Law Times

Law Times • sepTember 13, 2010 NEWS PAGE 3 Family relieved as lawyer blasted for taking company Christian Piersanti faked document to get control of paving business: court BY MICHAEL McKIERNAN Law Times M embers of a Toronto- area family are re- lieved after a judge blasted their lawyer for faking a document he claimed had en- titled him to sole ownership of their paving company. "Th ey are ecstatic," says Kevin Sherkin, who represent- ed the plaintiff s, the Alfano family. "Th ey feel that justice has been served as a result of the decision." In a decision issued Sept. 3, Ontario Superior Court Jus- tice Ellen Macdonald ordered lawyer Christian Piersanti, his wife, and companies controlled by the pair to pay $20 million in damages to members of the Alfano family, which owned Osler Paving Ltd. until it en- tered bankruptcy in 2002. Th e case hinged on two ver- sions of a shareholders' agree- ment made between Piersanti and four Alfano brothers, Ulti, Italo, Carmen, and Frank, when the company emerged from the ashes of a previous bankruptcy in the early 1990s. Piersanti drafted the agreement himself. Frank would later ask to be bought out, while Car- men was murdered in an exe- cution-style killing at Osler's Concord, Ont., headquarters in 1996. One agreement produced by the Alfanos apportioned almost all of the company to them, while the second version gave Piersanti alone a 100-per- cent interest in Osler. In the judgment, however, Macdon- ald found that Ulti, Italo, and Carmen's widow Bertina Alfa- no together owned 87 per cent of the company, while Piersan- ti held the remaining portion. She also ruled Piersanti had concocted the second agree- ment later in his offi ce. "I fi nd it shocking that a bar- rister and solicitor of the sophis- tication and expertise of Mr. Piersanti would engage in such a fraud," Macdonald wrote. Th e dispute dates back to 2002, when Piersanti told the Alfanos Osler was suff ering fi nancial diffi culties. Ulti and Italo, who believed the compa- ny was doing well, challenged their lawyer. Eventually, Pier- santi told them they need not worry because they didn't have an interest in Osler and locked them out of the property. When the Alfanos took the matter to court, Piersanti's de- fence essentially amounted to the fake agreement, according to Sherkin. "Th ere were two agreements put before the court with the same signatory page," Sherkin says. "You can't have two agree- ments with the same signatory page, and that was the basis on which he resisted the original motions." Piersanti told the court he had found the fake agreement ORDER your copy today Hardbound • Approx. 500 pp. October 2010 • Approx. $175 P/C 0994010000 ISBN 978-0-88804-504-1 in his offi ce while preparing an affi davit for the case. But Mac- donald ruled that was actually a ploy to force the remaining brothers out of the business af- ter the death of Carmen, whom she said was the driving force behind the company. Pier- santi's hope, according to the judge, was that they wouldn't have the means to engage in lengthy litigation. "Mr. Piersanti created the second version of the USA [unanimous shareholders' agree- ment] to gain control of the Osler company when he knew that, particularly after Carmen's death, the remaining brothers had little or no interest in the details of legal documentations such as the USA," Macdonald wrote. Within days of a court in- junction against Osler and other Piersanti business interests in June 2002, Piersanti "walked the company into bankruptcy" without the consent of the Alfa- nos, says Sherkin. Macdonald ruled that Pier- santi, who was in charge of Os- ler's fi nances, had misappropri- ated more than $1 million from the business. She also found he had asked a controller at Osler to doctor its 2002 fi nancial re- cords to show a loss when the company had actually made a profi t as part of his objective to "ensure the demise of Osler and get rid of the Alfanos." Piersanti could not be reached for comment, and his lawyer Samantha Chapman said she wouldn't discuss the case. Th e Alfanos fi rst got in- volved in paving shortly after the family moved to Canada from Italy in the 1950s. Car- men eventually took over the business, originally called Ontario Paving Co. Ltd., fol- lowing the death of his father Giuseppe Alfano in 1988. While it was doing more than $50 million in business by the early 1990s, the real estate slump hit the company hard, causing it to cease operations as all four brothers declared personal bankruptcy. Osler Paving emerged in Hoskin & Harcourt LLP for its insolvency expertise. Th e rela- tionship was short-lived, how- ever, because Carmen couldn't aff ord the fees. Macdonald characterized Piersanti and his wife as "de- vious" and "evasive" during the nine-month trial and con- demned their selective disclo- sure and delaying tactics be- fore eventually concluding she couldn't trust their testimony. "As the trial progressed, I became increasingly aware that the Piersanti defendants were on a path to deliberately con- As the trial progressed, I became increasingly aware that the Piersanti defendants were on a path to deliberately confuse the court on the relevant issues in this case. 1993 as a way to make a fresh start in the business. But Car- men was killed in his offi ce three years later before he could be discharged from bankruptcy. Th e crime remains unsolved as police have brought no charges in the case. Although Piersanti denied acting for the Alfano family after 1990, Macdonald found there was "overwhelming evi- dence that he was their trusted solicitor" after that time. He had met Carmen in the late 1970s while articling at To- ronto fi rm Gambin & Bratty. When the paving business fi rst experienced diffi culties in 1990, Piersanti recommended he get in touch with Osler fuse the court on the relevant issues in this case," she wrote. "Th e defendants are clever and experienced litigants. Th e re- cord at this trial demonstrates the temerity of Mr. Piersanti and Ms. Piersanti in these actions." Macdonald noted almost 200 evasive answers made by Piersanti's wife Terry, who manages three malls both fam- ilies claimed an interest in. Ac- cording to the ruling, she was dismissive of the guilty plea she had previously entered on charges related to goods and services tax fraud, which resulted in a $500,000 fi ne for failing to remit GST pay- ments by tenants at her malls. Her husband, meanwhile, de- nied in court a suggestion that he had allowed her to take the fall for the tax off ences because he would likely have been dis- barred. Macdonald ordered $2.5 million of the damages to be paid into court within 30 days for breaches of the 2002 injunction that barred all company dealings outside of the ordinary course of busi- ness. Still, she acknowledged the Alfanos "will most likely encounter great diffi culty en- forcing" her judgment for damages. She also ordered the Pier- santis to pay $250,000 in pu- nitive damages and ruled they had no interest in the Con- cord property where Osler had its offi ces. After Giuseppe left the land to his family, the four brothers took out a mortgage on it in 1993 to buy equip- ment for their new company, Osler. According to the rul- ing, Piersanti handled the dis- charge in 1997 but transferred the property to a numbered company and later listed it for sale. He then shut the family out of the site when the dis- pute broke out in 2002. Th e Alfanos have since formed a new paving com- pany called Southview Asphalt & Aggregates Inc. Th e size of the damages award partly re- fl ects the signifi cant debt they incurred to keep the busi- ness going and buy back as- sets and security from Osler's creditors after it went into receivership. LT Canadian Law of Competitive Bidding and Procurement Understand the rapidly evolving and unique rules for procurement processes This is a guide to the law governing the procurement of construction and other services in Canada. 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