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An Ontario Superior Court judge has awarded damages against law firm Cassels Brock & Blackwell LLP in the amount of $45 million for breach of fiduciary duty, breach of contract, and professional negligence.
In his 160-page decision Wednesday in Trillium Motor World Ltd. v General Motors of Canada Ltd., Justice Thomas McEwen found Cassels Brock owed contractual and fiduciary duties to some or all of the class members in the case and breached those duties. As well, he found it also owed a duty of care, which was also breached.
In a statement, Cassels Brock general counsel John Birch said it’s business as usual for the firm and it is actively pursuing an appeal. He noted the judgment “creates potentially indeterminate liability for lawyers.”
“Of course, we are disappointed,” Birch said. “But we remain confident that we conducted ourselves properly and in accordance with our professional responsibilities.”
“We feel that the findings are not justified on the evidence and that there are significant legal errors in the decision. We continue to believe that Trillium Motor World and the other automotive dealers had not become our clients in the circumstances, and they were each represented by their own independent legal counsel.”
In May 2009, about 200 General Motors dealers were eliminated during the federal auto bailout. The class action was seeking $750 million in damages on behalf of those dealers. Also named in the suit was Cassels Brock, which had been retained to represent Canadian dealers in a GM restructuring bankruptcy. The claim alleged Cassels Brock failed to disclose to dealers it was also acting for the Canadian government in the GM auto bailout and breached duties to dealers.
Also as part of his decision, McEwen found that General Motors of Canada Ltd. did not breach the Arthur Wishart Act (franchise disclosure), 2000. Therefore he dismissed the action against GMCL. He also dismissed the counterclaim by GMCL against each of the class members.
In his decision, McEwen wrote: “Cassels takes the position that there was only ever the potential for a conflict to arise on account of the two retainers. In other words, Cassels accepts that there was indeed a risk that immediate legal interests of Industry Canada and the GMCL dealers would be directly adverse.”
He then goes on to refer to testimony that indicated that “Cassels would have dropped the GMCL dealers if the risk became reality (‘if an adverse interest arose with respect to that retainer, it’s conceivable that we could not act for the dealers at that time’), there can be little doubt that there was a risk that Cassels’ representation of the GMCL dealers would have been materially affected.
“Thus, the issue is really whether this risk was a substantial one. In my view, the evidence supports a finding that it was,” McEwen wrote.
He then proceeds to outline that at the time of the retainer the following facts were known:
• GMCL was essentially insolvent and relying upon government money to survive;
• The current plan in place was to reduce the dealer network by 29 to 36 per cent by the end of 2014, later accelerated to 42 per cent by the end of 2010;
• Cassels, by virtue of its representation of the Saturn dealers, was aware of the fact that an argument could be raised that GMCL’s proposal may be in violation of the DSSA (dealer sales and service agreements). In fact, it advised the Saturn dealers and drafted a letter on their behalf to send to GMCL in this regard. Accordingly, it would have been aware that if the GMCL dealers were cut, it would have to take a position contrary to Canada’s desire for restructuring;
• The retainer was going to be accepted with the provision that Cassels could not take on the government in a CCAA proceeding. The interest of Canada would be aligned with GMCL on a CCAA filing. The interest of the GMCL dealers would be either to survive the rationalize or to, on the other hand, obtain as much financial compensation as possible if they were to be non-retained.
• The dealers who had received WDAs would have faced the loss of their businesses; and,
• The proposed CCAA filing would be one of, if not the, largest in Canadian history. A CCAA filing is “real time litigation” where parties have limited timeframes to act and react to the proceeding.
Read more on this story Monday on Canadian Lawyer InHouse
While provincial superior courts can decide that federal regulations are invalid, only the Federal Court of Canada can declare them invalid via judicial review — although they have broad discretion to deny such review.
|Mary-Jo Maur believes there’s little chance a challenge to wipe out the Child Support Guidelines would succeed.|
The ruling in Strickland v. Canada involves a divorce case from Alberta in which the appellant, Robert Strickland, challenged the validity of federal Child Support Guidelines under the Divorce Act.
Strickland argued that the regulations, implemented by former justice minister Allan Rock in 1997, are inconsistent with the legislation. Rock’s attempt to amend the Divorce Act (which considers the means of both parents) to correspond with the guidelines (which only considers the means of non-custodial parents) was defeated by the Senate.
It’s this inconsistency that led Strickland and two co-appellants to seek a judicial review at the Federal Court of Canada.
When the court denied application for review — arguing it had little experience in family law matters and was an inappropriate forum — the applicants turned to the Federal Court of Appeal, arguing that the lower court’s reasoning was insufficient to deny the review.
Today’s decision, written on behalf of a unanimous court by Justice Thomas Cromwell, makes clear that superior courts have overriding discretion to deny judicial review, particularly when the court deems itself to be an inappropriate or inadequate forum.
“In this case,” the decision states, “the appellants’ position that they are entitled to a ruling on the legality of the Guidelines through a judicial review is fundamentally at odds with the discretionary nature of judicial review and with the broad grounds on which that discretion may be exercised. The appellants do not have a right to have the Federal Court rule on the legality of the Guidelines; the Federal Court has discretion to do so, which it has decided not to exercise. . . .”
“The provincial superior courts deal day in and day out with disputes in the context of marital breakdown concerning the needs of children. . . . Parliament has entrusted, for practical purposes, this entire area of law to the provincial superior courts. Having done so, it would be curious, to say the least, if the legality of a central aspect of that regime were to be finally decided by the federal courts, which as a result of federal legislation have virtually no jurisdiction with respect to family law matters.”
Glenn Solomon, the litigator at Jensen Shawa Solomon Duguid Hawkes LLP who represented the appellants, says the ruling is by no means a decisive loss for his clients.
While the SCC decision shuts the door on a Federal Court review, it leaves open the possibility that the Child Support Guidelines will be rendered inconsistent with the Divorce Act through a traditional proceeding. Indeed, Solomon says an action at the Alberta Court of Queen’s Bench, which has been pending the SCC decision, will now proceed.
“It seems to me that what the Supreme Court has said is that only the Federal Court can declare the guidelines ultra vires the Divorce Act, but the superior courts can, in a case where there are other issues, decide that the guidelines are ultra vires the act,” says Solomon.
“And so we have the distinction between what the superior courts can decide, and what only the federal courts can declare.”
If Strickland’s challenge at the Court of Queen’s Bench succeeds, an appeal on the regulation itself — versus the discretion of the courts — could still make its way back up to the Supreme Court of Canada.
“A decision at the Federal Court doesn’t bind a provincial superior court,” says Solomon. “If anybody wants a ruling once and for all on the validity of the guidelines, it’s going to have to go up through the court system to the apex of the system, to the Supreme Court, to get a decision that binds everyone.”
Mary-Jo Maur, an assistant professor and family law expert at Queen’s University, says she “admires the boldness” of the attempt to wipe out the Child Support Guidelines, but she believes there’s little chance that such a challenge could succeed given the number of divorce cases that would be caught up in the maelstrom.
“Does this mean that people can go to the provincial superior court and ask to have the Child Support Guidelines declared invalid? Theoretically, somebody could do that, in the context of their own divorce application . . . but do they have a chance of winning it?!” she laughs.
“Ask me what the odds are — they have to be into the negative numbers. I mean, think about all the cases going back to May 1, 1997. What happens to them?”
Lu Chan Khuong has served a formal notice on the directors of the Barreau du Québec demanding that they they rescind the resolution ordering her suspension as bâtonnière.
Khuong was suspended last week following a special meeting Wednesday called as a result of an article in La Presse, in which the newspaper reported its discovery of a record of the shoplifting offence, which involved two pairs of jeans.
At the meeting, the board voted unanimously to demand Lu Chan Khuong’s resignation. When she refused to resign, the board responded by suspending her indefinitely.
“I intend to stay in office and to carry out the reforms desired by the 63 per cent of lawyers who democratically elected me on May 22. I intend to put an end to wasteful expenditures, reduce the dues paid by our members and work for our citizens, who deserve a simpler and more accessible justice system. I will not let myself be distracted by certain individuals who, through illegal and immoral means, are trying to sabotage the results of the election,” said Khuong in a statement this morning.
Khuong is asking the Barreau's directors to correct their error, which she says has already done harm to the image of one the most prestigious professional associations in Quebec.
In addition, Khuong, who is being represented by lawyer Jean-François Bertrand, wants a public apology and said she reserves the right to take action for defamation.
She said she received a wave of support during the last week from the bars of Longueuil, Laval, Arthabaska, Outaouais, Richelieu and Mauricie, as well as petitions and letters from lawyers and members of the public.
The Canadian Bar Association – Québec Branch issued a release earlier today saying it is “deeply concerned by the crisis that has been gripping the Barreau du Québec.”
It says the “reasons cited and made public to date by the Board to justify its decision are in our view insufficient and contrary to the principles of fundamental justice that underlie our profession.”
At this point, Khuong has not been charged with anything and the file on the case has been closed so the CBA-Quebec points out “she is entitled to the presumption of innocence,” like any other Canadian. It’s calling on the Minister of Justice to investigate who leaked the information on Khuong from its Diversion Program’s confidential files.
“CBA-Québec accordingly insists that [Khuong]., the democratically elected President of the Québec Bar by popular vote, be immediately allowed to resume the duties of her office, and that the Québec Bar's Board of Directors collaborate fully with her in ensuring the proper operation of the professional order of Québec lawyers.
Also speaking out against the Barreau’s board of directors is Claude Provencher, a senior federal bureaucrat and a former executive director of the Barreau. “It’s a settling of scores,” Provencher told Droit-Inc. “They were looking for a chance to act against the bâtonnière and they seized on the slightest pretext without doing any rigourous or reasonable analysis.
“It’s a vendetta,” he added, clarifying that he was speaking as an individual and not in his capacity as general counsel and regional director in Quebec for Justice Canada.
Speaking of the article in La Presse that led to the board’s decision, Provencher said, “They didn’t try to find out if it was true, because for them it was a gift fallen from heaven."
Khuong, he said, had promised major reforms at the Barreau, dealing with things ranging from the salary of directors to the number of hours of mandatory pro bono work required.
Update 2:40 pm: Comments from CBA-Quebec added.
Update 3:35 pm: Remarks from Provencher added.
Alberta appeal court upholds infanticide convictions for Calgary woman, Canadian Press
Newfoundland man in court accused of stabbing youth soccer player, Canadian Press
Tobacco companies return to court to fight settlement ruling, Canadian Press
Chicago will attempt to convince judge that pension law is constitutional, Reuters
Georgia appeals court to hear Ku Klux Klan lawsuit against state over refusal to adopt highway, Reuters
Former Italian PM Berlusconi found guilty of bribing a senator, Reuters
Former Serbian commander accused of war crimes extradited from Australia to face trial, Reuters
The Ontario Court of Appeal has upheld a defamation finding against former University of Ottawa professor Denis Rancourt, who called Joanne St. Lewis, a law professor at the same university, “a house negro” in a 2011 blog post.
|‘I think what the court did was clearly state there’s a boundary to freedom of speech; you don’t get to defame people,’ says Joanne St. Lewis.|
Speaking from Montreal, where she’s on vacation, St. Lewis says she is “very pleased” with the court of appeal’s decision.
“I feel really vindicated. The whole point is that for those of us who are racialized in our workplaces, it’s one thing to critique our work but when you choose to make false statements, defame someone, and not engage in a substantive analysis, you can’t hide behind free speech in the way that he [Rancourt] attempted to do,” says St. Lewis, who is also a bencher at the Law Society of Upper Canada.
“I think what the court did was clearly state there’s a boundary to freedom of speech; you don’t get to defame people. I think that’s a very important statement,” she adds.
Rancourt tells Legal Feeds: “I’m disappointed in the decision. I’m still reviewing it now, and I will be considering my options. In my view, the appellate court’s endorsement is wrong, on many points.”
“The Court of Appeal adopted the respondent’s theory. That theory is that in order to have evidence, you must lead evidence. My theory is that the evidence is what is in the record before the jury.”
The protracted lawsuit stemmed from Rancourt’s use of the pejorative language in a blog post in which he took issue with St. Lewis’ criticism of a 2008 student-commissioned report that found issues of systemic racism at the University of Ottawa.
The blog post, which has now been removed from Rancourt’s UofOWatch blog, was titled, “Did Professor Joanne St. Lewis act as Allan Rock’s house negro?” At the time, Rock was serving as the university’s president.
Last year, a jury found man of Rancourt's statements in the blog posts were defamatory and he exhibited actual malice. It awarded general damages of $100,000 and aggravated damages of $250,000. The trial judge endorsed the verdict and ordered substantial indemnity costs of $444,895, all inclusive, against Rancourt.
Rancourt appealed the lower court decision and sought a new trial on the basis that the trial judge erred in several ways. The judge, he argued, did not instruct the jury with respect to “fair comment,” did not consider that St. Lewis’ claim was statute barred, and failed to instruct the jury to watch a video of Malcom X speaking, which was embedded in one of the impugned blog post.
Rancourt also argued the finding that he defamed the respondent violates his right to freedom of expression. The court of appeal dismissed all his arguments and awarded St. Lewis $30,000 in costs.
Rancourt did not participate in the whole trial. He appeared in court on the second morning of the trial and read a prepared statement to the judge indicating he would not participate further, the court of appeal said.
“He left the trial and only returned to hear the jury verdict on June 5, 2014. In the result, he did not call evidence in his defence,” wrote Hoy.
Update July 9, 2015: Comments from Rancourt added and clarification on his participation in the trial.
Gowling Lafleur Henderson LLP is merging with U.K.-based Wragge Lawrence Graham & Co. to create a new international firm with more than 1,400 lawyers.
|Gowlings CEO Scott Jolliffe will be part of the international board governing the new Gowling WLG.|
The new firm — full name: Gowling WLG International Ltd. — which officially launches in January 2016, will have offices in 18 cities across Canada, the U.K., Asia, the Middle East, and Europe. Gowlings is currently one of the five largest law firms in Canada with over 750 lawyers.
“It’s a really wonderful day for Gowlings and a wonderful day for Canada to see a Canadian firm expanding globally in the way we are,” says Scott Jolliffe, CEO of Gowlings.
While other firms from the U.S. and U.K. approached Gowlings, Jolliffe says WLG was a good fit as it shares many of the firm’s strengths in expertise, particularly in the areas of intellectual property and innovation.
The firms are also like-minded and share similar corporate environments, says Jolliffe.
“They’re very much like us. They’re good people, they are sort a people-oriented firm as we are,” he adds. “They are one of the best employers in the U.K. as we are in Canada.”
While the appeal of an international market contributed to the merger, Jolliffe says a lacklustre Canadian legal marketplace was a bigger motivator.
“The Canadian market has been pretty stagnant or contracting on the legal side,” Jolliffe tells Legal Feeds. “The same is true for business generally in Canada. Our clients are more and more looking into international markets and especially developing markets for their growth.”
“Gowling WLG is a true coming together of like-minded firms,” said David Fennell, CEO of WLG. “In addition to complementary practice and sector strengths, a strong commitment to client service, and a shared vision for international growth, both WLG and Gowlings have fostered internal cultures that champion a people-first approach, innovation and collaboration. Together, we look forward to building one of the top sector-focused law firms in the world.”
The news follows another major law firm merger in March, when international giant DLA Piper found a portal into the Canadian market through an amalgamation with Vancouver-based Davis LLP.
Unlike DLA Piper Canada LLP and Dentons Canada LLP (which was formed when Fraser Milner Casgrain LLP merged with SNR Denton and Salans in 2012), Gowling WLG will not follow the Swiss verein model.
Gowling WLG will be structured as a company limited by guarantee, a scheme that creates an umbrella organization of which WLG and Gowlings will be members, according to Jolliffe. While it’s not a financially integrated partnership, the two firms’ client service and approach to the market will be full integrated, he says.
“We found that the U.K. limited by guarantee [model] was a more flexible structure and one that is a little more transparent,” he adds. “It’s also governed by U.K. common law, which we’re much more familiar with than Swiss civil code.”
The new firm will be governed by an international board, comprising each of the founding firms’ CEOs, Jolliffe and Fennell, and two additional representatives from each founding firm.
Gowlings WLG will provide services in areas including life sciences, manufacturing, power generation and distribution, projects and infrastructure, real estate, energy, and technology and communications.
Clients are excited about having immediate access to international expertise, Jolliffe says. “Secondly, a lot of our clients have been proud of the fact that this is a Canadian institution expanding internationally under a Canadian name.”
With this merger, Jolliffe says it was important for Gowlings to maintain its Canadian identity.
“We’ve seen other very good firms, U.S. and U.K. firms come to Canada and pick up a Canadian law firm to become part of their existing international platform. What that has meant is it’s a good thing for those [Canadian] firms but they’ve sort of given up their name and identity to join an international firm,” he continues.
“Our feeling was that we should create our own — a platform that was particularly suited to the Canadian market and the needs of Canadian business.”
Among recent mergers was also Norton Rose’s move in 2013 to join up with American firm Fulbright & Jaworski LLP, creating Norton Rose Fulbright — just a few years after storied Quebec-born Ogilvy Renault became part of U.K.-based Norton Rose.
Ontario court rules that condo common areas subject to privacy rights, Canadian Press
Canadian law firm Gowlings merging with U.K. firm Wragge Lawrence Graham to form Gowling WLG, Canadian Press
Quebec government seeks ruling on constitutionality of creation of national securities regulator, Canadian Press
Former MF Global Holdings Ltd. officials reach lawsuit settlement, Reuters
Civil rights activists sue Chicago suburbs over gun-control issues, Reuters
Myanmar men accused of murder of British tourists on trial, Reuters
Iraqi court sentences people to death over killing of hundreds of Shi'ite soldiers, Reuters
|John Williamson is taking on a two-year term as dean of law at UNB while the university conducts a search for another replacement.|
According to a spokesperson for UNB, a search for the next dean will take place during the two-year term.
Past dean, Dr. Jeremy Levitt, resigned voluntarily in March. At the time the university said he was on “research leave” until the end of July, so as to allow him to “complete ongoing research activities and speaking engagement commitments on behalf of the university.”
Levitt, who was hired last summer and went on leave in January, left UNB “in order to return to, and help advance, his home institution in Florida following completion of those commitments.”
Williamson has been with UNB’s faculty of law for more than 40 years. He spent nearly 20 years in leadership roles in the faculty, including associate dean, acting dean, and interim dean. It’s his first time in the top job.
Prior to joining UNB in 1974, Williamson obtained a bachelor of business administration and law degrees at UNB and an LLM at Harvard University. His primary teaching and research areas are debtor-creditor law, bankruptcy and receivership and commercial law.
UNB joins several other law schools across the country that are currently looking for new deans, including the University of Windsor, University of Saskatchewan College of Law, and the Bora Laskin Faculty of Law at Lakehead University.
Williamson’s two-year term began July 1.
Federal government drops Supreme Court CSIS overseas spying appeal, Canadian Press
Sleeping man who admitted to raping a sleeping woman wins a new trial, Canadian Press
Calgary man charged for flying in balloon rigged chair, Canadian Press
Former Goldman Sachs programmer wins dismissal of second criminal conviction, Reuters
U.S. appeals court upholds decision to strike down Puerto Rican bankruptcy law, Reuters
School teachers among people arrested for promoting Islamic State, Reuters
International judge resigns from U.N.-backed war crimes trials in Cambodia, Reuters
- Tragedy also strikes law office in Terrebonne, Que.
|Winnipeg police have charged Guido Amsel in connection with the bombing that seriously injured lawyer Maria Mitousis.|
Police, in fact, told the news conference they were investigating another scene at a Canada Post depot this morning and have issued a warning for people to watch for other incidents. The package turned out to contain only DVDs, reported the Winnipeg Free Press.
“Police are concerned that other packages could have been sent out to other legal counsel or justice officials who have dealt with Amsel,” the Winnipeg Police Service said in a news release yesterday.
“Police are asking those individuals to be aware and diligent in alerting police to any suspicious packages or items that may be addressed to them.”
The warning follows Friday’s explosion at the law offices of Petersen King on River Avenue that left lawyer Maria Mitousis, 38, with serious injuries to her hands, throat, and stomach. Police said this morning she remains in hospital and noted her condition had stabilized and she has been able to speak to officers.
Police investigated a second explosive device on Saturday as well as a third at the law firm Orle Barkman and Davidson on Stradbrook Avenue yesterday.
Police had earlier called the original bombing an isolated incident but have since charged Amsel, 49, with two counts of attempted murder, one count of aggravated assault, and a number of counts related to the possession of explosive devices. They are suggesting he has targeted his ex-wife as well as legal counsel who have represented either her or himself in the past.
Response and support from the bar both in Winnipeg and across Canada has been overwhelming says Sofia Mizra, president of the Manitoba Bar Association. Mizra says friends and family say Mitousis is recovering very well but her injuries are quite serious.
Members of the bar in the city are staying alert and looking carefully at packages before they open them, she says, noting the MBA offices were also evacuated on Friday in one of the other bomb scares.
According to police, the devices discovered so far have had distinct packaging and “unique” block lettering. Due to the Canada Day holidays last week, police believe any further packages will likely emerge in the next day or so.
Mizra emphasizes that issues of threats and potential violence are not new to many lawyers who are often involved in very emotional circumstances with their clients, but the situation with the bombings is obviously extreme. Lawyers and judges, particularly in the area of family law, are often on the receiving end of the anger from unhappy parties.
“When litigants hear something they don’t want to hear, they can take matters into their own hands,” she says, adding, “We have some brave lawyers in our community.”
According to Manitoba court records, Mitousis had represented Iris Amsel in family litigation against Guido that dates back to 2004 as well as a separate case filed in 2010 dealing with a numbered company. Mitousis is a family lawyer who had joined family law boutique Petersen King in 2014. Manitoba court records show Guido has also faced other small claims litigation matters over the years.
According to the CBC, police on Sunday deployed the bomb unit as part of the their investigation to two businesses, including EuroTech Auto Body. That business is among the defendants, along with Guido, named in the lawsuit launched by Iris involving the numbered company.
The incidents follow another tragic situation involving members of the legal community in Quebec. According to the CBC, lawyer Benoït Côté, 51, and notary Marie-Josée Sills, 30, died in hospital Saturday after a shooting at a law office in Terrebonne, Que., on Thursday.
Côté had once represented Michel Dubuc, a man found dead in his home on Friday along with the bodies of his two sons. Côté had been facing a $1.2-million lawsuit filed by Dubuc, the CBC reported.
Longueuil police spokesman Tommy Lacroix told the Canadian Press the timeline of events and motives behind the shooting had yet to be established but that autopsies were going to be conducted.
Canadian Bar Association-Manitoba members Laurelle Harris and Kelli Potter have set up a donation page on gofundme for those looking to support Mitousis in what will likely be a long recovery. In two days, it has raised more than $25,000.
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