Former B.C. Liberal MP Joe Peschisolido has lost his bid for an "urgent" hearing to clear his name in relation to a lawsuit filed over an alleged $15 million US fraudulent investment scheme.

Peschilsolido and his law corporation are accused of breach of trust in connection with legal services and the operations of a trust account that held funds from the alleged fraud.

The former Steveston-Richmond East MP filed an application to dismiss the personal claims against him just before the beginning of the last election campaign.

According to a judgment released Thursday, he argued that given the impending vote, "resolving the claims against him is urgent because it is damaging his reputation and he should not be further delayed from clearing his name."

But Justice Sharon Matthews waited until after the Oct. 21 vote — in which Peschisolido lost his seat to a Conservative challenger by nearly 3,000 votes — to reject him.

"I am not aware of any authority for the proposition that because of damage to their reputations that lawsuits might bring, lawyers or members of Parliament are entitled to have their cases heard or decided [in an expedited manner] if it is otherwise inappropriate," Matthews wrote.

"As is apparent from the timing of the release of these reasons, the election period was insufficient time for a decision to be considered and delivered before the election concluded in any event."

'They failed to take steps'

Peschisolido was named as a defendant in a lawsuit filed in 2015 by Yicheng Jiang against the alleged perpetrators of the fraud, Paul Oie and Loretta Lai.

Jiang claims Oie and Lai pursuaded him to put more than $3.7 million into a scheme that would have seen investors acquire an interest in a start-up fertilizer company through shares in shell companies.

A B.C. Supreme Court judge has rejected a bid by former Liberal MP Joe Peschisolido for a summary trial that he claimed would have allowed him to clear his name ahead of the 2019 federal election. (David Horemans/CBC)

But Jiang claims the money instead went to Oei and Lai.

According to the original claim, the pair retained Yvonne Hsu, a lawyer with Peschisoldio's law firm, to provide legal services and to receive and disburse the funds.

Jiang claims the law firm and Peschisolido failed to meet the standard of care expected of a B.C. law corporation.

"He alleges they failed to take steps to guard against the trust account being used as a tool of an unscrupulous client or for an illegal purpose," Matthews wrote..

"In particular, Mr. Jiang alleges that they made no attempt to communicate with him to verify the purpose for which the trust funds were transferred."

'No evidence that he was negligent'

In 2018, the B.C. Securities Commission found Oie and his companies had committed fraud involving more than 50 investors. He was fined $4.5 million.

And this August, Hsu was found to have committed professional misconduct by "engaging in activities that she ought to have known assisted in or encouraged dishonesty or fraud."

In 2018, the B.C. Securities Commission found that Paul Oie and his companies had committed fraud involving more than 50 investors. He was fined $4.5 million. (CBC)

Peschisolido argued that Jiang hasn't advanced the case in the four years since he filed the lawsuit.

"Mr. Peschisolido describes himself as a tangential defendant and there is no evidence that he had anything to do with the transactions, or to the extent that he did, there is no evidence that he was negligent or knowingly assisted in a breach of trust," Matthews wrote.

Peschisolido claimed that Hsu is the central defendant and that he "was not aware of the issues that led to the claims against her."

He argued for a summary trial to dismiss the claims against him, which would have meant a streamlined process in which a judge considers only written evidence.

Conflicting evidence

The judge noted conflicting evidence in the case relating to Jiang's claims that Oie made certain "representations" to him in late 2009 or early 2010 about Peschisolido's stature in the community and the fact Jiang could be "sure that the investment money would be safe because it was going to be deposited into Mr. Peschisolido's trust account."

Jiang claimed Peschisolido gave him a business card with a handwritten email address.

But Peschisolido said he didn't recall ever meeting Jiang. And he claimed the email address in question didn't come into existence until 2012, meaning Jiang had sworn a false affidavit.

Matthews also said there "was significant overlap" between the claims against Peschisolido, his law corporation and Hsu.

"Give the overlap, there is no basis that I can discern that severing the claim against Mr. Peschisolido will result in a savings of time and expense," the judge wrote,

"Instead it risks inconsistent findings of facts or results stemming from more than one trial on the same issue."

The judge said the conflicting evidence couldn't be resolved in a summary trial.

She awarded costs to Jiang.