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February 29, 2016

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Page 2 February 29, 2016 • Law Times www.lawtimesnews.com nated biphenyl, and it was pur- chased for a price of about $1.35 million. 162 Ontario Inc. paid $337,000 to Wolverine on closing and fi- nanced the rest of the purchase with a vendor take-back mort- gage, which Wolverine later assigned to related companies, 3072452 Nova Scotia Company and Great Lakes Copper Inc. At the time of the purchase, the property was contaminated by a series of transformers con- taining PCBs. At some point after the purchase, the property was further contaminated when PCBs leaked into a nearby lake. 162 Ontario Inc. launched its fraud action against the three related companies in October 2012 for $10 million in damages, claiming it was not made aware of the contamination when it purchased the property and that the vendor's intentional non- disclosure of the fact amounted to fraud. Amended claims increased the damage claims to $110 mil- lion in 2014 and then reduced the claims to $5 million later the same year. Each claim alleged the defendants conspired to conceal the contamination. The claims also alleged there were plans to acquire the property back from 162 Ontario Inc. by foreclosure and thereby pass off the costs of cleanup to 162 Ontario Inc. The defendants, through Da- vis, argued that 162 Ontario Inc. was aware of the contamination at the time of purchase. They also argued that the purchase agree- ment provided for the purchase "as is" and that the purchase price was substantially lower than it would have been without the contamination. According to Justice Price's ruling, after four years of litiga- tion, 162 Ontario Inc. produced records it had obtained by the Ministry of the Environment. Davis argued that these re- cords disclosed the fact that 162 Ontario Inc. knew about the contamination at least as recently as 2009, three years before com- mencing the fraud action, and argued the action was statute- barred. During a case conference on Jan. 22, 2016 to set a trial date, 162 Ontario Inc.'s counsel, Gregory Govedaris, who had only taken on the role in October 2015, in- formed the court he had been in- structed to discontinue the fraud action. Govedaris did not reply to a request for comment prior to press time. In response, Davis sought an order refusing the discontinu- ance and instead to dismiss the action and requested the court assess the defendants' post- assessment costs on a full indem- nity scale. In his ruling on costs, Justice Price wrote: "The general rule is that costs follow the event and will be awarded on a partial in- demnity scale. In special circum- stances, costs may be awarded on a high scale, but those cases are exceptional and generally involve circumstances where one party to the litigation has behaved in an abusive manner, brought pro- ceedings wholly devoid of merit and/or unnecessarily run up the costs of litigation." Justice Price wrote in his rul- ing that while he was not per- suaded that the plaintiff inten- tionally misled the court, it failed to substantiate its claims and "it was arguably irresponsible of 162 to make those allegations based on the evidence available to it at the time." "A knowledge of the falsity of its allegations cannot reasonably [be] imputed to 162 based solely on the assertions that the defen- dant's counsel made to its counsel at an early stage in the proceed- ing, before documentary produc- tions and examinations for dis- covery," Justice Price wrote. "A dilemma arises when the plaintiff commences an action in which it alleges fraud and later withdraws the allegations or discontinues the action be- fore a judgment is rendered," said Justice Price, who continued in ruling for a costs award on a sub- stantial indemnity scale. "It can be inferred from the withdrawal of the allegations or discontinuance of the action that the allegations of fraud were unfounded. Because of this, the action rightly attracts an award of costs on a substantial indem- nity scale until the allegations are withdrawn or the plaintiff dis- continues the action." Darren Smith of Humming- bird Lawyers LLP, director of the firm's civil litigation and alterna- tive dispute resolution practices, says that in reviewing the case, it is a trend of the court to deal harshly with fraud allegations that are unsubstantiated. "Parties really need to be care- ful of making allegations of fraud or other kinds of improper con- duct without being able to sub- stantiate them," he says. "Courts react quite negatively towards these types of allegations because they are often malicious in nature and they can do real harm to an organization or an individual," says Smith. "What the court has been say- ing is that it's somewhat offensive to the court to have to sit through these kinds of proceedings, par- ticularly when judicial resources are tight," he adds. "A lawyer is better to act out of an abundance of caution by not alleging the fraud initially; it doesn't mean you can't later. The really big takeaway from this is lawyers really have to act as a second sober thought for clients, and while we have an obligation to advocate on the best of our ability on their behalf, it doesn't mean we do so recklessly. And it's my opinion we do so when we allow them to go headlong into this kind of an action when they're making unfounded alle- gations." LT Judge rules plaintiff failed to substantiate its claims NEWS Continued from page 1 Milton Davis says a recent ruling is a cau- tionary tale about alleging fraud without a prima facie case. Juror ruling prompts call to look at Criminal Code BY TALI FOLKINS Law Times ith the Ontario Court of Appeal having ruled on jurors' use of extrinsic informa- tion in a recent case, the president of the Criminal Lawyers' Association says it may be necessary to amend the Criminal Code in order to get a better handle on the issue. "You can't say if jurors are or are not doing this at any level that is ap- preciable because you only find out in the rare case where a juror hap- pens to mention something," says Anthony Moustacalis. "Maybe jurors really do obey the judge's instructions. In my experi- ence, it seems that they generally do. But do I really know? The an- swer is no. Maybe they're Googling stuff all the time." The only way to know for sure and assess the necessity of any changes to the jury system, accord- ing to Moustacalis, is to amend the Criminal Code to allow research- ers to interview jury members anonymously about their experi- ences. "The fact of the matter is that people are people and they might not always remember the limits of what they're allowed to do or they might stray," he says. The comments follow the ap- peal court's ruling in R. v. Farinacci, a case that demonstrated the ease with which jurors can now find information about the defendant outside of the evidence presented during the trial. In their ruling on June 3, a panel of three judges re- fused to overturn the convictions of two brothers for possession of the proceeds of crime and conspiracy to traffic in cocaine. The brothers, Lucas Farinacci and Leonard Fari- nacci Jr., had argued their right to a fair trial had been compromised because jurors in the case, with the help of Google and other sources, had come across information about them that hadn't come up in court. The appeal came about as a result of a chance event at a coffee shop. Prior to sentencing but after the brothers' conviction, someone at the coffee shop overheard one of the ju- rors, in a conversation with a friend, mention that another me mber of Emond_LT_June15_15.indd 1 2015-06-10 2:47 PM Zero-tolerance conundrum Lawyers say pendulum has swung too far against accused in domestic violence cases BY TALI FOLKINS Law Times he justice system has taken the idea of zero toler- ance in domestic assault to such an extreme that it's unfair to defendants and no longer works in the best interests of Ontario families, says a 40- year veteran of criminal law. It's an opinion, however, vociferously opposed by at least one lawyer who helps victims of domestic violence. Leo Adler, of Adler Bytensky Prutschi Shikhman, says the issue of domestic assault has become "political football" over the last 25 to 30 years with largely undesirable results. While Adler emphasizes he doesn't want to diminish the tragedy of family violence, he says the situation has now reached a point where police called to family violence situa- tions are unduly afraid to release the defendant even in cases that don't appear serious. "Nobody wants to be the person who says, 'O.K., I'm going to release you,' because you might be the one in a million or whatever the statistic is who might end up killing your spouse," says Adler. "In a lot of these cases, there's no sign of violence, there's no sign of anything having occurred. You simply have the word of the complainant. And the person gets arrested and I can tell you that again in the majority of cases, the police don't even bother to try to take a statement from the accused, usually the male. . . . They don't ask because it doesn't make a difference because they're going to arrest you no matter what." Bail hearings in domestic violence cases, he says, are "a l- ways run on the presumption of guilt" and, if the court does grant bail, it's generally under strict conditions with the de- fendant required to live with a surety. The result, according to Adler, is often a divided family with the added financial strain OBA LAUDED Association honoured for mental-health efforts P4 CAMPAIGN SPENDING Bencher candidate calls for expense limits P6 FOCUS ON Legal Innovation P8 'In a lot of these cases, there's no sign of violence, there's no sign of anything having occurred,' says Leo Adler. Photo: Robin Kuniski See Silence, page 2 See Bail, page 2 There's no way to know if jurors are doing their own research on cases, says Anthony Moustacalis. PM #40762529 & $#&!&jmmm$cYa[bbWh$Yec ntitled-4 1 12-03-20 10:44 AM $5.00 • Vol. 26, No. 20 June 15, 2015 Follow LAW TIMES on www.twitter.com/lawtimes L AW TIMES T W during the trial. In their ruling on June 3, a panel of three judges re- fused to overturn the convictions of two brothers for possession of the proceeds of crime and conspiracy to traffic in cocaine. The brothers, Lucas Farinacci and Leonard Fari- nacci Jr., had argued their right to a fair trial had been compromised because jurors in the case, with the help of Google and other sources, had come across information about them that hadn't come up in court. The appeal came about as a result of a chance event at a coffee shop. Prior to sentencing but after the brothers' conviction, someone at the coffee shop overheard one of the ju- rors, in a conversation with a friend, mention that another me mber of Zero-tolerance conundrum Lawyers say pendulum has swung too far against accused in domestic violence cases 'In a lot of these cases, there's no sign of violence, there's no sign of anything having occurred,' says Leo Adler. Photo: Robin Kuniski page 2 PM #40762529 & $#&!& jmmm$cYa[bbWh$Yec June 15, 2015 L AW TIMES Juror ruling prompts call to look at Criminal Code BY TALI FOLKINS Law Times ith the Ontario Court of Appeal having ruled on jurors' use of extrinsic informa- tion in a recent case, the president of the Criminal Lawyers' Association says it may be necessary to amend the Criminal Code in order to get a better handle on the issue. "You can't say if jurors are or are not doing this at any level that is ap- preciable because you only find out in the rare case where a juror hap- pens to mention something," says Anthony Moustacalis. "Maybe jurors really do obey the judge's instructions. In my experi- ence, it seems that they generally do. But do I really know? The an- swer is no. Maybe they're Googling stuff all the time." The only way to know for sure and assess the necessity of any changes to the jury system, accord- ing to Moustacalis, is to amend the Criminal Code to allow research- ers to interview jury members anonymously about their experi- ences. "The fact of the matter is that people are people and they might not always remember the limits of what they're allowed to do or they might stray," he says. The comments follow the ap- peal court's ruling in R. v. Farinacci, a case that demonstrated the ease with which jurors can now find information about the defendant outside of the evidence presented during the trial. In their ruling on June 3, a panel of three judges re- fused to overturn the convictions of two brothers for possession of the proceeds of crime and conspiracy to traffic in cocaine. The brothers, Lucas Farinacci and Leonard Fari- nacci Jr., had argued their right to a fair trial had been compromised because jurors in the case, with the help of Google and other sources, had come across information about them that hadn't come up in court. The appeal came about as a result of a chance event at a coffee shop. Prior to sentencing but after the brothers' conviction, someone at the coffee shop overheard one of the ju- rors, in a conversation with a friend, mention that another me mber of Emond_LT_June15_15.indd 1 2015-06-10 2:47 PM Zero-tolerance conundrum Lawyers say pendulum has swung too far against accused in domestic violence cases BY TALI FOLKINS Law Times he justice system has taken the idea of zero toler- ance in domestic assault to such an extreme that it's unfair to defendants and no longer works in the best interests of Ontario families, says a 40- year veteran of criminal law. It's an opinion, however, vociferously opposed by at least one lawyer who helps victims of domestic violence. Leo Adler, of Adler Bytensky Prutschi Shikhman, says the issue of domestic assault has become "political football" over the last 25 to 30 years with largely undesirable results. While Adler emphasizes he doesn't want to diminish the tragedy of family violence, he says the situation has now reached a point where police called to family violence situa- tions are unduly afraid to release the defendant even in cases that don't appear serious. "Nobody wants to be the person who says, 'O.K., I'm going to release you,' because you might be the one in a million or whatever the statistic is who might end up killing your spouse," says Adler. "In a lot of these cases, there's no sign of violence, there's no sign of anything having occurred. You simply have the word of the complainant. And the person gets arrested and I can tell you that again in the majority of cases, the police don't even bother to try to take a statement from the accused, usually the male. . . . They don't ask because it doesn't make a difference because they're going to arrest you no matter what." Bail hearings in domestic violence cases, he says, are "a l- ways run on the presumption of guilt" and, if the court does grant bail, it's generally under strict conditions with the de- fendant required to live with a surety. The result, according to Adler, is often a divided family with the added financial strain OBA LAUDED Association honoured for mental-health efforts P4 CAMPAIGN SPENDING Bencher candidate calls for expense limits P6 FOCUS ON Legal Innovation P8 'In a lot of these cases, there's no sign of violence, there's no sign of anything having occurred,' says Leo Adler. Photo: Robin Kuniski See Silence, page 2 See Bail, page 2 There's no way to know if jurors are doing their own research on cases, says Anthony Moustacalis. PM #40762529 & $#&!&jmmm$cYa[bbWh$Yec ntitled-4 1 12-03-20 10:44 AM $5.00 • Vol. 26, No. 20 June 15, 2015 Follow LAW TIMES on www.twitter.com/lawtimes L AW TIMES T W How the legal community in Ontario gets its news Understand cutting-edge legal affairs, discover the latest news and benefi t from expert commentary for just 55 cents a day! SUBSCRIBE TODAY AND RECEIVE: • 40 issues a year covering Ontario's legal landscape • FREE digital edition and unlimited online access to past issues • FREE Canadian Legal Newswire, a weekly e-newsletter from the editors of Law Times and Canadian Lawyer Subscribe to Law Times today for only $199*! To place an order please call 416.609.3800 or 1.800.387.5164 Order online at: www.carswell.com/product-detail/law-times-print-digital *Plus applicable taxes @lawtimes Contact us for more information: Canlawyer.lawtimes@thomsonreuters.com | 416.609.3800 | 1.800.387.5164 Access a free preview at: bitly.com/CanLawyer-FreePreview

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