CEF: Higgerty Law Statement of Claim Section M (c) – Liability of ABC District, LCC and LCCFM

This article is part of the series from the Higgerty Law statement of claim. You can read what a statement of claim and a Quistclose Trust is in the first article in this series.

This section details / alleges –

  • that ABC District had complete control over deposits and could affect the depositors interests,
  • that the depositors were particularly vulnerable to District’s power of discretion by virtue of their position as religious leaders in the church,
  • various examples how District breached its duties to the depositors / the plaintiff by using funds in inappropriate ways,
  • that LCC and / or LCCFM helped ABC District do this which makes them liable as well.

Please note that these are allegations only and this case has not been adjudicated in a court of law. As always, if you have any legal questions or need legal advice please consult appropriate legal counsel.


From Higgerty Law Statement of Claim

M. Liability of ABC District, LCC and LCCFM

(c) Breach of Fiduciary Duty: ABC District/LCC/LCCFM

166. Further, by virtue of its position as trustee of the CEF Trust and or in the alternative the CEF Quistclose Trust, the ABC District was in a position to unilaterally exercise power or discretion over the monies of the Plaintiff Beinert and the putative Alberta Lutheran Class and Extra-provincial Lutheran Class members deposited in the CEF Trust and the CEF Quistclose Trust so as to significantly affect their interests.

167. Further, the Plaintiff Beinert and the putative Alberta Lutheran Class and Extraprovincial Lutheran Class members were particularly vulnerable to ABC District’s exercise of power or discretion by virtue of the ABC District’s position of religious leadership and moral authority over them. Accordingly, and by its own admission, the ABC District owed fiduciary duties to the Plaintiff Beinert and the putative Alberta Lutheran Class and Extraprovincial Lutheran Class members in respect of their deposits to the CEF Trust and the CEF Quistclose Trust, including duties of loyalty, honesty, good faith, and avoidance of any conflict between its duty to the Plaintiffs and putative Class members and its own self interest.
168. The ABC District breached its fiduciary duties to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members in respect of the CEF Trust by:

a. Using funds on deposit to the CEF Trust for purposes of speculative real estate development of the POP Village on its own account, or alternatively in partnership with the POP Congregation, and not for the purposes of investment in accordance with the ABC District Church Extension Program mandate as set out in paras. 43 – 60 herein;
b. Failing to repay the CEF POP Village Advances to the CEF from the proceeds of sale of life leases in the POP Village as set out in para. 58 herein;
c. Authorizing the POP Village CEF Mortgage Loan and the POP Village CEF Unsecured Loans to ECHS, a company under common control with ABC District, for purposes of speculative real estate development contrary to the ABC District Church Extension Program mandate, policies and procedures as set out in paras. 61 – 81 herein;
d. Transferring the POP Village Lands to ECHS and authorizing the POP Village CEF Mortgage Loan and the POP Village CEF Unsecured Loans for the sole purpose of avoiding disclosure of the POP Village development’s finances to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members as set out in paras. 61 -68 herein;
e. Preferring the interests of the POP Congregation to those of its depositors and the beneficiaries to the CEF Trust, including the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members, by entering into the POP Congregation Land Sale Proceeds Assignment Agreement as set out in paras. 88 – 90 herein;
f. Acquiring the Strathmore Lands from ECHS for its own use by “extinguishing” $6,000,000.00 of mortgage debt payable by ECHS to the CEF as set out in paras. 91 – 95 herein;
g. Authorizing the Shepherd’s Village CEF Loans as set out in paras. 97 – 106 herein;
h. Forgiving $12,575,685.00 of the Shepherd’s Village CEF Loans as set out in para. 108 herein;
i. Continuing to solicit and accept deposits to the CEF when ABC District knew or was willfully blind to the fact that it was insolvent and unable to meet its obligations to depositors to the CEF as set out in para. 111 herein; and
j. Lending monies on deposit to the CEF to the LCC to fund the LCC’s unfunded pension liabilities. all of which caused damages and loss to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members.

169. Further, or in the alternative, the ABC District breached its fiduciary duties to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members in respect of the CEF Quistclose Trust by:

a. Using funds on deposit to the CEF Quistclose Trust for purposes of speculative real estate development of the POP Village on its own account, and not for the purpose of providing assistance in the mission and ministry of congregations and agencies of Lutheran Church-Canada as set out in paras. 43 – 58 and 60 herein.
b. Failing to repay the CEF POP Village Advances to the CEF from the proceeds of sale of life leases in the POP Village as set out in para. 58 herein; c. Authorizing the POP Village CEF Mortgage Loan and the POP Village CEF Unsecured Loans to ECHS, a company under common control with ABC District, for purposes of speculative real estate development contrary to the terms of the CEF Quistclose Trust, as set out in paras. 61 – 81 herein;
d. Transferring the POP Village Lands to ECHS and authorizing the POP Village CEF Mortgage Loan and the POP Village CEF Unsecured Loans for the sole purpose of avoiding disclosure of the POP Village development’s finances to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members as set out in para. 67 herein;
e. Preferring the interests of the POP Congregation to those of the CEF depositors and the beneficiaries to the CEF Quistclose Trust, including the Plaintiff Beinert and the putative Alberta Lutheran Class and Extra-provincial Lutheran Class members, by entering into the POP Congregation Land Sale Proceeds Assignment Agreement as set out in paras. 88 – 90 herein;
f. Acquiring the Strathmore Lands from ECHS for its own use by “extinguishing”
$6,000,000.00 of mortgage debt payable by ECHS to the CEF as set out in paras. 91 – 95 herein;
g. Authorizing the Shepherd’s Village CEF Loans as set out in paras. 97 = 105 and 107 herein;
h. Forgiving $12,575,685.00 of the Shepherd’s Village CEF Loans as set out in para. 108 herein;
i. Continuing to solicit and accept or renew deposits to the CEF when ABC District knew or was willfully blind to the fact that it was insolvent and unable to meet its obligations to depositors to the CEF as set out in para. 111 herein all of which caused damages and loss to the Plaintiff Beinert and the putative Alberta Lutheran Class and Extra-provincial Lutheran Class members.

170. As participants in the joint enterprise that was the ABC District Church Extension Program, LCC and/or LCCFM are jointly and severally liable to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members for ABC District’s breaches of fiduciary duty as set out herein.

171. Further, or in the alternative, LCC and/or LCCFM knowingly assisted ABC District to breach its fiduciary duty to the Plaintiff Beinert and putative Alberta Lutheran Class and Extra-provincial Lutheran Class members and accordingly are jointly and/or severally liable for that breach. 

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