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Two face masks from TakeCare Supply are shown in Toronto on Thursday, June 11, 2020. Kevin Vuong started to sell face masks through a newly founded company just two weeks after the World Health Organization declared the outbreak of COVID-19 a pandemic.Joe O'Connal/The Canadian Press

The Liberal candidate in a downtown Toronto riding is facing a $1.5-million lawsuit from a former associate in a pandemic mask-making business, even though the party’s internal screening process states that candidates should not be involved in potentially controversial litigation.

The party announced Kevin Vuong’s acclamation in Spadina-Fort York on Aug. 13, just two days before Liberal Leader Justin Trudeau triggered the federal election campaign.

The Liberal Party’s national rules for candidate selection include a section specifically related to lawsuits.

The rules outline nine requirements the party’s green-light committee must consider when deciding whether to approve a candidate.

One of them states that an individual must “have not engaged in any claim, litigation or dispute of any sort which is liable to bring controversy or disrepute upon the qualified nomination contestant or the party.”

The claimant in the lawsuit, which was filed late last year, is Toronto accessories designer Anna-Maria Mountfort. She alleges that she, Mr. Vuong and Larry Lau, who was also involved in the business, had a “handshake deal” that she would be a founder or partner of a company that produced face masks during the pandemic, but was ultimately cut out of the business.

Mr. Vuong and Mr. Lau deny the accusations, which have not been proven in court.

In an interview, Ms. Mountfort said she lives in Spadina-Fort-York and was an active political supporter of the current Liberal MP, Adam Vaughan, who announced he was stepping down just before the Sept. 20 election was called.

She said a Liberal Party official contacted her to ask about the lawsuit before Mr. Vuong was announced as the candidate, and said she was surprised the party went ahead in light of its stated criteria for green-lighting candidates.

“To me, there’s these rules, and sometimes maybe there’s exceptions and stuff like that, [but] this just seems really, really arrogant and I don’t think that the Liberal Party can afford to look arrogant,” she said.

Liberal Party spokesperson Alex Deslongchamps provided a brief statement on Tuesday in response to questions about the lawsuit and the party’s decision to go with Mr. Vuong.

“The Liberal Party of Canada has followed a rigorous green-light process for candidates in this important election. We are aware Mr. Vuong is involved in a commercial dispute. As this is before the courts, we cannot comment any further,” he said in an e-mail.

In her statement of claim, Ms. Mountfort said the mask-making business – which operates under the brand TakeCare Supply – “became wildly successful.” She says the company sold more than 750,000 masks and made more than $7-million in sales during the first six months of operations.

Ms. Mountfort said the success of the business was due in large part to her management of the manufacturing side.

”Because of their friendship and good working relationship, Anna-Maria trusted Kevin and permitted him significant control over the financial aspects of the business under the assumption that he was acting prudently and fairly,” according to Ms. Mountfort’s statement of claim.

Ultimately, Ms. Mountfort said she was “sidelined” from the business and paid $135,000.

“The defendants’ actions were deliberate, high-handed, malicious and shameful, and depart to a marked degree from ordinary standards of decent behaviour,” Ms. Mountfort claims.

In a joint statement of defence, Mr. Vuong and Mr. Lau deny all the allegations in Ms. Mountfort’s statement of claim.

“The defendants deny that the plaintiff ever indicated a desire to be a shareholder in the corporation at any material time,” they state. They also say that, on two separate occasions, Ms. Mountfort declined an offer of equity. Instead, they said they agreed in an exchange of e-mails to pay Ms. Mountfort a 2-per-cent royalty on all sales. (Ms. Mountfort said in an interview that the discussions of equity were unclear and related to a broader company called the Agency for Public and Social Innovation, which is also named in her lawsuit.)

The statement of defence says the mask-making operation’s “explosive growth” was largely because Shopify Inc. chief executive officer Tobias Lutke posted a tweet on April 1, 2020, urging people to “support local businesses making DIY masks” with a link to TakeCare’s social media account.

“The defendants deny that there were any understanding that the plaintiff was a co-founder or partner in the TakeCare Supply business,” they state.

Mr. Vuong also provided a statement to The Globe and Mail on Tuesday.

“Seeing the challenge of getting protective equipment to the community at the start of the COVID-19 pandemic, I co-founded TakeCare Supply, which developed Canada’s first evidence-based reusable mask,” he said. “I am very proud that today, we have manufactured almost a million masks locally and created nearly 200 good jobs. As this is a commercial legal dispute before the courts, I cannot comment any further.”

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