ONTARIO SUPERIOR COURT DECIDES CASE WHERE ELDERLY AMERICAN INVESTORS
ALLEGE CASSELS BROCK, A LAW FIRM HEADED BY A FORMER PREMIER OF ONTARIO,
PLAYED A ROLE IN A FRAUDULENT INVESTMENT SCHEME OF A FORMER CLIENT
TORONTO, Nov. 12 /CNW/ - The Ontario Superior Court, in a recent
decision concerning two separate lawsuits, granted Judgment in favour
of the Plaintiffs in each lawsuit for fraud against Robert Hryniak, a
Toronto resident, who held himself out as the principal of Tropos
Financial Corporation and Tropos Capital Inc., in a fraudulent scheme
which is commonly known as "Prime Bank Fraud".
In particular, the Court granted partial judgment against Mr. Hryniak in
the sums of $1,190,401 USD and $1,000,000 USD, respectively, on two
motions for summary judgment brought by 14 American investors who claim
that a one-time Managing Partner (Gregory Jack Peebles) of Cassels
Brock and Blackwell LLP and a former long-standing client, Robert
Hryniak, were complicit in a scheme to defraud them and other investors
across North America of millions of dollars.
The motions for summary judgment alleged that the involvement of Cassels
Brock and Blackwell LLP and Gregory Jack Peebles added an air of
credibility and plausibility to the fraudulent investment scheme.
In detailing the evidence on the motion, The Honourable Mr. Justice
Grace remarked that "[t]he threads of dishonesty are everywhere".
While Judgment was not granted against Cassels Brock and Blackwell LLP
and Mr. Peebles, Justice Grace noted Mr. Peebles' disregard for the Rules of Professional Conduct of the Law Society of Upper Canada. Moreover, Justice Grace found it
"troubling" that Mr. Peebles had virtually no recollection of what
transpired during meetings with Mr. Hryniak, his client of many years,
and Justice Grace concluded that he was "dissatisfied, concerned and
highly suspicious" of Mr. Peebles' evidence.
Justice Grace was also troubled by the lack of proper procedures of
Cassels Brock and Blackwell LLP. The Court's expression of concern is
well founded as the Plaintiffs established that Cassels Brock and
Blackwell LLP failed to follow the procedures for dealing with trust
funds imposed on lawyers by the Law Society of Upper Canada. This is
more troubling when put in context of Mr. Hryniak's fraudulent conduct,
which was so obvious that a lawyer at another law firm, Mr. Jeffrey M.
Slopen, having attended a meeting regarding Mr. Hryniak's purported
investment wrote a letter to Cassels Brock and Blackwell LLP warning
the firm that Mr. Hryniak's scheme was a fraud.
While the Court found in favour of the Plaintiffs by recognizing
Hryniak's actions as fraudulent, the Plaintiffs, who have waited more
than five years to have their cases heard, are dismayed that the Court
did not grant judgment against Mr. Peebles and Cassels Brock and
Blackwell LLP, which will now force the Plaintiffs to go through the
ordeal of a trial that will cost millions of dollars. Moreover, the
Plaintiffs are concerned that the trial will provide the defendants
with further opportunity to use the judicial system to delay a process
that was already delayed by the defendants in two drawn-out motions for
security for costs.
Andrea Bosco, a representative of Bruno Appliance and Furniture, Inc.,
one of the Plaintiffs, states:
The Court applied the law unfairly. More than forty pages of the
Court's 57 page decision was based on Hryniak's evidence and his
obvious fraudulent conduct. Mr. Hryniak used the offices, lawyers and
trust accounts of Cassels Brock, yet the evidence and issues of
credibility in respect of Mr. Peebles, such as Mr. Peebles' signed
statement confirming his liability and Mr. Peebles' insolence and lack
of cooperation when examined for discovery, were glossed over by the
The fact is that Mr. Hryniak would have never been able to defraud us if
it was not for the legitimacy that Cassels Brock provided to Mr.
Hryniak's conduct and its total disregard for professional standards
and rules, especially the law society regulations dealing with the
handling of trust funds.
Rather than acknowledging its role in Hryniak's fraud and correcting the
wrong that happened to us and other investors, Cassels Brock is
attempting to silence us in the Courts and in the media. For example,
one of Canada's largest distributors of news releases has recently
refused to accept press releases from us that reference Cassels Brock.
Despite not granting summary judgment against Mr. Peebles and Cassels
Brock and Blackwell LLP, Justice Grace stated his view that "I have
little doubt that the presence of a respected partner at a venerable
law firm, even at one meeting, created an air of legitimacy,
professionalism and integrity which provided some comfort to investors.
I am not sure that Mr. Pebbles appreciates that fact even today."
Javad Heydary, lead counsel for the Plaintiffs, states:
This was a partial victory for our clients and we understand their
frustration with a judicial system that took five years to hold Mr.
Hryniak accountable for his fraudulent conduct. However, we are
confident that when the Court has the opportunity to weigh all of the
evidence at trial, including the evidence that was not available on
this motion for summary judgment, it will side with our clients and
find Cassels Brock and Mr. Peebles liable for our clients' losses.
Cassels Brock and Blackwell LLP is one of Canada's oldest and largest
law firms headed by Ontario's former Liberal Premier, The Honourable
David R. Peterson. Moreover, the firm recently retained another former
Ontario Premier, The Honourable Mike Harris, who joined the firm as a
senior business adviser.
The Plaintiffs comprise one Chicago-based company and 13 elderly
American investors, some of whom lost their life savings to Mr.
Hryniak's fraudulent scheme.
For background information on this matter including the recent court
decision details (in the form of documents filed with the court),
visit: www.brunovcassels.com. Please note that the allegations contained in the Statement of Claim
against Cassels Brock and Blackwell LLP and Gregory Jack Peebles have
not yet been proven in a Court of law.
The cases are being heard at:
Superior Court of Justice
393 University Avenue
SOURCE BRUNO APPLIANCE AND FURNITURE INC.
For further information: For further information:
Javad Heydary or David Alderson, Counsel for the Plaintiffs, Heydary Hamilton PC