More questions about the City of Hamilton’s legal department’s mishandling of a $10,000,000 lawsuit against Deutsche Bank Securities Limited, DBRS Limited and CIBC Mellon Trust Company and others.
Thus far, the media has only reported on what appeared to be one dismissed lawsuit.
City Council must get answers how the City’s legal department could make such serious and amateur errors – especially in a $10,000,000 case.
Background
The City invested $10,000,000 of taxpayers money in asset-backed commercial paper on July 24, 2007. Just before these supposedly safe investments crashed. (Taking the economy with them)
The City learned they purchased lemons (in fact, lemons would have more value) prior to August 23, 2007 when they signed an agreement – known as the Montreal Accord – that give the firms to try and save the investments, accepting a 60-day cooling off period during which the city was discouraged from taking any actions with the investments.
The investments were originally scheduled to mature on Sept. 26, 2007.
Eventually, the City decided to sue claiming misrepresentation of the investments.
The City argued September deadline, not August
The city’s lawsuit was dismissed by the courts for failing to meet a August 23, 2009 deadline under the statute of limitations to sue over investments gone bad. The City tried to argue the deadline was September 26, 2009 because the investments were due to mature on September 26, 2007.
The city waited until the last minute and filed their lawsuit on September 25, 2009.
More questions… why did the City missed a second deadline in 2009?
The City appeared to acknowledge the very August deadline they argued against.
From a lawyer who is a friend of mine:
On August 5, 2009, the City issued a notice of action. The Court found that this was within the 2 year time period. A Notice of Action is a document that you file with the Court which starts a lawsuit.Normally, a lawsuit is started by filing a Statement of Claim, which sets out the details of who you are suing, for how much, and why. However, if you are running short of time because of a limitation period, you can issue a shorter Notice of Action. It does not have to have all the details, just the names of the people you are suing, and the general nature of the claim. You then have to file a more detailed Statement of Claim within 30 days of filing the Notice of Action.
The City started a lawsuit by a Notice of Action, and if they had filed a Statement of Claim within 30 days of August 5, they would have been able to proceed with their lawsuit. However, they didn’t file within 30 days. There are provisions in the rules to ask for an extension of the 30 days, but it doesn’t appear they did that. They just let the first lawsuit expire, and started a second lawsuit, by filing a Statement of Claim, on September 25, 2009.
This means the City twice missed deadlines.
The City is also seen to acknowledge the true deadline as August – not September as they desperately tried to argue in the dismissed case.
Questions City Council needs answered
- Why did City lawyers wait until the last possible minute to file both suits?
- Why did the City try to argue a September deadline when they were seen to first acknowledge the August deadline, thereby spending more money on a borderline frivolous claim?
- Why was a Statement of Claim not filed within 30 days of August 5, 2009?
- If outside counsel was involved, does the City have a claim against that lawyer?
- Who is being held accountable for this?
- Also, why was $10,000,000 of taxpayers money gambled on ABCP?