On one side: Sherry Brydson, said to be Canada’s richest woman

On the other side: Jim Lawson, a high-profile boss at the CFL and Woodbine Entertainment Group, Canada’s premier horse racing business.

At stake: a bitter lawsuit brimming with allegations of wrongful dismissal, real estate scams, power struggles and pornography.

Brydson, the granddaughter of Roy Thomson, with personal wealth estimated at $6.6 billion, is a director of Westerkirk Capital, a private financial corporation, where Lawson was once the boss.

According to documents filed in Ontario Superior Court, Lawson was fired in 2012 after eight years as Westerkirk’s CEO. He claims he was dismissed without cause, and fires back that Brydson used the company as a personal piggy bank — for instance, making withdrawals of approximately $106 million “without proper authorization.”

Brydson denies this.

Her side says Lawson used his office to download pornography described as “graphic, hard-core, racist and misogynistic.”

Lawson denies this.

The escalating dispute plays out in a series of court documents, starting with Lawson’s wrongful dismissal claim in 2014. That was followed by a counterclaim seeking more than $14 million in damages by Westerkirk and Brydson, and a defence to the counterclaims by Lawson in 2015.

All allegations in this story are based on these court documents. None of the allegations have been proven in court. Both sides dispute the other’s claims.

The battle began when Lawson began proceedings to sue Westerkirk for wrongful dismissal, seeking more than $6 million in damages from the corporation after his many years of “exemplary” work.

While at Westerkirk, Lawson’s base salary was $800,000 in 2004. It jumped to $1.13 million by 2006, with 4 per cent raises annually. His yearly bonus money increased from $250,000 in 2004 to $700,000 in 2012, the year he was terminated.

Westerkirk and Brydson countered by accusing the former CEO of a “pattern of dishonesty,” alleging that Lawson:

Engineered Westerkirk’s sale of a Calgary mall, against the company’s best interests, to ensure a large incentive payment for himself to help him buy a Florida mansion;

Schemed to direct Westerkirk money to himself and his family;

Failed to disclose numerous conflicts of interest to the corporation

Sold a Toronto condo to Westerkirk without disclosing the that price was nearly 40 per cent over market value.

In the bulging countersuit, Westerkirk and Brydson also allege that Lawson used his office to download pornographic materials described as “graphic, hard-core, racist and misogynistic”; and “distributed some pornography to other persons, including to certain of his subordinates,” which “recklessly endangered the defendant’s reputation.”

Lawson’s defence denies “each and every allegation” made by Brydson and Westerkirk, claiming “Westerkirk had no grounds whatsoever to terminate him with cause and did not purport to do so when he left Westerkirk on November 27, 2012. Westerkirk only alleged cause long after the fact.”

Calling the pornography claims malicious and “deserving censure of the court,” the statement of defence stated:

“At no time prior to the commencement of Westerkirk’s counterclaim, was any issue regarding Mr. Lawson and pornographic materials ever raised. The claims were manufactured by the plaintiff through an extensive search of electronic records undertaken long after Mr. Lawson had departed as CEO. Westerkirk’s reputation was never at risk. Nor did the materials referred to . . . have any impact on the work environment. The claims were made maliciously and are an abuse of process deserving the censure of the court.”

Lawson could not be reached, but his lawyer, R. Paul Steep, said in an email to the Star that the Westerkirk claims are baseless.

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“This is a commercial dispute before the Commercial Court so we will only repeat what we have already said in our statement of defence which is that there is no basis for these allegations against Mr. Lawson,” Steep said.

Lawson claims Brydson butted heads with him over governance restructuring of Westerkirk and made whopping personal withdrawals of approximately $106 million “without proper authorization.”

Howard Levitt, the lawyer representing Westerkirk and Brydson, told the Star in an email that Brydson “certainly did not” make an unauthorized withdrawal of $106 million, adding “It is really an entirely ridiculous allegation to imply that Sherry Brydson ‘stole’ money from the company set up to hold the wealth of herself and her then minor children. These transactions were fully reported in Westerkirk’s financial statements and were properly implemented so as to be completed in a tax efficient manner.”

Levitt said he will be filing reply pleadings “respecting the many corporate inaccuracies respecting governance in the plaintiff’s pleadings — and there are many.”

In an emailed statement to the Star, a spokesperson for Westerkirk wrote that “Westerkirk and the Brydson family have filed a Statement of Defence and Counterclaim in response to Mr. Lawson’s claims. They will continue to seek redress through the courts and will have no further comment at this time.”

Lawson claims he was fired without proper authority, “to prevent a formal reorganization of Westerkirk governance” that Brydson did not like, according to his defence document.

Brydson’s side claims Lawson was appropriately fired after he asked her to sign resolutions to approve “this ill-advised new structure” that was engineered by Lawson without her knowledge or consent.

“At all material times, Brydson was the only person who had the authority to terminate Lawson” and the termination was “to protect the interests of Westerkirk and were in accordance with Brydson’s obligations and duties as a director,” the 49-page counterclaim alleges.

It claims Brydson “required the advice and assistance of a scrupulously honest and capable CEO to manage the assets of Westerkirk” and relied on Lawson to act in her best interests. Instead, “Lawson serially took advantage of her through a pattern of dishonesty and self-dealing.”

It further alleges that Lawson referred to Brydson as “crazy” to subordinates and business associates; forwarded confidential Westerkirk information to his wife; knowingly paid about half the actual market value to acquire a Westerkirk-owned painting; and arranged for himself senior appointments to the Jockey Club of Canada and Woodbine Entertainment Group, working for them during Westerkirk hours, according to court filings.

Lawson’s defence claims he had a written agreement to purchase the painting from Westerkirk at $32,000, and that the transaction was transparent and approved by the corporation’s chief financial officer; denies he made disparaging remarks “that caused dysfunction and discontent at Westerkirk” and did not breach confidentiality.

Lawson now chairs the Woodbine Entertainment Group, which oversees two of Ontario’s largest horse racing tracks — Woodbine in Toronto and Mohawk in Milton.

He is also chair of the CFL’s board of governors.

Brydson, a former journalist, does not maintain a high profile in Canada. The mother of three children has been described as an activist, philanthropist and entrepreneur who holds the largest single stake in the Thomson family fortune. Her wealth has been estimated at more than $6 billion by Canadian Business magazine.