients to be presented by her" given the attention the case has received, said Trudell, who added Cho has arranged for other counsel to take care of ongoing client matters she had been working on. Law society counsel Ian God- frey agreed to the order, noting the interim suspension would still protect the public interest. Cho reserves the right to make an ap- plication to set aside the order at a later date "if she sees fit," according to the panel. Many purchasers attended the hearing, prompting the law soci- ety to move the proceeding to a larger hearing room to accommo- date the crowd. Ross says the law society could have moved to hold the hearing sooner given the nature of the complaints. "ey've certainly been sitting for 2-1/2 months with serious al- legations of misappropriation of trust funds," he says. "In fact, in my court application, she admit- ted she misappropriated the trust funds. And that was an affidavit that the law society certainly saw by July 15 and she still practised another month aer [that]." While the allegations against Cho haven't been proven in court, Ross says it's possible it was a big mistake. "I've seen nothing to suggest she pocketed this money," he says. "It is possible that this was gross incompetence, I mean the grossest of incompetence." At a news conference an- nouncing the criminal charges last week, police cast doubt on Cho's story. "We don't have the foundation for that right now," said Det.-Const. Chris De- vereux of Cho's suggestions she mistakenly had transferred the deposits to the developer before the building was complete and the transactions had closed. "Given the amount of money, I would suggest there's something else involved," said Devereux. While Cho has said in her law society responses that she trans- ferred the money to Lee, Devereux said there's no evidence of that so far. "Criminally, again for us, it's just a basic paper trail," he said. "e purpose of the trust ac- count is to hold the money in trust," he added. LT said. "Before deciding them, I wish to hear any contrary legal argu- ments. erefore, I have conclud- ed that it is appropriate to appoint amicus curiae to assist the court." Blake Cassels & Graydon LLP associate Joshua Krane says the court is "clearly concerned" about a fair outcome in this case. "e decision to appoint an amicus in Mr. Chygyrynskyy's case shows that the courts are clearly concerned about the scope of Ontario's civil forfeiture laws and their impact on the rights of individuals who have not been subject to a criminal process," says Krane. In the past, the government has turned to civil forfeiture laws in motor vehicle impair- ment cases, according to Krane, who suggests authorities are us- ing the act to "supplement or circumvent criminal laws." "e intention behind the act was to address criminal enter- prises, not to supplement criminal laws regarding the use of motor vehicles or other vehicles," he says. "If Parliament wanted to make a forfeiture of a vehicle a punish- ment for driving under the influ- ence or boating under the influ- ence, they would have included that as a penalty in the Criminal Code," he adds. "So what the outcome is, it's the government using a statute of gen- eral application to supplement or circumvent criminal laws." at's problematic, Krane con- tinues, because the criminal law includes protections, such as the right to a fair trial, that aren't pres- ent in the civil forfeiture context. Ottawa lawyer Roxie Gray- stone, whose work is around civil remedies, says the Civil Rem- edies Act is "forward-looking" legislation and notes the Crown must prove the property is likely to be used in unlawful activity as well as the likelihood of serious injury to the public. In this case, the Crown may be seeking an expanded meaning of an "instrument of crime," says Graystone, who notes he's not fa- miliar with other cases that have dealt with this issue in Ontario. Although Ontario doesn't keep records, British Columbia's database of forfeiture applica- tions shows almost all outcomes are favourable to the Crown's position, says Krane. Oen, the respondents don't see an incen- tive in putting up a defence as the cost of doing so is greater than the value of the property in question, he notes. "It is problematic," he adds. "ese laws allow for tremen- dous discretion by the prosecu- tor to bring a proceeding, and once a proceeding is brought, the outcome typically favours the Crown." e Ministry of the Attorney General wouldn't comment on the case in question but noted the Civil Remedies Act serves a different purpose from criminal forfeiture legislation. 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