The Toronto Legal Blog

Don't Sweat the Small Costs

Brian Kwan — Sat, 14 Jun 2008 09:00:20 GMT

The summer tends to be the busiest time for me, and it's fairly common for people to call up asking for quotations for their real estate matters. Recently, I received a referral from an agent that I ordinarily dealt with. Her client was involved on the sale of an upscale condominium and the purchase of a half million dollar home. After providing the quotation, the agent informed me that her client was a little concerned because the quote was $500 more than he had wanted it to be. The total cost of the transaction on my part formed about 0.25% of the purchase price.

I had a nice chat with the agent about why he was in dispute over the last $500 of the transaction when he was dealing with two transactions worth over half a million dollars. In her experience, people tend to have difficulty visualizing what the service provides. The mentality is a simplistic one that can be illustrated using a retail example: Go to a store, pay your money for the goods being purchased, walk away. When the lawyers get involved, many clients do not understand what role or value is added by their work, since many in the general population see their lawyers as "paper pushers".

Early in the day, I had another chat with another lawyer who shared my sentiments about the business. She looked back at her career and questioned how lawyers, who must take on a significant amount of liability on each real estate transaction, are basically making less than many unionized transit or factory workers per hour on each file. The general feeling between her and myself was that if we are not making a minimum amount, we don't feel good about doing the file and things tend not to be handled well. For many lawyers, that means they simply hand it off to an assistant or clerk and allow them to deal with it. That's not a knock against assistants or clerks, but it means that the lawyer simply doesn't care about your transaction, interests or wishes.

The unfortunate part of this story is that the agent will take home about 2.5% of the total transaction costs, meaning that she will make 10 times what most lawyers will charge. If you are comfortable with paying that amount of commission, then why sweat the small costs on arguably the largest investments of your life?

Use Your Last Inspection Wisely

Brian Kwan — Mon, 09 Jun 2008 14:50:36 GMT

With the many closings that have been happening over the last few months, there are inevitably some issues that arise post closing. Some can have a quick resolution, such as readjustments for taxes when the purchase is title insured, while others may take much longer. Lately, the two biggest problems that have arisen seem to be something on the property not working correctly and not enough keys being delivered.

If you discover that something is not working properly after closing, practically speaking, there is little that the lawyer can do for you after closing without you incurring additional legal fees. For example, if you find that a showerhead is not working properly and you tell the lawyer, the lawyer is unable to give you a magic solution that will fix the problem. The most that can be done is a letter to the other solicitor, but if the other solicitor does not respond (and they often do not), there is no recourse except for initiating a legal action. The lesson here is that you should use your final inspection prior to closing wisely to ensure that everything that should be working is in fact working properly.

Unless there is a clause in the Agreement of Purchase and Sale indicating the number of keys you should receive, be careful what to expect. The vendor will usually not retain any keys as s/he has no interest in returning to the property. The problem lies in the fact that many place may have had tenants and the tenants may not have returned all the keys. The real estate agent may have also retained a set of keys from having to show the property, which s/he may not have surrendered at the time of closing.

From a vendor's perspective, once the money has been delivered, they don't want to deal with the problems after closing. If you have a dispute about something afterward, don't get your hopes up about having it fixed by someone else. Rather than call your lawyer and ask him or her to fix it, ask you home inspector why s/he didn't check something and why your agent didn't put in a clause stipulating the exact number of keys and other deliverables.

Don't Feel Sorry for X-Copper

Brian Kwan — Wed, 11 Jun 2008 09:49:00 GMT

Although this may be a little late, a few weeks ago, "paralegal" firm X-Copper filed for bankruptcy. The official reason? They were unable to meet their current liability. The root of the problem? They were unable to secure licensing as a paralegal firm.

To combat the licensing issue, X-Copper attempted to work "under the supervision" of a lawyer, effectively using his or her license to circumvent paralegal licensing requirements. Despite having a legal mechanism in place, they were unable to stay afloat.

Based on some postings across the Internet and on several news articles, it seems to me that their problem stemmed from cash flow issues. New rules on paralegals prohibit them from using monies received until the work done on the matter has been billed. Since they had a motto of "we win or its free" (much like many other traffic ticket agents), the monies had to be held in trust pending resolution of the matter, which may be several months to several years. It may be that they were using monies received to cover immediate costs and expenses. If they did not win, then they would wait until money was available to send a refund out.

While I do see the licensing and rules as a slight hassle, I do not believe that it should be overly prejudicial to the firm to collect it's money later. The only problem is that there will be a period of several months where it has a negative cash flow since it will need to wait to collect the fees due to them. Given that X-Copper knew what to expect, they had about two years to prepare for the transition, but failed to make plans for that situation. Instead, David Matheson, co-owner of X-Copper, seemed more interested in spending his money on a 2007 Jaguar rather than on reinvesting on the business.

I'm not trying to put down paralegals in any way. I have referred out several matters to paralegals because it would be more cost-efficient for them to use paralegals rather than a lawyer. I've found paralegals to be a reasonable alternative for less severe matters, such as residential tenancies, small claims and traffic tickets. However, I believe that X-Copper's venture into more severe matters such as impaired driving is dangerous. Impaired driving and related offences are Criminal Code offences, meaning that they carry a criminal record. Judges will typically warn those accused of the crime that they are not using a lawyer. For a little bit more money, many capable lawyers will take on such a matter.

So don't feel too sorry for X-Copper or it's founders. There was a better way, but everybody involved chose not to do it.

New ID Requirements

Brian Kwan — Tue, 10 Jun 2008 10:03:00 GMT

I had previously mentioned that there were some unintended consequences from my series of updates in late March to early April. While we did receive more inquiries for work, there were many attempts by people at fraud. While those inquiries seemed to have died down, I've made it clear here that I engage in no such activity.

To further strengthen my stance against fraud, we are imposing the new Law Society requirements on identification immediately, even though I am not obligated to do so until October 31, 2008. Before accepting any new matters, we shall require:

Government issued identification with a photograph
Address
Telephone number
Occupation
If it is for a company, in addition, we shall require the articles of incorporation, business identification number, place of incorporation and general type of business

Prior to even accepting an appointment to speak with you, the nature of your inquiry must be disclosed. If the discussion involves real estate, then a copy of your identification is required prior to the appointment.

The Equal Opportunity Glass Ceiling

Brian Kwan — Mon, 09 Jun 2008 09:23:00 GMT

I wasn't sure how to title this post. Originally, I was thinking of a quote from Peter Griffin on Family Guy from the episode Jungle Love, in which, after virtually enslaving the natives of a remote island, he says, "Finally, a white man has a chance to be in charge and succeed." Or it was something like that. But I didn't want to get carried away with Family Guy quotes like I did with Star Wars ones in the last two posts.

I was recently reading a copy of the National Post in which they talked about awards that were given out to lawyers who worked on huge deals. Let me start by saying that this post in no way is meant to take away any of their praise or glory from their accomplishments. Many of my friends who work on such deals may go days without sleep to see it through. That's a pretty big sacrifice that I'm not sure I could handle.

The problem that I have is not with the lawyers working on deals, the National Post or the writers. Rather, my problem is that the article indirectly shows a problem with the legal profession. The large majority of the lawyers involved are not visible minorities. In many Canadian cities today, visible minorities constitute almost half of the population. At the awards ceremony, visible minorities were barely a blip on the radar. This clearly shows that visible minorities are not being given the opportunity to accomplish the same things in the legal profession.

Before "haterz" start jumping in with other evidence of visible minorities doing well, I want to establish that it is still possible for visible minorities to do well in the legal profession. It just may not be through the traditional avenues that law schools, the Law Society or business publications would have you believe, and not with the same publicity.

My point is that it is a lot more difficult for a visible minority to find his or her way to be in the position to work on such large deals. A good friend of mine working for a Bay Street firm has even joked that he is the token affirmative action lawyer hired by the firm. Notwithstanding the fact that he is a very smart and talented lawyer, he believes that if he were not a visible minority, more opportunities would have been available to him, even though he is very happy with his current situation.

This problem also flows down to the mid-sized firms. When attempting to secure a job after law school, I interviewed with a firm that hired nothing but visible minorities for support staff, but none of the lawyers at the firm were minorities. Similarly, another firm that I did a closing with recently had it's entire support staff populated with visible minorities while the lawyers were not. I've mentioned to my staff that these firms have clearly established a form of institutional slavery: Visible minorities may work for lawyers, but the lawyers will never allow one of "them" to share power.

With the population of Canada becoming more diverse, this continuing problem is troubling for young lawyers. Don't expect the Law Society to do much about it; the most they can do is talk about the problem and "encourage" firms to change their ways. But that's it.

Know Your Title Insurance Options: Clone Wars

Brian Kwan — Sun, 08 Jun 2008 08:53:00 GMT

Alright, two Star Wars references in two straight posts is enough. I'll ease up on those in the next few. I promise.

Noted Toronto Star contributor and Toronto lawyer, Bob Aaron, recently wrote an article about knowing what is covered by title insurance. I had also previously addressed this issue. In his article, he notes that both Stewart Title and First Canadian Title do not cover final utility bills, but that TitlePLUS would.

Shortly after the publication of his article, Stewart Title sent me notice stating that they would begin covering final utility bills. It's well known in the legal community that Stewart Title has had some bad press, and Aaron's article just makes their situation worse. It is unfortunate because I feel that they have the best policy ordering system out of all the title insurers I have dealt with.

With most title insurance companies, each of them are always working to be more competitive. If insurer A won't cover something, insurer B will and insurer B will make sure that everybody knows that insurer A won't help you. It's the nature of the business; everybody will pounce on the competition's weakness.

Again, before just accepting the title insurance policy that your lawyer tells you to buy, ask questions about coverage and service. It's your choice as to which title insurer to use.

Miller is the New Palpatine

Brian Kwan — Sat, 07 Jun 2008 08:49:07 GMT

It's been a while since I've updated my blog. To all my loyal readers (all two of you out there), I apologize since it has been a busy time. I'm sure that my Google rankings have gone down, but the last time I improved my Google rankings, there were some negative unintended consequences. More on that in days to come.

It's not as though there hasn't been anything to discuss over the last month or so. Actually, many issues have arisen that I have wanted to discuss, but I just haven't had the time to bring them up. So here I start again, from the beginning.

In the last week, Mayor David Miller has been lobbying the provincial government for more power. Most of these powers would give Miller arbitrary discretion and the ability to conduct meetings secretly with his ~~Cosa Nostra~~ executive committee. Maybe it's just me, but this situation is starting to look like the final third of the movie Star Wars Episode 3: Revenge of the Sith. Yeah, I know it's a nerdy reference, but it makes the point.

Some people I have talked to down at City Hall have said that in the weeks leading up to this story breaking, Miller had already begun acting like a dictator. They reported that anything that he wanted to pass got through council because the majority of city councilors were either aligned with him or scared of political repercussions from Miller's camp. Case in point: Toronto Land Transfer Tax and Vehicle Registration. Despite great opposition by the public, the new taxes passed, and the city increased their spending.

Normally, I don't care about politics. I've stated before that I don't want to make this blog turn into a site that solely criticizes the City of Toronto or take a political side. The problem is that the City of Toronto has made life more difficult for my clients and my business.

Recently, I closed a transaction for a young couple of new immigrants who were just so happy to be in Canada and finally have the chance to own their own home. They purchased a home in Toronto, but one party was unable to qualify for an exemption for the City of Toronto Land Transfer Tax. The husband then went off, asking why the City of Toronto feels that they can justify this tax when none of the neighboring municipalities need the tax to make things work. "Why should I live in Toronto over Durham region?" he asked. His point was made and it was clear.

Similarly, my office is located in Toronto, in the former municipality of Scarborough. People who know me will know that I grew up in the area. I left the downtown core to work in Scarborough because of my ties to the community. While there is no shortage of lawyers in the neighborhood, they were all older lawyers working in the "old fashioned" manner. I wanted to provide an alternative to the community, by showing that not all lawyers are the same. As several of my clients have said, "Talking with you is more like talking to a social worker than a lawyer." Unfortunately, given the history of the City of Toronto's treatment of property owners, I may not be able to serve my community from my current location. I fear that commercial property tax increases may make it economically infeasible to continue practising in my area.

So who is being hurt by the City of Toronto? Property owners and small business.

Customer Service is Declining ... Real Estate Agent edition?!

Brian Kwan — Mon, 21 Apr 2008 14:36:27 GMT

It's been a little while since I've posted here. There's been a lot of stuff happening lately, some good, a lot of it bad. I won't get into it, but needless to say, it's been a rough time for me. Fortunately, many other professionals in the industry have come out and lent some level of support to me. I really appreciate everything that they have done. It hasn't affected my work, so there's nothing to worry about there.

The Toronto Star recently did another article about flat rate real estate agents. Frequent readers of this blog (if any), will know that I've previously voiced my opinion of this matter, and I remain of the view that it severely cheapens the role of real estate agents.

Perhaps this is indicative of a trend in society. MSN has posted an article about how customer service is disappearing as more "self-serve" solutions are being implemented. Customers are simply accepting poor service in the way of lower prices. Customers are simply becoming so fed up with poor service that they instead would prefer to do it themselves. For real estate agents, this means that sellers and buyers will put aside service if it means savings in their pocket.

I find this a dangerous trend in that it may make the real estate market worse. Without a dedicated agent who is adequately compensated, buyers and sellers may have a distorted view of the marketplace, and prices may fluctuate greatly, giving appraisers a difficult time obtaining comparables, since some houses may sell for much more than other houses on the same street. The lack of a consistent appraisal may open the door to questionable borrowing practices, leading to losses for mortgage lenders.

So what does that mean to you? Well, it means that in order to recuperate those losses, the banks will have much more strict guidelines and higher rates for legitimate borrowers. That means that it may be more difficult for you to obtain a mortgage, and even if you do obtain one, the rate will be higher.

And you can thank the "bargain hunters" for that.

My Attempt to Fight Fraud

Brian Kwan — Fri, 04 Apr 2008 12:32:19 GMT

It's no secret that mortgage lenders have been tightening up their purse strings in the last little while. A clear sign of this new conservative attitude can be seen with the recent layoffs at Xceed Mortgage, which resulted in two-thirds of their staff being let go. Unfortunately, desperate times can mean desperate measures, which has given mortgage fraudsters the opportunity to move in on a distressed area.

Recently, I've noticed an increase of questionable deals around the industry, and it's prompted me to implement new measures to fight fraud. These changes are as follows for new clients:

You must identify how you were referred over to my office. If you were referred by a known client/agent/broker, we will require verification from that person. A retainer may apply depending on the circumstances of the transaction.
If you were referred by an unknown person or from general advertising, a $500 retainer will apply prior to the commencement of any work.
In both situations 1 and 2, you will need to produce valid identification prior to the commencement of any work.
If we receive paperwork on your matter and cannot ascertain how it was referred into my office, we will make attempts to contact you. If we do not receive a response within 2 business days, the file is marked as possibly fraudulent and any financial institution involved is notified forthwith. If a mortgage broker or agent is involved, the Financial Services Commission of Ontario may also be notified.

Let this entry be notice to anyone looking to any deals that aren't legitimate: It's not going to happen so don't waste your time asking me. I never did it before, and I'm not going to start for anyone.

Sony BMG gets busted for piracy; Music lovers everywhere point and laugh

Brian Kwan — Wed, 02 Apr 2008 09:11:03 GMT

Sony BMG, the company that claims that buying CDs and transferring them to an iPod is stealing, was busted in France for using pirated software on their servers. Yes, it's the same company that created rootkits to be installed on computers as part of an anti-piracy system to it's CDs. The best part was how they got caught: An IT manager called into tech support and gave a pirated serial number.

The software involved was related to server administration tools from the software company PointDev. PointDev's CEO's statement (translated) may summarize Sony BMG in a nutshell: "I think piracy is linked to the policy of a company." How ironic.

As I've stated before, Sony BMG should focus on shifting it's business model into the 21st century rather than on questionable enforcement techniques and quasi-legal arguments. Maybe then they can afford to buy their own software.

Tech Solution Found!

Brian Kwan — Mon, 31 Mar 2008 13:36:27 GMT

So after much contemplation, I've found the solution to my tech woes.

I've basically installed some software onto one of my PCs which now automatically forwards all my faxes to everyone in the office via email. The benefit is now we don't need to keep checking that computer for faxes by walking up to it and leaves it open for other people to use. The downside is that it will contribute to the already growing email inboxes that we all have. I'm still test driving it, but based on a few hours of usage, it looks like it'll be a keeper.

The next step of the project is to determine how I can retrieve the faxes remotely through my PDA smartphone. Retrieving them through the email client is not the problem; it's how to get it done without breaking the bank on wireless data charges. The challenge is finding a cheap data plan, and that's not easy in Canada. I'll also need to find other ways to reduce my wireless bill since it will be topping $100 with the additional services.

A few other people in the legal business have seen my technology setup and have been fairly impressed with it, asking for how they can get something like that working for themselves. As many lawyers grow older and work/life balance becomes more important, perhaps there may be some demand for my knowledge and experience with technology solutions for law offices.

I recall about a year ago attending the Solo and Small Firm Conference held by the Law Society and they have a fairly extensive talk about implementing technology into the office. While the lawyers involved gave some decent advice, I knew of solutions that were equally, if not more efficient, that cost less. Maybe I should offer a technology consulting service on the side, outside of my legal practice.

MMA for kids

Brian Kwan — Thu, 27 Mar 2008 15:05:05 GMT

Mixed Martial Arts or MMA has become quite popular in the past few years. So popular, that children are now training for it.

On one hand, I do not see this being significantly different than children training in martial arts like karate, the only concern I would have is the degree of contact involved. Of course there are punches and kicks thrown, but I question how hard the children are allowed to strike. Even though it is supervised, full contact (i.e. full strength) strikes may be a little too much for children to endure. The benefit, though, is that it provides a great foundation for training children into martial arts.

The other concern I have is with legality. Although according to R. v. Jobidan, "schoolyard scuffles" and sports will not be ordinarily considered as part of the offence of assault causing bodily harm, I question of there will be some form of legal liability or culpability on the part of parents who place their children in such a sport. I see it as unlikely, but without any sort of legal precedence as guidance, it is a tough question to answer.

In the end, I believe that care should be taken in establishing such a program and that safety of the participants should be the primary concern.

Beware the Power of Attorney

Brian Kwan — Tue, 25 Mar 2008 08:47:00 GMT

Mr. Bob Aaron, another real estate practioner in Toronto, has written a brief summary of a case involving a fraudulent Power of Attorney (or POA). Any home owner, potential buyer or seller, should consider what he has said in his article.

The easiest solution is simply to avoid using a POA. Rather than giving a POA, the price of simply meeting with another lawyer to witness signatures in whatever jurisdiction is roughly the same. If you insist on giving someone a POA, it's best to ensure that it is prepared and witnessed by a lawyer. If you are using it to buy, sell or refinance real estate, make sure that your agent and lawyer know about it up front at the beginning of the transaction so that the appropriate documents can be prepared and the proper steps are taken.

Real estate fraud involving fraudulent POAs is a legal challenge. In a previous case, CIBC Mortgages Inc. v. Chan, the court found the mortgage to be fully enforceable upon registration, even though there was fraud. Prior to this 2005 case, fraudulently registered documents were generally held to be of no force or effect. There is a much longer and complex analysis regarding the previous law, but I will not get into it here.

Some legal analysts believe that CIBC Mortgages Inc. v. Chan should be considered an exception to the general rule of mortgage fraud since its fact scenario is odd. In that case, Ms. Chan forged her husband's signature on a Power of Attorney and refinanced their home with it in order to fund her gambling addiction. Mr. Chan had no knowledge of the refinance or her addiction until enforcement proceedings had begun. Strangely, Mr. Chan allowed Ms. Chan to remain on the property. In effect, Mr. Chan, who had received no benefit from the refinance claimed fraud by his wife. The ruling was perhaps one of practicality: It would be problematic for lenders to effectively enforce their mortgages if the court rules in the Chans' favour.

Mr. Aaron's reported case changes things slightly. In that case, the court found that one of the true owners of the property had received a benefit by way of a discharged prior mortgage and the mortgagee was entitled to recover the amount paid to discharge the past mortgage.

If you are concerned about title fraud, you may wish to consult with your lawyer about title insurance options or perhaps subsearches of your property. Many lawyers can give you up to date information about your property and while the cost varies from lawyer to lawyer, it shouldn't cost much more than a trip to the dentist.

Pirates of the Internet: Information Slaves

Brian Kwan — Mon, 24 Mar 2008 19:55:00 GMT

Alright, so this title is really unimaginative, but don't judge a book by it's cover.

During my perusal of Digg.com, I came across an article concerning the torrent site, The Pirate Bay. In it, the writer reviews a podcast done by the BBC with Peter Sunde, an administrator of The Pirate Bay. For those unfamiliar with The Pirate Bay or torrents, The Pirate Bay is a website that tracks the progress of downloads across the file sharing service BitTorrent. [Note: If SOCAN or any other industry group is reading this, everybody knows about this site. It's been well covered by the media.] If you need more information, Wikipedia has an excellent write up.

Let me make it clear that I disagree with the concept of piracy. I believe that artists should be paid for their work. Otherwise, there will be little incentive to produce new music or films.

However, Peter Sunde makes an interesting point: Big recording companies are still selling CDs and rely heavily on sales to generate revenue, but CDs are no longer the format of choice. Rather, with the rise of digital audio players such as the Apple iPod, consumers have been increasingly choosing digital audio file formats rather than traditional CDs to enjoy their music. Sunde notes that you cannot put a CD directly into a digital audio player and consumers want what is convenient to them. Hence the popularity of the Apple iTunes store.

I thought about Sunde's comments and tried to recall the last time I saw anybody use a CD player. I can only remember two instances of someone using a CD player on public transit in the last 3 years.

Although I don't agree with The Pirate Bay's methods, record companies should consider adopting its approach. According to reports, The Pirate Bay was generating $75,000 in advertising revenue per month. Perhaps it is time for marketing companies to work with the record companies to determine a business model to distribute music in exchange for brand promotion.

Wait, why am I giving away this idea for free?

Communism is alive and well in China

Brian Kwan — Fri, 21 Mar 2008 18:33:00 GMT

I'm not a very political person. I'm very skeptical of politics in Canada. I don't write much about it. But this is one case that screams out for something.

When I was in law school, I did a course relating to freedom of information in which I asserted, among many things, that freedom of information was fundamental to economic development. In what is considered by many to be a developing country with great potential, China doesn't seem to really have much in the way of freedom of information.

I'm not just talking about the government withholding internal memorandum that would affect it's accountability with the public; it's about not even allowing foreign press to travel to Tibet to report about escalating conflict. Even worse, the government controlled media is attempting to spin this matter by showing that Buddhist monks started the riot. That's right, it's not a typo.

Although China is moving in the right direction by granting property rights in hopes of eventually moving towards a civil code, it still has not addressed issues relating to it's freedom of press. However, without freedom of information from the press, citizens and foreign investment will have little trust to the government, China will reach a ceiling to it's economic growth. China's done a great job promoting it's market economy, but the basis of the government is still that of a communist state. Is this really the place that deserves the 2008 summer Olympics and considerable foreign investment? That's not for me to answer.

On a side note, I find it hilarious how communist countries continually need to assert that they are "democratic" or a "republic". Just look at the "Republic of Cuba" as another example.

I guess this means I can't travel to China without facing the wrath of the government. Maybe not even Hong Kong given that joke of a constitution that exists there. Then again, I'm assuming that they actually read this blog.

Tech Upgrade or Not, that is the question

Brian Kwan — Thu, 20 Mar 2008 13:58:00 GMT

Some of my friends live by the theory that if it ain't broke, it just doesn't have enough features yet. I prefer not to mess with things unless they are broken, hence my use of older technology but optimized for cost-efficient use in the office.

In the past year or so, I've been considering implementing some form of Microsoft Backoffice to improve functionality. Mainly, I've been researching Windows Small Business Server which basically provides some of the functionality of Windows Server and Microsoft Exchange for small offices. The big features that I've been interested in are the fax server, push email, remote desktop, calendar syncing, and SharePoint tools.

My only issue with this system is the cost of implementing it. Ignoring the $1,000+ for hardware and licensing fees, I need to upgrade my Internet service to a $100/month service rather than the existing high speed service we use that is about a quarter of the price. That is a fairly high price to pay when there are usually no more than 5 users accessing our network at a time who do not need to access all of these services on a regular basis.

I've also thought about outsourcing the service to other hosting companies, but I'd still be paying $30+ per month, which is substantially more than I am currently paying for very serviceable hosting that I am using right now. It also lacks the flexibility of having the server kept in house and as business grows, it may end up being more costly to outsource than keep a server around.

Hence, my dilemma.

I think that in the end, I think I will not perform the hardware upgrade and instead will purchase outsourced solutions from hosting companies unless my office experiences some massive growth, which will likely not occur for a few more years. Hopefully by then the Internet service will come down in price.

If anybody wants to make recommendations, I'd be glad to hear it.

Ryerson Chooses not to Expel Student over Facebook Group

Brian Kwan — Wed, 19 Mar 2008 08:45:49 GMT

It looks like Chris Avenir gets to continue his studies at Ryerson. As I had previously stated in another post, all Avenir should have received is a grade of 0 on the assignment itself and maybe a reprimand by the university. It looks like all he received was the grade of 0 on the assignment which formed 10% of his grade. At the end of the day, his overall grade in the class should allow him to pass the course.

Ryerson's only interest here seems to be deterrence from using technology as a means to exchange answers and water-down the learning process. I believe that the message that Ryerson was trying send was made loud and clear. The student union doesn't seem to be very happy with the ruling on Avenir, but it's really a case of Avenir bringing it onto himself by inviting people to post solutions. I don't believe that Avenir is a dishonest student but simply that he made a bad decision by wording the invitation wrong.

It's his decision on whether he wishes to appeal Ryerson's ruling, but it may be in his interests to just consider it a lesson learned and focus on his upcoming exams rather than pursuing this matter on principle.

Confessions of a Subprime Lender: It's not just the US

Brian Kwan — Wed, 12 Mar 2008 15:36:40 GMT

Newsweek has published a short article about one subprime lender's assessment of the mortgage mess in the United States. While this article is targeted towards the situation south of the border, I believe that it still rings very true in Canada.

The most noteworthy part is that the lender, Richard Bitner, puts a large share of the blame on mortgage brokers and appraisers. I agree with his analysis in that he believed that brokers were often attempting to put bad deals in front of lenders. As a lawyer that represents private lenders in transactions, I see this from many brokers and alert my clients of these issues, even if the brokers don't like it. One that comes to mind involved a broker that attempted to have my client, a private lender, fund a borrower with a history of non-payment, on a condominium building in which the building did not have enough money to complete repairs it had determined as necessary. Brokers try these "tricks" on lenders quite frequently, and I agree with Bitner that this may be a large part of the problem.

Bitner also blames appraisers for over-valuing property. While I agree that many appraisers may lean a little more in favour of the borrower, I don't believe that they are way off base. Rather, I believe that the over-valuing of real estate may be driven more by real estate agents attempting to earn their commissions. When a condominium project begins selling condos at $1,000 per square foot and paying the agents 4% commission, the math shows how many real estate agents can earn more in a weekend than many lawyers can earn in a month.

But in my view, what really caused the breakdown in the US was simple: Greed and delusion. Greed from people seeking their commissions and delusion from buyers thinking they could afford something they can't.

I wonder on a regular basis if what hit the US will come into Canada. Many of the same signs are there, but is there some differentiating factor that changes everything?

Facebook doesn't get students in hot water; soliciting answers gets students in hot water

Brian Kwan — Wed, 12 Mar 2008 12:17:26 GMT

There's been an interesting topic about the Ryerson student, Chris Avenir, facing an expulsion hearing over the alleged use of Facebook as a method to exchange answers and solutions with other students. Even though it is not directly a criminal law related matter, but rather an administrative law matter, I though that many criminal law issues are applicable to the case at hand.

Some media outlets are overly stating that Avenir is being unfairly punished for his use of Facebook as a study group. What they fail to note is that it is not the exchange of study tips or notes that is the problem, but rather the invitation used by Avenir to encourage membership in the Facebook group. In his invitation, he asks for students to post their solutions. While it is his position that no solutions were ever posted, the attempt was made, and that in of itself could be a violation of the Code of Conduct. I would have a difficult time making a defence for a client who fired a gun into a crowd and claims that he shouldn't be charged since the bullet didn't hit anyone. Barring some incredibly technical defence, I would venture that a judge would convict such an accused and I believe that some level of guilt does fall on Avenir here.

Having been through a long post-secondary education myself, I understand that Avenir's goal was to create a study group and that study groups sometimes exchange solutions to help guide other students in their own problems. However, much like the rules of Fight Club, you don't talk about what happens at study group. Professors and school administrators know that there probably is some level of information exchange, but they don't want it publicized.

At the end of the day, I don't believe that Avenir should be expelled for what he did. I don't believe that the study group gave him any grossly unfair advantage over a student not in the online study group. I don't even believe that he should receive an automatic "F" for the course, since he likely has shown his knowledge in the area through other assignments and examinations. The most he should really receive is perhaps a grade of 0% for the assignment alone and perhaps a reprimand by the university, but nothing more.

All Law Schools Are Not Created Equal - Brazil edition

Brian Kwan — Fri, 07 Mar 2008 14:40:34 GMT

I stumbled across an article that told of how an eight year old boy passed the entrance exam for a law school in Brazil . This story re-supports my statements before of how easy it is to gain entry into schools that may be borderline diploma mills and come into Ontario to get licensed. There needs to be stronger requirements to determine practice eligibility in Ontario.

Next time you go into a lawyer's office, it may be worth finding out where he or she graduated from. It could make a difference to your matter.