Law Times

January 18, 2016

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Page 2 January 18, 2016 • Law Times junction and process to this point is an attempt by Wong to mitigate his role in his disciplinary matter. "[The judges] were convinced that there's something going on here, something worth keeping the property from being disposed because, once it's gone, the plaintiff would be left with nothing more than a paper judgment." In the disciplinary action by the LSUC against Wong, he was ultimately ordered to pay costs of $50,000 and served a four-month suspension after admitting to the panel he failed to be on guard against being duped and abdicated his professional responsibilities by failing to supervise his real estate law practice in connection with12 transactions spanning 2003 to 2007. Wong fur- ther admitted he failed to disclose material facts to his lender and purchaser clients by failing to make reason- able inquiries regarding unusual features of the transac- tions and by failing to review or follow express lender in- structions. In writing its disciplinary penalty decision in 2013, the tribunal, chaired by lawyer Mark Sandler with Paul Dray, Seymour Epstein, Susan McGrath, and Ju- dith Potter agreeing, stated, "It was undisputed that Mr. Wong did not knowingly assist in the frauds." The agreed statement of facts detail that in eight trans- actions, the purchaser contributed no or nominal funds to the purchase. In seven transactions, surplus mortgage proceeds were disbursed back to the purchaser or a third party. Ten of the transactions included credits for unac- counted-for deposits. Ten of the transactions involved a f lip or resale of the property at a significantly higher pur- chase price than the initial purchase price. In four transactions, Wong acted for the vendor, pur- chaser, and the lender, the agreed statement of facts state, as well he did not advise the lender or purchaser of the potential conf lict and did not disclose material informa- tion that was relevant to the transactions. In his defence, Wong argued that members of his staff concealed the rel- evant information from him and conspired in part with Lee. He launched action against those employees and Lee in 2011, and the Mareva injunction is part of that con- tinuing action. In August of 2015, Wong successfully had an ex parte Mareva injunction placed against Lee, who he alleges was involved in at least one of the transactions in question. He alleges she conspired with members of his staff to perpe- trate the supposed frauds, and he pleaded a modus ope- randi to her scheming, asserting she used "other persons as puppets" to purchase properties in their names when, he alleges, the assets were actually being purchased by Lee, either for herself or for relatives. Justice MacKinnon wrote in his December decision that there was affidavit evidence from Wong that he mon- itored some of the movements in Lee's real estate holdings and discovered she sold five condominium units between February and October 2014. Wong swore to the court he feared the five condo sales were not consistent with the normal pattern of her real estate dealings. Lee's counsel argued that Wong was aware of seven other condo units that she owned and made no effort to sell, contradicting the claim she was trying to liquidate as- sets. Macdonald further argued she also purchased four other units in the eight months leading up to the first Ma- reva injunction. Macdonald called the allegations "frivo- lous" and that Wong did not proceed expeditiously and requested the injunction be struck. In extending the injunction, MacKinnon wrote that Lee failed to deal with specific allegations against her, gave inconsistent testimony, failed to co-operate in scheduling of questioning, and that, in turn, Wong had established a strong prima facie case. "I am required on this motion to consider all the evi- dence before Sutherland J. [in the August 2015 injunc- tion hearing] as now amplified before me," MacKinnon wrote. "Her real estate activity in 2014 together with her failure in 2015 to timely focus herself on this litigation leads me to objectively infer in all of the circumstances that there existed and still exists a significant risk of re- moval or dissipation of her assets." Macdonald says MacKinnon made errors in fact, missing a full affidavit, and that Lee "very clearly and explicitly" addressed specific allegations against her. In his motion for leave to appeal, Macdonald argues evidence was misconstrued and that Lee moved with all possible speed to address the allegations. The motion for leave to appeal further states that continuation of the injunction "is contrary to the exist- ing legal principles for granting such relief and unsup- ported by the acknowledged facts before the court." Brian Radnoff, partner with Lerners LLP, says ap- proval of such an injunction is fairly infrequent and one not granted by the court without a strong prima facie case. He says, as such, appeals of Mareva injunctions can be a difficult task. "You're essentially getting execution before judg- ment, so there's a fairly stringent test," he says. "If the judge is wrong and the evidence is different, then that's a good ground for appeal, but if the judge is correct in his observations of what the record was, it is a very dif- ficult appeal." Counsel for Wong could not be reached for com- ment by press time. LT "But then it becomes more of a po- litical thing," Bassani says. Bassani is also concerned about provisions that allow councils to pass additional criteria for determining what amounts to a minor variance. Currently, the Planning Act contains a four-part test. "Potentially, the new criteria could make minor variances more difficult to obtain and could result in more rezoning applications, which are less timely and more costly to submit and process," Bassani says. Initial indications are, however, that additional criteria will be few and far between. "The Ministry of Municipal Af- fairs and Housing set up a stakeholders committee and asked them to come up with additional criteria and they couldn't, which indicates how difficult it will be to do so," says one veteran mu- nicipal lawyer. Particularly impractical are the pro- visions of Bill 73 that require councils to provide descriptions of how submis- sions from the public have inf luenced decisions. "I think that the province is just trying to have councils explain their decisions, but they've done it in a very clumsy way," Lyons says. To be sure, in many cases municipal staff members make recommendations to council by way of a report. In these cases, council could merely cite the rea- sons given in the report. "But there are situations where councillors don't take staff 's advice and other situations where decisions are not unanimous," Lyons notes. As well, given that transcripts of public hearings are hardly the norm, councillors may have difficulties re- calling individual submissions. "That's not as much of a problem in large municipalities, where media coverage can provide a record, as it is in smaller places," Lyons says. Besides, public submissions are fre- quently not to council. "In practice, most of the deputa- tions are made to committees of coun- cil," Flowers observes. "In Toronto, that means about seven or eight out of 45 councillors are present to hear the submissions. Some are not always there, some leave in the middle, and some aren't always listening. So how is council going to explain how oral sub- missions made at an earlier committee impacted their decisions?" However that may be, Bill 73 has re- ceived Royal assent. Some provisions are in force, but most will come into force at future dates that have not yet been identified. LT NEWS Real estate lawyer says staff concealed information Continued from page 1 New rules could make minor variances hard to get Continued from page 1 'I think that the province is just trying to have councils explain their decisions, but they've done it in a very clumsy way,' says Catherine Lyons.

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