Global Learning Group Inc. Class Action —

Case Overview

This certified class action is brought on behalf of the approximately 40,000 Canadian taxpayers who participated in the Global Learning Group Inc. (GLGI) charitable donation program (the Gift Program) between 2004-2014. The Class excludes GLGI owners, employees and agents including the individuals who sold the Gift Program, and also excludes the individuals involved in the lead Tax Court case Mariano v. The Queen.

The Class Action was certified as a class proceeding by the Ontario Superior Court of Justice on June 26, 2019. The main certification order can be viewed here.

From 2004-2014, GLGI operated a charitable tax program called the Global Learning Giving Initiative. Canadian taxpayers made donations through the Gift Program – including cash and courseware donations – on the understanding that the donations would support underserved communities and entitle the taxpayers to valuable charitable tax credits.

By 2007, the Canada Revenue Agency was reassessing the participants’ tax returns, disallowing the tax credits claimed and charging interest and, in some cases, penalties.

In 2015, the Tax Court of Canada found that the Program was a “sham” perpetrated by GLGI. The courseware licence valuations that were used to support the charitable receipts were wrong, and that GLGI and its accomplices received approximately 90% of the cash donations intended for charities. The trust structure of the Program was also invalid.

This class action is brought against GLGI and other entities, together with the administrative, legal and accounting professionals who supported the Gift Program. The plaintiffs have commenced a class action to seek return of the cash paid into the Gift Program and to recover damages for the interest and penalties assessed.

For more information on this class action please complete our confidential online form and a member of our team at Waddell Phillips PC will respond to you, typically within 1-2 business days.

Saskatchewan Action (Piett v. Global Learning Group Inc et al.,) NOT CERTIFIED

On August 27, 2021, Saskatchewan Court of Queen’s Bench released its decision about whether the Merchant Law Group’s proposed class action could proceed as a class action.  The Honourable Justice McCreary refused to certify that action, Piett v. Global Learning Group Inc. et al., and struck the claim out as an abuse of process.

Justice McCreary found that the Piett action was an abuse of process because of the proposed representative plaintiffs’ (and other’s) improper conduct when the action was started, including soliciting $500 “retainer payments” which Merchant Law Group spent without court authorization.  Justice McCreary concluded that neither Mr. Piett nor Mr. Shoeman were suitable representative plaintiffs because they have a conflict of interest with the other class members.  She also decided that there is no tenable claim against the CRA, and that this Ontario action (Wintercorn et al. v. GLGI et al)  is the preferable procedure for the prosecution of the class members’ claims.

Justice McCreary’s complete judgment can be found here.

Piett then discontinued his claim against all the defendants in the SK action, except for the CRA.  He sought leave to appeal the decision of Justice McCreary dismissing his claim against CRA.  The SK Court of Appeal has denied Piett’s motion for leave to appeal, so the Piett action is now completely terminated.  The SKCA decision can be found here.

The Ontario action is the only certified class proceeding seeking relief for the Global Learning Group Inc. scheme.  The Ontario action does not assert a claim against CRA

If you previously opted-out of the Ontario class action, you cannot opt back into it now due to dismissal of the Piett action.

Settlement Reached with Wise, Blackman LLP Defendants

On March 14, 2022, the Ontario Superior Court of Justice granted the Plaintiffs’ motion to approve a settlement with the Defendant, Wise, Blackman LLP (Wise, Blackman).

An issued copy of the Court Order can be viewed here and can also be found under the “Documents” Tab.

The Court approved Notices to the Class regarding the settlement approval can be viewed here and are posted under the “Documents” Tab.

The settlement with the Wise, Blackman resolves the class action against them, and only them. The class action continues to be pursued against the non-settling defendants.

Under the terms of the settlement agreement, the Wise, Blackman Defendants paid $500,000 and agreed to co-operate with the Plaintiffs in the ongoing litigation of the action against the non-settling defendants. In exchange, all of the Class’ claims against Wise, Blackman have been released on a full and final basis. The liability of the non-settling defendants to the Class will exclude whatever proportion of fault (if any) the Court finds was the responsibility of Wise, Blackman.

The settlement funds have been and will be used to pay various costs and legal fees associated with litigating this case, and there will be no distribution of money to the Class from this settlement at this time. The Class Proceedings Fund has been paid a portion of the settlement fund as required by law in exchange for the indemnification and disbursement funding.

The Court has approved this settlement agreement as being fair, reasonable, and in the best interests of the Class.

Details of the settlement can be found in the Court Order approving the settlement here.

Saskatchewan Action (Piett v. Global Learning Group Inc et al.,) NOT CERTIFIED

On August 27, 2021, Saskatchewan Court of Queen’s Bench finally released its decision about whether the Merchant Law Group’s proposed class action could proceed as a class action.  The Honourable Justice McCreary refused to certify that action, Piett v. Global Learning Group Inc. et al.

Justice McCreary found that the Piett action is an abuse of process because of the proposed representative plaintiffs’ (and other’s) improper conduct when the action was started, including soliciting the $500 “retainer payments” which Merchant Law Group spent without court authorization.  On that basis, she struck out the claim, entirely.  Justice McCreary concluded that neither Mr. Piett nor Mr. Shoeman were suitable representative plaintiffs because they have a conflict of interest with the other class members.  She also decided that there is no tenable claim against the CRA, and that this Ontario action (Wintercorn et al. v. GLGI et al)  is the preferable procedure for the prosecution of the class members’ claims.

Justice McCreary’s complete judgment can be found here.

Piett has now discontinued his claim against all the defendants in the SK action, except for the CRA.

Piett is seeking leave to appeal the decision of Justice McCreary dismissing his claim against CRA.  The court hearing on that leave motion will be taking place at the end of November, 2021.  Only if Piett is granted leave to appeal, and then also is successful in overturning Justice McCreary’s decision on appeal will the SK action proceed against the CRA. The test to establish that leave should be granted is very onerous, and given the multiple bases upon which the Saskatchewan court denied certification of the Piett case, we do no expect that leave will be granted.  Once the results of the leave motion are known, we will provide another update.

Presently, the Ontario action is the only certified class proceeding seeking relief for the Global Learning Group Inc. scheme.

If you previously opted-out of the Ontario class action, you cannot opt back into the Ontario action due to Justice McCreary’s refusal to certify the Piett action.

Letters/Phone calls from CRA

We understand from class members that CRA has begun sending letters to and/or calling some GLGI program participants seeking to collect unpaid taxes.

Please be assured that resolving your tax issues with CRA will not affect your participation in this class action, or your right to recovery in the event of a settlement or judgment in favour of the class. Any issues or proceedings between you and CRA are separate from this class action.

If you need advice or assistance regarding your CRA reassessment(s), you should consult with your accountant or tax advisor. Class Counsel are acting on behalf of the class only in the class action. Class Counsel cannot provide advice to individual class members about their individual tax situations.

Settlement Reached with MKW Defendants

On August 19, 2020, the Ontario Superior Court of Justice granted the Plaintiffs’ motion to:

• amend the Statement of Claim to add Robert Kepes and Morris & Morris LLP as defendants;
• certify the case against Robert Kepes, Morris & Morris LLP, and Morris, Kepes & Winters LLP (collectively, the “MKW Defendants”) for settlement purposes;
• and approve a settlement with the MKW Defendants.

An unissued copy of the Court Order can be viewed here, and an issued copy will be posted as soon as it is available. Court-approved Notices to the Class regarding the settlement approval will be posted under the “Documents” tab as soon as they are available.

The settlement with the MKW Defendants resolves the class action against them, and only them. The class action continues to be pursued against ten other non-settling defendants.

Under the terms of the settlement agreement, the MKW Defendants paid $1,450,000 and agreed to co-operate with the Plaintiffs in the ongoing litigation of the Action against the non-settling defendants. In exchange, all of the Class’ claims against the MKW Defendants have been released on a full and final basis. The liability of the non-settling defendants to the Class will exclude whatever proportion of fault (if any) the Court finds was the responsibility of the MKW Defendants. The settlement funds have been and will be used to pay various costs associated with litigating this case, and there will be no distribution of money to the Class from this settlement at this time. The Class Proceedings Fund has been paid a portion of the settlement fund as required by law in exchange for the indemnification and disbursement funding. The Court has approved this settlement agreement as being fair, reasonable, and in the best interests of the Class.

Details of the settlement can be found in the settlement agreement, also posted under the “Documents” tab.

Update regarding addition of Defendant Graham Turner

On March 4, 2020, Graham Turner was added as a defendant. Turner is a now-retired tax lawyer who took over operation of Escrowagent in 2009 and acted as counsel to GLGI commencing in 2010. The Plaintiffs are advancing claims of negligence, negligent misrepresentation, knowing receipt, and unjust enrichment against him.

On October 21, 2020 the action was certified as against Graham Turner.  The certification order is posted under the Documents Tab.

Warning:  Communications from Donors4Donors

We understand that many class members have been receiving email communications from “Donors4Donors”, and recently a text from “Donor Support Group”. Most recently, Donors4Donors was soliciting class members to consult with an “expert” regarding their CRA obligations.

Donors4Donors was originally created to encourage people to “sign up” for the proposed class action started by Merchant Law Group.

Messages from Donors4Donors are not communications sent to you in relation to this class action, and they are not messages that have been approved by Class Counsel. Class Counsel does not endorse any communications from Donors4Donors or Donor Support Group.

We strongly encourage class members to disregard any communications from these sources, or to “unsubscribe” or block, if you no longer wish to receive emails from them.

The Class Action has been certified

On June 26, 2019, the Ontario Superior Court of Justice certified the Action as a National class proceeding on behalf of a class defined as:

• All persons who participated in the Global Learning Gifting Initiative Charitable Donation program (“the Gift Program”), exclusive of the Defendants, their family members, employees, agents, assigns, parent or subsidiary or affiliated companies, and any person or entity who provided services to one or more of the Defendants in respect of the creation, promotion, marketing or sale of the Gift Program, including any sales agents or distributors, and exclusive of Juanita Mariano, Douglas Moshurchak, Sergiy Bilobrov, Melba Lapus, Lylyne Santos, the Estate of Penny Sharp, and Janice Moshurchak.

The Certification Order can be viewed here. Formal notice of the certification of this action as a class proceeding is now being published and sent to the last known address of class members, where available. The Notices are under the Documents tab.

The Certification motion has been adjourned with respect to the claim against Morris Kepes Winters LLP, and will be brought back before the court at a future date in 2020.

A settlement with two of the Defendants, Denis Jobin and JDS Corporation, was also approved by the Superior Court of Justice on June 26, 2019. The order approving that settlement can be viewed here.

Several Defendants intend to bring motions for summary judgment. The summary judgment motions have not yet been scheduled, pending production of relevant documents and cross-examinations.

There is another action pending in Saskatchewan, Piett v. Global Learning Group Inc. et al., which raises many of the same claims as this action against the same defendants, but it also includes other defendants. The Piett action has not been certified as a class proceeding. The motion for certification of the Piett action was heard by the Saskatchewan Court of Queens Bench during the week of December 9, 2019, and is under reserve. Class Counsel argued that this Ontario proceeding should be preferred and that the Saskatchewan court should not certify the Piett action. Certification of the Saskatchewan action was also opposed by all defendants named in that action. When the result of that proceeding is known, this website will be updated.

This action is funded by the Class Proceedings Fund. The Class Proceedings Fund will provide some funding for the costs of disbursements incurred in prosecuting the case, and will provide an indemnity to the Plaintiffs for any adverse cost awards made by the court. In exchange, the Fund will be entitled to receive 10% of the net proceeds of any judgment or settlement achieved for the Class.

Interest Relief Letters from CRA

CRA delivered letters to some class members to let them know that it has agreed to provide some relief from interest on the reassessed taxes based upon delays of the Appeal Division in 2014 and again from March 22 to September 2016.

If you have not made an application for Taxpayer Relief, you may not receive the benefit of this recent decision.  You should consult with your accountant or tax advisor about this.  This is a link to CRA Form RC4288 the Taxpayer Request for Relief form.

December 2017 email from “support@glgi.ca”

Some people may have received an email in mid-December 2017 with a link to a CRA letter. The CRA letter does not confirm CRA is issuing Notices of Confirmation for all outstanding GLGI objections. It is our understanding that the email was not sent by GLGI, which is no longer carrying on business. If you have received a letter from CRA, you should contact your financial advisor. We cannot provide you with advice regarding your individual dealings with CRA.

Further updates will be posted as this matter progresses.

• Press Release, October 16, 2017
• Fourth Amended Statement of Claim, September 16, 2020
• Certification Order, June 26, 2019
• MKW Settlement Approval Order, August 19, 2020
• Jobin/JDS Settlement Approval Order, June 26, 2019
• Short Form Notice of Certification (EN)
• Avis Abrégé d’un Recours Collectif (FR)
• Long Form Notice of Certification (EN)
• Avis Long d’un Recours Collectif (FR)
• FAQs for Class Members
• Certification Order as against Graham Turner, October 21, 2020
• Denial of Certification in SK Piett action
• Wise, Blackman LLP Settlement Approval Order, March 14, 2022
• Long Form Notice re: Wise, Blackman LLP Settlement Approval (EN)
• Long Form Notice re: Wise, Blackman LLP Settlement Approval (FR)
• Short Form Notice re: Wise, Blackman LLP Settlement Approval (EN)
• Denial of Leave to Appeal in SK Piett Action

Frequently Asked Questions

Q1.      How do I join this class action?

A: If you fall within the class definition, then you are automatically included as a class member. The class definition is:

All persons who participated in the Global Learning Gifting Initiative Charitable Donation program (“the Gift Program”), exclusive of the Defendants, their family members, employees, agents, assigns, parent or subsidiary or affiliated companies, and any person or entity who provided services to one or more of the Defendants in respect of the creation, promotion, marketing or sale of the Gift Program, including any sales agents or distributors, and exclusive of Juanita Mariano, Douglas Moshurchak, Sergiy Bilobrov, Melba Lapus, Lylyne Santos, the Estate of Penny Sharp, and Janice Moshurchak.

Please note that anyone who was a sales agent or “fundraiser” for the GLGI program (the “Gift Program”) is not included in the class action.

Q2.      Do I have to pay to be a class member?

A: There is no upfront cost or charge to class members. Class Counsel are working on a contingency fee basis, which means that we only get paid if the class action is successful in recovering money for the class members. The fees that Class Counsel will be paid, and the amount we will be reimbursed for the expenses we incur in running the case (disbursements), will have to be approved by the court before we are paid.

There is also no financial risk of an adverse costs award for class members. Only the representative plaintiffs are liable for adverse costs awards. In this case, the action has been funded by the Ontario Class Proceedings Fund. This means that the Fund has provided the representative plaintiffs with an indemnity against any possible adverse costs awards, as well as paying for some of the disbursements. If the action is successful in recovering money for the class members, the Fund will be repaid the disbursements that it paid, and will be paid a levy equal to 10% of the net recovery obtained by the class, after the deduction of legal fees and repayment of the disbursements.

Q3.      When will I get my money from the class action?

A: The action is in the early stages. Many steps still need to be taken, including document exchange and examinations for discovery of the various parties. It is likely that some of the defendants will bring motions to the court to try to have the action dismissed against them. All of which is to say that the action is likely still several years away from a trial date.

We cannot say whether any of the defendants will enter into a settlement before trial. Any settlement with any of the defendants will be subject to court approval. If there is a settlement with any of the defendants, then notice will be provided to the class about the settlement and, if applicable, how to make a claim. At this stage, it is premature to speculate whether this may happen.

Q4.      My taxes have been reassessed by the CRA – what should I do?

            The CRA is calling me and demanding payment of the taxes it says are owing since I was reassessed – what should I do?

A: Class Counsel are acting on behalf of the class only in the class action brought against GLGI and other defendants, including various professionals. Class Counsel are not tax specialists, nor can we provide advice to individual class members about their individual tax situations. For tax advice, please consult with your own accountant or a tax lawyer.

Q5.      I entered into a settlement with CRA. Am I still allowed to be in this class action?

A: Yes. Any proceedings or settlements between you and CRA are completely separate from this class action. This class action is seeking compensation on behalf of the class for losses suffered (including any interest or penalties that you may have paid to CRA) from GLGI and other companies and individuals who were involved in the GLGI gift program.

Q6.      I signed up for the Saskatchewan action started by Donors4Donors / Tony Merchant / Merchant Law Group. Am I still allowed to be in this class action?

A: Yes. At this point, the Saskatchewan action has not been certified (i.e. received permission from the court to proceed as a class action). If the Saskatchewan court certifies and allows that action to proceed, you can be a member of both actions, so long as you meet the class definition approved by the court in each action.

The application for certification of the Saskatchewan class action took place during the week of December 9, 2019. All of the defendants and the plaintiffs in this action opposed certification. The judge has reserved her decision, which means that she is reviewing the materials and the arguments made by the parties, and she will make up her mind some time in the next few months. We do not have an estimate of when that decision is likely to be made, but, once it is released, we will be updating our website with the results.

Q7.      I signed up for the Saskatchewan action started by Donors4Donors / Tony Merchant / Merchant Law Group. Do I have to opt out of this class action?

A: NO. See answer to Q3 above. There is no requirement to opt out of this action due to participation in the Saskatchewan action.

Q8.      My parent (or other family member was involved in the Gift Program, but they have now died or are incapacitated. Can I make a claim of their behalf?

A: The person who is the Estate’s executor or who has a power of attorney for property can take the place of a class member. To do so, they must produce a document such as a grant of probate, or a will and proof of death, or the power of attorney and proof of the class member’s incapacity, along with their own personal identification, and then we can update our records to name the executor or attorney as the class member’s representative.

Q9.      I had to declare bankruptcy since participating in the Gift Program. Do I still qualify as a class member?

A: The Trustee in Bankruptcy is the one who has the right to make the claim on behalf of the bankrupt estate.  The Trustee in Bankruptcy should provide us with proof of appointment as trustee, and then we can update our records to name the Trustee instead of the class member.

Q10.    Should I send you my documents dealing with the GLGI Gift Program or my income tax reassessment?

A: No, you should not send us your documents right now (other than estate/bankruptcy paperwork, as described above). If you still have any of the GLGI documents, including the contract documents, charitable receipts, tax returns or CRA reassessments, you should gather them all together and put them in a safe place where you will be able to find them easily. You may have to produce some of those documents to prove that you are a class member, and—if there is a settlement, or the action succeeds at trial—the extent of your losses.

Q11.    I received the notice about this class by mail or email .How did you get my contact information?

A: As part of a settlement with a minor defendant, we received all of the documents that he had in his possession, which included a database of class members who participated in the GLGI Gift Program between 2004 and 2010. We obtained permission from the court to use this database so that we could provide the best direct notice that we could about this class action. If you received the notice by mail or email, then your name was on that database or you previously provided your contact information to us.

Q12.    I know other people who were involved in the GLGI Gift Program but they didn’t get the notice about certification.

A: We want as many people as possible to learn about the class action and that it has been certified.  Please let those people know about the certification of the class action, either by forwarding a copy of the notice to them, or directing them to our website. Please encourage them to contact us and give us their contact information, so they will receive any future notices. Unfortunately, due to privacy concerns, we will not take these other individuals’ contact information from another person without their consent.

Other Questions?

We review every inquiry we receive and will respond promptly to case specific inquiries.

Please provide us with your name and contact information in the below form and we will get back to you soon.