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 A U G U S T 2 0 1 7 13 but the request was never completed. EF operates B House company, which pro- vided private offshore banking services. Over the years, Gurney had acted for EF and B House. EF introduced Gurney to C Inc. in May 2013 and its proprietor IJ. Jaffe says there is nothing to suggest that the client or anyone in this case suf- fered a loss or trust funds were misused. He says that Gurney's client had not been charged with money laundering either. The LSBC's hearing decision said that Gurney didn't ask enough questions not only of EF or the recipient of the funds but also about the offshore source of funds, which was said to be stocks. Gur- ney was found to have relied upon EF's information too heavily. "The law (legal case precedents) is clear that the respon- dent cannot delegate his duty to make reasonable inquiries," the decision said. The LSBC called Gurney queries pro forma. The LSBC claimed there was nothing to explain why "companies in Nevis/Marshall Islands/Belize would lend a total of $26 million to a newly incorpo- rated B.C. company with, as far as [Gur- ney] knew, no assets and no plans." The hearing decision also shed light on whether the LSBC has a role in preventing lawyers' trust funds from becoming laundered money conduits. It points to the Federation of Law Societies of Canada v. Canada (Attorney General) case where the Supreme Court of Canada exempted lawyers or law firms plus their trust accounts from FINTRAC reporting rules in lieu of society rules. "It is clear from the decision in the Federation of Law Societies case that the ability of a law society to regulate lawyers' use of trust accounts has been preserved," the hearing ruling said. The LSBC maintains lawyers serve as "gatekeepers" of their trust funds and that Gurney "failed to exercise his role." He also didn't provide legal services for the funds. "The lawyer must play a role as a legal advisor with regard to the transac- tion," it said. The LSBC hearing ruling said that Gurney should have been more cautious about acting with suspended former law- yer EF. Jaffe says Gurney had dealt with EF or his company for more than 30 years and there was nothing to indicate improper business dealings. Jaffe questions whether the decision means all cited or penalized lawyers should be dealt with more cautiously. "Do we now have to treat these individuals differently?" he asks. Jaffe also says the case brings into question to what extend lawyer should go when it comes to identification and verification of a client. While a lawyer may be able to verify information in B.C. or Canada, there are hurdles faced in attempting to provide reliable informa- tion about off-shore funds. Gurney, when contacted by Cana- dian Lawyer, said: "It was a very disap- pointing decision." — JEAN SORENSEN \ 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 Choosing a personal injury lawyer is one of the most important decisions an injured person will make. Help your client ask the right questions: Is the lawyer... • selected by peers for inclusion in Best Lawyers in Canada • rated 5 out of 5 AV Preeminent - Martindale Hubbell • selected by peers for inclusion in Lexpert, Canada's Legal Lexpert Directory • a Director or Past President of the Ontario Trial Lawyers Association • a Certified Specialist in Civil Litigation CREDENTIALS MATTER A Noticeable Difference ™ TORONTO I BAR R IE I HAMILTON I K ITCHENER 1-866-685-3311 w w w.mcleishorlando.com C A N A D I A N L AW Y E R M A G A Z I N E cLeishOrlando_CL_Aug_17.indd 1 2017-07-14 12:54 PM

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