Good news!
The defamation claim brought against me, the author of this blog, has been dismissed following a court hearing in Vancouver on May 13 & 14, 2024. To read the reasons for judgement by Justice Kevin Loo, click here.
This goes back almost three years to when Scott Cousens, a Vancouver business person, filed a defamation claim against me because of a series of letters that I wrote to the City of Burnaby. My letters warned the City to do more due diligence before paying $26 million to Fortius Foundation, a charity of which Cousens claims to be the founder.
Fortius Foundation built and owned Fortius Sport & Health Centre until it was sold to the City of Burnaby for $26 million in the spring of 2021. It has since been renamed The Christine Sinclair Community Centre.
My main concerns with regards to Cousens and Fortius are:
1) Cousens claimed that he made a $23 million gift to build the sports centre but when one looks as a whole at all the transactions involved, there was no $23 million gift. Instead, there was a loan, not a true gift.
2) Fortius received a "gift" of $74 million from Charitable Impact Foundation ("CHIMP") but the $74 million just went in circles and back to CHIMP via Fortius and other charities, all run by the same people. Again, the $74 million was not a true gift. This concerns me because when that $74 million "gift" was reported in CHIMP's tax returns, it was the single largest in B.C. history, and one of the largest in Canadian history.
Unbeknownst to me at the time, when Cousens sued me, he had been just been informed that CRA intended to revoke the charitable status of Foundation Foundation. Not only that, CRA warned Cousens that Fortius could be assessed a penalty of nearly $13 million.
According to a CRA audit report, Fortius and Cousens' for-profit business, Fortius Institute, had an unwritten expense sharing agreement. Payroll-related expenses at the business were being paid via the charity.
CRA also found that Fortius Foundation "leased" the sports centre to Cousens' for-profit business, Fortius Institute, but failed to collect any rent owed. The outstanding amount over seven years was $21 million, according to financial statements.
Blaming me for having motivated CRA to audit and revoke the charitable status of Fortius Foundation, Cousens applied to the Federal Court of Appeal for an injunction against CRA. His application was dismissed. He then applied to the Supreme Court of Canada and was again dismissed. Despite his charity having been revoked, and despite having lost in both the Federal Court of Appeal and the Supreme Court of Canada, Cousens pursued legal action against me for nearly three years. In response, I retained Dan Burnett, K.C. at Owen Bird Law Corp. and filed a motion for dismissal under the Protection of Public Participation Act. After two postponements, my motion was finally heard by Justice Kevin Loo.
For my dismissal motion to succeed in court, I needed to show that the comments about which I am being sued are a matter of public interest. I succeeded.
Justice Loo wrote, "I am of the view that it is in the public interest to consider whether someone is illegitimately taking funds from the public purse. Further, I note that the Letters were all published in the context of the sale of the Fortius Centre to the City. In my view, it is in the public interest to know whether an asset sold by a charitable foundation to a municipality for $25.8 million was funded by charitable donations or otherwise. Finally, it is in the public interest to know whether a person has legitimately taken public credit for a donation to build a recreational facility for the community."
The $23 Million
With regards to Scott Cousens' alleged $23 million gift, Justice Loo wrote:
“Mr. Cousens concedes that he did not donate the funds used to build the Fortius Centre directly to Fortius, but he asserts that he chose to structure his contribution to the Fortius Centre as loans from NDF (New Dimensions Foundation) and Imladris for ‘a variety of valid reasons.’
In my view, whether Mr. Cousens arranged this transaction for ‘valid reasons’ is not the point, at least with respect to justifying this particular defamatory statement. The point is that in public materials, Mr. Cousens stated that he made a $23 million donation 'to create' the Fortius Centre, and this statement appears to have been untrue based on the admitted facts.”
The $74 Million
With regards to the $74 million transaction between CHIMP and Fortius, Justice Loo wrote:
“In particular, CHIMP – a charity created by Mr. Bromley – made a gift of $74.7 million to Fortius, which in turn used the money to repay debts it owed to five different Bromley-created charities, including the debt to Imladris (which became $29 million with interest). But then all five of those charities made gifts back to CHIMP in the same or slightly greater amounts.”
Justice Loo concluded, “While it is beyond the scope of this application to make any conclusive findings regarding whether these transactions occurred as Ms. Krause alleges, or whether the transactions had some legitimate purpose, I note that Mr. Cousens does not appear to deny the basic facts underlying Ms. Krause’s allegations.”
This case is important because it raises troubling questions about CRA oversight. What does it say about CRA that some of the largest so-called "gifts" in Canadian history were not true gift? Furthermore, the so-called $74 million "gift" was made six years ago. Why is it taking CRA so long to audit and address this? Its not as if CRA isn't aware. It has been more than three years since I first wrote to CRA about this.
To read the reasons for judgement of Justice Kevin Lee, click here.