Court File No ONTARIO SUPERIOR COURT OF JUSTICE B by daylah

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									                                                              Court File No.

                                    ONTARIO
                           SUPERIOR COURT OF JUSTICE
B E T W E E N:


(Court Seal)




      RICHARD WEISS as TRUSTEE for UNIVERSAL WORKERS UNION, LOCAL 183
            LABOURERS' INTERNATIONAL UNION OF NORTH AMERICA

                                                                                             Plaintiff

                                               - and -


               JOHN COLACCI, ANTONIO DIONISIO, ROCCO DI GIOVANNI, JOHN
                  DIAS, ANTONIO PINTO, JOHN CORDEIRO, KEITH COOPER

                                                                                          Defendants


                                 STATEMENT OF CLAIM

TO THE DEFENDANT(S)

        A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the
plaintiff. The claim made against you is set out in the following pages.

        IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for
you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil
Procedure, serve it on the plaintiff's lawyer or, where the plaintiff does not have a lawyer, serve it
on the plaintiff, and file it, with proof of service, in this court office, WITHIN TWENTY DAYS
after this statement of claim is served on you, if you are served in Ontario.

       If you are served in another province or territory of Canada or in the United States of
America, the period for serving and filing your statement of defence is forty days. If you are
served outside Canada and the United States of America, the period is sixty days.

        Instead of serving and filing a statement of defence, you may serve and file a notice of
intent to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to
ten more days within which to serve and file your statement of defence.



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       IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN
AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. If you
wish to defend this proceeding but are unable to pay legal fees, legal aid may be available to you
by contacting a local legal aid office.



Date                                 Issued by
                                                            Local registrar

                                             Address of court office:
                                             393 University Avenue
                                             10th Floor
                                             Toronto, Ontario
                                             M5G 1E6


TO:            JOHN COLACCI


AND TO:        ROCCO DI GIOVANNI


AND TO:        JOHN CORDEIRO


AND TO:        ANTONIO PINTO


AND TO:        JOHN DIAS


AND TO:        ANTONIO DIONISIO


AND TO:        KEITH COOPER




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                                               CLAIM

1.         The plaintiff claims against the defendants:


           a)     damages, jointly and severally, in the amount of $2,843,684.80 for breach of

                  fiduciary duties;

           b)     pre-judgment and post-judgment interest in accordance with the Courts of Justice

                  Act;

           c)     costs of this action on a substantial indemnity scale plus GST; and


           d)     such further and other relief as this Honourable Court my seem just.


THE PARTIES

2.         The Labourers’ International Union of North America (“LIUNA”) is a union representing

construction workers throughout North America. It is headquartered in Washington D.C. and

has approximately 700,000 members.


3.         Local 183, which has over 27,000 members, is an affiliate of LIUNA. LIUNA, as the

parent body, and its Locals are governed by various constitutional documents. LIUNA placed its

Local 183 under trusteeship, as confirmed by Order of the Ontario Labour Relations Board

(“OLRB”) on June 12, 2006.


4.         Richard Weiss is the currently appointed trustee of Local 183.


5.         Prior to the trusteeship, the defendants Antonio Dionisio, Keith Cooper, Rocco Di

Giovanni, Antonio Pinto, John Dias, John Corderio and John Colacci constituted Local 183’s




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Executive Board. Prior to the trusteeship, the Executive Board was responsible for administering

the day-to-day affairs of Local 183 and for representing the interests of Local 183’s 27,000

members.


6.         Pursuant to the confirmed trusteeship, all of the Executive Board members were relieved

of their duties as officers.


IMPLEMENTATION       OF THE    TRUSTEESHIP

7.         In or about March 2004, the General Executive Board Counsel – Canada of LIUNA

began an investigation into allegations of various improper activities by Local 183.


8.         On December 6, 2004, following the investigation, which found various improper

activities by Local 183, LIUNA General President, Terrance O’Sullivan, issued a Declaration of

Emergency Trusteeship over Local 183.


9.         Local 183 disputed the trusteeship. By agreement, LIUNA and Local 183 agreed to have

the validity of the trusteeship determined by a Canadian Independent Hearing Officer, Brian

Keller (“Keller”).


10.        On April 20, 2006, Keller confirmed the validity of the trusteeship. He made, among

others, a finding that Local 183 spent large sums of money for improper purposes, which did not

benefit the membership as a whole.


11.        As a result of Keller’s decision, on April 21, 2006, General President O’Sullivan issued a

Notice of Trusteeship placing Local 183 under trusteeship.




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12.        Despite Keller’s decision, Local 183 continued to dispute the trusteeship.


13.        In June 2006, therefore, a further hearing was held before the OLRB regarding the

validity of the trusteeship. On June 12, 2006, the OLRB confirmed the validity of placing Local

183 under trusteeship.


14.        On June 13, 2006, the trustee entered the premises of Local 183. The trustee now

manages the Local pursuant to the Order of the OLRB and the Notice of Trusteeship.


EXECUTIVE BOARD MEMBERS          OWE   FIDUCIARY DUTIES

15.        Members of the Executive Board owe fiduciary duties to the members of Local 183 to act

in the best interests of the Local and its members, including duties to safeguard the property and

assets of Local 183 and to ensure that such property and assets are used solely for proper union

purposes.


16.        These duties are owed not only to the members of Local 183, but also to all other

members of LIUNA, the parent body. In discharging their fiduciary duties, the Executive Board

members must act reasonably, honestly and in good faith.


17.        The Executive Board Members also have duties to administer and abide by the LIUNA

Constitutions and the Canadian Ethical Practices Code.




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18.        The Uniform Local Union Constitution of LIUNA states, among other things, the

following:


                  Article II
                  Section 1. Objects:

                  Each Local Union, having had assigned to it its craft and territorial
                  jurisdiction, by its charter, is charged with the responsibility:

                  ···

                  (c)    To conduct its affairs in a manner which would most tend to
                         enhance, conserve and protect the welfare and interest of the
                         International Union, its affiliates and members.

                  ···

                  Article IV
                  Section 4. Duties of Officers:
                  H – Executive Board

                  (9)    It shall be the duty of the Executive Board to see to it that the
                         affairs and business of the Local Union are being properly
                         conducted, in accordance with the Constitution.

19.        The Canadian Ethical Practices Code states, among other things, the following:


                  DEMOCRATIC PRACTICES

                  1.     The Constitution of LIUNA and applicable Canadian law
                         protect the democratic rights of the members of LIUNA to
                         participate fully, without fear, abuse, intimidation in all Union
                         affairs. To that end, the following principles shall be
                         respected.

                         (d)     The Union shall ensure that its operations shall be
                         conducted in a democratic and fair manner. Corruption,
                         discrimination or anti-democratic practices and procedures
                         shall not be permitted.

                  FINANCIAL PRACTICES

                  1.     Union funds are held in trust for the benefit of the
                         membership. The membership is entitled to assurance that
                         Union funds are not dissipated and are spent for proper


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                         purposes. The membership is also entitled to be reasonably
                         informed as to how Union funds are invested or used.

                         (b)     The Union shall not permit any of its funds to be
                         invested in a manner which results in the personal profit or
                         advantage of any officer or representative of the Union or any
                         member of the immediate family of an officer or
                         representative.

                         (c)     There shall not be contracts for purchase or sale or for
                         rendering services that result in the personal profit or
                         advantage of any officer or representative of the Union. Nor
                         shall any officer, representative or employee of the
                         International Union, District Council, or any Local Union
                         receive personal profit or special advantage from any action
                         of any officer or representative of the Union.

20.        The activities hereafter described are a breach by the former Executive Board members

of their fiduciary duties, as well as their duties under the LIUNA Constitutions and the Canadian

Ethical Practices Code.


21.        The object and purpose of the expenditures described below was to perpetuate each

former Executive Board member in office and to quell any democratic process.


EXECUTIVE BOARD AUTHORIZES IMPROPER EXPENDITURES

22.        The former Executive Board, without proper approval or any approval by the

membership of Local 183, authorized various improper expenditures, described below.


23.        The former Executive Board authorized the expenditure of Local 183 funds to conduct

surveillance of five business representatives of Local 183 members, namely Messrs. Strazzanti,

Terciera, Avero, Bremner and Melo.




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24.        The surveillance commenced on or about May 25, 2004 and was conducted intermittently

until June 18, 2004. Intensive surveillance commenced on June 18, 2004 and terminated on

August 4, 2004.


25.        The former Executive Board also authorized the expenditure of funds to conduct

surveillance of Mr. Cassano, a member of Local 183 and LIUNA. This surveillance began on

April 5, 2004 and ended on April 27, 2004.


26.        The former Executive Board also authorized the expenditure of funds to conduct

surveillance of Mr. Cosmo Mannella, a member of Local 183 and the Canadian Director of the

LIUNA Tri-Funds, as well as surveillance of various individuals, employers, and construction

companies.


27.        The cost of the surveillance described at paragraphs 24 to 27 above was approximately

$764,684.89.


28.        Between February 2004 and June 2006, the former Executive Board also authorized the

expenditure of approximately $2,079,051.21 to spy on and investigate members, employees and

officers of Local 183 and/or LIUNA. Those funds were used to install concealed fibre-optic

cameras throughout the offices of Local 183’s headquarters and to investigate the personal

finances and activities of employees, members and officers of LIUNA.


29.        The above expenditures, totalling approximately $2.84 million, were authorized by the

former Executive Board to be paid by Local 183, without proper approval or any approval by the

membership of Local 183.



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30.        The expenditures were not aimed at carrying out any proper objects or purposes of Local

183 or its members and were contrary to the LIUNA Constitutions and the Canadian Ethical

Practices Code. The expenditures were directed only to the preservation of the then Executive

Board’s leadership of Local 183.


31.        The former Executive Board authorized the above expenditures to spy on Local 183

members who were simply exercising their constitutional rights to meet with representatives of

LIUNA, if they so chose. The purpose of the above activities was to determine whether Local

183 members were meeting or associated with LIUNA representatives or other individuals of

interest.


EXECUTIVE BOARD BREACHES FIDUCIARY DUTIES

32.        The former Executive Board members knew, or ought to have known, that the above

expenditures were neither in the best interests of Local 183 or its members, nor necessary or

proper to carry out the objects and purposes of Local 183. These expenditures were improperly

made for the sole personal benefit and advantage of the former Executive Board members.


33.        The Canadian Independent Hearing officer, Keller, who conducted a lengthy hearing

regarding the validity of the trusteeship, found that the surveillance described at paragraphs 24 to

27 above was not in Local 183’s interest and, therefore, not a proper expenditure by the former

Executive Board.


34.        In authorizing the expenditures described above for improper purposes and without the

requisite proper approval by the membership, the Executive Board members breached their




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fiduciary duties to Local 183 and its members, as well as their duties under the Canadian Ethical

Practices Code and the LIUNA Constitutions.


35.        But for the defendants’ breach of their duties, the expenditures would not have been

made.


36.        As a result of these breaches of duties, Local 183 has suffered a loss, for which the

Executive Board members are personally liable, and seeks indemnity, jointly and severally, from

each of the defendants in the amount of $2,843,684.80.


           The plaintiff proposes that this action be tried at the City of Toronto, Ontario.


November 17, 2006                                           LENCZNER SLAGHT ROYCE
                                                               SMITH GRIFFIN LLP




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