DECISION PRESENTS A MIXED BLESSING FOR AMERICAN INVESTORS DEFRAUDED BY ONTARIO MAN WHO USED A BAY STREET LAW FIRM AS A FRONT FOR A FRAUDULENT INVESTMENT SCHEME
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TORONTO, ONTARIO – (December 8, 2011) –The Ontario Court of Appeal recently released a judgment in five appeals concerning the proper application of the revised Rules governing motions for Summary Judgment, which came into force January 1, 2010.
The decision will impact litigants across the province, but it is especially significant for the Plaintiffs of two of the decisions under appeal.
In one of the decisions, Mauldin et al v. Cassels Brock et al., the Ontario Court of Appeal upheld the decision of the Honourable Mr. Justice Grace of the Ontario Superior Court of Justice, who granted judgment in favour of a group of thirteen American investors that brought a claim of fraud against Robert Hryniak, a Toronto resident.
The funds that the victims invested were disbursed to a company run by Hryniak from the trust accounts of Cassels Brock & Blackwell LLP. Cassels Brock and Blackwell LLP is one of Canada’s oldest and largest law firms. It is headed by a former Ontario Liberal Premier, the Honourable David R. Peterson. Another former Ontario Premier, the Honourable Mike Harris, joined the firm in 2010 as a senior business adviser.
The Court of Appeal found that the evidence at the motion for Summary Judgment motion firmly supported Justice Grace’s findings that Hryniak committed civil fraud against the Plaintiffs and that Hryniak never had, or intended to have, a legitimate trading program in place.
The Mauldin motion for Summary Judgment was heard concurrently with a similar motion brought by another victim, Bruno Appliance and Furniture, Inc. (“Bruno Appliance”). Bruno Appliance also obtained summary judgment against Mr. Hryniak, which was subsequently appealed by Mr. Hryniak. The Court of Appeal allowed the appeal.
The Mauldin Plaintiffs are happy that the Court of Appeal upheld Justice Grace’s decision in their case, but are dismayed at the outcome in the Bruno matter.
Marvin Cleair, one of the plaintiffs in the Mauldin matter, states:
The summary judgment our group got against Robert Hryniak was hard-won. I am relieved that the Court of Appeal did not take it away from us. My thoughts and prayers go out to Mr. Bruno and his daughter, who have fought alongside us every step of the way.
Theodore Landkammer, another Mauldin plaintiff states:
The thing that I can’t get past is why there isn’t a criminal investigation against Mr. Hryniak. We have Judge Grace saying he’s a fraud and we have the Court of Appeal confirming it, yet law enforcement appears to not be doing anything about it.
Andrea Bosco, a representative of Bruno Appliance, is puzzled by the Court of Appeal’s decision. She states:
It’s baffling. The court accepted that the investment scheme that Hryniak was touting was a fraud, that our money was sent to him through Cassels Brock’s trust accounts, that he knew that my father’s company was an investor and that at least part of the money was used for his own purposes. Yet still the Court of Appeal says we have to go to trial to prove he defrauded Bruno Appliance.
Javad Heydary, lead counsel for the Plaintiffs, states:
Our legal team is not surprised that the Court of Appeal was able to see the fraudulent nature of Robert Hryniak’s enterprise shining through in the Mauldin evidentiary record.
On the other hand, we are surprised that the Court of Appeal failed to find that Mr. Hryniak defrauded Bruno Appliance, when in the same reasons for decision they found he never had a legitimate trading program in place. It is shocking for the highest court in the Province not to hold him accountable for the loss in the Bruno matter when they themselves acknowledged that this established fraud artist used at least part of Bruno’s money for his own purposes. Frankly, it makes me question my faith in our courts’ ability to assist victims of fraud at a time when that assistance is desperately needed. After all, we live in a post-Madoff world.
Monday’s decision is not the end of the matter for the Plaintiffs. There is still a pending action in both cases against Gregory Jack Peebles, Mr. Hryniak’s lawyer with respect to the scheme, and Cassels Brock and Blackwell LLP, the law firm where Mr. Peebles was a partner at the time, as well as the pending action against Mr. Hryniak in the Bruno matter.
The Plaintiffs are concerned that Cassels Brock and Blackwell LLP will be able to exert its weight to run procedural interferences designed to delay the trial of their actions. Given that the average age of the Plaintiffs is over 70 years old, they are worried that not all of them will live to see this case through to its conclusion.
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 not all of the allegations contained in the Statements of Claim have been proven in a court of law.
The Plaintiffs will be giving a brief press conference at 10:30 a.m. Friday, December 9, 2011, at the offices of Heydary Hamilton PC, Toronto-Dominion Centre, 66 Wellington Street W., Suite 4500, Toronto.
Javad Heydary or David Alderson, Counsel for the Plaintiffs, Heydary Hamilton PC
Phone: 416-972-9001
E-mail: jheydary@heydary.com
Email: dalderson@heydary.com
