Former client seeks $200k from suspended lawyer

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This article was published 03/12/2019 (1752 days ago), so information in it may no longer be current.

Another former client of suspended Winnipeg immigration lawyer Paul Hesse is hoping to recoup a $200,000 investment he says the lawyer urged him to make.

The latest lawsuit, by Brandon resident Ashraf Azer, is the third to be filed against Hesse since he was terminated as a partner at Pitblado Law in June, following allegations that he misused his position to solicit investments from clients into businesses linked to himself and his former romantic partner. 

Hesse is also being sued by former clients Xiaomei and Xuefeng Zhang, who allege a $200,000 loan to Hesse has not been repaid, as well as former Manitoba lieutenant-governor Philip Lee, who alleges Hesse defaulted on a $60,000 loan issued through Lee’s company earlier this year. 

None of these claims have been tried in court. Hesse, a former president of the Manitoba Liberal Party, has yet to file a statement of defence in any of the three cases, and did not return an emailed request for comment by the Free Press on Wednesday.

Hesse remains under investigation by the Law Society of Manitoba, which suspended his license this summer.  

In an affidavit filed on Nov. 22, Azer stated he first hired Hesse as his immigration lawyer in 2012. After arriving in Canada, he contacted Hesse again in 2018 to seek legal advice on other immigration issues, as well as on business and investment opportunities. 

According to the lawsuit, Hesse advised Azer to invest in a numbered company of which the lawyer served as both president and director. The client was told that the business had $1.3 million equity in a mortgaged property it owned at 2 Donald St., which would serve as security for the investment loan. 

The address is a commercial property that includes the former location of White Lotus Pet Spa, a pet grooming and boarding business run by Hesse’s former romantic partner, Patrick Maxwell. The spa closed suddenly in late June, amidst allegations of staff mistreatment and questionable financial dealings.  

Azer decided to make a $200,000 investment loan into the company, with an assurance that he would be repaid at a rate of $1,000 per month. According to the lawsuit, Hesse stopped making payments in June 2019, and numerous attempts at contacting him by Azer went unanswered. 

Soon thereafter, the client contacted Pitblado, only to learn Hesse was no longer working at the firm. A senior Pitblado partner encouraged him to contact the Manitoba Law Society and seek other legal representation, Azer stated in the affidavit. 

Pitblado is also named as a defendant in the suit, as are two numbered companies linked to Hesse. 

Azer is seeking a judgment of $200,000 against Hesse and the two associated numbered companies, as well as a declaration that he is entitled to register a caveat against the 2 Donald St. property, among other remedies. 

“As a newcomer to this country with limited financial resources, I was devastated to learn that it may be a possibility that I will never recover my money,” Azer stated in the affidavit. 

In August, former Manitoba lieutenant-governor Philip Lee sued Hesse. In an affidavit, Lee alleges that on Jan. 28, he and his company, Risun Connexions Inc., loaned Hesse and a numbered company $60,000, a sum which was to be guaranteed against Hesse’s own Wardlaw Avenue house.

Under the terms of the agreement, the lawsuit states, the loan was supposed to be repaid by June 30, but Hesse later defaulted on three payments. In July, the plaintiffs learned Hesse had transferred ownership of the Wardlaw property for $1 to a holding company owned by two shareholders.

One of those shareholders lives in China, according to Lee’s affidavit. The other is an associate of Maxwell’s.  

The lawsuit seeks to have that land transfer reversed, as well as damages for failing to repay the loan and other losses arising from the situation. 

melissa.martin@freepress.mb.ca