Lantzville’s mayor and his wife are the subject of a lawsuit alleging that they misrepresented their accounting practice’s finances when they sold it and then poached clients from the new owner in the months following the sale.
According to a notice of civil claim filed in the Supreme Court of British Columbia last week, Colin Haime and Denise Haime, who is a current member of Lantzville council, sold their accounting business known as Barber and Haime Inc., to B. Rushton Inc., in August 2017 for $727,000. B. Rushton Inc. is owned by Brent Rushton, a Nanaimo-based accountant.
As part of the purchasing agreement, B. Rushton Inc. would be able to retain the business’s name, all client files, billing records, social media accounts and the right to indicate it was taking over the business from the Haimes, who were retiring and weren’t going to practice accounting, court documents show.
The Haimes also entered into a non-competition and non-solicitation agreement, which, for period of six years, prohibited them from “directly or indirectly” soliciting or interfere with any customer or client or conducting any form of public accounting within 55 kilometres of the business’ location on Lantzville Road, unless a number of conditions were met.
The Haimes live on Shell Beach Road in Ladysmith and since the sale, have registered a business called Connect Live CPAs Inc., according to court documents.
Although the Haimes were allowed to conduct an online business related to public accounting, the non-solicitation agreement, according to the documents, applied to their online practice as well. They were also required to “work co-operatively and provide all reasonable assistance to ensure” the transfer of their business to the new owners, according to the court documents.
The claim alleges that since the sale, the Haimes have remained practising accountants who have not retired, have actively solicited clients who had been with Barber and Haime prior to August 2017, and have failed to provide B. Rushton Inc. with all the intellectual property including client files and billing records. It also alleges the Haimes have breached the non-competition and non-solicitation agreements by practising business from their Ladysmith address and have received payments from clients for work done by B. Rushton Inc.
In one case, according to the documents, the Haimes refused, after the closing date, to provide B. Rushton Inc. with documents and files including “working papers” for four of their clients whom B. Rushton Inc. had been expecting to take on. As a result, the new owner could not verify financial statements and ultimately lost the clients, according to the civil claim.
The claim argues the Haimes had close relationships with former clients, were in a “powerful position” to influence the the transfer of their business, and “conspired” to take back the business they had previously sold and through their actions have aimed to increase profits “through an outrageous disregard of the legal or equitable rights.”
Rushton claims his company has incurred extra expenses, suffered loss of profits, lost future profits and lost revenue for work that was done by B. Rushton Inc. but paid to the Haimes. B. Rushton Inc. is seeking a declaration that the Haimes are liable, as well as undisclosed financial damages.
None of the claims have been proven in court.
Calls to Rushton’s lawyer were not returned. Calls to the Haimes were not returned.