Volume 92, Issue 10

Friday, September 18, 1998

cheque please


USC slaps CFS with $100 million lawsuit

By Karena Walter
Gazette Staff

Western's University Students' Council has launched a multimillion-dollar lawsuit against a federal student lobby group, a move which could have a ripple effect across other universities.

Ontario court records reveal the USC is suing the Canadian Federation of Students-Services, a branch of the Canadian Federation of Students. Also named in the suit are the Association of Student Councils-Canada (AOSC) and the Canadian Universities Travel Service Limited, better known as Travel Cuts.

Western's council is asking for $100 million in addition to or as an alternative to other claims, USC lawyer John McNair said. The suit states the figure is for wrongful conversion of assets.

The issue of contention has a long history. In 1969, the AOSC, a non-profit organization, was incorporated by six university student councils, including Western's USC. The AOSC owned Travel Cuts, a profit-making company.

In 1987, the AOSC voted to transfer its assets to the Canadian Federation of Students-Services with the precondition the transfer occur by July 1988.

The USC claims the transfer of assets was never completed. The lawsuit states "the shares of Travel Cuts remain vested in the AOSC and CFS-S has improperly converted the said shares to their own use."

"The USC is really trying to determine the proper owner of Travel Cuts," McNair said, adding it is trying to prove that the AOSC is still the owner.

"The lawsuit is to regain what was originally owned by AOSC – what is now known as Travel Cuts," said USC President Ian Armour.

Travel Cuts operates 55 travel agencies on university campuses across Canada.

The USC is launching the suit as a member of AOSC because it believes the AOSC is not in a position to bring the action itself, McNair said.

The lawyer for the defense was not available for comment but CFS national deputy chair Jenn Story said CFS is confident its federation has a strong case.

"It's unfortunate that a student union is suing another student group over vital services that we offer," she added.

Western's Society of Graduate Students is a member of CFS and SOGS President Kelly Barrowcliffe said she could not comment on the suit. However, she said she doesn't believe the action will pit SOGS and the USC against each other. "It's not about SOGS and the USC. It's about CFS and the USC."

The suit was launched on Oct. 31, 1997 and served early this year. USC general manager Jim Walden said Western has taken the initiative and other schools may jump on board.

For now, the USC will pay the legal costs. "If the other schools join, we'll share those legal costs," Walden said.

The other university student councils which incorporated the AOSC were the University of Toronto, York, Ryerson, Carleton and Dalhousie.

President of the Dalhousie Student Union,Ted Shiasson, said his council is waiting for details of the lawsuit. "We're sort of connected with the whole thing peripherally," he said. "A lot of this student politics stuff is much more complicated than people realize."

Shiasson said the lawsuit didn't surprise him. "CFS has been around for a long time. Anything that's been around that long is apt to have some dirty laundry."

Over 60 student groups across Canada are members of CFS, including Ryerson Students' Administrative Council. President David Steele said they have no plans of launching their own lawsuit against CFS. "We found our relationship with CFS has been fairly good," he said.

McNair said there is no trial date yet and the parties are in the process of exchanging documents. He said it would be premature to comment on an outcome. "The litigation is quite complex and we will be in a better position after the exchange of documents."

What the USC claims:

- declaration that the purported transfer of assets from AOSC to CFS-S is void

- damages in the amount of $100 million

- re-conveyance of shares held in Travel Cuts to AOSC

- repayment to AOSC of all funds received from Travel Cuts

- an interim order appointing a receiver and manager of Travel Cuts

- an account of all funds transferred from Travel Cuts to CFS-S

- legal costs

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Copyright The Gazette 1998