Legal Feeds Blog
- Kaufman Laramée is on its own defending a series of lawsuits over missing trust account money
Kaufman has been sued in five actions by investors who say they made deposits into the trust accounts of the firm or its former partner Dany Perras, but have not got their money back.
The insurer, Fonds d'assurance responsabilité du Barreau du Québec, refused to defend, claiming the lawsuits were outside the scope of its policy, since the trust fund deposits were unconnected to “professional services” rendered to the plaintiffs in the five cases. Kaufman challenged that decision in court, but last week, Quebec Superior Court Justice David Collier sided with the insurer.
“A review of the pleadings and exhibits does not reveal anything that allows one to conclude that Perras or Kaufman may have rendered professional services to the plaintiffs. Taking the pleadings at face value, it appears they provided investment services to the plaintiffs,” Collier wrote. “Since the pleadings and exhibits in the five actions do not show that Perras or Kaufman may have held the plaintiffs’ trust funds in connection with professional services rendered to the plaintiffs or to a third party, there is no coverage under the policy and the Fonds has no duty to defend.”
According to Collier’s decision, plaintiffs in three of the lawsuits claim Perras approached them to participate in “business opportunities,” involving short-term loans to be held in the trust account of the law firm before paying out a pre-determined rate of interest. By the time they made the deposits, Perras had already left Kaufman, but the plaintiffs allege the firm was negligent in failing to inform them of his departure. None of the allegations have been proven in court.
Kaufman’s counsel William Brock, a partner in the Montreal office of Davies Ward Phillips & Vineberg LLP, says they plan to appeal Collier’s ruling. And regardless of the final ruling on the insurer’s defence of the firm, he believes the professional liability fund will ultimately be obliged to indemnify Kaufman.
“Kaufman Laramée is one of the victims here,” Brock says. “No other partners or associates were in any way involved. This is about a rogue lawyer, acting alone, who victimized and betrayed the trust of his partners.”
According to Brock, Kaufman hired Perras through a well-known legal recruiter in January 2011. Within months, they decided he should leave because they were unimpressed with his work. During that time, Brock says Perras’ trust transactions appeared “completely regular.” After his departure in June 2011, Brock says the trust account transfers also appeared to be properly signed off by clients.
“There was no suspicion anything fraudulent going was on,” he says.
Brock says Kaufman notified the police and the Barreau as soon as it became suspicious, which was in October 2011, when a bank contacted them about trust account irregularities.
“Today in the office, business is continuing. These are hard working reputable lawyers. I think that it’s always unfortunate when lawyers are victimized,” says Brock.
Update Dec. 6: Comments added above from Kaufman’s counsel.
Plaintiffs in the other two actions claim Perras solicited them to participate in a transaction designed to help a U.S. company out of bankruptcy, which promised significant fees in return for a $2.4-million deposit while they considered whether they wanted to take part. The money went into Kaufman’s trust account, but was then transferred to Perras’ personal trust account when he left the firm, according to the claim.
Both plaintiffs got their money back from Perras after 90 days, but had their bank accounts seized during a Barreau investigation, while it established the ownership of the money Perras returned. Their lawsuits allege Kaufman and its partners transferred the deposits without authorization, and demand Kaufman return their money and compensate them for legal fees spent to contest the Barreau’s seizures, according to Collier’s decision. Again, none of the allegations have been proven in court.
Richard Wagner newest justice of the Supreme Court of Canada, Toronto Star
Student sues over student union's barring of anti-abortion club, National Post
Toronto bylaw banning shark fins outside city's jurisdiction: judge, Calgary Herald
Ford Hood massacre military trial gets a new judge, Reuters
Hearing set in Strauss-Kahn civil lawsuit, Reuters
China's new sea laws need clarification: U.S. Ambassador to China, Reuters
Human rights activists say it will be years before Arab Spring improves women's rights, Reuters
Congratulations to all the participants who have been instrumental in helping Canada raise mo' than any other country in the world — for the second year in a row — during the Movember campaing for prostate cancer research and men's mental health.
This year’s intake of students in McGill’s faculty of law formed a team under the leadership of Tim Apedaile. The team, referred to as “Mo’tion to Dismiss” is comprised of 36 members, some of whom are pictured here.
The Canucks brigade from the University of Ottawa law school were motivated to grow some mos. Photo: Tim Tam.
These gentlemen law students from the University of Ottawa show us how to mo. Photo: Tim Tam.
The University of Manitoba’s Robson Hall had a team of 13 law students growing mos this year.
Second-year JD student at the University of Manitoba’s Robson Hall Michael Cashion is one of the top law student fundraisers in Canada.
First-year Windsor University law student Jason Sitt was crowned King of Movember at his school. Photo: Evan Bawks
Windsor Law student Mike Maher now has a bristly upper lip to go with his full head of hair. Photo: Evan Bawks
Mo bros and sistas at the University of Windsor sport their “moustaches” in support of Movember. Photo: Evan Bawks
Farris Vaughan Wills & Murphy LLP’s Mo Bros were split between its Kelowna and Vancouver offices. The Kelowna team sent along their photo but unfortunately the Vancouver bros were more camera shy.
The crew from Norton Rose Canada’s Calgary office ham it up for Movember.
McMillan LLP lawyers from across the country joined in to the facial hair-growing frenzy. Here's the Calgary section of the McStaches.
Alexandre Forest was the lone McStache at McMillan LLP's Montreal outpost.
There seems to be a theme going on with McMIllan's Ottawa McStaches.
The Toronto office McStaches seem to be pretty casual about the whole affair.
McMillan's Vancouver office with some serious Mos on their members of team McStaches.
|The Sino-Forest class action settlement is the largest by an auditor in Canadian history. (Photo: Reuters/Xavier Ng)|
The settlement is the largest by an auditor in Canadian history and is one of the largest-ever auditor settlements worldwide.
“We are proud of this historic settlement,” said plaintiff’s counsel Dimitri Lascaris of Siskinds LLP, “it provides direct and immediate benefits to the class members.”
“Our clients are pleased with this result and we look forward to aggressively prosecuting the action against the remaining defendants,” said Koskie Minsky LLP’s Kirk Baert, who also represented plaintiffs in the class.
The OSC alleges Ernst & Young breached the Ontario Securities Act by failing to conduct its audits in accordance with relevant industry standards. The audits related to the 2007, 2008, 2009, and 2010 consolidated financial statements of Sino-Forest.
“Our investigation into Sino-Forest is a complex international investigation, and a major focus has been on whether gatekeepers such as auditors and other corporate advisors properly performed their role in protecting investors,” said Tom Atkinson, director of enforcement with the OSC. “Investors rely on auditors to conduct their audits in accordance with professional standards, particularly when foreign companies are listing on Canadian exchanges. If auditors fail to abide by Canadian auditing standards and securities laws, we will hold them accountable.”
The OSC alleges E&Y failed to perform sufficient audit work to verify the ownership and existence of Sino-Forest’s most significant assets; and failed to undertake audit work on Sino-Forest with a sufficient level of professional skepticism.
On May 22, 2012, the OSC issued allegations of fraud against Sino-Forest and former senior executives. Those proceedings are ongoing.
“The OSC Allegations against Ernst & Young LLP are not unexpected in light of Tom Atkinson’s prior statements that OSC Staff intended to focus future enforcement efforts on gatekeepers,” says Janice Wright, a partner with Rueter Scargall Bennett LLP.
Wright says the OSC’s allegations against E&Y could trigger a greater focus on all professional services firms providing audit functions.
“This case most certainly will increase pressure on all gatekeepers, who will now become aware of the alleged so-called standard of ‘professional skepticism.’ I do note that, at least at this juncture, the OSC has chosen to make allegations against the firm but has not named any individuals.”
That said, it’s not out of the realm of possibility that the investigation could broaden in the future, adds Wright.
“The OSC has stated publicly that at this time it does not intend to initiate further allegations against additional parties in the Sino-Forest matter. But it has also stated that its investigation is on-going. So one cannot say unequivocally that further allegations are out of the question, but based on the evidence the OSC currently has no further allegations are pending at this time.”
The litigation continues against former Sino-Forest CEO Allen T.Y. Chan, and others including BDO Ltd, Credit Suisse Securities (Canada), Inc., TD Securities Inc., Dundee Securities Corp., RBC Dominion Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., Merrill Lynch Canada Inc., Canaccord Financial Ltd., Maison Placements Canada Inc., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Advocates hope courts take animal cruelty charge seriously in death of dog beaten, left in dumpster, Vancouver Sun
Ford in office until appeal OK by opposition lawyer, The National Post
Trump hotel buyers bring lawsuit against Trump, developers, Toronto Star
Judge in California temporarily blocks landmark law barring gay conversion therapy, Reuters
U.S. Supreme Court relists gay marriage cases for later in the week, may defer action again, Reuters
Top U.N. human rights official urges Iran to free hunger-striking lawyer, Reuters
Chinese legal system has no law to follow: blind China dissident after nephew beaten, jailed, Reuters
Wagner is the son of Claude Wagner, a Quebec lawyer, prosecutor, judge, cabinet minister, federal Conservative leadership candidate, senator, who gave him much inspiration. He paid tribute to his father at yesterday's cermony.
“His generosity and noble spirit always inspired me to follow in his steps. He will always be my hero,” Wagner said at the formal gathering at the Supreme Court.
Wagner, 55, was elevated to the top court from Quebec Court of Appeal. He replaces Justice Marie Deschamps who retired in August.
New SCC judge Richard Wagner sworn in, CTV News
B.C. woman who won lawsuit unable to pay $180K in legal fees, CBC News
Man. appeal court reserves judgment in Graham James case, Winnipeg Free Press
GM workers permitted to sue State Street over pensions, Reuters
Supreme Court remains silent on same-sex marriage, Reuters
Egypt's top court shuts down following protests, Reuters
Chile's sea claims unjust, Peru tells The Hague, Reuters
“As the legal profession continues to evolve, it has become even more important to be able to represent the experience of our membership to government and the Law Society of Upper Canada as they consider changes to the justice system,” says Whitehead, a lawyer at George Murray Shipley Bell LLP in Sarnia, Ont.
Whitehead replaces Michael Johnston in the lead role at CDLPA.
“For the past year and a half, Michael has significantly strengthened our capacity to advocate on issues that affect the practising bar and I will continue to build on this important work,” says Whitehead, who touts her strong roots in Lambton County and notes she’s familiar with many of the issues facing the profession, especially those related to sole and small-firm practitioners.
Whitehead’s practice focuses on civil and commercial litigation, family and collaborative law, and estates matters. Born and raised in Lambton County, she studied law at the University of Western Ontario and went on to article in London, Ont. She later moved to Sarnia and has been a partner at her current law firm since 2006. She and her husband ran the cash-crop and beef operation for 28 years before moving to Sarnia.
Besides her law practice, Whitehead has been active in a number of organizations. She served on the board of the Breast Cancer Society of Canada for six years first as director and later as president. She also served multiple terms as the treasurer and president of the Lambton Law Association.
As well check out the photo gallery of the students from law schools across the country who also participated. It'll be posted tomorrow.
Calgary’s Burnet Duckworth & Palmer LLP articling students Andrew Kuzma (left) and Brandon Holden (right) did it up right.
The BLG "Mo Bros" show theirs off!
The "Cassels Brock and Stachewell" team featuring (l to r) top: Geoff Breen, Ardy Mohajer, bottom: John McGowan, Lorne Silver, Chris Horkins and Patrick MacDonald.
The dapper team from Fasken Martineau DuMoulin LLP’s Montreal office.
London, Ont.'s Harrison Pensa lawyers show off their moustachioed selves.
Alex Shalashniy of the Regina firm Kanuka Thuringer LLP’s very bold mo.
Our colleague Tim Wilbur, Lexpert Magazine managing editor, sports one for the team.
The team from Mason Bennett Johncox in Whitby, Ont.
Celebrating their ’staches (l to r) are: Ryan Gelbart, Ben Bloom, David Ullmann, Andrew Zinman, Brad Good, Mark Freake and Edward Asmar of Toronto firm Minden Gross LLP.
A sterling mo effort from the team at Norton Rose Canada’s Toronto office. Photo: V. Summerfield.
The Honourable Justice Jamie W. S. Saunders Award is presented in Halifax annually to a Mo Bro or a Mo Sista or a team for their passion for and commitment to Movember. Nova Scotia Court of Appeal Justice Jamie W.S. Saunders presented this year’s to Rebecca L. Hiltz LeBlanc, a partner at Boyne Clarke LLP, and her husband Mitch Hiltz LeBlanc.
Sporting their ’staches at the Movember wrap up event held at the Halifax Law Courts on Nov. 29 are Nova Scotia Court of Appeal justices Peter M.S. Bryson, Pierre L. Muise, David P.S. Farrar, and Jamie W.S. Saunders, and Nova Scotia Supreme Court Justice Patrick J. Murray.
The Aird & Berlis LLP in Toronto team took their sexy moustaches up a notch, doing it Gangnam Style.
The very smiley bros from Oslers show off a solid set of mos.
Winnipeg law firm Pitblado’s team: Michael Puchniak, Seth Nerman, and Mark Wallace.
Daniel Strickland of Siskinds LLP in London gets a donation from Western University’s law dean Iain Scott.
Jean-Marc Leclerc of Sotos LLP sports his self-described “creepy” moustache.
The proud members of the Thornton Grout Finnigan LLP: (l to r): Kim Ferreira, Danny Nunes, Mark Donald, Kyle Plunkett, and Bob Thornton.
The MoTorys LLP team display their ’staches.
Dec. 4 — British Columbia — Ediger v. Johnston
Torts: Cassidy Alexis Ediger suffered severe permanent brain damage during her birth after Dr. William Johnston attempted a rotational mid-level forceps procedure to assist the delivery. It failed. Ediger’s heart slowed in a bradycardia and deprived her of oxygen until she was delivered by Caesarean section and resuscitated 18 minutes later. The trial judge found that Johnston breached the standard of care in attempting a rotational mid-forceps delivery without first checking to see if there was backup available for a C-section. The judge also concluded that the doctor didn’t have the mother’s informed consent to the forceps procedure before delivery. The Court of Appeal allowed Johnston’s appeal and dismissed Ediger’s action. Several questions are being raised in relation to the finding of liability on the issue of causation.
Dec. 5 — Quebec — R. v. Manning
Criminal law: Alphide Manning pleaded guilty to two counts of operating a motor vehicle with a blood alcohol level over the legal limit. He had similar prior convictions. He was sentenced to 17 months in jail and banned from driving for five years. The Crown applied for the forfeiture of Manning’s vehicle because it was considered offence-related property under the Criminal Code. The Court of Quebec dismissed the Crown’s motion, noting that Manning was unemployed and living on social assistance, and the vehicle was his only property, which he was dependent on. The Court of Appeal dismissed the Crown’s appeal, finding that the judge had not erred in law. In question are the factors a court can consider in deciding not to order the forfeiture of offence-related property.
Dec. 6 — Manitoba — R. v. O’Brien
Criminal law: While in jail, Kelly Joseph O’Brien threatened to kill his girlfriend if she aborted their child. Staff at the jail complained and the girlfriend was called to testify. She said O’Brien’s threat didn’t scare her; he was just being loud and belligerent with her. O’Brien was acquitted on two counts of uttering threats and two counts of breach of probation. The majority of the Court of Appeal dismissed the Crown’s appeal. At issue is whether the appeal court erred in assessing the mens rea requirement for the offence of uttering threats and in finding that the evidence of the complainant was the determinative factor.
Dec. 6 — Ontario — R. v. Sanichar
Criminal law: Harry Persaud Sanichar was convicted of rape, indecent assault, buggery, gross indecency, sexual assault, assault, and assault with a weapon in relation to the physical and sexual abuse of his stepdaughter, which allegedly occurred over several years when she was a child. She was in her mid-30s when she testified against him. The majority of the Court of Appeal allowed Sanichar’s appeal and ordered a new trial on the basis that the trial judge failed to conduct a proper inquiry into the reliability of the stepdaughter’s testimony and apply the principles of reasonable doubt to aspects of the evidence that could have been in Sanichar’s favour. The court is being asked to assess the trial judge’s behaviour.
Dec. 7 — New Brunswick — Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper Ltd.
Labour law: Irving implemented a new workplace policy in its paper mill that included random alcohol testing for employees with safety-sensitive positions. An employee was tested and found to have a blood alcohol level of zero. Nevertheless, the union filed a grievance challenging the reasonableness of the policy. The arbitration board found that Irving failed to demonstrate that the mill posed a sufficient risk of harm that outweighs an employee’s right to privacy. Specifically, the board concluded that Irving didn’t cite enough evidence of prior incidents of alcohol-impaired work performance to justify the policy, and that although the mill was considered “a dangerous work environment,” it wasn’t deemed “ultra dangerous.” The Court of Queen’s Bench allowed the application for judicial review and quashed the board’s decision, ruling it was unreasonable to require evidence demonstrating a history of alcohol abuse in the workplace once the board deemed the mill a dangerous workplace. The Court of Appeal dismissed the union’s appeal.
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Gail J. Cohen