3464920 Canada Inc. v. Strother et al., (2007) 363 N.R. 123 (SCC)

• Judge: McLachlin, C.J.C, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein, JJ.
• Court: Supreme Court (Canada)
• Case Date: June 01, 2007
• Jurisdiction: Canada (Federal)
• Citations: (2007), 363 N.R. 123 (SCC);2007 SCC 24;241 BCAC 108;363 NR 123;48 CCLT (3d) 1;[2007] SCJ No 24 (QL);[2007] DTC 5273;67 BCLR (4th) 1;EYB 2007-120234;[2007] 4 CTC 172;[2007] 7 WWR 381;281 DLR (4th) 640;29 BLR (4th) 175;[2007] ACS no 24;[2007] 2 SCR 177;157 ACWS (3d) 439;JE 2007-1152

3464920 Can. v. Strother (2007), 363 N.R. 123 (SCC)

MLB headnote and full text

Temp. Cite: [2007] N.R. TBEd. JN.001

Davis & Company, a partnership (appellant) v. 3464920 Canada Inc. (formerly known as Monarch Entertainment Corporation) (respondent)

Robert C. Strother (appellant) v. 3464920 Canada Inc. (formerly known as Monarch Entertainment Corporation) (respondent)

Robert C. Strother, Strother Family Trust (Trust No. 1) and University Hill Holdings Inc. (formerly known as 589918 British Columbia Ltd. (Company No. 1) (appellants) v. 3464920 Canada Inc. (formerly known as Monarch Entertainment Corporation) (respondent)

3464920 Canada Inc. (formerly known as Monarch Entertainment Corporation) (appellant) v. Robert C. Strother, Davis & Company, a partnership, J. Paul Darc, Pacific Cascadia Capital Corporation, Sentinel Hill Entertainment Corporation, Sentinel Hill Productions Corporation, Sentinel Hill Productions II Corporation, Sentinel Hill Productions (1999) Corporation, Sentinel Hill Management Corporation, Sentinel Hill 1999-1 Master Limited Partnership, Sentinel Hill 1999-2 Master Limited Partnership, Sentinel Hill 1999-3 Master Limited Partnership, Sentinel Hill 1999-4 Master Limited Partnership, Sentinel Hill 1999-5 Master Limited Partnership, Sentinel Hill 1999-6 Master Limited Partnership, J. Paul Darc and Leslie Marie Darc, Trustees of the Darc Family Trust, and the said Darc Family Trust, Sentinel Hill 1998 Master Limited Partnership, Sentinel Hill 1998-2 Master Limited Partnership, Sentinel Hill Productions No. 5 Limited Partnership, Sentinel Hill Productions No. 7 Limited Partnership, Sentinel Hill 1999 Master Limited Partnership, Sentinel Hill Ventures Corporation, Sentinel Hill Alliance Atlantis Equicap Millenium Limited Partnership, Sentinel Hill Productions III Corporation, Sentinel Hill Alliance Atlantis Equicap Limited Partnership, Sentinel Hill GP Corporation, Company No. 1, Company No. 2, Company No. 3, Company No. 4, Company No. 5, Company No. 6, Company No. 7, Company No. 8, Company No. 9, Company No. 10, Partnership No. 1, Partnership No. 2, Partnership No. 3, Partnership No. 4, Partnership No. 5, Partnership No. 6, Partnership No. 7, Partnership No. 8, Partnership No. 9, Partnership No. 10, Trust No. 1, Trust No. 2, Trust No. 3, Trust No. 4, Trust No. 5, Trust No. 6, Trust No. 7, Trust No. 8, Trust No. 9 and Trust No. 10 (respondents) and Canadian Bar Association (intervenor)

(30838; 2007 SCC 24; 2007 CSC 24)

Indexed As: 3464920 Canada Inc. v. Strother et al.

Supreme Court of Canada

McLachlin, C.J.C, Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein, JJ.

June 1, 2007.

Summary:

Monarch promoted tax-sheltered investments in film production. Strother, a partner in the Davis law firm, was Monarch's tax lawyer. Darc was Monarch's chief financial officer. Amendments to the Income Tax Act eliminated the tax shelter as of October 1997. Strother advised Monarch that he had no technical fix and, even if he did, he did not believe an advance tax ruling could be obtained from Revenue Canada. Darc was dismissed as of October 1997. In March 1998, Strother, acting on instructions from Darc, sought, and subsequently obtained, an advance tax ruling permitting a new tax shelter based on an exception in the amending legislation. The previous tax shelters were effectively resurrected until eliminated in 2001. Both Darc and Strother, who resigned from his law firm in 1999 and became a 50% shareholder in Darc's promotion company (Sentinel Hill), took steps to keep the "exception" secret until they obtained the favourable tax ruling, then profited from the promotion of the tax shelters. When Monarch learned of the advance ruling, it terminated its relationship with the Davis firm and sued, inter alia, Strother, Darc and the Davis firm. Monarch claimed that Strother breached his duty to it by advising Monarch that it could not continue in business due to tax law changes and then, using the "exception" which was not disclosed to Monarch, secretly starting up and pursuing the same tax shelter business in partnership with Monarch's former employee. Strother submitted that his retainer with Monarch ended before he began to act for Darc and that he was under no continuing duty to disclose a new initiative developed by he and Darc to revive such tax shelters.

The British Columbia Supreme Court, in a judgment reported [2002] B.C.T.C. 1179, dismissed Monarch's action for an accounting for the profits derived from the tax shelter. Monarch failed to establish a breach of any fiduciary or contractual duty in failing to advise Monarch of the exception. Monarch appealed.

The British Columbia Court of Appeal, in a judgment reported (2005), 208 B.C.A.C. 39; 344 W.A.C. 39, allowed the appeal in part. Strother was liable for breach of fiduciary duty to account for and disgorge all benefits, profits, interests, etc., he received or was subsequently entitled to receive. A constructive trust was imposed. The dismissal of the claim against Darc and the Sentinel Hill companies was affirmed. The court stated that without resolving certain issues, which were never dealt with, it was unable to determine whether the law firm was also liable. The court directed further argument on those, and other, issues.

The British Columbia Court of Appeal, in a judgment reported (2005), 215 B.C.A.C. 9; 355 W.A.C. 9, held that the law firm was liable to repay all fees paid by Monarch since January 1, 1998, the time when the conflict of interest arose. The law firm was also liable to account for and disgorge the profit from fees earned from Sentinel Hill, after January 1, 1998. The law firm was not jointly and severally liable for the profits Strother earned from Sentinel Hill. The law firm was not a joint wrongdoer and did not provide "knowing assistance" to Strother's wrongdoing. The law firm had no knowledge of Strother's interest in Sentinel Hill, nor were they wilfully blind or reckless. The court, in supplementary reasons, resolved a dispute as to the form of the order for judgment. Strother and the law firm appealed. Monarch cross-appealed.

The Supreme Court of Canada, McLachlin, C.J.C., Bastarache, LeBel and Abella, JJ., dissenting in part, allowed both appeals in part and dismissed the cross-appeal. Strother was liable for breach of fiduciary duty by putting himself in a position of conflict between his duty to Monarch and his personal financial interest. The law firm, as an innocent party in Strother's misconduct, was not directly liable for breach of fiduciary duty, but was vicariously liable under s. 12 of the Partnership Act. The court reduced the amount of compensation awarded against Strother as excessive. Strother was liable to account to Monarch for the personal profit gained directly from the Sentinel group and indirectly through his earnings as a law firm partner on account of billings to Monarch, but only for the period of January 1, 1998, to March 31, 1999. Such amount was to be determined by a reference. The law firm was vicariously liable for the same amount. McLachlin, C.J.C., opined that "the Court of Appeal erred in holding that Strother's duty to Monarch extended beyond the terms of the 1998 retainer agreement with Monarch, grounding an on-going duty to advise Monarch of any developments in the film production tax-shelter business".

Barristers and Solicitors - Topic 1007

Retainer - General principles - Scope of - The Supreme Court of Canada stated that "when a lawyer is retained by a client, the scope of the retainer is governed by contract. It is for the parties to determine how many, or how few, services the lawyer is to perform, and other contractual terms of the engagement. The solicitor-client relationship thus created is however overlaid with certain fiduciary responsibilities, which are imposed as a matter of law" - The court agreed that "the source of the duty is not the retainer itself, but all the circumstances (including the retainer) creating a relationship of trust and confidence from which flow obligations of loyalty and transparency" - The court stated that "where a retainer has not been reduced to writing ... and no exclusions are agreed upon, ... , the scope of the retainer may be unclear. The court should not in such a case strain to resolve the ambiguities in favour of the lawyer over the client." - See paragraphs 34, 40.

Barristers and Solicitors - Topic 1502

Relationship with client - General - Lawyer as fiduciary - Monarch promoted tax-sheltered investments - Strother, a partner in the Davis law firm, was Monarch's tax lawyer - Darc was Monarch's chief financial officer - Legislative amendments eliminated the tax shelter as of October 1997 - Strother advised Monarch that he had no technical fix and, even if he did, he did not believe an advance tax ruling could be obtained from Revenue Canada - Darc was dismissed as of October 1997 - The exclusive written retainer between the law firm and Monarch terminated at the end of 1997, although Monarch continued as a firm client on various issues as the need arose - In March 1998, Strother, acting on instructions from Darc, sought, and subsequently obtained, an advance tax ruling approving a tax shelter based on an exception in the amending legislation - The previous tax shelters were effectively resurrected until eliminated in 2001 - Both Darc and Strother, who resigned from his law firm in 1999 and became a 50% shareholder in Darc's promotion company (Sentinel Hill), kept the "exception" secret until they obtained a favourable tax ruling - When Monarch learned of the advance ruling, it terminated its relationship with the Davis firm and sued Strother for breaching his fiduciary duty of loyalty by not advising Monarch of the "exception" and secretly starting up and pursuing the tax shelter business in partnership with Darc - Strother submitted that when his exclusive retainer with Monarch ended he was under no continuing duty to disclose a new initiative developed by he and Darc to revive such tax shelters - The Supreme Court of Canada affirmed Strother's liability for breach of his fiduciary duty of loyalty - After the exclusive retainer terminated, there remained a "current meaningful" relationship between Monarch and Strother that grounded the duty of loyalty - Strother, by acquiring a financial interest in one client (Sentinel) seeking entry into a restricted market where his other client (Monarch) had a previous major presence, placed his personal financial interests in conflict with his duty to Monarch - The conflict was compounded by Strother's lack of "candour", as it was in Strother's personal interest to keep his client in the dark - Monarch was entitled to candid and complete advice from a lawyer who was not in a position of conflict - See paragraphs 34 to 73.

Barristers and Solicitors - Topic 1545

Relationship with client - Duty to client - General - Obligation of loyalty - [See Barristers and Solicitors - Topic 1502 ].

Barristers and Solicitors - Topic 1548

Relationship with client - Duty to client - General - Fiduciary duty - [See Barristers and Solicitors - Topic 1502 ].

Barristers and Solicitors - Topic 1554

Relationship with client - Duty to client - General - Duty to inform or advise client - [See Barristers and Solicitors - Topic 1502 ].

Barristers and Solicitors - Topic 1554

Relationship with client - Duty to client - General - Duty to inform or advise client - The Supreme Court of Canada stated that "generally a lawyer does not have a duty to alter a past opinion in light of a subsequent change of circumstances. ... The rationale behind the general rule is that a legal opinion speaks as of its date, and that being the case, a lawyer is only obligated to exercise due care in rendering an opinion based on the legal and factual circumstances existing at that time. A client cannot assume that the lawyer's opinion has an indefinite shelf life. There are, however, exceptions to the general rule. ... a lawyer is not obligated to 'alter advice given under a concluded retainer'"- The court noted that the general rule did not apply where the lawyer continued to act for the client and any change in the previous advice would be of continuing interest and importance to the client - See paragraphs 45 to 46.

Barristers and Solicitors - Topic 1609

Relationship with client - Conflict of interest or duties - Resulting from lawyer's self-interest - [See Barristers and Solicitors - Topic 1502 ].

Barristers and Solicitors - Topic 1614

Relationship with client - Conflict of interest or duties - Acting for several parties (incl. competitors) - The Supreme Court of Canada stated that "the conflict of interest principles do not generally preclude a law firm or lawyer from acting concurrently for different clients who are in the same line of business, or who compete with each other for business. ... There is no reason in general why a tax practitioner ... should not take on different clients syndicating tax schemes to the same investor community, notwithstanding the restricted market for these services ... In fact, in the case of some areas of high specialization, or in small communities or other situations of scarce legal resources, clients may be taken to have consented to a degree of overlapping representation inherent in such law practices, depending on the evidence. ... The more sophisticated the client, the more readily the inference of implied consent may be drawn. The thing the lawyer must not do is keep the client in the dark about matters he or she knows to be relevant to the retainer" - See paragraphs 54, 55.

Equity - Topic 1006

Equitable relief - General - Accounting of profits - Monarch promoted tax-sheltered investments - Strother, a partner in the Davis law firm, was Monarch's tax lawyer - Darc was Monarch's chief financial officer - Legislative amendments eliminated the tax shelter as of October 1997 - Strother advised Monarch that he had no technical fix and, even if he did, he did not believe an advance tax ruling could be obtained from Revenue Canada - Darc was dismissed as of October 1997 - In March 1998, Strother, acting on instructions from Darc, sought, and subsequently obtained, an advance tax ruling approving a tax shelter based on an exception in the amending legislation - The previous tax shelters were effectively resurrected until eliminated in 2001 - Both Darc and Strother, who resigned from his law firm in 1999 and became a 50% shareholder in Darc's promotion company (Sentinel Hill), kept the "exception" secret until they obtained a favourable tax ruling - When Monarch learned of the advance ruling, it terminated its relationship with the Davis firm and sued Strother for breaching his fiduciary duty - Strother was found liable to account for breach of fiduciary duty - The Supreme Court of Canada held that "to the extent Strother personally made a profit under the Davis firm allocation process attributable to hours docketed to Monarch's account, or to fees paid to the firm by Monarch, such profit (earned at a time when Strother was in a position of conflict, and derelict in his duty to Monarch) should form part of Strother's accounting to Monarch." - Legal fees paid by Monarch to the law firm after Strother left the firm were not the result of any breach of fiduciary duty and therefore need not be accounted for - Strother had to account for the profit earned from the personal financial opportunity he pursued in breach of his fiduciary duty, but only from January 1, 1998, to March 31, 1999, by which time Monarch and Strother had severed their links with the law firm and the "conflict was spent" - Given that the remedy was prophylactic rather than restitutionary, this was not an appropriate case for apportionment - Finally, Strother was entitled to a deduction for his reasonable and necessary expenses incurred in earning the profit to be disgorged - See paragraphs 74 to 97.

Equity - Topic 3644

Fiduciary or confidential relationships - Breach of fiduciary relationship - Nondisclosure - Effect of - [See Barristers and Solicitors - Topic 1502 ].

Equity - Topic 3654

Fiduciary or confidential relationships - Breach of fiduciary relationship - Remedies - [See Equity - Topic 1006 ].

Partnership - Topic 3104

Relations between partners and third parties - Liability of firm for acts of partner - For partner's breach of fiduciary duty - Monarch promoted tax-sheltered investments - Strother, a partner in the Davis law firm, was Monarch's tax lawyer - Darc was Monarch's chief financial officer - Legislative amendments eliminated the tax shelter as of October 1997 - Strother advised Monarch that he had no technical fix and, even if he did, he did not believe an advance tax ruling could be obtained from Revenue Canada - Darc was dismissed as of October 1997 - In March 1998, Strother, acting on instructions from Darc, sought, and subsequently obtained, an advance tax ruling approving a tax shelter based on an exception in the amending legislation - The previous tax shelters were effectively resurrected until eliminated in 2001 - Both Darc and Strother, who resigned from his law firm in 1999 and became a 50% shareholder in Darc's promotion company (Sentinel Hill), kept the "exception" secret until they obtained a favourable tax ruling - When Monarch learned of the advance ruling, it terminated its relationship with the Davis firm and sued Strother for breaching his fiduciary duty - Strother was found liable to account for breach of fiduciary duty - The Supreme Court of Canada agreed that the law firm was not liable for breaching its fiduciary duty to Monarch, as it was unaware that it was assisting Strother's breach of fiduciary duty, received no direct benefit, did not knowingly authorize his misconduct, was not reckless or wilfully blind and had no knowledge that Strother had a personal interest in Sentinel (Strother was actually told he was forbidden from having any interest in Sentinel) - However, the law firm was vicariously liable under s. 12 of the Partnership Act, where Strother committed a "wrongful act of omission" while "acting in the ordinary course of the business of the firm" and "injury" to Monarch was caused - "Wrongful act or omission" included an equitable wrong - The "ordinary course of business" test was met where Strother's wrong was "so connected" with the partnership business that it could be said that the law firm introduced the risk of the wrong that befell its client Monarch and was therefore "fairly and usefully charged 'with its management and minimization'" - See paragraphs 98 to 108.

Cases Noticed:

MacDonald Estate v. Martin and Rossmere Holdings (1970) Ltd., [1990] 3 S.C.R. 1235; 121 N.R. 1; 70 Man.R.(2d) 241, refd to. [para. 34].

R. v. Neil (D.L.), [2002] 3 S.C.R. 631; 294 N.R. 201; 317 A.R. 73; 284 W.A.C. 73; 2002 SCC 70, refd to. [para. 34].

De Beers Canada Inc. v. Shore Gold Inc. et al. (2006), 278 Sask.R. 171; 2006 SKQB 101, refd to. [para. 36].

Dobbin et al. v. Acrohelipro Global Services Inc. et al. (2005), 246 Nfld. & P.E.I.R. 177; 731 A.P.R. 177; 2005 NLCA 22, refd to. [para. 36].

Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592, refd to. [para. 36].

Hilton v. Barker Booth and Eastwood, [2005] 1 All E.R. 651; 330 N.R. 317 (H.L.), refd to. [para. 39].

Côté et al. v. Rancourt et al., [2004] 3 S.C.R. 248; 325 N.R. 279; 2004 SCC 58, refd to. [para. 46].

Ramrakha et al. v. Zinner et al. (1994), 157 A.R. 279; 77 W.A.C. 279 (C.A.), refd to. [para. 51].

Stewart v. Canadian Broadcasting Corp. (1997), 150 D.L.R.(4th) 24 (Ont. Gen. Div.), dist. [para. 53].

Credit Suisse First Boston Canada Inc., Re (2004), 2 B.L.R.(4th) 109 (Ont. Sup. Ct.), dist. [para. 53].

Chiefs of Ontario v. Ontario, [2003] O.T.C. 133; 63 O.R.(3d) 335 (Sup. Ct.), dist. [para. 53].

Bolkiah v. KPMG, [1999] 2 A.C. 222; 234 N.R. 180 (H.L.), refd to. [para. 55].

Kelly v. Cooper, [1993] A.C. 205; 144 N.R. 307 (P.C.), refd to. [para. 55].

Williams v. Reed (1824), 29 F. Cas. 1386, refd to. [para. 55].

Martin v. Goldfarb et al. (1998), 112 O.A.C. 138; 41 O.R.(3d) 161 (C.A.), refd to. [para. 57].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), refd to. [para. 58].

Uniform Custom Countertops Inc. et al. v. Royal Designer Tops Inc. et al., [2004] O.T.C. 655 (Sup. Ct.), refd to. [para. 60].

de Guzman et al. v. de la Cruz et al., [2004] B.C.T.C. 36; 2004 BCSC 36, refd to. [para. 61].

Celanese Canada Inc. v. Murray Demolition Corp. et al., [2006] 2 S.C.R. 189; 352 N.R. 1; 215 O.A.C. 266; 2006 SCC 36, refd to. [para. 61].

R. v. Speid (1983), 43 O.R.(2d) 596 (C.A.), refd to. [para. 62].

Coutu et al. v. Jorgensen et al. (2004), 202 B.C.A.C. 67; 331 W.A.C. 67; 2004 BCCA 400, refd to. [para. 62].

Nocton v. Ashburton (Lord), [1914] A.C. 932 (H.L.), refd to. [para. 67].

R. v. Shamray (M.) (2005), 191 Man.R.(2d) 55; 2005 MBQB 1, refd to. [para. 67].

R. v. Henry (1990), 61 C.C.C.(3d) 455 (Que. C.A.), refd to. [para. 67].

Wewayakum Indian Band v. Canada and Wewayakai Indian Band, [2002] 4 S.C.R. 245; 297 N.R. 1; 2002 SCC 79, refd to. [para. 74].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1, refd to. [para. 74].

Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534; 131 N.R. 321; 6 B.C.A.C. 1; 13 W.A.C. 1, refd to. [para. 74].

Chan v. Zacharia (1984), 154 C.L.R. 178 (Aust. H.C.), refd to. [para. 75].

Warman International Ltd. v. Dwyer (1995), 128 A.L.R. 201 (Aust. H.C.), refd to. [para. 89].

MacMillan Bloedel Ltd. v. Binstead (1983), 22 B.L.R. 255 (B.C.S.C.), refd to. [para. 97].

McDonic Estate et al. v. Hetherington, Fallis, Park, Watt & Carriere (1997), 96 O.A.C. 289; 31 O.R.(3d) 577 (C.A.), refd to. [para. 100].

Dubai Aluminium Co. v. Salaam, [2003] 2 A.C. 366; [2002] UKHL 48, refd to. [para. 100].

Bazley v. Curry - see P.A.B. v. Children's Foundation et al.

P.A.B. v. Children's Foundation et al., [1999] 2 S.C.R. 534; 241 N.R. 266; 124 B.C.A.C. 119; 203 W.A.C. 119, refd to. [para. 105].

G.T.-J. et al. v. Griffiths et al., [1999] 2 S.C.R. 570; 241 N.R. 201; 124 B.C.A.C. 161; 203 W.A.C. 161, refd to. [para. 105].

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K.L.B. et al. v. British Columbia et al., [2003] 2 S.C.R. 403; 309 N.R. 306; 187 B.C.A.C. 42; 307 W.A.C. 42; 2003 SCC 51, refd to. [para. 105].

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E.B. v. Order of the Oblates of Mary Immaculate (B.C.) et al., [2005] 3 S.C.R. 45; 340 N.R. 202; 217 B.C.A.C. 1; 358 W.A.C. 1; 2005 SCC 60, refd to. [para. 105].

Smith v. McInnis - see Webb Real Esate Ltd. and Antigonish Home Furnishing Ltd. v. McInnis, Meehan and Tramble.

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Statutes Noticed:

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Authors and Works Noticed:

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Counsel:

Irwin G. Nathanson, Q.C., Ardella A. Thompson and Geoffrey Gomery, for the appellant/respondent, Davis & Co.;

Rose-Mary Liu Basham, Q.C., Robert D. Holmes and Leslie J. Muir, for the respondent/appellant, 3464920 Canada Inc. (formerly known as Monarch Entertainment Corp.);

George K. Macintosh, Q.C., J. Kenneth McEwan, Q.C., and Robin M. Elliot, Q.C., for the appellants/respondents, Robert C. Strother, the appellants Strother Family Trust (Trust No. 1) and University Hill Holdings Inc. (formerly known as 589918 British Columbia Ltd.) (Company No. 1), and the respondents Partnership No. 1, Partnership No. 2, Partnership No. 3, Partnership No. 4, Partnership No. 5, Partnership No. 6, Partnership No. 7, Partnership No. 8, Partnership No. 9, Partnership No. 10, Trust No. 1, Trust No. 2, Trust No. 3, Trust No. 4, Trust No. 5, Trust No. 6, Trust No. 7, Trust No. 8, Trust No. 9 and Trust No. 10;

Kenneth N. Affleck, Q.C., Lisa A. Warren and Michael J. Sobkin, for the respondents, J. Paul Darc, Pacific Cascadia Capital Corp., Sentinel Hill Entertainment Corp., Sentinel Hill Productions Corp., Sentinel Hill Productions II Corp., Sentinel Hill Management Corp., J. Paul Darc and Leslie Marie Darc, Trustees of the Darc Family Trust, and the said Darc Family Trust, Company No. 1, Company No. 2, Company No. 3, Company No. 4, Company No. 5, Company No. 6, Company No. 7, Company No. 8, Company No. 9 and Company No. 10;

David C. Harris, Q.C., and Andrea N. Mackay, for the respondents, Sentinel Hill Productions (1999) Corp., Sentinel Hill 1999-1 Master Limited Partnership, Sentinel Hill 1999- 2 Master Limited Partnership, Sentinel Hill 1999-3 Master Limited Partnership, Sentinel Hill 1999-4 Master Limited Partnership, Sentinel Hill 1999-5 Master Limited Partnership, Sentinel Hill 1999-6 Master Limited Partnership, Sentinel Hill 1998 Master Limited Partnership, Sentinel Hill 1998-2 Master Limited Partnership, Sentinel Hill Productions No. 5 Limited Partnership, Sentinel Hill Productions No. 7 Limited Partnership, Sentinel Hill 1999 Master Limited Partnership, Sentinel Hill Ventures Corporation, Sentinel Hill Alliance Atlantis Equicap Millenium Limited Partnership, Sentinel Hill Productions III Corp., Sentinel Hill Alliance Atlantis Equicap Limited Partnership and Sentinel Hill GP Corp.;

Terrence J. O'Sullivan and M. Paul Michell, for the intervenor, Canadian Bar Association.

Solicitors of Record:

Nathanson, Schachter & Thompson, Vancouver, B.C., for the appellant/respondent, Davis & Co.;

Holmes & King, Vancouver, B.C., for the respondent/appellant, 3464920 Canada Inc. (formerly known as Monarch Entertainment Corp.);

Farris, Vaughan, Wills & Murphy, Vancouver, B.C., for the appellants/respondents, Robert C. Strother, the appellants Strother Family Trust (Trust No. 1) and University Hill Holdings Inc. (formerly known as 589918 British Columbia Ltd.) (Company No. 1), and the respondents Partnership No. 1, Partnership No. 2, Partnership No. 3, Partnership No. 4, Partnership No. 5, Partnership No. 6, Partnership No. 7, Partnership No. 8, Partnership No. 9, Partnership No. 10, Trust No. 1, Trust No. 2, Trust No. 3, Trust No. 4, Trust No. 5, Trust No. 6, Trust No. 7, Trust No. 8, Trust No. 9 and Trust No. 10;

Macaulay McColl, Vancouver, B.C., for the respondents, J. Paul Darc, Pacific Cascadia Capital Corp., Sentinel Hill Entertainment Corp., Sentinel Hill Productions Corp., Sentinel Hill Productions II Corp., Sentinel Hill Management Corp., J. Paul Darc and Leslie Marie Darc, Trustees of the Darc Family Trust, and the said Darc Family Trust, Company No. 1, Company No. 2, Company No. 3, Company No. 4, Company No. 5, Company No. 6, Company No. 7, Company No. 8, Company No. 9 and Company No. 10;

Hunter Litigation Chambers Law Corporation, Vancouver, B.C., for the respondents, Sentinel Hill Productions (1999) Corp., Sentinel Hill 1999-1 Master Limited Partnership, Sentinel Hill 1999-2 Master Limited Partnership, Sentinel Hill 1999-3 Master Limited Partnership, Sentinel Hill 1999-4 Master Limited Partnership, Sentinel Hill 1999-5 Master Limited Partnership, Sentinel Hill 1999-6 Master Limited Partnership, Sentinel Hill 1998 Master Limited Partnership, Sentinel Hill 1998-2 Master Limited Partnership, Sentinel Hill Productions No. 5 Limited Partnership, Sentinel Hill Productions No. 7 Limited Partnership, Sentinel Hill 1999 Master Limited Partnership, Sentinel Hill Ventures Corporation, Sentinel Hill Alliance Atlantis Equicap Millenium Limited Partnership, Sentinel Hill Productions III Corp., Sentinel Hill Alliance Atlantis Equicap Limited Partnership and Sentinel Hill GP Corp.;

Lax O'Sullivan Scott, Toronto, Ontario, for the intervenor, Canadian Bar Association.

These appeals and cross-appeal were heard on October 11, 2007, before McLachlin, C.J.C., Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein, JJ., of the Supreme Court of Canada.

On June 1, 2007, the judgment of the Supreme Court of Canada was delivered in both official languages and the following opinions were filed:

Binnie, J. (Deschamps, Fish, Charron and Rothstein, JJ., concurring) - see paragraphs 1 to 116;

McLachlin, C.J.C. (Bastarache, LeBel and Abella, JJ., concurring), dissenting in part - see paragraphs 117 to 165.