Missing lawyer Javad Heydary faces contempt of court motion
Javad Heydary is under investigation by the Law Society of Upper Canada for allegedly failing to return funds from a trust account to clients
Photo: Glenn Lowson for National Post
Former clients of lawyer Javad Heydary want an Ontario judge to declare the lawyer in contempt of court for failing to comply with an order that he return millions in client funds.
Mr. Heydary, a Toronto lawyer who specializes in representing victims of white collar crime, is under investigation by the Law Society of Upper Canada after millions of dollars in client funds seem to have disappeared from his firm’s trust account.
Samira and Hasan Abuzour, two former clients, successfully brought a motion in the Ontario Superior Court of Justice earlier this month demanding that Mr. Heydary and his firm, Heydary Hamilton PC, return at least $2.1-million in funds that were supposed to be paid to the couple as part of a settlement in a shareholder dispute.
The judge granted the order on Nov. 14, giving Mr. Heydary and his firm until Nov. 18 to pay the $2.1-million, and to provide some assurance that the firm still holds a further $1.5-million belonging to the couple. Neither the funds nor the assurance arrived by the due date, so the Abuzours are returning to court to have the judge declare Mr. Heydary in contempt.
The funds were part of a settlement Mr. Heydary had obtained for his clients last April. The Abuzours had so much trouble receiving the funds that they hired another lawyer, Ray Thapar of Simmons, da Silva & Sinton LLP in Brampton, Ont., to take the legal action against Mr. Heydary.
The Abuzour matter has prompted the Law Society, the body that regulates the legal profession in Ontario, to take the dramatic step of seizing control of Mr. Heydary’s legal practice. On Monday, a judge issued an ex parte court order permitting the law society to take control of Mr. Heydary’s client files, records and trust accounts, and his law offices in Mississauga and Toronto.
A lawyer for the law society says in an affidavit filed in court that he believes Mr. Heydary left the country on Nov. 15. The affidavit also claims that the firm’s mixed trust account contains $319,000, some $3-million less than it is supposed to. The Law Society is supposed to report back to the court on the status of its case on Friday.
According to court documents filed on the Abuzour matter, Mr. Heydary is thought to have traveled first to Dubai, but was suddenly called to Iran to visit a sick uncle. He was supposed to have returned to Canada by Nov. 25.
Someone at Mr. Heydary’s firm was answering the telephone on Thursday. When theFinancial Post asked if the firm remains open, the response was: “I’m sorry, we don’t have any comment for the press at this moment.”
Mr. Heydary has carved out a reputation as a lawyer for the little guy, issuing press releases and calling media conferences to describe his efforts to recover funds from alleged fraudsters.
He’s had some success. In late 2010, he obtained a $2.1-million summary judgment in two cases against Toronto businessman Robert Hryniak who was accused of defrauding a group of pensioners from Chicago. One of those judgments was overturned on appeal, while another was confirmed. Both those appellate decisions were then appealed to the Supreme Court of Canada, which has yet to issue its rulings.
According to court documents, the Abuzours hired Mr. Heydary to represent them in an oppression remedy action brought against several businesses. The action was resolved last April when the Abuzours agreed to sell their stakes in those businesses.
Mr. Heydary’s firm received $3.6-million in trust as part of that settlement by April 23, 2013, the court documents state. Some $2.1-million of the funds arrived by wire transfer from a financial institution. The other $1.5-million came through 24 bank drafts from several different individuals.