Category Archives: Law and Advice

Black Bay Street: Hadiya Roderique had it all.

But still could not match  in

05 Nov 17
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Former Hollinger Attorneys sue Law Society of Upper Canada

02 Sep 17
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Former Torys LLP attorneys Beth DeMerchant and Darren Sukonick are suing the Law Society of Upper Canada for damages totalling $22-million, alleging the regulatory body was malicious in its prosecution of these over alleged mistakes in their work for Hollinger Inc. over 15 years back.

Ms. DeMerchant and Mr. Sukonick faced a protracted Law Society hearing between 2010 and 2012, but were vindicated in a 2013 ruling that dismissed six counts of alleged conflict of interest against them. They have been accused of acting in a conflict of interest when advising Conrad Black’s Hollinger group on the sale of newspaper properties between 2000 and 2003.

The Law Society decided to the Law Society Tribunal Appeal Division, which dismissed the appeal in 2015. In January, 2017, the appeal division increased the costs awarded to the two attorneys from a total of $500,000 to $1.3-million to cover their legal fees.

The attorneys, both of whom have since retired, filed a lawsuit this week against the Law Society, seeking general and special damages of $21-million and further aggravated and punitive damages of $1-million.

The lawsuit alleges the Law Society knew it did not have enough evidence to prosecute the group after conducting an investigation, but pushed forward in part due to public criticism that the company had not disciplined any attorneys over controversial Hollinger company transactions.

The attorneys also allege there was “no reliable evidence on issues crucial to some conflict-of-interest prosecution” presented in their hearing, and that the Law Society “simply had no signs of its conflict-of-interest allegations.”

Additionally, it complains that a statement issued by the Law Society after its loss from the case in 2013 was defamatory because it indicated that they were, in reality, guilty and the tribunal judgment was incorrect. In the announcement, the regulator said it was disappointed with the decision and it had initiated the proceeding after “a thorough investigation” into issues about a breach of the principles of professional conduct.

Law Society spokeswoman Susan Tonkin said the organization just got the lawsuit on Tuesday and is now reviewing it. It’s not yet filed its defence in the case.

Both the first ruling and the appeal judgment in the event concluded that the prosecution was originally justified, but the situation should have been reassessed and shut down early after the attorneys’ expert witnesses gave evidence that the Law Society couldn’t contradict.

Courts have generally ruled that defendants in legal proceedings can’t sue regulatory bodies and tribunals for prosecuting them in good faith, even if the prosecution doesn’t succeed and the accused are cleared. However, some cases have succeeded if there’s evidence of negligence or wrongdoing by prosecutors.

The Supreme Court of Canada ruled in 2004, as an instance, the Barreau du Québec, which regulates lawyers in that state, failed to act appropriately in a disciplinary situation for decades despite several complaints about a attorney. The top court said the “virtually complete lack of this diligence called for in the situation” amounted to “gross carelessness and severe negligence.”

Courtesy: The Globe And Mail

Former Hollinger attorneys prosecute Law Society of Upper Canada

30 Mar 17
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Former Torys LLP attorneys Beth DeMerchant and Darren Sukonick are suing Regulations Society of Upper Canada for problems totalling $22-trillion, claiming the regulatory body was destructive in its justice of these over alleged problems inside their benefit Hollinger Inc. over 15 years back.

Ms. DeMerchant and Mr. Sukonick experienced a long Legislation Community reading between 2010 and 2012, but were vindicated in a 2013 judgment that ignored six matters of supposed struggle of awareness against them. These were arrested of behaving in a clash of fascination while informing Conrad Black’s Hollinger party around the selling of magazine attributes between 2000 and 2003.

Regulations Community appealed your choice for the Law Community Tribunal Appeal Section, which ignored the charm in 2015. In January, 2017, the charm section improved the expenses given for the two attorneys from the whole of $500,000 to $1.3-trillion to address their legal expenses.

The attorneys, both of whom have since outdated, registered case this week unlawful Community, seeking basic and specific problems of $21-million and additional annoyed and psychological damages of $1-thousand.

The suit claims Regulations Community realized it didn’t have ample data to prosecute the couple after performing a study, but forced onward in-part as a result of as a result of public complaint the firm hadn’t encouraged any attorneys over dubious Hollinger company purchases.

The attorneys also state there is “no trustworthy data on problems essential to your conflict-of-awareness prosecution” introduced at their reading, which Regulations Community “simply had no proof its conflict-of-awareness allegations.”

In addition, it complains a record given from the Law Community as a result of its damage in case in 2013 was defamatory as it meant these were, infact, accountable which the tribunal judgment was inappropriate. Inside the assertion, the regulator mentioned it had been unhappy from the selection plus it had begun the actions after “a complete investigation” into worries a few violation of the principles of professional conduct.

Law Society spokeswoman Susan Tonkin explained the corporation simply acquired the suit on Thursday and is researching it. It’s not yet registered its support in case.

The original judgment as well as the charm judgment in case determined the justice was guaranteed, nevertheless the circumstance needs to have been reassessed and shut-down early following the lawyers’ expert witnesses provided proof the Law Community couldn’t oppose.

Surfaces have generally decided that defendants in appropriate actions can’t prosecute regulatory systems and tribunals for defending them in good-faith, even though the justice doesn’t succeed as well as the accused are eliminated. However, many circumstances have prevailed if you have proof disregard or wrongdoing by prosecutors.

The Supreme Court of Canada decided in 2004, as an example, the Barreau du Québec, which manages attorneys because state, did not work properly in a disciplinary event for decades despite several issues of a lawyer. The very best judge mentioned the “virtually full lack of the persistence needed inside the situation” came to “gross neglect and significant negligence.”

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RBC should get maximum fine in alleged fraud scheme involving billionaire art dealer: French prosecutors

15 Oct 16
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French prosecutors are calling for Royal Bank of Canada’s wealth-management subsidiary in the Bahamas to be hit with the maximum fine allowed – €187,500 ($270,619 Canadian) – for its alleged role in a sophisticated tax fraud and money-laundering scheme involving billionaire international art dealer Guy Wildenstein and other family members.

Royal Bank of Canada Trust Company (Bahamas) Ltd. were active participants in helping the Wildensteins use an offshore trust system to stash thousands of valuable art works away, prosecutors Monica d’Onofrio and Mireille Venet alleged in a Paris courtroom on Thursday. The family was able to cheat the French government out of hundreds of millions of euros in inheritance taxes by hiding the assets in an elaborate offshore trust system that included the participation of a second tax haven, Northern Trust in the Guernsey Islands, the prosecutors allege.

The trusts were technically to be held at arm’s length but were in fact used to provide funds for family members, they allege.

“We can’t comment on details in the case as it is before the court, but can say we are confident that the facts presented through the legal process will reflect that there is no merit to the allegations being made against the RBC Bahamas trust company,” RBC spokeswoman Tanis Feasby said in an email Friday.

Prosecutors are asking for the same maximum fine to be levied against Northern Trust. In the case of Mr. Wildenstein they are recommending a sentence of four years in prison, with two years suspended, and a financial penalty of about $250-million (U.S.).

Lawyers for RBC are expected to present their defense to the tribunal sometime next week.

The trial at the Palais de Justice began last month and is scheduled to continue through to next Thursday. A date for the final ruling has not been set.

Lawyers for France’s tax-evasion watchdog – Parquet national financier – have alleged that RBC’s Bahamas wealth-management unit held in trust part of the inheritance from the estate of Mr. Waldenstein’s father Daniel, who died in 2001 at the age of 84. Also accused besides Guy Wildenstein, 70, are his brother Alec and other family members as well as two lawyers and a notary.

Lawyers for Mr. Wildenstein say he was advised by legal counsel that he was not obligated to disclose the trusts to French authorities since it was the trusts and not the family that technically owned the paintings.

In a first-quarter report last year, RBC mentioned the case and said it believes “its actions did not violate French law.”

The Wildenstein family is known as one of the art world’s leading dealers, going back to the Paris founding by Nathan Wildenstein in 1875.

Guy Wildenstein is a friend and financial backer of former French president Nicolas Sarkozy and his UMP party.


Courtesy: The Globe And Mail

AMF distorted Amaya chief’s actions, lawyer says

13 Oct 16
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Quebec’s securities regulator presented a “distorted picture” of events in outlining how former Amaya Inc. chief executive officer David Baazov was the source in a sophisticated insider-trading and kickback scheme involving a group of closely knit friends and associates, his lawyer says.

Sophie Melchers of Montreal law firm Norton Rose Fulbright said the Autorité des marchés financiers (AMF) built a theory about what happened based on selective information, which it then presented to an administrative tribunal this past spring to win cease-trade orders and the freezing of certain bank accounts for 13 individuals in the case.

Ms. Melchers spoke on Thursday at a hearing of that tribunal, asking its members to issue a new decision on those orders that considers the fact the AMF’s probe is ongoing and that refrains from coming to any conclusion about any alleged tipping by Mr. Baazov.

“Without knowing if these people actually spoke to each other, without knowing what they said to each other, the AMF built a theory stipulating that these individuals should have been in the possession of privileged information when they made their trades,” she said. “And the AMF speculates, it supposes, that the information these people supposedly had came from David Baazov.”

The AMF alleges that its investigation has uncovered a major leak of privileged information stretching back six years by which Mr. Baazov provided tips, mostly to his brother Josh, about upcoming takeover deals involving Amaya and other companies. Several people traded on the information that eventually filtered out, reaping about $1.5-million collectively. Those who gave the tips received compensation from others, the AMF says. It has filed bank statements, phone records, e-mails and text messages to build a circumstantial case against the 13 individuals. One piece of proof is a phone recording of one businessman talking to his wife about information allegedly “coming from David.” None of the individuals has yet been charged.

Mr. Baazov faces insider-trading charges in a separate case related to Amaya’s 2014 purchase of PokerStars owner Oldford Group Ltd. He has pleaded not guilty.

The regulator had an obligation to provide full and frank disclosure to the tribunal about what it knows about the circumstances surrounding Mr. Baazov’s alleged involvement in the trading scheme and it failed to do so, Ms. Melchers said. It did not, for example, submit a complete picture of phone records between the individuals. It also chose not to include certain information that was publicly available about the companies they traded on, which could explain those trades. It also largely ignored the confidentiality provisions Amaya has in its business agreements.

All of these things might have led the tribunal to draw different conclusions than possible insider trading, Ms. Melchers said.

“What you’ve been presented is a distorted picture of the situation,” she told the tribunal members.

Further, she said, the AMF has no evidence Mr. Baazov received any kickbacks as part of this scheme. An AMF investor earlier acknowledged there is no proof yet of any payment or gift given to Mr. Baazov, only a reference to a payment in correspondence between certain individuals.

“So Mr. Baazov apparently repeatedly broke the law in exchange for nothing,” Ms. Melchers said. “And for the benefit of people with whom, for the most part, he doesn’t have any contact. Why would he do that?”

The tribunal will now rule on the merits of keeping and expanding previous freeze and cease-trade orders in place for the 13 individuals, since lowered to 12 after a deal was struck with one person. A decision could take weeks or even months.

It could also clarify its view on Mr. Baazov’s role in the affair. It was the tribunal itself that added the former Amaya CEO as a party to the proceedings earlier this year, given the allegations being made by the AMF.

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Amaya CEO charged by Quebec securities regulator
(BNN Video)

Courtesy: The Globe And Mail

Cameco tax dispute with CRA could lead to tougher regulations

13 Oct 16
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Cameco Corp.’s long-awaited showdown with the Canada Revenue Agency will throw a spotlight on the tricky question of how to tax companies that channel billions of dollars in sales through foreign subsidiaries.

The Tax Court of Canada case, which is expected to begin Wednesday in Toronto, has inched along at an agonizingly slow pace since Cameco filed an initial appeal in 2009. It centres on how the Saskatoon-based miner accounts for sales of the uranium it produces in Canada.

More broadly, it focuses on the ability of companies to manage their affairs by setting up foreign units in low-tax jurisdictions and transferring assets to them.

While there is nothing necessarily wrong with such an arrangement, the general rule is that companies cannot set up subsidiaries purely as a tax dodge. Foreign units must fulfill a genuine business function.

In addition, transfers of assets between subsidiaries have to be priced at realistic levels that would be suitable for “arm’s-length” transactions between unrelated parties.

A decision against Cameco could result in a multibillion-dollar tax bill for the uranium miner and a much tougher regulatory regime for other companies that also funnel sales through foreign units.

Back in 1999, Cameco established a subsidiary, Cameco Europe Ltd., in Switzerland and agreed to provide it with uranium for the next 17 years at roughly $10 (U.S.) a pound, which was close to the prevailing price at the time.

As uranium prices soared in subsequent years, this agreement allowed Cameco to record little or no profit in Canada on the uranium sales. Instead, most of the profit was attributed to the Swiss subsidiary when it sold the metal on to customers. Since the tax rate in Switzerland is lower than in Canada, this resulted in major tax savings.

The CRA takes issue with this arrangement and argues that the profit should properly be recorded in Canada. The tax agency says Cameco had $3.4-billion (Canadian) more in Canadian profit between 2003 and 2010 than the company declared.

If the CRA’s approach is also applied to the period between 2011 and 2015, Cameco could be hit with a total tax bill of about $2.2-billion, plus interest and penalties, for the 13-year period.

Cameco said in its 2015 annual report that external advisers have counselled it that “CRA’s position is incorrect.” However, the miner doesn’t expect a quick victory in the tax brawl. The trial that begins Wednesday will likely last until March, 2017, with a ruling six to 18 months later, the company says.

“We expect this case to be ultimately settled out of court, [but] the timing … is unknown and likely not soon,” Rob Chang, an analyst with Cantor Fitzgerald, wrote in a report this week.

The Cameco case carries implications for companies like Silver Wheaton Corp. of Vancouver, which is locked in its own battle with the CRA.

Silver Wheaton is a so-called streamer. It provides upfront cash to miners in exchange for the continuing right to purchase a portion, or stream, of their future output at discounted prices.

The bulk of Silver Wheaton’s streams comes from mines outside of Canada, many of them in Latin America. The silver and gold produced by those mines is sold through a Silver Wheaton subsidiary in the lightly taxed Cayman Islands.

As with Cameco, the CRA objects to this arrangement and argues that the profit should properly be taxed in Canada. It has presented Silver Wheaton with a reassessment notice that demands $353-million for the years 2005 to 2010.

For its part, Silver Wheaton says the tax agency is overstepping its mandate by trying to tax transactions involving metal that was produced outside of Canada and sold outside of Canada, without ever touching Canadian soil. The company is appealing the CRA assessment in the Tax Court of Canada and says it is confident of victory.

In a recent interview, Randy Smallwood, chief executive officer of Silver Wheaton, said he hoped the two sides will be able to arrive at a settlement when the discovery process in the trial begins in the fourth quarter. Barring that, he expects a trial date in mid-2017 and a decision in early 2018.

A decision against Silver Wheaton would raise questions about where the streaming company should be domiciled, he said. “We could be the first of many resource companies to leave Canada, because a negative decision would imply that resources mined outside of Canada would be subject to taxation in Canada.”

Also on The Globe and Mail



I’ve been hiding money from CRA – how do I come clean?
(The Globe and Mail)

Courtesy: The Globe And Mail

Dentons stocks up on ex-politicians, but ‘it’s not about influencing legislation’

18 Sep 16
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This week, the top brass at global law firm Dentons were brainstorming all the ways former prime minister Stephen Harper could fit onto their team and help their clients in Canada and beyond.

Chairman Joseph Andrew wants one thing to be crystal clear: When Mr. Harper, who announced his affiliation with Dentons as a consultant in its Calgary office on Monday, gets his first mandate, it will have nothing to do with lobbying.


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Watch the highlights from Harper’s convention speech in under two minutes
(The Globe and Mail)

Courtesy: The Globe And Mail