Fonting Fraud Reveals Sham Trust

High-stakes litigation often involves the use of experts, who are expected under the Rules of Civil Procedure to provide fair, objective and non-partisan evidence to assist the court to determine issues under dispute. These experts are required to limit their evidence to matters within their expertise, and it’s not uncommon to see experts in a wide range of technological, medial, and other areas.

Typically, the opinion evidence provided by an expert evidence must comply with certain requirements under rule 53.03, such as their area of expertise, qualifications and employment, and a review of the basis for which the opinion is provided, including factual assumptions made, any research conducted, and every document reviewed in the process.

The Ontario Court of Appeal clarified in the 2015 case of Westerhof v. Gee Estate that there are some circumstances where “fact witnesses” can also play a role in litigation without complying with these requirements,

[60] Instead, I conclude that a witness with special skill, knowledge, training, or experience who has not been engaged by or on behalf of a party to the litigation may give opinion evidence for the truth of its contents without complying with rule 53.03 where:

• the opinion to be given is based on the witness’s observation of or participation in the events at issue; and

• the witness formed the opinion to be given as part of the ordinary exercise of his or her skill, knowledge, training and experience while observing or participating in such events.

Often referred to as “fact witnesses,” these witnesses are indeed capable of providing opinions, though they are based on observation or involvement in the underlying facts, and are better characterized as “participant experts,” as they may also have formed a relevant opinion based on personal observations or examinations unrelated to the litigation.

The manner in which expert witnesses generally can play a role in litigation can lead to some interesting and occasionally amusing circumstances.

One example would be the recent Ontario Superior Court of Justice bankruptcy decision in McGoey (Re), where the court reviewed a motion by the trustee seeking a declaration on two properties held in joint tenancy by a couple are assets of the estate. The couple resisted the motion, relying on s. 67(1)(a) of the Bankruptcy and Insolvency Act, stating that the property was held in trust for their children.

The trust documents were alleged to have been created in 1995 and 2004, stating that it is not a marital asset, and was held in trust for their various children, some from previous relationships. They claim that these documents were created by themselves, and without any legal advice or assistance. The trustee attacked the validity of the trusts on the basis that they were either “sham” trusts, or a fraudulent preference created for the purposes of defeating the creditors.

Central to the trustee’s theory was the expert report of Thomas W. Phinney, who holds a Master of Science in graphic arts. This might seem to be a strange credential to tout before a court, unless Mr. Phinney’s specialization in this degree is known to be in design and typography. He has decades of experience in this area, including participation in legal proceedings as an expert in several jurisdictions. On this basis, the court accepted Mr. Phinney as properly qualified his evidence admissible using the Mohan criteria.

There was significant reliance by the couple on the trust documents, which made the expert’s evidence particularly relevant for these proceedings,

[25] Mr. Phinney has definitively identified the typeface used in the Ledge Lodge document, dated January 4, 1995, as set in a font called Cambria. As of January 4, 1995, however, the Cambria typeface had not yet been created. It was designed for Microsoft beginning in 2002 and did not reach the general public until January 2007 when Microsoft released Windows Vista and Office 2007. Because Cambria typeface did not exist on January 4, 1995, the document set in the typeface Cambria, allegedly dated January 4, 1995, could not have been created or signed on that date.

[26] Similarly, the typeface used in the Humber Station document has been definitively identified as set in a font called Calibri. Like Cambria, Calibri is part of Microsoft’s ClearType Font Collection, which was developed in 2002 but did not reach the general public until 2007.

[27] Mr. Phinney deposes that no one, other than a Microsoft employee, consultant or contract designer, could have created a document such as the Humber Station document using the Calibri typeface in March 2004. Even if they did, however, the Humber Station document uses Calibri’s “tabular lining” numbers, which did not become the default Calibri numbers until after November 2005.

[28] Because the Humber Station document is set in Calibri using tabular lining numbers, it could not reasonably have been created or signed on March 4, 2004. In any event, it is extremely unlikely that anyone besides a Microsoft employee or a Microsoft consultant could have created a document such as the Humber Station document until more than a year after March 2004.

[emphasis added]

Needless to say, neither one of the couple worked for Microsoft in any capacity, and were unable to explain in any way the discrepancy with their own evidence.

 

Comments

  1. RE: “Typically, the opinion evidence provided by an expert evidence must comply with certain requirements under rule 53.03, such as their area of expertise, qualifications and employment, and a review of the basis for which the opinion is provided, including factual assumptions made, any research conducted, and every document reviewed in the process.”
    ……….

    The point of departure for this piece takes the high-sounding promise regarding Rule 53.03 as reality rather than rhetoric. This is a description of what ought to be – not what is. The promise of the Form 53 remains unfulfilled. Why? Because, as Master Short pointed out, there is no enforcement mechanism that would encourage long-time “hired gun” experts to “change their partisan stripes”. Alas, neither the ON Civil Rules Committee nor the ON AG has demonstrated the slightest desire to make the Rule 53.03 promise of impartial experts a reality. And so it remains little more than a hoax on the public and a misleading insult to injured litigants who are the captive subjects of the ON auto insurers’ preferred vendors of medico-legal expert reports and testimony.

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