Platinum Equities lawsuit survives defence appeal
Elderly investor, now 79, hopes he’ll live long enough to see the end of class action
Hundreds of investors who claim they were bilked of $200 million in an alleged real estate fraud secured a victory Thursday after a Calgary court rejected an attempt to block their class-action lawsuit.
About 2,200 investors claim they suffered major losses, in many cases their life savings, after they bought into limited partnerships or trusts, which invested the funds in commercial real estate.
The Platinum Group and a lengthy list of associated companies and individuals are named in the class action, which was certified in 2015 by Court of Queen’s Bench Justice Alan Macleod.
Defendants in the lawsuit filed for an appeal against the judge’s decision in an attempt to block the case from proceeding.
After a hearing Thursday, a three-member panel from the Alberta Court of Appeal took less than an hour to dismiss the appeal, allowing the case to move ahead.
Simon Okkerse, an elderly investor who says he lost $225,000 in the real estate scheme, said the quick decision was a relief, but he acknowledged his lawyers still face a long road ahead to close the case.
“I hope I’m still alive,” said the 79-year-old, who had to go back to work after five years in retirement because of the financial losses he suffered. Instead of hunkering down in the benches of a Calgary courtroom, he may have been under balmy Florida skies or in an Arizona vacation home, if he hadn’t lost his investment.
“I’ve still got a roof over my head and food to eat,” he said, noting other investors have suffered major losses in their personal lives as a result of the alleged fraud.
Throughout Thursday’s hearing, lawyers for the defendants argued Macleod should not have certified the class action lawsuit. They said the allegations contained in the 83-page statement of claim are vague and cannot be lumped together in a single case.
“The issues are based on a fundamentally flawed, hopelessly imprecise statement of claim,” said Sean Smyth, a lawyer who represents defendant Riaz Mamdani and his group of companies.
Neither Mamdani — who survived a shooting outside his Calgary mansion in December in what police called a targeted attack — nor his former business partner, Shariff Chandran, who ran the real estate firm Platinum Equities, attended Thursday’s hearing.
Smyth told the three-member appeal panel the alleged scheme involved investments in 21 projects that spanned many years. He argued there are no common threads that link all of these deals together, adding the defendants in one project were not necessarily involved in the next.
David Bishop, who represents several defendants including an investment trust named in the lawsuit, said the statement of claim lacks details and uses vague language, making it impossible for the various defendants to know exactly who is being accused of what.
Bishop argued claims of alleged misrepresentation, conspiracy and fraud “are almost entirely absent of facts.”
The three-member panel did not give its reasons for rejecting the appeal, noting it would later provide a written decision, but Justice Peter Costigan may have offered a hint when he challenged Bishop’s argument. Costigan said the lawsuit claims “this series of companies involved in these various transactions had a common connection to a couple of individuals,” adding Mamdani and his Strategic Group of Companies was among them.
“Those couple of individuals controlled the process” in the alleged fraud, the justice said. He noted the investors’ lawyers claim there is a “connection between all of these transactions that need to be sorted out in one action.”
The investors’ lawyer, Kevin McGuigan called the quick decision “a very strong signal” that they disagreed with the defendants.