Canadian Lawyer

REGIONAL WRAP-UP traNSactioN fee createS furor the transaction fee and its ongoing implementation. Brenda Grimes, executive director of the law society, told Canadian Lawyer in an interview: "We as a small law society were having difficulty finding insurance on our own." At the time, the society looked to a solution Ontario had implemented in 1995. "Our fee is modelled after this," Grimes notes. "I don't know of any other province that has a similar fee in place." Frampton believes the fee is no longer necessary, if it ever was. "[T]he public continues to be dinged with the levy to the tune of more than a million dollars a year, even though law society members' insurance rates are below the national average and the number of insurance claims is down." The newspaper editor is calling for the transaction fee to be axed. That's not about to happen. However, the law society has reduced the fee by 20 per cent. That reduction is not a reflection of the media attention on the issue, says Grimes. "The timing of this is unfortunate in some ways. We recently approved a reduction in the fee to $40." Grimes also says the media coverage is a tempest in a teapot. Neither members of the society nor the public appear upset by the fee, she notes. "We have only received a couple of responses from the public, and one has complained about this in the past." — DM CENTRAL doN't C all it a cautionary tale for law- yers who seek to have judg- ments that are deemed enforce- able in the United States — but still subject to appeal — applied in Canada. In December, a Quebec Superior Court judge reversed — with costs — a spectacular search-and-seizure order obtained under the Canadian Bankruptcy and Insolvency Act and executed against Georges Marciano, the California multi- millionaire co-founder and former co- owner of the Guess Jeans franchise who now calls Montreal home. It had taken a dozen bailiffs and their helpers close to 10 days last September to seize tens of millions of assets belong- ing to Marciano and securely haul away his private contemporary art collection worth an estimated $30 million, a white diamond he purchased for $16.2 mil- lion, and other collectibles such as Rolex watches, luxury cars, and wine. Liens were also put on 18 buildings in Old Montreal held in a Marciano family trust, including a boutique hotel housing much of the art and Marciano's penthouse living quarters, bank accounts frozen, and computers and personal documents confiscated. Justice Mark Schrager quashed not before they hatch only the seizure order, but rescinded peti- tions for recognition of a California bank- ruptcy proceeding against Marciano and its U.S. trustee, and the appointment of PricewaterhouseCoopers Inc. as an interim receiver in Canada for Marciano's assets. In no uncertain terms, the judge lam- basted lawyers for the petitioners for their lack of full and frank disclosure when presenting their case during two days of ex parte hearings before Quebec Superior Court Justice Chantal Corriveau in September on behalf of a group of former personal employees of Marciano. They were seeking to collect on a California court's $270-million award for defamation and emotional distress. They had won the award against the former jeans mogul in a cross-complaint filed after Marciano lost a court case in which he accused them of theft, misappro- priation, and fraud. Marciano appealed but California law requires the posting of security equivalent to the amount of the judgment, failing which the judgment is enforceable notwithstanding appeal. The employees then petitioned Marciano into bankruptcy, but the upholding of that judgment is also still pending appeal. Schrager ruled that the petitioners' 8 FEBRUA R Y 2012 www. CANADIAN Lawyermag.com lawyers had clearly given Corriveau the impression the California court orders were final and thus enforceable in Canada. "By far the most striking omission which is of sufficient importance by itself to rescind the orders, is the failure to ade- quately disclose to Justice Corriveau that both the Civil Judgments (for defamation and emotional stress) and the Bankruptcy Judgment, were subject to appeal," wrote Schrager in his 45-page ruling. He went on to note that, "as in any other voluminous and complex ex parte application Justice Corriveau was relying on counsel." Instead, petitioners' lawyers gave "the impression that the civil judgments and the bankruptcy judgment were final because they were enforceable," said Schrager. On top of that, the enforceabil- ity of the civil judgments was in question because they were subject to a stay under U.S. bankruptcy law. Schrager also ruled that the petition- ers did not have the right to obtain the ex parte seizure by invoking s. 189 of the BIA that allows a trustee or interim receiver to search and seize property of a "bankrupt" subject. The California litigants are seek- ing a declaration of bankruptcy against Marciano in Canada, but that petition has c o u N t y o ur e GGS C ontinued fr om pa g e 7

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