Simran Law: the court's reasons for a receiver over two law firms

"This is an extraordinary situation," Justice Dunphy wrote on October 19, 2026, opening the endorsement in which the Ontario Superior Court of Justice (Commercial List) granted FCT Insurance Company Ltd.'s application for a receiver over two law firms, Simran Law Professional Corporation and JP Mann Law Firm Professional Corporation. What was extraordinary, the judge went on, was "not only the order being asked but also the fact that the situation calling for such an order has been occurring with distressing regularity in the recent past and if left unaddressed represents an exceptionally grave attack on the profession of law at large and the integrity of our civil legal system," per the Endorsement of Justice Dunphy, Oct. 19, 2026, paras. 1, 3, 9. The endorsement names no other case.

The order those reasons accompany was reported here on October 22. It makes Grant Thornton Limited receiver of the two firms' property and of all funds in either firm's possession or control that it was required to hold in trust, and investigator of the 25 transactions in its Schedule A, whose "Held Funds" it totals at $18,028,903.00, per the Receivership Order, Oct. 19, 2026, para. 2 and Sched. "A". The application was brought without notice to the respondents, who are the two firms and the two lawyers the endorsement says operate them, and the endorsement's appearance slip names no one appearing for the respondents, per the Receivership Order, Oct. 19, 2026, title of proceeding and recitals and the Endorsement of Justice Dunphy, Oct. 19, 2026, p. 1 and para. 3. The endorsement's finding is of a prima facie case, made while the respondents had not been heard, and nothing from them is in the record read for this piece. Grant Thornton's initial report is due by November 19, and the matter returns before the Commercial List at 9:00 a.m. on November 23 for directions, per the Receivership Order, Oct. 19, 2026, para. 18.

Twenty-five occasions, in the endorsement's account

FCT, the endorsement says, is a title insurance company, per the Endorsement of Justice Dunphy, Oct. 19, 2026, para. 3. On 25 separate occasions, according to the endorsement, one of the two lawyers and that lawyer's firm acted for vendors in real estate transactions while the other lawyer and firm acted for purchasers. The endorsement continues: "A total of more than $18 million in mortgage advances to the purchasers were delivered into the respondents' trust accounts for the purpose of discharging the existing mortgages. Not one of the mortgages was in fact discharged with the mortgage advance proceeds." It goes on: "Solicitors' undertakings to discharge the mortgages were not honoured. None of the funds advanced have been deployed as directed, none of the funds have been returned or accounted for," per the Endorsement of Justice Dunphy, Oct. 19, 2026, para. 4.

Paragraph 5 is one sentence: "The applicant has established a strong prima facie case of serious breaches of trust." FCT's application, as paragraph 6 describes it, asks for a receiver under s. 101 of the Courts of Justice Act "to investigate the two subject law firms to determine where the trust funds entrusted to them have gone and to preserve assets," per the Endorsement of Justice Dunphy, Oct. 19, 2026, paras. 5–6.

What the judge called "a serious and significant problem"

The capitals in paragraph 7 are the judge's: "This is NOT a 'one off' case of records having been inadequately maintained or sloppy ledger-keeping. Twenty-five similar cases over an extended period of time, a history of the respondents providing inaccurate or misleading explanations all point to a serious and significant problem." The endorsement does not describe the explanations or say to whom they were given. "There is every indication that trust funds have been seriously and repeatedly mishandled," the paragraph goes on. "Millions of dollars have been received for a particular purpose and have not been applied as directed and have not been returned or accounted for," per the Endorsement of Justice Dunphy, Oct. 19, 2026, para. 7.