Business Development

‘Tis the Season for Holiday Scams

Posted in: "All, Business Development, Case Digest/Comments, In the News, Lawyer Talk by Pei Wang | No Comments Thursday, December 1, 2011

Yesterday we had our first snowfall in Toronto for the season. Undoubtedly, the holidays are coming.

People are either preoccupied with the coming holidays (Christmas, Kwanza, Hanukkah, Ashura, Boxing Day, New Year’s Day … take your pick) or are looking forward to taking time off work. No doubt, major financial institutions will also be closed for a few days, thereby delaying the clearing of cheques.

While people are otherwise occupied, scammers and fraudsters are taking  advantage of the combination of bank closures and holiday distractions to defraud their victims.

Dan Pennington of LawPRO has said that bad cheque scams are on the rise and warned lawyers taking large sums of trust funds to be vigilant.* He said the scams are becoming more and more sophisticated. Some of the bad cheques could even fool bank tellers.

According to Pennington, a lawyer from St. Catharines was recently suspended for misappropriating trust funds after he was defrauded with fake cheques. The funds from the fake cheques did not clear and resulted in a shortfall in his trust account. The lawyer tried to cover the loss with other clients’ money held in trust. But the shortfall soon became too large, and the lawyer became the subject of an investigation.

In addition to bad cheque scams, “Oklahoma frauds” are resurfacing, according to Jeffrey W. Lem, a partner in the real estate group at Miller Thomson LLP.^ A recent lawsuit was brought alleging $6.5 million in damages as a result of mortgage frauds.

Lem explained in a nutshell how an Oklahoma fraud operates. A fraudster buys a piece of land for a small amount, say $10,000, in an otherwise legitimate transaction. The fraudster then flips the property to an accomplice for a grossly inflated price, say $500,000. The accomplice then goes to the lender for a mortgage against the inflated property value. Typically, the fraudsters rapidly target a single mortgage lender several times before they take off with the proceeds. The lender then is left with collateral properties worth a fraction of the mortgaged value.

*Michael McKiernan, “St. Catharines case shows pitfalls of fake cheques” Law Times (28 November 2011) 13

^Jeffrey W. Lem, “Oklahoma frauds return as scam of choice” Law Times (28 November 2011) 7

This blog is provided for your reference only and is not a substitute for the law. This article is not legal advice and should not be regarded as such.

Ex-Lovers’ Quarrel: Was It a Gift or a Loan?

Posted in: "All, Business Development, Case Digest/Comments, In the News, Lawyer Talk by Pei Wang | No Comments Tuesday, November 15, 2011

Here’s a classic dispute between former lovers.

The boyfriend gave the girlfriend money to buy a car. The two broke up. The girlfriend sold the car. The boyfriend wanted his money back. He said it was a loan; she said it was a gift.

Who was right?

In the recent decision of Devries Financial Group Inc. v. Duggan, the judge held that it was neither a loan nor a gift.* Rather, it was a resulting trust.

In Devries, the boyfriend sued in the capacity of a corporation. (I suspect that the plaintiff wanted to distance his former relationship with the defendant, but this is only my speculation.) However, the judge found that the plaintiff corporation and its sole director and shareholder, Mr. Devries, were indistinguishable for the purposes of deciding the lawsuit.

Mr. Devries, a sophisticated licensed financial adviser, advanced the funds to the defendant (then-girlfriend) Ms. Duggan to buy a car. Soon after, the relationship turned sour and the two broke up.

Ms. Duggan decided that she could no longer afford the car after the breakup and sold the car for a significant loss. Mr. Devries wanted to recover the funds from her.

The judge found that Mr. Devries couldn’t establish the transfer of the funds as a loan in the face of Ms. Duggan’s denial. The judge reasoned that, given Mr. Devries’s profession (a licensed financial adviser), it was unlikely that he would have advanced funds without proper instruments if the transaction were a loan.

Rather, the judge reasoned that the advancement of funds for the purchase of a car created a rebuttable presumption of result trust. When the transaction is challenged, the onus is on the transferee to establish that a gift was intended.

In this case, the judge reasoned that it was unlikely the funds were transferred as a gift given the short duration of the relationship.

In the absence of additional evidence supporting the transfer of the funds as a gift, the defendant was declared as a trustee of the car and ordered to repay the funds, after deducting her financial loss, depreciation, and unpaid services in the amount of $8,000.

* 2011 ONSC 3773, 106 O.R. (3d) 682 (sm. cl. ct.)

This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.

Bell Canada Settles Complaint on Misleading Advertisements; Agrees to Pay $10 Million Fine

Posted in: "All, Administrative Law, Business Development, Case Digest/Comments, In the News, Lawyer Talk by Pei Wang | No Comments Friday, July 15, 2011

Bell Canada recently settled a complaint brought by the Commissioner of Competition with respect to misleading advertising under the federal Competition Act* by filing a consent agreement with the regulating tribunal. Under the terms of the settlement, Bell Canada is obliged to pay an administrative fine of $10 million, which is the maximum monetary penalty available under the legislation.

The Commissioner of Competition alleged that many of the services by Bell aren’t available at the advertised price because of hidden fees. For example, consumers who pay the advertised home phone service price must also pay a touch tone fee. Similarly, in providing high-speed internet, Bell charges modem rental fees in addition to the advertised price.

Toronto lawyers James B. Musgrove and Daniel G. Edmondstone of McMillan LLP think that the Commissioner’s pursuit of the maximum administrative fine may be the clearest message to retailers who utilize “add-on” or “hidden fee” advertising structures.

In addition to the administrative fine, Bell Canada also agreed to pay for the Commissioner’s legal fees in the amount of $100,000.

*R.S.C. 1985, c C-34

Impact of Canada Post’s Labour Dispute Deeper Than Expected at This Law Office

Posted in: "All, Business Development, Family Law, In the News, Lawyer Talk by Pei Wang | No Comments Wednesday, June 22, 2011

The dispute between the union and management at Canada Post is affecting this law firm more deeply than we expected.

When Canada Post management first suspended mail delivery on June 15, 2011, the consensus among lawyers regarding the dispute seemed to be that there would be only a minor inconvenience. After all, in the 21st century, we have (or are supposed to have) various alternative means to communicate. Besides the obvious email and fax, we can also use commercial couriers. (Social media such as Facebook and Twitter are not used for routine legal correspondence because of the lack of security.)

However, as outgoing mail piles up beside my desk, it’s becoming clear that practising family law without reliable mail delivery is beyond the “minor inconvenience” that we first expected.

Although our firm does take credit card payments, clients who prefer to pay by cheque must now deliver them either in person or by courier, rather than by mail. For clients who work full-time and are unable to deliver the funds in person, it can be quite burdensome to pay an additional $20-$30 just to have the cheque delivered.

Similarly, the disbursement of trust funds, which is done exclusively by cheque at this firm, has been put on hold except where the recipient is willing to pay for alternative delivery services.

Paying vendors has also become nearly impossible. Because many service providers are small to medium-sized companies, cheques remain the most cost-effective way to pay. It is simply impractical to explore alternative payment methods given the amounts payable and the likelihood of timely resumption of mail delivery services.

For many public institutions and offices, correspondence by mail remains the default method of communication. For example, court orders are almost exclusively delivered by mail once they have been signed by the judge. With Canada Post delivery suspended, people aren’t able to receive their divorce orders and may have to delay their plan to remarry.

Correspondence with other institutions relying heavily on mail are similarly frustrated. These institutions include Legal Aid Ontario, the Family Responsibility Office (FRO), the Canada Revenue Agency (CRA), the Social Benefits Tribunal, the Health Services Appeal and Review Board, and the Office of the Registrar General, just to name a few. Although some of these institutions do accept incoming messages by fax, their outgoing messages are largely delivered by mail.

Finally, the timely delivery of routine correspondence and reporting letters becomes an issue, even in the era of the internet. Often, the reporting letters contain documents that may be too large in volume to be delivered electronically or contain original documents that must be physically delivered to the client.

The cost of alternative delivery for routine correspondence is approximately 20 or more times greater than that of ordinary mail. For example, a standard letter under 30 grams costs 59 cents by mail but at least $10 for overnight delivery, depending on the distance. For items that are not urgent, we telephone the client advising them of the delay. However, for items that are time-sensitive, we often have no alternative but to pay private couriers for timely delivery.

What’s your experience with the mail delivery disruption? Feel free to leave a comment.

A Brief Note on the HST and Exporting Professional Services to Non-Residents Not Present in Canada

Posted in: "All, "Brief Note" Series, Business Development by Pei Wang | No Comments Monday, June 6, 2011

The rules of HST on exported services (particularly advisory, consulting and professional services, including legal services) provided to non-residents not present in Canada are difficult to understand and often quite confusing.

Exported advisory, consulting and professional services will qualify for zero-rated HST as long as they are not specifically excluded under the law. A professional service refers to a service provided by an individual whose vocation or occupation requires special, usually advanced, education and skills.

For example, if a law firm provides services to a non-resident to assist the client to become a resident, the services will not be subject to the HST until the client has become a resident under the Excise Tax Act.

However, if the law firm starts acting as an agent of the client to purchase real property in Canada, the services rendered while as an agent would likely not be zero-rated as they go beyond the scope of “advisory, consulting, and professional services.”

Of course, the zero-rated HST is subject to numerous exclusions to this rule. For lawyers, perhaps the exclusion relating to litigation services is of most interest.

A service to an individual in connection with criminal, civil or administrative litigation in Canada, other than a service rendered before the commencement of such litigation (e.g., pre-litigation cost-benefit analysis), will be HST-applicable.

Other examples include:

  • a service in respect of real property situated in Canada and a service in respect of tangible personal property that is situated in Canada at the time the service is performed; and
  • a service of acting as an agent of the non-resident person or of arranging for, procuring or soliciting orders for supplies by or to the person, effective for supplies made on or after April 24, 1996.

*Source: Canada Revenue Agency, GST/HST Memoranda Series, 4.5.3 Exports – Services and Intellectual Property. <http://www.cra-arc.gc.ca/E/pub/gm/4-5-3/4-5-3-e.html> accessed June 6, 2011

Disclaimer

 

The information in this blog/memorandum does not replace the law found in the Excise Tax Act and its Regulations. It is provided for your reference. As it may not completely address your particular operation, you may wish to refer to the Act or appropriate Regulation, or contact a Canada Revenue Agency (CRA) GST/HST Rulings Centre for more information. These centres are listed in GST/HST Memorandum 1.2, Canada Revenue Agency GST/HST Rulings Centres. If you wish to make a technical enquiry on the GST/HST by telephone, please call the toll-free number 1-800-959-8287.
The law may have changed since the publication of this article.


Useful Income Determination Tools for the Self-Employed in Family Law Proceedings

Posted in: "All, Business Development, Family Law by Pei Wang | No Comments Wednesday, May 18, 2011

Income determination is a prerequisite for determining both child and spousal support payable. Since the self-employed person has a certain degree of control over his or her income level, income determination for that party often becomes a contested issue.

There are several useful ways to gauge the “real” income of a self-employed person.

For starters, the basic requirement of providing income tax returns for the 3 most recent tax years applies equally to the self-employed.

Other useful documents may include the following:

  • financial statements (balance sheets and income statements) for all businesses in the past years (usually 3)
  • the most recent monthly or quarterly income statement
  • a statement showing a breakdown of all salaries, wages, fees, or other payments and benefits paid to anyone that’s not at arm’s length
  • a copy of any application made by or for the business for a loan or line of credit, including any statement of income or net worth provided by or for the business

Please note: This article is provided for your reference. It is not legal advice and should not be regarded as such.

Top 10 Counterfeit Gifts to Watch Out For

Posted in: "All, Business Development, In the News, Lawyer Talk by Pei Wang | No Comments Friday, December 24, 2010

From consumer website sitejabber.com, here’s a list of 10 gifts that are the likeliest to be produced by counterfeiters:

  1. UGGs brand boots
  2. Coach brand handbags
  3. Tiffany & Co. brand jewelery
  4. Athletic jerseys
  5. Name brand perfume
  6. Nike brand sneakers
  7. Ed Hardy and Juicy Couture brand clothing
  8. Luxury watches (often referred to by counterfeiters as “replicas” to ease the consumers’ mind)
  9. The North Face brand outerwear
  10. DVDs

There are good reasons not to knowingly buy fake goods. They are often a hazard to personal safety because of their questionable quality and shoddy construction. Incidents of fake electronics bursting into flame are not unheard of.

How do you avoid buying counterfeit goods? If ”it looks too good to be true,” it probably is.

Canada Lifts Visa Requirement for Visitors from Taiwan

Posted in: "All, Administrative Law, Business Development, In the News by Pei Wang | No Comments Thursday, November 25, 2010

On Monday, November 22, 2010, Citizenship and Immigration Canada announced that Canada has lifted its visa requirement for visitors from Taiwan. This is no doubt an early holiday gift to many Taiwanese-Canadians.

Under the new directive, travellers holding ordinary Taiwan passports issued by the Ministry of Foreign Affairs in Taiwan no longer require a Temporary Resident Visa to visit Canada.

According to Minister Jason Kenney, this decision will help boost Canada’s significant trade, investment, cultural and people-to-people links to Taiwan.

Taiwan is home to many of the world’s most dynamic international and high technology companies, including computer giants Acer and Asus, GPS maker Garmin, and the popular mobile phone manufacturer HTC.

Besides the obvious benefits of boosting trade between Canada and Taiwan, the lifting of the requirement makes it easier for Taiwanese passport holders to visit their Taiwanese-Canadian family members or simply to come here for pleasure. In 2009 more than 51,000 Taiwanese travellers visited Canada. More than 150,000 Canadians are of Taiwanese descent.

The visa exemption applies only to holders of ordinary Taiwan passports issued by the Ministry of Foreign Affairs in Taiwan that contain the personal identification number of the individual.

For a complete list of countries and territories whose citizens require a visa, please visit CIC’s website at www.cic.gc.ca/english/visit/visas.asp.

With files from Citizenship and Immigration Canada

B.C.’s Pet-Friendly Antifreeze Legislation Mandates Bitter Agent

Posted in: "All, Animal Welfare, Business Development, In the News, Lawyer Talk by Pei Wang | 2 Comments Monday, November 22, 2010

The Government of British Columbia is taking measures to prevent ingestion of antifreeze by animals (mostly household pets) and small children by mandating that a bitter agent be added to all antifreeze sold by retailers, starting January 2011.

In the bitterly cold Canadian winter, antifreeze is a common household item, used primarily in cars and sometimes as a surface treatment for sidewalks and driveways to prevent ice from building up.

The main ingredient in antifreeze, ethylene  glycol, is toxic to many animals and humans. It causes poisoning by damaging the liver and interfering with the central nervous system.

Unfortunately, antifreeze has a naturally sweet flavour, which makes its taste appealing to animals and small children. While children are supervised by adults, household pets are often left on their own. When they come across antifreeze, they may lap it up because it tastes good, or simply because they are thirsty.

To combat accidental ingestion of antifreeze by household pets and small children, the B.C. government introduced new antifreeze regulation in 2009. The new law,* which takes effect on January 1, 2011, mandates that all antifreeze sold by retailers must contain denatonium benzonate, a bitter agent.

Denatonium benzonate, often referred to by trade names such as Bitrex or Averson, is the bitterest chemical compound known. It does not interfere with the working mechanism of antifreeze, nor does it cause known long-term health risks.

The law, the first one of its kind in Canada, is welcomed by animal welfare groups and parents with small children in B.C. Let’s hope other provinces and territories will follow suit soon.

*B.C. Reg. 142/2009

Our Dog-Friendly Law Office

Posted in: "All, Animal Welfare, Business Development, Lawyer Talk, Site Updates by Pei Wang | 1 Comment Tuesday, November 16, 2010

After consultation with our staff members and colleagues who share the office with us, I’m pleased to announce that our law office is now officially dog-friendly.

While I’ve always been a dog lover and for the past 10 years also a pet parent, our dog-friendly policy wasn’t my idea originally. (I never thought dogs and law are that compatible.)

One day a client came to the office with her dog because she couldn’t find someone to mind  the Yorkshire terrier mix during her consultation. At first I was reluctant to let the dog into the office. But at the end of the appointment, my staff members wouldn’t let the dog go!

After that visit I decided to bring Ben Wang, my youngest household member, to work on a trial basis. After a few visits staff members and colleagues started asking about the dog and when he would be in next. People in the office seem much more relaxed when a dog is around. They joke more and appear less tense.

Yesterday we had a meeting with everyone in the office. The consensus was that we should make our law office dog-friendly. I then volunteered to bring Ben in on the days that I don’t have appointments.

At the same time, to maintain a high level of professionalism, clients need not worry about dogs running everywhere. We bring the dogs in when the office is quiet, and they are kept from visitors.

We have the following amenities available for our four-legged guests and companions:

  • pet bed
  • water bowl
  • treats (no extra charge)
  • lots of love

Guest Appearance: Ben Wang, age 5


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