Report: #1338740

Complaint Review: Global Royalties Ltd

  • Submitted: Fri, November 18, 2016
  • Updated: Fri, November 18, 2016
  • Reported By: Willfindyou — Chicago Illinois USA
  • Global Royalties Ltd

    ,
    USA

Global Royalties Ltd Benchmark Conversion LtdBciltdGlobal Royalties Brandon Hall Any information on the owner? Mississauga Ontario

*General Comment: Global Royalties - David Brook vs. Brandon Hall

*General Comment: Lawsuit against David Brook

Show customers why they should trust your business over your competitors...

Does anyone else have information on Global Rylaties or this BCI or its owner?  I lost a lot of money with these clowns. For the longest time there was no website or information on Global. I got a call from Dominic character and he told me they had a cyber attack!

  Now they have a website again and a new facebook page.  There was nothing on them for over 15 months. There is no address listed for them .

I  have been doing a little digging and it looks like they now call themself BCI Ltd or Benchmark Conversion Ltd.  They are in Missisaugi Ontario Canada. On Kittimat Road? Anyone have information on this?

 

I have been trying to sell my Emeralds for a long time and have not been helped at all.  In the past I have dealt with a Dale and then David Becker?. Then David brooks who sold me the stones!  Then William for two years. He just pushed me away.  Another guy I cant remember called Craig or greg? Then a Dominic! No one has helped and I am positive I have been scammed by this company. 

I am reching out to the police or DA here in Illionois and have a meeting for the first week of Decmber to discuss what I can do with lawyer.

Is there anyone who can recommend what police  people in Canada to work with? 

Does anyone have any information on this Brandon Hall ? Where he lives? Other business he may own?

It says on his website that his daugther Karen works there. Anyone dealt with her?  Is this another lie? 

If it is even his real name ? I was told this company was over 40 years old. I think that is bullshit.  If anyone in America or Canada have information on this Brandon Hall please post it.  If anyone is working with law enforcement please share as well and we can put this guy where he belongs.

 

I will check other message boards for information and will be sharing everything I find out on Global, BCi and this Hall guy 

      

 

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#1 General Comment

Global Royalties - David Brook vs. Brandon Hall

AUTHOR: Akward - (Canada)

 Global Royalties has an on going lawsuit right now because David Brook was working for another company secretly on the side and was essentially undercutting all of Global Royalties customers and stole their list of customers to obviously benefit from in another company. Apparently this company operates out of Hamilton, Ontario. My mother's name is Diane McCrae and she is an employee for Global Royalties or Benchmark Conversions, same s*** storm different name. She has been working for Brandon or Branden Hall for 16 years and she now might not be getting a much deserved severance pay out or retirement payout, I dont know what to call it, because of all the secrets behind the industry she is employed by. Controversial subjectivity precious gems and stones are I would assume. Aside from slavery in mines and potential foreign laws with corruption and the potential for blackmailing being a possibility, I would say my mom has me as her son which does nothing but bring the worlds controversial subjects to the forefront of social media, like Facebook... But I can't bring this subject to the forefront because my mom asked me not too and its hard enough living with me already. So I think that David Brook the guy who now associated with the people whom f**ked over my mother's employer should be either paying out my mother's employer to even things up to alleviate all the stress that Brandon or Branden Hall is taking on that my mom absorbs instinctively like a babysitter and brings home to me so that I dont have to nurse my mother when she gets old and I have to be a nanny. My mom works hard and deserves a fair payout when she retires because it is not her fault or the owner's that his employee stole his customers and left their company in lawsuit s*** storm that eventually they will not be able to afford because lawyers do not work for free and corruption and controversial subjects might make destroy a lawyers reputation. Money works with corruption and away from controversial subjects. Deny that and your a b****! Thank you for listening, I hope you help my mom.

Respond to this report!

#2 General Comment

Lawsuit against David Brook

AUTHOR: Curious1 - (USA)

 

 

ONTARIO


Court File No.:            r     /VV"'"" L

Cv-\.5 - \ \CX) 0 -c_j_J.-

 

SUPERIOR COURT OF JUSTICE

( Commercial List )

 

 

 

GLOBAL ROYALTIES LIMITED AND BENCHMARK CONVERSION INTERNATIONAL  LIMITED  0/A  BCI

 

Plaintiffs

- and -

 

 

DAVID BROOK , ANNA BROOK , 2323593 ONTARIO INC., GEOFFREY BLACK aka GEOFF BLACK , GRIFFIN & IDGHBURY INC., DARIO BERIC aka DARIO BERIC - MASKAREL , DIKRAN KHATCHERIAN aka DIKO KHATCHERIAN aka DANNY MATAR , LESLIE FROHLINGER aka LES FROHLINGER , DIVERSITY WEALTH MANAGEMENT INC. and DIVERSITY WEALTH MANAGEMENT HOLDINGS INC.

 

Defendants

 

 

STATEMENT OF CLAIM

 

TO THE DEFENDANTS

 

A  LEGAL  PROCEEDING   HAS  BEEN  COMMENCED  AGAINST  YOU  by   the

plaintiff. The claim made against you is set out on the following   pages.

 

IF YOU WISH TO DEFEND TIDS PROCEEDING, you or an Ontario lawyer acting for you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil Procedure, serve it on the plaintiff s lawyer or, where the plaintiff does not have a lawyer, serve it on the plaintiff, and file it, with proof of service, in this court office, WITHIN TWENTY DAYS after this statement of claim is served on you, ifyou are served in Ontario.

 

If you are served in another province or territory of Canada or in the United States of America, the period for serving and filing your statement of defence is forty days. If you are served outside Canada and the United States of America, the period is sixty days.

 

Instead of serving and filing a statement of defence, you may serve and file a notice of intend to defend in the Form 18B prescribed  by the Rules  of Civil  Procedure.  This will entitle  you to ten more days within which to serve and file your statement    of defence.

 

 

IF YOU FAIL TO DEFEND TIDS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE.

 

-=-':,-'

 

IF YOU PAY THE PLAINTIFF'S CLAIM, and $1,500.00 for costs, within the time for serving and filing your statement of defence, you may move to have this proceeding dismissed by the court. Ifyou believe the amount claimed for costs is excessive, you may pay the plaintiff's claim and $400.00 for costs and have the costs assessed by the court.

 

Date: Jun:fo s                                           Issued by ....·  ·......... 0.0.......

Lo  al Registrar

 

 

 

TO:

 

 

 

 

 

AND TO:

 

 

 

 

 

AND TO:

 

 

 

 

AND TO:

 

 

 

 

AND TO:


'

Geoffrey Black c/o Griffin & Highbury Inc.

1100 Central Parkway West, Suite 37 Mississauga, Ontario

L5C 4E5

 

Dario Berle c/o

Griffin & Highbury  Inc.

1100 Central Parkway West, Suite 37 Mississauga,  Ontario

L5C 4E5

 

Griffin & Highbury Inc.

1100 Central Parkway  West, Suite 37

Mississauga,  Ontario

L5C 4E5

 

Anna Brook

3880 Duke of York Blvd., Suite  2909

Mississauga, Ontario

L5B 4M7

 

David Brook

3880 Duke of York Blvd., Suite  2909

Mississauga,  Ontario

L5B 4M7

 

 

 

AND TO:

 

 

 

 

 

AND TO:

 

 

 

 

 

AND TO:

 

 

 

 

AND TO:

 

 

 

 

 

AND TO:


2323593 Ontario Inc. c/o Anna Brook

3880 Duke of York Blvd., Suite 2909 Mississauga,  Ontario

L5B 4M7

 

Dikran Khatcherian  c/o

Diversity Wealth Management Inc. 3550 Victoria Park Avenue, Suite 309 Toronto, Ontario

M2H 2N5

 

Diversity Wealth Management Inc. 3550 Victoria Park Avenue, Suite 309 Toronto, Ontario

M2H 2N5

 

Leslie Frohlinger c/o

Diversity Wealth Management Holdings  Inc.

66 Nuggett Court Brampton, Ontario L6T 5A9

 

Diversity Wealth Management Holdings Inc. 66 Nuggett Court

Brampton, Ontario L6T 5A9

 

 

 

CLAIM

 

 

  1. The Plaintiffs  Global Royalties  Limited  ("Global") and BCI claim:

 

(a)  a declaration that at all material times David Brook ("Brook") was a fiduciary of and owed fiduciary duties to Global and BCI, including the duties of  honesty,  loyalty,  avoidance  of  conflicts of interest, utmost good faith and to at all material times  act in the best  interests  of  Global and BCI;

(b)   a declaration that Brook breached his fiduciary duties by, inter alia, establishing Griffin & Highbury Inc. ("Griffin") a competing business, while in the employ of or under retainer by Global and BCI and stealing proprietary information and diverting sales, clients, revenues and business opportunities for the benefit of himself, Griffin and all other defendants;

(c)   a declaration that Brook defrauded Global and BCI and or misappropriated sales, clients, revenue and business opportunities belonging to Global and or BCI while acting in a fiduciary capacity;

(d)   a declaration that the defendants knowingly assisted and or participated with Brook in his dishonest  and fraudulent breach  of fiduciary duty;

(e)  a declaration that the defendants were unjustly enriched by reason of Brook's breach of his fiduciary and or contractual duties to Global and BCI;

(f)  a declaration that any funds directly or indirectly obtained or derived from Brook's breaches of his fiduciaries duties and or contractual duties are impressed with a constructive trust for the benefit of Global and or BCI;

(g)  an order requiring the defendants to disgorge any and all funds, directly or indirectly obtained from Brook's breaches  of his fiduciary  and or contractual  duties;

(h)  an accounting of any and all funds directly or indirectly obtained or derived from Brook's breaches of his fiduciaries duties;

 

 

(i)   an order allowing the plaintiffs to trace and recover any and all of the funds directly  or indirectly obtained or derived from Brook's breaches of his fiduciaries duties and or contractual duties;

G) if necessary and to the extent it is necessary an order, granted nunc pro tune, authorizing the commencement and continuance of this action as against Brook, an undischarged bankrupt  who  was deemed to be assigned into bankruptcy on or about February  27,   2015;

(k)   in  addition  and  or  in the  alternative  and  as  against  Brook,  damages  in the  amount of

$1,000,000.00 , or such other amounts as may be proven at trial, for breach  of fiduciary duty and  or breach  of contract;

(1)  as against all defendants such orders including equitable orders as are necessary  to restore Global and or BCI to the position they would have been in or would be in but for the breaches of fiduciary and or contractual and or common law duties of the defendants; including,  without limiting the generality  of the foregoing, a permanent  and interlocutory  injunction:

(i)        restraining the defendants, their agents and representatives, from directly or indirectly soliciting orders from any present clients or customers of Global and or BCI or endeavoring to solicit, or gain the custom of, canvass or interfere with any person or entity who is a current client or customer including a prospective customer of Global and or BCI;

 

(ii)         restraining the defendants, their agents and representatives, from directly or indirectly communicating or dealing with any person or entity who is a current client or customer of Global and or BCI for the purposes of selling, servicing, marketing or promoting any products or services that are the same as or similar to the products and services currently offered by Global and or BCI;

 

(iii)              restraining the defendants, their agents and representatives, from directly or indirectly communicating or dealing with any person or entity who is a current supplier of services, products, or materials that Global and or BCI needs or uses in its business for the purpose of attempting to persuade or entice such supplier to supply such services, products or materials to any business operating or planning to operate in competition with or similar to the current business of Global and or BCI;

 

(iv)        restraining the defendants, their agents and representatives, from directly or indirectly interfering with Global and or BCI's business relationships generally, and with its employees which, without limiting the generality of the foregoing, shall include any attempt to induce such employees to leave their employment with Global and or BCI;

 

(v)        restraining the defendants, their agents and representatives, from directly or indirectly making use of any confidential or proprietary information of Global and or BCI; and

 

 

(vi)       requiring the defendants, their agents and representatives to immediately return to Global and or BCI any and all property including intellectual property of Global and or BCI.

 

(m)     as against all defendants other than Brook, damages in the amount of $1,000,000.00, or such other amounts as may be proven at trial, for knowingly assisting Brook in breaching his fiduciary duties;

(n)       as against all of the defendants, jointly and severally, special damages in an amount to be specified on or before trial and as may be proven at trial, for unlawful    conspiracy;

(o)          as against all defendants, jointly and severally, damages in the amount of $1,000,000.00 or such other amounts as may be proven at trial, for loss of business  and injury to   reputation;

(p)      in the alternative and or in addition, as against all defendants, damages in an amount to be specified on or before trial and as may be proven at trial, for breach of contract or for inducing breach  of contract;

(q)          as   against   all   defendants,   jointly   and   severally,   punitive   damages   in   the   amount of

$200,000.00 or such other amount as, in its discretion, this Honourable Court deems just;

 

(r)          pre-judgment interest, compounded, pursuant to the Courts of Justice Act, R.S.0. 1990, and amendments thereto;

(s)      post-judgment interest, compounded, pursuant to the Courts of Justice Act, R.S.O. 1990, and amendments thereto;

(t)      costs of this action on a substantial  indemnity basis plus H.S.T.;   and

 

(u)       such further and other relief as this Court may  deem just.

 

 

I.   OVERVIEW

  1. In the fall of 2013 the defendant Brook, a long time fiduciary  employee  of the plaintiffs, and his assistant/co-employee Geoffrey Black,  agreed  to  steal  Global's  clients  and misappropriate the clients, sales and business opportunities of  Global.  To that  end, they, along  with Brook's wife Anna Brook and Dario Berle incorporated  the  defendant  Griffin  & Highbury Inc. on November 22, 2013 as the corporate vehicle for their misconduct  and  commenced  operation while still employed by  Global.

 

 

  1. Black and Berle resigned effective January 31, 2014 but Brook remained employed by Global and later by BCI until his termination for cause on or about March 23, 2015. While employed or under retainer by Global/BC!, Brook continued to steal clients, client data files, marketing and sales documentation and misappropriate sales and business opportunities, which he shared with Black, his wife, Griffin & Highbury Inc. and Berle. Millions of dollars of revenue were lost. Brook now appears to be using his stolen information for the benefit of the other defendants as well and continues to cause the plaintiffs to sustain substantial losses of revenue. The plaintiffs accordingly bring this claim.

 

II.      THE PARTIES

 

(a)                        Global

  1. The plaintiff Global is an Ontario company incorporated in 1972 with its principal place of business at 6635 K.itimat Rd., Suite 31, Mississauga, Ontario. Global has been and is in the business of the marketing of precious gemstones and coloured diamonds for long term investment purposes to clients in Canada and the U.S.A. and assisting clients in the acquisition, education and re-marketing of precious gemstones and coloured diamonds. Brandon Hall is the president of Global.

 

(b)                        BCI

  1. The plaintiff BCI, originally incorporated in 1985 as Hallmark Rarities Inc. is an Ontario company with its principal place of business at 6635 K.itimat Rd., Suite 30, Mississauga, Ontario. Since October, 2014 BCI, and for reasons explained in this statement of claim, has been active in the business of the marketing of precious gemstones and coloured diamonds for long term investment purposes to clients in Canada and the U.S.A. and assisting clients in the acquisition, education and re-marketing of precious gemstones and coloured diamonds. BCI is an affiliate of Global and BCI is assuming responsibility for clients and accounts of Global, where it is deemed to be appropriate. Brandon Hall is also the president of BCI.

 

 

(c)           Brook

  1. The defendant Brook is an individual residing in the City of Mississauga. He is an undischarged bankrupt, having been deemed to be assigned into bankruptcy on or about February 27, 2015. He was and is a principal of and beneficial shareholder in the defendant Griffin and is the principal and beneficial shareholder of the shares of the defendant 2323593 Ontario Inc.. He is also an associate of the defendants Dikran Khatcherian and Leslie Frohlinger.

 

  1. Brook was "employed" and or retained as an independent contractor, indirectly through a variety of corporations, by Global from January 1, 2002 until March 20, 2015 when he was terminated for cause for conspiring with the other defendants, or some of them, to create and operate the defendant Griffin while employed/retained by Global and or BCI.

 

  1. Brook was moreover employed by BCI pursuant to an employment agreement dated February 25, 2015 until March 20, 2015 when he was terminated for cause for conspiring with the other defendants, or some of them to create and operate the defendant Griffin while employed/retained by Global and or BCI.

 

  1. Pursuant to the relevant provisions of the oral and or written agreements, Brook had, amongst other things, duties of honesty, loyalty and confidentiality to Global and BCI and to act in their best interests. To be clear, said duties, amongst other things, prohibited Brook from:

a)           stealing and using confidential information of Global or BCI;

b)     supplying confidential information to any unauthorized person let alone a competitor;

c)        directly and or indirectly competing with Global or BCI;

d)        assisting, directly or indirectly any competitor of Global or BCI; and

e)        appropriating any sales, revenue or clients of Global or BCI.

 

 

  1. During the term of his employment and or retainer with Global and or BCI, Brook was Brandon Hall's right hand man and a key component of the success of the two companies. During his tenure with Global and or BCI he generated millions of dollars in revenue and earned in excess of $7,300,000.00 in salary and commission from January 1, 2002 to December 31, 2014.

 

 

  1. Brook was at his own discretion moreover entitled to share equally in the profits of either company with Brandon Hall as opposed to being paid a salary and or commission. He was fully trusted by Brandon Hall who consulted with him on all aspects of the business and viewed him as his de facto partner. Brook in fact represented himself to the clients of Global that he was Brandon Hall's partner.

 

  1. Brook was the face of both Global and BCI to all clients and was responsible for all sales. He developed personal relationships with their clients and obtained their trust and confidence. To them he was Global and or BCI.

 

  1. Brook had access to Global's and BCI's confidential client information data base. He had full authority and substantial discretion with respect to sales and clients. Indeed he was in charge of the transfer of clients to BCI with full discretion in terms of the transfer. He had full knowledge of all sales techniques, programs and methodologies. He moreover had full knowledge of their key gemstone and diamond suppliers, the prices paid to those suppliers and had in fact a relationship with those suppliers by reason of his tenure at Global.

 

  1. The plaintiffs plead by reason of, inter alia, his role in the two companies and his long term relationship of trust with Brandon Hall he was a fiduciary of both companies and owed said companies fiduciary duties including the duties of honesty, loyalty, avoidance of conflicts of interest, utmost good faith and to at all material times act in the best interests of Global and BCI.

 

  1. Brook moreover owed common law implied contractual duties of honesty, loyalty and confidentiality to Global and BCI and to act in their best interests. In addition his employment contract dated February 25, 2015, which BCI relies upon in full, provided a variety of duties and obligations  including:

a)        In section 2.3 a comprehensive full and faithful service provision;

b)        In section 5.1 a comprehensive confidentiality provision;

c)        In section 6.1 a six month non-competition provision;

d)       In section 7.1 a comprehensive one year non-solicitation of clients, suppliers and employee provision; and

e)        In section 9.1 a non-disparagement provision.

 

 

 

  1. The plaintiffs further plead that by reason of, inter alia, their relationships with Brook, his role in the two companies and his long term relationship with Brandon Hall, that the other defendants were aware that Brook was a fiduciary of both Global and BCI and owed those companies fiduciary duties, both during and after the termination of his employment. In addition and for, inter alia, the same reasons they were aware of the contractual obligations of Brook to Global and BCI, and Brook was aware of their contractual obligations to Global.

 

(d)           Anna Brook

  1. The defendant Anna Brook is the wife of Brook. She, in combination with Brook and Geoffrey Black ("Black"), caused the defendant Griffin to be incorporated on November 22, 2013. She is an officer, director and shareholder of Griffin. She is also an officer and director of the defendant 2323593 Ontario Inc., which was one of the vehicles used by Brook to obtain compensation from Global and is the vehicle, or one of the vehicles used by Brook and Anna Brook to wrongfully appropriate funds derived from the sales of gemstones and or diamonds properly belonging to Global and or BCI.

 

(e)           2323593 Ontario Inc.

  1. The defendant 2323593 Ontario Inc. is an Ontario corporation incorporated on April 10, 2012 by Anna Brook on the instructions of Brook in order to receive compensation from Global which he could try to shield from Canada Revenue Agency. In order to give effect to this scheme on May 1, 2012, Anna Brook, on behalf of 2323593 Ontario Inc. executed an independent contractor agreement with Global. To the extent it is necessary Global relies upon the terms of said agreement.

 

  1. The plaintiffs plead that 2323593 Ontario Inc. is in fact owned and controlled by Brook and is his alter ego for all intents and purposes. 2323593 Ontario Inc. is also one of the vehicles used by Anna Brook and or Brook to wrongfully appropriate funds derived from the sales of gemstones and or diamonds properly belonging to Global and or BCI.

 

 

(t)       Geoffrey Black

  1. The defendant Black is a resident of the City of Ancaster. He was "employed" and or retained as an independent contractor by Global from November 17, 2009 until his resignation effective  as of January  31, 2014.  During  his tenure  with  Global,  Black  earned  in excess of

$550,000.00 in salary and commissions.

 

 

  1. Black was initially employed pursuant to an agreement dated November 17, 2009 as an "opener", that is a sales person, who sought to make initial sales to persons who had been qualified as being potentially interested in purchasing gemstones or coloured diamonds for investment purposes.

 

  1. In 2012 Black was promoted to the position of "loader" that is a high level sales person, who takes over from the opener and develops a personal relationship with a client in order to make larger sales. He accordingly entered into an employment agreement dated May 1, 2012 with Global.

 

  1. The May 1, 2012 employment agreement, which Global pleads and relies upon in full, provided a variety of duties and obligations including:

a)        In section 2.3 a comprehensive full and faithful service provision;

b)       Insection 5.1 a comprehensive confidentiality provision;

c)        Insection 6.1 a six month non-competition provision;

d)       In section 7.1 a comprehensive one year non-solicitation of clients, suppliers and employee provision; and

e)        Insection 9.1 a non-disparagement provision.

 

 

  1. In addition to the duties specified in his agreement Black owed Global duties of honesty, loyalty and confidentiality to Global and to act in its best interests.

 

  1. Black worked under and with Brook and by reason of his promotion obtained access to the confidential and proprietary client information. Black moreover commenced developing personal relationships with Global' s clients and earning their trust. By reason of his promotion Black earned in and around $153,000.00 in 2012 and $235,000.00 in 2013.

 

 

  1. In and around early January, 2014 Black informed Hall he would be resigning effective January 31, 2014 in order to pursue a different line of sales.

 

(g)           Dario Berle

  1. The defendant Dario Berle ("Berle") was employed by Global as a qualifier salesman from May 27, 2010 to January 31, 2014 when he resigned and joined Griffin.

 

  1. Berle was employed pursuant to an agreement dated May 31, 2010. The plaintiff Global pleads and relies upon all the terms of said agreement which provided a variety of duties and obligations  including:

a)        In section 2.3 a comprehensive full and faithful service provision;

b)        In section 5.1 a comprehensive confidentiality provision;

c)        In section 6.1 a six month non-competition provision;

d)       In section 7.1 a comprehensive one year non-solicitation of clients, suppliers and employee provision; and

e)        In section 9.1 a non-disparagement provision.

 

  1. In addition to the duties specified in his agreement, Beric owed Global duties of honesty, loyalty and confidentiality to Global and to act in its best interests.

 

(h)          Griffin & Highbury Inc.

  1. The defendant Griffin is an Ontario corporation incorporated on November 22, 2013 by Ann.a Brook, acting in combination with Brook, Black and Berle. Griffin is in the business of the marketing of precious gemstones and coloured diamonds for long term investment purposes and assisting clients in the acquisition, education and re-marketing of precious gemstones and coloured diamonds. Griffin is a direct competitor of Global and BCI.

 

  1. Griffin was created and operated while the defendants Brook, Black and Berle were employed by Global and it was the recipient of the confidential proprietary information wrongfully appropriated by said defendants. Griffin was moreover the recipient of the sales, revenue and clients wrongfully appropriated from Global and BCI by the defendants.

 

 

(i)       Dikran Khatcherian

  1. The defendant Dikran Khatcherian (Khatcherian) is a resident of the City of Toronto and an associate of the defendant Leslie Frohlinger and Brook. He is a former employee of Global. He was employed pursuant to an independent contractor agreement from July, 2010 to November, 2011. He is the principal of the defendant Diversity Wealth Management Inc., formerly named Dibon Jewellery Inc. which was one of the corporate vehicles used by Khatcherian to receive commission for his gemstone sales for Global.

 

  1. Khatcherian and Diversity Wealth Management Inc. are the recipients of the confidential proprietary information wrongfully appropriated by Brook and or the other defendants and they are moreover the recipients of the sales, revenue and clients wrongfully appropriated from Global and BCI by the defendants.

 

(j)       Diversity Wealth Management Inc.

  1. The defendant Diversity Wealth Management Inc. ("Diversity") is an Ontario corporation incorporated on July 30, 2010 by Khatcherian under the name Dibon Jewellery Inc.. On or about July 18, 2013 Khatcherian changed the company name to Diversity. The defendant Frohlinger is involved in the business of Diversity.

 

  1. Diversity is located in the City of Toronto and it is in the business of the marketing of precious gemstones and coloured diamonds. It is a direct competitor of Global and BCI. Diversity is one of the recipients of the confidential proprietary information wrongfully appropriated by Brook and or the other defendants and it is moreover the recipient of the sales, revenue and clients wrongfully appropriated from Global and BCI by the defendants.

 

(k)      Leslie Frohlinger

  1. Frohlinger is a businessman with offices in Toronto. He is an associate of Khatcherian and involved directly or indirectly in the business of Diversity. He is an associate of Brook and directly or indirectly facilitated Brook's evasion of the payment of taxes by cashing Brook's commission cheques for substantial fees.

 

 

  1. Frohlinger incorporated the defendant Diversity Wealth Management Holdings Inc. ("Diversity Holdings") on April 14, 2015 in order to work with the defendant Brook in the sale and marketing of precious gemstones and coloured diamonds. Frohlinger and Diversity Holdings are the recipients of the confidential proprietary information wrongfully appropriated by Brook and or the other defendants and it is moreover the recipient of the sales, revenue and clients wrongfully appropriated from Global and BCI by the defendants.

 

(1)          Diversity Wealth Management Holdings Inc.

  1. The defendant Diversity Holdings is an Ontario corporation incorporated on April 14, 2015 by Frohlinger. It is related to the defendant Diversity and Brook and Khatcherian are involved in said company.

 

  1. Diversity Holdings is located in the City of Brampton and it is in the business of the marketing of precious gemstones and coloured diamonds. It is a direct competitor of Global and BCI. Diversity Holdings is one of the recipients of the confidential proprietary information wrongfully appropriated by Brook and or the other defendants and it is moreover the recipient of the sales, revenue and clients wrongfully appropriated from Global and BCI by the defendants.

 

  1. BACKGROUND
  2. Global and BCI are small family owned and operated businesses. Global was started by Vinson Hall with his wife Gloria in 1972. Their son Brandon Hall, the current president, joined the company in 1983 and in 1989 when his father retired, he became the president and indirect owner.

 

  1. Over the years and by reason of, inter alia, their knowledge of the gemstone and diamond market and through proprietary and confidential telemarketing and sales programs Global developed a successful business and business model with a substantial client base.

 

  1. On or about January 1, 2002 Brook joined Global as a loader. In conjunction with and through the application of the Global marketing and sales programs he generated millions of dollars in revenue for Global and generated millions of dollars in profits/commissions/salary for himself over the years.

 

 

 

  1. Brook was Brandon Hall's right hand man and a key component of the success of Global. Brook was the face of Global to all clients and was responsible for all sales. He developed personal relationships with Global clients and obtained their trust and confidence. To them he was Global.

 

  1. Brook was fully trusted by Brandon Hall who consulted with him on all aspects of the business and viewed him as his de facto partner. Brook had access to Global's confidential client information data base. He had full authority and discretion with respect to sales and clients. He had full knowledge of all sales techniques, programs and methodologies. He moreover had full knowledge of their key gemstone and diamond suppliers, the prices paid to those suppliers and had in fact a relationship with those suppliers by reason of his tenure at Global.

 

  1. In November, 2009 Black joined Global and in and around January, 2012 he was promoted to the position of loader, but working under and with Brook. In working with Brook he too had access to Global's confidential client data base and developed personal relationships with Global' s clients.

 

  1. In and around 2012 and at about the same time Black was promoted to loader, Brook was being audited by Canada Revenue Agency for the years of 2008-2011.

 

  1. Brook was fully aware that he had failed to remit huge sums of tax and in order to shield his income from Global from the CRA, on April 10, 2012 he caused the defendant 2323593 Ontario Inc. to be incorporated by his wife who moreover executed an independent contractor agreement with Global on his behalf on or about May 1, 2012.

 

  1. Brook represented that said company was owned by his wife but he admitted to Global that 2323593 Ontario Inc. was his company and he was using said company as a way to protect his income from the CRA.

 

  1. The CRA ultimately determined that Brook owed approximately $1,700,000.00 in unpaid income tax, HST, interest and penalties for those years.

 

 

  1. Due to his debt to CRA, Brook was in financial distress and in and around July 31, 2013 he lodged a proposal under s.62 of the Bankruptcy and Insolvency Act, as amended.

 

  1. Brook acknowledged that he was concerned about his ability to shield his assets and income from CRA and in the late fall of 2013 requested that Global pay him cash as commission for his sales. Global did not accept his request.

 

  1. Brook and Black had been working very closely as loaders and in and around the beginning of January, 2014 Black advised Brandon Hall that would be resigning effective January 31, 2014 in order to pursue sales opportunities in a different area. In and around the same time, the defendant Berle also tendered his resignation indicating he too would be leaving to pursue different opportunities.

 

  1. Global had full confidence that Brook would be able to fulfill his sales and marketing obligations and maintain Global's revenues. Global did not therefore replace Black. Global's sales however declined during 2014 as did the revenues being generated by Brook. Upon being asked for an explanation, Brook falsely represented that the decline was due to negative internet press. Brook recommended that in order to address the negative internet press that a new corporate vehicle be created to assume the business of Global and that clients be transferred over from Global to the new corporate entity. He would be in charge of the transfer.

 

  1. Brandon Hall owned another jewellery marketing company, infrequently used, by the name of Hallmark Rarities Inc., which had been incorporated in 1985. In view of the declining sales and Brook's advice, in and around May 20, 2014 Brandon Hall amended the corporate name of said company to Benchmark Conversion International Limited. On July 17, 2014 he caused the corporate name to be registered as BCI.

 

  1. Though Global continued to operate and still does, in around November, 2014 BCI commenced its marketing operations and assumed responsibility for such Global clients as Brook, in his sole discretion as the person in charge of sales, saw fit to transfer over to BCI.

 

 

  1. In view of the importance of BCI and Brook's clear role in respect of the sales in said company, Brook and BCI entered into an employment agreement dated February 25, 2015, which provided a variety of duties and obligations including:

a)        In section 2.3 a comprehensive full and faithful service provision;

b)        In section 5.1 a comprehensive confidentiality provision;

c)        In section 6.1 a six month non-competition provision;

d)        In section 7.1 a comprehensive one year non-solicitation of clients, suppliers and employee provision; and

e)     In section 9.1 a non-disparagement provision.

 

 

  1. Despite the creation of BCI, overall sales revenue of both Global and BCI, including the sales being generated by Brook did not increase. Indeed there was a substantial decrease in revenues from 2013 to 2014 and no significant increase in January or February, 2015.

 

  1. Consequently the income being earned by Brook from Global and BCI was reduced and on or about February 27, 2015, Brook's s.62 proposal, which he had not been able to comply with due to his reduced earnings, was rejected and he was deemed to be assigned into bankruptcy.

 

  1. In view of Brandon Hall's belief that the expenses being incurred and paid by Brook, exceeded the salary and commission being earned by Brook from BCI, in early March, 2015 Brandon Hall reluctantly commenced an investigation into Brook's activities .

 

IV.          THE INVESTIGATION

  1. The honesty and integrity of its staff and personnel were of critical importance to Global and BCI. In order to ensure the honesty and integrity of its sales personnel and to ensure that complete records of all telephone communications with clients and potential clients were accurately documented all personnel agreed to being video/audio-monitored and all calls including personal calls recorded.

 

 

 

61.          From in and around March 9, 2015 and from time to time Brandon Hall monitored Brook's actions and activities after his bankruptcy. By reason of same, and other investigations he determined that:

a)     Brook was wrongfully copying client files into hard copy and removing client files from the office;

b)     regularly communicating with Black with respect to the confidential business of Global and BCI;

c)     diverting sales, revenues and clients of Global/BC!to Griffin;

d)     Black and Brook were using Global's/BCI's gemstone/diamond suppliers to affect the sales;

e)     Brook and Black were organizing some of those sales as cash sales;

f) that the fraudulent misappropriation of clients, sales and revenue had been extensive and had generated no less than $200,000.00 in profits for Black and $200,000.00 in profits for Brook in the period of eight months; and

g) Brook was diverting his profits to the benefit of his wife and or his alter ego company.

 

 

  1. On or about March 23, 2015, prior to regular business hours, Brandon Hall met with Brook in Brandon Hall's office. Brandon Hall confronted Brook with the results of his investigation and terminated his employment. In the meeting Brook implicitly admitted: 1) stealing client files from Global/BC!; 2) providing confidential Global and BCI files and business information to Black; 3) misappropriating substantial sales and clients from Global/BC!for the benefit of Griffin, Black and himself. Brook claimed he did so because he was desperate for money.

 

  1. Subsequent investigations revealed that:

a)     the defendant Anna Brook had incorporated Griffin on November 22, 2013;

b)    Anna Brook and Black were officers and directors of Griffin but her purported involvement in Griffin was a sham designed to cover Brook's involvement and ownership in Griffin;

c)          the defendant Berle had joined Griffin after leaving Global and was selling gemstones/coloured diamonds on behalf of Griffin in contravention of his employment agreement with Global;

 

 

d)      Griffin was operating at a time when the defendants Berle, Black, Brook and 2323593 Ontario Inc. were under contract with and employed by Global and they continued to operate Griffin immediately after leaving Global;

e)     Brook was operating Griffin at a time when he was also under contract with BCI;

f) Brook joined Griffin immediately after his termination of employment with BCI and Global;

g)       Brook was continuing to solicit customers and suppliers of BCI after the termination of his employment;

h)       Brook was also supplying confidential information, including names of BCI/Global client to the defendants Khatcherian and Diversity and was arranging to be paid in cash in respect of sales regarding said clients; and

i)       Brook was also supplying confidential information, including names of BCI/Global client to the defendants Frohlinger and Diversity Holdings and was arranging to be paid in cash in respect of sales regarding said clients.

 

  1. The plaintiffs plead that the actions of the defendants as described above and below constitute tortuous misconduct and breaches of their obligations to the plaintiffs which caused and will continue to caused Global and BCI to sustain substantial damages, the particulars of which are not yet ascertained.

 

 

V.  BREACH       OF       FIDUCIARY       DUTY/BREACH CONTRACTS/DAMAGES


OF       EMPLOYMENT

 

 

(a)       Brook

  1. The plaintiffs plead that Brook was a fiduciary of Global and BCI and owed Global/BC! fiduciary duties including the duties of utmost honesty, utmost loyalty, avoidance of conflicts of interest, utmost good faith and to at all material times act in their best interests.

 

  1. In addition while an employee of Global/BC!, Brook owed Global/BC!contractual duties, including duties of confidentiality, loyalty, honesty and to act in their best interests while employed by them.

 

 

  1. The plaintiffs further plead that after his termination Brook continues to owe fiduciary duties to Global/BC!including the duties:

a)        not to unfairly compete with Global/BC!;

b)        not to directly or indirectly seek to obtain the custom of Global/BCI's customers;

c)        not to use confidential  and proprietary information of Global/BC!; and

d)         not to appropriate Global/BCI's  business  opportunities.

 

 

  1. The plaintiffs further plead that after his termination Brook continues to owe contractual duties to  Global/BC! including:

a)          a comprehensive duty of confidentiality prohibiting any use or disclosure of confidential  information;

b)         a duty not to compete with BCI for six months;

c)          a comprehensive  duty not to solicit any clients,  suppliers and employees for a period  of one year; and

d)         a comprehensive  non-disparagement provision.

 

 

  1. Brook dishonestly and fraudulently breached (and continues to breach as applicable) the aforesaid  fiduciary duties and his contractual duties to Global and BCI by amongst   other things:

 

(a)     conspiring to and establishing a competing business while employed by Global and BCI;

(b)      continuing to compete with Global and   BCI;

(c)      accepting business  from clients of Global and  BCI;

(d)         stealing and using confidential and proprietary information of Global and BCI to establish and operate the competing business and to obtain revenue, sales and clients from Global and BCI;

(e)       defrauding Global and BCI and misappropriating sales, revenues and clients for his benefit  and the benefit of the other  defendants;

(f)        directly and or indirectly communicating with Global and BCI customers for the purposes  of obtaining their custom for his competing  business;

(g)         soliciting and communicating with suppliers of Global and BCI for the purpose of competing with BCI;

 

 

(h)       misappropriating for the benefit of himself and the defendants or some of them, the business opportunities of Global and BCI;

(i)       conspiring with Black and others to avoid liability to Global/BC!or the authorities by failing to record or disclose cash sales transactions; and

G) disparaging Global and BCL

 

 

  1. The plaintiffs plead by reason of said breaches of fiduciary duty Brook fraudulently and dishonestly deprived Global and BCI of funds they would have and were entitled to receive from clients and wrongfully, and without juristic reason, Brook enriched himself and other defendants by doing so.

 

  1. The plaintiffs plead in the circumstances that it is only fair and just that the funds derived from Brook's fraudulent and dishonest breach of fiduciary duty be impressed with a constructive trust for the benefit of Global and BCI and that Brook and the other defendants be required to disgorge said funds to Global and BCL

 

  1. Inthe alternative in the event this Honourable Court is not prepared to impress said funds or all of them with a constructive trust in favor of Global and BCI, then they seek damages and an accounting of all sums derived from Brook's breach of fiduciary duty.

 

  1. In addition to and or in the alternative the plaintiffs seek damages for Brook's breach of contract, the particulars of which are yet unascertained but will be provided before or at trial.

 

  1. The plaintiffs state that the aforesaid breaches by Brook caused and or will cause Global and BCI to continue to sustain damages and losses, including damage to its goodwill and reputation, the particulars of which are yet unascertained but will be provided before or at trial .

 

  1. The plaintiffs further state that Brook's conduct and actions to Global and BCI were high­ handed, malicious, designed to harm and hurt, highly reprehensible and departed to marked degree from the standards of decent behavior, including the behavior expected of a fiduciary. Global and BCI is accordingly entitled to punitive damages from Brook.

 

 

(b)     Black

  1. The plaintiffs plead that Black owed contractual duties while employed by Global including duties of confidentiality, loyalty, honesty and to act in Global's best interests while employed by Global. The plaintiffs further plead and rely upon Global's contract of employment with Black dated May 1, 2012 and the duties contained therein.

 

  1. The plaintiffs further plead that after his resignation Black continued to owe contractual duties to Global including:

a)           a comprehensive duty of confidentiality prohibiting any use or disclosure of confidential information;

b)        a duty not to compete with Global for six months;

c)         a comprehensive duty not to solicit any clients, suppliers and employees for a period of one year; and

d)       a comprehensive non-disparagement provision.

 

 

  1. The plaintiffs further plead that Black, who knew that Brook was a fiduciary of Global/BC!had a duty not to knowingly assist Brook in breaching his fiduciary duties.

 

  1. Black breached (and continues to breach as applicable) the aforesaid duties by amongst other things:

(a)      conspiring to and establishing a competing business while employed by Global;

(b)        conspiring with Brook and others in establishing and operating a competing business while Brook was employed by Global/BC!and a fiduciary of Global/BC!;

(c)        conspiring with Brook and others in stealing and using confidential and proprietary information of Global and BCI to establish and operate the competing business and to obtain revenue, sales and clients from Global and BCI;

(d)        conspiring with Brook in defrauding Global and BCI and misappropriating sales, revenues and clients for his benefit and the benefit of the other defendants;

(e)          establishing and operating a competing business with Brook while Brook was employed by Global/BC! and a fiduciary of Global/BC!;

(t) breaching the full and faithful service provision in his employment agreement;

 

 

(g)      competing with Global while employed by Global;

(h)        breaching his employment agreement by immediately competing with Global after res1grung;

(i)            breaching    his   employment   agreement  by  using/accepting    confidential  Global information;

G) breaching his employment agreement by soliciting and accepting business from clients of Global;

(k)      breaching his employment agreement by soliciting and communicating with suppliers of Global for the purpose of competing with Global;

(1)     misappropriating for the benefit of himself and the defendants or some of them, the business opportunities of Global and BCI;

(m)       conspiring with Brook and others to avoid liability to Global/BC!or the authorities  by failing to record or disclose cash sales transactions; and

(n)      disparaging Global and BCI.

 

 

  1. The plaintiffs plead by reason of said actions and breaches of duties or some of them Black knowingly assisted Brook in fraudulently and dishonestly breaching his fiduciary duties to Global/BC!. Though Black was not a fiduciary of Global he at all times acted in concert with Brook, who was fiduciary and as such is liable for the damages arising from any such breaches of fiduciary duty.

 

  1. The plaintiffs further plead that as a result of said wrongful actions and breaches Global/BC! were deprived of funds they would have and were entitled to receive from clients and Black and the other defendants were wrongfully, and without juristic reason, enriched.

 

  1. The plaintiffs plead in the circumstances that it is only fair and just that the funds derived from Brook's fraudulent and dishonest breach of fiduciary duty be impressed with a constructive trust for the benefit of Global and BCI and that Black and the other defendants be required to disgorge said funds to Global/BC!.

 

 

  1. In the alternative in the event this Honourable Court is not prepared to impress said funds or all of them with a constructive trust in favor of Global/BC!, then they seek damages and an accounting of all sums derived from Brook's breach of fiduciary duty.

 

  1. Inaddition to and or in the alternative the plaintiffs seek damages for Black's breaches of contract, the particulars  of which are yet unascertained  but will be provided before or at  trial.

 

  1. The plaintiffs state that the aforesaid breaches by Black caused  and  or will cause Global and BCI to continue to sustain damages and losses, including damage to its goodwill and  reputation,  the particulars  of which are yet unascertained but will be provided before or at  trial.

 

  1. The plaintiffs further state that Black's conduct and actions to Global and BCI were high­ handed, malicious, designed to harm and hurt, highly reprehensible and departed  to  marked  degree from the standards of decent behavior, including the behavior expected of a former employee. Global and BCI are accordingly entitled to punitive damages from    Black.

 

(c)        Anna Brook

  1. The plaintiffs plead that Anna Brook knew that Brook was a fiduciary of Global/BC! and had a duty not to knowingly assist Brook in breaching his fiduciary duties to    Global/BC!.

 

  1. The plaintiffs plead that Anna Brook knowingly assisted Brook in dishonestly and fraudulently  breaching his fiduciary  duties to Global/BC! by, amongst other  things:

(a)  establishing and operating a competing business in concert with Brook while Brook was employed by Global/BC! and a fiduciary of Global/BC!;

(b)  conspiring with Brook and others in establishing and operating a competing business while Brook was employed by Global/BC!and a fiduciary of Global/BC!;

(c)  conspiring with Brook and others in stealing and using confidential and proprietary information of Global and BCI to establish and operate the competing business and to  obtain revenue,  sales and clients from Global and  BCI;

(d)   conspiring with Brook in defrauding Global and BCI and misappropriating sales, revenues and clients for his benefit and the benefit of the other defendants;    and

(e)  conspiring with Brook and others to avoid liability to Global/BC! or the authorities by failing to record  or disclose cash sales transactions.

 

 

 

  1. The plaintiffs plead by reason of said actions or some of them Anna Brook knowingly assisted Brook in fraudulently and dishonestly breaching his fiduciary duties to Global/BC!. Though Anna Brook was not a fiduciary of Global she at all times acted in concert with Brook, who was fiduciary. As such she is liable for the damages arising from any such breaches of fiduciary duty.

 

  1. The plaintiffs further plead that as a result of said wrongful actions and breaches Global/BC!were deprived of funds they would have and were entitled to receive from clients and Anna Brook and the other defendants were wrongfully, and without juristic reason, enriched.

 

  1. The plaintiffs plead in the circumstances that it is only fair and just that the funds derived from Brook's fraudulent and dishonest breach of fiduciary duty be impressed with a constructive trust for the benefit of Global and BCI and that Anna Brook and the other defendants be required to disgorge said funds to Global/BC!.

 

  1. Inthe alternative in the event this Honourable Court is not prepared to impress said funds or all of them with a constructive trust in favor of Global/BC!, then they seek damages and an accounting of all sums derived from Brook's breach of fiduciary duty.

 

  1. The plaintiffs further state that Anna Brook's conduct and actions were high-handed, malicious, designed to harm and hurt, highly reprehensible and departed to marked degree from the standards of decent behavior, including the behavior expected of an officer and director of the defendant 2323593 Ontario Inc., a company under contract with Global. Global and BCI are accordingly entitled to punitive damages from Anna Brook.

 

(d)                        2323593 Ontario Inc.

  1. The plaintiffs plead that 2323593 Ontario Inc. is in fact owned and controlled by Brook and is his alter ego for all intents and purposes.

 

 

 

  1. 2323593 Ontario Inc. is also one of the vehicles used by Anna Brook and or Brook to wrongfully appropriate funds derived from the sales of gemstones and or diamonds properly belonging to Global and or BCI.

 

  1. The plaintiff accordingly plead that 2323593 Ontario Inc. was wrongfully enriched and any such funds should be impressed with a constructive trust in favour of Global/BC! and disgorged to the plaintiffs. Alternatively 2323593 Ontario Inc. should be required to account for any such sums.

 

(e)                        Berle

  1. The plaintiffs plead that Beric owed contractual duties while employed by Global including duties of confidentiality, loyalty, honesty and to act in Global's best interests while employed by Global. The plaintiffs further plead and rely upon Global's contract of employment with Beric dated May 8, 2012 and the duties contained therein.

 

  1. The plaintiffs further plead that after his resignation Beric continued to owe contractual duties to Global including:

a)          a comprehensive duty of confidentiality prohibiting any use or disclosure of confidential information;

b)        a duty not to compete with Global for six months;

c)          a comprehensive duty not to solicit any clients, suppliers and employees for a period of one year; and

d)        a comprehensive non-disparagement provision.

 

 

  1. The plaintiffs further plead that Berle, who knew that Brook was a fiduciary of Global/BC!had a duty not to knowingly assist Brook in breaching his fiduciary duties to Global/BC!.

 

 

 

 

 

  1. Beric breached (and continues to breach as applicable) the aforesaid duties by amongst  other things:

(a)  conspiring to and establishing  a competing business while employed by   Global;

(b)  conspiring with Brook and others in establishing and operating a competing business while Brook was employed by Global/BC! and a fiduciary of Global/BC!;

(c)   conspiring with Brook and others in stealing and using confidential and proprietary information of Global and BCI to establish and operate the competing business and to  obtain revenue,  sales and clients from Global and  BCI;

(d)   conspiring with Brook in defrauding Global and BCI and misappropriating sales, revenues  and clients for his benefit  and the benefit of the other  defendants;

(e)    establishing and operating a competing business with Brook while Brook was employed by Global/BC! and a fiduciary of Global/BC!;

(f)  breaching the full and faithful service provision  in his employment   agreement;

(g)  competing with Global while employed by   Global;

(h)  breaching his employment agreement and immediately competing with Global after res1gmng;

(i)   breaching his employment agreement and using and accepting confidential Global information;

(j) breaching his employment agreement by soliciting and accepting business  from clients of Global;

(k)  misappropriating for the benefit of himself and the defendants or some of them, the business  opportunities  of Global and BCI; and

(1)    disparaging Global and  BCI.

 

 

  1. The plaintiffs plead by reason of  said actions  and breaches  of duties or some of them  Beric knowingly assisted Brook in fraudulently and dishonestly breaching his fiduciary duties to Global/BC!. Though Beric was not a fiduciary of Global he at all times acted  in concert with  Brook, who was fiduciary and as such is liable for the damages arising from any such breaches of fiduciary duty.

 

 

 

  1. The plaintiffs further plead that as a result of said wrongful actions and breaches Global/BC! were deprived of funds they would have and were entitled to receive from clients and Berle and the other defendants were wrongfully, and without juristic reason enriched.

 

  1. The plaintiffs plead in the circumstances that it is only fair and just that the funds derived from Brook's fraudulent and dishonest breach of fiduciary duty be impressed with a constructive trust for the benefit of Global and BCI and that Berle and the other defendants be required to disgorge said funds to Global/BC!.

 

  1. In the alternative in the event this Honourable Court is not prepared to impress said funds or all of them with a constructive trust in favor of Global/BC!, then they seek damages and an accounting of all sums derived from Brook's breach of fiduciary duty.

 

  1. Inaddition to and or in the alternative the plaintiffs seek damages for Berle's breaches of contract, the particulars of which are yet unascertained but will be provided before or at trial.

 

  1. The plaintiffs state that the aforesaid breaches by Berle caused and or will cause Global and BCI to continue to sustain damages and losses, including damage to its goodwill and reputation, the particulars of which are yet unascertained but will be provided before or at trial.

 

  1. The plaintiffs further state that Berle's conduct and actions to Global and BCI were high­ handed, malicious, designed to harm and hurt, highly reprehensible and departed to marked degree from the standards of decent behavior, including the behavior expected of a former employee. Global and BCI are accordingly entitled to punitive damages from Berle.

 

(t)      Griffin

  1. Griffin which was incorporated by Anna Brook on November 22, 2013 and established and operated by the defendants Brook, Anna Brook, Black and Berle and is under their control is the corporate vehicle used by those defendants to compete with Global/BC!. As such it too is liable for any damages arising from the breaches of Brook and the others and any funds it received should be impressed with a constructive trust in favour of the plaintiffs.

 

 

 

 

(g)      Khatcherian

  1. The plaintiffs plead that as a former employee of Global  that  Khatcherian  knew  that  Brook was a fiduciary of GlobaVBCI. He accordingly had a duty not to knowingly assist Brook in breaching his fiduciary duties to  GlobaVBCI.

 

  1. The plaintiffs plead that as a former employee of Global  that  Khatcherian  knew  that  Brook  was contractually  prohibited from:

a)     competing with GlobaVBCI;

b)      using and or disclosing confidential information;

c)      soliciting clients of GlobaVBCI;  and

d)      soliciting suppliers of Global/BC!.

 

 

  1. Khatcherian accordingly knew he was prohibited from inducing Brook to breach his contractual  obligations  from engaging  in such misconduct.

 

  1. The plaintiffs plead that Khatcherian knowingly assisted Brook in breaching his fiduciary duties and induced him to breach his contract with BCI   by:

(a)  conspiring with Brook and others in establishing and operating a competing business while Brook was a fiduciary of Global/BC! and prohibited  by contract  from doing   so;

(b)   conspiring with Brook and others in stealing and using confidential and proprietary information of Global and BCI to establish and operate the competing business  and to  obtain revenue,  sales and clients from Global and  BCI;

(c)   conspiring with Brook in defrauding Global and BCI and misappropriating sales, revenues and clients for his benefit and the benefit of himself, Brook, Diversity and the other defendants;

(d)  inducing Brook  into competing with Global while employed by   Global;

(e)  inducing Brook into breaching his employment agreement and immediately competing with Global/BC!after resigning;

(f)   inducing Brook into breaching his employment agreement and using and accepting confidential  GlobaVBCI information;

 

 

(g)  inducing Brook into breaching his employment agreement by soliciting and accepting business  from clients of Global/BCI;

(h)  inducing Brook into misappropriating for the benefit of the defendants or some of them including Brook, Khatcherian and Diversity the business opportunities of Global and BCI;

(i)  conspiring with Brook to avoid liability to Global/BC! or the authorities by failing to record  or disclose cash sales transactions;  and

G) disparaging Global and BCI.

 

 

  1. The plaintiffs plead by reason of said actions and breaches of duties or some of them Khatcherian knowingly assisted Brook in fraudulently and dishonestly breaching his  fiduciary duties to Global/BCI. Though  Khatcherian  is not  a fiduciary  of Global/BCI  at all times he acted in concert with Brook, who was fiduciary and as such is liable for the damages arising from any such breaches  of fiduciary duty.

 

  1. The plaintiffs further plead that as a result of said wrongful actions and breaches  Global/BC! were deprived of funds they would have and were entitled to receive from clients and Khatcherian  and the other defendants were wrongfully,  and without juristic  reason  enriched.

 

  1. The plaintiffs plead in the circumstances that it is only fair and just that the funds derived from Brook's fraudulent and dishonest breach of fiduciary duty be impressed with a constructive trust for the benefit of Global and BCI and that  Khatcherian  and the other defendants be required  to disgorge  said funds to Global/BC!.

 

  1. Inthe alternative in the event this Honourable Court is not prepared to impress said funds or all of them with a constructive trust in favor of Global/BC!, then they seek damages and an accounting of all sums derived from Brook's breach of fiduciary duty.

 

  1. In addition to and or in the alternative the plaintiffs seek  damages  for  Khatcherian  inducing Brook's breaches of contract, the particulars of which are yet unascertained but will be provided  before or at trial.

 

 

  1. The plaintiffs state that the aforesaid breaches by Khatcherian caused and or will cause Global and BCI to continue to sustain damages and losses, including damage to its goodwill and reputation, the particulars of which are yet unascertained but will be provided before or at trial.

 

  1. The plaintiffs further state that Khatcherian's conduct and actions to Global and BCI were high-handed, malicious, designed to harm and hurt, highly reprehensible and departed to marked degree from the standards of decent behavior, including the behavior expected of a former employee. Global and BCI are accordingly entitled to punitive damages from Khatcherian.

 

(h)      Diversity

  1. Diversity originally incorporated by Khatcherian on July 30, 2010 while employed by Global is another one of the corporate vehicles used by Brook, Khatcherian and some or all of the other defendants to unlawfully compete with Global/BC!. As such it too is liable for any damages arising from the breaches of Brook and the others and any funds received should be impressed with a constructive trust in favour of the plaintiffs.

 

(i)       Leslie Frohlinger

  1. The plaintiffs plead that as a long time associate of Brook, Frohlinger knew that Brook was a fiduciary of Global/BCI. He accordingly had a duty not to knowingly assist Brook in breaching his fiduciary duties to Global/BCI.

 

  1. The plaintiffs plead that as an associate of Brook and as a businessman involved in the sale and marketing of gemstones/coloured diamonds that Frohlinger knew that Brook was contractually prohibited from:

a)     competing with Global/BC!;

b)    using and or disclosing confidential information;

c)     soliciting clients of Global/BC!; and

d)    soliciting suppliers of Global/BCI.

 

  1. Frohlinger accordingly knew he was prohibited from inducing Brook to breach his contractual obligations from engaging in such misconduct or in any way assisting Brook in breaching his duties to Global/BCI.

 

 

  1. The plaintiffs plead that Frohlinger knowingly assisted Brook in breaching his fiduciary duties and induced him to breach his contract with BCI   by:

(a)  conspiring with  Brook  and others in establishing  and operating  a competing  business;

(b)   conspiring with Brook and others in stealing and using confidential and proprietary information of Global and BCI to establish and operate the competing . business and to  obtain revenue,  sales and clients from Global and  BCI;

(c)   conspiring with Brook in defrauding Global and BCI and misappropriating sales, revenues and clients for his benefit and the benefit of himself, Brook, Diversity, Diversity Holdings  and the other defendants;

(d)  inducing  Brook into competing with  BCI;

(e) inducing  Brook  into breaching his employment agreement;

(f) inducing Brook into breaching his employment agreement and using and accepting confidential  Global/BC! information;

(g)  inducing Brook into breaching his employment agreement by soliciting and accepting business from clients of Global/BC!;

(h)  inducing Brook into misappropriating for the benefit of the defendants or some of the including Brook, Khatcherian, Diversity and Diversity Holdings the business opportunities  of Global and BCI;

(i)  conspiring with Brook to avoid liability to Global/BC! or the authorities by failing to record  or disclose cash sales  transactions.

G) disparaging  Global and BCI.

 

 

  1. The plaintiffs plead by reason of said actions and breaches of duties or some of them Frohlinger knowingly assisted Brook in fraudulently and dishonestly breaching his fiduciary duties to Global/BC!. Though Frohlinger is not a fiduciary of Global/BC!at all times he acted in concert with Brook, who was fiduciary and  as such is liable  for the  damages  arising  from  any such breaches  of fiduciary duty.

 

  1. The plaintiffs further plead that as a result of said wrongful actions and breaches Global/BC!were deprived of funds they would have and were entitled to receive from clients and Frohlinger and the other defendants were wrongfully, and without juristic reason enriched.

 

 

 

  1. The plaintiffs plead in the circumstances that it is only fair and just that the funds derived from Brook's fraudulent and dishonest breach of fiduciary duty be impressed with a constructive trust for the benefit of Global and BCI and that Frohlinger and the other defendants be required to disgorge said funds to Global/BC!.

 

  1. In the alternative in the event this Honourable Court is not prepared to impress said funds or all of them with a constructive trust in favor of Global/BC!, then they seek damages and an accounting of all sums derived from Brook's breach of fiduciary duty.

 

  1. In addition to and or in the alternative the plaintiffs seek damages for Frohlinger inducing Brook's breaches of contract, the particulars of which are yet unascertained but will be provided before or at trial.

 

  1. The plaintiffs state that the aforesaid breaches by Frohlinger caused and or will cause Global and BCI to continue to sustain damages and losses, including damage to its goodwill and reputation, the particulars of which are yet unascertained but will be provided before or at trial.

 

  1. The plaintiffs further state that Frohlinger's conduct and actions to Global and BCI were high-handed, malicious, designed to harm and hurt, highly reprehensible and departed to marked degree from the standards of decent behavior, including the behavior expected of a competitor. Global and BCI are accordingly entitled to punitive damages from Frohlinger.

 

(j)        Diversity  Wealth Management  Holdings Inc.

  1. Diversity Holdings was incorporated by Frohlinger on April 14, 2015 as another one of the corporate vehicles used by Brook, Khatcherian and some or all of the other defendants to unlawfully compete with Global/BC!. As such it too is liable for any damages arising from the breaches of Brook and the others and any funds it received should be impressed with a constructive trust in favour of the plaintiffs.

 

 

 

 

VI.     CONSPIRACY

 

  1. The plaintiffs plead that the defendants also acted in concert and wrongfully, unlawfully, maliciously and lacking bona tides, agreed together, the one with the other and with persons unknown,  to, among other things, compete with  Global/BC! and injure  Global/BC!.

 

  1. Infurtherance of the conspiracy, the following are some, but not all of the acts carried out or caused to be carried out by the defendants, or some of them:

(a)  they agreed to and did establish a competing business while Brook, Black and Beric  were employed by  Global;

(b)  they agreed to and did operate a competing business while Brook, Black  and Beric  were employed by  Global;

(c)  they agreed to and did operate a competing business while Brook  was employed  by  and was a fiduciary of both Global and  BCI;

(d)  they agreed to and did steal confidential proprietary documentation and information from Global/BC!;

(e)    they agreed to and did use that confidential  proprietary  documentation  and information  for their own benefit;

(f)    they agreed to and had Brook breach his fiduciary and contractual duties  to  Global/BC!;

(g)  they agreed to and did solicit clients, sales and revenue from Global/BC!;

(h) they agreed to and did accept business from clients of Global/BC!;

(i)  they agreed to and did defrauding Global/BC! by misappropriating sales, revenues and clients for their  own benefit;

G) they agreed to and did misappropriate business opportunities belonging to Global/BC!.

(k) they agreed to and did structure cash sales to clients of Global/BC!to avoid liability  to Global/BC! or the authorities by failing to record  or disclose  cash  sales transactions;  and

(k) they agreed to and did disparage Global and   BCI.

 

 

  1. The conspiracy was unlawful because Brook breached his fiduciary duties and Brook, Black and Berle breached their contractual duties to Global and or BCI, in amongst other things, establishing and operating the competing business.

 

  1. The conspiracy was directed towards Global/BC! and the defendants knew in the circumstances that the conspiracy would, and it did, cause loss to Global/BC!, particulars of which are yet unascertained.

 

  1. The plaintiffs further state that the defendants' conduct and actions to Global/BC! were high-handed, malicious, designed to harm and hurt, highly reprehensible and departed to marked degree from the standards of decent behavior, including the behavior expected of a fiduciary and former employees. Global/BC!are accordingly entitled to punitive damages from the defendants in respect of their unlawful conspiracy.

 

 

 

The plaintiffs propose that this action be tried at Toronto, Ontario.

 

 

Date: June 22 , 2015

 

HARVEY STONE

Barrister & Solicitor

LSUC No.32071U

124 Downing Blvd. Thornhill, Ontario L4J 7M2

 

Harvey Stone

 

Telephone (416) 318-6544

Fax (905) 709-9202

Lawyer for the Plaintiffs

 

 

Global Royalties Limited  et al                                    V.            David Brook et al

Plaintiffs                                                                                    Defendants


Court File No.

cv·-\        oc

 

::::> - l I         b--c«l-

 

 

 

 

 

ONTARIO

SUPERIOR COURT OF JUSTICE

 

Proceedings Commenced  at Toronto, Ontario

 

 
   

 

 

STATEMENT  OF CLAIM

 

 
   

 

 

 

 

Harvey Stone Barrister & Solicitor LSUC No.32071 U

124 Downing Blvd. Thornhill, Ontario L4J 7M2

 

Tel :(416)318-6544

Fax : (905)709-8202

 

Lawyer  for  the Plaintiffs

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