Legal Feeds Blog
Lead plaintiff in blood-transfusion case dies, Canadian Press
Marijuana store owner arrested in Winnipeg, Canadian Press
French fries likely cause of Newfoundland fire: RCMP, Canadian Press
A Supreme Court of Canada ruling that administrative monetary penalties don’t offend constitutional rights because they are not criminal in nature could open the doors to greater use by government bodies.
|The SCC's decision was a tax case but will have implications for securities law, the Competition Act, telecommunications, and other instances in which the government is pursuing AMPs against professionals including lawyers and accountants.|
Four of the seven SCC judges reached the decision which was released July 31, while the other three declined to deal with the issue, ruling the constitutional argument shouldn’t be considered because Julie Guindon, the lawyer who launched the appeal, failed to give proper notice to federal and provincial authorities.
The case involved adviser penalties found under s. 163.2 of the Income Tax Act, which imposes monetary penalties on anyone who makes false statements that could be used by another person for the purpose of the act.
Guindon is a lawyer practising mostly family and estate law. In September 2001, she gave a legal opinion about the Global Trust Charitable Donation Program. At the time, she signed the opinion she had not reviewed the documents she said she had relied on.
The program involved a tax reduction scheme that involved the donation of vacation ownership weeks in a timeshare.
The taxpayers would donate the undervalued VOWs to a registered charity and, in return, receive charitable tax receipts in the amount of the fair market value of the VOWs.
It was later revealed that no timeshare units were ever legally created and no VOWs were actually donated to charity. The only charity to become involved in the program was Les Guides Franco-Canadiennes District d’Ottawa, a registered charity that Guindon was president of from 1999 to 2004. On Dec. 31, 2001, 135 tax receipts were signed by Guindon and the charity’s treasurer.
The CRA assessed adviser penalties of $546,747 against Guindon. The SCC’s decision from last week means she must now pay the AMP.
Peter Aprile, of Counter Tax Lawyers in Toronto, has been watching the case as it moved through first the Tax Court, then the Federal Court of Appeal.
“What was interesting to me was listening to the statements the CRA was making at various accounting conferences through all of this,” says Aprile. “We know the CRA wanted to get the word out there about the possibility of substantial fines being levied in the civil context without having to cross over to criminal prosecution.”
During the Guindon appeal period, Counter Tax Lawyers filed an access to information request just before the Federal Court of Appeal released its decision to determine how many penalties the CRA had issued.
In March 2013, its research revealed the CRA had issued 77 s. 163.2 penalties to tax preparers, planners, and promoters totalling approximately $119.5 million. There were 47 on-going audits and 14 of those involved tax preparers and 33 were tax promoters (i.e. promoters of tax shelters).
As at April 11, 2014, the CRA approved 93 proposals to assess the penalty and chose not to issue assessments related to 21 s. 163.2 penalties. As at May 2011, 19 promoters and 27 tax preparers had been assessed $65.5 million, and audits of 52 promoters and 23 preparers were underway. No penalties had been reversed at the objection stage.
The 2014 Auditor's General report indicates that the median penalty is $440,000.
Between 2000 and 2007, the CRA had only issued nine assessments. In 2012, it issued 19 assessments. Between the Federal Court of Appeal decision and the SCC decision the numbers jumped to $137 million in penalties. All assessments were stuck at the objection level while Guindon went through the courts.
“Two things are happening,” says Aprile. “The CRA has held every other one in abeyance pending resolution of Guindon, and so we will start seeing those move through the courts. And it’s obvious with the Federal Court of Appeal decision, the CRA gained some confidence it would stand the test of the Supreme Court.
“I have little doubt we are going to see more imposition of these penalties as well as more activity in the court to determine what rises to the level of culpable conduct and what an appropriate due diligence defence will look like.”
Aprile says the threat of penalties will have a chilling effect.
“I think the CRA is using the threat of this as a pretty good tool to change behaviour even in instances in which behaviour shouldn’t or doesn’t need to be changed,” he says.
Two shot dead at Toronto nightclub, Canadian Press
More human remains found near Edmonton, Canadian Press
Halifax man faces arson charges, Canadian Press
Katie Sykes, a law faculty member of Thompson Rivers University, has written a paper that outlines international support for the formation of global animal protectionism. It argues law rather than science played a main role in arriving at two landmark decisions.
|‘Science can only inform, and cannot ultimately decide, the legal questions’ around issues such as whaling. (File photo: Issei Kato/Reuters)|
It has been accepted for publication in the European Journal of International Law and looks at two significant 2014 international legal decisions that make major strides in the protection of species. They are the World the World Trade Organization’s ruling upholding the EU law banning seal products, and the decision of the International Court of Justice that Japan’s Antarctic whale hunt is not exempt from the international moratorium on commercial whaling because it does not qualify for the scientific research exemption under international whaling law.
Science plays an important role in both decisions but the paper finds that the decisions are based more on legal arguments with science as a foundation of the arguments.
“Both cases, as well as the broader international controversies over whaling and sealing in the context of which they arose, illustrate the persuasive power of the ‘appeal to science’: enlisting scientific objectivity and rigour to underpin the credibility of legal arguments and legal norms,” says the abstract.
“But the role of science in both cases, while important, is only auxiliary. The questions that the WTO and the ICJ had to resolve were fundamentally legal ones concerning the interpretation of the relevant treaties. The cases also implicated more profound questions of policy and ethics at stake in international conflicts over the protection and the exploitation of marine mammals.”
The abstract and paper can be found at on the Social Science Research Network.
A couple who lost $3.6 million lawyer Javad Heydary disappeared are entitled to garnishment from his liability insurance policy — but will have to renounce any claims against three lawyers formerly employed by him, the Court of Appeal for Ontario ruled yesterday. They will get well under the $3.6 million they lost.
In November 2013, Heydary disappeared after claims were filed by Hasan and Samira Abuzour, a Mississauga couple, for $3.6 million he had been holding in trust for them. Heydary was later declared dead. Soon after his disappearance, the Abuzours successfully obtained two court orders requiring the payment of the funds from the trust account held by Heydary’s company, Heydary Hamilton. But the money was not forthcoming, and Heydary and Heydary Hamilton were found in contempt of court.
In March, 2014, the Abuzour’s lawyer sent a demand letter to three lawyers formerly employed by Heydary — Jeff Landmann, Darren Smith, and Yan Wang — threatening to sue them “unless a resolution is reached” regarding the missing funds.
Last October, Superior Court Justice Michael Penny awarded the sum remaining in Heydary’s $1-million coverage under LawPRO’s innocent-party insurance to the Abuzours. According to the terms of the policy, LawPRO is entitled to use some of the money to investigate and defend claims that might arise against a lawyer ensured by it.
The three lawyers then filed a motion to set aside or vary the order, arguing the payout would leave them without coverage in case the Abuzours sued them.
But in February, Penny ruled against the motion.
The lawyers appealed the decision, and in April LawPRO successfully obtained an order to stay the garnishment order pending a decision in the lawyers’ appeal.
In yesterday’s ruling, the three-member Court of Appeal panel ruled to allow the appeal and vary the motion judge’s order, adding a requirement that the Abuzours “should provide a release as a condition of the payment to them of the garnished insurance policy limits.”
Explaining the panel’s decision, the ruling states: “This situation is unusual in that the initial orders for payment out of the Heydary Hamilton trust accounts were not based on negligence, omissions, errors or fraud covered by the policy. It is the failure to comply with these orders which arguably gives rise to an insured loss.”
But the most important factor in the panel’s decision, the ruling states, is that, despite their refusal to release the lawyers from future claims against them for the missing money, the Abuzours were unable to provide any grounds for a possible lawsuit against them.
“The respondents at oral argument were unable to articulate any basis upon which the respondents might advance a claim against the appellants relating to the money which has vanished,” wrote Justice Gladys Pardu for the panel.
“I am left with the impression that the respondents’ refusal to execute a release in favour of the appellants is a tactical one, designed to extract funds from innocent parties who do not have the means to defend themselves. The losses suffered by the respondents must be devastating, but there is no basis shown to visit Heydary’s misconduct on the appellants.”
Commenting on the decision, Brian Radnoff, counsel for the three lawyers, says, “My clients, who were also innocent victims of Mr. Heydary, are pleased they will not lose their insurance coverage for a claim that was asserted against them.”
The Abuzour’s lawyer could not be reached for comment.
B.C. refuses to sign pledge to protect transgender people, Canadian Press
Officer who killed himself was RCMP scapegoat, says wife, Canadian Press
Reality-show stars face assault, obstruction charges, Canadian Press
Ontario Ombudsman Andre Marin’s annual report cites “recurring concerns” around the way the Ministry of the Attorney General’s Office of Public Guardian and Trustee treats its vulnerable clients.
Marin’s report says his office received 142 complaints about poor customer service and communication from the office, which manages the financial affairs of people who don’t have the capacity to do so themselves or have anyone else who is authorized to act on their behalf.
“For example, a long-time OPGT client received a payment of almost $33,700 from an insurance company, as reimbursement for 20 years of underpayments. Not only did the OPGT not inform her about the money, it withdrew $15,500 from her account as compensation for being her financial guardian for 13 years,” says the report released this week.
“The OPGT is able to collect payment for guardianship if clients are able to pay. However, it can defer payment if a client is unable to pay — a fact that it did not advertise. The woman had repeatedly asked the OPGT for information about her finances and did not receive adequate information about the additional funds or the deferred compensation until our office intervened,” it says.
At ARCH Disability Law Centre, executive director Robert Lattanzio says the complaints included in the report are all too familiar. A lot of the clinic’s work around capacity comes from clients who have difficulty accessing services at OPGT, Lattanzio says.
“As I read through the report by the ombudsman, I think our experiences are quite in line. We’ve actually also engaged the ombudsman on some files where we felt we were getting nowhere,” he adds.
At times, the problem is that information is not communicated in an accessible format to clients, says Lattanzio,
“That’s a serious issue we find for a lot of our clients.”
Other times, people have simply been unable to get through to a representative at the OPGT and, as a result, defaulted on payments in their day-to-day lives, Lattanzio adds.
“At the heart of this is something so fundamental — it really is about a person’s autonomy,” he says.
“When someone is under the OPGT, they’ve basically been removed from something we all take for granted. We’re talking about a government body managing property, managing finances on behalf of someone, so we can imagine in our own lives if we don’t have control over that.”
According to Marin’s report, although complaints about the OPGT have dropped by 21 per cent from last year, the kind of concerns complained of has remained the same.
“We have also raised concerns about repeated cases where the OPGT has failed to take appropriate action on behalf of its clients to obtain benefits from other government programs,” says the report. “In one case, it did not submit the necessary transportation allowance forms to the Ontario Disability Support Program (ODSP), causing a woman to lose out on that allowance for 14 months. After Ombudsman staff looked into this, the OPGT agreed to reimburse her $1,799.”
The Ministry of Attorney General did not responded to a request for comments on the report by posting time.
Lattanzio says his impression is there aren’t enough representatives at the OPGT to adequately serve the volume of clients.
Marin’s report also cited other justice-related concerns. In 2014-15, his office received 3,904 complaints about correctional facilities, a slight increase from last year’s 3,839.
The Toronto South Detention Centre, a “superjail” that opened last year, was the subject of 422 complaints, the report says. Those complaints included concerns about “inadequate health care and sick inmates being housed in segregation cells while all four of the facility’s medical units stood empty.”
“In two especially serious cases, we intervened to ensure that inmates who had undergone major surgery could get to an infirmary to receive proper care. The inmates were in severe pain and had been left in segregation cells without adequate medical services,” according to the report.
The ombudsman’s office also saw a sharp increase in complaints regarding segregation placements. It says it found cases where inmates were kept in segregation for months at the time without the benefit of requisite periodic reviews. The report says in the past year, at least three segregated Ontario inmates are believed to have taken their own lives.
Mohamed Fahmy verdict postponed, Canadian Press
Detained man's family fights for his release from UAE jail, Canadian Press
Expats hope Supreme Court will hear their case on voting rights, Canadian Press
Rolling Stone sued over rape story, Reuters
As Legal Aid Ontario expands eligibility for legal aid, it says it will provide new funding to clinics based on the needs of the particular areas they serve.
Today LAO announced it will provide $1.5 million in funding to support legal clinics serving areas with the most number of people living in poverty. The funding is on top of $2.4 million it provided to clinics for the 2014-15 fiscal year, legal aid says, adding it will allow clinics to hire more staff, expand existing services, or launch new services that support clients.
The need-based allocation of funds means so far, clinics like Kensington-Bellwoods Community Legal Services Toronto have seen no increase in funding while the Community Legal Clinic of York Region is getting a 65 per cent boost in financial support.
The allocation strategy recognizes the inequalities in funding to clinics over the years as poverty changed its postal code, says Cynthia Harper, LAO’s director general for the Toronto central district.
“Poverty has moved,” Harper says. “The money is being allocated where the greatest need is.”
In the GTA, this means funding will follow poverty in areas such as Scarborough, Brampton, Etobicoke, North York and Mississauga, according to Harper.
As poverty moved, “Some clinics were finding that they had to serve this great number of people but they didn’t have the same financial resources per low-income person,” says Genevieve Oger, spokeswoman for legal aid. “So legal aid has opted to increase the financial resources of clinics that have the fewest resources per low-income person.”
To determine funding per low-income person in clinics’ service areas, legal aid says it is using Statistics Canada's low-income measure data from 2012 as well as its own funding and population data.
While not every clinic has seen a boost in its funding, Harper notes all legal clinics are eligible to apply for $2.4 million in funding available for joint and co-operative initiatives among legal clinics.
The funding to clinics follows $95.7 million in increased government support for legal aid over three years.
“Thanks to the Ontario government’s move to increase access to legal aid, Legal Aid Ontario can invest in new services for low-income people,” said John McCamus, chairman of LAO. “Ontario's clinics are the foundation of poverty law in this province and we are committed to helping them meet the needs of their communities."
Lenny Abramowicz, the executive director of the Association of Community Legal Clinics of Ontario, also lauded today’s announcement of additional funding.
“Ontario’s community legal clinics, and the communities they serve, welcome this investment of additional funding,” he said. “We applaud the provincial government for its ongoing commitment to improving access to justice, and we look forward to working with Legal Aid Ontario on expanding the availability of community legal services across the province.”
Armed Forces commander charged with 10 sex-related offences, Canadian Press
Subscribe to Legal Feeds
- Jennifer Brown
- Glenn Kauth
- Tali Folkins
- David Dias
- Yamri Taddese
- Gail J. Cohen
- Karen Lorimer