Class Actions

Global Learning Group Inc. Class Action —

This certified class action is brought on behalf of the approximately 60,000 Canadian taxpayers who suffered damages as a result of their participation in the GLGI charitable donation program between 2004-2014.

Case Overview

This certified class action is brought on behalf of the approximately 60,000 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.

Case Overview

This certified class action is brought on behalf of the approximately 60,000 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.

The Statement of Claim for this action was issued on September 28, 2017, and has been amended twice. Most Defendants have now delivered statements of defence, and the rest have been noted in default.

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 will be published once it has been approved by the Court.

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 2019.

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 and proposes a class that will include the sales agents of GLGI. The Piett action has not been certified as a class proceeding. The motion for certification in that action has been scheduled to be heard in Saskatchewan during the week of December 9, 2019. The Plaintiffs in the Ontario action will be appearing in the Saskatchewan Court and will argue that this Ontario proceeding should be preferred and that the Saskatchewan court should not certify the Piett action. Certification of the Saskatchewan action is also being challenged by all defendants named in the Piett action.

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

It appears that CRA is delivering 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.

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