Law Times

Law Times • November 19, 2012 Judge issues rare $500K fine to drug trafficker 'Harshest judge in the country' sends strong message in marijuana case NEWS I BY YAMRI TADDESE Law Times na dealer is rare, says Alan Young, a professor at Osgoode Hall Law School. "I've never seen it my life. I have seen it in corporate cases but not in drug trafficking. There' six years in prison. Such a steep fine for a marijua- prison term is also "on the high- er end of the range for a mari- juana trafficker. According to Young, the " Brian Stephen Shin, who has a master's degree in taxation from " the University of Waterloo, de- clined a high-paying job with an international accounting firm be- cause "he quickly appreciated that he could make far greater income by continuing his marijuana wholesaling enterprise, John McIsaac wrote in his Nov. 5 reasons for sentence. Shin likely made millions of n a rare ruling, a Superior Court judge has fined a mari- juana trafficker $500,000 in addition to sentencing him to remorse and contrition." Ruby calls that reasoning "quite honestly disgusting." for using his right," says Ruby. "You're taking away a miti- McIsaac "is punishing [Shin] definitely something in the case that made the judge feel like [the offender] is incorrigible. s gating factor that would have otherwise worked. You can't do anything negative about his ap- peal on grounds of constitutional error. We cherish the right to ap- peal. This is humiliation to the rule of law. ment was strange. "It appears that the offender is being punished for exercising his right to appeal, says. "Perhaps the judge was mak- ing an inelegant attempt to cast doubt on the offender' " he showing of remorse, but the com- ment does leave the appearance of being punished for the exercise of a basic right." According to the ruling, Shin s apparent was in possession of more than 12 kilograms of marijuana and approximately " Justice dollars in the 14 years he oper- ated his illicit business and there should be "a nominal fine im- posed to strip the offender of some of the ill-gotten gains from his trafficking career, concluded. The Crown didn't ask for a monetary penalty. Shin, who financed his educa- " McIsaac tion through his trafficking busi- ness, continued to stay in the ille- gal enterprise aſter his graduation because "he was simply motivated by greed and sought to run in the exciting atmosphere of the drug high-life, Shin will pay an additional $75,000 as a victim surcharge. Lawyer Clayton Ruby calls " wrote McIsaac. McIsaac "the harshest judge in the country" and says the rul- ing doesn't surprise him. But he points out what he calls "fault- ing errors" in his deliberation in the case. The judge' Ruby, was to discredit Shin's re- s worst call, says morse as a mitigating factor be- cause he has launched an appeal against his conviction based on constitutional error. McIsaac told the court: "The president of the company that employs [Shin] presently as a fi- nance and accounting recruiter concludes that the offender 'ap- pears remorseful and willing to take accountability for his actions.' "But this belief is belied by the ceeds that belonged to him and a fellow trafficker. The Crown had asked for $240,000, pro- Young agrees McIsaac's com- " Clayton Ruby calls Justice John McIsaac 'the harshest judge in the country.' Photo: Laura Pedersen four years in jail, which would have broken down to three years for possession for the purpose of trafficking marijuana and one year for the possession of the proceeds of crime. McIsaac considered the duration of Shin's drug distri- bution as an "uncharged but proven offence" that counted as an aggravating factor. He cited the right of sentencing courts to consider "any facts forming the circumstances of the offence that would constitute the basis for a separate charge. But that's wrong, says Ruby. "That's the offender's history, not " the circumstances of his offence. He can't even see the difference between that." Leo Adler of Adler Bytensky Prutschi Shikhman says the judge's decision to impose the heſty fine probably stemmed from "the to- tality of the offender' as he's otherwise a bright young s behaviour" person who could have pursued better opportunities. Tax authorities may require Shin to pay taxes for the gains from his illegal business, says Adler, but stripping profits from offenders falls on the courts. However, McIsaac' the offender's appeal to discred- s use of it a mitigating factor is wrong, he adds. "This is a legitimate Charter issue," he says, noting the of- fender's appeal may have little to a more favourable punishment. But it' pointed out that Shin doesn't say how he financed the three resi- dences he owned and that "it ap- pears the probation officer did not explore this aspect of the of- fender' In the ruling, McIsaac also " he says. But according to Ruby, "It is not [the probation officer's] job to do that. That's for the revenue agency to do." s circumstances." some of their illicit profits isn't new but the amount is usually lower. In most cases, Alder says, it' Fining drug traffickers to catch but rarely both. In R. v. Hill, for example, a s either a heſty fine or jail term heroin trafficker lost his appeal of a $10,000 fine. He also received a 15-year jail sentence. In another case, R. v. do with his remorse as he could simply be pursuing it in a bid for Kotrbaty, a judge sentenced a heroin trafficker to 12-1/2 years in prison and ordered him to pay $50,000. LT Lawyer vindicated as appeal court tosses judge's fine New Brunswick court took Sandra Dawe to task for third-party claim A BY YAMRI TADDESE Law Times ents' claim in a fraud case. Sandra Dawe, managing partner at Shib- ley Righton LLP, was representing a group of auditors for Deer Island Credit Union Ltd. tors to court last year in a lawsuit accusing them of negligence for failing to notice that a former employee had cheated the company out of more than $1.8 million between 1995 and 2007. The auditors denied the allegations and Directors of the company took the audi- brought a third-party claim arguing that it was in fact the 16 directors who were negli- gent and had contributed to the company' losses. In his Nov. 30, 2011, ruling, New Bruns- wick Court of Queen's Bench Justice Hugh s McLellan criticized Dawe for a claim that was "irresponsible and an abuse of the pro- cess of court." In addition, he ordered Dawe to pay a fine n Ontario lawyer has won an appeal of the decision of a New Brunswick judge who slapped her with a steep fine last year aſter striking her cli- Salomon & Co. Ltd.]," a previous case in which a judge ruled that once it's legally in- corporated, a corporation should be treated like "any other independent person, with rights and liabilities appropriate to itself. The issue revolves around the question of " when the corporate veil can be liſted to hold the directors of a company responsible. "The corporate veil should not, in general, be liſted to make principals of the corporation liable for its obligations," the appeal court said. But officers, directors, and employees are responsible for their own misconduct even if they acted in the best interests of the company, the appeal court ruled, adding Dawe had a le- gitimate claim against the directors of Deer Island Credit Union. "It was my view from the beginning that says Dawe, who notes the publicity following McLellan' tion as a competent lawyer. "Having that hap- pen and be made public isn't something any lawyer likes to see, The 2011 ruling caused her a lot of stress, s decision compromised her reputa- s decision. fact that Mr. Shin has launched a Charter-based appeal against his conviction which will, no doubt, be vigorously pursued. I want to emphasize that I am in no sense aggravating the sentence today because the offender intends to pursue his complaint of consti- tutional violations on appeal. However, it deflates any potential mitigation based upon genuine of $45,000 aſter noting he didn't believe she had acted in an honest belief that the auditors' claim against the directors had merit. He also threatened to put her in prison if she didn't pay the money by the set deadline. McLellan also said Dawe was pursuing the third-party claim on her own without a request by her clients, an accusation the New Brunswick Court of Appeal found was without evidence. But on Nov. 1, the appeal court reversed McLellan' It cited several principles the trial judge had overlooked and misapplied. The appeal court reasoned that the trial judge's "preoccupation with the need to pro- s underlying ruling. was pleased to overturn the underlying deci- sion," she says. "It was a satisfying thing to be at the end of a stressful time. In addition to seeing the fine tossed out, "I " she says. posed mining project in Ecuador to be car- ried out by a subsidiary of Copper Mesa Mining. They alleged that the subsidiary' ence, the appeal court judges said. In Piedra, the plaintiffs opposed a pro- tect corporate directors appears to be based on a flawed understanding of Salomon [v. security agents harassed and threatened them because of their opposition to the plan. They claimed the directors at Copper Mesa www.lawtimesnews.com should have been aware of an Ontario Court of Appeal case, Piedra v. Copper Mesa Mining Corp., that he said was a clear indication of how fiercely the courts will protect directors of companies from baseless litigations. But the two cases have an important differ- In his ruling, McLellan told Dawe she " Mining were responsible for the way the sub- sidiary' to the alleged crimes wasn't established, the appeal court said, adding the trial judge in Pie- dra had concluded that a corporate director "has no established duty in law to be mindful of the interests of strangers to the corporation when discharging his or her duty as a director. "In the present case, the claims against the third parties are not novel," the New Bruns- " wick appeal court said. "Because negligence claims against direc- the ruling was incorrect," says Dawe, who adds she felt both relief and satisfaction from the appeal court' tors constitute part of the legal landscape in Canada, the issue which arose in Piedra, the application of the Cooper-Anns test, has no relevance to the real issues between the appel- lant and the third parties." In the case involving Deer Island Credit In that case, the proximity of the directors s security agents treated them. has seen a judge irritated by an ap- peal. "Some judges even consider it a little aggravating, s not the first time Adler PAGE 3 Union, "directors are responsible for balanc- ing financial statements," says Edward Wait- zer, a partner at Stikeman Elliott LLP who focuses on corporate law. While the appeal court' like he didn't understand what was going on," says Waitzer. Dawe agrees. She notes the appeal court was that "the trial judge goes aſter the law- yer personally. s ruling is "a routine decision," he notes it's not uncommon for some judges to be in- experienced in corporate cases. "The trial judge overreacted and it sounds "simply reaffirmed the law. It didn't create a new law." What was bizarre, according to Waitzer, why the judge would believe she was pur- suing the third-party claim without her cli- ents' request. She filed a complaint with the Canadian Ju- hadn't asked the judge to fine Dawe. For her part, Dawe says she has "no idea" s dicial Council against McLellan immediately aſter his ruling. But she declined to reveal the status of her complaint at the moment. The council didn't respond to a request to confirm the status of the matter by press time. LT " In fact, the plaintiffs' lawyers

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