A fraudulent conveyance voided, Johnson & Johnson sued over a blood clot, and sealed Buziak documents

This week on Legally Speaking with Michael Mulligan:

In 2003 there was a coastal forestry worker strike in BC. It involved thousands of employees and multiple unions. After three weeks the strike was eventually ended by back-to-work legislation. 

One of the impacted union locals, led by Sonny Ghag, was not happy about this. Mr. Singh organized the storming of a sawmill owned by Mainland Sawmills Ltd. during which employees were assaulted, people were threatened, and the mill was forced to close. 

The mill owner, and employees who were assaulted, sued Mr. Ghag and the union local that he was the president of. Ultimately, this case was successful.  The union local further sued Mr. Ghag, on the basis that he had acted without authorization in organizing the violent storming of the sawmill. 

Mr. Ghag ended up owing $437,706.21.

That, however, was not the end of the matter as Mr. Ghag transferred all of his assets to his 18-year-old son, in 2013, declared bankruptcy to avoid paying the judgment. 

If someone disposed of property in order to delay, hinder, or defraud creditors, or others, such a transaction can be voided pursuant to the Fraudulent Conveyance Act. 

A judge concluded that this was exactly what Mr. Ghag had done. As a result, the transfer of seven properties to Mr. Ghag’s son were voided. The property will now be available to his creditors to collect the unsatisfied judgment. 

Also on the show, Johnson & Johnson Inc. was unsuccessful in trying to strike out a claim made by a first nations woman who suffered a blood clot, and stroke, after using an Ortho Evra contraceptive patch. 

Johnson & Johnson argued, amongst other things, that a “Black Box Warning” advised the plaintiff, who had a grade 10 education, of the risks of using the contraceptive patch. The warning referend a risk of “venous thromboembolism” and conflicting studies that compared the risk of this to the risk of this compared to using oral contraceptives. 

The judge hearing the application concluded that there very much a triable issue with respect to whether or not the warning misrepresented the risk of using the patch. 

Finally, on the show,  lawyers for Capital City News Group Ltd. are applying to remove or vary, thirty-five sealing orders relating to production orders, search warrants, and other judicial authorizations concerning the investigation of the 2008 murder of Lindsay Buziak, a real estate agent in Victoria, BC. 

The lawyers making the application were asking that they have access to the documents, on their undertaking not to disclose them to anyone, so as to permit them to make submissions with respect to their client’s application. 

The judge hearing the application refused to permit access, even in this way,  referencing in camera evidence that confirmed investigations into the murder remain active and ongoing. 

As a result, even though the documents have been provided to lawyers for the Saanich Police Department, and the Province of BC, who are opposing the application, the lawyers for the news organization will need to make submissions without knowing what is in the documents.

Follow this link for a transcript of the show, and links to the cases discussed. 

Transcript

Legally Speaking Mar 25 2021

Adam Stirling [00:00:00] It is time for, Legally Speaking on CFAX 1070, where we're joined by Michael Mulligan Barrister and Solicitor with Mulligan Defence Lawyers; to take a look at the latest legal affairs of the week. Michael, good morning. How are you? 

Michael T. Mulligan [00:00:10] I'm doing great. Great to be here. 

Adam Stirling [00:00:13] What's on the agenda for this week? 

Michael T. Mulligan [00:00:15] Well, the first case, I think, is a really interesting one that's been rolling on now for, I think, something like 18 years, which is hard to believe. The fact pattern arose back in 2003 and it was the result of a strike going on in the sawmill industry in BC. A strike that started in November of 2003. 

Adam Stirling [00:00:42] mhmm. 

Michael T. Mulligan [00:00:42] And eventually by December of 2003, the government intervened, had some negotiations with the parties and had made an agreement that would involve the strike being ended by legislation, ordering everyone back to work. Now, it was going to take a couple of days for that legislation to be, in fact, passed and an evening sitting of the legislature and most of the union locals involved with the dispute, went back to work upon announcing the agreement. But at least one of them said, no, we're not going back until the legislation is actually passed. And then there were some I think can only be described as unfortunate events that occurred at a sawmill in the Lower Mainland. And what was found to have occurred is that a man, who goes by the name of Sonny, good name. 

Adam Stirling [00:01:38] mhmm. 

Michael T. Mulligan [00:01:38] Was the president of a union local for one of the for the local that didn't want to go back until the legislation was passed. And it appears to be common ground that, Sonny, managed to lead a whole group of union members and others, presumably to a mill in the Lower Mainland and essentially forced their way into the mill. 

Adam Stirling [00:02:06] hmm. 

Michael T. Mulligan [00:02:06] And there was a physical confrontation that went on in the mill, shutting it down. And then there was litigation flowing from that. A whole bunch of people who worked in the mill that was shut down effectively by force, sued, the union local that had taken the mill essentially. 

Adam Stirling [00:02:30] hmm. 

Michael T. Mulligan [00:02:30] And sued people, including Sonny, who was the leader of the group of people that stormed the mill, basically, and was found to have physically assaulted people who were working there in order to shut it down. And so much litigation went on about that. But ultimately, it was found that both, Sonny, and the union local that he was representing were responsible for what happened. And so, there was a judgement for several hundred thousand dollars against both the union local and Sonny. And in fact, the union local, who paid out for the claims by all of these workers who indicated they were battered and injured in the mill getting shut down and so forth, also turned-on Sonny. 

Adam Stirling [00:03:27] hmm. 

Michael T. Mulligan [00:03:27] And said, look, you know, you weren't authorized to do this. And so, you should pay us back for all of these losses. And so, such as the decision back in 2007. But the reason why the case is still going and just had another decision in it is because of what Sonny did prior to that litigation started. And what Sonny did is that he transferred all of his interests in a whole number of properties over in the Lower Mainland, seven or eight different properties, some value and shares in a holding company that owned yet more property in the Lower Mainland,. 

Adam Stirling [00:04:13] hmm. 

Michael T. Mulligan [00:04:13] To his son for no compensation whatsoever. And so, he had no assets. And Mr., Sonny then declared bankruptcy in 2013. And so, his position was, well, I have nothing. I don't have any assets. I have declared bankruptcy. You can't have your sub $437,000 dollars. I have nothing. 

Adam Stirling [00:04:33] Mhmm. 

Michael T. Mulligan [00:04:33] Well let me tell you, the law has thought of that. You, you can't make yourself judgement proof by simply transferring all of your assets to somebody for no consideration and then saying, well who cares what happens in court. I don't have anything. It's all owned by my fill in the blank son, wife, brother, mother, whatever it might be. 

Adam Stirling [00:04:54] Yes. 

Michael T. Mulligan [00:04:55] And so the application that was just decided was an application, pursuant to an act called the Fraudulent Conveyance Act, and it provides for setting aside and voiding transactions like that. Where somebody is conveying property in order to prevent a judgement creditor or somebody else from being able to collect. And so, this was an application by the various people who were owed money as a result of that earlier court decision. To set aside what Sunny had done, in terms of giving all of his assets to his son and then declaring bankruptcy. And at this most recent trial, at issue was why did Sunny do that? Right. 

Adam Stirling [00:05:49] yes. 

Michael T. Mulligan [00:05:49] So there can be circumstances where somebody for some legitimate purpose, you know, sells their house or does something, which is not for the intention of defeating their creditors. 

Adam Stirling [00:05:58] Yes. 

Michael T. Mulligan [00:05:59] And that's fine. And that's what Sunny tried to claim here. He claimed, well, this was, you know, my grandfather's wish, that the properties go to my son when he turned 18. And so that's just what I was doing. I had no concern about being sued or owing money. I wasn't trying to defeat the creditors. I was just doing what my, my grandfather wanted. That didn't get far. The judge found that Sonny had serious problems with his credibility. One, I must say I smiled at. One of the facts that he was cross-examined on is that prior to declaring bankruptcy, he applied for a credit card and claimed to be the owner of a sawmill making $200,000 dollars a year, when in fact he did not own a sawmill, earned almost nothing, and then racked up a debt of $5,000 on said credit card before going bankrupt, that did not do much to help his credibility. 

Adam Stirling [00:06:53] I just, I just love that it's like, no, no no, you have to understand, Your Honour, I was committing fraud when I made those claims. I didn't actually have that money. It's like, oh, wait, I guess I should admit to that. 

Michael T. Mulligan [00:07:02] Yes, there's always a good you're looking to assess somebody's credibility. You might want to assess the difference between their application for credit and the form they filled out with somebody seeking, you know, fill in the blank child support or spousal support or something like this. Often they're markedly different. 

Adam Stirling [00:07:19] Yeah. 

Michael T. Mulligan [00:07:19] The judge commented further on cross-examination of Sonny in terms of affidavits that he'd filed in tax court, describing his testimony as cavalier, disdainful, about the all the falsehoods contained in various things he was claiming. So, the bottom line is that the judge found that, look, you clearly conveyed these things to your son for no consideration to try to get out of having to pay for the losses sustained, when you organized a mob of people to storm the sawmill in Vancouver. You were clearly aware that that was a risk that you just put yourself in by taking those actions. And so, as a result, pursuant to the Fraudulent Conveyance Act, the judge set aside those transactions. So, there is if they didn't occur. 

Adam Stirling [00:08:04] Okay. 

Michael T. Mulligan [00:08:04] The judge also found sort of a belt and suspenders that there was a concept of a resulting trust that flowed from when the father, Sonny, gave those things to his son. And that in part turned on evidence from the young son who testified, you know, he didn't think that they were just his that he could, you know, sell the properties, and do whatever he wanted with the money. 

Adam Stirling [00:08:27] Yeah. 

Michael T. Mulligan [00:08:27] That really he was just holding them for his dad. And so now, all these years later, this decision will mean that the people who were injured in the storming of the mill and the mill that lost money from the shutdown, can be paid and the union local who wound up paying out on the basis that it was vicariously liable for what its president had done, storming the mill, will be able to collect the money back from Sonny, and from the sounds of it, he owns effectively now again, all of these properties all over the Lower Mainland. And so, there's probably a realistic chance that the $437,000 is going to go to the various people who got the judgement. And so, the takeaway from a life perspective should be if you think you can avoid responsibility for something you've done by just giving all of your assets to somebody else, that's been thought of, you may slow things down a little bit. But ultimately, all of that is going to get unwound and he'll wind up having to pay the judgement and wind up paying the costs for all of this litigation that's been going on for years in an effort to extract the money for what he did all the way back in 2004. 

Adam Stirling [00:09:47] Yeah, it's as a general rule, it's helpful, I would suspect, to consider that is as devious and brilliant as one may consider a plan, somebody somewhere is probably already thought of it and tried it at least once. 

Michael T. Mulligan [00:09:59] Yes indeed. The other thing I must say, I smiled as I read the original trial decision and there all of these people being sued, dozens of them, one of the things the judge points out is that Sonny, alone, was the one fellow who didn't have a lawyer helping him back at the time. So perhaps he's gotten some legal advice all the way back in 2003. He would have realized that his devious plan to give all of his assets to his son was not going to make him Teflon from the perspective of the court proceeding. And, you know, people have thought of that one. 

Adam Stirling [00:10:29] All right. Let's take a quick break, Legally Speaking. We'll continue in just a moment with Michael Mulligan from Mulligan Defence Lawyers. 

[00:10:35] COMMERCIAL BREAK

Adam Stirling [00:10:35] Back to Legally Speaking here on CFAX 1070, Michael Mulligan from Mulligan Defence Lawyers. Michael, what's next on the agenda? 

Michael T. Mulligan [00:10:43] Well, the next case on the agenda, I think, has some particular resonance given the current discussions about covid vaccines and one of the defendants in this case. So, this was a case involving a young lady, locate Lakota James, who was an Aboriginal woman in B.C. 

Adam Stirling [00:11:04] mhmm. 

Michael T. Mulligan [00:11:04] Who is suing Johnson and Johnson as a result of having suffered a very serious brain blood clot that went to her brain, a very short time after she started using a contraceptive patch manufactured by Johnson and Johnson. 

Adam Stirling [00:11:23] hmm. 

Michael T. Mulligan [00:11:23] An Evra Patch, E-V-R-A and so the case has been marching along for the past few years. And the most recent part of it was an unsuccessful effort by Johnson and Johnson to try to strike out the claim or stop it. And a large part of the argument that Johnson and Johnson was making, which is again, I think resonant in the current context, is that they were relying upon a warning. They described as a black box warning because literally it's in a black box in the packaging for the contraceptive patch. And the warning is significant because as we've talked about previously, in the context of suing over medical malpractice. 

Adam Stirling [00:12:11] Yes,. 

Michael T. Mulligan [00:12:12] One of the things that will be looked at is, you know, did the person, was the person properly informed of the risks and would they have or if they weren't, would they have undergone the procedure had the person been properly informed of the risks? And so, Johnson and Johnson, one of their arguments here was, look, we put this black box warning in the package with the contraceptive patch. And so, you should find that the person has, this young lady, had accepted the risk when she decided to start using the patch. And you ought to therefore disallow her claim from continuing. That was one of their core arguments here. And I must say, reading this warning, indeed, that the judge reproduced it helpfully in the decision. 

Adam Stirling [00:12:59] Mhmm. 

Michael T. Mulligan [00:12:59] It is indeed in a black box. But I must say, when you start reading the thing, it speaks about the risk of the venous Throm…Thromboembolism

Adam Stirling [00:13:11] Thromboembolism, I believe

Michael T. Mulligan [00:13:14] Yeah, I counted it up, that word has 15 letters in it and it, and it goes on to discuss various studies that found different percentages of risk for that particular thing to have occurred. 

Adam Stirling [00:13:24] Yes. 

Michael T. Mulligan [00:13:25] And I must say, reading that thing, when you look at the context of, you know, this was a young lady who had a grade 10 education. 

Adam Stirling [00:13:32] Yeah. 

Michael T. Mulligan [00:13:33] You hand somebody warning with a black box with that term, which I can't pronounce. And you say, well, look, clearly you've accepted all of these risks. You know that I think is at the very least a triable issue. You know, the fact what she experienced only a very short time after she started to use this patch, she had a serious headache, couldn't get out of bed, the side of her face drooped. 

Adam Stirling [00:14:01] mhmm. 

Michael T. Mulligan [00:14:01] vision was blurred. She began convulsing. 

Adam Stirling [00:14:04] mhmm. 

Michael T. Mulligan [00:14:04] And she wound up in hospital with a brain clot. 

Adam Stirling [00:14:06] oh no. 

Michael T. Mulligan [00:14:06] and required numerous procedures and operations to try to relieve the pressure on her brain, a horrific outcome which is continuing to have an impact on her. And I must say, when you look at the black box and the 15 letter words and the discussions of various studies in it, at least to my mind, that it doesn't seem clear that somebody reading this would appreciate that that's the risk that was being described in the most clinical of terms in the black box. And so, the judge who heard this application by Johnson and Johnson dismissed it. And it doesn't mean that Ms. James is going to be compensated for what happened to her yet, but it means that the claim can continue. And Johnson and Johnson weren’t able to strike it out by, amongst other things, pointing to the black box warning. And I should say, if I had a generalized piece of advice to Johnson and Johnson and otherwise, perhaps when you're describing risks to people in that way, perhaps do it in language which ordinary, reasonable person could look at when making a decision about, you know, do I wish to use the patch or should I be taking the pill? And rather than using 15 letter words, perhaps make it a little clearer to people what exactly they are risking. And so, all of that, of course, is, I think, very timely, given the current discussion about putting warning labels on various things in terms of vaccines. And I think it's important that that be done in a clear fashion, even where in that case it may be an exceedingly low risk. At the very least, you have to do it with language that a reasonable person could read it and make a proper judgement for themselves. 

Adam Stirling [00:15:48] Yeah, it's interesting here. I'm just looking because venous thromboembolism, it talks about how one study found it compared to current users the oral contraceptives odds ratio is 2.46. And then there's a confidence interval here, 95%. Like most people don't even know what a confidence interval is. I don't think an ordinary person, as you mentioned, would be able to read this and comprehend what it's actually saying or what information is being conveyed. 

Michael T. Mulligan [00:16:12] Indeed, I also like how they shortened the 15-letter word into VTE, much more friendly and approachable. But perhaps if you described it as, you know, blood clots/ brain aneurysm or something of that sort, people might have a much better idea of what exactly was going on. And if you presented in a way where somebody could actually assess the risk more reasonably to make a decision about, hey, do I wish the patch or do I wish the pill when there's clearly an alternative to this, I think that would be the fair and reasonable way to approach it. 

Adam Stirling [00:16:45] All right. What's next on the agenda? 

Michael T. Mulligan [00:16:48] Well, the final case on the agenda is one which comes out of the tragic case of the murder of a real estate agent, Lindsay Buziak. 

Adam Stirling [00:16:57] Yes. 

Michael T. Mulligan [00:16:58] Back in 2008, and the particular court application about that case, which was just decided, involved an application by a local news organization to look for access to a whole series of applications and orders that have been made as part of that, the ongoing investigation. 

Adam Stirling [00:17:23] Yes. 

Michael T. Mulligan [00:17:24] In particular documents, there are thirty-five of them, which have been sealed, included, include production order, search warrants, judicial authorizations and so there's a lot of material there as part of that investigation. And the application was made in the context of the general idea that court proceedings are to be public, presumptively. 

Adam Stirling [00:17:48] Yes. 

Michael T. Mulligan [00:17:49] And the court agreed with that. Right. The public must have the ability to scrutinize the justice system, and that's important to enhance public confidence in it. We don't want secret decisions being made. And you would ordinarily only have a ban on publication where it's necessary and there's a real issue about trial fairness or other things of that sort. And there needs to be a weighing of the benefit and the harm that flows from doing things in a secret way. 

Adam Stirling [00:18:17] Yes. 

Michael T. Mulligan [00:18:18] And here, there are a couple of interesting elements to this. First of all, this application isn't done. This was sort of an application to make the application. In the sense that the lawyers acting for the news organization were asking that they be provided with a copy of all of these documents, which have been sealed on their undertaking not to disclose them to anyone, including their clients, but simply so that they might be aware of what's in them, so that they could make submissions to the judge about why they ought to be unsealed or some of them unsealed or some of them unsealed in a redacted way. And that concept of an undertaking is an important one. 

Adam Stirling [00:19:05] Yes. 

Michael T. Mulligan [00:19:05] And it goes to the heart of how many legal proceedings operate. An undertaking is a promise from a lawyer, which if you don't strictly comply with it, you can be professionally disciplined for doing so. And so, undertakings are used for all manner of serious matters where there's a whole lot at stake. 

Adam Stirling [00:19:26] mhmm. 

Michael T. Mulligan [00:19:26] You know, even in even in routine things like can being a property, for example, that process operates on lawyers giving undertakings, saying things like, look, I'll undertake to convey this property if you undertake to pay me the, you know, two million dollars into trust to give to my client. 

Adam Stirling [00:19:44] Yes. 

Michael T. Mulligan [00:19:44] And the system works because you can count on a lawyer abiding by their undertaking, right. It is just at the core of what the lawyers are obliged to do. And so, the lawyers here are arguing, look, you can use an undertaking. Disclose it to us. We can have access to it and then make submissions. And indeed, various other people have access to the material, including, of course, the lawyer for the provincial government who's resisting the release, and the lawyer for the police, who are resisting the release of it. And so that's what the judge was struggling with, here, because there is a long history of those things working. But ultimately, the judge found that because there could be inadvertent disclosure by somebody. 

Adam Stirling [00:20:30] Yeah. 

Michael T. Mulligan [00:20:30] Including, frankly, by the police or the crown or other people involved. But the judge found that the larger the circle of people you have sort of inside the tent, the greater the prospect is that there could be a mistaken or inadvertent disclosure. 

Adam Stirling [00:20:46] Yeah. 

Michael T. Mulligan [00:20:47] And the judge also reverted to this concept of what was described as a mosaic effect, whereby, you know, if you give, if you wind up having enough pieces, even if they're redacted, you can sometimes put things together and, you know, come to conclusions about, you know, who the suspect is or, you know, that kind of thing. And the judge also made reference to the fact that the role of people in an investigation can change, somebody who might at this point appear to be a witness,. 

Adam Stirling [00:21:15] Yeah. 

Michael T. Mulligan [00:21:15] Could later turn into the accused or something. Right. 

Adam Stirling [00:21:18] It's interesting,. 

Michael T. Mulligan [00:21:19] For all of those reasons, the judge found that even with the undertaking, these documents could not be released to the lawyers acting for the news organization. And so there will be a further application to try to get the material released in some way or other. But of course, the lawyers doing that are going to be in a pretty difficult spot. 

Adam Stirling [00:21:41] Yeah. 

Michael T. Mulligan [00:21:41] Trying to make submissions about how these things should be edited or what's in them or why they might or might not need to be kept secret when they're not allowed to see them. 

Adam Stirling [00:21:50] Yeah,. 

Michael T. Mulligan [00:21:50] And so that's still going to go on. But for the reasons discussed, it's going to go on in a way that might not be as fulsome as what would occur if the lawyers were able to actually see what they're arguing about. 

Adam Stirling [00:22:03] Yeah, it's interesting because it looks like they tried to use the documentary test. But then the crown argued that the test does not apply for the motion because it's a purely procedural issue. Looks at courtside, which is a fascinating case. We're almost out of time. Michael, any final thoughts? 

Michael T. Mulligan [00:22:18] No, I guess, I say the upside of it is it clearly does appear to be and, the judge found, the investigation is an active and on and ongoing one. 

Adam Stirling [00:22:25] Yeah. 

Michael T. Mulligan [00:22:26] And so well, there's no doubt frustration by many people affected by this about how long it's taken. It's clear from this decision that the judge has concluded that this is indeed an active and ongoing investigation. So, there may well be more. 

Adam Stirling [00:22:39] Michael Mulligan with, Legally Speaking, for Mulligan Defence Lawyers. Thank you for your time, as always, until next week. 

Michael T. Mulligan [00:22:44] Thank you so much. Always a pleasure. Stay Safe. 

Adam Stirling [00:22:46] You Too. Bye now. 

Automatically Transcribed on March 25, 2021 – MULLIGAN DEFENCE LAWYERS