Canada's top court on Thursday upheld a lower court ruling in favour of investors who had launched a lawsuit alleging they were misled by U.S. President Donald Trump and a real estate development firm.
The Supreme Court of Canada said it will not hear a leave to appeal by the defendants in the legal saga — which include the U.S. president, developer Talon International and its former executives. No reasons were given by the court for the dismissal.
The plaintiffs — warehouse worker Sarbjit Singh and homemaker Se Na Lee — both sued the brash billionaire and Talon, alleging that they were sold units in the Trump International Hotel and Tower in Toronto under false pretences. The hotel is not owned by Trump but licenses his name and is operated by one of his companies.
The investors said they were led to believe the residential units, which were to be rented out as part of the hotel, would generate returns ranging from 7.74 per cent to 20.9 per cent. Singh and Lee said they instead lost a combined $1.2 million after the hotel failed to be as popular with visitors as originally anticipated, and the monthly fees started to pile up.
Last October, the Ontario Court of Appeal ruled in favour of the investors, ordering that the deposit of one of the units totalling nearly $250,000 be returned to Singh, who never closed on the sale.
It also ordered that damages, the amount to be determined at a later date, be paid out to Lee for "negligent misrepresentation." Lee said she lost nearly $1 million after taking possession of the unit.
Mitchell Wine, a lawyer representing the plaintiffs, says the Supreme Court ruling clears the way for more legal action to be taken against Trump, Talon and its ex-CEO and president Val Levitan and ex-director and chairman Alex Shnaider.
He said there are at least two dozen other investors who will also be looking to have the deposits returned.
"They're not high rollers, high finance people. They're plain ordinary people who generally read about this (Trump hotel) on the Internet or saw advertisements and were told they would get a very decent return," said Wine.
"When I would ask them: 'Why did you invest in this?' The answer, in their not very good English, was 'Donald Trump, The Apprentice.' They had a lot of faith in Mr. Trump's ability to build first-class hotels and to make money for people."
The Trump Organization did not immediately respond to a request for comment.
Talon's lawyer, Symon Zucker, said his client was "clearly disappointed" by the Supreme Court decision. He confirmed that Talon was currently under receivership in relation to the hotel.
Earlier this week FTI Consulting, a receiver in a court-run sale of the hotel, said in a letter it received no competing bids for the luxury property, located in Toronto's financial district. Investment firm JCF Capital ULC was listed in the letter as the successful bidder after making an initial "stalking horse" bid.
The 65-storey tower in Toronto's financial district opened in 2012 and is comprised of 211 hotel rooms and 74 private residences.