It has been building for 400 years, but here is the short answer:

Courts have no power to either enforce of fix-up an illegal contract, including and especially financial securities:

Nothing is more important, or more often lost sight of, than the proper aim of the court. The court is not to remake the contract for the parties or to tell them what they should have written. Still less is it to give a fair or just result. That may be the aim in torts, but here the parties are the legislators, and their decree must be followed. If the parties have indicated in their contract what is to be the result, then the result is to be followed, whether it seems a wise or a just result or not. (J.E. Cote, An Introduction to the Law of Contract, Jubiler, 1974 p. 150).

But if any of it is illegal, then the contract is wholly void and unenforceable:

The principle of law is clear. The courts, which exercise the judicial power of the Crown, will not enforce a contract that Parliament, which exercises the legislative power of the Crown, has made unlawful. In the words of Lord Mansfield in Holman v. Johnson [1775]:

“The principle of public policy is this: Ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act.”

The combination of the two is among the most critical means by which the entrenched-money-power has obtained de facto ownership and control of the entire planet.

The wealth of the world has been captured and accumulated under the fine-print and by employing the contractual principle of all-or-nothing.

It does not matter whether a contract is fair or reasonable or even understandable (to you) – if you sign it, then you are bound by it. The Courts have no power to otherwise interfere and your only protection is called the law. It is essentially the same throughout most of the world.

The Law is the Law

Section 4 of the Canada Interest Act (federal securities law), for example, requires a security that makes interest payable at any rate for any period less than a year to also provide an express statement of the annual rate which is equivalent, otherwise no more than 5% per annum can be enforced.

In Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills; 1991, 68 O.R. (2d) 165, the solicitors for the financial institution had prepared promissory notes for their client that called for interest at 2% per month, only. The Courts held that the notes did not comply with the securities law, there was a $177,000 constructive loss to the financial institution, and the negligent solicitors were held legally and financially liable:

Very simply, a solicitor who practices commercial law is responsible, if he undertakes to draft a promissory note [or any other financial security], to see to it that it expresses the interest rate in a form that is enforceable.

And again in Niagara Air Bus v. Camerman which immediately followed Elcano Acceptance at the Ontario Court of Appeal – the promissory notes called for interest at 2% per month, only.

The Court of Appeal ruled / held here too:

The purpose of s. 4 of the Interest Act is to limit recovery of interest to 5% [per annum] on contract debts if there is non-disclosure of the annual rate….As Draconian as it may seem in today’s interest climate, it is clear that if disclosure of the true annual rate is not expressly made, the lender’s rights are limited.

The liability for the constructive loss would then have automatically attached to any solicitor who had been paid to draft the agreements.

Most critically, however, the judges clearly and unambiguously admitted that the Court is bound by the law (even a mere civil interest-rate disclosure law) and that they had no power to otherwise interfere with the consequences.

In the U.S., especially, the same principle is used systematically to confiscate the assets of the little people for the most seemingly trivial and otherwise unrelated legal offences because the law is the law.

Thomson v. Carpenter (1989/90)

In William E. Thomson Associates, Inc. v. Carpenter (1989) the same Ontario Court of Appeal, dominated by former-bank-solicitors who had been directly appointed or elevated as judges by a former-bank-director (Prime Minister Brian Mulroney, former director of the CIBC (Canadian Imperial Bank of Commerce)), found that the nominal creditor had illegally entered into an agreement or arrangement to receive interest at a criminal rate (145% per annum) in violation of the criminal law (max. 60%).

And that the nominal creditor had been aided and abetted by its solicitors – what the trial judge had described as a “leading Toronto law firm” – both / all of whom obviously knew that they were violating the criminal law, and which is also a designated organised-crime or racketeering offence, and so falsified all of the securities (constructive forgery or forgery-in-law) and supporting documentation to conceal and deny the real transaction.

And the plaintiff nominal creditor was itself a constructive middleman that had obtained its nominal loan funds from the CIBC, whose management had apparently been aware of the real (criminal) agreement and transaction, thus making the bank and its management co-parties to the same criminal offences, along with the solicitors of the “leading Toronto law firm”.

In total, there were a minimum of fourteen direct and substantive strict-liability domestic criminal offences and domestic and international racketeering and money-laundering offences. And all of the Courts (all three levels) found and admitted the necessary facts to establish same:

There is no doubt that the corporate plaintiff [Thomson Associates Inc., funded by the CIBC] committed an offence under s. 347(1)(a) by entering into an agreement or arrangement to receive interest at a criminal rate… [and] The parties… acted on the advice of their… solicitors…. [described elsewhere by the trial judge as “two leading Toronto law firms”]

And bearing in mind that if you rank-order all 800-plus offences under the Criminal Code according to how much money is obtained in fact in violation of them, then s. 347 would be ranked number-one (because virtually all loan-fees are illegal under the section (as they already are under GAAP also)) and would be at least 100-times greater than the next closest competitor, and regardless greater than all the other criminal offences combined.

On the facts established, Thomson Associates Inc., and its solicitors, and the CIBC, were all prima facie guilty (i.e., automatically once the trial court established the facts that established the offence against s. 347) of offending (at least) ss. 347(1)(a) (entering into an agreement to receive interest at a criminal rate), ss. 347(1)(b) (receipt or conversion of a payment or partial payment of interest at a criminal rate ($45,000 loan fee(s) converted in advance)), ss. 397(1)(b) (omitting material particular ($45,000 required rebate / kickback to creditor) from a valuable security for a fraudulent purpose (i.e., to deny and conceal the real transaction / criminal rate), s. 366 (making false document with intent to rely upon as genuine), s. 368 (uttering false / forged document), ss. 380(1) ((fraud) against unsecured creditors (including the ordinary employees) of the mining company), ss. 462.31(1) (laundering proceeds of crime), and ss. 463.3(c) (counselling to commit an enterprise crime / racketeering offence (a separate count / indictment against the solicitors (and the CIBC, and its own lawyers / solicitors) in respect of each of the preceding offences), all of which are enterprise crime / racketeering offences (now and as of 2001 called “designated offences”).

So the Courts obviously and overwhelmingly had no power to enforce or fix-up the illegal and in fact flagrantly criminal contract – Right?

Not so – said thirteen consecutive mostly-former-bank-lawyer-judges, from the trial judge, to a unanimous panel of the Ontario Court of Appeal, to a unanimous Supreme Court of Canada. They all agreed that the criminal law only provides for severe punishment of offenders but does not expressly state: Don’t do it:

“…[The criminal law [Section [347(1)(a)]][1], … provides only for punishment of persons agreeing to receive interest at criminal rates but does not prohibit agreements providing for such rates….”

The purpose of [the criminal law [s. 347(1)(a)]] is to punish everyone who enters into an agreement or arrangement to receive interest at a criminal rate. It does not expressly prohibit such behaviour, nor does it declare such an agreement or arrangement to be void. The penalty is severe, and designed to deter persons from making such agreements. … It is designed to protect borrowers … It is not designed to prevent persons from entering into lending transactions per se…. Therefore the agreement [which the Court / judges have found and acknowledged to be contrary and offensive to the criminal law, and which criminal law is a designated racketeering offence] is not fundamentally illegal.” (Thomson, (William E.) Associates Inc. v. Carpenter [1989] 34 O.A.C. 365).

The Courts / judges then wholly ignored all of the domestic and international criminal-law and racketeering violation(s) by the plaintiff, by the bank, and by the financial solicitors, and then gave the offending plaintiff full judgement.[2] And all sections of the Criminal Code are of the same form – none of them expressly state: Don’t do it. According to the judges’ (prima facie insane) reasoning, murder, theft, forgery, assault, fraud, and money-laundering etc. are also not fundamentally illegal.

And there you have it. The decision in Thomson was not an anomaly – it was standard operating procedure. The decision was then rapidly recognized and applied directly or indirectly to hundreds of civil law claims / decisions throughout Canada to legitimize flagrantly falsified securities that had been falsified to conceal criminal law violations.

Not a single judge appears to have even noticed anything odd about this new doctrine of: Yes, it’s definitely criminal and racketeering, but it’s not fundamentally illegal.

With my apologies for the seemingly inflammatory analogy, the global financial system and its civil Court-enforcement-system operates-in-fact under the general business-model that rape-is-wrongful-and-criminal-but-gang-rape-is-ok. It is the same in Canada and throughout most of the world. The more egregiously wrongful and criminal the act – the more likely the established financial order is to get away with it. And it is very much learned-behaviour, and eventually systemically-coordinated-behaviour.

If a single lawyer or solicitor messes up, even under just a civil disclosure law, then the law is the law and the Courts have no power to interfere with the consequences. In this case the Courts will often even make a show-of-it or make an example of the negligent lawyer to reinforce the public message that everything is under control and even lawyers cannot avoid the Rule of Law.

But if a sufficiently-large number or gang-of-solicitors all commit even the same criminal and even international-racketeering offences – no matter how flagrant – then the rule-of-law is simply thrown-under-the-bus and the former-bank-solicitors, who are directly appointed as judges by mostly former-bank-directors and bank-solicitors, will do whatever is necessary to cover for the solicitors and their financial liability.

Even if it means committing a prima facie seditious and criminal coup d’état against the Crown, the Parliament, the People, and the Law itself.

Ground Zero

It remains regardless that both the Canadian financial system and eventually the whole global financial system took the Courts’ decision in Thomson as a blanket policy decision that anything goes. Because of the massively-interconnected nature of the financial and international-treaty-connected legal systems,[3] Thomson became in fact ground-zero or case-zero of an ever-expanding global fraud-and-forgery-pandemic.

Thirty years later in 2020, there virtually isn’t a financial security on the planet that isn’t saturated with criminal law violations. We are all being systematically looted by a self-admitted professional-criminal-class.

So how do the financial solicitors justify such massive violations of the criminal law?

Simple: they add the following typical disclaimers to their mortgages and other securities:

NOTWITHSTANDING the provisions of any Statute [any lawful Act of Parliament (including the criminal law)] relating to the rate of interest payable by debtors this contract [and security] shall remain in full force and effect whatever the rate of interest received or demanded by [the Bank].


4.3 If the Interest Rate stipulated herein [7.75%] would, except for this clause, be a criminal rate or void for uncertainty or unenforceable for any other reason, then the interest rate chargeable on the credit advanced or secured by this mortgage will be ONE (1.00%) percent per annum less than the rate which would be a criminal interest rate calculated in accordance with generally accepted actuarial practices and principles [i.e., 60% – 1% = 59% per annum].

And, yes, all such disclaimers are in fact clinically-insane (by real existing medical / psychiatric standards, and even though bankers, lawyers, and judges are the only people on Earth who can’t see it).

And of course the disclaimers themselves are illegal and criminal in and of themselves, and automatically and independently render the securities null and void even if they weren’t already criminal under other provisions:

[A]ny contract stipulating whether directly or indirectly that the question of fraud [against the criminal law] shall not be raised, is against public policy and therefore void. (The Manufacturers Life Insurance Company v. Anctil [1897] S.C.C. Vol. XXVIII p.122)

It remains that a typical mortgage security in Canada (and increasingly the rest of the world) today is constructively and / or on its face (prima facie) offensive to domestic and international laws / treaties against one or more (and normally most) of falsification of an account, fraud, GAAP / IFRS-fraud, breach of trust, breach of fiduciary duty[4], embezzlement, constructive and actual forgery / making-false-documents, uttering false / forged documents, obtaining credit (from the issuer / pretended-borrower) by fraud or false pretence, omitting material particulars from valuable securities for a fraudulent purpose, receiving / converting payments or partial payments of interest at a criminal rate, incipient-mail-fraud and wire-fraud, laundering proceeds of crime, and racketeering / wagering.

And all nominally justified and purportedly legitimized by disclaimers to the effect that the parties know and understand that the agreements and securities are illegal and criminal, but if such should be discovered or raised as an issue, then either (1) they simply don’t care, and / or (2) they were just kidding.

But it’s all ok because none of the primary two dozen or so unlawful, illegal, criminal and international racketeering / organised-crime offences are “fundamentally illegal”.

People are conditioned to at best assume that major systems may be in need of tinkering or tweaking or some other minor adjustment. But our global financial-law system by which ownership of the wealth of the world is determined, is on its face (prima facie) clinically and criminally-insane – here again by real existing medical and psychiatric standards.

In theory if you genuinely believe that financial crimes are not fundamentally illegal because the criminal law only provides for severe punishment but does not expressly state: Don’t do it – then you absolutely cannot obtain bonding or insurance to otherwise hold any form of public office or do anything that requires the direct or indirect handling of money.

In summary and conclusion, here, until very recently, the 400-year-old rule used to be:

The principle of law is clear. The courts, which exercise the judicial power of the Crown, will not enforce a contract that Parliament, which exercises the legislative power of the Crown, has made unlawful. In the words of Lord Mansfield in Holman v. Johnson [1775]:

“The principle of public policy is this: Ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act.”[5]


This prohibition, as Chief Justice Dorion justly remarks, is a law of public policy in the public interest, and any transaction in violation thereof is necessarily null and void; no court can be called upon [has jurisdiction] to give effect to any such transaction or to enforce any contract or security on which money is lent or advances as thus prohibited are made.

It would be a curious state of the law if, after the Legislature had prohibited a transaction, parties could enter into it, and, in defiance of the law, compel courts to enforce and give effect to their illegal transactions.[6]

But ever since 1990, and the Supreme Court of Canada’s unanimous ratification of Thomson and the new doctrine of Yes it’s definitely criminal and racketeering, but it’s not fundamentally illegal, the new rule is that from now on whether a criminal contract drafted and solicited in support of a racketeering-operation remains enforceable in favour of the offending bank / bankers, aided and abetted by their financial solicitors, depends upon the former-bank-lawyer-judges’ opinion of:

The serious consequences of invalidating the [criminal] contract, the social utility of those consequences, and a determination of the class of persons for whom the [criminal] prohibition was enacted…[7]

Welcome to Apartheid 2.0. Only this time they’re calling it The New World Order.

The remedy in law and equity

Both law and equity are clear and automatic in the remedy, and as was ratified and explicitly spelled-out as recently as 1990 by the House of Lords itself. There isn’t even a triable issue. All the world’s alleged bank assets are held in constructive trust for all of the world’s alleged (pretended) borrowers – and the BAR and its malpractice liability insurance underwriters are responsible for all of the financial consequences to the world’s nominal depositors and other bank-liability-holders.

In Guiness PLC v. Saunders [1990] 2 A.C. 663, one of the directors of the beer conglomerate (and public company) Guiness Plc. (Mr. Ward) had entered into a nominal contract with / through two other directors of the company under which Mr. Ward would be paid a commission on the purchase / acquisition price of Distillers Plc. purportedly in exchange for his expertise and negotiation skills. After the purchase and sale was complete Guiness paid the resulting commission of £5.2 million to Mr. Ward (or rather his own private consulting company).

It was later discovered or raised as an issue that under the legally binding Guiness corporate / public-company bylaws directors could only receive such special remuneration / payments under a contract pre-ratified by the entire board of directors.

Guiness (led by its minority shareholders) sued to recover the £5.2 million on the ground that it had been paid over pursuant to a legal nullity – a non-existent or illusory contract.Virtually all of the world’s nominal mortgages have the same status in law:

[at p. 689, Lord Templeman] If the bid for Distillers had not led to allegations of misconduct by Guiness it is possible that the payment of £5.2 m. to Mr. Ward’s company, apparently for services rendered by his company, would not have been questioned or, at any event, that Mr. Ward would not have been required to repay that sum. But there never was any contract by Guiness to pay special remuneration to Mr. Ward for services rendered in connection with the bid for Distillers.

[p. 693] The fact is that Guiness never did contract to pay anything to Mr. Ward. The contract on which Mr. Ward relies is not voidable but non-existent.

[at p. 696, Lord Goff of Chieveley]. In the Court of Appeal [1988] 1 W.L.R. 863, Mr. Ward’s appeal against that decision was dismissed. It was said of him, at pp. 870-871, that he had “succeeded in getting his hands on the company’s money,” and that the company had never ceased to own the money which he had been paid. Accordingly Mr. Ward was a constructive trustee of the money which he had received, and must pay it back.

[at p. 702] Finally, I cannot see any prospect of success in a claim by Mr. Ward to relief under s.727 of the Act of 1985. Given that Guiness’s claim must be one for the recovery of money paid to Mr. Ward under a void contract and received by him as a constructive trustee, there is no question of his being able to claim relief from liability for a breach of duty, as might have been the case if Guiness’s claim had been founded upon breach by Mr. Ward of his duty of disclosure. [i.e., Mr. Ward is estopped (legally prevented) by the fact of the by-law from a defence based on the equitable doctrine of quantum merit.]

I have been very conscious, throughout this case, that Guiness is seeking summary judgment for the sum claimed by it, without any trial on the merits. Even so, I have come to the conclusion that Mr. Ward has no arguable defence to Guiness’s claim. The simple fact emerges, at the end of the day, that there was, in law, no binding contract under which Mr. Ward was entitled to receive the money and that, as a fiduciary [constructive trustee[8]], he must now restore that money to Guiness. For these reasons I would dismiss the appeal.

So in answer to the question: What is really going on out there? – The answer is that the entrenched-money-power, that purportedly owns and controls the planet, are in fact comprised of what the law (and equity) defines as absconding debtors who are in fact attempting to avoid and evade their lawful and legal debts to the People they have systematically looted and defrauded for generations.

Under the real terms of a typical nominal mortgage-secured transaction, the issuer and merely pretended-borrower advances pre-qualified real-estate-secured credit to the bank. The bank strips off the security as a premium for itself, and then returns – or reinsures – unsecured-credit to the pretended-borrower in the form of a deposit-credit that does not cost the bank anything to produce or create. The pretended-borrower then assigns the deposit-credit to the seller of the property via cheque. Then the bank merely agrees that it owes the purchase price to the seller instead of to the pretended-borrower.

Most critically, the pretended-borrower is in fact the lead-underwriter and creditor-in-fact and the bank is the lead-debtor and reinsurer.

But then doesn’t the bank have to pay back the secured or insured credit that it receives from the pretended-borrower? No (at least not in the banker/lawyer’s fantasy-fiction world) because virtually every mortgage directly or indirectly includes a clause to the effect:

8.11 The Borrower agrees that neither the execution nor registration of this mortgage …will oblige the Lender to advance any…money hereunder but the advance of money from time to time will be in the sole discretion of the Lender.

That in turn allows the bank to charge-off its liability to repay the secured-credit that it obtains from the pretended-borrower as a nominal loan-fee. It also converts the entire agreement into an illegal wager even if it were not already criminal to the nth degree.

So to anyone who is facing nominal or pretended foreclosure – the bank is in fact your debtor, and not only is the mortgage null and void in law and in equity – (in law it never existed) – but the bank also owes you a refund-with-interest for every last penny that you have paid to it under the falsified (and non-existent) security.

And for those who are not in foreclosure, or who have already nominally paid off their mortgage(s) – in both law and equity you are also the aggregate technical and actual beneficial co-owners of the banks and (pro rata) all of their apparent assets.

The entrenched-money-power is currently experiencing what psychiatrists call a lucid interval as the realisation sinks in that their managed-mental-illness business-model isn’t working any more.

Either they are all going to jail – or we are.

The decision-makers have decided – it’s to be a global public lockdown.

That, in a nutshell, is what is really going on out there.

Is that clear?

Timothy Paul Madden, forensic-financial-economist and historian of equity, law, and policy. Johannesburg, Republic of South Africa, March 26, 2020.

  1. The section was originally enacted as s. 305.1. Also, in this particular case the plaintiff / creditor had violated both subsections of the criminal interest rate law – the whole term yield was 145%, and the securities had been falsified to conceal it by front-loading $45,000 of interest in advance.
  2. Including its legal costs against the financial-fraud victim! The defendant Mr. Carpenter was not the nominal borrower. He was simply a pure guarantor who had not even received any premium to guarantee the payment.
  3. The global financial system operates under part-constructive and part-explicit level-playing-field laws that holds that if the banks in one country can get away with something, then all of the other banks can too.
  4. Normally a banker will claim that a bank is not a fiduciary, but the illegal or criminal status of one or more provisions means that the writing cannot pass as a financial instrument and instead creates a trust in favour of the issuer / nominal-debtor, and that automatically makes the bank a constructive trustee and fiduciary (Saunders v. Guiness Plc. (1990) H.L.). The two example disclaimers are from a standard Sun Life security (Personal Guarantee) and a Sun Life mortgage, respectively. Virtually all financial institutions in Canada have adopted variations of the same essential provisions.
  5. Snell v. Unity Finance, Court of Appeal, [1963] 3 All E.R., pp. 50-61, at p. 59.
  6. Bank of Toronto v. Perkins [1883] S.C.C. [Vol. VIII] 60
  7. Thomson, (William E.) Associates Inc. v. Carpenter [1989] 34 O.A.C. 365. Note also how quickly (in the same decision) the Court / judges commit the constructive Freudian slip of constructively referring to the criminal law as a “prohibition” notwithstanding the substance of their core ruling in the same case that there is technically no such prohibition. It is criminally insane either way of course, but that’s policy.
  8. The court / judge is referring to Mr. Ward’s legal status as a fiduciary of the trust that arose with the illegal delivery of the cheque. The reference is otherwise unrelated to Mr. Ward’s independent fiduciary status as a Member of the Board of Guiness. The reference to the offence of embezzlement, however, would involve Mr. Ward’s status as a trustee / fiduciary as a member of the board.