Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m M A R C H 2 0 1 7 13 \ AT L A N T I C \ C E N T R A L \ P R A I R I E S \ W E S T REGIONAL WRAP-UP Sentinel or the tax shelter proposal. By Dec. 31, 1998, Sentinel had closed transactions worth $260 million. While still a Davis partner, Stroth- er had received two advances from companies held by the Darc: one for $450,000 in February 1999 and another for $333,500 on March 10, 1999. The grapevine twigged Monarch to the new shelter in early 1999; it severed its relationship with Davis & Co. and sought litigation counsel. Effective March 31, 1999, Strother resigned from Davis & Co. and became a 50-per-cent shareholder in Sentinel. Monarch sued Strother and Davis & Co. for breach of fiduciary duty in B.C. Supreme Court, but after 42 days of trial, the claim was dismissed. The subsequent B.C. Court of Appeal ruling came in favour of Monarch, ordering Strother to disgorge earned profits of $32 million from Sentinel as Monarch's damage award. Sentinel had closed transactions of $4 billion with $64 million in profits divided between Darc and Strother. Davis & Co. and Strother appealed to the SCC. It upheld the BCCA ruling, but it slashed the award, saying the appeal court erred in its calculation and Stroth- er should disgorge profits earned only during the time at Davis & Co. It ordered the B.C. Supreme Court to re-crunch the numbers and, in 2009, damages were reduced to $1 million plus interest. Strother challenged various LSBC citations, delaying the LSBC hearing panel on facts and the determination of his professional misconduct until 2014. The panel ruled Strother should have advised Monarch of the favourable rul- ing, his involvement with Sentinel and reconsidered his previous negative advice. There was still an ongoing retainer agree- ment and Monarch still looked to Stroth- er for advice. "M (Monarch) Corp. paid for, and was entitled to expect, better advice and rep- resentation from the Respondent than it received. M Corp. was entitled to expect undivided loyalty, full disclosure, and candid advice from the Respondent," the hearing panel ruled. "The Law Society expects better from its members." Strother also argued that the extensive court litigation had cost millions, taken years to resolve and resulted in a signifi- cant award against him that should weigh against any LSBC action. The panel ruled that Strother had enjoyed profits of $32 million against damages of $1 mil- lion. "This would tend to support the imposition of a more significant disci- plinary action," the panel ruled. The panel, however, realized its suspension was "likely a neutral event" as Strother was not a practising lawyer and didn't intend to return to practice. But it maintained there was a need to ensure the public's confidence in the profession and imposed the five-month suspension and $54,792.38 in LSBC hearings costs. — JEAN SORENSEN CCLA Gala 2017 FEATURING: EDWARD SNOWDEN via live video M E D I A S P O N S O R APRIL 27, 2017 THE EGLINTON GRAND, TORONTO TICKETS AND INFORMATION: GALA.CCLA.ORG Join us to celebrate remarkable Canadian human rights and civil liberties activists from all walks of life ntitled-1 1 2017-02-16 12:46 PM

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