West Face seeks disclosure on stings

The stings run on a former Ontario Superior Court j udge and a lawyer and former executive with West Face Capital Inc. “shock the conscience of the court” and “cast the administration of justice into disrepute,” according to a court motion filed by West Face.

West Face and Catalyst Capital Group, two Toronto private- equity firms, are in an ongoing legal battle. They are next due in court Friday.

The comments are found in a lengthy motion filed by West Face at the Ontario Court of Appeal late Tuesday.

That motion seeks to obtain an enormous amount of disclosure about the stings carried out on both former judge Frank Newbould and West Face’s former general counsel Alexander Singh. It also says West Face may seek to have Catalyst lawyers removed or disqualified and to have Catalyst’s appeal dismissed “for abuse.”

Newbould was the original trial judge in a 2016 lawsuit between Catalyst and West Face.

As exclusively reported by the National Post last Saturday, Newbould was approached by a purported client of his new arbitration business ( he j ust retired from the bench in June) and was secretly recorded and photographed in two meetings with the bogus client.

The client appeared to be trying to induce him to make anti-Semitic remarks.

The sting on Alexander Singh, former general counsel to West Face, was reported on by the Financial Post Nov. 17.

It involved Singh being approached by a bogus recruiter who pretended he was courting Singh for future employment.

Both operations were run by Black Cube, the same Israeli private investigations agency employed by the disgraced Hollywood producer Harvey Weinstein to discredit some of the women accusing him of sexual misconduct, though the agency has since apologized for its role in that case and promised to donate its fees to women’s groups.

While West Face alleged it had identified Black Cube as the agency which set up Singh and flew him to Lon- don, England, in documents filed in court 10 days ago, the Post has independently confirmed this with a man authorized to speak for Catalyst.

Similarly, that person last week confirmed that it was also Black Cube which ran the operation on the 74-yearold former judge.

The source said Catalyst neither authorized nor knew about the sting on Newbould, and only learned about it afterwards. And when it did, the spokesman said, it immediately attempted to call a halt to the covert operations, telling Black Cube “we don’t do this in Canada.”

According to the authorized spokesman, however, the instructions were misunderstood — he called it an example of “broken telephone” — and the agency continued with the Singh sting, flying him businessclass to London instead.

What West Face lawyers put in writing in their motion — casting the investiga- tions of Newbould and Singh as “egregious and entirely improper abuse” — reflects the muted but troubled reaction of the Canadian bar and judiciary in Canada to the news that Newbould had been targeted.

The former judge learned of the sting only when the Post gave him and his lawyer Brian Gover a copy of the USB flash drive I received unsolicited from a public relations woman I’d never met before and who approached me Sept. 17 with an email entitled, “Exclusive story offer — Judge Frank Newbould’s record might unravel…” This woman later offered to connect me with “the leading figure from Catalyst.”

The USB drive contained audio of the two conversations between Newbould and the agent, edited transcripts and three photographs of the former judge.

“It is shocking,” Allan Rouben, a veteran Toronto litigator, told the Post in a recent telephone interview. “I don’t think there’s anything unusual, per se, about hiring a private investigator to gather information as part of litigation.”

But, he said, in the Newbould case, “they were not trying to find anything that would tarnish the actual decision, but to tarnish the character of the judge…. It’s sleazy. It’s really sleazy.”

Rouben said it’ s“very much to the judge’s credit he didn’t rise to the bait.”

In his Aug .18,2016 decision, Newbould ruled against Catalyst, had harsh words for founder and managing partner Newton Glassman who had testified before him, and awarded a total of more than $ 1.5 million in costs to West Face and a junior analyst.

Catalyst has claimed it lost out on $ 750 million in potential profit.

According to the authorized source, Catalyst had hired another Israel- based security firm in August, after company executives believed the firm had been cyber-hacked and that there had been intrusions at their homes and cottages.

That company had approval to hire consultants or sub- contractors, and chose Black Cube without Catalyst’s knowledge, the source said.

His only comment Tuesday was that the Post had inaccurately reported the contents of the Newbould sting tape and was to blame for the new West Face motion.

Targeting a former judge or judge is almost unprecedented in Canada.

The only case even veteran lawyers can remember which is remotely like it is one called Lac Minerals Ltd. vs. International Corona Resources Ltd.

In a March 7, 1986 decision, the late Richard Holland of what was then called the High Court of Justice found in Corona’s favour and the company walked away with what the New York Times once called “just a darling of a gold mine.”

But after Lac l awyers brought a motion, heard eventually at the High Court, out came evidence as the lead lawyer for Corona, Alan Lenczner, remembered Tuesday in a phone interview, that Lac had hired a major private investigator for a total of $ 6 million to “investigate everybody — the lawyers, witnesses” and even Holland’s wife’s and daughter’s financial holdings.

“This was stunning to us,” Lenczner said. “I’d never heard of this before.”