Category Archives: Law and Advice

Lexpert roundup: Cara buys ownership stake in Original Joe’s

15 Sep 16
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Lexpert Roundup on the Business of Law

Lexpert identifies and reports on emerging business issues and practice areas in the business of law. Whether , in our or in the e-newsletter, we chronicle deals and lawsuits of interest, and cover issues of broad concern to the legal profession and those who purchase legal services. We hope you enjoy this sample of our latest content.



Courtesy: The Globe And Mail

Stephen Harper to join law firm in Calgary

15 Sep 16
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Former prime minister Stephen Harper, who resigned his seat in Parliament to pursue a new career in international business consulting, is set to join Dentons LLP’s Calgary office, sources say.

The massive global law firm, which counts former Liberal prime minister Jean Chrétien as one of its most prominent lawyers, has offices across Canada and around the world – including Shanghai, London and Washington. Mr. Harper’s work at Dentons will dovetail with his newly established international business consulting practice.


Also on The Globe and Mail



Stephen Harper supports Jason Kenney’s united right plan in Alberta
(CP Video)

Courtesy: The Globe And Mail

Case between Ecuadoreans, Chevron heading to Ontario court

15 Sep 16
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The latest salvo in a marathon multibillion-dollar legal battle between global energy giant Chevron Corp. and a group of Ecuadorean residents over environmental damage begins Monday in a Toronto court.

Lawyers for both parties will meet before an Ontario Superior Court judge this week to argue pretrial motions related to whether a hefty foreign judgment should be recognized in Canada.

The Ecuadoreans will try to enforce the $9.51-billion (U.S.) award from an Ecuador court against the assets of Chevron subsidiaries in Canada. The company, however, will contend that the claim should be dismissed because Chevron Canada is a distinct entity that’s separated from its corporate parent with no business ties to Ecuador.

Closely watched by lawyers, the case, which started in Canada in 2012, is part of a broader trend that sees plaintiffs in developing countries come to Canada to seek relief against multinational companies.

The matter is back in Ontario after the Supreme Court of Canada said in 2015 that jurisdiction has been established and that the case can proceed. The country’s highest court held that there’s a low threshold for foreign judgment creditors to start recognition actions, boosting the litigation risks for multinational companies with assets in Canada.

The legal dispute between Chevron and the villagers in Ecuador has been playing out in courthouses around the world for decades. Since the first class-action lawsuit was filed 23 years ago in New York, lawyers representing the plaintiffs have tried to force Texaco Inc., which was acquired by Chevron in 2001, to pay damages for water and soil contamination that occurred in the oil-rich Lago Agrio region of Ecuador from 1964 to ’92. Texaco operated the project with Ecuador’s state oil company, Petroecuador.

The 47 plaintiffs in the Ontario action, which represent roughly 30,000 indigenous villagers in Ecuador, say their health and well-being has suffered because of Texaco’s former operations and the toxic waste that was left behind. Chevron, one of the largest oil companies in the world, has ferociously defended itself over the years. It has refused to settle the lawsuit or pay the amount the Ecuadorean court said it owed. The San Ramon, Calif.-based company says that Texaco paid its share of the cleanup costs after it ceased operations in the 1990s. But the plaintiffs disagree – they claim Texaco’s remediation of the contaminated site was incomplete. Since the company no longer owns any assets in the country, the Ecuadoreans have taken the legal fight overseas. They’ve mounted an attempt to seize any Chevron assets outside Ecuador.

The Ecuadoreans attempted to execute the judgment in the United States, but several courts have ruled that it isn’t enforceable in the United States after it was found that the plaintiffs’ legal counsel obtained the original decision in Ecuador through fraud, coercion and bribery. The Ecuadoreans dispute the findings.

“Even innocent clients may not benefit from the fraud of their attorney,” an August ruling from the U.S. Court of Appeals for the Second Circuit stated, upholding a lower-court decision.

In addition to their campaign in Canada, the plaintiffs have also made similar attempts to collect the $9.51-billion judgment in Brazil and Argentina.

A pillar of Chevron’s litigation strategy here in Canada continues to be a principle known as the corporate veil, or the legal separateness between a parent company and its subsidiaries that insulates one entity from the liabilities of the other.

“The plaintiffs seek to evade the bedrock principle of corporate separateness in Ontario in an effort to apply pressure to Chevron Corp.,” lawyers for Chevron said in filings submitted this summer.

Chevron Canada, it contends, is a seventh-level indirect subsidiary of parent company Chevron Corp. with its own board and financials. However, it does receive “high-level oversight and strategic input” from its U.S. parent, lawyers for the Chevron companies said in their filings.

Also on The Globe and Mail



Suncor raising $1-billion in new debt
(BNN Video)

Courtesy: The Globe And Mail

Stingray counters Music Choice’s lawsuit, calls it ‘smear campaign’

31 Aug 16
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Canada’s Stingray Digital Group Inc. is swinging back in response to a lawsuit filed by U.S. rival Music Choice.

Music Choice, which is backed by a group of media giants that include Comcast Corp. and Time Warner Inc., sued Stingray for patent infringement in June, alleging the Montreal-based music channel provider had used confidential information about its technology after an attempt to acquire the U.S. company in 2013.

On Tuesday, Stingray insisted through a court filing that it has not infringed on these patents, and initiated a counterclaim against Music Choice.

The company said in documents filed in an eastern Texas courthouse that Music Choice has been engaged in “a smear campaign” to discredit Stingray and thwart its growth in the United States since as early as February, 2014. It also argued that the handful of patents at the centre of this dispute are invalid.

A spokesperson for Music Choice said the Pennsylvania-based company is reviewing Stingray’s filing.

Stingray has claimed the timing of the Music Choice lawsuit was no coincidence.

It was filed just after Stingray, which reaches roughly 400 million households in about 152 countries, announced that it would expand its reach into the United States through a new pact with cable provider and Music Choice-backer Comcast.

Through a separate claim also filed on Tuesday in a Texas court, Stingray Music USA Inc. is seeking monetary damages for the harm it allegedly suffered as a result of what it describes as Music Choice’s attempt to damage Stingray’s reputation and impede its business in the United States through the dissemination of misinformation.

“Music Choice’s illegal activity has damaged Stingray’s brand and reputation,” it alleged, “and caused Stingray to lose customers, make concessions in its contracts with customers, expend significant manpower and money in order to address the impact of the lies spread by Music Choice.”

Stingray is pushing to expand its business beyond its home base, mainly through acquisitions. The company generates 43 per cent of its revenue from abroad and aims to increase that share to 70 per cent by 2020, having just opened a new regional headquarters in Singapore.

The Music Choice lawsuit has diverted some of the attention away from Stingray’s performance of late. And although the companies are clashing in a U.S. court, it appears that a marriage between the two is not out of the question – at least according to Stingray.

During a June conference call, Stingray chief executive officer Eric Boyko said these legal proceedings “may put Music Choice in play and provide an opportunity for a future transaction.”

Stingray ()

Close: $7.17, down 3¢

Also on The Globe and Mail



Can this Montreal music broadcaster take on Spotify?
(BNN Video)

Courtesy: The Globe And Mail

Former Manitoba premier to be adviser for law firm Dentons

31 Aug 16
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Gary Doer, a former Manitoba premier and Canadian ambassador to the United States, is joining the Toronto office of the global law firm Dentons.

The firm says in a release that Doer will be senior business adviser and will work with clients on Canada-U.S. trans-border matters, as well as global public policy initiatives.

Doer was premier of Manitoba from 1999 to 2009 and led the NDP to three consecutive majority governments.

He served as ambassador from October 2009 to March of this year.

Chris Pinnington, CEO of Dentons Canada, says in a statement that Doer’s experience and widely-respected stature in public service, in government and with cross-border diplomatic and business relations in North America, will be “invaluable” to clients.

Doer joins a number of former political figures who now work at Dentons, including former prime minister Jean Chretien, who joined the firm in 2014.


Courtesy: The Globe And Mail

B.C. securities watchdog investigation leads to prison sentence

19 Aug 16
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A Surrey, B.C., man was sentenced to more than two years in prison after an investigation by the British Columbia Securities Commission revealed his fraudulent activity.

Roberto Castano became known to the BCSC in 2009 through a tip from a financial institution. The institution alleged that money Mr. Castano had raised through his company, Skyline Communications, was being invested in the stock market through a brokerage account.

An investigation was then launched by the BCSC, which found that Mr. Castano was misappropriating funds from clients through a Ponzi scheme.

The BCSC said Mr. Castano issued promissory notes, and told investors he would use the money to trade on the stock market and earn them a 5-per-cent return each month. But some of the money he took in from investors was being used to make interest and other payments back to investors. Mr. Castano also used some funds for personal expenses, the commission said in a statement Thursday. Charges of theft and fraud were approved by the Crown in 2012, and earlier this year, Mr. Castano pleaded guilty to one count of fraud over $5,000 against eight victims. This week, the B.C. Supreme Court ordered Mr. Castano to pay a total of about $1.5-million to seven of the investor victims. It also sentenced him to 27 months in prison.

Peter Brady, director of enforcement at BCSC, said the organization is “almost constantly” investigating Ponzi schemes, and the complexity of the cases means the investigations typically take a long time.

Also on The Globe and Mail



Video: How one Canadian couple lost their life savings in a fraud
(The Globe and Mail)

Courtesy: The Globe And Mail

Louis Bacon can’t sue Peter Nygard in New York over Bahamas property feud

11 Aug 16
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Billionaire fund manager Louis Bacon lost another battle in his decade-long feud with Canadian clothing magnate Peter Nygard over their neighbouring properties in the Bahamas as a New York judge threw out Mr. Bacon’s defamation lawsuit claiming he was forced to flee the island country.

After an appeals court last month upheld the dismissal of claims over most of 135 statements Mr. Bacon said were part of Mr. Nygard’s harassment campaign, state court Justice Cynthia Kern on Wednesday threw out the rest, saying the case should be heard in the Bahamas because the dispute arose from their relationship as neighbours.

Mr. Bacon sued Mr. Nygard in January, 2015, as part of a long-standing dispute over plans to expand his property on the exclusive Lyford Cay, claiming the clothing magnate staged rallies targeting him and had employees vandalize his property.

Mr. Nygard countersued, accusing Mr. Bacon of pursuing a vendetta.

“In describing the actions that constitute the smear campaign,” Justice Kern said, “it is clear that the allegations almost entirely involve activities which took place in the Bahamas.”

The ruling was strictly procedural, Patrick Scanlan, a spokesman for Mr. Bacon, said in an e-mail.

“While Mr. Bacon disagrees with this decision, and is considering his appellate options, it should be noted that nothing in the court’s decision purports to exonerate Mr. Nygard for his malicious conduct.” Mr. Scanlan said.

Mr. Bacon is committed to proving his claims in whichever court is appropriate,” Scanlan said.

Justice Kern noted that Mr. Bacon started nine separate legal actions in the Bahamas since 2011 related to the dispute. She dismissed the case on the condition that the defendants agree to the jurisdiction of that court system.

The men have fought in courts from London to Los Angeles over matters including Mr. Nygard’s plans to expand his property and Mr. Bacon’s use of large speakers to drown out noise from Mr. Nygard’s parties. Mr. Nygard in December bought full-page ads in two Bahamian newspapers calling for an end to the feud.

A New York appeals court last month upheld Justice Kern’s ruling dismissing most of 135 statements that Mr. Bacon said were part of the harassment campaign because he had taken too long to file them.

“This was a frivolous lawsuit brought by Mr. Bacon in an effort to further his campaign of harassing Mr. Nygard in the international media,” Aaron Marks, an attorney for Nygard, said in a statement. “Justice Kern correctly found such an action has no place in a New York courthouse.”

Also on The Globe and Mail



Labour talks between the Detroit Three kick off
(BNN Video)

Courtesy: The Globe And Mail

OSC approves settlement for overpaying Scotiabank clients

05 Aug 16
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Three Bank of Nova Scotia dealers will pay a combined $20-million to compensate current and former clients who overpaid to hold various types of investments.

On Friday, the Ontario Securities Commission heard and approved a no-contest settlement agreement with Scotia Capital Inc., Scotia Securities Inc. and Holliswealth Advisory Services Inc. The OSC said that while these dealers’ internal controls and supervisory systems were inadequate, it found no evidence of dishonest conduct.

The fee overcharges, which date as far back as 2009 and went undetected for years, affected roughly 45,703 client accounts that were invested in various mutual funds, exchange-traded funds and structured products.

“Based on the evidence that staff reviewed, we determined that the Scotia dealers failed to establish, maintain and apply procedures and to establish controls and supervision,” Yvonne Chisholm, a senior litigator for the OSC, said at the Friday hearing.

She added that the dealers “provided prompt, detailed and candid co-operation” during the investigation.

The Scotiabank dealers self-reported these issues to the regulator starting in early 2015 and, as a part of the settlement, they did not admit to or deny the allegations. The bank also conducted a review of its other businesses in Canada and found no further issues.

“We regret any inconvenience this has caused, and will immediately begin to notify affected current and former clients and appropriately compensate them,” Scotiabank spokesman Rick Roth said.

“We have also taken corrective action to implement additional controls, reporting and procedures to prevent these matters from occurring in the future.”

The most sizable case of mispricing affected 30,218 client accounts that paid both an account fee and a trailer fee – a type of commission paid to advisers for keeping someone invested in a certain fund – for certain structured products. These clients indirectly paid too much, the regulator said, and will receive more than $10-million in compensation.

Another instance of mispricing of fees occurred when 12,751 clients were not advised that they had amassed a large enough portfolio to meet the threshold necessary to purchase a class of mutual funds with a lower management expense ratio (MER). As a result, the regulator said, these people indirectly paid more in fees than they should have and will receive roughly $8.9-million in compensation.

The Scotiabank dealers have made a voluntary payment of $850,000 to the OSC, of which $800,000 is earmarked for investor education and $50,000 is to cover the regulator’s costs of the investigation.

“Approval of this settlement agreement will remind other market participants about the importance that this commission places on self-reporting, on compensation and remediation to investors and on establishing and on maintaining internal compliance systems that operate appropriately,” Ms. Chisholm said.

Also on The Globe and Mail



Scotiabank CEO: Ottawa needs to cool down Canada’s housing market
(BNN Video)

Courtesy: The Globe And Mail

OSC’s whistle-blower program aims to change corporate behaviour

05 Aug 16
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The Ontario Securities Commission’s new crime reporting program should compel more companies to act on internal complaints and report wrongdoing to regulators before their employees become whistle-blowers, according to chair Maureen Jensen.

The commission’s whistle-blower office opened Thursday, promising payouts of up to $5-million for people who report securities-related crimes that lead to successful prosecutions.


Also on The Globe and Mail



Millennials, Gen Xers losing confidence in ability to meet financial goals: poll
(BNN Video)

Courtesy: The Globe And Mail

Northern Gateway defeat the latest legal rebuke to Harper legacy

05 Aug 16
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The Federal Court of Appeal’s decision on Thursday to overturn Ottawa’s approval of the Northern Gateway pipeline project extended the Stephen Harper losing streak in the courts. The former Conservative government gave the $7.9-billion project the go-ahead in 2014, subject to Enbridge Inc., the pipeline builder, meeting 209 conditions.



Northern Gateway project approval overturned
(BNN Video)


Courtesy: The Globe And Mail