36583  Sidney Green v. Law Society of Manitoba

Law of professions – Barristers and solicitors – Discipline

Mr. Green is lawyer, called to the Bar of Manitoba in 1955, who did not comply with the requirement prescribed by the Law Society of Manitoba (“LSM”) to complete a minimum of twelve hours of annual continuing professional development (“CPD”) activities. He challenged the validity of those rules under which the LSM had suspended his practicing certificate on two grounds. First, he argued that The Legal Profession Act, C.C.S.M., c. L107 did not explicitly permit the LSM to enact mandatory CPD rules and to enforce those rules with the imposition of a suspension. Secondly, he argued that the rules violated the principles of natural justice because they gave the LSM authority to impose a suspension without a right of hearing or appeal. The Court of Queen’s Bench of Manitoba dismissed the Applicant’s application to have certain rules declared invalid and the appeal was dismissed.

36606    Attorney General of Canada v. Fairmont Hotels Inc., FHIW Hotel Investments (Canada) Inc. and FHIS Hotel Investments (Canada) Inc.

Commercial law – Corporations – Taxation

The Respondents were involved in the financing of Legacy Hotel’s purchase of two American hotels in return for obtaining management rights. The arrangement resulted in reciprocal loans rendered neutral for accounting purposes and Fairmont’s global operations were acquired and its shares ceased to be publicly traded. As the acquisition would cause Fairmont to realize a deemed foreign exchange loss, the purchasers agreed to a modified plan in which Fairmont realized its accrued foreign exchange gains and losses and allowed its foreign exchange exposure to be hedged. The plan, however, did not address the foreign exchange exposure of the Canadian affiliates. In 2007, Legacy wished to terminate the reciprocal loan arrangements to allow the sale of the hotels. Consequently, the Respondents redeemed their preferred shares under the mistaken assumption that the original arrangement was still in place. The redemptions triggered taxable foreign exchange gains. The transactions were reported as if the original 2006 foreign exchange plan had been implemented. The mistake was learned after the CRA undertook an audit. The Respondents sought and were granted the equitable remedy of rectification to change the documentation relating to the share redemption to reflect that the transaction was intended to occur on a tax-free basis without the triggering of a taxable foreign exchange gain. The Appeal was dismissed.