Legal Feeds Blog
The Ontario Court of Appeal has ordered a Corruna, Ont., lawyer to pay $200,000 in damages after finding he was negligent and breached his fiduciary duty when he represented both parties in a sale of shares transaction. The lawyer had mistakenly perceived the transaction as a gift rather than a sale.
|Brian Radnoff, lawyer with Lerners LLP, says the court of appeal drew a very different factual conclusion from the evidence compared to the trial judge.|
“Having perceived no potential conflict, he did not undertake the most basic obligations of a lawyer to his client: to raise the problem of acting for both sides, to explain the potential conflict, to obtain consent to act for both sides or to recommend independent legal advice,” said appeal court Justice Kathryn Feldman, who wrote on the court’s behalf.
Brian Radnoff, commercial litigator and appellate lawyer at Lerners LLP, says the court of appeal in this did something it’s normally reluctant to do.
“It drew very different factual conclusions or inferences from the evidence compared to the trial judge and took very different views of the agreement at issue,” Radnoff says.
The seller, Harold Roth, entered into a share-purchase agreement with the Juschkas in 1992 with respect to shares of a grocery store they jointly owned. The agreement ensured Roth and his wife would continue to receive a stream of income and it included a promissory note that said the Juschkas would pay $408,000 to the Roths in 40 years for the value of the transferred shares. The Roths maintained the right to demand the payment earlier should the store close or Cynthia’s share go down to 50 per cent. If the Roths died before the 40-year deadline, Brock told the court the understanding was that the Juschka’s debt would be forgiven in the Roths’ wills, although this agreement wasn’t documented.
Brock had argued, and the Superior Court agreed, that the agreement the lawyer helped arranged in this case was akin to a gift, and any other lawyer would have advised the Juschkas to sign it. The appeal court, however, read the agreement quite differently.
“In my view, it is clear that following the share purchase transaction, the Juschkas were not in a financially better position than before and certainly had not received a gift,” said Feldman, who stated Brock failed to understand and explain the implications of the promissory note to the Juschkas.
She added: “The purpose of the transaction, as conceived by Harold Roth, was to transfer his shares to the Juschkas in a tax-efficient manner while retaining a significant income stream for himself and his wife during their lifetimes.
“Although he expressed to the respondent that his wish was to benefit the Juschkas by allowing them to become full owners of the grocery business without interference from other family members, the ultimate transaction was in no way a gift of shares.”
The litigation in question ensued after Roth’s wife demanded payment of the promissory note following her husband’s death because the Juschkas sold the business to Sobeys.
James Virtue, counsel for Brock, did not respond to a request for comment by time of posting this story.
“You can see how a lawyer in this situation might think this is appropriate to do this,” says Radnoff, but he adds most lawyers in a similar position would either tell one party to get independent advice, and if they decline to do so, include a note in the agreement that says the parties were advised to obtain independent legal advise and that they have waived that right.
Police in St. John’s were investigating a bomb threat at Atlantic Place Tuesday morning, a building that houses provincial court, shops and offices.
According to Canadian Press, the Royal Newfoundland Constabulary’s canine team and explosive disposal unit were at the building around 10 a.m. local time and it was evacuated for about 90 minutes.
Earlier, a tweet from police read: “We are currently at Atlantic Place investigating a threat of an explosive device in the building. Evacuations are underway. Updates to follow.”
Melissa Royale, a lawyer at Benson Buffett PLC Inc. said she and others at the law firm, which has offices in Atlantic Place on Water Street, saw the activity unfolding on Twitter before being alerted to leave the building.
“They evacuated the court first,” she says. “As the provincial court is in the building this kind of thing has happened before.”
Royale said coffee shops around Atlantic Place were full with office workers while police conducted a search but everyone was able to return to work without incident.
The Law Society of British Columbia task force struck to provide recommendations for regulating law firms will begin touring the province for feedback from lawyers starting Feb. 15.
|Law firm regulation task force chairman Herman Van Ommen says there tour will begin Feb. 15 seeking feedback from profession.|
Task force chairman Herman Van Ommen says that while the Feb. 15 date has been confirmed, final venues and dates are still being finalized with the task force expecting to kick off its tour in Nanaimo.
Other planned venues, during the two-week tour include Prince George, Abbotsford, Castlegar, Cranbrook, Kelowna, New Westminster, Surrey, Victoria and Vancouver.The tour is being led by Van Ommen and LSBC staff members who will liaison with task force members located in points outside the Lower Mainland including Jan Christiansen, Martin Finch, Peter Lloyd, Lori Mathison, Sharon Mathews, Angela Westmacott, and Henry Wood.
Van Ommen says there was a need to obtain more feedback from members than could be provided online after the task force released its October 2015 consultation paper regarding law firm regulation. “Generally, there is concern that there may be duplication of regulation,” he says. The other concern raised is that the LSBC is wandering into areas where it has no business. One area, which has yielded the none-of-your-business response, is succession planning.
"We feel that law firms should have a plan in place to protect their clients," says Van Ommen, adding that larger firms are often better prepared, with a plan in place, rather than smaller or sole practitioner. He said the LSBC has a whole department in place that currently handles custodial duties for firms that have not had contingency plans for events that may impact a lawyer's ability to practice.
Van Ommen said the consultation paper has yielded feedback from lawyers but not at the depth he would like to see and meetings where a back and forth dialogue can occur would help clarify the resistance that is being encountered. “I’m looking for a deeper dive to these questions,” he says, but he also wants to hear new views on the different aspects of law firm management that will be impacted. He says the intent of the regulations is not to set out a new group of rules that law firms must adhere to, but to provide regulations and then let the management group within law firms devise their own in-house systems and strategies to comply with those regulations.
The firm's managers or partners would be responsible for setting in place those strategies, however, in the small sole practitioner firms, the lawyer would be responsible. Van Ommen wants to ensure that B.C.'s new regulations are in stride with what is happening in the rest of Canada as other jurisdictions bring forward entity regulation so that national firms can better manage their branches across Canada.
The LSBC has broken its concerns into 10 areas: conflict of interest, accounting, lawyer and firm succession plans, marketing, mentoring, training and supervision, client service complaints and client relations, file management, privacy and confidentiality, safe workplace and interpersonal relations, crisis and personal assistance, conduct and competence issues.
Van Ommen says most other provinces have only seven main categories relating to aspects of firm management. “But, you can fit the 10 areas we are concerned about into these seven quite easily,” he says.Good policies in-house will also stop problems from reaching the LSBC, such as in the event of a client being unhappy with a lawyer's work or a lawyer having personal problems and not performing for clients as he should.
Once the discussion sessions have yielded feedback and members gain a better understanding of why the LSBC needs to regulate firms, Van Ommen says the eight-person task force (which includes four benchers) will place its findings and recommendations before the benchers. The benchers as a whole will assess the findings and if satisfied approve the recommendations. The LSBC staff will then be charged with putting those recommendations into regulations, he says.
Van Ommen said he was unsure how the enforcement would be carried as yet but noted that Australia, which has a regulatory system in place, has a self-auditing system and firms annually go over the areas at risk and ensure policies are in place to eliminate any problems.
A recent ruling that found a man financially liable for posting a private sex tape of a former girlfriend online is being hailed as a case that is the first of its kind in Canada.
Experts are calling the decision a win, which makes sense given we live in an age where there is a rapidly climbing sensitivity to victimization of all kinds, particularly in social media.
But here’s the sticky widget — how much is a lifetime of possible humiliation by an online sex video worth?
If you were to ask the women or men I know how much it would be worth to not have videos made public, for most, the figure would be off the charts.
No one who has lived through any kind of public humiliation, even those who behaved improperly, such as Hydro One employee Shawn Simoes, would want sensitive online information about himself or herself accessible in perpetuity.
In the recent tort in question, in Jane Doe 464533 v. N.D., a then 18-year-old man shared a video of his one-time girlfriend that he’d promised her would remain private.
In fact, the day she sent the video to him, he posted it online, where it was available for three weeks, and accessed or copied an unknown number of times, before it was taken down.
According to the ruling by Ontario Superior Court Justice David Stinson, the damages against the defendant for posting the video were $100,000, as well as pre-judgment interest of $5,500.
That included general damages of $50,000 for “the past and ongoing impact of the defendant’s actions on the plaintiff,” as well as $25,000 for the breach of trust the plaintiff committed by making a private video public, and $25,000 for punitive damages.
“Personal and private communications and the private sharing of intimate details of person’s lives remain essential activities of human existence and day to day living. To permit someone who has been confidentially entrusted with such details — and in particular intimate images — to intentionally reveal them to the world via the Internet, without legal recourse, would be to leave a gap in our system of remedies,” said the ruling. “I therefore would hold that such a remedy should be available in appropriate cases."
In the landmark case Jones v. Tsige, there were $10,000 in damages, after a bank employee illicitly checked out confidential information about her husband’s ex-wife.
Stinson acknowledges in this case the financial reward is much higher.
“[Jones vs. Tsige] was a much different situation, however; while it, too, was a case involving ‘invasion of privacy,’ the privacy right offended and the consequences to the plaintiff there were vastly less serious and offensive than the present case,” said the ruling by Stinson. “…This case involves much more than an invasion of a right to informational privacy; as I have observed, in many ways it is analogous to sexual assault."
Justice Stinson’s ruling notes in this case the plaintiff’s action was under the Simplified Procedure, so the damage claim was restricted to a $100,000 limit.
“In support of the damage award sought, plaintiff’s counsel analogized this case to ones involving claims arising from physical sexual battery, with its attendant psychological impact and consequences; although the physical injuries may be modest and ones from which the victim may recover relatively promptly, the emotional and psychological effects of the offensive conduct are frequently severe and long-lasting,” said Stinson. “Counsel Donna Wilson submitted that, in many ways, this case is worse since not only was the plaintiff’s personal and sexual integrity violated through the posting of the video, that violation is ongoing, because the video may well have been copied and stored and is therefore quite possibly still being viewed."
Justice Stinson also fixed the plaintiff’s cost of the action and motion on a full indemnity basis at an all-inclusive sum of $36,208.73, bringing the full award to $141,708.03.
“While this case may be novel it should serve as a precedent to dissuade others from engaging in similar harmful conduct,” said Stinson.
The question any reasonable Canadian might have is, would $141,708.03 possibly begin to address the depression, worry, possible career impacts, and reputational damage a person might experience for having a sexual video shared? With that, I’d say most would say it would not.
Iris Fischer, partner with Blake Cassels & Graydon LLP, says, “The decision, unlike Jones v. Tsige, does not set any cap on non-pecuniary damages.”
Fischer says it’s possible that "more could be available in cases analogous to a sexual assault, as the judge found this one to be."
"Of course, here, the court was limited by the Simplified Procedure Rules, but that won’t always be the case,” says Fischer. "The analogy to sexual assault cases highlights the dignity-based nature of this tort. While this was initially the Court of Appeal’s focus in Jones v. Tsige, where it recognized intrusion upon seclusion, recent class action certification decisions indicate that courts are developing intrusion upon seclusion into more of a negligence-based cause of action, where no 'intrusion' is required.
"How this new tort of 'publication of embarrassing facts' may be developed, and in what contexts, remains to be seen."
Jian Ghomeshi sexual assault trial begins in Toronto, Canadian Press
Two people in hospital following head-on crash in Toronto, Canadian Press
It could be last call for the Toronto version of Lawyers Feed the Hungry.
|Bencher Anne Vespry supports the concept of Lawyers Feed the Hungry, but she has concerns that charity is not a direct mandate of the LSUC.|
If it cannot become self-sustaining after two years, some benchers say it will be time to consider ending the Toronto program or finding new charitable avenues to pursue.
“Of course, this is a good idea, it’s motherhood, apple pie or motherhood and poutine, however we say it in Canada . . . but is this the best way to spend the money?” said Anne Vespry to Convocation during the debate.
She and several bencher peers said they support the concept and ideals behind providing food to the poor, but she has concerns that charity is not a direct mandate of the Law Society of Upper Canada, and she wondered if there were better ways to provide the services in Toronto without the added expenditure.
Vespry added that in terms of the process requesting the funding, the matter should have come about during budget discussions. She had concerns supporting the expenditure without a proper review of the program’s efficiency or alternative measures that might cost less but fill the same need.
“It’s not because I think this is a bad charity or I think this is not a worthwhile initiative; my concern is with the evidence on which we have to make this decision, or I should say, the lack of evidence,” said bencher Barbara Murchie. “I don’t believe that the law society has the expertise to take on this role and I don’t think there’s any evidence we do, and secondly, there’s no evidence that this proposal is the best choice; there’s no evaluation of the efficiency of the program or how we deliver it.”
Launched in 1998 and funded primarily through donations to the Law Society Foundation, the program has been facing a major financial shortfall for some time. Foundation chairman and bencher Ian Hull pleaded with Convocation in late fall to support the program in Toronto or it may be lost, facing a deficit of about $150,000 last year.
Costs to operate the program in 2015 for Toronto alone exceeded $400,000. The LSUC provides staff volunteers to help with the meals, space at Osgoode Hall, and administrative support to keep operating costs down. In presenting a motion Jan. 28 to hire the co-ordinator, audit and finance committee co-chairman Peter Wardle explained having a full-time dedicated staffer at a cost of $100,000 per year would ease that in-kind, volunteer pressure put on staff.
Providing administrative support to the other programs, the main goal will be to create a self-sustaining model in Toronto. The money would support the position, the marketing and promotional efforts to raise awareness, and, hopefully, a continuing stream of funds to sustain the program.
“Lawyers Feed the Hungry has a real need for professional assistance in fundraising and stakeholder management co-ordination,” Wardle said. “This is a two-year commitment, it’s not an indefinite. The question in my mind is not whether we continue to support Lawyers Feed the Hungry, it’s in what fashion.”
When the program began, volunteers provided hot meals once a week in Osgoode Hall’s cafeteria. That blossomed over the years to four hot meals each week all year with about 3,500 people served each month in Toronto. All told, including Lawyers Feed the Hungry programs in Ottawa, London, and Windsor, Ont., the programs have served hot meals to more than three million people since the beginning and average about 100,000 people per year. Of that 100,000 annual average, Hull said about 60,000 people come through Toronto’s program.
But despite being the busiest of the programs, Toronto’s is also the one that’s struggling the most financially. It is also the only Ontario program that actively serves meals, rather than purchasing food for other organizations that feed the poor.
Some benchers said Toronto’s version should consider pulling back from serving and support other programs.
Wardle explained that as the co-ordinator position was not part of the strategic plan and budgetary process for 2016, the first year’s $100,000 will come from the LSUC’s approximately $1 million contingency fund and the second year will then be included in the regular budget stream.
“I really do firmly believe we can do this in two years; we are in this with both feet — we just need to give this one good college try,” Hull said.
CSIS obtained taxpayer information from CRA without a warrant, Canadian Press
Jian Ghomeshi trial set to begin next week, Canadian Press
Canadian charged with spying by China, Canadian Press
- Commission executes its second malware-related search warrant in two months
Investigations of malware dissemination are on the rise, as the Canadian Radio-television and Telecommunications Commission executes its second search warrant in as many months under Canada’s anti-spam legislation.
|Lawyer Steve Szentesi says penalties for intentional violations could be ‘in the millions.’|
Yesterday, the CRTC, among three agencies tasked with enforcing CASL, announced that it had raided two Niagara facilities allegedly set up to install malicious software on the computers of unwitting users.
The alleged perpetrators remain unnamed, and violations unspecified, but a similar takedown last month involved what is known as a “command-and-control” centre that uses servers to steal passwords and conduct remote attacks on corporate systems.
"We are working to protect Canadians from online threats by pursuing those individuals and entities who violate Canada's anti-spam legislation,” said Manon Bombardier, the CRTC’s chief compliance and enforcement officer in a statement.
This is the second search warrant ever issued under CASL’s malware provisions, which went into force 12 months ago. In December, CRTC investigators — along with the FBI, Europol, Interpol and the RCMP — conducted a raid on a Toronto server responsible for disseminating a type of malware that has already infected over a million computers in more than 190 countries.
Corporations have also come to the aid of enforcement agencies, with Microsoft playing a key role in the first search warrant, and cyber-protection outfit FireEye tipping off authorities in the most recent investigation.
“We are grateful for the assistance that FireEye Inc. provided, which led to the execution of this warrant, and we will continue to work closely with our domestic and international partners in the fight against cyber threats,” said Bombardier.
The involvement of tech companies like Microsoft and FireEye is something that caught the attention of Steve Szentesi, a competition and advertising lawyer who works with clients to ensure CASL compliance. Szentesi points to a parallel in the advertising space, where the U.S. Federal Trade Commission sponsored a contest where “white hat” hackers were invited to help the agency track down the origin of telemarketing fraudsters.
“I would be very interested to see whether, as in the United States with the FTC, we see the CRTC partnering with folks in the tech sector as an investigative tool.”
Szentesi is also curious to see what the penalties are going to be for intentional violations. To date, the CRTC has delivered a measured response, with negotiated settlements and modest penalties of around $50,000 for inadvertent compliance violations.
For intentional violations, however, Szentesi anticipates penalties in the millions: “A number of the cases that have come so far have been for allegedly failing to comply with the consent and ID-unsubscribe requirements, but now we’re starting to see some cases on the more fraudulent end of the spectrum. . . . I'm curious to see, once some of the malware cases or the botnet cases are resolved, whether we are going to see penalties closer to $10 million. That remains to be seen.”
NHL player fined and banned for killing grizzly bear in B.C., Canadian Press
Imagine a criminal defence lawyer, a former prosecutor, and a former Supreme Court judge sitting around a table talking about the wildly popular Netflix documentary, Making a Murderer.
|Ottawa lawyer Michael Spratt’s podcast features former SCC judge Louise Arbour and former prosecutor Emilie Taman.|
Now imagine the former Supreme Court judge is Louise Arbour, one of the most respected (and adored) legal minds in the country. And get this — Arbour is joined by her daughter Emilie Taman, an accomplished lawyer in her own right, and son-in-law Michael Spratt, a prominent criminal lawyer in Ottawa.
It’s like a Thanksgiving dinner party right out of a legal nerd’s dream, and thanks to an iTunes podcast, we’re all invited to the party.
Spratt started the podcast, called The Docket, in May 2014 with fellow criminal lawyer Leo Russomanno. But ever since he invited Taman and Arbour to the show to talk about Making a Murder episode by episode, he says the podcast is getting about 1,000 to 5,000 downloads per day. Spratt also says The Docket’s first episode on Making a Murderer ranked number two on iTunes’ news and politics chart for Canada.
It’s hard to know where to attribute the credit for that. Is it Arbour, who brings not just her reputation but also a pleasant radio voice? Or, as Taman made it clear to Spratt, the credit is due to her. She was an NDP candidate in Ottawa-Vanier in the recent federal election and made headlines last year for challenging the Public Service Commission’s decision to bar her from running for office as a prosecutor. On the show, she and Spratt are effortlessly engaging.
But perhaps the podcast’s success is in the topic itself — the addictive, if often enraging series about Steven Avery, the Manitowoc County, Wisconsin man who was exonerated after nearly 20 years in prison for a rape he did not commit only to be locked up again following a shady conviction for murder.
The trio starts its discussion of the series on the common ground that wrongful conviction should be every judge’s, prosecutor’s, and defence counsel’s worst nightmare. At the outset, Arbour says Making a Murderer “raises tons and tons of questions, it leads the mind in all kinds of different directions, including outrage, cynicism, [and] hope.”
This week, Avery’s co-counsel Jerry Buting recorded the show with Spratt and Taman. It was an interesting discussion that touched on differences in the U.S. and Canadian court systems.
“We talked about why we don’t like cameras in the courts and elected judges versus appointed judges,” Spratt says. “Any discussion around those areas is really interesting.”
A consumer of podcasts himself, Spratt says it’s a medium he’s always been interested in. “It was a good excuse for me to talk to people whom I found interesting,” says Spratt, who has invited guests such as Senator George Baker and MP Sean Casey.
“I also thought there was sort of a lack of communication between the legal profession and the public about basic principles of our legal system — why things are done a certain way, why legislative changes are important, and how public policy [and] criminal justice policy can affect your everyday life.”
You can download The Docket for free on iTunes and read Spratt’s new criminal law column in Canadian Lawyer.
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