SCC Case Information
Bertina Alfano, Trustee of the Carmen Alfano Family Trust, et al. v. Christian Piersanti, et al.
(Ontario) (Civil) (By Leave)
Commercial law - Fraud, Bankruptcy, Expert evidence.
Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch) for information purposes only.
Commercial law – Fraud – Misappropriation of funds - Bankruptcy – Expert evidence –Derivative claim - Whether the Court of Appeal relied on a theory of liability which was not raised or addressed by the Alfanos et al. to dismiss the claim against Terry Piersanti? – If so, whether that constitutes a breach of the principles of natural justice? – Whether the Court of Appeal erred in upholding all remaining findings of fraud and misappropriation against Christian Piersanti? – Whether the Court of Appeal erred in upholding the trial judge’s disqualification of Piersanti et al.’s expert witness? – Whether there is at law a cause of action for damages for wrongfully assigning a company into bankruptcy? – If so, what are the constituent elements of the cause of action and can such a cause of action result in an award for damages? – Whether there is an exception to the rule in Foss v. Harbottle where the company is in bankruptcy or where the practical effect is that there is no company left to which the shareholders can assert a derivative claim?
Christian Piersanti, a lawyer, assisted the Alfanos in incorporating a family paving business and in establishing family trusts which would indirectly hold just under 90 percent of the interest in the paving company. Mr. Piersanti held the remaining interest in the business and subsequently became its president. Nine years later, Mr. Piersanti asserted that he was the sole owner of the paving company and locked the Alfanos out.
Members of the Alfano family and trustees of several family trusts first initiated an action seeking a declaration of their interests in the paving company. On or about the same day, Mr. Piersanti assigned the company into bankruptcy. The Alfanos et al. then brought an unsuccessful motion to set aside the assignment into bankruptcy. During the course of litigation, the Alfanos became aware of evidence leading them to believe that Christian and his spouse Terry Piersanti had been – by way of numerous numbered companies owned by Ms. Piersanti – misappropriating funds from the Alfano family business as well as misappropriating the interests held by the Alfanos et al. in different commercial properties. The Alfanos amended their original statement of claim, seeking numerous orders and declarations, including an order for damages against Mr. and Ms. Piersanti for breach of fiduciary duty, fraud, conversion and conspiracy.