CEF: Higgerty Law Statement of Claim Section Q – Liability of Chowne and Prowse Chowne

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 alleges misconduct on the part of the law firm Prowe Chowne and advised ECHS, Shepherds Village Ministries Ltd., ABC District, and CEF. It also alleges that Ronald Prowe  and Prowse Chowne LLP knew what was going, was wilfully ignorant of it – and they are liable for their (in)action.

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.

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From Higgerty Law Statement of Claim

Q. Liability of Chowne and Prowse Chowne.

203 . Between 2002 and 2005, Ronald Chowne Q.C. of Prowe Chowne advised SVML with respect to, and knowingly facilitated, SVML’s receipt of the Shepherd’s Village Lands and the proceeds of the SVML CEF Loans from ABC District. 204. Chowne knew of the existence of the CEF Trust and the CEF Quistclose Trust or in the alternative was willfully blind to the existence of the CEF Trust and CEF Quistclose Trust.

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208. In June, 2006, Ronald Chowne, Q.C. of Prowse Chowne was counsel to ABC District in respect of the POP Village CEF Mortgage Loan to ECHS referenced in paragraph 64 herein.

209. Chowne knew or was willfully blind to the fact that:

a. ECHS was insolvent and operating at a deficit, and that ECHS had no reasonable prospect of repaying the POP Village CEF Loans;

b. the CEF Mortgage Loan contravened the intent and purpose of the ABC District Church Extension Program and the terms of the CEF Trust or alternatively the CEF Quistclose Trust, and that the POP Village CEF Mortgage Loans were fraudulent and dishonest schemes; and

c. The POP Village CEF Mortgage Loans were knowingly advanced by the ABC District to ECHS for the purpose of divesting the ABC District of the failing POP Village Development and its associated financial liabilities, and instead recording the POP Village CEF Mortgage Loan as an asset in the CEF mortgage portfolio for the benefit of ECHS and not for the benefit of the beneficiaries of the CEF and CEF Quistclose Trusts, and constituted a risk and prejudice to the interests of the beneficiaries of the CEF and CEF Quistclose Trusts that the ABC District knew it was not entitled to take.

210. Acting in bad faith, and for an improper purpose, Chowne advised the ABC District with respect to the CEF Mortgage Loan and knowingly facilitated the breach of the CEF Trust or alternatively the CEF Quistclose Trust by the ABC District in order to preserve the relationship between his law firm and the ABC District, to generate legal work and legal fees for himself and his law firm, and to garner future legal work, all of which caused the Plaintiffs and putative Class and Sub-class members to suffer damages and loss.

211. At all times material to this proceeding Chowne was acting in the ordinary course of the business of Prowse Chowne LLP and/or with the authority of his partners therein. Accordingly, Prowse Chowne LLP is vicariously liable for Chowne’s breaches of duty and wrongful acts as set out in paras. 208 – 210 herein.

212. In the alternative, Prowse Chowne LLP had actual knowledge of the wrongful conduct of Chowne as set out herein, or was reckless or willfully blind thereto. Therefore, Prowse Chowne is liable to the Plaintiffs and putative Class and Sub-class members for the conduct of Chowne as set out in paras. 208 – 210 herein.

213. Further, at all times material to this proceeding Chowne was acting in the ordinary course of the business of Prowse Chowne LLP and/or with the authority of his partners therein. Accordingly, Prowse Chowne LLP is vicariously liable for Chowne’s breaches of duty and wrongful acts as set out in paras. 208 – 210 herein.