Mr. Brian Cass

That's when Brian Cass, assistant deputy minister for the ministry and superintendent of deposit institutions, said he "believed that a scam was taking place."

Brian Cass, Assistant Deputy Minister of MFI and Superintendent of Deposit Institutions, looked into the situation and as his notes disclosed on January 3, 1990 - - "twigged, major problems, nobody has twigged."

The judge concluded that it was his "twigging" that set off a whole sequence of events.Mr. Cass believed that a "scam" was taking place, i.e.: Mater's was involved in fraudulent activities and the investors in the Verona project would be the victims of that fraud.From the outset, Cass was primarily concerned with trying to stop suspected criminal activity and, to that end, engaged the regulatory procedures under The Mortgage Brokers Act to obtain evidence of criminal activities of Mater's and Docouto as well as the Fallons and Falloncrest.
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The applicants claimed that Cass initiated regulatory action for the purpose of obtaining evidence of criminal fraud and thereby breached the rights of the accused both at common law and under the Charter.
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The memo made by Cass on January 4, 1990 documenting the views of the MFI was before the Court.The memo claimed that Mater's appeared to be in significant financial difficulty, the appraisal for the Verona II project appeared to be "seriously flawed and perhaps fraudulent" and that Mater's projects had been unsuccessful.The judge, in reviewing the aforesaid, stated that there appeared to be no evidence of any kind to suggest that Cass even directed his mind with respect to what jurisdiction the MFI had to investigate Mater's under The Mortgage Brokers Act.In reading Cass' views, the judge noted that Cass had not considered the September 29, 1989 report by Halpert, which made positive remarks regarding Mater's track record.
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Further, in reviewing the memo, the judge queried whether Cass was proceeding on the basis that he was dealing with regulatory breaches of The Mortgage Brokers Act or if he was concerned that a fraud was occurring.The judge concluded that Cass was of the view that the mortgage investments were property specific and that the borrower, Mater's, was using borrowed funds in a way contrary to the purpose for which the lenders had invested.The judge considered that Cass ought to have been aware that there was no provision in The Mortgage Brokers Act that covers such conduct.

The memo also noted that funds were being advanced from the trust account of the law firm to Mater's despite Mater's not having satisfied mortgage conditions precedent to an advance of funds.The judge queried why the law firm would advance money from their trust account without having been satisfied that the mortgage conditions precedent had been complied with and furthermore stated that the evidence was that the law firm was at no time consulted by anyone from the MFI in respect of the advances of mortgage funds to Mater's.The judge stated that the evidence before him was that Cass was at one time employed by that law firm and he ought to have known that it was highly unlikely that that firm would have advanced funds when it knew it should not.

ABUSE OF PROCESS

In reviewing the issue of abuse of process, the judge stated that, "It is my duty to not only look at the forest but as well the individual trees.That look has clearly demonstrated to me that what 'twigged' in Mr. Cass' mind back in January, 1990 was that the whole Verona Project was a scam - - i.e. a fraud directed at defrauding the investors of their investment funds."

The judge agreed with the submission that Mr. Cass thought he would be "the white knight racing to save the investors from the Mater's/Falloncrest dragons.He was personally responsible for setting in motion a process which, in its application to the accused and their companies, had draconian consequences."

The judge considered that the investigation that was ordered was flawed and that Cass knew that most of the information he had received was preliminary.Further, the judge outlined a number of instances of improper conduct of Cass and other MFI officials.
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It appeared to the judge that it did so because it relied on the representations made to it by the MFI through Cass.
...
The judge held that because Mr. Cass believed there was a massive fraud, he instigated a hurried and preliminary investigation of Mater's despite being cautioned by the investigators that their findings were preliminary and should not be relied upon.

In his conclusion, the judge pointed out that the MFI officials believed that false and misleading advertising was inducing the investors to invest and that mortgage funds in the hands of Mater's were trust funds.Furthermore, MFI officials believed that Mater's was using those funds for the purposes other than those for which they were advanced.The judge concluded that during all that time, MFI officials never spoke to a single investor, and as far as he could discern, never thought to speak to any investor.

The construction team responsible for this job includes SEDALCO's construction professionals, Hal Ingram, Project Manager ; Dean Terry, Superintendent ; George Millard, Quality Manager ; Brian Cass, Assistant Superintendent ; and Nala Beal, Project Administrator.

Brian Cass, Assistant Deputy Minister of MFI and Superintendent of Deposit Institutions, looked into the situation and as his notes disclosed on January 3, 1990 - - "twigged, major problems, nobody has twigged."

The judge concluded that it was his "twigging" that set off a whole sequence of events.Mr. Cass believed that a "scam" was taking place, i.e.: Mater's was involved in fraudulent activities and the investors in the Verona project would be the victims of that fraud.From the outset, Cass was primarily concerned with trying to stop suspected criminal activity and, to that end, engaged the regulatory procedures under The Mortgage Brokers Act to obtain evidence of criminal activities of Mater's and Docouto as well as the Fallons and Falloncrest.
...
The applicants claimed that Cass initiated regulatory action for the purpose of obtaining evidence of criminal fraud and thereby breached the rights of the accused both at common law and under the Charter.
...
The memo made by Cass on January 4, 1990 documenting the views of the MFI was before the Court.The memo claimed that Mater's appeared to be in significant financial difficulty, the appraisal for the Verona II project appeared to be "seriously flawed and perhaps fraudulent" and that Mater's projects had been unsuccessful.The judge, in reviewing the aforesaid, stated that there appeared to be no evidence of any kind to suggest that Cass even directed his mind with respect to what jurisdiction the MFI had to investigate Mater's under The Mortgage Brokers Act.In reading Cass' views, the judge noted that Cass had not considered the September 29, 1989 report by Halpert, which made positive remarks regarding Mater's track record.
...
Further, in reviewing the memo, the judge queried whether Cass was proceeding on the basis that he was dealing with regulatory breaches of The Mortgage Brokers Act or if he was concerned that a fraud was occurring.The judge concluded that Cass was of the view that the mortgage investments were property specific and that the borrower, Mater's, was using borrowed funds in a way contrary to the purpose for which the lenders had invested.The judge considered that Cass ought to have been aware that there was no provision in The Mortgage Brokers Act that covers such conduct.

The memo also noted that funds were being advanced from the trust account of the law firm to Mater's despite Mater's not having satisfied mortgage conditions precedent to an advance of funds.The judge queried why the law firm would advance money from their trust account without having been satisfied that the mortgage conditions precedent had been complied with and furthermore stated that the evidence was that the law firm was at no time consulted by anyone from the MFI in respect of the advances of mortgage funds to Mater's.The judge stated that the evidence before him was that Cass was at one time employed by that law firm and he ought to have known that it was highly unlikely that that firm would have advanced funds when it knew it should not.

ABUSE OF PROCESSIn reviewing the issue of abuse of process, the judge stated that, "It is my duty to not only look at the forest but as well the individual trees.That look has clearly demonstrated to me that what 'twigged' in Mr. Cass' mind back in January, 1990 was that the whole Verona Project was a scam - - i.e. a fraud directed at defrauding the investors of their investment funds." The judge agreed with the submission that Mr. Cass thought he would be "the white knight racing to save the investors from the Mater's/Falloncrest dragons.He was personally responsible for setting in motion a process which, in its application to the accused and their companies, had draconian consequences."

The judge considered that the investigation that was ordered was flawed and that Cass knew that most of the information he had received was preliminary.Further, the judge outlined a number of instances of improper conduct of Cass and other MFI officials.
...
It appeared to the judge that it did so because it relied on the representations made to it by the MFI through Cass.
...
The judge held that because Mr. Cass believed there was a massive fraud, he instigated a hurried and preliminary investigation of Mater's despite being cautioned by the investigators that their findings were preliminary and should not be relied upon.

In his conclusion, the judge pointed out that the MFI officials believed that false and misleading advertising was inducing the investors to invest and that mortgage funds in the hands of Mater's were trust funds.Furthermore, MFI officials believed that Mater's was using those funds for the purposes other than those for which they were advanced.The judge concluded that during all that time, MFI officials never spoke to a single investor, and as far as he could discern, never thought to speak to any investor.

In early January, 1990, Brian Cass, Assistant Deputy Minister of the Ministry of Financial Institutions and Superintendent of the of the Deposit Institutions looked into the situation and as his notes disclosure on January 3, 1990 - "twigged, major problems, nobody has twigged." Judge in the case of R.v. Docouto concluded that it was his "twigging" that set off a whole sequence of events.Mr. Cass believed that a "scam" was taken place, i.e.: Mater's was involved in fraudulent activities and the investors in the Verona project would be the victims of that fraud.

Brian Cass, Assistant Deputy Minister of MFI and Superintendent of Deposit Institutions, looked into the situation and as his notes disclosed on January 3, 1990 - - "twigged, major problems, nobody has twigged."

The judge concluded that it was his "twigging" that set off a whole sequence of events.Mr. Cass believed that a "scam" was taking place, i.e.: Mater's was involved in fraudulent activities and the investors in the Verona project would be the victims of that fraud.From the outset, Cass was primarily concerned with trying to stop suspected criminal activity and, to that end, engaged the regulatory procedures under The Mortgage Brokers Act to obtain evidence of criminal activities of Mater's and Docouto as well as the Fallons and Falloncrest.
...
The applicants claimed that Cass initiated regulatory action for the purpose of obtaining evidence of criminal fraud and thereby breached the rights of the accused both at common law and under the Charter.
...
The memo made by Cass on January 4, 1990 documenting the views of the MFI was before the Court.The memo claimed that Mater's appeared to be in significant financial difficulty, the appraisal for the Verona II project appeared to be "seriously flawed and perhaps fraudulent" and that Mater's projects had been unsuccessful.The judge, in reviewing the aforesaid, stated that there appeared to be no evidence of any kind to suggest that Cass even directed his mind with respect to what jurisdiction the MFI had to investigate Mater's under The Mortgage Brokers Act.In reading Cass' views, the judge noted that Cass had not considered the September 29, 1989 report by Halpert, which made positive remarks regarding Mater's track record.
...
Further, in reviewing the memo, the judge queried whether Cass was proceeding on the basis that he was dealing with regulatory breaches of The Mortgage Brokers Act or if he was concerned that a fraud was occurring.The judge concluded that Cass was of the view that the mortgage investments were property specific and that the borrower, Mater's, was using borrowed funds in a way contrary to the purpose for which the lenders had invested.The judge considered that Cass ought to have been aware that there was no provision in The Mortgage Brokers Act that covers such conduct.

The memo also noted that funds were being advanced from the trust account of the law firm to Mater's despite Mater's not having satisfied mortgage conditions precedent to an advance of funds.The judge queried why the law firm would advance money from their trust account without having been satisfied that the mortgage conditions precedent had been complied with and furthermore stated that the evidence was that the law firm was at no time consulted by anyone from the MFI in respect of the advances of mortgage funds to Mater's.The judge stated that the evidence before him was that Cass was at one time employed by that law firm and he ought to have known that it was highly unlikely that that firm would have advanced funds when it knew it should not.

ABUSE OF PROCESSIn reviewing the issue of abuse of process, the judge stated that, "It is my duty to not only look at the forest but as well the individual trees.That look has clearly demonstrated to me that what 'twigged' in Mr. Cass' mind back in January, 1990 was that the whole Verona Project was a scam - - i.e. a fraud directed at defrauding the investors of their investment funds." The judge agreed with the submission that Mr. Cass thought he would be "the white knight racing to save the investors from the Mater's/Falloncrest dragons.He was personally responsible for setting in motion a process which, in its application to the accused and their companies, had draconian consequences."

The judge considered that the investigation that was ordered was flawed and that Cass knew that most of the information he had received was preliminary.Further, the judge outlined a number of instances of improper conduct of Cass and other MFI officials.
...
It appeared to the judge that it did so because it relied on the representations made to it by the MFI through Cass.
...
The judge held that because Mr. Cass believed there was a massive fraud, he instigated a hurried and preliminary investigation of Mater's despite being cautioned by the investigators that their findings were preliminary and should not be relied upon.

In his conclusion, the judge pointed out that the MFI officials believed that false and misleading advertising was inducing the investors to invest and that mortgage funds in the hands of Mater's were trust funds.Furthermore, MFI officials believed that Mater's was using those funds for the purposes other than those for which they were advanced.The judge concluded that during all that time, MFI officials never spoke to a single investor, and as far as he could discern, never thought to speak to any investor.