Legal Feeds Blog
Does Canada need a formalized deferred prosecution agreement system to tackle white-collar crime?
|he separation of punishment of crime and public procurement is key, says Milos Barutciski.|
The report is based on a round table held in Toronto last November that included legal and academic experts and stakeholders for a discussion on ensuring “integrity in government procurement processes while allowing Canadian firms to conduct their business on a level playing field with international competitors.”
“Finding the Right Balance: Policies to Combat White-Collar Crime in Canada and Maintain the Integrity of Public Procurement” calls on the federal government to:
• adopt a regime of deferred prosecution agreements;
• disintangle punishment of crime and public procurement;
• strengthen enforcement;
• raise public awareness of white-collar crime; and
• fill the knowledge gaps in data and research.
The separation of punishment of crime and public procurement is key, says Milos Barutciski of Bennett Jones LLP who was a member of the round table.
“Procurement policy should be about securing the integrity of public procurement and value for the dollar for the Canadian taxpayer,” says Barutciski. “The criminal justice system is about punishment, retribution, rehabilitation — that’s a separate world and the old regime confused the two. It became a piling on of punishment.”
In 2012, the government introduced stricter eligibility rules and automatic 10-year disqualification period for doing business with governments for companies charged with fraud and other offences, either domestically or abroad.
But as certain cases came to light, critics started suggesting the punishment was excessive with unintended consequences. A lack of appeal mechanism was also cited as a potential violation of due process.
Then in July 2015, the rules were adjusted and the 10-year debarment rule was reduced to a potential five years through an administrative agreement that included monitoring to make sure remedial actions and compliance were being followed.
Barutciski says it doesn’t make sense to add criminal punishment when companies have already paid in the form of a fine and conviction.
“A debarment will only hurt innocent employees and communities where the companies do business,” he says.
Barutciski says in Canada, the system overall doesn’t enforce effectively or efficiently. He points to prolonged trials such as the one involving former Nortel executives and delays in the preliminary inquiries for cases such as SNC Lavalin.
“When it comes to white-collar crime we make a meal of it in Canada; cases take forever,” he says.
“The trial in that case won’t be for years — it’s ridiculous,” he says. “Part of that is about inadequate resources and inadequate court time and the pre-trial procedure.”
Deferred prosecution agreements are favored by lawyers such as Norm Keith, a white-collar crime lawyer and partner with Fasken Martineau DuMoulin LLP.
“I think deferred prosecution agreements are very important,” he says. “In the U.S. and the U.K., the only way for a publicly traded company to survive and not get its stock price beat up is to negotiate a deferred prosecution agreement.”
In the U.S. companies only get a DPA with the Department of Justice if they also turn in the individual or individuals involved.
“It takes away some of the criticism of DPAs that they can be become an easy shield for a company to admit responsibility,” he says.
Some, including Barutciski and those involved with Transparency International, are against DPAs but Keith says that is a “big mistake.”
“You’re not going to get companies coming forward and admitting they’ve had problems until they know there is a solution available,” he says.
While there are “isolated diversion programs” in Canada, Keith says the big problem here is that there is no comprehensive approach to defer prosecution and no rules in place that individuals know about in advance.
Barutciski says he would rather see what can be done with existing laws before drafting new ones. His concern is a DPA would see a judge “bless” a settlement but questions if that is really the role of a judge — rather, he says, shouldn’t it be the role of the Crown?
“We think our legal system currently allows for DPAs, and the problem with going for a statutory regime is once you start drafting something what comes out is rarely what you wanted,” he says.
“It starts becoming a political football. Right now we have immunity agreements — essentially the Crown promises that someone who could be charged won’t be charged if they satisfy certain conditions including giving evidence. How different is that from a DPA?”
Keith says there is also public interest in collecting fines through DPAs.
“I think DPAs are absolutely necessary and helpful. They will help in cleaning things up and bringing light to the whole subject of corruption as opposed to what happens now,” he says.
For now, he says a good lawyer has to tell a client not to self-disclose unless they know they are going to get caught.
“That might sound bad, but that is the correct advice to give, otherwise you’re getting nothing for it,” he says.
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- Claims father disinherited her for having a mixed-race child
A daughter who alleges she was disinherited by her father for having a mixed-race child will seek leave to appeal from the Supreme Court of Canada, after the Ontario Court of Appeal earlier this week upheld testamentary freedom in supporting the man’s will.
|The appeal court says neither human rights codes nor the Charter are sufficient to override someone’s final, private, legal bequest. (Photo: Shutterstock)|
Verolin claimed in her affidavit that her relationship with her father was close, and only soured after she told him that she was having a child fathered by a white man. Eric was emphatic over the years that her “white bastard son” would never set foot in his house.
When Eric died in 2013, at age 71, he left a will that bequeathed his entire estate, worth $400,000, to his estranged daughter, Donna. The will was unambiguous: “I specifically bequeath nothing to my daughter, Verolin Spence, as she has had no communication with me for several years and has shown no interest in me as her father.”
Last year, Superior Court Justice Cory Gilmore set aside the will, finding that the “clear and uncontradicted” reason for disinheriting Verolin was based on a racist principle, and that the man’s will “offends not only human sensibilities but also public policy.”
That decision, however, was struck down Tuesday by the Ontario Court of Appeal, which found in Spence v. BMO Trust that testamentary freedoms were absolute — that neither the Human Rights Code, nor the Charter, nor public policy arguments are sufficient to override someone’s final, private, legal bequest.
“The court’s power to interfere with a testator’s testamentary freedom on public policy grounds does not justify intervention simply because the court may regard the testator’s testamentary choices as distasteful, offensive, vengeful or small-minded,” the decision states.
The decision also notes that, while third-party evidence points to an uncontradicted racist motive, the will itself contains no racist statement, and inferring one would open the floodgates to challenges by disappointed beneficiaries.
Estate lawyers will no doubt view the appeal court’s decision as a big win that protects the interests of their clients. Justin de Vries, counsel for the respondent, declined comment beyond saying that his client was content with the decision.
Plaintiff’s counsel Michael Deverett, meanwhile, is currently preparing leave material for submission to the SCC. He’s hoping that the high court will see things differently.
“The Court of Appeal gave its reasons, and they gave case law to support it, and they said were not going to allow the floodgates to open. I get that. It’s just a question of whether or not the Supreme Court of Canada will agree.”
While the appeal court suggests that legal and unambiguous bequests are sacrosanct, Deverett doesn’t believe an expressly racist will could survive a court challenge. And he says there are examples where human rights protections against racism have trumped private economic freedoms.
Deverett, for example, points to an article written by none other than Chief Justice Beverley McLachlin entitled “Racism and the Law: the Canadian Experience,” in which McLachlin cites the 1939 SCC decision Christie v. York.
The case involved Fred Christie, a black man who was denied service at the York tavern after a Montreal Canadiens game. Christie’s lawyer argued that Quebec’s laws forbade such discrimination, but the Supreme Court at the time was of the view that private commercial freedoms were absolute.
The 1939 decision states: “ . . . the general principle of the law of Quebec is that of complete freedom of commerce. Any merchant is free to deal as he may choose with any individual member of the public. It is not a question of motives or reasons for deciding to deal or not to deal; he is free to do either.”
The point being, times have changed.
“If that were to happen today, there would be no question that that would not be sanctioned by the courts,” says Deverett. “I think that maybe it’s time for our view of testamentary freedom to be re-evaluated by the Supreme Court.”
Legislative intervention from Ontario’s Liberal government could also provide a useful avenue for reform in testamentary law:
“The thing is, we don’t have human rights legislation for wills,” says Deverett. “Legislation says you can do this, you can’t do this, you can do this, you can’t do this. And it’s very well set out with strict guidelines. . . . That’s an important point that the Court of Appeal was addressing, you know, that they’re not about to open a new avenue without direction from the legislature.”
The Canadian Bar Association is encouraging in-house counsel to implement a set of business principles within their companies to combat labour abuse.
|CCCA chairman Frédéric Pérodeau says in-house counsel are especially in a position to have a role that goes beyond providing legal expertise to their business clients, related to labour issues.|
The CBA adopted the principles this week, saying forced and illegal child labour are “realities we cannot ignore” in this country.
The guideline is inspired by international laws as well as work done by the American Bar Association, but the final document has been tailored to the distinct realities of Canadian businesses, says Frédéric Pérodeau, chairman of the Canadian Corporate Counsel Association.
The CCCA, an arm of the CBA, mounted a 10-month effort to draft the principles. They will help combat forced labour, labour trafficking, and illegal child labour if in-house counsel and their business clients adopt them, Pérodeau says.
The model considers situations where people are forced to work but are not trafficked over a geographic area. This could include children. It also considers scenarios that could be happening in Canada, such as children working in family-operated businesses in the agricultural and restaurant sectors.
“These issues exist in Canada,” says Pérodeau. “We feel that we have a responsibility, as the voice of in-house counsel, not only to organize professional development activities but also be proactive in some other fields, including advocacy and moving this resolution before the CBA council.”
The CBA’s resolution, which was adopted by the association’s council, said lawyers, including in-house counsel, have “a pivotal role to play in advising businesses on corporate social responsibility and environmental, social, and governance issues, and reporting on related legal duties and obligations.”
In-house counsel are especially in a position to have a role that goes beyond providing legal expertise to their business clients, according to Pérodeau, who says they are also “the moral compass of the corporate world.”
The model document is not prescriptive, but rather it provides four principles in-house counsel can use to implement their own policies at work.
The principles, in brief, are following:
1. The business should prohibit forced labour, labour trafficking, and illegal or harmful child labour in its operations.
2. The business should conduct risk assessments of the risk of forced labour, labour trafficking, and illegal or harmful child labour in its operations and continually monitor implementation of this statement of principles.
3. The business should train relevant employees, engage in continuous improvement, and maintain effective communications mechanisms with its suppliers.
4. The business should devise a remediation policy and plan that addresses remediation for forced labour, labour trafficking, and illegal or harmful child labour in its operations.
“We wanted to make sure these principles were reflective of the Canadian reality,” Pérodeau says.
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Edmonton M&A lawyer Shawna Vogel has been named one of five new global vice chairpersons for Dentons.
|Edmonton M&A lawyer Shawna Vogel has been named one of five new global vice chairpersons for Dentons.|
“It is very exciting; things have come a long way when I reflect on it on,” she says. “There were not that many women partners when I graduated. I think women in our class accounted for 40 per cent so it was a decent percentage but from my graduating class, in terms of transaction lawyers, there is essentially myself and one other classmate still practising who happens to be at Dentons as well.”
While Vogel noted there are a number of women from her graduating class serving on the bench, in government, and in specialized boutique practices, there are not that many still practising in transactions or in top-level management.
“The good news is I see a lot of women becoming partners every year and a lot of women associates so I see a real growth and change since 1984. A lot of the milestones we were trying to break through — I feel like we’ve achieved them,” she says. “There is still a ways to go, but I’m proud of it.”
With more than 30 years of experience, Vogel’s practice is focused on mergers and acquisitions, corporate reorganizations, financing, and international trade. She is also recognized as a leading lawyer in sports law. Based in Edmonton, Vogel is the presiding member of the Dentons Canada Region Board.
Vogel says she thinks women are staying longer in private practice and efforts to consider women for opportunities and improve processes have helped encourage more women to stay in the practice of law.
“One of the problems I’ve come to realize in getting any kind of diversity involved in the upper levels — whether it’s more women or younger people — it’s very much about looking at the process used to fill those positions and if we’re going to improve our diversity it means changing the process.”
Historically in law firms, she says, people have risen into management not by election but through discussions among partners who are influential. Consensus is reached on an informal basis, which has not provided as much opportunity for women.
A few years ago, Dentons put a nominating committee process in place for when there is a management position. Each partner is asked if they are interested and to also suggest who they think might be a good candidate.
“It’s disrupted a traditional process of boards and management replicating itself by confining its discussion of who would be appropriate to just a small group and I think that’s made a big difference,” says Vogel.
In her duties on the global board, Vogel will be travelling every two months to the regions Dentons operates in including Australia, which she visited in January, and China next month.
The global vice-chairperson position is for a one-year term.
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If a drunk person falls asleep in a parked vehicle, is it impaired driving? It might depend on who you ask, and which province you’re in when the incident happens.
|A recent Ontario decision found a drunk man sleeping in a running car was not guilty of any criminal offences. (Photo: Shutterstock)|
The ruling last week in the Ontario Court of Justice, R. v. Toyota, should help lawyers handling impaired driving offences. The decision addresses the risk-of-danger element of care and control of a vehicle in the Criminal Code.
Justice Alan D. Cooper ruled that defendant Ryan Toyota was not guilty of a crime for falling asleep in a parked vehicle outside a housing complex in Burlington, Ont. in February 2015, with the engine running and the exterior lights on. Court heard Toyota was drunk but planned to stay at a friend’s house, and only slept in the vehicle because he was locked out of the home.
The ruling focuses on a section of the Criminal Code in which the presumption of care or control of a vehicle is established. Cooper’s ruling refers to case law established by the Supreme Court of Canada in R. v. Boudreau “that the risk of danger is an essential element of care and control.”
“In the opinion of this court, the cumulative defence evidence has satisfied me on a balance of probabilities that Mr. Toyota had no intention of driving his vehicle home that night. He was sleeping in his car, with the engine on to get heat, only because his homeowner friend had passed out and had locked Mr. Toyota out,” said the ruling.
“The clear plan was for the defendant to spend the night inside that residence so he would not have to drive home. The presumption of care and control has been rebutted.”
According to the case history outlined in ruling, police arrived at the housing complex and found Toyota sleeping in the vehicle, in below-zero temperatures. After the officer opened the car door and smelled alcohol within the vehicle, the officer asked Toyota to step out.
The officer noted Toyota was groggy, and had glassy eyes and slurred speech. Police arrested Toyota and took him to a police station for testing.
Cooper indicates in his ruling that the police gave evidence “the car as parked properly, and there is no evidence that it would be a danger to anyone by virtue of where it was located.”
“It is necessary to consider whether a realistic risk of danger still existed because Mr. Toyota, in his inebriated state, might have changed his mind and driven somewhere, or might have unintentionally set the vehicle in motion,” said the ruling.
Cooper goes on to say “although the defendant’s blood-alcohol readings were 160 and 160 milligrams of alcohol in 100 millimetres of blood, it is my view that once awake, it is very unlikely that he would have changed his mind and driven home. I also find it unlikely he would have unintentionally set his vehicle in motion in his intoxicated condition. To set the car in motion he would have had to put his foot on a brake, push a button, and pull the gear lever back.”
Therefore, Cooper concludes the Crown didn’t prove its case that Toyota presented “a realistic risk of danger in the particular circumstances.”
It’s not the first time cases have emerged on how drunk driving is defined, or prosecuted, under the Criminal Code. Last month, media reported that the Royal Newfoundland Constabulary charged a 33-year-old man with impaired driving and other offences after finding him asleep in his vehicle.
The Edmonton Sun also reported in 2013 on a case where a woman as charged for falling asleep in her vehicle after drinking, and expressed displeasure with Alberta’s impaired driving laws.
He called the approach “Draconian” and said the law “mandates an immediate three-day impoundment of an offender’s vehicle and three-day suspension of his or her licence on first offence. No trial, no appeal, not even a chance to call your lawyer.”
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A Toronto-based tax lawyer disbarred in California for moral turpitude is hoping for a different result after appearing in front of the Law Society of Upper Canada’s disciplinary tribunal to oppose an interlocutory motion to suspend his Ontario licence.
LSUC counsel Leslie Maunder brought the March 2 motion on the grounds there is significant risk to the public if sole practitioner Joel Allan Sumner is allowed to continue to practise during a conduct unbecoming investigation against him for allegedly sending threatening and harassing e-mails and phone calls.
“I think what’s most important is that the prosecutors no longer abuse their power,” says Sumner, who was self-represented at the LSUC hearing.
“I think I got the message to the tribunal about what these guys did to me down in California,” he adds. “They turned the justice system into a racket; obviously I don’t particularly want to get suspended, but I think if I cause a change, it’s worth it.”
Sumner made a motion to the tribunal panel, chaired by Malcolm Mercer with Sophie Martel and Andrew Oliver, to exclude the e-mail evidence against him on the grounds the statements it contained were made as a result of “torture and/or cruel, inhumane or degrading treatment or punishment.”
The motion to exclude evidence was dismissed by the panel and it reserved its decision on the suspension motion.
Sumner was disbarred in California in December 2014 when he failed to participate in the disciplinary proceeding there for sending threatening e-mails.
He was found to have committed moral turpitude after sending intimidating and threatening e-mails to San Bernardino County Chief Deputy District Attorney John Kochis and others about Kochis when he did not appear at the hearing to respond to the allegations.
According to the LSUC factum, Sumner is still facing 27 criminal charges with an outstanding warrant in relation to those emails in California.
“The threats underlying the criminal charges and disbarment occurred prior to the respondent obtaining his license to practise here in Ontario,” the factum states.
It goes on to say Sumner began sending threatening e-mails to Kochis as early as 2011, leading to criminal charges in February 2012 and his disbarment in 2014. He was called to the Ontario bar in January 2012.
Those e-mails include statements like: “When I go to California next I will arrest [sic]. If you resist I will kill you [sic] accordance with the law!!”; “You should die”; “I intend to arrest him and if he resists, I will kill him”; “I authorize the Hells Angels to act as my agent and arrest chief deputy district attorney John P. Kochis. If he resist [sic] the Angels may use all lawful force to secure the prisoner, including lethal force if allowed under the law.”
The factum states in early January of this year the LSUC obtained a phone call recording from the sheriff’s dispatch centre in San Bernardino County “of someone believed to be the respondent” making further explicit threats against Kochis.
The LSUC received another recording from the sheriff’s call centre from February with the caller stating it was Sumner, declaring Kochis under arrest, and “threatening to use all necessary force to effect the arrest, including lethal if lawful.”
Sumner says Kochis conspired to extort him, causing him pain and suffering through abuse of his public office position and leading to his e-mail responses.
“I signed this release involuntarily; he [Kochis] threatened me that if I don’t sign this release he’s going to withhold an official act and oppose my motion,” Sumner says, alleging Kochis sent him threatening e-mails as well.
“He engaged in all the elements of torture as I understand it.”
Sumner argued because the e-mails were sent as a result of his torture, the e-mail evidence should not be allowed.
According to the summary of facts, Sumner had been charged in California in 2007 with battery and vandalism against a roommate. Sumner signed an agreement of compromise, settlement and mutual release in 2010 releasing himself and the roommate from any further claims arising from the 2007 altercation. He was granted a declaration of factual innocence in 2010 after signing the mutual release.
According to the summary, at some point after signing the release, Sumner came to the conclusion that Kochis “knew” the allegations against him were based on lies and he had been coerced into signing the release. Sumner then began to accuse Kochis of criminal offences, including coercion and extortion, and sent e-mails to him or about him to others that eventually lead to his California disbarment.
Sumner argued he was effectively kidnapped by police when wrongfully arrested in 2007 with Kochis engaging in extortion and torture “by insisting on the settlement/release before agreeing to the Deceleration of Factual Innocence.” He says Kochis extorted him when Kochis forced him to sign the release in exchange for not opposing the motion for declaration of innocence.
While the LSUC states Sumner has practised in Toronto without apparent incident or complaint “at the same time, he faces serious criminal charges in California — for which he would be arrested if he returned — has been disbarred and is currently being prosecuted by us for making threats against Mr. Kochis and the prosecutor of the discipline charges in California.”
The additional tape recordings of phone calls secured by the LSUC earlier this winter include similar threats against Kochis.
Sumner also sent an e-mail to LSUC disciplinary counsel Maunder on Feb. 19 stating: “You are taking or withholding an official act for the purposes of comforting or insulating an extortionist who used coercion and crossed the line between public and private beneficiaries. Mr. Kochis is under arrest, if he so much moves an inch, I will consider my life to be in danger and I will pop two shots into the side of his head!”
The LSUC declined to comment as the decision is still under reserve.
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