The Province of BC paid $6 million to lawyers representing Basi and Virk. Does the public have the right to see an itemized invoice and full disclosure about purposes of the payment?
Questions have been raised in the blogosphere about the $6 million. People wonder if part was paid out by the lawyers for personal benefit of Basi and Virk, or associates, not strictly related to legal matters. If that happened, the action would not be unprecedented. Recall this story:
Lawyer David Martin has been reprimanded and must pay a total of $55,000 after being found guilty of professional misconduct for submitting fraudulent bills while he was representing convicted terrorist Inderjit Singh Reyat. [Martin] got into trouble after he hired two of Reyat’s adult children to work on the publicly funded defence team. Didar and Prit Reyat then submitted inflated bills on which Martin signed off before sending them on for payment.
Another question worthy of consideration is whether the Province agreed to pay income taxes that should arise from paying for the unsuccessful defence of Basi and Virk. An employer paying legal fees for personal matters provides the employees with taxable benefits. Therefore, the Canada Revenue Agency should be looking for somewhere around $3 million as their tax share. Who is paying that?
This taken from a case summary of a Federal Court trial involving legal expenses paid by a taxpayer’s employer to defend him from criminal charges (Clemiss vs HMQ).
The issue here was whether or not the payment . . . of the taxpayer’s legal expenses amounted to an employee “benefit” required to be included in his income by virtue of paragraph 6(1)(a) of the Act. The applicable test. . . is whether the legal fees paid by the employer are for losses incurred by reason of the employee’s employment or his office as a director, or whether they are for expenses incurred by the employee of a predominantly personal nature.
In this case, the expenses were incurred by the taxpayer not in order to do his job, but to answer criminal charges laid against him personally and not against BX Ltd. Accordingly, while the actions giving rise to the criminal charges took place in the context of the taxpayer’s employment as an employee and director of BX Ltd., the legal expenses incurred in connection therewith were not sufficiently closely connected to the taxpayer’s employment to warrant a conclusion that they were incurred in respect thereof. Payment thereof by BX Ltd. therefore constituted a “benefit” to be included in the taxpayer’s income under paragraph 6(1)(a) of the Act. On both issues, therefore, the taxpayer’s appeal was dismissed and the Minister’s assessment was upheld.
Who funded living expenses for the Basi and Virk families over seven years? There are questions to be answered but BC Liberals want this issue to go away quietly. That can only be because they have much to hide.