December 16, 2008 by Guy Crittenden
Chester Waxman has died at the age of 82, after fighting asbestos-related lung cancer for just under three years. I wouldn’t wish mesothelioma on anyone, yet it’s somehow not surprising that someone who worked in the scrap recycling industry might succumb to it. Asbestos was a common material back in the day when Waxman was part of the hands-on side of his family’s recycling operation. You can read the detailed obituary at www.solidwastemag.com (December 15, 2008) website news.
I thought it’d be interesting to reprint two items. The first is an article from today’s Hamilton Spectator; and the second is an editorial I wrote back in the August/September 2002 edition of Solid Waste & Recycling magazine after judgement was rendered in Waxman v. Waxman — the longest running civil lawsuit in Ontario history. See below.
Tough, honest business grew from junk buyer to scrap empire
STEVE ARNOLD — The Hamilton Spectator
(Dec 15, 2008)
It takes guts to build a business from almost nothing.
That was one of the things Chester and Morris Waxman had going for them over the 40 years they worked together to turn their father’s horse-and-wagon junk trade into one of Canada’s largest scrap metal companies.
“Chester had a lot of street savvy,” recalled Ron Foxcroft, whose trucking company was next door to the Waxman scrapyard for almost 25 years. “Chester was a salesman, a promoter, a leader. In scrap, and trucking, you have to be tough. You have to make tough decisions, and Chester did that.
“He was tough guy, a passionate guy, a never-give-up kind of guy.”
The Waxman business roots go back to 1911 when Isaac, a Jewish shoemaker from Poland, arrived in the city. After losing his job because he refused to work on the Sabbath, he got a horse and wagon and took to gathering rags, bottles and other scrap to earn a living. After 11 years, he’d earned enough to bring his wife and five children from Poland. Eventually, four more children were added to the brood, including Morris in 1925 and Chester in 1926.
Chester Waxman left high school at age 15 to help support the family, working as a jeweller’s apprentice and then at Hamilton Bridge and National Steel Car during the Second World War. After the war, the brothers joined their father in the junk business, trading the horse for a truck and focusing on scrap metal, which they sold to the city’s booming steel mills.
They quickly won contracts with Stelco, Butler Manufacturing, Firestone and other companies that soon had the scrapyard behind the family home on Harriet Street humming with constant activity. Early on, the brothers divided up the workload to play to their strengths — Morris ran the yard and the trucks while Chester handled sales and the legal-financial side.
When the scrapyard needed a new piece of equipment Morris laid out the specification and Chester made the deal.
That tag-team approach worked well — without a well-run yard the company wouldn’t have been able to handle the volume of business Chester brought in.
“They were successful because they started young, they kept up with the times and they worked damn hard,” recalled former Ontario lieutenant governor Lincoln Alexander. “To succeed in business you have to believe in yourself, and the Waxmans did that very well.
“Chester was especially tough,” he recalled. “He didn’t back down from anybody, he was a real fighter.”
Success brought rewards — the brothers often treated themselves to matching Cadillacs and expensive gifts for their wives. There was also money to indulge Chester’s interest in horse racing, allowing him to buy a part interest in the Fort Erie race track.
Over those decades, I. Waxman and Sons had a sterling reputation in the city and a tough industry.
“My grandfather, who’s 94, remembers selling scrap to the Waxmans on nothing but a handshake,” said former regional chairman Terry Cooke. “There was never anything but a handshake and my grandfather was never disappointed.”
The fact they started from such modest beginnings coloured the way the brothers approached business, Cooke added.
“Because they started with nothing they knew they had to hustle and find a way to survive,” he said.
Former mayor Jack MacDonald had a similar memory of Waxman.
“Chester Waxman was one of my very favourite people,” he said. “He was one of the most interesting and honest people I’ve ever known.”
As Chester’s sons matured they also joined the business, following a short road from sales to the executive offices. A spot was also found for Chester’s brother-in-law Sheldon Kumer.
The Chester-Morris partnership dissolved in the mid-1980s into a bitter legal dispute that eventually ended with a multimillion-dollar judgment in favour of Morris. In March 2007, the family business was ordered into liquidation. The assets were eventually sold to Montreal scrap king Herb Black and the shell of the company was petitioned into bankruptcy.
Solid Waste & Recycling, August/September 2002
The Waxman Decision
On June 27, 2002, the Ontario Superior Court’s Madame Justice Mary Anne Sanderson rendered her decision in Waxman vs. Waxman. Her ruling, which runs 440 pages, culminates 14 years of civil litigation capped by a 200-day trial between warring factions of the country’s most prominent scrap-recycling family. (See “Family Scrap” in the October/November 2000 edition.)
Judge Sanderson’s decision struck like an avenging sword. The judge ruled that Chester Waxman duped his older brother Morris out of his 50 per cent share of the multi-million-dollar family business I. Waxman & Sons Ltd. in December 1983. The ruling reinstates the plaintiff Morris (now 77) as half-owner of the company and orders Chester and his family to return his share in tens of millions of dollars in profit and bonuses pocketed since 1984.
Stating they were “fabricated,” the judge rejected Chester’s defense and most of his counter suit as well as the testimony of his three sons, company accountant Steve Wiseman, and lawyer Paul Ennis (whom she also found liable). Moreover, she assigned unusual punitive damages against Chester totaling $350,000, saying, “He abused the trust of a loving brother and faithful partner.”
“On the facts before me,” she writes, “I find Chester’s conduct meets, indeed, surpasses, the bar set…for malicious, oppressive and high-handed conduct deserving of public censure by the court.”
The judge accepted Morris’s testimony that in 1983, shortly before he was to undergo open-heart surgery, Chester — his brother and business partner of 40 years and someone he trusted implicitly — got him to sign over half of the business for just $3-million and ignored his pleas to tear up the deal after he realized what had happened.
The judge cites the issue of succession as the trigger for the terrible feud. The accountant had proposed an “estate freeze” (for tax purposes) in which Chester’s three sons (Robert, Gary and Warren) and Morris’s two sons (Michael and Douglas) would each inherit an equal 20 per cent of the company. Morris rejected this proposal as it gave control to Chester’s sons (three could out-vote two).
The judge determined that Chester, angered by Morris’s rejection of the estate freeze, sought to gain control of the company and operate it from then on for the benefit of himself and his sons. Morris and his family, for example, were not made aware of multi-million-dollar bonuses that Chester paid himself and his boys, or of property leases that were highly unfavorable to Morris.
The judge concluded that Chester and his sons formed a number of side businesses that provided various services to the company (e.g., Greycliffe trucking) the real purpose of which was to divert equity from the company through such things as inflated charges. Her ruling provides tracing orders to allow the plaintiff to recover profits that may have been invested in such things as fine art and Bobby Waxman’s notorious racehorses.
The judge also found that Chester and his sons induced Philip Environmental to breach contracts it held with a business operated by Morris and his son Michael, Solid Waste Reclamation Inc. (SWRI). Philip was then just a young start-up company that provided contract services to SWRI. Chester and Bobby told Philip’s owners Allen and Philip Fracassi they would only drop a lawsuit against them if they stopped doing business with Morris.
The judge writes, “I find that Robert tampered with the documents, then presented them to Fracassi…in order to induce Philip to terminate its contract with SWRI.”
The Fracassi’s took most of SWRI’s customers with them to the benefit of Philip and later bought Chester’s business for $30-million. Morris and his family, already shut out of I. Waxman & Sons, were left devastated.
During the trial the judge was absolutely inscrutable. But in her written decision she makes it clear — in terms that are at times scathing and quite personal — that she found Chester and his sons not to be credible witnesses. She mentions that Morris’s family medical benefits were cut off shortly after his wife was diagnosed with cancer.
Meanwhile, she cites testimony that as a child Morris defended his younger brother from schoolyard bullies. She praises Morris as a “reluctant warrior” who was slow to sue his brother Chester for fear of shaming the family. She praises son Michael as a young businessman with whom she was greatly impressed. She quotes transcripts that recount how the extended Waxman family in Hamilton has sided with Chester — who controls the purse strings — and shunned Morris and his family, though the judge decided that he was the real victim.
The story isn’t quite over yet. Chester’s lawyers say they will file an appeal, stating that a man is responsible for his signature and has a duty to read documents before signing them. And Philip Environmental’s lawsuit against Chester’s son Bobby for $150-million is still before the courts. Philip’s lawyers will find Judge Sanderson’s conclusions about Bobby Waxman’s and Allen Fracassi’s testimony in Waxman vs. Waxman excellent bedtime reading.
But there’s one outcome that needn’t wait for further court decisions: The extended Waxman family that sided with Chester should read the judge’s decision line by line, word for word.
Readers can access the complete 440-page decision in Waxman vs. Waxman and the related lawsuits by looking under the “Posted Documents” section at our Web site: www.solidwastemag.com
Guy Crittenden is editor-in-chief of this magazine. Send your letters to: