Loan sharking would be hard to prove in Anne Squires' case, lawyer says

Defence lawyer Bob Simmonds says Anne Squires' claims against Ron Ellsworth, the deputy mayor of St. John's, would be difficult to investigate and prove.

Simmonds, who is not involved in the case, spoke to the CBC's St. John's Morning Show about the statement of claim Exit Realty on the Rock owner Anne Squires filed against Ellsworth on Aug. 29 at Supreme Court of Newfoundland and Labrador.

In the statement of claim, Squires said she borrowed $50,000 from Ellsworth, but paid back more than $190,000. She is suing for $137,412 of "interest overpayment," claiming the amount charged was "illegal, criminal and contrary to the Interest Act and Criminal Code of Canada."

• Anne Squires sues St. John's Deputy Mayor Ron Ellsworth for $137K

Too early to predict

Simmonds said it's much too early to assign any wrongdoing by Ellsworth.

"I can tell you that the allegations … are unsubstantiated, unproven and at this point un-replied to by Mr. Ellsworth who, I would expect, will likely be replying in very clear form in the appropriate time frame."

What will have to be proven, said Simmonds, is whether Ellsworth charged Squires more than a 60 per cent rate of interest per year.

How much interest is too much? 

"Anything greater than a 60 per cent rate of interest, which is what the Criminal Code speaks of, likely implies that one of the parties was in a very bad bargaining position and may have been under duress and it's appropriate for the law to step in."

Simmonds said it would be difficult to prove how much interest was charged.

 "(It's) a very complex question. A question that only a court could answer after seeing all the documents, after hearing the submissions and hearing the witnesses on this — and we're a long, long ways from that right now. "

Could police come knocking?

When asked if the police may investigate it as a criminal matter, Simmonds said that would depend on what happens with the civil case.

"Depending on what the judge says, it could be possible that the police may feel there are reasonable grounds to believe that an offence has been committed … and may do an investigation." 

Churchill Falls kind of deal 

But Simmonds said just because someone wins a civil case does not mean it will become a criminal matter. He said it may be something that Squires will have to live with.

"You can make very bad contracts and have to pay for them for a long while — as we've seen with Churchill Falls — and the courts are not willing to do anything about it. You made the deal, you live with it."