Law Times

April 16, 2018

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Page 2 April 16, 2018 • lAw Times www.lawtimesnews.com not the first time a judge has criticized the backlogs in the as- sessment process. In a 2016 deci- sion in Gilberts' LLP v. David Dixon Inc., Ontario Superior Court Justice Sean Dunphy said delays to obtain a hearing are "unacceptably long." Then, in a 2017 decision in the same case, Justice Ian Nord- heimer said that the assessment process is "outdated and imprac- tical" and that MAG's failure to properly resource the assess- ment office was compounding delays. Nordheimer also urged the provincial government to make amendments to the Solici- tors Act. At the time of Nordheimer's decision, MAG said it was aware of the problem and exploring options to ensure matters are heard in an efficient manner. Pagliaroli says the govern- ment will have to provide the assessment office with more re- sources in order for things to get any better. She says that as there will likely be an increasing num- ber of challenges to accounts in the future, the system in Toronto is going to be overburdened with more assessments if the govern- ment does not step in. "I think it can get worse and that's not something that should be ignored," she says. LT Andrew Rudyk, a spokesman for Naqvi, referred questions about the issue to the Ministry of the Attorney General, which did not provide comment before deadline. Lawyers say the government has not done enough to allevi- ate delays, which are now even worse. Hearings are currently being scheduled for 2019 at the earliest. "If you can't get these back- logs cleared up and people wind up waiting and waiting for 18 months or whatever length of time it takes, it really sends the wrong message to the public [and] it hurts the administration of justice," says Robert Schipper, a lawyer who represents parties in assessments. He was not in- volved in the Linett case. There are currently four as- sessment officers in the Toronto assessment office, whereas there used to be nine years ago, Schip- per says. Exacerbating the problem, the volume of cases is increas- ing and the amount of money involved in accounts under as- sessment is significantly higher than it used to be. This also means that hear- ings are much longer. They can sometimes last as long as 20 days, which ties up assessment officers in lengthy proceedings. Schipper says the govern- ment has let delays fester in the assessment office in Toronto simply because it has not been a priority. He says that, over the years, lawyers and judges have asked the ministry to add more assessment officers and look into changing the process to make it more efficient. He adds that the provincial government also needs to up- date the Solicitors Act, which contains provisions that lay out the assessment process. The act has been criticized as being ar- chaic. Linett, who is also a lawyer, first sought to have Aird & Ber- lis' accounts assessed in early 2012. He first brought the appli- cation in the assessments office in St. Catharines, Ont., as he had heard that the one in Toronto was severely backlogged. The assessment was then delayed be- cause of a series of cancellations, including one that was the result of there being no room available at the assessment office for a me- diation. The case has since been transferred to Toronto, where it has been scheduled for a hearing in 2019. Tanya Pagliaroli, the lawyer who represented Linett in the matter, says Monahan's ruling is the first reported decision in Ontario dealing with a dismissal for delay of a solicitor's assess- ment. She says the extreme delays really call into question the fair- ness and effectiveness of the pro- cess. "It's a real problem for the ad- ministration of justice, frankly," she says. "When there is exces- sive delay in any part of the ad- ministration of justice . . . there is an appearance that justice is not being done and it's not fair when clients and lawyers can't have these disputes resolved quickly." She says the delays are mainly the result of a lack of resources and the fact that the process is outdated. Monahan's comments were Bennett Jones LLP, who was not involved in the Chevron matter, says there is a practice direction in Ontario that the media as in- terested party should get notice of sealing order motions. He says the reason for this is that the court should have the benefit of an adverse view, which would be given by the media. "Part of this will have to turn on the content of the documents, which, unfortunately, only the court and right now the parties know what they say," he says. Alan Lenczner, one of the lawyers representing the plain- tiffs, says the motions have been adjourned until June because they were brought late but that he intends to reveal the confi- dential information orally in the Court of Appeal hearings. In a 2017 decision in the case, Ontario Superior Court Justice Glenn Hainey found the assets of Chevron Canada Limited could not be seized to pay out a foreign judgment against Chev- ron Corp., as the subsidiary is not an asset of the parent com- pany. The Court of Appeal is set to hear an appeal of Hainey's deci- sion after it reversed a ruling that the plaintiffs would have to post more than $900,000 in security for costs for their appeal to pro- ceed. In that decision, the Court of Appeal found that the order requiring they post security for costs was unjust because of the unique circumstances of the case. In a redacted version of their factum in the appeal, the plain- tiffs argued that the case is about the collection of a debt and not establishing liability. They also contended that Chevron Can- ada is an asset of the Chevron parent company and that the lower court judge erred in his determination of piercing the corporate veil. The plaintiffs argued that the result of failing to pierce the cor- porate veil has allowed the par- ent company to benefit from re- ceiving at least US$25 billion in dividends over the last six years from subsidiaries, including Chevron Canada, "while, at the same time, allowing the corpo- ration to escape paying a judg- ment for widespread contami- nation and debilitating disease that it caused." Sean Comey, a spokesman for Chevron Corporation, said in an emailed statement that de- spite attempts by the plaintiffs' lawyers and others to "shift the discussion to unrelated topics," the question before the court remains whether the Canadian subsidiary can be held liable for a judgment that a U.S. Federal Court has found was the prod- uct of fraud. "That finding has been unan- imously affirmed by a U.S. Fed- eral Court of Appeals and is now final," Comey said in the state- ment. "Chevron does not believe that the fraudulent Ecuadoran judgment is enforceable in any court that observes the rule of law," he added. The case has attracted the attention of corporate lawyers as its ultimate outcome could have significant implications for when it's appropriate for the court to pierce the corporate veil — a bedrock principle of corpo- rate law. "The decision may end up having implications as to when a party holding a foreign judg- ment against a defendant corpo- ration can look to enforce that judgment against assets held in Ontario by a company that is somehow related to the defen- dant," says Andrew Kalamut, a lawyer with McCarthy Tétrault LLP, who was not involved in the matter. The case has already made its way all the way up to the Supreme Court of Canada on jurisdictional issues. However, lawyers expect it will likely make its way up to the country's top court again, considering the importance of the issues being raised and the amount of money at stake. 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