What follows are extracts from
the referenced court documents - direct quotation.
You can locate the original
court documents by going to the following website and searching by key word:
http://www.canlii.org/en/on/onsc/index.html
Update: Dec. 5/09 Here is a direct link to the most recent court documents dealing with this case
http://www.canlii.org/en/on/onsc/doc/2009/2009canlii49639/2009canlii49639.html
Here are two brief extracts from the document:
"[7] Following the transfer of the Lands to the Charity disputes arose between Chaplin and Fretwurst, on the one side, and Barnstijn and others, on the other, about the Encumbrances placed on the Lands by CPCL. At the heart of the dispute lies the parties’ disagreement over the intended use of the Lands: Barnstijn contends that it was always understood that all of the Lands would be dedicated to public purposes and that the granting of the Encumbrances violated that understanding; Chaplin and Fretwurst argue that it was always known that some encumbrances would be placed on the Lands immediately adjacent to the Manour House and the Land’s use would be of a mixed public and private nature.
[8]
The plaintiffs commenced this proceeding by way of application
for a variety of relief, including declarations that the Encumbrances are
invalid and that Chaplin and Fretwurst do not have any interest in the Lands.
The plaintiffs, Keith Ainsworth and Sheila O’Donovan, are founding members of
the Charity."
"IV. The pleadings in this proceeding
[13] In accordance with the timetable set by Cameron J., the plaintiffs delivered a Statement of Claim in April, 2009. In early May the defendant lawyers and law firms delivered their defences. The Statement of Defence, Counterclaim and Crossclaim of Jan Chaplin, Mark Fretwurst and The Cruickston Park Company Limited was not delivered until late June, some two months late. That pleading runs to 67 pages and 219 paragraphs.
[14] Just prior to the hearing of this motion the Defendants filed an amended Statement of Defence, Counterclaim and Crossclaim which, they submitted, addressed any legitimate deficiencies identified in their original pleading by the plaintiffs. Although the Defendants have not styled their pleading as an amended one, I will treat it as such in order to avoid further delay in this already far too old proceeding. Accordingly, I order that the Statement of Defence, Counterclaim and Crossclaim contained in the Responding Motion Record of the Defendants, Chaplin, Fretwurst and Cruickston Park, stand as their Amended Statement of Defence, Counterclaim and Crossclaim, and I will determine this motion by reference to that amended pleading.
[15] Although I will consider the plaintiffs’ objections by reference to the Amended Defence, I must express my disapproval of the way the Defendants have dealt with this pleadings motion. It is not fair to the opposing parties, nor to the Court, to dump on their laps an amended version of a pleading literally on the eve of the argument of the motion. Apart from the difficulty in dealing with an amended pleading on short notice, significant changes were made to the paragraph numbering in the amended pleading, yet the Defendants did not provide the opposing parties or the Court with a copy of the pleading which cross-referenced the new paragraph numbers to the old. Such an omission increases the work that all must perform, and I will take such conduct into account when dealing with the issue of costs.
[16] For ease of reference I have appended to this endorsement Schedule “A” which cross-references the paragraph numbering between the Original and Amended Defence."
SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE
NO.: 07-003/06
DATE: 20061019
ESTATES LIST
RE: RARE CHARITABLE RESEARCH RESERVE et al. v. JAN CHAPLIN, et al.
BEFORE: Justice Spies
COUNSEL: Jerome R. Morse and Erica Toews, for the Respondents/Cross-Applicants
Dean A. Peroff, for the Applicants/Cross-Respondents
DATE HEARD: October 4, 2006
THE ISSUE
[5] The central issue before me is whether or not to convert the within application and cross-application into an action and counterclaim, at this time, notwithstanding the fact that there have been no cross-examinations and the application and cross-application have not been heard on the merits.
THE NATURE OF THE APPLICATION/CROSS-APPLICATION
[6] The Applicants bring this application for certain declaratory relief pursuant to section 10(1) of the Charities Accounting Act[1] and as well seek damages and other relief. The dispute concerns a 913-acre parcel of ecologically valuable land (the “Lands”) that was once owned by the University of Guelph and is now owned by the Applicant Rare Charitable Research Reserve (the “Charity”), a charitable organization. The Lands were first conveyed by the University to the Respondent, The Cruickston Park Company Limited (“CPCL”), a company incorporated by the Respondents Jan Chaplin and her husband Mark Fretwurst. Before CPCL conveyed the Lands to Charity, CPCL granted to Chaplin and Fretwurst an option to buy (under certain circumstance) a certain 130-acre parcel of the Lands at a fixed price, in addition to certain restrictive covenants and options that restrict the remainder of the Lands. Chaplin owns 53 acres of property, including a Manor house where she and her husband live, which is located in the middle of the Lands in question.
[7] The Applicant Michael Barnstijn is a former chairman of Charity’s board and there seems to be no dispute that he provided a donation in the order of $3.5 million, which permitted Charity to purchase the Lands. The Applicants take the position that Chaplin and Fretwurst as a former director and officer respectively of Charity, breached trust and fiduciary obligations to Charity when CPCL granted the options and restrictive covenants to Chaplin and seek a declaration that the options and restrictive covenants are void.
[8] The Respondents take the position that Barnstijn knew that the Respondents acquired the Lands from the University for two purposes; the first to become involved in a project to preserve part of the Lands as an ecological asset for the community and the second being to enhance and protect the privacy of Chaplin and Fretwurst’s family. They take the position that Charity bought the Lands from CPCL knowing and accepting that the Lands had the encumbrances in question. The Applicants dispute this.
[9] The Respondents have brought a cross-application seeking an order declaring that the encumbrances in issue are bona fide and in full force and effect in accordance with their terms, or in the alternative an order that the transfer of the Lands from CPCL to Charity be declared null and void or rescinded. A reference is also sought to determine the amounts due in the event the lands are returned to CPCL.
[22] In order to refute this claim, the Respondents intend to retain expert witnesses to support their position that the loss of this parcel of land is not fatal to the ecological objectives/capabilities of Charity and that the encumbrances over Charity’s land would not be a bar to fundraising in the future. In other words the court will have to consider whether or not to approve of the transaction retroactively. At this stage however no expert evidence has been filed and so the extent of any dispute is unknown.
ONTARIO
SUPERIOR COURT OF JUSTICE
Rare Charitable Research Reserve v. Chaplin,
2008 CanLII 48651 (ON S.C.D.C.)
COURT FILE NO.: 09/08
DATE: 20080918
BACKGROUND FACTS IN THIS CASE
[3] This application and cross application raises various issues with respect to a complicated land transaction involving the transfer of some 966 acres previously owned by the University of Guelph, including what was known as the Manor House (the “Transaction”).
[4] The disputing parties have each initiated separate actions against the same two lawyers and their law firms for negligence with respect to the Transaction. These lawyers were associated with steps taken or not taken, advice given or not given to the parties with respect to the Transaction.
[5] The losing party in the applications will be pursuing the lawyers involved in the Transaction. It appears clear that the factual underpinning for any claim for negligence in the two outstanding actions against the interveners will be largely determined by the facts and legal determinations in these applications.
FACTS
General
[8] This case begins with a piece of land. The Cruickston Park Lands comprise approximately 913 acres immediately adjacent to the City of Cambridge. The Cruickston Park Lands are contiguous to a further parcel of land which, for the purposes of the two applications been labelled the Manor House Lands. As the name suggests, a manor house is located on the 53 acres which make up the second parcel. Prior to 1996, both the Cruickston Park Lands and the Manor House Lands were owned by the University of Guelph. During that year, the respondent to the First Application, Jan Chaplin, purchased the Manor House Lands. Jan Chaplin, her husband, the respondent to the First Application, Mark Fretwurst, and their three daughters reside in the manor house on the Manor House Lands. The respondent to the First Application, The Cruickston Park Company Limited, is a corporation created and controlled by Jan Chaplin and Mark Fretwurst. On October 17, 2000, The Cruickston Park Company Limited acquired the Cruickston Park Lands from the University of Guelph. It appears that the acquisition was made with a view to subsequently transferring the property to a charity or charitable foundation. Jan Chaplin, in an affidavit sworn in support of the First Application, deposes that careful consideration was given as to the structure which would best allow for the preservation of lands in a natural and undisturbed state. In the affidavit, she states that it was determined that this could best be done by creating a charity and having it hold the land subject to certain encumbrances because it was felt that "a charity holding a sizable tract of land would be more likely to succeed in imposing a Regional development scheme than two private individuals" (see: affidavit of Jan Chaplin sworn September 5, 2006, para. 35) The Charity is an applicant in the First Application and was incorporated as a non-profit corporation effective December 6, 2001. On February 8, 2002, the Board of Directors of the Charity held a meeting at which it discussed the acquisition of the Cruickston Park Lands from The Cruickston Park Company Ltd. The Board of Directors resolved that the Charity purchase the Cruickston Park Lands. The transaction closed on February 12, 2002.
[9] Immediately prior to the closing of the transaction by which the Cruickston Park Lands were transferred to the Charity, certain restrictive covenants and options were registered. Accordingly, it appears that the acquisition of the Cruickston Park Lands by the Charity was made subject to these covenants and options. The covenants and options were registered with respect to various parcels of land each of which represent a portion of the Cruickston Park Lands. One of these parcels abuts the Manor House Lands (identified as Parcel "E") and is subject to a covenant restricting the use of those lands. Parcel “E” and three additional parcels (identified as Parcels “A”,”D”, and “F”) had options registered against them in favour of Jan Chaplin or Jan Chaplin & Mark Fretwurst allowing them to purchase the lands affected in the event that there is a change in the permitted land-use.
[10] It seems that this covenant and these options were put in place as a result of the advice and actions of the moving party, John Stirling.
John Stirling
[11] The Statement of Claim alleges that the moving party, John Stirling, was retained to investigate all relevant issues, make application for and do what was necessary to set up a foundation or charity and to advise as to the method of conveyance of the Cruickston Park Lands to the foundation or Charity. John Stirling prepared the necessary applications for charitable status to the Canada Customs and Revenue Agency. John Stirling advised that the Cruickston Park Lands be sold to the Charity, subject to the covenant and the options. This advice was contained within the memo dated November the 27, 2001 which states, in part:
This memorandum has been drafted following my meeting on November 22/01 with Jan Chaplin and Mark Fretwurst at the Cruickston Park property. At the meeting we discussed various alternatives including a phased conveyance of lands to the charity. In the end, it appeared that the best solution would be to convey all of the lands subject to options back if roads were permitted to go through.
[12] The plaintiffs in the Statement of Claim (the respondents in the First Application) say that as a result of this advice, John Stirling was instructed to prepare the various agreements, licenses, options and restrictive covenants required to give effect to the proposed transfer of the Cruickston Park Lands. John Stirling attended two meetings of the Board of Directors of the Charity and outlined the proposed transaction. The second of these meetings was the meeting which took place on February 8, 2002. (see: para. [3] above) It is alleged that the Board of Directors of the Charity relied on the advice of John Stirling in approving the taking of the Cruickston Park Lands subject to the covenant and options. In an affidavit sworn on June 1, 2007, Michael Barnstijn, an applicant in the First Application swears:
I was greatly influenced by Stirling's advice. He advised the board that it bore no legal responsibility for the Encumbrances and was in no position to either prove them or remove them. (See: para.151)
Michael Barnstijn also deposes:
In the final analysis, I was convinced by Stirling that there was nothing the Board could do about the encumbrances at the time. His advice to the Board was that we had no option but to take the Cruickston land subject to the encumbrances. (See: para. 156)
[13] The Statement of Claim also alleges that John Stirling advised Jan Chaplin that, as a result of her being both a principal in The Cruickston Park Company Limited (the vendor) and a member of the Board of Directors of the Charity (the purchaser), she was in a conflict of interest regarding the transfer of the Cruickston Park Lands. According to the Statement of Claim, John Stirling further advised that this conflict of interest could be resolved if Jan Chaplin declared her interest in the transaction, declined to attend the Board meeting on February 8, 2002 and did not participate in the decision of the Charity to purchase the Cruickston Park Lands from The Cruickston Park Company Limited.
[14] The Statement of Claim says that, subsequently, an employee of the Charity obtained a legal opinion from another solicitor. The opinion raised the prospect that as a result of the conflict, the approval of the Office of the Public Guardian and Trustee or the court was required for the transaction to be valid.
[15] The applications deal with the validity of the covenant and options which, it is said, were put in place as a result of the advice of John Stirling. It is argued that the sale was approved by the Board of Directors of the Charity, pursuant to the advice of John Stirling, without the approval of the Office of the Public Guardian and Trustee in the absence of advice from John Stirling that such approval is required.
[16] Moreover, there appears, from the material filed and contained within the court file, to be some confusion as to which of the parties John Stirling was acting for. Was it Jan Chaplin and Mark Fretwurst? Did his retainer include Michael Barnstijn? Was he retained to act on behalf of the Charity?
Thomas LeBrun
[17] The Statement of Claim alleges that Mark Fretwurst retained Thomas LeBrun to advise and represent The Cruickston Park Company Limited with respect to the transfer of the lands from that company to the Charity. It is said that Thomas LeBrun met with Mark Fretwurst on several occasions, was given and reviewed all of the documentation related to the transfer and provided an opinion that the transaction was fair, sound and valid from the point of view of The Cruickston Park Company Limited. According to the Statement of Claim, Jan Chaplin and Michael Fretwurst, who controlled The Cruickston Park Company Limited, relied on the advice of Thomas LeBrun in deciding to proceed with the sale of the Cruickston Park Lands to the Charity.
[18] The Statement of Claim goes on to allege that at no time did Thomas LeBrun suggest or advise that there was any risk that the conveyance of the Cruickston Park Lands could be challenged, that any aspect of the transaction could be found to be invalid or that there was a process to ensure a valid transaction through an application made to the Office of the Public Guardian and Trustee and the court.
[19] It is apparent that whichever side is unsuccessful in respect of the relief sought on the two applications will seek to recover the loss from the two lawyers and their respective firms claiming that they were negligent in the advice they provided and breached whatever contractual or fiduciary relationship existed between them and their clients. In that sense, it would seem that the actions represented by the Statement of Claim, on the one hand, and the Notice of Action, on the other, are contingent on the results of the applications. This is demonstrated by the Statement of Claim which states, at paragraph 67:
The Plaintiffs plead that if the Court grants the relief sought by the Applicants in Application No. 07-003/06 [the First Application] such that the Options and Restrictions are declared null and void then as a result of the Defendants' negligence, Chaplin and Fretwurst have suffered the following general pecuniary damages (in addition to the special damages pleaded at paragraph 57): . .
[20] It is in the context of this situation that John Stirling and Thomas LeBrun seek to intervene, as parties, in the two applications.
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