'Financially desperate' Winnipeg business swindled out of 2 properties, lawsuit alleges

A Winnipeg business owner is suing a man she alleges swindled her and her business out of ownership of two properties after promising financial help — the latest in a string of court proceedings against the man, whom a judge previously described as showing the signs of a "predator" who seeks out financially vulnerable clients.

A statement of claim filed in Winnipeg's Court of King's Bench on Sept. 18 alleges Richard Boon, the defendant, offered Denise Nadine Baker and her husband, Brian Donald Baker — who died in 2017 — help to pay off debts and keep them from losing the two properties in a tax sale.

But the suit alleges that "it is clear that the plaintiffs, as financially desperate entities and weaker parties, were taken advantage of by the stronger and sophisticated defendants."

There was "inequality in bargaining power and unfairness" in the agreements made, and Boon's conduct in the arrangement was "highly reprehensible," according to the statement of claim.

In addition to Boon, the suit names 4638817 Manitoba Ltd., a numbered corporation, and Daylight Capital Corporation as defendants. Boon is the sole director and shareholder of both corporations, the suit says.

Nadine Baker and her family business, Custom Vac Ltd., the plaintiffs in the lawsuit, allege that after following Boon's advice, they lost ownership of two properties — a Logan Avenue property the business operates out of and an empty Elgin Avenue lot owned by Baker — to Boon's numbered company.

Outstanding debt purchased by Boon

The relationship between Boon and the Bakers seems to have stemmed from a small debt the Bakers owed to a local architect, years before Boon's numbered company became the owner of the two properties.

In 2009, the Bakers contracted Gerri Stemler, a Winnipeg-based architect, to do work on their Logan property. Stemler told CBC News in an interview she invoiced the couple $350 for the design, but when payment hadn't been made after about six months, she took the issue to small claims court. The couple were ordered to pay the debt, plus $127 for costs and disbursement fees, for a total of $477.

The Bakers contacted Stemler, who told the couple that if they paid the original bill, the debt would have been considered "paid in full or otherwise cleared up," according to the lawsuit. 

The couple gave Stemler a $350 cheque that was cashed in April 2010, the suit says, but they didn't pay the $127 for costs and fees.

Stemler said she "sort of let it go" but didn't "formally close the claim" with the courts.

About six months after receiving the cheque, she got a call from Boon "out of the blue," she told CBC.

"He wanted to take over the debt," and offered to cover the remaining $127, Stemler said. She hadn't met Boon before, but assumed he knew the Bakers and accepted his offer.

"I don't know how he got that information.… He was very obviously not forthcoming on many details," she said. 

In a past case that ended up in court, Boon admitted he found out about a couple's looming foreclosure by going through records at the land titles office.

CBC also reached out to Denise Baker, but she declined to comment as the allegations are before the courts. 

In early December 2012, Stemler assigned the $127 small claims judgment to Boon's numbered company, the lawsuit says. That assignment "expressly acknowledged" the $350 payment to Stemler, but "was silent on Ms. Stemler considering the debt collected or otherwise satisfied," the statement of claim says.

Shortly after, the numbered company registered the assignment of the small claim file in court, and obtained a certificate of judgment — a court document that certifies that money is owed — naming Boon's company as the creditor of the full amount of the initial small claim — $477 — owed by the Bakers and their company, the lawsuit says.

Once registered, a certificate of judgment allows a creditor to place a lien on the debtor's property, meaning the creditor can hold the property until the debt is paid.

Boon's numbered company registered the debt onto the titles of the Logan Avenue and Elgin Avenue properties owned by the Bakers in January 2013, the suit says. 

Exchanging ownership

At around the same time Boon's company assumed the debt, he approached the Bakers, offering financial assistance with paying and handling debts, according to the statement of claim.

Boon also told them that "through his help" and that of his companies, the Bakers "would not need to redeem the Logan property nor the Elgin lot from tax sale."

It is not clear from the lawsuit when or why the properties were put up for tax sale. A City of Winnipeg spokesperson said a tax sale arises when an owner has three or more years of unpaid property taxes and penalties.

Once a property goes up for tax sale, "anyone that has an interest in the property has the opportunity to take ownership," if they pay the outstanding taxes and penalties, the spokesperson said.

The lawsuit alleges that under Boon's advice, the Bakers were "induced to not settle any outstanding debts" or make payments to the City of Winnipeg for tax redemption. 

Boon's company acquired the Logan Avenue certificate of title in June 2013 through the tax sale, but told the Bakers that if they made $800 monthly payments, they could continue operating their business there and didn't have to worry about losing ownership.

The Bakers started making those payments that month, believing the titles would be transferred back if the monthly payments were made, the suit claims.

But the agreement and Boon's promises weren't put into writing, the suit said, and the couple stopped payments in January 2014, once they learned the numbered company had placed an $85,000 mortgage on the title of the property in August 2013 for "Richard Boon's personal use." 

Boon's company obtained the certificate of title for the empty Elgin Avenue lot in a tax sale in February 2014, and sold it later that year for $65,900, according to the statement of claim.

Boon's company "failed, refused, or neglected" to pay the mortgage tied to the Logan Avenue property, and in May 2019 a notice exercising the power of sale was filed by the mortgage holders, the suit says.

But the sale was prevented after Baker filed a notice in July 2019.

Threats to close business 

The suit also claims Boon has also threatened to close down Custom Vac and take possession of the Logan Avenue property, harassing Baker with personal visits and calls at all times of the day.

He has also "constantly entered the premises at the Logan property and repeatedly brought in real estate and other people … dismantled the alarm system, removed batteries, shut off the power, and attempted to change the locks," the statement of claim alleges. 

The suit accuses Boon of "fraudulent misrepresentation" in the original agreement he made after assuming the small claims court debt, leading to the loss of the Logan and Elgin properties.

Had those promises not been made, the Bakers "would have otherwise settled all legitimate debts … or otherwise provided payments towards the City of Winnipeg of the tax redemption themselves," the statement of claim says.

The suit seeks unspecified general and punitive damages, as well as an order transferring the Logan property, back to Custom Vac. 

None of the allegations made in the statement of claim have been proven in court.

No statement of defence has been filed in response to the suit. CBC News hand-delivered a letter to Boon, requesting a comment on the allegations, but he declined.

Past lawsuits

This isn't the first time Boon has been accused of targeting desperate Manitoba property owners. He and his corporation Daylight Capital Corporation have been at the centre of several disputed real estate deals over the years involving homeowners in debt and on the verge of losing their homes to foreclosure.

In 2006, Manitoba's then deputy registrar general stopped processing land transfers to Boon, after receiving complaints from people who said they hadn't intended to sell their homes to him, but had signed papers indicating they had.

CBC has reached out to the Office of the Registrar-General for comment, but the provincial office had not responded prior to publication.

More recently, in late 2018, Boon was ordered to pay a Winnipeg couple $30,000 in punitive damages plus court costs, after they won a legal battle with him over their home.

The couple sued Boon, alleging he used "fraudulent misrepresentations and fraud" to get them to sign an agreement that saw him take over their mortgage when they ran into financial difficulties and risked losing their home in 2004.

"His practice of seeking out the financially vulnerable has the hallmark of a predator," the judge said in her ruling.

His suggestion to the couple that he was offering help was "disingenuous," the decision in that case said, and "in fact, he was acting in aggressive pursuit of his self-interest."