Financial Institutions: Vulnerability to Fraud and Legal Responsibility

Tuesday, October 18, 2005

Table of Contents

Collecting and Negotiating Cheques: The Financial Institution’s Exposure

Robert J. Sewell and H. William Veenstra McCarthy Tétrault

Badges of Fraud

Jacklyn A. Davies and Douglas J. Nash Inkster Group

Providing Information to the Police

Warren Milman McCarthy Tétrault

Speaker Biographies

About the Inkster Group

About McCarthy Tétrault’s Litigation Group

About McCarthy Tétrault

A

B

C

D

E

F

G

Collecting and Negotiating Cheques

Robert J. Sewell Q.C. and

H. William Veenstra

October 18, 2005

Collecting and Negotiating Cheques

What is a Cheque?

A cheque is a bill of exchange, drawn on a bank.1

A cheque is a form of negotiable instrument, and is governed by the Bills of Exchange Act which traces its history through the development of the law merchant and the codification of these laws in the first Bills of Exchange Act in England in 1882 and in Canada in 1889. The Bills of Exchange Act (“BEA”) contains a set of highly technical rules that have not changed substantially since 1889.

Key features of a bill of exchange include:

title is transferable by endorsement and delivery.

transfer enables the transferee to maintain an action upon the instrument.

in appropriate circumstances, the transferee may take the negotiable instrument free from any defect in title, or in some cases, from want of title.

Another important feature of a bill of exchange is that the holder of a bill that is dishonoured has an immediate right of recourse against the drawer and any endorsers (i.e. any prior holder) of that bill. [BEA s. 81]

Canadian Payments Association

Most cheques in Canada are now processed through the Automated Clearing Settlement System (“ACSS”) operated by the Canadian Payments Association (“CPA”). The CPA has passed a number of rules, to which its member institutions (including most banks and central credit union organizations) are members. Those rules operate in addition to the BEA. Among the rules are time limits in CPA Rule A4 for the return of cheques processed through the ACSS. These deadlines operate from the time of receipt by the first organization unit of the drawee that is able to make or act upon a decision to dishonour. Time limits include the following:

Form of Payment Return Deadline

Traditional Paper Cheques Next Business Day “”

Items with Forged Endorsements No time limit

Duplicate Items No time limit

Materially Altered 90 days

1 A bank, for purposes of the cheque provisions of the Bills of Exchange Act, is defined to include credit unions that are members of a credit union central that participates in the Canadian Payments Association.

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Negotiating a Cheque

Most people don’t realize that when they deposit a cheque at their bank, they are in fact negotiating a bill of exchange. Negotiation of a bill of exchange involves a transfer of title to the cheque – which is treated by the law as a chattel or a piece of property. The bank, in return for the negotiation to it of a negotiable instrument, assumes a debt to the depositor. This bank is referred to as the collecting bank.

In a typical transaction, the collecting bank will then process the cheque through the ACSS and receive payment from the bank upon which the cheque is drawn (the drawee bank) through the ACSS. Through this mechanism, funds that are “credited” to the account of the person who deposited the cheque are “debited” from the account of the drawer. In a legal sense, however, the collecting bank negotiates the cheque to the drawee bank. The collecting bank will typically endorse the cheque by way of a teller’s stamp.

While the process is, by virtue of the ACSS, streamlined and automated, it remains one of negotiation that is virtually the same in law as it was a century ago. The position of the collecting bank was summarized in one recent case as follows:

An individual obtains title to a bill through negotiation. Once an individual has obtained title, that individual has the right to present the bill to the drawee for payment, as well as a right of recovery against the drawer if the bill is dishonoured by the drawee.2

While this paragraph refers to “an individual”, it would apply equally to a bank.

Endorsement of a cheque is a key part of negotiation. The BEA provides that a cheque, transferred for value without an endorsement, gives the holder those rights that the earlier party had in it: section 60(1). Thus, apart from the provisions of section 165(3) of the BEA (discussed below), a bank that collects a cheque by accepting it for deposit without obtaining an endorsement obtains no better title to the cheque than the person who deposits it. If that person has no title to the cheque because, for example, he obtained it by fraud, the bank has no better title and will be liable to the true owner (the person defrauded) if the amount of the cheque is ultimately debited from his account.

Protecting the Bank

1. Holder in Due Course

One of the major creations of the law merchant, which was codified in the BEA, was the status of holder in due course. A holder of a cheque attains the status of holder in due course where:

the cheque is complete and regular on its face,

the holder became holder before it was overdue and without notice that it had been previously dishonoured;

2 Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce (1996), 140 D.L.R. (4th) 462 (S.C.C.) at para. 30

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the holder took the bill in good faith and for value; and

at the time the bill was negotiated to it, the holder had no notice of any defect in the title of the person who negotiated it to him. [BEA s. 55(1)]

The BEA specifies that the title of a person is defective if that person obtained the bill by fraud, duress or force and fear, or other unlawful means, or for an illegal consideration, or if the person negotiates it in breach of faith, or under such circumstances as amount to a fraud.

A holder in due course holds the cheque free from any defect in title of prior parties, as well as from any personal defences available to prior parties among themselves. So long as it attains the status of holder in due course, a bank is shielded from the effects of any fraud or other unlawful acts involving the drawer or any prior holders of the cheque.

2. Account Agreement

In the absence of agreement it would be the customer’s own bank that would suffer the loss as a result of the negotiation of fraudulently obtained cheques. However, account agreements provide significant protection to a bank against claims that might be made against it by its customer.

A typical account agreement will contain a verification clause, requiring a customer to forthwith examine any account statements and notify the bank of any errors or objections within a short time – often 30 days – of the statement date.

Some account agreements may also exempt a bank from liability to its customer for loss or damage suffered by the customer unless such loss or damage was caused by the bank’s gross negligence or unlawful misconduct.

These clauses will not provide a bank with any protection against any party, other than its own customer, who may have been a holder of the cheque. As well, while they provide some protection to drawee banks they are generally of little assistance to collecting banks. Finally, the clauses will be carefully construed by the Courts and may not apply in any particular circumstances.

3. Section 165(3)

Section 165(3) of the BEA provides that:

Where a cheque is delivered to a bank for deposit to the credit of a person and the bank credits him with the amount of the cheque, the bank acquires all the rights and powers of a holder in due course of the cheque.

This section has been interpreted by the courts as allowing the collecting bank to overlook the need for an endorsement in those situations were the payee is depositing a cheque to the payee’s own account. It does not apply where the cheque is being deposited to an account other than that of the payee.

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The Fraud Issue

Over the past few years, financial institutions which have had no real connection to fraudulent schemes have been held liable to pay, in some cases, many millions of dollars to persons who have been defrauded by their own employees. Financial institutions have found themselves in this position through a combination of:

the strict liability imposed by the courts on persons who “convert” the goods of another person;

the stringent provision of the Bills of Exchange Act with respect to the formalities required to be a holder in due course; and

a lack of awareness of the obligations of a person negotiating a bill of exchange.

The key to understanding the vulnerability of the financial institution’s position is to understand that the law regards a cheque as a chattel which has a value equal to the amount of the cheque and that anyone who negotiates the cheque without having proper title to it commits the tort of conversion and is liable for damages in an amount equal to the face value of the cheque.

Successful claims against banks often are based on a fraudulent employee engaging in behaviour which would cause a reasonable person to have a suspicion that something irregular was going on. Examples in the reported cases include cheques signed by an employee which are deposited and bank drafts immediately drawn on the account into which the cheques are deposited, cheques which appear to be out of the ordinary course of the business of the depositor and anything which indicates that the person signing the cheque on behalf of the drawer is obtaining some personal benefit from the cheque.

Conversion

The tort of conversion involves a wrongful interference with the goods of another, such as taking, using or destroying those goods. The law is clear that a negotiable instrument such as a cheque is a good that is capable of being converted. The tort of conversion is one of strict liability – that is, it is no defence that the wrongful act was committed in all innocence. Nor can a party found liable for conversion seek to reduce its liability by relying on any contributory negligence of the owner.

A bank that does not attain the status of holder in due course is at risk of being held liable for conversion of a cheque, in the event that the tile of any prior holder of the cheque is tainted by fraud or other unlawful act.

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The question of whether a bank attained the status of holder in due course will in many cases depend on whether the bank acted in good faith or had “notice”. The classic statement of the law in this area is from an 1892 judgment:3

. . . regard to the facts of which the taker of such instruments had notice is most material in considering whether he took in good faith. If there be anything which excites the suspicion that there is something wrong in the transaction, the taker of the instrument is not acting in good faith if he shuts his eyes to the facts presented to him and puts the suspicions aside without further inquiry. . . .

I apprehend that when a person whose honesty there is no reason to doubt offers negotiable securities to a banker or any other person, the only consideration likely to engage his attention is, whether the security is sufficient to justify the advance required. And I do not think the law lays upon him the obligation of making any inquiry into the title of the person whom he finds in possession of them; of course, if there is anything to arouse suspicion, to lead to a doubt whether the person purporting to transfer them is justified in entering into the contemplated transaction the case would be different, the existence of such suspicion or doubt would be inconsistent with good faith. And if no inquiry were made, or if on inquiry the doubt were not removed and the suspicion dissipated, I should have no hesitation in holding that good faith was wanting in a person thus acting.

A bank may therefore be liable if it negotiates a cheque where circumstances have come to its attention that reasonably give rise to suspicion, and it fails to make adequate inquiry.

Forgery (Good News and Bad News)

Section 48 of the BEA provides that a forged signature on a bill is “wholly inoperative”, and that no right to retain or enforce the bill can be obtained through or under that signature. A forged cheque is, therefore, a nullity, or “worthless paper “and no liability is incurred by a bank negotiating it because it never met the definition of a Bill under the BEA.

However if the endorsement is forged the bank is not entitled to rely on it and will not be afforded the status of a holder in due course. Section 49 of the BEA gives a person who made payment in respect of the cheque a right to recover the amount paid from the person to whom it was paid or from any person who endorsed the cheque subsequent to the forged endorsement.

3 London Joint Stock Bank v. Simmons, [1892] A.C. 201 (H.L.) at pp. 221 and 223

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Fictitious Payee

Section 20(5) of the BEA provides that a cheque containing a “fictitious or non-existing” person as payee may be treated as payable to bearer. This often arises in fraudulent schemes, where the fraudster selects a name or names that he thinks he can easily impersonate for the purpose of depositing cheques into a bank account in his own name, either directly or by way of forged endorsements.

Generally, if the person named is a real person, or might plausibly be a real person, then the cases seem to indicate that the payee is not fictitious. In one case, a fraudster caused some cheques to be issued in the names of former employees, and others to be issued to wholly invented names – the court found that only the latter group were fictitious. As a result, the bank was liable for conversion of the cheques naming former employees, but not for those with wholly invented names – the bank was entitled to treat those cheques as payable to bearer.4

In another case, a number of cheques were payable to a name very similar to that of the fraudster (Lam vs. Alm), while others were payable to persons having some connection to the drawer company’s business. The court concluded that none of these cheques were payable to fictitious payees.5

Thus, the law appears to be that “if the name of the payee is a pure invention of the drawer of a cheque (or the maker of the note), the payee may be “non-existing” . . . but only if it is also true that the name is of a person having no real connection with the drawer’s business, or . . . is not a name that plausibly might be identified by the drawer as being a real creditor of his business.6

Alternatively, to use the words of a leading textbook:

If Martin Chuzzlewit is the name of a real person, intended by Bede to receive payment, the payee is neither fictitious nor non-existing, notwithstanding that Bede has been induced to draw the bill by the fraud of some other person who has falsely represented to Bede that there is a transaction in respect of which Chuzzlewit is entitled to the sum mentioned in the bill.7

From the point of view of a bank, it will be difficult to know in any particular case whether a particular cheque has a fictitious or non-existent payee. The best course of action for a bank will be, in the event of any concerns as to fraud, to take steps quickly to consider the circumstances and determine whether it should do anything other than negotiate the cheque.

4 Royal Bank of Canada v. Concrete Column Clamps (1961) Ltd. (1976), 74 D.L.R. (3d) 26 (S.C.C.) 5 Boma Manufacturing, supra 6 B. Crawford, Payment, Clearing and Settlement in Canada (Canada Law Book, 2002), at p. 7 Falconbridge on Banking and Bills of Exchange (6th ed., 1956) at p. 469, cited with approval in Boma, supra

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Material Alteration

Sections 144 and 145 of the BEA deals with material alterations to bills (including cheques). It provides that:

any alteration to the date, sum payable, time or place of payment is material – this list is not exhaustive, however, and any alteration that produces a change in the legal nature of the instrument may be material

where a bill is materially altered without the assent of all parties liable on the bill, it is voided except as against a party authorizing the alteration or a subsequent endorser;

the exception is that if the material alteration is not apparent, and the bill is in the hands of a holder in due course, the holder in due course may enforce it – to be apparent, an alteration should be one that can be discerned by a prospective holder who scrutinizes it with reasonable care.

Conclusion

Our courts have limited the circumstances in which banks will be found liable to their customers and those who have dealt with their customers. Account verification agreements further limit the scope for liability of banks to their clients.

Notwithstanding these limitations, banks need to be aware that the law of negotiable instruments, and the law of conversion, provide an alternative means by which a bank may find itself liable. If liable in conversion, a bank is unable to rely on contributory negligence of the drawee or of any other person as a defence or to reduce its own liability.

As a result, it is incumbent on banks to exercise reasonable care and to respond to any suspicious circumstances with all reasonable dispatch in order to avoid potential liability arising from its collection or negotiation of cheques.

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Glossary

“bill of exchange” is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, on demand or at a fixed or determinable future time, a sum certain in money to or to the order of a specified person or to the bearer

“cheque” is a bill of exchange drawn upon a bank

“bank”, for purposes of the BEA provisions governing cheques, includes every member of the Canadian Payments Association and every local cooperative credit society that is a member of a central that is a member of the Canadian Payments Association

“drawer” is the person drawing a cheque

“drawee” is the bank upon which the cheque is drawn

“payee” is the person too whom the drawer directs the drawee to make payment

“collecting bank” is the bank at which the payee negotiates the cheque

Badges of Fraud

Doug NashJackie Davies

Who is the Inkster Group?

A team of:

•Forensic accountants

•Former police and immigration officers

•Computer forensic experts

•Researchers

Inkster Experiences

• Case #1 – Dummy Loans

• Case #2 – Inventory Fraud

• Case #3 – Know Your Client

• Case #4 – Unauthorized Advances

Case #1 – Dummy Loans

Problem: Loans Manager creates fictitious loans.

Indicators:

• Increase in volume

• Close to authorization limit

• Same address and telephone number

• Invalid serial numbers

• No holidays taken

Case #2 – Inventory Fraud

Problem: Dealer financing of vehicles that are sold to auction in U.S.A.

Indicators:

• Poor background checks

• Infrequent audits

Case #3 – Know Your Client

Problem: Millions of investment dollars are missing and broker is being sued for lack of due diligence.

Indicators:

• Unusual activity in account

• Lack of Board Resolution

• Activation of new accounts

• Cloaking of account name

• Activity does not make business sense

Case #4 – Unauthorized Advances

Problem: Internal controls were overridden by a senior branch official to issue unauthorized advances to related parties.

Indicators:

• Minimal segregation of duties

• Clearing account and control accounts were not reconciled

• Suspicious journal entries

• Lack of follow-up to audit deficiencies

Client Issues:

Mortgage fraud

Cheque alteration

Mortgage Fraud

Problems:

•Impersonation of seller

•Impersonation of lawyer

•Flips – Value Fraud

•Fraudulent title transactions

See Law Society of Upper Canada site re: Fighting Real Estate Fraud

http://www.lsuc.on.ca/news/a/hottopics/fighting-real-estate-fraud

Cheque Alteration

Will the planned 2007 transfer from bulk evening paper clearing to constant electronic clearing solve or increase problems?

During scanning can check for differences in font and erasures.

The Price of Performance?

• Security functions of prevention, detection, investigation and prosecution can slow production.

• Institutions must balance these functions with customer service and cost.

• Risk Management is the process used to achieve an acceptable balance.

Providing Information to the Police

Warren B. Milman

October 18, 2005

Providing Information to the Police

I. Common Law – Duty of Secrecy and its Four Exceptions

The classic case is Tournier v. National Provincial and Union Bank of England,[1924] 1 K.B. 461 (C.A.): “It is an implied term of the contract between a banker and his customer that the banker will not divulge to third persons, without the consent of the customer express or implied, either the state of the customer’s account, or any of his transactions with the bank, or any information relating to the customer acquired through the keeping of his account, unless the banker is compelled to do so by order of a Court, or the circumstances give rise to a public duty of disclosure, or the protection of the banker’s own interests requires it.” (bank liable to customer for unauthorized and unjustified disclosure of account information).

R. v. Donaldson (1990), 58 C.C.C. (3d) 294 (B.C.C.A.) – search and seizure violated s.8 of the Charter and evidence inadmissible because brokerage house assisted police and voluntarily produced materials from other locations (searches are location specific)

CIBC v. Sayani (1993), 83 B.C.L.R. (2d) 167 (C.A.) – reiterates the four exceptions from Tournier and amplifies the exception re public duty: bank disclosed to new prospective mortgage lender that customer had defaulted in settlement with bank and owed bank $300,000; customer had not disclosed this in financial statement provided to new lender; customer sued bank for breach of duty of confidentiality; suit dismissed on the basis that bank had a public duty to new lender to disclose misrepresentation even if fell short of fraud

R. v. Lillico (1994), 92 C.C.C. (3d) 90 (Ont. G.D.) – bank routinely discussed customer account activity with the police, and on request, would confirm ore deny for police whether particular check was deposited and whether there was subsequent activity in the account – nothing more specific provided without warrant – no violation of s.8 of the Charter

Robertson v. CIBC, [1995] 1 All ER 824 (P.C.) – customer sued bank for negligence in responding to subpoena and providing evidence in court without objecting, informing him or advising the court that the bank did not have customer’s consent; court rejects the suggestion that there is any such duty – only one of best efforts to contact customer to advise of subpoena

II. Warrants under s.487 of the Criminal Code

Authorizes officer to search a place and seize certain specified things

Note application of s.29 of the Canada Evidence Act – allows financial institutions:

(1) to produce copies, along with affidavit as to keeping of record in ordinary course

(3) to verify that there is no account in name of accused

(7) to restrict searches to copies, unless warrant specially endorsed otherwise

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III. Production Orders Under ss.487.012-015 of the Criminal Code

Two varieties: general and specific

general like search warrant: reasonable grounds to believe offence committed;

Specific applicable only to specified custodians, such as financial institutions: reasonable grounds to suspect;

$250,000 or up to 6 months prison if breached; and

Saves police resources by shifting cost to custodian.

Montréal | Ottawa | Toronto | Hamilton | Waterloo Region | Calgary | Vancouver | Moscow |

Toronto, Senior Vice-President

Telephone: 416 369-7330

Fax: 416 863-3612

E-Mail: doug.nash@inkstergroup.com

Douglas J. Nash

Doug is a known authority on commercial crime investigation, law enforcement and security assessments.

During his RCMP career, he was responsible for the investigation of complex frauds and criminal violations

involving securities, loans, insurance and investments. During the latter portion of his RCMP career, Doug

worked in the Informatics and Corporate Services areas as a senior officer. In 1995, Doug retired as an

Inspector, after a twenty-five year career with the Royal Canadian Mounted Police (RCMP). He then joined

the forensic practice of one of Canada’s big four accounting firms, where he utilized his investigative and

security skills to serve many clients. Doug joined the Inkster Group in 2003.

Doug has extensive experience conducting:

• Fraud, theft, conflict of interest and secret commission investigations;

• Threat, Risk and Impact Assessments;

• Reviews of police services, corporate security departments, and various government investigation units;

• Security related process and policy reviews; and

• Training courses on topics such as interviewing techniques, personnel screening and conducting threat,

Risk and Impact Assessments.

Examples of Investigations include:

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• Various investigations for large municipalities in the Toronto area, including investigations of

suspected fraud, conflict of interest, breach of trust and theft, plus a major workplace accident

investigation;

• Numerous investigations in the Caribbean for various corporate clients, including investigations

concerning allegations of secret commissions, fraudulent loan schemes, theft, breach of trust, using

fraudulent documents to defraud, plus tracing assets;

• Investigations of fraud, inventory shrinkage, internal thefts, secret commissions and conflicts of

interest complaints for a variety of clients, such as a large equipment financing company, a life

insurance company, a university, a community college, a law firm, various provincial government

departments, and a large retail company.

Examples of law enforcement and corporate security department reviews include:

• An assessment of Transport Canada’s Enforcement Renewal plans for its Marine Safety

Directorate;

• Security screening procedures utilized by a joint U.S. and Canadian customs and immigration

program, which is now known as NEXUS;

• The processes used to detect, deter and investigate fraud within the Ontario Ministry of Health;

• Employee security screening processes for public service employees;

• Policing services for the City of Surrey, B.C., a city with a population of about 334,000;

• Policing services for a large southern Ontario municipality;

• A policing amalgamation study for two municipalities in southern Ontario;

• A provincial insurance corporation’s investigation unit;

• An enforcement branch for a large provincial natural resources department;

• Corporate Security groups within a large financial institution and a telecommunications company;

and

• Various corporate guard services.

Montréal | Ottawa | Toronto | Hamilton | Waterloo Region | Calgary | Vancouver | Moscow |

Vice President, Forensic Accounting Services Telephone: (604) 891-2777 Fax: (604) 443-5648

E-Mail: jacklyn.davies@inkstergroup.com

Jacklyn A. Davies

Jackie is a Chartered Accountant with over 15 years of experience in public practice; the last six specializing

in forensic investigations and litigation support. In 2003, Jackie co-authored and instructed a web-based

course on asset recovery offered by the Forensic Technology Program at the British Columbia Institute of

Technology.

Prior to joining Inkster Group in 2004, she practiced with the forensic group in one of Canada’s big four

accounting firms.

Jackie has utilized her accounting and investigative expertise to investigate complex frauds, trace assets,

provide litigation support and conduct proactive fraud vulnerability reviews. For example, she has:

• Conducted various investigations of employee theft and fraud involving secret commissions with

related suppliers, manipulation of electronic and manual accounting records, alteration of

documents, fictitious loans, and the sale of assets for less than market value;

• Provided litigation support to trace the flow of funds through a significant number of bank accounts

and companies in Canada and foreign countries. This analysis showed that related individuals and

corporations were involved;

• Conducted investigations into complaints of fraud, theft, secret commissions, and data

manipulation, which resulted in the preparation of evidence briefs for civil and criminal processes;

• Analyzed union records to investigate alleged pension hour and dues payment irregularities;

• Quantified losses resulting from employee fraud, under reporting royalties, and purchase of

substandard production component;

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• Conducted investigations into shareholder disputes, which assisted legal counsel to resolve issues

concerning the agreements;

• Conducted Fraud Vulnerability Reviews to assist corporations to reduce their exposure to fraud

related offences;

• Provided costs of various police service options;

• Reviewed the financial records of local organizations on behalf of their international governing

bodies for adherence to the constitution and to identify assets.

• Reviewed insurance claims for business losses on behalf of a significant insurance company.

• Reviewed corporate security departments as part of an efficiency and effectiveness review; and

• Reviewed expenditures and trust accounts in accordance with statutory and self-governing

regulations.

Jackie’s clients have included:

• Financial institutions, an accounting firm, and an insurance company;

• Private and publicly held corporations in the service industry, forestry, transportation, construction

and real estate;

• Government and self-regulating organizations; and

• Law firms.

An Ontario Limited Liability Partnership

Robert J. Sewell, Q.C.* is a partner in the Vancouver office practising in the Litigation Group. His practice focuses on commercial, financial institution, corporate and real estate litigation.

ROBERT J. SEWELL, Q.C.

Partner

Mr. Sewell has appeared as Counsel on numerous significant cases in the British Columbia Courts. He has also successfully represented financial institutions in matters involving the recovery from third parties of funds fraudulently obtained from his clients. He appears in the 2004 Canadian Legal Lexpert Directory, a guide to the leading law firms and practitioners in Canada, as a leading lawyer in the area of corporate-commercial litigation.

Mr. Sewell received a BA in 1968 and an LLB in 1971 from the University of British Columbia and is a member of the Vancouver Bar Association and the Canadian Bar Association. He was called to the British Columbia bar in 1972.

Office: Vancouver Direct Line: 604.643.7968 E-mail: rsewell@mccarthy.ca Year of Call: 1972 *denotes Law Corporation

An Ontario Limited Liability Partnership

H. William Veenstra is a partner in the Vancouver office practising in the Litigation Group. His practice encompasses most areas of commercial civil litigation, including:

H. WILLIAM VEENSTRA

Partner

many types of business disputes, including claims in contract, tort, and for breach of fiduciary duty, as well as shareholder, partnership and joint venture disputes;

real estate and construction disputes, and professional negligence claims against professionals in the real estate and construction industries;

commercial fraud;

intellectual property disputes, including claims for breach of confidence;

insurance coverage disputes;

aboriginal litigation, including cases relating to claims of aboriginal rights or aboriginal title and their impact on business interests;

multi-jurisdictional disputes, including disputes over the proper jurisdiction and venue for such cases; and

mediation, commercial arbitration and other methods of dispute resolution.

Mr. Veenstra joined the firm in 1992. He received a B.A.Sc. in Engineering Physics from the University of British Columbia in 1986 and his LLB from the University of Victoria in 1990. Mr. Veenstra was called to the British Columbia bar in 1992.

Mr. Veenstra was a law clerk to the British Columbia Court of Appeal in 1990-1991.

Office: Vancouver Direct Line: 604.643.7199 E-mail: bveenstra@mccarthy.ca Year of Call: 1992

An Ontario Limited Liability Partnership

Warren B. Milman is a partner in our Litigation Group in Vancouver. Mr. Milman’s practice is focused on both civil and criminal litigation, including class action defence. He has considerable experience acting for both the Defence and the Crown in criminal and regulatory prosecutions, and also for various parties in commercial litigation, particularly in the Energy and Financial Services sectors, both through the courts and in mediations and arbitrations.

WARREN MILMAN Partner

Mr. Milman was a member of the prosecution team on the Air India case and has acted in civil matters for the B.C. Securities Commission. He has represented government attorneys and others in a malicious prosecution suit. He has defended class action proceedings on behalf of a financial institution (in connection with a dispute over service charges), a supermarket chain (in connection with a dispute over an outbreak of an infectious disease) a hydro-electric utility (in connection with a dispute over flood damage) and a medical equipment manufacturer (in connection with a product liability dispute).

Mr. Milman has appeared on numerous occasions before the British Columbia Court of Appeal, the Supreme Court of British Columbia, the Provincial Court of British Columbia, the Federal Court of Appeal and the Federal Court of Canada.

He has written and published on topics ranging from “screen scraping” to regulatory prosecutions under the Canadian Charter of Rights and Freedoms.

Mr. Milman is a member of the firm’s Pro Bono Committee and is currently a member of the board of Pro Bono Law of B.C. He has served as legislative liaison for the Class Action subsection of the Canadian Bar Association and has also served as Chairman of the Board of Har-El Congregation in West Vancouver.

Mr. Milman joined the firm in 1992. He received a BA (1985), an LLB (1992) and a BCL (1992) from McGill University. Mr. Milman was called to the British Columbia and California Bars in 1993.

Office: Vancouver Direct Line: 604.643.7104 E-mail: wmilman@mccarthy.ca Year of Call: 1993

About the Inkster Group

inkstergroup.com

The Inkster Group was established to help organizations reduce the risk and impact ofcrimes such as fraud, secret commissions and other related offences.The group specializesin innovative solutions that address investigations, employee security, protection againstfraud, and the safeguarding of assets and intellectual property.

The Inkster Group tackles investigation and security concerns through the expertise of ateam of professionals comprised of commercial crime investigators, security specialists,intelligence analysts, computer forensic experts and forensic accountants combining theirknowledge and skills to provide timely, innovative solutions and recoveries.

Named for Norman Inkster, former Commissioner of the RCMP, President of Interpol,and one-time head of a global forensic practice of a large accounting firm, the Inkster Groupspecializes in a variety of risk management services, including:

• Investigations that include matters alleging fraud, theft, workplace accidents and workplace harassment;

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• Asset tracing and assisting financial institutions with the establishment of anti-money laundering strategies or training;

• Computer forensics involving the recovery of deleted materials relevantto investigations and litigation—contained on computer hard drives and on other electronic devices as well as advice in respect of policies, sys-tems and the organization of electronic files to ensure safe storage andefficient review of data; and

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The Inkster Group is an all-in-one risk management service firm. Our professionals providediscreet, effective solutions to mitigate organizational exposure to adverse events withinthe corporate realm.

inkstergroup.com© Inkster Group 2005.06

For more information, please contact:

Eastern Canada1 First Canadian Place100 King Street WestToronto, OntarioCanadaM5X 1G5

T416 814 5675F 416 863 3612

Western CanadaSuite 23001055 Dunsmuir StreetP.O. Box 49122, Bentall IVVancouver, British ColumbiaV7X 1J1

T 604 891 2778 F 604 443 5648

When winning i s everything.Litigation

McCarthyTétrault LLP

While we carry a

big stick (and use

it when needed),

we won’t waste

your time, money or

reputation on pointless

fights or posturing

Litigation is an uncomfortable anddisruptive reality.

In its relentless advance throughcorporate Canada, the litigationprocess does not discriminate by size ortype of business. The onset of litigationdistracts management, forcing theirfocus away from growth and profits.

However, amid the anxiety andannoyance of any action, officers andowners can count on McCarthyTétrault to exercise independentjudgment and get to the heart of thematter, bringing clarity out of chaosand minimizing the intrusion of anaction into their business lives.

In the end, we are judged not only onhow successfully we manage the disputeitself, but also on how well we bufferour client’s business against disruption.

McCarthy Tétrault: A Dominant Litigation CultureOur firm's litigation strength is severallayers deep, and our depth is noaccident. It is the result of a litigationculture that stresses a keenunderstanding of the real businessissues underlying litigation and theknowledge that the ‘best’ resolutionmust be guided as much by the realitiesof business as the intricacies of law. Asa client noted: “In the middle of anaction, it’s hard for us to stay objectiveand rationally assess what’s going on.So we rely on McCarthy Tétrault tohelp us keep our eye on our realbusiness interests.”

McCarthy Tétrault is the only law firmwith enough experienced litigators —proven in the courtroom — toguarantee clients that their litigationwill always be led, shaped, managedand controlled by a seasoned litigator,and supported by lawyers of comparabletalents. Our bench strength is equal tomost firms’ first team.

We hire great young minds and lawyerswith passion, then develop their talents— on our account, not our clients. Webring them into pro bono cases to givethem trial and advocacy experience.We trust them to assist senior lawyers.They shoulder more real trialresponsibilities than is typical amonglarge firms, including those in the U.S.It is no surprise that McCarthyTétrault’s Litigation Group remains theprized destination of exceptional younglawyers. As one client said: “Morestars, with the best bench strength inToronto and a clear line of succession— quality all down the line.”

The McCarthy Tétrault WayWe adhere to three unwaveringprinciples:

➣ get to the heart of the matter;➣ develop and implement the

strategy; and➣ minimize business disruption.

The Road Map to RemedyWe analyze each case thoroughly, rightfrom the start. We define the likelyconsequences. We test alternatives,assessing their exposure, timing and

Litigation can mean winning in different ways.

With more than a

century’s experience

in every court and

tribunal in the land,

we have earned the

respect of judges

for the thoroughness

of our preparation,

and the pragmatism

and reasonableness

of our approach

control. We consult the best experts tosupport your case.

From the initial stages of an action, webegin developing arguments, foreseeingissues. We create strategies on anongoing basis and modify them as thematter evolves. This early preparationand constant anticipation give ourclients peace of mind and ensure thebest possible result.

Fight What is Worth Fighting ForEssential to minimizing disruption and cost is knowing which battles are really worth fighting. While wecarry a big stick (and use it whenneeded), we won’t waste your time,money or reputation on pointless fights or posturing.

Even our opponents respect thisquality in us. As one put it: “We knowwe will have a rational, realistic personon the other side. We would rathernegotiate with someone represented byMcCarthy Tétrault than anyone else.”

At Home in CourtNo law firm can guarantee afavourable result in court.

However, if your litigation runs its fullcourse, we will ensure your legalposition is given the most serious

consideration, in the way you intend.With more than a century’s experiencein every court and tribunal in the land,we have earned the respect of judgesfor the thoroughness of ourpreparation, and the pragmatism andreasonableness of our approach. Again,a client says it best, crediting ourlitigators with having a distinct rapportwith the judiciary: “They commandobvious respect, which gives meconfidence that our position will beheard and we will have the bestpossible day in court.”

The Human Side of LitigationWhile the litigation process holds noenjoyment for a client, we believestrongly that our relationships with ourclients should be as comfortable andhuman as possible. Despite the highlevels of stress in any litigation, wemaintain our perspective, our balanceand, critical to any relationship, ourhumour. Perhaps this is why we arerated so highly for our responsivenessand our level of service. We enjoy whatwe do and it shows.

We are also very good at what we do.Our unique breadth of experience withthe large tough cases (and the smalltough ones as well), as well as our workevery day in courtrooms across Canadagive our clients a competitive edgewhere it matters most.

VancouverP.O. Box 10424, Pacific CentreSuite 1300, 777 Dunsmuir Street Vancouver BC V7Y 1K2Tel: 604.643.7100 Fax: 604.643.7900

CalgarySuite 3300, 421 - 7th Avenue SWCalgary AB T2P 4K9Tel: 403.260.3500 Fax: 403.260.3501

LondonSuite 2000, One London Place255 Queens AvenueLondon ON N6A 5R8Tel: 519.660.3587 Fax: 519.660.3599

TorontoBox 48, Suite 4700 Toronto Dominion Bank TowerToronto ON M5K 1E6Tel: 416.362.1812 Fax: 416.868.0673

OttawaThe ChambersSuite 1400, 40 Elgin StreetOttawa ON K1P 5K6Tel: 613.238.2000 Fax: 613.563.9386

MontréalLe Windsor1170 Peel StreetMontréal QC H3B 4S8Tel: 514.397.4100 Fax: 514.875.6246

QuébecLe Complexe St-Amable1150, rue de Claire-Fontaine, 7e étageQuébec QC G1R 5G4Tel: 418.521.3000 Fax: 418.521.3099

New YorkOne New York Plaza, 25th Floor New York, NY 10004-1980 U.S.A. Tel: 212.785.6410 Fax: 212.785.6438

United Kingdom & Europe5 Old Bailey, 2nd FloorLondon, England EC4M 7BATel: +44 (0)20 7489 5700 Fax: +44 (0)20 7489 5777

mccarthy.ca

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Firm Prof i le

Welcome to Canada's premier

law firm. With a client base

that spans the globe, we

advise on many of the largest

transactions and cases in

Canada and around the

world. We are recognized as

a top firm by the leading

international directories in a

broad range of practice areas.

With the resources of a full-

service firm at our fingertips,

we deliver competitive and

comprehensive strategies to

help our clients succeed.

McCarthyTétrault LLP

1

About McCarthy Tétrault

McCarthy Tétrault is Canada's premier law firm,with a significant presence in all major financialcentres in Canada and offices in New York andLondon. With close to 800 lawyers, we regularlyadvise on many of the largest transactions andcases in Canada and around the world.

We are recognized as a top law firm by the leading international legal directories, includingthe International Financial Law Review, ChambersGlobal: the World's Leading Lawyers, The Guide tothe Leading 500 Lawyers in Canada and theCanadian Legal Lexpert Directory.

According to Thomson Financial's internationalleague tables, McCarthy Tétrault is the top-ranked legal advisor on Canadian completedmergers and acquisitions for 2003. In addition,the firm is listed as the “Top M&A Shop inCanada” by the Financial Post.

With an international client base across a broadrange of practice groups, we provide a wealth of Canadian, cross-border and international legal services. Our lawyers and agents arerenowned for delivering timely, competitive andcomprehensive strategies that enable our clientsto achieve the best results.

Practice GroupsMcCarthy Tétrault is organized into practice,industry and specialty groups with relatedbusiness lines. As part of a full-service firm, ourlawyers exchange knowledge and resources acrosspractices in the interest of clients. Ourintegrated organizational structure enables us toserve our clients on the full spectrum of legalmatters as no other firm can.

Bankruptcy and Restructuring

Our Bankruptcy and Restructuring Group ismultijurisdictional in scope - we regularly act onmajor international matters in the U.S., Europe,and Central and South America. Members of ourgroup have an extensive and leading bondholderrepresentation practice and frequently representmajor financial institutions, large corporatecreditors, debtors and insolvency professionals,such as court-appointed monitors, receivers andtrustees. We have acted on many of the majorCanadian and cross-border insolvencies,restructurings and workouts over the past 20 years.

Biotech/Life Sciences

Our Biotech/Life Sciences Group advises onfinancing and securities, licensing, intellectualproperty (patents, trade mark and copyright),strategic alliances, mergers and acquisitions,commercial agreements, corporate governance,litigation, regulatory, environmental,international trade and tax matters. We serve a diverse range of clients varying in size fromstart-up companies to biotech incubators andmajor multinational corporations. In addition, we advise biotechnology and pharmaceuticalclients involved in the research and developmentof new technologies as well as manufacturers,and distributors of pharmaceuticals and medical devices.

Class Actions

Our Class Actions Group offers outstandingexpertise and a demonstrated ability to assistnational and international clients in class actionlitigation. We have represented clients in someof the most high-profile cases in Canada and in abroad cross-section of claims, including securities,

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consumer, product liability, environmental,competition, labour and tax proceedings.Members of the group are the authors of DefendingClass Actions in Canada (2002, CCH), a conciseand valuable resource for business executives andcorporate counsel. In addition to being skilledcourtroom litigators, we recognize that alternativeprocedures for the resolution of claims can bemore fair, efficient and manageable. We havesignificant experience in the design and use ofalternative dispute resolution programs foradjudication and resolution of multiple claims.

Communications

McCarthy Tétrault’s Communications Groupadvises on a wide range of matters, includingtelecommunications, broadcasting, internet andelectronic commerce, and copyright law. Weprovide counsel and assistance on all mattersconcerning the business and regulation of thetelecommunications and broadcasting industry inCanada. In addition to its Canadiancommunications practice, McCarthy Tétrault hasbeen involved in communications projects inNorth, South and Central America, Europe, theMiddle East, Asia and Africa. Members of ourteam have worked on many of the majortransactions and regulatory proceedings in thecommunications field in Canada over the last 25 years.

Competition

Our Competition Group creates effective,business-oriented solutions to sophisticatedcompetition law issues. We advise national andinternational clients on all aspects of competitionlaw, including mergers and acquisitions, jointventures and strategic alliances, pricing practices,

distribution and marketing, restrictive tradepractices and trade association activities. Wealso help create effective compliance programs.Members of our Competition Group includeexperienced litigators who have been involved inmany landmark cases and seasoned experts inother areas of competition law including mergersand acquisitions.

Corporate Finance and Mergers

and Acquisitions (CFMA)

McCarthy Tétrault’s CFMA Group acts fornational and international companies, as well asthose interested in the activities of entities suchas investment dealers, special committees andshareholders. We collaborate with our FinancialServices and Technology, Communications andIntellectual Property Groups (TCIP) to provideall the business law needs of our clients. Ourgroup is one of the leading Canadian firms inproviding corporate finance advice ranging fromprivate equity and venture capital financing,through private and public offerings to thepublic, including intial public offerings. Ourother main activity is mergers, acquisitions anddivestitures of private and public companieswhere we are consistently ranked at or near the top of Canadian deals, announced and completed.

Energy

Our Energy Group has considerable experiencein the development, structuring and financing of energy-related projects, includingcogeneration, hydroelectric and wind powerprojects, mergers and acquisitions, utilityrestructuring, privatization and energyprocurement. We also advise on issues arising out

of the deregulation or re-regulation of electricitygeneration and distribution. Members of ourgroup act for all levels of government, lenders,developers, equity investors, steam hosts,electricity and pipeline utilities, fuel suppliers,equipment suppliers and other projectparticipants in Canada and abroad.

Environmental

McCarthy Tétrault's Environmental Groupadvises on a broad spectrum of international,federal, provincial, local and municipalenvironmental regulation. We act on behalf of awide range of corporate and government clients,including public and private corporations,municipalities, financial institutions, directors,officers, employees and shareholders. We are alsoat the forefront of emerging environmentalissues, such as emissions trading. We workclosely with environmental professionals toprovide our clients with the most informeddecisions regarding environmental matters, from litigation, corporate transactions,assessments, project development to day-to-daybusiness operations.

Family Law

Our Family Law Group specializes in high-profile,complex family law cases and issues. Werepresent clients at every level of the courts,from the local to the Supreme Court of Canada.Our team understands the intricacies of thevarious provincial statutes that make it crucial toreceive local counsel. We have a broad range ofexperience related to complex property disputes,estate planning, divorce, separation agreements,resolution of spousal support, child support, andcustody and access. In addition, we assist in the

planning of marriage and cohabitationagreements. Our lawyers create comprehensivelegal strategies by working closely with other firmpractitioners with related experience in tax andestates. We establish the structure and solutions,from strategic planning through legal guidanceand direction.

Financial Services

Our Financial Services Group is a leadingpractice that advises on all aspects of Canadianfinancial services law. We regularly act on thelargest and most complex project financing,securitization, transitions, syndicated creditfacilities and secured lending offering. Wecollaborate with our CFMA and TCIP Groups to ensure seamless service for our clients. We are Canada's leading law firm with respect tocapital findings by banks and insurancecompanies. We also advise on a broad range ofissues, including financial institutions regulation,payments systems, personal property security,electronic securities, foreign exchange clearingand settlement systems. In addition, we assistdomestic and foreign financial servicescompanies in their major acquisition anddisposition transactions.

Health

McCarthy Tétrault’s Health Group advises onmatters integral to health care institutions andpharmaceutical companies, including outsourcingagreements, research and developmentagreements, joint ventures, and public/privatepartnerships. We advise on issues pertaining tocorporate governance, bylaws, reorganizations,liability, fundraising arrangements, corporategovernance, supplier agreements, security

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enforcement and regulatory compliance. We also have extensive experience in acting forhealth-related institutions, such as goods andservices providers, nursing homes, professionalorganizations, public and private foundations and charitable organizations. As a result of thisexperience, we are able to provide effective and efficient legal counsel to clients facingcomplicated issues that require a diverse range of legal and technical knowledge.

Hospitality

Our Hospitality Group is involved in all aspectsof the development, financing, ownership andmanagement of hotels, resorts, food service andother hospitality properties. Our group ismultidisciplinary, with respected counsel incorporate and commercial law, real property and planning, labour and employment, taxation,intellectual property, electronic commerce,litigation and insolvency. We represent clients ina wide range of transactions, bringing togetherinnovative ideas and strategies for a variety ofowners, managers, lenders, commercialdevelopers, financial institutions, governmentagencies, individual investors, REITS and theiradvisors. Our lawyers regularly act for clients incross-border and international transactions inorder to capitalize on global markets.

Immigration

McCarthy Tétrault's Immigration Group advisesclients on a broad range of matters, such asacquiring temporary status, permanent residence,Canadian citizenship certificates and passports.We also advise on the employment, custom and tax issues that may arise in transfer situations, and assist clients in applying for

government approval to overcome inadmissibilityproblems. We work with immigration authoritiesto ensure the most efficient processing possiblefor workers arriving from overseas. Our clientbase includes major entertainment and sportscompanies, leading Canadian companies in thefields of engineering, mining, high-tech andfinancial services.

Intellectual Property

Our Intellectual Property Group compriseslawyers and patent and trade-mark agents whoadvise on patent, trade-mark, copyright, designand trade secret matters. We provide counsel onintellectual property management andcommercialization, registration and licensing,validity and infringement, and litigious disputesinvolving intellectual property protection beforethe courts. In the patent field, our experiencecovers all major scientific and engineeringdisciplines, including biotechnology, chemistry,mechanical and electrical engineering,electronics and software. Our clients includenational and international companies, publicand private research and teaching institutions,hospitals, biotechnology and computercompanies, and inventors and start-uptechnology enterprises.

International

McCarthy Tétrault’s International Group adviseson a full range of international commercematters and has extensive practices in specificindustry areas, such as telecommunications andmining. We can communicate effectively in manyof the world's languages and we have a uniquefamiliarity with the common and civil law legal systems that are integral to a national

Canadian legal practice. We advise clients onmatters, such as project finance, privatization,joint ventures, strategic alliances, licensing, traderegulation, dispute resolution, mergers andacquisitions and commercial arbitration. Ourinternational clients include governments,governmental agencies, financial institutions,private lenders and investors.

Internet and Electronic Commerce

Our Internet and Electronic Commerce Groupassists companies in developing innovative legal solutions to e-commerce and internetlegal issues, such as copyright, patent andtrade-mark protection, domain names, privacy,

electronic banking, electronic contracts,financing, intellectual property, taxation andcompliance. Our team includes lawyersaccomplished in all areas of e-commerce andinternet law, including tax, intellectual property,banking, mergers and acquisitions, corporatefinance, securities, strategic alliances, real estate,insurance, litigation and communications. Indealing with internet and e-commerce issues, our lawyers work with clients who provideproducts and services across the internet, andthose establishing e-commerce services over the internet.

Labour and Employment

McCarthy Tétrault’s Labour and EmploymentGroup is a dynamic, experienced group thatworks with both federal and provincial employersin the public and private sectors. The scope ofour experience is as broad as the issues facingtoday's employers, including traditionalunion/management relationships; human rights,wrongful dismissal, employment standards,

corporate restructuring and executivecompensation, and cutting edge issues such asprivacy, novel work arrangements and managingtechnology in the workplace. We regularlyappear before the courts and administrativetribunals across the country, on matters such asdefending on wrongful or unjust dismissalcomplaints, or representing employer interestsbefore labour relations boards or human rightstribunals. We provide concise and practical legaladvice, recognizing the ever changing labour andemployment regulatory structure. Whether ourclients need general advice on statutory rights,employee or management training, or fulldefence representation, our group has theexperience and resources to assist.

Litigation

Our Litigation Group has acted as counsel at alllevels of the federal and provincial courtsystems, before regulatory and administrativetribunals and in commercial arbitrations. Wehave a diverse litigation practice that includes allaspects of civil, commercial, criminal, family,insurance, professional liability and internationallaw litigation. In addition, we provide alternativedispute resolution strategies and handle complexclass action claims. We advise and represent alarge client base in corporate, banking, securities,bankruptcy, municipal, environmental,insurance, intellectual property, real estate andtelecommunications law.

Mining

McCarthy Tétrault’s Mining Group advises onmining projects globally, on behalf of nationaland international clients with worldwide interestsand businesses without borders. We have offices

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in the major national and international centresfor mining finance and investment, includingVancouver, Calgary, Toronto, Montréal andQuébec City and London, England. We advise asignificant number of the world's leading mininggroups, as well as many junior and intermediatemining companies. We have experience in anumber of key regions, including Africa, Asia,Eastern and Western Europe and Latin Americaand we have strong relationships with localcounsel in those regions.

Municipal

Our Municipal Group has broad experience indealing with municipal and environmentalauthorities to obtain initial approval for projectsthrough to financing, construction, leasing andsale. We regularly act for real estate lenders,especially in areas involving constructionfinance. In addition, we advise on bond issues,loan syndications, workouts in the real estatearea and mortgage receivables financing onbehalf of real estate developers and lenders. Wealso advise on planning approvals for all types ofdevelopment proposals, property and business taxassessments, expropriation matters and emergingenvironmental law issues.

Privacy

McCarthy Tétrault’s Privacy Group advises onprivacy compliance obligations in national andinternational jurisdictions. We are on top of thelatest judicial and policy changes regarding theuse and control of data in the public, private andnot-for-profit sectors. Using our comprehensiveknowledge base, we work with clients from theinitial assessment phases of their practices andpolicies through their adjustments to ensure

compliance with industry standards andprovincial, federal and international regulations.We also advise clients regarding requests,complaints, regulatory interventions and court actions related to privacy matters.We serve clients in all areas of business,including banking, insurance, manufacturing,the pharmaceutical industry, informationtechnology providers, municipalities andeducational and medical institutions.

Real Property and Planning

Our Real Property and Planning Group hassignificant experience in all types of industrialand commercial real estate transactions,including development, financing, securitizationand public-private joint ventures. We handle avariety of properties, including retail, industrial,commercial, recreational, hospitality, utilities and healthcare.

Securities Trading and Adviser

Regulation (STAR)

McCarthy Tétrault’s STAR Group providesdomestic and foreign capital market participantswith a comprehensive understanding of theregulatory requirements governing the conduct of their businesses, and the offering of theirfinancial products and services, in Canada. Weadvise on the regulatory framework which governsthe trading of securities, and the offering ofinvestment counselling and portfolio management services in Canada, as well regulatoryrequirements that should be considered andaddressed when developing new products andservices for Canadian residents. We also assistclients on transactions involving the sale, transfer,restructuring or merger of their businesses,

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products and services, and with the developmentof strategies in response to compliance audits andinquiries, investigations, enforcement proceedingsand civil actions.

Tax

Our Tax Group advises on all aspects of Canadiantaxation, including corporate, commodity, salesand use, international trade, customs, estateplanning, and pensions and employee benefitsmatters. We have considerable experiencenegotiating and managing all stages of the tax dispute resolution process, from the initialaudit by the Canada Customs and RevenueAgency (CCRA) to litigation before the courts.We also assist clients in the preparation of briefsseeking legislative amendments to Canada's tax laws.

Tax Dispute Resolution

McCarthy Tétrault's Tax Dispute ResolutionGroup advises on all levels of the tax disputeprocess, from the audit and pre-assessment stagethrough to the appeal and litigation process. Thegroup is renowned for its exceptional experiencein tax law and litigation, with a remarkable recordof precedent-setting tax decisions to its credit.

Technology

Our Technology Group is distinguished by acombination of legal and technical experience invarious legal areas, including e-commerce,corporate finance, mergers and acquisitions,licensing, joint ventures, outsourcing, strategicalliances, intellectual property, employment,telecommunications, litigation, finance andtaxation. Working together with lawyers from ourFinancial Services and CFMA Groups, we provide

counsel to a diverse client base, from start-upenterprises to leading technology corporations andinvestment companies. Our lawyers provideeffective, innovative and flexible legal services toa broad spectrum of clients, such as softwaredevelopers, Internet companies, new mediapublishers, outsourcing services suppliers andbuyers, hardware manufacturers, financialintermediaries, universities and governments.

Telecommunications

McCarthy Tétrault’s Telecommunications Groupprovides advice and representation on regulatory,commercial and financial aspects of thetelecommunications business worldwide. We haveworked on telecommunications projects in morethan 25 countries in North, South and CentralAmerica; Europe; the Middle East; Asia; andAfrica. We provide a broad range of legal andconsulting services to telecommunications carriers and users, regulatory agencies,governments, international financial institutions,new service providers, investment banks,telecommunications equipment, and systemssuppliers and contractors. In recent years, wehave worked on a wide range of matters, such as regulatory and policy issues; mergers andacquisitions; financing; privatization; licensing;joint ventures; competition issues; internet and electronic commerce; interconnection; and outsourcing.

Trade Law

Our Trade Law Group advises on a wide range of measures concerning cross-border trade ingoods, services, technology and intellectualproperty, including customs and tariff laws,import, export and transaction controls,

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economic sanctions and trade remedies. We havebeen involved in most of the major anti-dumpingand countervailing cases heard in Canada overthe past three decades, acting for domesticproducers, importers, exporters and end-users ofsubject goods. In addition, we have considerableexperience advising on the full range of customsissues that arise on the importation of goods intoCanada, including customs valuation, transferpricing, tariff classification, rules of origin, themarking of imported goods, duty remissions anddrawbacks, and seizures.

Trusts and Estates

McCarthy Tétrault’s Trusts and Estates Groupprovides comprehensive advice and advocacy onthe full spectrum of trust and estate matters,including tax planning, wills, trusts, charitableorganizations, powers of attorney, incapacityplanning, contentious proceedings, and estateadministration and accounting. Ourcomprehensive estate plans and trusts facilitatethe accumulation, management and preservationof wealth and the orderly devolution of assets tosubsequent generations. We are engaged in everystage of the planning process and work seamlesslywith other members of the firm to deliver the bestrepresentation and advice from the top talent inall areas of the law. This enables us to best advise

our clients on meeting their goals, such as taxminimization and wealth preservation.

Our Knowledge Management SystemLaw firms throughout the world are now beingchallenged as never before to better manage theircollective knowledge and expertise to serve theirclients. To address this we have developed anelectronic Knowledge Management system thatcaptures and retains existing firm-wideknowledge and gives our lawyers access to up tothe minute legal developments. The system alsoenables our lawyers to leverage the wealth ofknowledge in the firm to provide quality serviceto our clients in a timely and efficient manner. McCarthy Tétrault's Knowledge Managementsystem is supported by full-time knowledgemanagement lawyers who ensure the accuracy and timeliness of the content. With thiselectronic matrix of skill, we can quickly put inplace the right team of experts to meet thecomplex needs of our clients.

Contact UsTo learn more about what Canada's premier lawfirm can do for you, please contact any of ourRegional Managing Partners, our NationalMarketing Director or visit us at mccarthy.ca.

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VancouverP.O. Box 10424, Pacific CentreSuite 1300, 777 Dunsmuir Street Vancouver BC V7Y 1K2Tel: 604.643.7100 Fax: 604.643.7900

CalgarySuite 3300, 421 - 7th Avenue SWCalgary AB T2P 4K9Tel: 403.260.3500 Fax: 403.260.3501

LondonSuite 2000, One London Place255 Queens AvenueLondon ON N6A 5R8Tel: 519.660.3587 Fax: 519.660.3599

TorontoBox 48, Suite 4700 Toronto Dominion Bank TowerToronto ON M5K 1E6Tel: 416.362.1812 Fax: 416.868.0673

OttawaThe ChambersSuite 1400, 40 Elgin StreetOttawa ON K1P 5K6Tel: 613.238.2000 Fax: 613.563.9386

MontréalLe Windsor1170 Peel StreetMontréal QC H3B 4S8Tel: 514.397.4100 Fax: 514.875.6246

QuébecLe Complexe St-Amable1150, rue de Claire-Fontaine, 7e étageQuébec QC G1R 5G4Tel: 418.521.3000 Fax: 418.521.3099

New YorkOne New York Plaza, 25th Floor New York, NY 10004-1980 U.S.A. Tel: 212.785.6410 Fax: 212.785.6438

United Kingdom & Europe5 Old Bailey, 2nd FloorLondon, England EC4M 7BATel: +44 (0)20 7489 5700 Fax: +44 (0)20 7489 5777

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