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Law Times • January 18, 2010 FOCUS 'Semi-optimistic' year ahead following 'Doomageddon' of 2009 BY ROBERT TODD Law Times market in 2010, which is good news for lawyers who plodded through a disappointing start to 2009. E Canadian Real Estate As- sociation (CREA) chief econo- mist Gregory Klump tells Law Times he expects sales activity for 2009 to be up 6.6 per cent compared to 2008 and rise an additional seven per cent in 2010. But, Klump notes, "Th e increase in 2010 refl ects the fact that there was a lot of weakness in activity in the fi rst quarter of 2009 that was a carry-over from late 2008. "News at the time was of economic Doomageddon and depression and so forth. So that seven-per-cent increase refl ects the fact that we're not going to have a symmetric decline in 2010 like we had in 2009, where sales in January of 2009 bottomed out at the lowest level in 20 years." Th e forecast also reveals the that belief activity will have peaked in the fourth quarter of 2009 and weaken from that point on. Klump anticipates more activity in the fi rst quar- ter of 2010 as buyers avoid the imposition of the harmonized sales tax in July. Th e Ontario Real Estate Association esti- mates the new levy will amount to $1,449 in added taxes on an conomists expect a mod- est rise in activity in the residential real estate The credit crunch played a big role in weaknesses in the com- mercial real estate market last year, says Jeffrey Schwartz. average resale home purchased for $302,354. Meanwhile, CREA expects home prices to continue to rise and eat into aff ordability along with anticipated interest-rate increases in the second half of the year that will also make it harder for buyers to make pur- chases. "Th at'll weigh on sales activ- ity, so for that reason that will contribute to a downward trend in activity over 2010," says Klump. While Klump doesn't ana- lyze the commercial real estate market, he says fi nancing issues and a continued weakness in demand are expected to con- tinue to aff ect such sales in the year ahead. CREA's forecast likely won't have real estate lawyers jump- ing for joy but it will certainly come as upbeat news when jux- taposed with the dip in activity in early 2009. Jeff rey Schwartz, a lawyer with Schwartz & Schwartz Pro- fessional Corp. and chairman of the Ontario Bar Association's real property section, says he observed "a signifi cant sag in the work that we do in the regu- lar, house-conveying residential conveyance and in the commer- cial world" for the fi rst half of last year. "Th e fi rst six months or so [of 2009] were of great con- cern, no question about it," says Schwartz. "A lot of downsizing, a lot of hedging. Commercial work that we would do, like clients that would buy and sell plazas or commercial property, stepped away from the market- place." Much of the problem, he re- calls, was prompted by banks' reluctance to off er credit. "Th ey were doing that, I guess, in part because they didn't know where things were going. Th ey were worried about lending out money because they thought maybe the real estate market it- self was going to take a big hit. And it didn't." Schwartz suggests large Bay Street fi rms were in "terrible pain" through the crisis last year. "Th e big stuff dried up completely," he says. But Minden Gross LLP law- yer Steven Pearlstein, a com- mercial real estate practitioner, Subscribe to Law Times Why pay extra for your legal news? Cutting-edge legal affairs, news and commentary for just 37¢ a day! Make the time for Law Times and keep up with all the developments in Ontario's legal scene. Subscribe today and receive: • Unlimited access to the Law Times digital editions and to our digital edition archives...FREE • Canadian Legal Newswire, a weekly e-newsletter from the editors of Law Times and Canadian Lawyer...FREE www.mckellar.com www.mckellar.com $3.55 • Vol. 20, No. 13 1-800-265-8381 Covering Ontario's Legal Scene together we have all the tools. TitlePLUS title insurance and you, TitlePLUS title insurance and you, together we have all the tools April 20, 2009 BY ROBERT TODD Law Times dicial Council's decision to call for his ouster, saying he was compelled to resign due to his pending retire- ment, despite finding aspects of the council's report "troublesome." Cosgrove tells Law Times in an interview that once the CJC issued its recommendation to the justice minister, "My options were pretty narrow." While he believes he could have appealed an earlier committee report at F ormer Ontario Superior Court justice Paul Cosgrove has spo- ken out on the Canadian Ju- month after the CJC issued a final re- port stating that his actions in a late- Cosgrove 'Shock and disappointment' Cosgrove says 'life goes on' after the bench Cosgrove's final criticism is the people in public office, and they were given little weight, according to the decision." CJC's determination that the issue of public confidence was central to its decision. He suggests that it remains unclear what evidence is required to make such a determination. inquiry the Federal Court, he says a decision was un- likely before his mandatory retire- Former Superior Court justice Paul Cosgrove tells Law Times that his ment took hold in December. resigned earlier this 1990s murder trial led to the conclusion that he "failed in the execution of the duties of his judi- cial office and that public confidence in his abil- ity to discharge those duties in future has been irrevocably lost." The decision made him only the second federal judge to meet such a fate. But the former judge says parts of the CJC's the senior regional judges in Ottawa since I've been here for the last 24 years, all wrote very positive recommendations, and they also were aware of the trial," says Cosgrove. "So to say that these letters, the people had final report could have been challenged. The council did not use a set of 32 letters of pending mandatory retirement compelled him to resign from the bench rather than battle a call for his ouster. given rise for us to challenge," he says. "The problem with that is, of course I'm retired — manda- tory retirement in December of this year. And the process, for ex- ample, dealing with the constitu- tional issue, took three years." He says he did not want to "So, all of those issues may have Financial Matters with 20,000 pages of evidence likely put forth. The 74-year-old former judge, who will gamble and let the matter play out before Parliament, where an un- precedented joint resolution would have been required to finalize his ouster. Doing so may have proved cumbersome, suggests Cosgrove, no knowledge of what was going on was not accurate." Cosgrove also suggests the council should support written by judges and retired judges, law- yers, and members of the public when coming to its decision, saying they were irrelevant, he notes. "Personally, I found that difficult because, for example, there were my supervising judges, have used the letters from community mem- bers when considering whether he had lost the public's confidence. "It would seem to me that it's logical to test collect an annual pension of about $170,000, says that before the decision he was reason- ably confident that the council would not call for his dismissal. Independent counsel Earl Cherniak, a partner at Lerners LLP, had previ- ously told the council such a stern punishment was not necessary. "It was shock and disappointment," Cos- what the public's demeanour is; you ask people who are knowledgeable in the public," he says. "And there were a number of letters from See Cosgrove, page 4 Inside This Issue 3 Fight Over Fees 6 9 Focus On ADR/ Mediation Quote of the week grove says of his reaction to the final decision. He says he has been dealing with the fall- out by responding to media inquiries, and "It is now incumbent on sports federations in selection disputes to show they had the proper criteria set up and that it was properly applied . . . The onus is now on the organiza- tion not the athlete. It wasn't quite as clear a few years ago." BY TIM NAUMETZ For Law Times OTTAWA — The possible closure of McCarthy Tétrault LLP's high- profile office in the nation's capital is unrelated to dire economic cir- cumstances that have hit home for some Canadian law firms, a senior McCarthys partner says. Future uncertain for McCarthys' Ottawa office zation we review our business plans on an ongoing basis," Boake tells Law Times when asked of the Ot- tawa office closure possibility. She adds the firm wants to meet the needs of its clients, and that each of its offices have a practice and focus which aligns with McCarthys' over- all strategy. "So it's in that context "Yeah, I guess, like any organi- staff, remains undecided. "It's really just a question of the fact that we are in discussion with lawyers there as part of an overall strategic review," she tells Law Times. "These discussions have been decisions" because of a drop in busi- ness due to the economy, letting go less than 20 of its 650 lawyers across the country. She would not give the specific number or other details. Gowling Lafleur Henderson going on for a while and are not related to the economy," she says. "I would call it a strategic review. Our firm really focuses on integrat- The financial crisis that has hit directly New York and London, being financial centres of the world, and the financial institutions based there, has not hit to the same degree in Canada, primarily because of the strength of the financial institutions in Canada. McCarthys' Ottawa contingent is a "strategic review" based on the firm's national business plan, and the role played by all of its six loca- tions across Canada, says Barbara Boake, national leader, profession- als, at McCarthy Tétrault. Consideration of the future of that we're currently reviewing the Ottawa office, but no decision has been made to close it," she says. Boake would not divulge fur- ther details and said the fate of the office, along with the employ- ment of its seven partners, two associates, and 11 administrative ed practices; we have offices right across the country. We have a very diversified practice geographically and our overall strategy is to inte- grate those practices and develop client teams on a firm-wide basis." Boake, however, confirmed Mc- Carthys has taken "difficult staffing LLP also confirmed to Law Times the firm released staff last week. But Gowlings chairman and CEO Scott Jolliffe said the shakeup did not involve partners or associ- ates. Jolliffe says the firm is shifting toward a "pod" model where law- yers and associates share a smaller number of secretaries, but he would not say how many were affected. The move not only economizes, but also creates a team atmosphere among secretaries that is useful for mentoring and sharing workloads. Sources in the legal community See Ottawa, page 4 say McCarthy Tétrault's Ottawa re- view may be related to a management WHICH DIRECTION IS BEST FOR YOU? RainMaker Group 110 Yonge Street, Suite 1101 Toronto, Ontario M5C 1T4 www.lawtimesnews.com Tel: 416-863-9543 Fax: 416-863-9757 www.rainmakergroup.ca suggests the commercial mar- ket has been busier recently than many practitioners were expecting. "Th ere are transactions go- ing on," he says. "People are buying and selling and mort- gaging. It's not as frenetic a pace as in prior years when capital was more readily available but it's certainly not ground to a halt." Th e unemployment rate, hovering around the 10-per- cent mark in some communi- ties, continues to be a concern on the residential side, Pearl- stein notes. But for commercial real estate, interest rates are the big question mark. "You can't buy or sell if you can't get a value, and if inter- est rates go up, the value will come down," he says. Eyes will also be on bankruptcy rates. "People aren't going to build a new plaza when they can't even rent the existing plazas, and there is no demand for new space, offi ce towers or hotels," says Pearlstein. Th e industry seems to be keeping its collective fi ngers crossed that 2010 will be a bet- ter year than 2009. Pearlstein uses the term "semi-optimistic" to characterize the general atti- tude toward the market. "Th ey don't think it's going to be a boom year. However, you never know. Everybody thought that the residential would be a poor year [in 2009]. It turned out to be a great year." He adds, "We've turned the corner. How far off the bottom we've risen is to be seen, but at least we're no longer retracting, and the economy may be grow- ing again." 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