Mega-trials biggest criminal law issue of 2006

For criminal lawyers, mega-trials and funding, or lack thereof, for defence counsel were the top issues of 2006 and  it looks like they’ll spill over into this year.

Cross-border matters took centre stage in civil cases last year with mortgage fraud at the forefront for the real estate bar.

Law Times surveyed leading lawyers in their areas of expertise and asked them to list their top cases of 2006. They were asked to select several decisions based on the impact on the practice of law in specific areas.
This week we have the top selections from criminal law, civil litigation, and real estate law.

It wasn’t exactly a stellar year from the Supreme Court of Canada, according to defence lawyer John M. Rosen of Rosen and Company Barristers. However, he and others selected R. v. Khelawon as one of the most significant decisions of 2006 because it overrode previous decisions such as R. v. Starr about the admissibility of hearsay.

“It will have a huge impact on the conduct of trials,” says Rosen. “Of all the cases [last] year, I think this is the most important case.”
 The Supreme Court took a ‘functional approach’ and concluded that the factors to be considered on the admissibility inquiry cannot be categorized in terms of threshold or ultimate reliability, and that comments to the contrary in previous decisions of the Supreme Court should no longer be followed.

“Rather, all relevant factors should be considered including, in appropriate cases, the presence of supporting or contradictory evidence,” wrote Justice Louise Charron. “In each case, the scope of the inquiry must be tailored to the particular dangers presented by the evidence and limited to determining the evidentiary question of admissibility.”

Lawrence Greenspon of Greenspon Brown & Associates refers to the decision as the “fuzzification of the hearsay rule” because the SCC broadens the considerations for admitting hearsay, but “doesn’t give judges an awful lot of guidance as to what weight to give each of the factors. It really leaves it up to the judge on any given day in any given circumstances.”

Another significant decision was R. v. Boulanger because of the number of AdScam cases coming up through the system, and because of the current trend by government to crack down on, or react to allegations of misconduct by public officials, says Rosen

In Boulanger, the top court clarified precisely what is required to establish breach of trust by a public officer under s. 122 of the Criminal Code, and concluded that the offence is established where the Crown proves the following elements:

“The accused is an official; the accused was acting in connection with the duties of his or her office; the accused breached the standard of responsibility and conduct demanded of him or her by the nature of the office; the accused’s conduct represented a serious and marked departure from the standards expected of an individual in the accused’s position of public trust; and the accused acted with the intention to use his or her public office for a purpose other than the public good, for example, a dishonest, partial, corrupt or oppressive purpose.”

The court did not include receiving a personal benefit in its criteria noting the fact that an officer obtaining a benefit is not conclusive of a culpable mens rea.

Also notable is the SCC’s R v. Krieger, where the trial judge had directed the jury to convict a man with unlawfully producing cannabis, adding the jury was bound by his direction. The top court quashed the conviction and ordered a new trial, saying “juries are not entitled as a matter of right to refuse to apply the law - but they do have the power to do so when their consciences permit of no other course.”

For criminal lawyers in the trenches, the most significant development of 2006 may have been the mega-trials, those prosecutions with mammoth budgets and multiple defendants.

Defence lawyers argue that while the provincial government was busy spending $51-million on its new gangs and guns strategy, Legal Aid Ontario was going broke trying to cover the legal costs of the defendants in these cases. Requests for funding for three cases alone (the Bandito biker gang homicide case, the St. Jamestown Project XXX prosecution and the Brampton terrorism case) amounted to the total funding historically allotted to homicide cases in one year, says John S. Struthers who sat on LAO’s big case management committee in 2006.

“We are moving further and further towards an American style of justice system where nobody can afford the time to actually have trials anymore,” says Struthers.

LAO and the Ministry of the Attorney General are working to come up with a solution. LAO and the Ministry of the Attorney General are currently working on a plan to avoid legal aid having to put caps on lawyers’ fee for big trials.

Cases with cross-border implications secured the three top spots on the list of the most significant civil cases of last year.

Mr. A and Ontario Securities Commission, a decision of the Ontario Superior Court, dealt with whether Mr. A should be required to give evidence to the Ontario Securities Commission under circumstances where he was also facing potential proceedings in the United States. This case, says Jeffrey Leon, past president of the Advocates Society, highlighted the differences between what can be done with evidence given in Canadian proceedings versus U.S. investigation proceedings.

“In the United States, you have the right not to answer questions. In Canada, you can be compelled to answer questions but have use and derivative use immunity for those statements used against you.

 “And so the difference in those two aspects of the law creates a situation that needs to be harmonized at some point, particularly given that many securities issues in the regulatory context and the civil context involve issues both in the United States and Canada.”

Number two on the list is Pro Swing Inc. v. Elta Golf Inc., decided by the Supreme Court of Canada. The appellant Pro Swing, which sells golf products under the trademark Trident, commenced a lawsuit in Canada to enforce a U.S order that ordered Elta Golf Inc. to stop offering or selling golf products under the trademark Rident. Although the court did not enforce the U.S. judgment, it did open the door to cross-border enforcement on non-monetary judgments.

Just as important, says Leon, is that the courts recognized the globalization of commerce in the litigation context and the need to adapt.
Also notable is November’s Poulin v. Ford Motor Co. of Canada. Ontario Superior Court Justice A. Donald K. MacKenzie dealt with the arrangements that are made between U.S. and Canadian counsel for starting a class action in Canada.

“He discusses some of the limits to which that sort of arrangements can have,” says Leon. “I think that’s important because increasingly class actions will have a cross border component.”

The top real estate case of the year has to go to Susan Lawrence and Maple Trust Company and Thomas Wright, although technically it could be labeled the top case to watch in 2007 because a decision is expected from the Court of Appeal of Ontario any day now.

In last year’s Household Realty v. Chan and Liu, the Court of Appeal decided that a fraudulently signed mortgage was valid and enforceable. The Superior Court upheld and applied this decision to Susan Lawrence and Maple Trust Company and Thomas Wright and the appeal of Wright v. Lawrence was argued in December.

“What makes this significant is that the Court of Appeal was asked to overturn [Household Realty],” says Sidney Troister, senior partner of the commercial real estate group at Torkin Manes Cohen Arbus LLP.
Another significant decision is 473807 Ontario Ltd. v. TDL Group Ltd. Tim Horton’s entered into a 20-year lease agreement with a landlord, however, the landlord mortgaged the property.

Tim Hortons eventually successfully sued the landlord for breach of the lease and costs. The court ordered that the tenant was entitled to set off its damages and costs award against its rent but the landlord defaulted on the mortgage.

The mortgagee wanted to remove Tim Hortons, but the two parties had signed a non-disturbance clause. The trial judge said Tim Hortons had to make the payments to the mortgagee, but the Court of Appeal decided Tim Hortons didn’t have to pay the mortgagee.

“This became a very significant case because it tells how important it is to get the non-disturbance clause,” says Reuben M. Rosenblatt, head of the real estate group at Minden Gross LLP.

In condo law, one of several noteworthy cases in 2006 was Peel Standard Condominium Corporation No. 668 v. Dayspring Phase I Ltd. In this case, a developer created an arrangement where special heating and cooling equipment would not be paid for by him, but incorporated into the building and he would raise his purchase prices accordingly, explains Harry Herskowitz, head of DelZotto Zorzi LLP’s real estate department.

Essentially, the developer had the condominium finance the acquisition of this equipment and had the condominium corporation enter into a $1.7 million loan agreement. The condo corporation would pay off this equipment over time and the annual loan payments would comprise part of the common expenses.

The unit owners complained that there wasn’t adequate disclosure about the loan transaction. However Ontario Court Justice Paul Perell decided that the loan was enforceable because the financing of the equipment that comprises part of the common elements falls within the power and jurisdiction of the board of directors and condominium corporation to undertake.

“Therefore if they have a complaint, it’s either against the developer for inadequate disclosure or they have a complaint against their own individual lawyers for not having advised them of this,” says Herskowitz.
“So it’s very important that purchasers and their lawyers carefully review the material in their disclosure statement,” he says.

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