Breaking Fraud Cases from Canadian Courts

At Canadian Fraud News, we report on decisions issued by Canadian Courts related to fraud, that are not reported in the main stream media, and that contain legal issues the Canadian public and fraud recovery experts should be aware of. The following is one such story.

On July 21, 2017, the Ontario Superior Court released its decision in the civil fraud action of the Estate Trustees of the Estate of Clifford Hoyle ats Melissa Gibson-Heath and DC Jain & Sons Inc. This case addressed the issue of civil judgments being issued where criminal restitution orders had already been made, and where the thief had been discharged from bankruptcy. The case also addressed the vicarious liability of the retirement home.

Thefts on senior by director Gibson-Heath at the Fairfield Manor East Retirement Home

Melissa Gibson-Heath commenced employment at the Fairfield Manor East retirement home in Kingston, Ont. on January 28, 2004. Mr. Clifford Hoyle was a resident the Fairfield Manor East retirement home. He was already demonstrating the early stages of dementia when he started to reside there in 2006.

In a letter of reference written in August 2008, the former Administrator at Fairfield stated that Ms. Gibson-Heath had “grown and developed into a fine middle manager with 15 generalist staff under her direct supervision”.

Based upon the recommendation of the previous Administrator, DC Jain & Sons Inc., the owner of Fairfield Manor East, promoted Ms. Gibson-Heath to the position of full-time Administrator of the retirement home in 2008.

In January 2008, resident Clifford Hoyle’s chequing account balance had been in excess of $186,910. His savings account balance was $49,030. On May 2, 2010, the day that Mr. Hoyle passed away at the age of 93, his chequing account balance was down to $5,408, and there was just $73 in his savings account.

The subsequent police investigation revealed that between May 28, 2008, and March 3, 2010, Ms. Gibson-Heath stole $229,000 from Clifford Hoyle. Mr. Hoyle was retired from the Canadian Armed Forces.

Ms. Gibson-Heath was subsequently charged criminally, pleaded guilty and, upon conviction, was sentenced to 18 months’ imprisonment. The court also made a free-standing restitution order in the amount of $229,000, and issued a fine-in-lieu-of-forfeiture order.

Ms. Gibson-Heath assigned herself into bankruptcy. The Estate could not collect from her, at least not while she was in prison. Accordingly, the Estate moved for default judgment against Ms. Gibson-Heath, as well as a declaration that the judgment survived her bankruptcy.

The Estate also moved for summary judgment against the owner of the retirement home, DC Jain & Sons Inc. – as they were the only entity from which they could reasonably collect.

Civil judgement against Gibson ordered despite bankruptcy discharge

The civil court held that the availability of a civil remedy for theft or fraud is not affected by reason only that a Criminal Code restitution order has been made.

The Court further held that just because Gibson had assigned herself into bankruptcy and been discharged, this did not mean that a civil judgment could not be ordered against her. The Court ruled that:

Parliament has clearly made a policy decision that a bankrupt should not be allowed to raise the shield of her general discharge in bankruptcy against judgment creditors who hold judgments against the bankrupt grounded in [theft and fraud].

The Court gave the Estate judgment against Ms. Gibson-Heath for the amount of $155,468.46, being the amount that remained unrecovered.

The Court declined to award punitive damages against Ms. Gibson-Heath because the Court was of the view that she had been adequately punished in the criminal system.

The criminal conviction has not been reported on-line legal case banks. For a media story on the criminal conviction of Ms. Gibson-Heath, see Stolen Funds Must Be Paid Back: Judge – The Whig

Trial required to determine liability of the retirement home

As mentioned above, the Estate also moved for summary judgment against the retirement home owners DC Jain & Sons Inc. The Court declined to award summary judgment, and ruled that a trial was required.

The Court held that the legal question of whether the retirement home is vicariously liable for Ms. Gibson-Heath thefts and frauds is complex and fact based. The Court held that vicarious liability will generally be appropriate where the victim was vulnerable to a rogue employee, and where the employer gave the rogue employee the opportunity to abuse his or her power.

No trial date has been set as of the date of this article.

Information on this and other fraud recovery stories

For further information on this case, or any other fraud recovery inquiry, contact Canadian Fraud News Inc. at Kayla@Canadianfraudnews.com.