The Enumerated Facts

An appeal has been dismissed by the Tribunal Appeal Division Law Society of Upper Canada in a claim that (in effect ) collateral estoppel was improperly applied based on civil litigation

According to the court decisions, the Lawyer acted for the Alfano brothers to incorporate Osler Paving Company Limited (“Osler”) in 1993 so that they could continue in the paving business. The Lawyer was made president of Osler and was given a 10% ownership interest. The Lawyer acted for the brothers to establish four family trusts which each held a 22.5% interest in Osler, by way of an option to purchase shares. Frank Alfano withdrew from the business in 1997, after Carmen’s death. As found by the trial judge and affirmed in the Appeal Decision, the remaining three family trusts then each held 29% of the equity in Osler, and the balance of 13% of the shares were held by the Lawyer.

In 2001 the relationship between the Lawyer and the Alfanos began to deteriorate. In 2002 the Lawyer took the position that he owned Osler, locked the Alfanos out of the business, listed the business premises for sale, and eventually assigned Osler into bankruptcy. This precipitated lengthy litigation, and eventually the trial and appeal proceedings, which resulted in the decisions that form the basis of the findings in these reasons.

In the Trial Decision Macdonald, J. made specific findings of fact (the “enumerated facts”) including that:

1. The Lawyer concocted a fraudulent unanimous shareholders’ agreement (“USA”) which effectively eliminated the plaintiffs’ interests in 758 and Osler (paras. 60 to 62).
2. The Lawyer improperly assigned Osler into bankruptcy (paras. 73 to 75).
3. The Lawyer misappropriated funds totaling over $1,000,000 from Osler (para. 48).
4. The Lawyer listed Osler’s building on Bowes Road for sale without informing the plaintiffs (para. 119).

Justice Macdonald also found that the Lawyer was in a solicitor-client relationship with the Alfanos when these events occurred.

Justice Macdonald declared (at para. 54) that the Alfano family trusts were each 29% owners of Osler and awarded punitive damages in the amount of $250,000 “for compensation for the fraud perpetrated on them” by the Lawyer.

There was no abuse of process

There was no allegation that the civil proceedings were unfair. Mr. Piersanti was a full party who participated in the prior proceedings, including the lengthy trial, an appeal to the Court of Appeal, and an unsuccessful application for leave to appeal to the Supreme Court of Canada. He had every opportunity and incentive to challenge the findings of fact that were made and upheld by the civil courts, and in most cases, he did so. It would have been obvious during the civil proceedings that the central issues that were being contested – ultimately embodied in the five findings we are dealing with – were directly relevant to his continued status as a licensee of the Law Society.

The matter now proceeds to the penalty phase. (Mike Frisch)