BarTalk December 2002
Volume 14, Number 6

by Shelley Bentley

The BC Branch sponsors 72 Sections which play a vital role in keeping members informed on both changes in the law and legal and political issues affecting a given area of practice. They are the main resource utilized by the BC Branch in legislative review, law reform initiatives and in responding to matters affecting the profession. What follows is a sample of the recent activities of some Sections.

Business and Corporate Counsel (Joint Meeting)
The new British Columbia Business Corporations Act was on the agenda as John Lundell from Lawson Lundell and Jill Sinkwich from the Financial Sector and Corporate Policy Branch described the primary policy objectives and gave details of the significant changes introduced by the new Act.

Under the current Act a company’s articles are contractual and allow companies the freedom to determine their own internal rules of conduct. The new Act will use the current “contract model” but will permit the rules to be changed more easily and to a greater extent than under the current Act. Provisions enhancing flexibility will be adopted particularly in the areas of corporate governance, corporate finance and fundamental corporate changes.

Another goal of the new Act is to reduce the regulatory burden on companies. It will require fewer filings at the corporate registry, remove overlap with the Securities Act, and remove the need to obtain the Registrar’s permission for postponing annual general meetings or holding general meetings outside BC. It will remove unnecessary rules such as the requirement that companies have officers and that the company’s president be a director.

The new Act will enable automation of the corporate registry by allowing certain records to be filed and corporate reorganizations to be effected on a 24-hour-a-day basis.

Computer Law
Nick Batistic, a senior insurance broker who specializes in technology, discussed technology, intellectual property and cyber risk related insurance. He identified six types of insurance coverage:

• Commercial/Comprehensive General Liability Insurance: Coverage for some Web site-related risks may be provided under “advertising injury” or “personal injury” clauses.

• Intellectual Property Infringement Insurance: This is specifically aimed at defending an infringement action.

• Infringement Abatement Insurance: This type of insurance helps cover the cost of enforcing patent, copyright and trademark rights.

• Multimedia Professional Liability Insurance: This is errors and omissions coverage for publishers, broadcasters and software designers.

• Internet Security Liability Insurance: This provides coverage for loss of money or electronic funds resulting from data theft.

• Trade Secret Insurance: This protects against loss of revenue resulting from theft of trade secrets, including theft by ex-employees.

Environmental
The Advisory Panel on Contaminated Sites invited Environmental Law Section members to provide comments on its Interim Report to the Ministry. The Panel characterized the current legislative regime as problematic for the allocation of diminishing ministerial resources. It warned that if wholesale changes are not made to the Waste Management Act and the Contaminated Sites Regulation the currently unbearable delays will become worse.

The Panel advised that it is considering redefining the term “contaminated site” to one involving a two-step determination process. Whether a site meets the definition would first depend on the application of a numerical standard and second on an assessment of risk. This would mean that low risk sites would not be considered contaminated and hence remediation would be voluntary. A number of Section members commented that this redefining would result in increased litigation.

To address problems created by staff cutbacks the Panel is recommending an independent system of licensed environmental professionals (LEP’s) be established to allow resources to be focused on high-risk sites. These professionals will be multi-disciplinary professional engineers whose professional membership fees will assist in paying for the management of the qualification process.

The Panel is recommending that cost recovery actions be either eliminated from the Act or limited to high-risk sites. Alternative dispute resolution will be recommended as the sole method for resolving disputes over contaminated sites in BC. A number of Section members expressed concern over this decision in light of the fact that ADR lacks a discovery mechanism and a precedent system and is only binding on parties in the absence of an error of law.

The Panel informed the Section that by 2004/2005 the provincial government would no longer allocate money from general revenue to manage contaminated sites. Suggested alternative sources of funding are a wholesale tax or industry sponsored levy on gas and underground storage tank registration fees.

Taxation
Peter Wong from Boughton Peterson Yang Anderson set out several structures for setting up professional practices using co-ownership arrangements and corporate partnerships. He revealed a sample CCRA ruling for a proposed structure designed to optimize flexibility and control on the part of individual professionals in determining hours of work, vacation and expenses incurred. The structure allows each professional to see a direct result between effort and time put into the practice and earnings, as well as to provide more options for estate planning and improve the position of each professional with respect to joint liability. His paper can be ordered through the CBABC.

Wills and Trusts-Vancouver
Noreen Brox commented on Hall Estate v. Marshall (2002 BCSC 893) in which costs were awarded personally against the executrix who brought an action seeking a determination that funds formerly held in a joint account were held on a resulting trust. The Court examined the relationship of the joint account holders, as well as evidence of the contribution and intent with respect to ownership of funds in the joint account. The Court observed that the absence of a conjugal relationship between the Deceased and Mr. Marshall was immaterial except perhaps as to the applicability of a presumption of advancement and resulting trust but noted a recent trend in case law to rely less on presumptions and more on evidence of actual intention. Of significance to the Court was the evidence of the close, caring relationship between the Deceased and Mr. Marshall, as well as the fact that they had both made substantial contributions to the account and used the account for shared expenses. The action was dismissed with costs. The executrix applied to vary the costs award on the basis that there had been a valid issue for the determination, the executrix had not stood to benefit personally and there was no estate to bear the costs. Her application was dismissed on the basis that “no order as to costs would deprive the successful defendants of their costs, despite the fact they offered to settle.” The defendants then applied for an order to enforce the costs award against the plaintiff personally and were successful.

Shelley Bentley is in private practice at G Davies & Company.

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This article originally appeared in the December 2002 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.