Michael McKiernan

Michael McKiernan

Monday, 06 February 2012 08:05

Judging the judges

Illustration: Tara Hardy
Illustration: Tara Hardy
In almost two decades of practice, criminal lawyer Paul Slansky had never complained about a judge. But one day in July 2004, he resolved to change that. Ontario Superior Court Justice Robert Thompson had just ordered him confined to the courthouse in Owen Sound, Ont., while jurors deliberated on the fate of his client, Vytautas Baltrusaitis, who was charged with murder. Toronto-based Slansky, who was staying at a hotel just a couple of minutes’ walk from the courthouse, viewed the move as malicious and petty. “However this conduct was merely the straw that broke the camel’s back,” Slansky wrote in an affidavit following the trial he called “the most difficult of my career.”
Wednesday, 01 February 2012 08:09

What's the future of glass houses?

When condo historians look back on the early 21st century, they may identify 2011 as the year Toronto’s love affair with the glass tower began to sour.
The summer was punctuated with incidents of falling glass from high-rise balconies shattering in the downtown streets, and the year ended with some developers and engineers voicing their concerns about the long-term durability and energy efficiency of buildings whose primary protection from the elements is a wall of double-glazed glass.
“Obviously, developers are very concerned, particularly when you look at the number of condos that have gone up, and are still going up using glass,” says Leor Margulies, a partner at Robins Appleby & Taub LLP, who is also a member of the executive at the Building Industry and Land Development Association.
He says it’s essential developers get engaged when potential issues come up.
“It’s tough, because the industry wants to make money, and on the other hand it has to be socially responsible, and I think it is. They’re actually really innovative and a lot of the buildings that are being built go well above the building code,” Margulies says.“It’s not for the industry to set the standards. It’s for the industry to work with the regulators to improve standards, which is constantly happening. But if there’s a problem, then the industry and government will sit down as they always do and try to find a realistic solution.”
Sally Thompson, an engineer with Toronto-based Halsall Associates, conducts reserve fund studies for condominiums, calculating the amount of money they need to set aside for future repairs and maintenance. She says window walls can be a significant source of major projects, typically accounting for around 20 per cent of condo owners’ reserve fund contributions.
In the early years after construction, she says the quality of the sealing job between slabs of glass can make a big difference. Once the building is complete, the original seal becomes inaccessible and the joints have to be resealed from the outside. In the first decade, some buildings get away with repairs to a few localized leaks, but one seven-year-old condominium she has done work for is spending around $500,000 to seal up joints on its tower. “With glass, there are so many joints to seal up that those projects become pretty significant. Some of these buildings need seven to 20 kilometres of caulking on a single tower,” Thompson says. “In a perfect world, no cladding should need that major of a repair after five or 10 years. If you bought a brick building or a pre-cast concrete building you wouldn’t expect it.”
At Earth Development, which bills itself as a socially responsible property developer, the company steers clear of glass walls, because of concerns over building performance.“We’re not anti-glass, we’re anti-all glass. It’s overkill to do floor-to-ceiling glass; you just lose so much energy,” says principal Mark Johnson. His colleague David House says there are ways to get a glass look by simply covering a better insulated pre-cast concrete wall with an outer layer of glass, but developers tend to be more attracted to the cheaper option of a glass wall.“We want to believe it works. The market likes it, it’s kind of cool to look at, it’s cost-effective, and none of us are really forced to measure energy, so it doesn’t really matter. But if people buying condos or leasing office space were the ones building the building, I don’t think they would be interested in all-glass buildings. As soon as you figure out this will double or triple your energy bill, you’d think it was nuts,” he says. “Some day, given our litigious society, I think someone will figure out this doesn’t work and want to talk about how to get some compensation somewhere.”
Mark Arnold of Gardiner Miller Arnold LLP has represented a number of condo corporations in disputes with developers, including unit owners at Harry Stinson’s landmark downtown Toronto 1 King West development in a long-running dispute involving various alleged deficiencies. “One portion of it was similar to what you have with glass falling from balconies, because there were parts of the exterior cladding on the building that started falling off. We had to prove why it fell off and to what extent the builder had investigated from an engineering standpoint.”
The case eventually settled with a global settlement before trial, making conclusions difficult to draw, but Arnold says cases like the Supreme Court of Canada’s 1995 decision in Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. make it possible to go after builders many years after completion. In that case, the condominium corporation was able to recover its costs for repairing dangerous defects caused by negligent design and construction 15 years after the building was substantially complete. Unit owners had to pay to replace the entire cladding after discovering the problem when a large section fell nine floors to the ground.
One problem Arnold frequently runs into with developer lawsuits is finding a source of money so he can enforce any judgment. “By the time the lawsuit raises its head, the builder-developer may have gone or the company is left as a shell,” he says.
But that doesn’t stop him from pursuing the matter if there’s a case to be made for developer liability. One case he’s currently working on involves a condominium corporation left with $500,000 worth of repairs to bring the project up to code. “The developer is saying they’re not going to fix it, and there’s no money left to fix it, so don’t bother us,” Arnold says. “So I have sued personally the developer’s sole director, officer, and shareholder, trying to pierce through the company veil to get to the warm body, and he doesn’t like it very much.”
Margulies is keen to stress that buildings with alleged glass problems have been meeting the Ontario Building Code, and says the falling balcony episode provides a textbook example for the way developers and the authorities should react when issues arise. In a November report, Toronto’s city council recommended emergency amendments to the province’s building code after investigating six buildings at four sites affected by falling glass from balconies. Those included the Festival Tower at the TIFF Bell Lightbox and a number of buildings owned by Lanterra Developments. By the time the report came out, Lanterra had already announced plans to replace tempered glass on its balconies with laminated glass. The process for making the less expensive tempered glass involves putting stress into the glass, which means that it breaks into small pieces when it fails. Laminated glass, on the other hand, does not shatter, meaning it is more likely to stay in place when it does crack. “Our first priority is the safety of the public and our residents,” said Lanterra in a statement in August when the change was announced.
Margulies says the Building Industry and Land Development Association’s members were immediately involved with the city to find out why glass was falling and what should be done about it. “You can only build in terms of standards that are set, so if there’s something wrong with the standards or one of the products, then it has to be determined and the builders will work with it,” he says. “The code is always being upgraded and we work closely with the building code commission.”
In addition to strict code compliance, Margulies says developers need to go back to basics to minimize risks, spending time vetting consultants, subcontractors, and suppliers.
“My grandmother used to say she couldn’t afford to buy cheap shoes. Yes, developers are always looking for the best price for profit, but they’re also looking to build a good product, and the builders that use the right consultants, and maybe spend a little more on the right product are hopefully less likely to encounter problems,” he says. “My big builders are very cognizant of ensuring that they don’t end up in lawsuits because of poor design or poor products. They want to have a product they can rely on when they go to the market again. If there are problems happening, that gets out.”
When problems do arise, as they inevitably will, many will be covered by the Ontario New Home Warranties Plan Act, which imposes mandatory seven-year warranties on new homes in the province. The act is administered by the Tarion Warranty Corp., and Margulies says developers’ behaviour in the process can have an impact. “If you’re going to be in business, things will happen. You can’t avoid it. If you build a 60-storey building, there will be deficiencies and issues, but I think the solid builders step up to the plate. They don’t wait for Tarion to come in; they deal with these issues. That’s what separates out the good builders. Once they’re in the business for the long term, reputation means a lot.”
Margulies says concerns over the long-term viability of glass-walled condos have been overblown, and Denise Lash, who chairs the condominium practice at Heenan Blaikie LLP in Toronto, says consumers may be unduly deterred by the idea of disposable glass-walled buildings. Experts are working on improvements to insulation in glass wall systems, while other wall systems are not perfect, she says. “Although the window-wall systems may not last as long, if you get problems with pre-cast concrete, you could have a very expensive overhaul 40 years down the road, that’s going to cost more than it would to do the ongoing frequent maintenance of window wall systems,” Lash says.
In addition, she says reserve
fund requirements should help condos foresee potential issues and plan for dealing with them many years down the road. “Engineers will come in and assess the life expectancy of all these major components, which includes the window wall system, and they’ll come up with projections over a 30-year period of how much to contribute to reserve fund every year,” Lash says.
Even so, condo owners do not always react well when handed the burden of repairs or replacements through maintenance fee boosts or special assessments, and developers are frequently targeted in lawsuits. In Toronto, Concord Adex has faced more than one action from condominium corporations at its CityPlace development near the city’s waterfront, while failing floor-to-ceiling windows are at the heart of a suit involving Vancouver’s landmark Wall Centre. Some condo owners in the 10-year-old building were hit with special assessments of more than $100,000 to repair an allegedly deficient sealing job that allows air and moisture in through cracks. The total repair bill is estimated at $7 million, according to a CBC report.
Vancouver and B.C. are no strangers to condo lawsuits. The province’s “leaky condo crisis” reached a peak in the 1990s as the region’s damp coastal climate, combined with inadequate construction, left some developers, engineers, and architects in legal hot water. A 1998 commission of inquiry led by former premier Dave Barrett laid into developers, engineers, architects, municipalities, and regulators for their roles in the debacle, which affected thousands of homes and resulted in repairs in the billions of dollars.
Some of the original cases are still crawling through the courts, and the
episode has cast a shadow over the condo market in B.C., constraining growth while other real estate sectors boomed.
Although Toronto’s condo market shows no signs of stagnation, it may be in developers’ long-term interests to address concerns about glass condos. James Balderson, who runs B.C.’s Coalition of Leaky Condo Owners, says consumer confidence in condos has been permanently shaken on the West Coast, and he expects other regions to follow in the future. “Here, anybody with a brain is well aware of the leaky condo mess,” he says. “People are waking up all over the country to leaky rotten condos. This will be a problem long in the revelation, and it might go on for years and years as it did here.”
Stricter requirements in the new Ontario Building Code may force the hands of some developers in that province. As of Jan. 1, 2012, all high-rise buildings must come in 25 per cent above the Model National Energy Code for Buildings for energy efficiency, a previously voluntary standard. “If people actually comply with it, then that should inherently reduce the amount of glass you can put on a wall, because compliance is going to be a huge challenge with floor-to-ceiling glass,” Halsall’s Thompson says.
Lash doesn’t see a shift entirely away from glass in the near future because developers are guided by consumer demand for glass buildings that deliver affordability. Thompson would like to see an energy-labelling system for buildings. “Only then will we see the truth about how these buildings are actually performing. You’d get some competition suddenly, because builders will want to build something that gets a better label.”
Illustration: Joel Kimmel
Illustration: Joel Kimmel
When condo historians look back on the early 21st century, they may identify 2011 as the year Toronto’s love affair with the glass tower began to sour.
Illustration: Jason Schneider
Illustration: Jason Schneider
This article is a continuation of "IP boutiques holding their own" from the January 2012 issue of Canadian Lawyer magazine. Click here to read Part One.
Tuesday, 03 January 2012 11:12

IP boutiques holding their own

When Philip Mendes da Costa started out at Bereskin & Parr LLP in the mid-1980s, intellectual property boutiques were small affairs. Twenty-five years later, “we’re now larger than some of the mid- to large-size firms,” says the firm’s managing partner. He says the 59-lawyer shop has grown in tandem with the increasing emphasis corporations are putting on their IP portfolios. “Back then, patents and trademarks were considered important, but not really central to the business of the company,” he says. “More recently, you’ve got companies who can receive more revenue from patent royalties than manufacturing products, and companies where the value of the IP portfolio or goodwill represented by the trademark portfolio is very significant, and stands out on the balance sheet. It’s of critical importance to make sure the IP strategy aligned with the business strategy.” For that reason, he says it’s natural that larger corporate firms are looking to get in on the action. “It’s not just a peripheral issue at the moment.æ
“[Boutiques] don’t dominate the field anymore like they might have done 10 years ago. Big firms have formed their own departments and the market has certainly become more competitive,” says one Bay Street practitioner, who says full-service firms are strong on the litigation and transactional side of IP law.
Another western Canada-based lawyer at a full-service firm says IP lawyers outside boutiques are still often overlooked because the field is so strongly associated with specialist firms. “Most IP practices, even in large firms, are run as mini boutiques. The IP department is run very differently from departments in other areas of law, because it really is quite distinct,” he says.
Mark Evans, managing partner of Smart & Biggar/Fetherstonhaugh’s Toronto office, says that the unique nature of IP law makes it difficult for large firms to match the depth of expertise boutiques can provide. Because the volume of IP litigation is not as high as in other jurisdictions such as the United States, firms need to branch out. Evans says some larger firms struggle to accommodate patent agents in their structure, or the specific file-handling systems IP demands. “We have our own proprietary systems and administrative features that are geared to that,” Evans says. “There are certain elements of IP that can be suited to general practice firms, but a lot of it is an uneasy fit.”
Despite the new competition, Mendes da Costa says IP boutiques have a long future ahead of them. “I don’t think it’s ever going to be subsumed into the full-service firm and disappear. We’re going to be here forever,” he says.
In employment and labour law, conventional wisdom says that large firms sop up the management-side work, while boutiques live off referrals when conflicts arise. But Erin Kuzz, co-founder of Toronto firm Sherrard Kuzz LLP, says there’s a lot more to it than that. “To be candid, our experience is a lot of the large firms have issues with billing rates. Some of the files that we do just can’t bear the billing rates that a large corporate commercial department might charge. I certainly understand that creates some conflict sometimes in the larger firms,” she says.
Paul Young, managing partner at Filion Wakely Thorup Angeletti LLP, agrees that price has been a key factor in the rise of the employment and labour boutique. He says new ones seem to spring up every year. “We just have a greater ability to be flexible in terms of fee schedules, which really makes us quite competitive,” he says.
And boutiques are cementing their positions by forming their own alliances across international borders to expand referral networks in an increasingly global business landscape. Young says the firm’s recent tie up with L&E Global, the Belgium-based group of 10 management-side employment boutiques, will bring in new work, as well as offering domestic clients with international business a ready-made panel of counsel in foreign jurisdictions. “You also get lots of ideas from the other firms in the alliance about how to attract new business, which leads to more entrepreneurial thinking,” he says.
Sherrard Kuzz also branched out last year, joining the larger Employment Law Alliance, which consists of 3,000 lawyers from 135 countries around the world. “Clients feel very well looked after,” says Kuzz. “I’d say it gives us bigger reach than some of the large firms, because they may not be willing to refer to firms around the world who may be competitors in other fields. We have no competition with the other members of the alliance, so it takes away that conflict issue.”
Our editorial team began the process of selecting Canada’s top IP and labour and employment boutiques by creating a short list of the most notable firms in their respective fields. From there, we drew on the experience of in-house counsel and large-firm lawyers who refer work to these boutiques, conducting a series of confidential interviews to identify the cream of the crop. The following results are an alphabetical list of the 10 boutique firms in each of the intellectual property and labour and employment categories that are most often called upon by other lawyers when stakes are high.
Illustration: Jason Schneider
Illustration: Jason Schneider
When Philip Mendes da Costa started out at Bereskin & Parr LLP in the mid-1980s, intellectual property boutiques were small affairs. Twenty-five years later, “we’re now larger than some of the mid- to large-size firms,” says the firm’s managing partner. He says the 59-lawyer shop has grown in tandem with the increasing emphasis corporations are putting on their IP portfolios. “Back then, patents and trademarks were considered important, but not really central to the business of the company,” he says. “More recently, you’ve got companies who can receive more revenue from patent royalties than manufacturing products, and companies where the value of the IP portfolio or goodwill represented by the trademark portfolio is very significant, and stands out on the balance sheet. It’s of critical importance to make sure the IP strategy aligned with the business strategy.” For that reason, he says it’s natural that larger corporate firms are looking to get in on the action. “It’s not just a peripheral issue at the moment."
Monday, 19 December 2011 10:46

Anti-spam law draws backlash

A mid-September webinar gave Patricia Wilson an insight into the waves Canada’s anti-spam law is making in the in-house community. The Ottawa partner at Osler Hoskin & Harcourt LLP co-hosted the event, which drew an unseasonably large audience of well over 300 viewers from across the continent, mostly corporate counsel hungry for information on compliance with the new legislation. “I think many businesses are just realizing that this applies to them, too. They’re all going, ‘Oh my God, what do we have to do?’” Wilson says.
Bill C-28, or CASL, as it’s become known, received Royal assent in December 2010, and while Canada arrived late to the anti-spam party — it was the last of the G7 nations to enact legislation dealing with the issue — it’s been making up for lost time since, quickly establishing itself with some of the toughest provisions the world has seen.
The act bars senders from delivering unsolicited commercial electronic messages, which includes text messages and e-mails, without receiving express or implied consent from the recipient. The broadness of the legislation has challenged common conceptions of spam, and forced businesses to rethink the way they market themselves and sell to the public.
“Anti-spam legislation is typically considered as something that goes after the bad apples. People think of those in-the-depths-of the-night type e-mail spammers who are running scams or sending viruses,” Wilson says. “This legislation has quite a broad scope and it will capture many regular business operations by legitimate operators, so in-house counsel are starting to realize that this imposes additional requirements that they’re going to need to take into account.”
To give it some muscle, the government has backed up its new measures with some impressive potential fines. Individuals who breach the law can face penalties of up to $1 million, while corporations are liable for as much as $10 million. Officers and directors may also be held liable if they participated in or acquiesced to the breaches. The act also creates a private right of action for CASL violators, paving the way for potential anti-spam class actions, with remedies capped at $1 million per day.
Those headline-grabbing numbers have been enough to attract the attention of many legal departments, but at the Globe and Mail, legal counsel Logan Willis says they’re not the only things that should concern them. “Penalties can be very high, but there are also reputational risks associated with non-compliance. At the Globe, for example, two-way engagement with our readers and the users of our media is very important to our business, so it’s critical we live up to their expectations as well. Those expectations will be shaped by this legislation in the future,” Willis says. “We’re treating compliance very much as a priority, and getting prepared is a lot of work.”
U.S. companies with Canadian customers face an additional headache, says Wilson, because CASL applies to any commercial electronic message sent from or received by a computer in Canada, and sets a higher bar for consent than its U.S. equivalent, the 2003 CAN-SPAM Act. “It’s difficult for U.S. businesses. Most are very compliance oriented, but they have the additional difficulty of having to locate recipients to confirm they are Canadian, as well as making sure they comply with the law,” Wilson says.
At the Globe, Willis has established an anti-spam team, with representation from across the company, to educate personnel on the requirements of the new law. They are then tasked with cascading the information down through their own departments. “We’ve found with other legislation that making sure people understand it is really the best defence for ensuring there’s no non-compliance in the future,” Willis says. The Globe is also conducting an audit of all existing communications the company has with clients and users to identify which relationships meet the strict consent requirements and which raise compliance concerns.
At Johnson & Johnson Inc., Andrea Freund, the company’s vice president of law, has taken a similar audit-based approach. But Freund says her company and others have been handicapped by uncertainty over when exactly the legislation will come into force, and what regulations will come under it. “The problem is since the regulations haven’t been finalized, we can’t put in place the final processes, training, and implementation plans. The audit itself is a large undertaking, and I think unless the regulations change, there’s going to be a significant amount of work still to do for many businesses.”
After the legislation passed Parliament in 2010, Industry Canada and the Canadian Radio-television and Telecommunications Commission, the bodies tasked with enforcing the law, released draft supplementary regulations the following summer. There was hope in the business community that the regulations would narrow the scope of the legislation and provide for exemptions, but Alexander Adeyinka, senior regulatory counsel at Rogers Communications, says it didn’t live up to expectations. “Unfortunately, when the draft regulations came out, frankly they didn’t do anything about the concerns that industry mentioned about the scope of the legislation itself,” says Adeyinka, who has also been active in the Canadian Wireless Telecommunications Association’s response to the legislation. “In fact, the regulations themselves in our general view went overboard in terms of some of their compliance requirements.”
As they currently stand, the regulations require senders of commercial electronic messages to make requests for express consent in writing. Consent can be implied where the recipient has had a business relationship with the sender in the last two years. There is also a “business card exemption” that allows senders to use e-mail addresses disclosed in the course of doing business, as long as the recipient does not object to receiving unsolicited messages.
Once consent has been obtained, all commercial electronic messages must also comply with form requirements, which means that the name, mailing address, web site, and phone number of the person sending the message, as well as any business on whose behalf they’re sending it, are contained in the message. Messages must also have a mechanism that allows recipients to unsubscribe from future messages.
The draft regulations attracted a barrage of comments, with more than 50 trade and public interest organizations making their concerns known, most from critical businesses and industry associations bristling at the compliance burden they will impose. Wally Hill, the vice president of the Canadian Marketing Association, says his members were particularly disappointed that consents obtained in the past under the Personal Information Protection and Electronic Documents Act would no longer be considered good enough for compliance with CASL. If the requirements are to change, he suggests old lists should be grandfathered to minimize disruption and costs. “Otherwise, companies are put in a position where they have to go out and re-qualify their entire database,” he says.
Susan Copland, director of the Vancouver-based Investment Industry Association of Canada, says the new rules could impede her members from acting on client referrals, and calls the “in-writing” requirement for consent requests “highly impractical” in an increasingly electronic world. “It basically precludes you from using electronic communication to get consent, or even verbal consent over the phone. The reality of business is that communication is instant, and people get impatient when they face a two-second delay when they’re sending e-mails, so it really doesn’t make sense,” Copland says.
Adeyinka is keen to stress that he, and most of the commenters, support the broad goals of CASL, but want to see more done to combat what he calls its “unintended consequences.” He says it’s unnecessary for the draft regulations to capture innocuous communications such as the text messages Rogers Communications sends to welcome new customers or to warn them when their pre-paid balances are low. “It may sound like businesses crying, but the way the regulations are right now, it will create inconveniences for customers as well,” he says. “We are extremely concerned about spam, and it’s in our interest to protect customers from being on the receiving end of it from anyone.”
John Lawford, counsel for consumer organization at the Public Interest Advocacy Centre, says he has little sympathy for those critical of the regulations. “They don’t want to face up to the fact that you can’t e-mail people you don’t know. Some of the marketers have woken up and realized that this thing may actually apply to them, so they’re attacking the regulations,” Lawford says.
Michael Osborne, a partner at Affleck Greene McMurtry LLP, says the tumult around CASL is unlikely to end with its coming into force. He calls the legislation Canada’s “biggest restraint ever on freedom of speech” and says he expects various provisions to be
challenged in court. “If I want to send a flyer to your house, I can do it. That’s part of the trade-off for living in a free economy, and I don’t see why e-mail would be any different. I don’t like getting junk at my door or in my inbox, but if I want to live in a free economy, I think I have to accept that,” Osborne says.
And while startup companies struggle to market themselves, and law-abiding companies shell out cash to upgrade their databases and track their communications, Osborne says he expects CASL to have a negligible effect on the inboxes of ordinary Canadians. “True spammers will thumb their noses at this. They’ll carry on sending e-mail for unlicensed pharmaceutical products and the like,” he says.
While the debate rages on over the regulations, larger companies are positioning themselves so that they’ll be ready to comply, whatever the final regulations say. Craig McTaggart, director of broadband policy at Telus Communications Co., says the real compliance problems will be for smaller companies. “Telus and other major companies have the resources to come to grips with this legislation now, but I’m convinced there are a lot of industries and companies that still don’t really know much about this legislation. There’s so much unknown, even among those who are fairly up to speed, so my view is the government is going to have to give a reasonable time for businesses and other organizations to bring themselves into compliance,” McTaggart says.
The backlash against the regulations has set back the “in-force” date for CASL until at least early 2012. Industry Canada and the CRTC are working on a second set of draft regulations, and some believe it may be 2013 before all the loose ends are tied up. Even if the legislation does come into force before then, many commentators say a transition period will be needed to give companies a chance to fully comply. “Anything less than six months would be mind-boggling,” says Hill.
Anti-spam law draws backlashA mid-September webinar gave Patricia Wilson an insight into the waves Canada’s anti-spam law is making in the in-house community. The Ottawa partner at Osler Hoskin & Harcourt LLP co-hosted the event, which drew an unseasonably large audience of well over 300 viewers from across the continent, mostly corporate counsel hungry for information on compliance with the new legislation. “I think many businesses are just realizing that this applies to them, too. They’re all going, ‘Oh my God, what do we have to do?’” Wilson says.
Monday, 29 August 2011 09:00

Yes, councillor

Yes, councillorSince late 2008, the Bowmanville, Ont., branch of the Clarington Public Library has been like a second home to Osgoode Hall Law School student Corinna Traill. After winning her spot at Osgoode, she decided to move home to her parents’ house in the town east of Toronto, and make the 80-kilometre commute for class. With the law school undergoing major renovations, and its library severely shrunk, Bowmanville filled the gap for Traill’s study space.
<< Start < Prev 1 2 3 4 5 Next > End >>
Page 5 of 5

Latest Videos

More Canadian Lawyer TV...

Digital Editions