The Supreme Court of Canada ruled on Wednesday that former newspaper mogul Conrad Black is entitled to pursue libel suits in Ontario against the authors of a report that said he ran his U.S.-based media company, Hollinger International Inc, like a “corporate kleptocracy”.

Conrad Black and his wife Barbara Amiel leave federal court in Chicago, June 24, 2011. (Photo: John Gress/Reuters)

Black, 67, is currently serving a prison sentence in Florida for fraud and obstruction of justice and expects to be released next month. His spokesman Adam Daifallah said Black was delighted with the Canadian court’s ruling.

But an agreement to settle the defamation suits and other court actions, reached after the Supreme Court heard the case in March 2011, could render the ruling in Breeden v. Black moot.

Black has sought more than $2.3 billion in damages in his libel suits. The defendants are Richard Breeden, a former head of the U.S. Securities and Exchange Commission who spearheaded a 2004 Hollinger committee report on Black’s practices, along with three committee members, and other former Hollinger directors.

The report said Black, a former Canadian citizen who is now a member of the British House of Lords, looted publisher Hollinger International of hundreds of millions of dollars. Black denies the charge.

Hollinger used to own Britain’s Daily Telegraph, the Jerusalem Post, the Chicago Sun-Times and many other papers.

In a statement on Wednesday, Daifallah said Black and the defendants had entered into a memorandum of understanding to resolve these legal actions as well as others in the United States.

“The settlement remains subject to court approvals in Ontario and Delaware and, once approved, disposes of these actions notwithstanding the Supreme Court’s favorable decision today,” Daifallah said. No money has yet been exchanged.

Earlier, he characterized the agreement as enforceable and as one that would not be affected by the Supreme Court decision.

The defendants say their comments were justified, and they were doing what was required under U.S. securities law.

The Supreme Court dismissed arguments by the defendants that Black was a “libel tourist” who shopped for the easiest jurisdiction to win his case. Black had filed a number of libel lawsuits not connected to this case.

Black’s lawyers argued his reputation was more tied to Ontario than anywhere else, even though Black gave up Canadian citizenship. Black is now a British citizen.

Jacques Audette, a veteran labour lawyer whose clients include the Montreal municipal police force, has been caught up in the net thrown around 15 people and two engineering and construction companies Tuesday in a major dawn operation by Quebec’s anti-corruption squad.

Jacques Audette

Audette, 59, a partner at the Montreal office of Fasken Martineau DuMoulin LLP for almost 10 years, now faces six charges under the Criminal Code including fraud, conspiracy to commit fraud, breach of trust, fraud on a government, and influencing a municipal official in Mascouche, a city north of Montreal.

Mascouche Mayor Richard Marcotte, Quebec construction business kingpin Antonio (Tony) Accurso, and Louis-George Boudreault, a long-time Quebec Liberal Party organizer, are also among those facing a total of 47 charges as a result of the massive search and arrest operation by more than 120 police officers and civilian investigators working with Quebec’s Unité permanente anticorruption (UPAC), an entity created last year to look into questionable practices in public works and provisioning contracts and fight against corruption.

Dubbed Operation Gravel, an 18-month investigation “allowed us to establish that a system had been put in place a few years ago allowing certain companies to gain an advantage towards the attribution of municipal contracts,” Quebec provincial police Lt. Guy Lapointe said at a news conference.

Police said the arrests and charges — including those laid against engineering company BPR-Triax Inc. and construction firm Transport et Excavation Mascouche Inc. — followed an analysis of seized documents and computer hard drives, 120 interviews and — and according to the Montreal La Presse newspaper — a mole working on the inside on behalf of UPAC.

Fasken Martineau acknowledged Audette’s arrest in a brief statement Tuesday.

“As there is an ongoing police investigation, the firm is unable to offer additional comment,” Fasken said, adding that it “will cooperate fully with any inquiries by the Sûreté du Québec (Quebec’s provincial police force).”

Audette’s bio on the law firm’s web page does not mention any municipal public works contracts but notes that the lawyer “has been very active at the municipal level since the beginning of his (30-year) career. He was an important player in municipal mergers, mainly on the island of Montreal.”

Clients that are mentioned include the Service de police de la Ville de Montréal (SPVM) in “many highly publicized and important labour relations cases,” the Société des alcools du Québec, the government-owned corporation for liquor trade in the province, and the Canadian Air Transport Security Authority (CATSA).

As the media and social media sizzled over Tuesday’s police swoop down, the filing of criminal charges, and speculation about how ongoing investigations might affect other companies and lawyers who act for them, Quebec Premier Jean Charest said Tuesday’s operation demonstrates that “no one is above the law.”

Audette and the other suspects — with the exception of the Mascouche mayor who was reported to be in Cuba on holiday — were taken to holding cells headquarters of Sûreté du Québec headquarters, but later released.

They are set to respond to charges in a court appearance scheduled for June 19.

A former lawyer who resigned from practice during his articling and was later disbarred after his conviction for fraud has been denied a third shot at the profession after a hearing panel of the Law Society of Upper Canada decided he was not of good character.

Dennis-Gwyn Gross told a hearing panel he had turned his life around since serving a five-month jail term in 2000 for defrauding various members of the public.

His younger girlfriend left him after his arrest and he had been working as a material handler at a Niagara Falls Value Village since his release. He also looked after his mother in the home they shared until her death at the age of 98 in 2011.

Gross told the panel his low wages had prevented him from paying restitution to his victims or obtaining a pardon for his conviction, but aimed to remedy both if allowed to return to practice in the area of criminal law.

“I believe I can be a lawyer again and contribute meaningfully to society,” Gross said at his hearing in November.

Gross first ran into trouble with the law society in the mid-1980s when he was given permission to resign his student membership during his articling year after being found guilty of misconduct for attempting to remove a file from his articling firm for himself and providing legal services without supervision.

In 1987, a new panel decided he could be called to the bar as long as he promised not to practise as a sole practitioner for at least a year afterwards.

Then in July 2000, Gross pleaded guilty to five counts of fraud, including against clients. He received an eight-month conditional sentence in addition to the five months he had spent in jail awaiting trial. He was also disbarred in that year, after the law society found he had misappropriated almost $10,000 from the trust funds of 13 clients.

A more lucrative scam involved transferring the title of his mother’s home to himself and then registering a series of mortgages and forged discharges on the property. Mortgagees claimed more than $400,000 in civil actions against Gross, while the judge in his criminal trial ordered him to pay restitution of $300,000. Gross managed to raise $200,000 of that total from the sale of the house and other property.

Gross then made his application for readmission in 2007, admitting that he hadn’t been able to afford any formal continuing legal education in the intervening years. According to the panel’s decision, he told them he “occasionally read the Ontario Reports and some legal decisions on the Internet.” Gross admitted he was not competent to practise criminal law without some more CLE, but said he was willing to work under a mentorship agreement.

The panel was impressed by Gross’ “emphatic and heart felt remorse,” but expressed concerns about his rehabilitation. He only began treatment in June 2011 after the death of his mother, and his doctor was unable to provide assurances on how Gross might react if faced with future temptation. The panel also noted Gross’ lack of effort to repay the money he still owes to the financial institutions he defrauded.

“While we are of course sympathetic to his financial situation since his disbarment . . . the fact remains that there is no evidence of any effort to repay even nominal or small amounts of the debts that were created by the applicant’s fraudulent conduct,” reads the decision.

“While a sufficient time span has elapsed to justify a reassessment of his character, and indeed he has expressed genuine remorse for his earlier actions, we have balanced those factors against the nature and extent of his previous misconduct and what we conclude is insufficient evidence at the hearing before us of rehabilitative steps and other actions on his part to satisfy us of his present good character. It may be that he will be able to make a stronger case at a later date.”

Canada

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United States

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International

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