COURT FILE NUMBER 9L, 0 COURT JUDICIAL CENTRE PLAINTIFFS DEFENDANTS DOCUMENT ADDRESS FOR SERVICE AND CONTACT INFORMATION OF PARTY FILING THIS DOCUMENT NOTICE TO DEFENDANTS Form 10 [Rule 3.25] Clerk?s Stamp: COURT OF BENCH OF ALBERTA EDMONTON BRIAN A. BERESH, 0.0. and BRIAN A. BERESH PROFESSIONAL CORPORATION BOB H. ALONEISSI, Q.C., EDMOND BRIAN M.J. HURLEY, EAMON CHRIS MILLSAP, BOB H. ALONEISSI PROFESSIONAL CORPORATION, EDMOND PROFESSIONAL CORPORATION, BRIAN M.J. HURLEY PROFESSIONAL CORPORATION, EAMON PROFESSIONAL CORPORATION, and CHRIS MILLSAP PROFESSIONAL CORPORATION, AND BERESH, ALONEISSI, HURLEY, and MILLSAP PARTNERSHIP STATEMENT OF CLAIM RICHARD J. COTTER, QC. Dentons Canada LLP 2900 Manulife Place 10180 101 Street Edmonton, Alberta T5J 3V5 Ph. (780) 423-7316 Fx. (780) 423-7276 E-Mail: richard.cotter@dentonscom File No.: You are being sued. You are a defendant. Go to the end of this document to see what you can do and when you must do it. Note: State below only facts and not evidence (Rule 13.6) Statement of facts relied on: 1. The Plaintiff B.) resides in Edmonton, Alberta. Mr. B. is a highly respected, well known lawyer with a preeminent reputation who practices law primarily as a criminal defence lawyer (but also conducts civil and regulatory litigation) in Edmonton and elsewhere in western Canada and has been practicing la for over 42 years. 35727915_4 - 2 2. Mr. B.?s stellar reputation is enhanced by his continuing to and having taught at the University of Alberta Law School for approximately 30 years and having mentored students and lawyers throughout his entire career. Further and in addition, Mr. B. is involved in many associations where he lectures from time to time and speaks on topics relevant to lawyers practicing in the criminal bar and other areas of litigation generally. 3. Mr. B. has appeared several times before the Supreme Court of Canada as well as all levels of courts in Western Canada. 4. The Plaintiff is the majority Shareholder and Director of Brian A. Beresh, Professional Corporation (?Beresh and at all material times prior to February 28, 2018 was a member of the law partnership known as Beresh Aloneissi that consisted of Beresh PC, and the Defendant Professional Corporations Hereinafter, the Plaintiffs will be referred to as collectively as ?Mr. 5. The Defendants, Bob H. Aloneissi, Q.C., Edmond O?Neill, Brian Md. Hurley, and Eamon O?Keefe, reside in the City of Edmonton, in the Province of Alberta. The Defendant Chris Millsap resides in the City of Grande Prairie, in the Province of Alberta. These Defendants are criminal defence lawyers who practice in Edmonton, Alberta, or Grande Prairie, Alberta (as the case may be) and elsewhere (the ?Individual Defendants"). 6. The Individual Defendants Bob H. Aloneissi, Q.C., Edmond O?Neill, Brian M.J. Hurley, Eamon O?Keefe, and Chris Millsap are respectively the majority shareholder and director of Defendant Bob H. Aloneissi Professional Corporation (?Aloneissi Defendant Edmond O?Neill Professional Corporation (?O?Neill Defendant Brian M.J. Hurley Professional Corporation (?Hurley Defendant Eamon O?Keefe Professional Corporation (?O?Keefe and Defendant Chris Millsap Professional Corporation (?Millsap respectively, which carried on business at all material times up until February 28, 2018 in BA. On and after March 1, 2018 the Defendant Professional Corporations formed a law partnership consisting of the Defendant Professional Corporations under the name Aloneissi, O?Neill, Hurley, O?Keefe and Millsap 7. BA carried on business as a criminal and civil law boutique firm in Alberta, Saskatchewan, British Columbia and Canada?s Northern Territories specializing in defending individuals' rights and freedoms in respect to the most serious criminal charges and professional complaints and/or disciplinary matters as well as civil litigation, regulatory and other quasi-criminal matters. 35727915_4 10. 11. 12. -3- The Individual Defendants all articled at BA to Mr. B. As indicated earlier herein, all of the Individual Defendants, after being called to the Bar and becoming members of the Law Society of Alberta and in other Jurisdictions, remained with BA. Ultimately, as hereinafter provided, each of the Individual Defendants, through their professional corporations, became partners in BA. BA was constituted in 1982 when the partnership was formed by Mr. B. as its founding pannen From its formation, BA carried on the practice of law without a written partnership agreement governing the relationship between Mr. B. and the Defendants. The BA's partnership agreement was partly oral and partly based upon the conduct and customs carried on over existence, consisting of among other things: Each of the partners were equal as to the interest they held in BA, which as of February 28, 2018 was one?sixth thereof; For the fiscal years 1982 2017, the practice of BA with respect to income allocation and partners compensation had been determined annually by a formula by which each partner?s annual compensation for the current fiscal year was predicated upon the formula of total partner receipts as a percentage of the BA partnership?s net operating income for the prior fiscal year (?Partner Compensation Formula?); The managing partner (?Managing Partner?) was appointed annually at a meeting of the partners held in early January of the fiscal year. The day to day management of BA was delegated to the Managing Partner; Managing Partners typically received compensation for being Managing partner- most recently for 2018 it was slated to be $35,000; The partners met when convened by the Managing Partner. Such meetings were called without formal notices; but rather by written communications forwarded by the Managing Partner. Such meetings were typically held on the weekend to avoid regular working hours for the partners ?and, where necessary, partners participated by telephone who could not be physically present?. To conduct a meeting never required the attendance of all partners, if in the circumstances a partner was unavailable; 4 At the meetings, there were typically few formalities followed. Resolutions were moved and seconded and following discussion were voted on by a show of hands. The meetings were courteous and were held in an orderly business fashion. Summary informal minutes of the meetings were prepared and circulated and thereafter approved at the next partners? meeting; Informal summary agendas were circulated in advance of a scheduled partners? meeting. Any item of interest to a partner would be added to the agenda by simply a request being made by a partner to the Managing Partner. Until late 2017, there was no gatekeeping or restriction as to the inclusion of any topic at a scheduled partners? meeting nor was there a requirement to outline in writing what was to be discussed with respect to such topic prior to the topic being added to the agenda. The agenda was simply revised by the Managing Partner to include any request made by an individual partner, or revised within the meeting itself. Until late 2017 as Partners left BA, there was an understanding they would be repaid the balance of their capital account, unless waived by the departing panneh Series of Events Pertaining to Mr. B.?s Proposed Transition to Counsel 13. On or about September 29, 2017, Mr. B. presented a proposal (?Transition Proposal") to the Defendants relating to his future relationship with BA. Among other things, Mr. B. proposed that: 35727915_4 he would alter his relationship with BA such that he would withdraw as a partner from BA and assume the role of counsel (?Counsel?), commonly referred to in the legal profession for former senior partners, allowing such lawyers to be independent contractors to the legal partnership, but still offering invaluable assistance to partnerships in attracting and retaining lucrative legal work predicated on the skills, reputation, and business acumen of lawyers, such as Mr. 8., who remain highly skilled lawyers with significant reputational cache; he would continue mentoring students and young lawyers, which he had carried out during the course of his entire legal career, having acted as a principal for over 50 articling students; - 5 - (0) he would continue to have a dynamic practice and continue to make significant financial contribution to BA, which would include sharing in the expenses by agreeing to pay $50,000 to defray expenses of BA (which would be disproportionate to his receipts and therefore such proposal was extraordinarily generous); he would actively engage in marketing BA as he was and remained what is commonly referred to in the legal profession as a rainmaker; he would continue to practice at current Edmonton office; and, he would continue to assist in the operation, management and leadership of BA as requested. 14. On or about October 7, 2017, the Defendants responded to Mr. B.'s Transition Proposal. The Defendants stated, among other things, that being a Counsel with BA was not possible. The Defendants expressed a desire to resolve some of the outstanding issues relating to BA in a fair and equitable manner but indicated that they would not be accepting the Transition Proposal. The Defendants informed Mr. B. he could remain a partner of BA and carry on as he previously had as they did not have the legal right to expel him, or he could leave no other alternative was possible. 15. As a result of the Defendants? October 7, 2017 response, Mr. B. indicated on or about October 13, 2017 that he would consider resigning from the Partnership effective December 31, 2017 but clarified on or about October 23, 2017 that he would remain a partner in BA until such time as all outstanding issues had been resolved. 16. On or about October 29, 2017, Mr. B. and the Defendants held a partners? meeting to discuss various issues, including issues relating to the Transition Proposal and/or Mr. B.?s potential departure from BA (the "October 29, 2017 Meeting?). 17. At the October 29, 2017 Meeting, various resolutions were considered and passed, including, among other things: a resolution to reconcile 2017 billings to 2017 income and draws, which was contrary to past practices and its partnership agreement (?Distribution Formula Resolution?); a resolution to have the capital accounts of the Individual Partners of BA reviewed (?Review Resolution?); 35727915_4 6 a resolution to limit partner draws to $30,000 per month per partner until such time as the outstanding issues with respect to Mr. B.'s proposed departure from BA had been resolved which was contrary to past practices and its partnership agreement (?Compensation Cap Resolution?); a resolution appointing Mr. O?Neill as Managing Partner (?Managing Partner Resolution?). 18. Mr. B. had no prior knowledge or information that some or all of the October 29, 2017 Resolutions would be considered and passed at the October 29, 2017 Meeting (the Distribution Formal Resolution, the Review Resolution, the Compensation Cap Resolution, and the Managing Partner Resolution, collectively referred to as the ?October 29, 2017 Resolutions?). 19. Mr. B. opposed the October 29, 2017 Resolutions and was the only partner to vote against the October 29, 2017 Resolutions during the course of the meeting. During the October 29, 2017 Meeting and thereafter, Mr. B. advised the Defendants that the October 29, 2017 Resolutions were invalid and contrary to law, as he had not voted in favour nor consented to any of the October 29, 2017 Resolutions. Despite such advice, the Defendants and BA implemented the October 29, 2017 Resolutions. 20. Some or all of the Defendants, on the initiative and furtherance of Defendant O?Neill, conspired to injure the commercial interests of Mr. by agreeing to take concerted action by voting in favour of the October 29, 2017 Resolutions intending to damage the commercial interests of Mr. or alternatively knew or ought to of known that their unlawful actions would damage the commercial interests of Mr. B. His conduct was motivated by greed, fear, and jealousy of Mr. B?s past success. 21. In furtherance of the conspiracy, on or about October 29, 2017, the Mr. O?Neill, on behalf of the Defendants, announced to the associates, students, and staff of BA that Mr. B. was resigning from BA and that a transition would take place. This announcement was made without the prior knowledge or consent of Mr. B. This announcement was not made with any confidentiality restriction prohibiting further dissemination to anyone not a partner or employee of BA (?Resignation Announcement?). 22. On or about October 29, 2017, following the Resignation Announcement, Mr. B. again clarified his position by email circulated to the Defendants and to associates, students, and staff that he had not resigned from BA and would continue to be a 35727915_4f 7 member of BA. He further informed the Defendants that until such time as all of the issues in dispute relating to his proposed departure from the partnership were resolved he would remain a partner of BA. 23. Thus, at no time did Mr. B. resign from BA, and Mr. B. continued to be a partner of BA until its dissolution at midnight on February 28, 2018 as outlined herein. 24. For the months of November 2017, December 2017, and January 2018, Mr. B. received a compensation draw in the amount of $30,000 (the ?Draws?) on the following dates: the sum of $30,000 on November 28, 2017; the sum of $30,000 on December 28, 2017; and, the sum of $30,000 on January 30, 2018. The Draws received grossly underpaid Mr. B. his entitlement under the 2017 Partner Compensation Formula as calculated in early January 2017 by the Defendant Hurley. 25. During existence, Draws were typically authorized by the Managing Partner and paid by mid-month cheque prepared by bookkeeper calculated using the Partner Compensation Formula for the current fiscal year on a year to date basis. 26. The Draws received for November 2017 to January 31, 2018 inclusive by Mr. B. from BA were significantly less than what Mr. B. was entitled to under the Partner Compensation Formula. The Compensation Cap Resolution resulted in some of the partners receiving amounts in excess of what they were entitled to under the Partner Compensation Formula. 27. On or about November28, 2017, it was made clear by Mr. B., through his authorized representative, that presentation of the Draws was not to be construed as a waiver, acquiescence, estoppel, or laches in respect of any and all amounts that were and may be due and owing to Mr. B. under the Partner Compensation Formula.- Subsequent to October 29, 2017, Mr. B. and others on his behalf made repeated requests that the October 29, 2017 Resolutions be rescinded. Despite such requests, in furtherance of the conspiracy, the Defendants and BA refused to convene a meeting of BA and rescind the October 29, 2017 Resolutions. 35727915_4l -8- Preparation of 2017 Financial Statements 28. 29. 30. 31. In furtherance of the conspiracy, on or about December 15, 2017, Mr. B. was informed that the partners of BA would not consider rescinding the October 29, 2017 Resolutions, until the 2017 financial statements for BA were reviewed by BA's external accountants who typically reviewed the fiscal statements each year on a review engagement basis only. Mr. B. was informed that the external accountant for BA would not be in a position to finalize the review of the 2017 financial statements until the end of January, 2018. Pending receipt of the 2017 financial statements for BA reviewed by external accountants, the Defendants informed Mr. B. that the underfunded or unpaid Draws to Mr. B. would not be paid. Once again, this was contrary to the past practices of BA as such decisions as to compensation for the current fiscal year (in this case 2018) were made relying upon the in-house financial statements prepared by the BA bookkeeper. Typically the Defendant Hurley made this calculation for the current fiscal year early in the fiscal year. Following the conclusion of 2017 fiscal year, Mr. B. made repeated requests that, in accordance with the usual practice of BA, the Partner Compensation Formula for determining partner compensation for the 2018 fiscal year be prepared by the Defendant Hurley, and circulated amongst partners. The Defendant Hurley had prepared and circulated such calculations early in the current fiscal year, following the completion of the prior fiscal year, without the benefit or reliance upon the finalized review of the prior year?s financial statements for BA conducted by the external accountants. On or about January 19, 2018, external accountants circulated drafts of their review of the 2017 financial statements for BA. external accountants also represented some of the Individual Partners and their professional corporations, but not Mr. Be. The instructions provided to external accountants in respect to the preparation of the 2017 financial statements were provided in furtherance of the conspiracy and were intended to cause damage to the commercial interests of Mr. or alternatively were provided by the Defendants (some or all of them) knowing or ought to have known that the consequences of such instructions would injure Mr. B?s commercial interests. The capital account of each Partner was calculated on a basis which had not been utilized previously. On or about January 20, 2018, Mr. B. requested that external accountants prepare a revised statement of capital of each Partner consistent with the prior practices of BA. 35727915_4 32about January 22, 2018, such statement of capital of each individual partner prepared by the external accountants for BA, consistent with the previous practice of BA, were circulated to the partners of BA. Commencing early in 2018, Mr. B. made inquiries of the Managing Partner as to when a meeting of Partners would be convened to revoke the October 29, 2017 Resolutions, distribute the excess capital of BA for its 2017 fiscal year, appoint the new Managing Partner for fiscal 2018, and approve the Partner Compensation Formula for 2018 fiscal year. Mr. B.?s inquiries were ignored. On or about January 23, 2018, the Defendant Hurley calculated the Draws for 2018 fiscal year utilising the Partner Compensation Formula consistent with practices and partnership agreement and as the Defendant Hurley had undertaken for the past 15 years or so. On or about January 28, 2018, in an effort to mitigate his damages, Mr. B. requested that the Managing Partner convene a meeting of BA partners to discuss various issues, including: rescission of the October 29, 2017 Resolutions; top up payments for those partners who were undercompensated for 2017 fiscal year and adjust payments for those partners who were overcompensated pursuant to the Partner Compensation Formula for 2017 fiscal year following adoption of the Compensation Cap Resolution; (0) approval of the 2017 financial statements for and, appoint the Managing Partner for BA for the 2018 fiscal year. Despite continuing follow-up by Mr. B. as to the calling or convening of the annual partners meeting for BA, in furtherance of the conspiracy, Mr. O?Neill delayed convening a Partners? Meeting. On or about January 29, 2018, the Managing Partner, acting in the course and scope of his duties, and on the express instruction of the remaining Defendants, responded to Mr. B.'s request to convene a Partners? Meeting by threatening not to table items requested by Mr. B. and not consider them at the requested meeting of BA, unless Mr. B. articulated what Mr. B. wished to discuss in respect to each item he wanted placed on the agenda of the requested BA Partners' meeting and further informed Mr. B. that a 35727915_4 38. 39. 40. 41. - 10 partners? meeting could not be convened on the dates requested by Mr. B. as not all Defendants would be able to attend on those dates; all of which was contrary to the past practices of BA. On or about January 31, 2018, in order to avoid the tabling of agenda items, as threatened by the Managing Partner, Mr. B. forwarded an email to the Managing Partner outlining what Mr. B. intended to be discussed on each agenda item he requested be placed upon the agenda at the requested partners? meeting. On or about February 1, 2018, the Managing Partner convened a meeting of partners for Saturday February 10, 2018. On February 2, 2018, Mr. B. requested the Managing Partner circulate an agenda for the February 10, 2018 Meeting. On February 8, 2018, the Managing Partner circulated the agenda and materials to be considered by the partners at the February 10, 2018 meeting. February 2018 Partners Meeting Results in further Actionable Wrongdoing 42. On February 2018 the Partners of BA met at offices (the ?February 2018 Meeting"). Contrary to the previous advice of the Managing Partner, all partners attended this meeting in person. At the commencement of the meeting further items were added to the Agenda without the prior knowledge or consent of Mr. B. During the February 10, 2018 Meeting, various resolutions were considered and passed including among other things: The Defendant Aloneissi demanded Mr. B. return the $2,500 payment received by Mr. B. for November 2017 and December 2017 as Mr. B. had been Managing Partner until October 31, 2017 and therefore asserted Mr. B. was not entitled to retain such funds. After further discussion amongst the Defendants such request was tabled. A resolution to reconcile 2017 billings to 2017 Draws consistent with the past practices of BA and as calculated by BA's bookkeeper or external accountant, authorizing the application of the January 30, 2018 Draw to the BA partners? individual fiscal 2017 compensation owing, resulting in the following further amounts being payable to or payable by the Partners as follows: i) the sum of $338,347.04 payable to Beresh 35727915_4 (C) 35727915_4l 11 ii) the sum of $107,297.98 payable to the Defendant O?Neill the sum of $23,545.30 payable to the Defendant Hurley iv) the sum of $1,461.26 payable to the Defendant O?Keeffe v) the sum of $34,795.66 payable to the Defendant Millsap and vi) the amount of $3,747.24 to be re-paid to BA by the Defendant Aloneissi PC. This resolution had the effect of rescinding the Distribution Formula Resolution and the Compensation Cap Resolution (but the Defendants specifically refused to expressly rescind the October 2017 Resolutions indicating that the passage of this resolution constituted in all practicality the rescission of such resolutions) (the ?February 10, 2018 Distribution Formula Resolution"); A resolution directing that the January 31, 2018 Draw paid to the partners would be applied to the amounts payable to each of the partners as outlined in the February 10, 2018 Distribution Formula Resolution; A resolution appointing Mr. O?Neill ?Managing Partner? for the fiscal 2018 at an annual compensation of $35,000.00; A new Compensation Cap Resolution limiting a Partner?s draw to 80% of an individual Partner?s entitlement such that one twelfth of 80% of an individual Partner's year-to-date annual compensation would be payable on the last Friday of each month and the remaining 20% would be paid following the fiscal year end at such time as agreed to by ordinary resolution of the Partners following taking into account special considerations are applied toward redistribution of any portion of that hold back from that based on prior year?s billing percentage, to take into account such contributions as the Partnership by ordinary resolution may decide.? and further when a Partner withdraws, that the withdrawing Partner?s capital account would be forfeited and allocated to the remaining Partners in equal shares, such that no capital would be paid to a withdrawing Partner? (the ?80% Compensation Cap Resolution?). Forming part of the new February 10, 2018 Distribution Formula Resolution was approval of the Financial Statements and Capital Accounts of the individual - 12 Partners of BA based upon the 2017 Financial Statements for BA as reviewed by the external accountants of BA. A resolution requiring associates and articling students to record billable time to BA client files except for court appearances designed to be form part of such person?s education or where dispensed with at the discretion of the Managing Partner, a policy contrary to the practice in place since the formation of BA. (these Resolutions collectively referred to as the ?February 2018 Resolutions") 43. The February 10, 2018 Resolutions were passed by the Defendants, or alternatively some or all of them, in furtherance of the conspiracy and such Resolutions were passed to cause damage to the commercial interests of Mr. B. 44. While Mr. B. was in general agreement with distributing the undistributed income payable in accordance with past practice (the ?Distribution Formula?) and further that the distribution of undistributed income would reduce the capital account of the individual Partners of BA, Mr. B. did not and does not agree to: 35727915_4 The actual amounts distributed pursuant to the February 10, 2018 Distribution Formula Resolution which distributed undistributed income for fiscal 2017 as calculations made by and on behalf of Mr. B. calculated different amounts payable or to be repaid by partners. in Mr. B.?s case, be calculated following the application of the January 30, 2018 Draw received and the further $338,347.04 paid to him on February 15, 2018 that the further sum of $37,888.96 remained due and owing to him; Mr. B. did not and does not agree with the February 10, 2018 Compensation Cap Resolution as it required unanimous consent and Mr. B. was not in agreement thereto as the special considerations and payment of the holdback were unclear and were not articulated either during the course of the February 10, 2018 Meeting or in the meeting materials provided in advance of the meeting or clarified in any supplemental materials provided by the Managing Partner or some or all of the Defendants following the meetings conclusion; As the amount paid on January 31, 2018, in the sum of $30,000 to each partner, was applied to the amounts owing for each partner under the Distribution 45Formula, no partner received a Draw for the first month of fiscal 2018 contrary to the previous practices and the provisions of the BA partnership agreement. Despite the passage of the February 10, 2018 Distribution Formula Resolution providing that the outstanding compensation owing to all partners including Mr. B. would be paid forthwith, and despite requests therefor, the sum of $338,347.04 was not paid to Mr. B. until February 15, 2018. Presentation of the cheque for $338,347.04, on February 15, 2018 waiver, acquiescence, estoppel, or laches in respect of any and all amounts that were and may be due and owing to Mr. B. under the Partner Compensation Formula. On February 20, 2018 the Managing Partner forwarded an email to all lawyers and staff at BA advising that ?the partners recently decided that all students and associates shall henceforth record all of their time when working on a file for a partner. Time will encompass everything you do on the file including but not limited to research, preparation of legal argument, transcript review, witness interviews and importantly, Court time with the partner This email was incorrect and did not reflect the resolution passed by Partners on February 10, 2018 in respect to the recording of time by associates and students. The forwarding of this email by Mr. O?Neill in his capacity of the Managing Partner was outside his authority granted by the partners and was made without the knowledge or consent of Mr. and breached the Law Society of Alberta?s guidelines and rules for the appropriate training and education of articling students generally, and was contrary to the contractual representations made to the articling students upon being hired. Such announcement and instructions were designed to obtain improper bargaining leverage and inflict financial hardship upon Mr. B. in furtherance of the conspiracy in order to obtain and extract an unfair result from the founder of BA and was forwarded wrongfully and without the proper authority therefor. The passage of the February 10, 2018 Resolutions, in substitution or in lieu of the October 2017 Resolutions, was an attempt to rectify the errors of some or all of the Defendants, in passing the October 29, 2017 Resolutions which was expressly acknowledged by some or all of the Defendants during the February 2018 Meeting, that the October 2017 Resolutions were not valid in law or in equity and were de facto rescinded by the passing of the February 2018 Resolutions. The passage of some or all of the February 10, 2018 Resolutions were not valid, in law or equity, and simply perpetuated the wrongful actions of the Defendants as the passage 35727915_4 14 of such resolutions breached the terms of the BA partnership agreement, express or implied, and/or the provisions of the Partnership Act (Alberta) which required the consent of all partners including Mr. B. to the passage thereof and was simply passed in furtherance of the conspiracy designed to cause damage to the commercial interest of Mr. B. 50. The Defendants? failure to discuss and rescind the October 29, 2017 Resolutions prior to February 10, 2018, and originally passed, in a capricious, deceitful and arbitrary manner, contrary to law or equity, constituted breaches of the obligation to perform the terms of the BA partnership agreement and negotiate the amendment to such terms, in good faith and honestly by some or all of the Defendants. The reduction in the amount payable to Mr. B. and the passage of the Compensation Cap Resolution were designed to obtain improper bargaining leverage and inflict financial hardship upon Mr. B. in order to obtain and extract an unfair result from the founder of BA in furtherance of the conspiracy. 51. Further or alternatively, some or all of the Defendants, by agreeing to reduce the amount payable to Mr. B. (for his compensation payable for fiscal 2017 [and subsequent years] and the amount of capital to be returned to Mr. B. upon his leaving the partnership) knew or ought to have known that the passage of the October 2017 Resolutions and the February 10, 2018 Resolutions, wrongfully and without legal right, and in breach of their contractual obligations and/or their fiduciary duties owed to Mr. B. and in breach of their obligations to perform the partnership agreement and to negotiate amendments thereto, honestly, reasonably and in good faith, would harm and did harm Mr. B. and were designed to obtain improper bargaining leverage and inflict financial hardship upon Mr. B. in order to obtain and extract an unfair result from the founder of BA in furtherance of the conspiracy. 52. On February 23, 2018 BA had in its general account the sum of $664,123.53. On February 23, 2018 the Managing Partner authorized a year to date draw for the partners of $400,000.00; of which $320,000.00 was distributed to the partners pursuant to the 2018 compensation formula and 20% was allocated to a savings account. Accordingly, Mr. received $98,464. By failing to pay Mr. Beresh the 20% held back, in the sum of $24,616, by the Managing Partner, as approved by the Defendants, was designed to obtain improper bargaining leverage and inflict financial hardship upon Mr. in order to obtain and extract an unfair result from the founder of BA and was not valid, in law or in equity, and breached the terms of the BA Partnership Agreement, express or implied, and or the provision of the Partnership Act (Alberta) which required the 35727915_4l - 15 consent of the partners of BA including Mr. to withhold such amount. Further and in any event, the failure to authorize a Draw pursuant to the overall criteria, or the calculation and authorization of a Draw was contrary to the terms of the BA Partnership Agreement, express or implied, and or the provision of the Partnership Act (Alberta) and was designed to obtain improper bargaining leverage and inflict financial hardship upon Mr. in order to obtain and extract an unfair result from the founder of BA all in furtherance of the conspiracy. 53. On February 27, 2018, the Managing Partner directed that unless one of articling students would be entitled to bill her time for attending a preliminary hearing as proposed by Mr. then such articling student would not be permitted to attend such hearing. Mr. B. thought the attendance at the hearing would be a meaningful part of this articling student?s training and exposure to and involvement in work that would provide this student with knowledge of the practical aspects of the law and procedures pertaining to serious criminal offences. The direction imposed by the Managing Partner breached the terms of the BA Partnership Agreement express or implied, and or the rules and recommendations of the Law Society of Alberta for the appropriate training and education of articling students generally by Principals or supervising lawyers, and in breach of the terms of the contracts entered into with the students. This direction of the Managing Partner was made with the express authorization of some or all of the Defendants and was designed to harm and did harm Mr. and was designed to obtain improper bargaining leverage and inflict financial and mental hardship upon Mr. in order to obtain and extract an unfair result from the founder of BA in furtherance of the conspiracy. 54. As a result of the above, the Defendants: wrongfully and without the proper authority altered the Partner Compensation Formula for 2017 fiscal year and subsequent fiscal years; wrongfully and without the proper authority altered the formula for payment or return of capital to individual partners upon such partner(s) leaving (0) breached the terms of the partnership agreement of BA, express or implied, and violated the provisions of the Partnership Act (Alberta); wrongfully and without the proper authority limited partner draws to $30,000 per month per partner beginning in November 2017 and to 80% per month of each 35727915_4 16 annual compensation commencing January 1, 2018 and withholding 20% to be distributed at the discretion of the Managing Partner; contrary to BA's Compensation Distribution Formula; caused a shortfall for Mr. B. with respect to his share of 2017 income in the amount of $37,347.04, which remains properly due and owing to Mr. caused a shortfall for Mr. B. with respect to his share of 2018 year-to-date income in the sum of $24,616.00 or such amount as may be proven which remains due and owing to Mr. (Q) breached their fiduciary duties owed to Mr. breached their duty to perform the partnership agreement and negotiate amendments thereto honestly, reasonably and in good faith as required in law; and such wrongful actions were undertaken in furtherance of the conspiracy and designed to damage the commercial interests of Mr. B. 55. Mr. B. pleads and relies upon the provisions of the Partnership Act, R.S.A. 2000, P-3, as amended. 56. In 2018 Mr. B. learned that it had been suggested by some or all of the Defendants and shared with others outside BA that Mr. B. had been expelled from BA. Such information was incorrect, contrary to law caused significant emotional distress to Mr. B., and thereby caused significant damage to his reputation. Such conduct was extraordinarily vindictive and was designed to cause embarrassment to Mr. B. as Mr. B. not only founded BA, but was its senior Partner. Some of these suggestions occurred in the presence of senior courthouse members. 57. The failure to revoke the October 29, 2017 Resolutions, and the February 10, 2017 Resolutions and to delay the payment of the Draws to which Mr. B. was entitled to, being actions taken in furtherance of the conspiracy, deprived him of the opportunity to utilize such funds to earn other income and Mr. B. seeks damages in the sum of $150,000, or such other amount as may be proven, for such damages for loss of opportunity. 35727915_4 -17- Dissolution of BA 58. 59. 60. 61. 62. 63. Despite repeated requests from Mr. to rescind the October 29, 2017 Resolutions and the February 10, 2018 Resolutions, or negotiate the resolution of the outstanding issues extant between Mr. B. and the Defendants, which the Defendants failed or refused to do so, Mr. B. sent the notice of dissolution of BA to the Defendants effective midnight February 28, 2018. On March 1, 2018 the Managing Partner convened a meeting of the former staff, associates and partners of BA and advised: that it was business as usual as the former partners of BA save for Mr. B. would be forming AO would continue to carry on the practice of law at the former locations of BA in Edmonton and Grande Prairie; (0) A0 would extend offers of employment to all former employees of The former employees of BA were instructed to answer the phone and transmit emails in the name of AO. On March 1, 2018 Mr. B. circulated an email to the lawyers, formerly either partners or employees of BA, requesting that all accounts for work in progress for clients of BA be rendered to February 28, 2018. Mr. B. forwarded a further email to the former partners of BA requesting that as soon as possible an accounting of the liabilities and assets of BA occur. Mr. B. further indicated to the former partners of BA that he had no objection to A0 entering into novations for the lease of the Edmonton and Grande Prairie premises without prejudice to the rights of Mr. B. to obtain a further and proper accounting of the assets and liabilities of BA. On March 2, 2018, Mr. B. advised AO that he would be vacating the Edmonton premises on Saturday, March 3, 2018 and would remove all of his contents by Friday, March 9, 2018. On March 2, 2018, A0 circulated an email within AO that trade name "Liberty Law? could not be utilized temporarily. On March 8, 2018 Mr. B. forwarded an email to the current Managing Partner for A0 requesting that the former partners and associates of BA render accounts or value all 3572791524 64legal services as February 28, 2018 in order that the final accounting for BA as at its date of dissolution could be undertaken. By March 6, 2018 Mr. B. had learned that some or all of his former partners had failed to render accounts on a timely basis in order to avoid being obliged to share revenue from such accounts with Mr. B. Such action was taken by some or all of the Defendants in furtherance of the conspiracy and was designed to damage the commercial interests of Mr. B. On March 12, 2018, Mr. B. forwarded an email to the current Managing Partner at A0 requesting that no cheques be drawn on the bank accounts of BA without Mr. B.'s consent. Mr. B. had learned that on March 2, 2018 some of the Defendants, in furtherance of the conspiracy, had revised the signing authorities of bank without the knowledge or consent of Mr. B., contrary to law and equity. On March 22, 2018 Mr. B. forwarded to the current Managing Partner of AO (being the former Managing Partner for BA) copies of the accounts Mr. B. proposed to render to his clients as at February 28, 2018. On or about March 23, 2018 Mr. B. informed the current Managing Partner of AO (being the former Managing Partner for BA) that he had learned that cheques drawn on the general account of BA had been utilized to pay expenses for A0 contrary to law and equhy. On March 26, 2018 Mr. B. reiterated his request for his former partners and associates to render accounts for services rendered to February 28, 2018. On April 23, 2018 Mr. B. communicated with the Defendants that despite repeated requests he had only received a few accounts rendered by the former partners and associates of BA for services rendered to the date of dissolution and of the accounts received some of these accounts received failed to adequately describe the services rendered with sufficient detail to allow Mr. B. to assess whether or not the account fairly valued the services rendered to the date of dissolution of BA. Between April 20, 18 and July 6, 2018 Mr. B. and the Defendants, directly and through their authorized agents, negotiated a process by which a valuator (?Valuator?) (being a former partner of BA) would value any disputed account rendered by the Defendants or Mr. B. in order that all of the legal services rendered by BA to February 28, 2018 could be valued and paid to permit: The BA trust account to be closed; 35727915_4 70distribute the outstanding amount remaining in the BA general account following payment of all liabilities of (0) Permit the financial statements for BA to its dissolution to be prepared; and Permit the final accounting of BA could occur. Despite repeated requests, the Defendants refused, and continue to refuse, to resolve any of the outstanding issues extant in respect to the dissolution of BA. Mr. B. proposed that all outstanding issues extant in respect to the dissolution of BA be arbitrated in order to have an effective, efficient and confidential process to resolve the outstanding issues pertaining to the dissolution of BA to occur. On or about May 2018 the Defendants? representative informed the representative for Mr. B. that the Defendants had retained a business Valuator to value the remaining assets of BA (?Remaining Asset Valuation?). The valuation of the remaining assets was necessary in order to finalize the 2018 financial statements for BA being its last fiscal year (?2018 Financial Statements?) Despite repeated requests to distribute some or all of funds remaining in general account, the Defendants ignored such requests until June 14, 2018. On or about June 14, 2018 the Defendants advised they were prepared to distribute a substantial portion of the funds remaining in general account without provision of the 20% holdback as required by the 80% Compensation Cap Resolution. Mr. B. received his proportionate amount on June 26, 2018 of $215,390.00. Despite repeated requests, the Defendants did not forward the accounts for legal services performed by Mr. B.?s former partners and associates to the date of dissolution, until around June 30,2018. On July 2018 the Valuator reviewed the disputed accounts rendered by both Mr. B. and the Defendants. Pursuant to the ruling of the Valuator the additional amounts directed to be paid by either Mr. B. or the Defendants were paid into BA's general account. The Valuator has not addressed contingency files of the Defendants which remain to be resolved. Further Partial Settlement 76. On or about June 2018 Mr. B. proposed to the Defendants: 35727915~4 20 a) The Trade Name ?Libety Law? and the website of BA being, be transferred to and b) The three telephone numbers being 1-780-421?4766 and 1-877-277?4766 and the facsimile telephone number 1-780-429-0346 be assigned to Brian A. Beresh Professional Corporation. 77. Mr. B.?s proposal was accepted by the Defendants and effective July 2018 the Trade Name and website were transferred to A0 and the phone numbers and facsimile number were conveyed to Brian A. Beresh Professional Corporation. 78. Despite repeated requests made by and on behalf of Mr. B. for a copy of the Remaining Asset Valuation of assets, this valuation has not been provided to Mr. B. The delay in finalizing the Remaining Asset Valuation was made with the express authorization of some or all of the Defendants and was designed to harm and did harm Mr. B. and was designed to obtain improper bargaining leverage and inflict financial and mental hardship upon Mr. B. in order to obtain and extract an unfair result from the founder of BA in furtherance of the conspiracy and was designed to damage the commercial interests of Mr. B. The Defendants knew or ought to have known that the finalization of the 2018 Financial Statements for BA was required in order to calculate Mr. B.'s Capital Account in BA. 79. On September 21, 2018 Mr. B.'s representative made inquiry of the Defendants? representative as to the status of the closing of trust account. Subsequently on September 21, 2018 the Defendants notified Mr. B. that trust account was closed by the Bank of Nova Scotia on July 27, 2018 and former bookkeeper would now been proceeding to remit to the Law Society of Alberta the final Trust Reporting as required. The Defendants representative further informed Mr. B.?s representative that the balance in BA's general account as of September 21, 2018 was the sum of $155,549.60. 80. As a result of the wrongful actions of the Defendants, Mr. B. has incurred and sustained the following damages: The sum of $37,268.96 or such other amount as is proven being the compensation payable to Mr. B. which remains due and owing for BA's 2017 fiscal year; 35727915_4 - 21 The sum of $24,616.00 or such other amount as is proven being the compensation payable to Mr. B. which remains due and owing for 2018 fiscal year; Repayment of Mr. B.?s capital in BA in the sum of $538,493 or such other amount as may be proven; Outstanding compensation earned by Mr. B. during the period January 1, 1994 to December 31, 2016 upon which Mr. B. has paid all taxes owing in reSpect thereto but has not received in the sum of $242,000; interest on such amounts as would have normally been received at his cost of borrowing being the Royal Bank of Canada prime interest rate as set from time to time plus 2% per annum or such other rate as permitted and as found appropriate by this Honourable Court in accordance with the provisions of the Judgement Interest Act (Alberta); Loss of opportunity on the funds wrongfully withheld from him in the sum of $150,000 or such other amount as shall be proven; Aggravated damages for sullying Mr. B.?s reputation in the sum of $4,000,000 or such other amount as may be proven; Punitive or exemplary damages in the sum of $250,000; and Costs on a solicitor and his own client full indemnity basis or such other elevated basis as this Court finds appropriate. 81. The Plaintiff states that this action should be categorized as a Standard Case. The Plaintiff states that a Dispute Resolution Process would not be beneficial or is likely to result in an agreement between the parties, or alternatively, there is a compelling reason why Dispute Resolution Process should not be attempted by the parties, or in the further alternative, the Court is satisfied that engaging in a Dispute Resolution Process would be futile. 82. BA is named as a Defendant herein in order to bind it to results of this action. Remedies sought: 35727915_4 A declaration or declarations that: 35727915_4 22 some or all of the Defendants conspired or intended to harm the Plaintiff as they knew or ought to have known that the passage of the October 29 2017 Resolutions or some or all of the February 10, 2018 Resolutions passed in substitution therefore, would harm and did harm Mr. B. and did damage his commercial interests; (ii) some or all of the Defendants breached their duty to perform the provisions of partnership agreement and negotiate amendments thereto reasonably, honestly, and in good faith in breach of their obligations to Mr. some or all of the Defendants breached their fiduciary duties owed to Mr. B. as his partner; (iv) some or all of the October 29,2017 Resolutions or some of the February 10, 2018 Resolutions passed in substitution therefore, breached the terms, express or implied of partnership agreement and/or the provisions of the Partnership Act (Alberta) and are of no force and effect; and, Mr. B. is entitled to amounts as determined by this Honorable Court for breaches of the provisions of the partnership agreement of BA and/or violation of the provisions of the Partnership Act (Alberta); (vi) A declaration that BA was dissolved as of midnight on February 28, 2018; For an Order declaring that some or all of, the October 29, 2017 Resolutions or the February 10, 2018 Resolutions passed in substitution therefore, breached the partnership agreement of BA and/or violate the provisions of the Partnership Act and are declared to be of no further force and effect; A declaration that some or all of the Defendants failed to properly value the accounts rendered for legal services performed to the date of dissolution in order to damage or cause harm to the commercial interests of Mr. B. in order to avoid paying to Mr. B. his proper share of the revenue received for payment of such accounts pursuant to the BA 2017 compensation formula, or alternatively the 2018 BA compensation formula and for accounting thereof pursuant to paragraph hereof; 35727915_4 23 A declaration that some or all of the Defendants conspired or intended to harm Mr. B. as they knew or ought to have known that delaying the preparation of the Remaining Asset Valuation did or would cause damage to the commercial interests of Mr. B. and in particular would delay the finalization of the calculation of his Capital Account and therefore his entitlement as at the date of dissolution of BA. An accounting of BA specifically as it relates to income allocation for the Partnership?s 2017 fiscal year and in each year thereafter and the allocation of such income to each partner and a settling of and payment of the proper amounts to each partner of The appropriate calculation of the Partners? capital at the end of fiscal 2017 and each fiscal year thereafter; An award of the amounts rightfully due and owing to Mr. B. with respect to his compensation payable for 2017 fiscal year, that being $406,000 or such other amount that remains to be paid pursuant to the Partner Compensation Formula for fiscal 2017, and the repayment of his capital determined to be payable; An award of the sum of $24,616.00 or such other amount as is proven with respect to his compensation payable for fiscal year 2018. The valuation of all of BA's assets and liabilities and the settling of accounts in respect to those assets and liabilities as between the partners as of February 28, 2018 being the date of dissolution of BA pursuant to the Partnership Act, R.S.A. 2000, B-3, as amended, or, in the alternative, a declaration that BA be dissolved effective as of February 28, 2018 and the settling of accounts in respect to the assets and liabilities as aforesaid; Damages for loss of opportunity in the sum of $150,000.00 or such other amount as may be proven; Aggravated damages in the sum of $4,000,000 or such other amount as found appropriate by this Honourable Court; Punitive damages in the sum of $250,000.00 or such other amount as found appropriate by this Honourable Court; - 24 interest on all amounts determined payable to Mr. B. at Mr. B.?s cost of borrowing being the Royal Bank of Canada?s prime interest rate plus 2% per annum or at such other rate as prescribed by the Judgment Interest Act, RSA 2000, as amended as found appropriate by this Honourable Court; All legal costs and expenses incurred by or allowed to the Plaintiff including those as between solicitor and client full indemnity basis or such other elevated level of costs as determined appropriate by this Honourable Court; and (0) Such other relief as the nature of this case may require and to this Honourable Court may seem appropriate. NOTICE TO THE DEFENDANTS You only have a short time to do something to defend yourself against this claim: 20 days if you are served in Alberta 1 month if you are served outside Alberta but in Canada 2 months if you are served outside Canada You can respond by filing a statement of defence or a demand for notice in the office of the clerk of the Court of Queen?s Bench Edmonton, Alberta, AND serving your Statement of Defence or a demand for notice on the plaintiff's address for service. WARNING If you do not file and serve a statement of defence or a demand for notice within your time period, you risk losing the law suit automatically. If you do not file, or do not serve, or are late in doing either of these things, a court may give a judgment to the plaintiff against you. 35727915_4l