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  • 7 Feb 2019 1:43 PM | Anonymous

    Employees unable to locate or access $190 million in cryptocurrency

    A number of media outlets (including the Halifax Chronicle Herald, the CBC and CNN) are reporting that Vancouver-based cryptocurrency exchange QuadrigaCX has filed for creditor protection in Nova Scotia after the death of the company’s founder, CEO and sole director. The company, it is reported, was already facing liquidity challenges when early last year CIBC froze $25.7 million of its funds that were held in the account of a third-party processor. The founder’s death, it appears, has left the remaining employees unable to locate or access $190 million of customer’s funds. Its filings in the Nova Scotia court indicate that the company owes 115,000 customers about $250 million in cash and cryptocurrency.

  • 7 Feb 2019 1:42 PM | Anonymous

    Electronic evidence requires authentication

    The British Columbia Court of Appeal offered guidance on the proper use of evidence from Facebook, finding that it had been improperly introduced in R v Ball. The accused had been convicted of arson, specifically of having set fire to a property of a former friend. He came to the attention of the police when his ex-girlfriend attended at an RCMP detachment to report that he had told her that he was responsible for the fire. She called up her Facebook page on a detachment computer and showed several messages from an account that she identified as belonging to the accused, and which constituted admissions to setting the fire. The officer took photographs of the computer screen with those pages on it.

    At trial, those photographs were admitted into evidence, although the accused maintained that the Facebook messages were forgeries. In fact, the British Columbia Court of Appeal noted, whether the photographs were admissible depended on the portions of the Canada Evidence Act dealing with the authentication of electronic documents, but this point seemed to have occurred to no-one at the trial:

    [67] Facebook posts and messages, emails and other forms of electronic communication fall within the definition of an “electronic document”. Home computers, smartphones and other computing devices fall within the definition of a “computer system”. Accordingly, the admissibility of Facebook messages and other electronic communications recorded or stored in a computing device is governed by the statutory framework. As with other admissibility issues, where there is reason to question whether an electronic document meets the statutory requirements, a voir dire should be held and a reasoned determination made as to its admissibility. This step is particularly important in the context of a jury trial.

    The Court of Appeal noted that the person seeking to introduce an electronic document has the burden of proving its authenticity, based on the best evidence rule. In that regard the Act states:

    31.2(1) The best evidence rule in respect of an electronic document is satisfied: (a) on proof of the integrity of the electronic documents system by or in which the electronic document was recorded or stored…

    In this case, no efforts had been made to authenticate the evidence. That was particularly important given the nature of the evidence and the issues at trial. The alleged admission to lighting the fire would be hearsay, but the timestamps associated with the message would be real evidence. The evidence consisted only of photographs of the computer screen, not printouts. The only evidence of authenticity came from the ex-girlfriend, but she only addressed the content of the messages, not the time stamps or other data. Further, the only evidence about the operation of Facebook messenger came from the ex-girlfriend: however, the accused’s claim was that the messages had been tampered with, and that she was the one who had done the tampering.

    The British Columbia Court of Appeal did not conclude that the evidence was not admissible, holding only that “[i]t is sufficient to say there is a realistic possibility that, properly scrutinized, the judge may have justifiably excluded or limited the evidentiary use of the photographs” (para 87). Based on that and other errors, they ordered a new trial.

  • 24 Jan 2019 2:01 PM | Anonymous

    US Second Circuit Court of Appeals finds total internet ban as part of supervised release conditions “excessive” and unconstitutional

    In United States v. Eaglin, Eaglin was a convicted sex offender who had been convicted several times for breaching conditions attached to his release, primarily those relating to registering as a sex offender when he relocated. Because he had, in the past, used internet-enabled devices to look for sexual partners and view pornography, the prosecution viewed these as risk factors and had convinced the District Court to impose a total ban on Eaglin using the internet or viewing legal adult pornography. Eaglin successfully appealed these conditions, the Court of Appeal beginning the substance of its reasons by describing them as “unusual and severe.” It noted that the US Supreme Court had recently “forcefully identified” internet access as a constitutional right, on the basis that deprivation of internet access prevented legitimate exercise of freedom of expression rights. The total ban proposed was obviously excessive since it prevented him from using email, blogging, keeping track of the events of the day, or looking for work—the latter not interacting well with the accompanying condition that he remain employed. The Court remarked:

    Today, as we observed above, access to the Internet is essential to reintegrating supervisees into everyday life, as it provides avenues for seeking employment, banking, accessing government resources, reading about current events and educating oneself.

    Nor was the ban logically connected to his relevant convictions, which were for failure to register as a sex offender; none of his previous crimes had involved internet use. Even monitoring of internet usage would be more tailored to the circumstances of the case and less restrictive than the total ban. Similar findings were made regarding the ban on pornography. The Court concluded:

    …the special conditions of supervised release banning access to the Internet and to adult pornography are substantively unreasonable in the circumstances presented here because neither is reasonably related to the relevant sentencing factors and both involve a greater deprivation of liberty than is reasonably necessary to implement the statutory purposes of sentencing.

  • 24 Jan 2019 2:00 PM | Anonymous

    Privacy Commissioner issues guidance on their understanding of meaningful consent, which they’ll begin to implement and enforce in 2019

    The Office of the Privacy Commissioner of Canada (the “OPC”) has released “Guidelines for obtaining meaningful consent,” which it says it will begin to enforce as of January 1, 2019. This follows a round of consultations carried out by the OPC beginning in 2016.

    The Personal Information Protection and Electronic Documents Act (“PIPEDA”) is principles-based and has a lot of flexibly in its application. Consent can be implied or express, depending on a range of factors. However, recent amendments to the Act have added to the requirements for obtaining consent and what is sufficient:

    6.1 For the purposes of clause 4.3 of Schedule 1, the consent of an individual is only valid if it is reasonable to expect that an individual to whom the organization’s activities are directed would understand the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting.

    The OPC Guidelines focus on 7 principles:

    1. Emphasize Key Elements: what personal information is being collected, with which parties personal information is being shared, for what purposes personal information is collected, used or disclosed, and the risk of harm or other consequences.
    2. Allow individuals to control the level of detail they get and when (e.g. layering documents, being able to return to the policy)
    3. Provide individuals with clear options to say ‘yes’ or ‘no’
    4. Be innovative and creative: consider using “just in time” notices (offering an explanation and asking for consent at the time an action is to be taken, rather than as a blanket upon first engagement with the service), interactive tools, customized mobile interfaces
    5. Consider the consumer’s perspective
    6. Make consent a dynamic and ongoing process (e.g. privacy check-ups)
    7. Be accountable – stand ready to demonstrate compliance

    The OPC guidelines also say that there children are involved organizations must take precautions to ensure that minors providing consent have the capacity to do so, and that individuals lacking that capacity are supported by the consent of a parent or guardian. The OPC is of the view that children under 13 lack the capacity to consent.

  • 24 Jan 2019 2:00 PM | Anonymous

    Opposing counsel objected as cases are available for free online; Judge noted the case required only “basic legal knowledge”

    In Cass v 1410088 Ontario Inc., Justice Whitten of the Ontario Superior Court, on a costs motion, disallowed a $900.00 charge for “legal research”. The plaintiff disputed a number of elements of the cost award, including the fee for legal research “for case precedents which are available for free through CanLII or publically accessible websites?”

    The Court agreed, noting that the case was not particularly complicated and that there would be a very limited need for research in the first place:

    [32] $900.00 for legal research is problematic. One assumes that counsel graduated with the basic legal knowledge we all possess. This matter was unlikely his first blush with the world of “occupier’s liability”, and specifically the liability of landlords. Counsel no doubt was familiar with the focus on the degree or control and access exercised by the landlord on the subject area. So given all the base experience and knowledge, the need for “research” by some anonymous identity is questionable.

    What might have been said to be “research” was simply preparation of the factum, and that time would have been reduced if the lawyer had used “artificial intelligence sources.”

    [34] All in all, whatever this “research” was would be well within the preparation for the motion. There was no need for outsider or third party research. If artificial intelligence sources were employed, no doubt counsel’s preparation time would have been significantly reduced

  • 24 Jan 2019 2:00 PM | Anonymous

    Driver acquittal for provincial distracted driving offence overturned on appeal

    In R. v. Ahmed Justice John Henderson of the Alberta Court of Queen’s Bench sat as a court of appeal over a decision of the Traffic Commissioner, who had acquitted the accused of a distracted driving offence under the Alberta Traffic Safety Act. The accused had been observed steering his moving vehicle with his left hand while holding a smart phone in his right, and intermittently looking at it. The police charged him under s. 115.1(1)(b) of the Act, which prohibits a motorist from driving while at the same time holding, viewing, or manipulating “a hand-held electronic device or a wireless electronic device.” However, the Traffic Commissioner held that this conduct would have amounted to an offence if the accused had been charged under s. 115.1(1)(a), which prohibits driving while holding or manipulating a “cellular telephone, radio communication device or other communication device ....” In the Commissioner’s view, a smart phone could properly be included under the definition of “hand-held electronic device or a wireless electronic device” since smart phones were separately provided for under s. 115.1(1)(a), and thus acquitted him. The Crown appealed.

    In a decision resting entirely on statutory interpretation (and as readers of this newsletter will recall, most cases on distracted driving offences do so), Justice Henderson overturned the ruling of the Traffic Commissioner and entered a conviction. Noting that the two sections in question were part of a set of distracted driving offences that had been inserted into the Act, he began by noting that in the grammatical and ordinary sense of the words, smart phones fell under both sections:

    
[18] Cell phones and smart phones are now very widely used throughout Canada and the developed world. I take judicial notice of the fact that these devices are intended to be hand- held. I take judicial notice that the devices are powered by battery and are thus electronic. I take judicial notice that the devices operate wirelessly.

    [19] There can be no reasonable doubt that a cell phone is both a hand-held electronic device and a wireless electronic device.

    [20] There can be no reasonable doubt that a smart phone is both a hand-held electronic device and a wireless electronic device.

    Next Justice Henderson examined the context and scheme of the legislation. The Traffic Commissioner had been convinced that because ss. 115.1(1)(a) and (b) were separated by the word “or”, two separate offences were in fact created. However, use of the disjunctive “or” did not necessarily separate the two and in context did not indicate an intention to except smart phones from being treated as wireless/handheld devices. There was, in fact, a fair amount of overlap between the various provisions in the Act which dealt with distracted driving, but this did not create an interpretive issue:

    [30] The fact that there is overlap among the various “distracted driving” provisions is not of consequence when interpreting the provision of a statute. It is presumed that the provisions of legislation are meant to work together logically as parts of a functioning whole. The parts are presumed to form a rational, internally consistent framework; because the framework has purpose, the parts are also presumed to work together dynamically, each contributing something toward accomplishing the intended goal: Sullivan on the Construction of Statutes, 6th ed (Markham: LexisNexis Canada, 2014), at para 11; R v LTH2008 SCC 49 (CanLII) at para 47.

    The court next turned to the argument that certain defences under the Act were available for the (a) offence (cellular phones) but not the (b) offence (wireless devices). The Commissioner had reasoned that smart phones must therefore be excluded from the scope of the (b) offence. Justice Henderson noted that the expressio unius principle of statutory interpretation supported this conclusion, but felt that in the overall context it could not bear the weight of the obvious legislative intent behind the distracted driving provisions:

    [39] The concerns raised by the learned Traffic Commissioner are legitimate. The Legislature cannot have intended that the defences for legitimate cell phone use, as provided by s 115.1(3), should be dependent upon which of several distracted driving provisions the charge is advanced under. The charging section is often made at the discretion of a police officer without any regard to the consequences which may flow from it. For this reason, the decision on the charging section may be completely arbitrary. The Legislature cannot have intended that the legitimacy of defences would be based upon arbitrary decisions of a police officer.

    [40] However, while the concerns are legitimate, the solution is more complex. One potential solution is that s 115.1(1)(b) should be interpreted as excluding cell phones and that any cell phone charges must be advanced under s 115.1(1)(a). That solution has its own problems because it requires that the Court infer words into the subsection which are simply not there. This solution would also not address potential cell phone charges under s 115.2 or other subsections.

    [41] Ultimately the concerns with the s 115.1(3) defences arise because of inelegant drafting of the legislative provisions. The real solution is for the Legislature to respond with amendments to address the concerns.

    Finally Justice Henderson explored the Hansard records surrounding the introduction of the distracted driving provisions and held that they were intended to be comprehensive, practical and enforceable. He concluded:

    [49] The terms “handheld electronic device” and “wireless electronic device” are broad and were intended to be expansive. If the Legislature had intended to exclude cell phones or smart phones from the scope of s 115.1(1)(b), then it could have employed clear wording to achieve this result. It did not do so.

    [50] I conclude that the intention of the legislature and the purpose of the legislation would be defeated if cell phones or smart phones were excluded from the definition of the terms “handheld electronic device” or “wireless electronic device” in s 115.1(1)(b).

  • 24 Jan 2019 1:59 PM | Anonymous

    A Facebook page, operated by a public official, can be a “public forum” for First Amendment purposes

    Whether politicians can block citizens on social media has been in the news in Canada, but not yet in the courts. Not surprisingly, it’s a different story in the US where the question has found itself before the United States Court of Appeal for the Fourth Circuit.

    In Davison v Randall, Brian Davison alleged that being blocked from a politician’s Facebook page infringed his First Amendment Rights. The defendant, Phyllis Randall, is the chair of the Loudoun County Board of Supervisors. The day before she was sworn in, she created a Facebook page entitled “Chair Phyllis J. Randall”. Randall also had a personal profile on Facebook and a page for her campaign. Her campaign page was designated as a “politician” page, and the page associated with her role as Chair had a “governmental official” label. Her personal profile had no label. Randall and her Chief of Staff generally used the Chair page to notify the public about upcoming board meetings, hosted discussions about significant public safety issues, and invited the public to participate in consultations. She also used the page to update her followers on her travels and meetings, and various other updates. The public, including Davison, would ‘like’ and comment on these posts offering commentary and criticism. Randall would occasionally reply to these comments.

    Randall blocked Davison from the Chair page after Davison submitted a question implying that some School Board members had acted unethically in approving financial transactions. Davison subsequently used a page he managed to comment on a post made by Randall. Randall then deleted the whole original post, which included Davison’s comment. Randall also banned Davison’s page from the Chair page. The next morning, less than 24 hours later, Randall reconsidered and unbanned Davison’s page.

    Davison sought relief against the Board and Randall in the District Court. The District Court released the Board from the suit, but concluded that the defendant Randall, as chair of the Loudoun County Board of Supervisors, violated the First Amendment rights of one of her constituents, Brian Davison, when she banned Davison from the "Chair Phyllis J. Randall" Facebook page she administered.

    While a number of interesting issues were raised on appeal, the most interesting one was whether the Facebook page constituted a public forum so that it would be a forum for constitutionally protected speech that the government cannot interfere with. The appeal court noted:

    Although neither the Supreme Court nor any Circuit has squarely addressed whether, and in what circumstances, a governmental social media page—like the Chair's Facebook Page—constitutes a public forum, aspects of the Chair's Facebook Page bear the hallmarks of a public forum. Randall "intentionally open[ed the public comment section of the Chair's Facebook Page] for public discourse," inviting "ANY Loudoun citizen" to make posts to the comments section of the Chair's Facebook Page—the interactive component of the page—"on ANY issues, request, criticism, complement or just your thoughts." Randall placed no restrictions on the public's access to the page or use of the interactive component of the Chair's Facebook Page. And, in accordance with Randall's invitation, the public made numerous posts on matters of public concern.

    The Chair's Facebook Page also is "compatib[le] with expressive activity." "Congress [has] recognized the internet and interactive computer services as offering 'a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity.'" And the Supreme Court recently analogized social media sites, like the Chair's Facebook Page, to "traditional" public forums, characterizing the internet as "the most important place[] (in a spacial sense) for the exchange of views." An "exchange of views" is precisely what Randall sought—and what in fact transpired—when she expressly invited "ANY Loudoun citizen" to visit the page and comment "on ANY issues," and received numerous such posts and comments. J.A. 455. [citations omitted]

    Randall argued that the Facebook website was private property and could not be a public forum. The Court disagreed:

    Significantly, even assuming the relevant aspects of the Chair's Facebook Page constitute private property—which, again, is not entirely clear from the record before us—Randall, acting under color of state law, retained and exercised significant control over the page. She created the Chair's Facebook Page. She designated the page as belonging to a "governmental official." She clothed the page in the trappings of her public office. She chose to list her official contact information on the page. And she curated the links in the left column of the page and the lists of Facebook Pages or profiles "liked" by the Chair's Facebook Page in the right column.

    Of particular importance, Randall had complete control over the aspect of the Chair's Facebook Page giving rise to Davison's challenge because, as administrator of the page, Randall had authority to ban Facebook profiles or Pages from using the Chair's Facebook Page—and, therefore, the interactive component of the page—authority she exercised in banning Davison's Virginia SGP Page. Cf. Knight, 302 F. Supp. 3d at 566¬67 (holding that the interactive component of the President's Twitter account constituted public forum because the President and his advisors "exercise control over various aspects of the . . . account," including the power to block other users from accessing the account).

    The Court of Appeal concluded that the Facebook page in question was a public forum for First Amendment analysis purposes and upheld the lower court’s determination that blocking Davison from participating infringed his First Amendment Rights.

  • 10 Jan 2019 2:03 PM | Anonymous

    Mandatory licence suspensions added to increased fines

    Ontario has stiffened the penalties for its distracted driving laws. Under the Highway Traffic Actit was already an offence for any person to drive a motor vehicle “while holding or using a hand-held wireless communication device or other prescribed device that is capable of receiving or transmitting telephone communications, electronic data, mail or text messages.” In the Cannabis, Smoke-Free Ontario and Road Safety Statute Law Amendment Act, which came into force on January 1 2019, the penalties have been significantly increased.

    The offence now carries a fine of between $500 and $1000 for a first offences, with the maximum increasing to $2000 for a second offence, and $3000 for subsequent offences. In addition, conviction now carries a mandatory licence suspension: three days for a first offences, seven days for a second offences, and 30 days for any subsequent offences.

  • 10 Jan 2019 2:03 PM | Anonymous

    U.S. Court refuses to dismiss copyright infringement claim over Willie Nelson image

    In Philpot v. ALTERNET MEDIA, INC., the California District Court heard a motion to dismiss claims against Alternet, an “alternative news website” with a companion Facebook page, by Philpot, a photographer whose work focuses on US concert events. Philpot had taken a photo of singer Willie Nelson, for which he registered a copyright in 2012, and uploaded it to the Wikimedia website. In June 2015 Alternet posted on its Facebook page a meme that superimposed a quotation from Nelson over Philpot’s photo, which received 14,000 likes, 33,000 shares and 306 comments. Alternet did not seek or receive Philpot’s permission to use the photo, and ignored his requests to cease and desist. Philpot brought claims against Alternet framed in infringement of copyright and violation of the US Digital Millennium Copyright Act (DCMA). Alternet moved to dismiss the claims.

    Alternet argued that the “fair use” defence barred Philpot’s claim. The court described that defence:

    When determining whether a use constitutes a "fair use," courts consider several factors, including (1) the purpose and character of the use, including whether the use is commercial or for non-profit educational purposes, (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion of the work used in relation to the work as a whole, and (4) the effect of the use on the potential market for or value of the work. Id.; Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 576-77 (1994).

    The main issue for the court was the one raised by the first factor: whether and to what extent the photo as it had been used by Alternet was “transformative,” i.e. “whether the new work merely `supersedes the objects' of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning or message.” The court reasoned as follows:

    On this motion to dismiss, there are not enough facts alleged in the Complaint to allow the Court to determine whether or not Alternet's use of the Willie Nelson photo was transformative. First of all, there are almost no allegations concerning Philpot's purpose in taking the photo. Second, it is not clear as a matter of law what Alternet's purpose was in reproducing the photo. Philpot does allege that Alternet is an alternative news website whose purpose is "to influence its readers' political leanings, and consists of opinion pieces, purportedly newsworthy information, and sensationalized current events." Compl. ¶ 7. However, taken at face value, the Court reads this to be merely a description of Alternet's operational model rather than an allegation of Alternet's purpose in using the photo.

    Attached to the Complaint as an exhibit is a snapshot of the Facebook post by Alternet featuring an image of Willie Nelson with the quote: "Rednecks, hippies, misfits—we're all the same. Gay or straight? So what? It doesn't matter to me. We have to be concerned about other people, regardless. I don't like seeing anybody treated unfairly. It sticks in my craw. I hold on to the values from my childhood." Compl. Ex. E, ECF No. 1-5 at 2. Alternet argues that by adding the quote, it used the photograph to provide political commentary and that this use of the photograph supersedes Philpot's original purpose. Mot. to Dismiss, ECF No. 19 at 12.

    While that is possible, at this stage of the pleadings, Philpot credibly argues that the photograph, as used by Alternet, was merely for the purpose of identifying who the quote came from, thus leaving the purpose unchanged: to identify Willie Nelson. In order to make a determination as to Philpot's argument, the Court would need additional facts. For example, whether or not Alternet's purpose in using the photograph was to identify Willie Nelson's connection to the quote or to transform it into a political poster. The latter is a factual question more appropriate for the summary judgment phase. As evident based on the above analysis, the facts, as alleged in the complaint, are simply insufficient to conduct a thorough analysis of transformative use at this time. Accordingly, this factor weighs in favor of denying dismissal.

    The questions raised by the other three criteria, similarly, could not be answered on the pleadings and required some form of evidence to be led. The court therefore refused to dismiss the copyright infringement claim. However, it dismissed the DMCA claim because the plaintiff was required to plead facts that could lead to the conclusion that Alternet possessed the required mental state to make out a breach of the act, “the mental state of knowing, or having reasonable grounds to know, that his actions will induce, enable, facilitate, or conceal infringement to be liable for removing copyright management information (CMI) metadata and distributing images knowing that CMI was removed.” However, the plaintiff had simply provided conclusions on this point without pleading facts, leading to the claim being struck.

  • 10 Jan 2019 2:02 PM | Anonymous

    Nova Scotia court decides deceased lawyer’s estate should fund discovery referee

    In Medjuck v. Medjuck, Justice Peter Rosinski of the Nova Scotia Supreme Court dealt with a discovery motion that arose out of civil litigation among members of a family, in which one brother (Harold) was suing two of his brothers, one of whom (Franklyn) was a deceased lawyer. Lawyer G, who was representing the living defendant brother and the Executrix of Franklyn’s estate as to Franklyn’s individual capacity, had come into possession of two computers which were reasonably thought to have been used by Franklyn for his legal work. He had put them aside and not reviewed their contents because he suspected there was privileged information on them. The plaintiff was of the view that the contents of the two computers needed to be reviewed because it was quite likely that documents and other information potentially relevant to the civil claim was on the hard drives. This was uncontroversial since, as Justice Rosinski noted, the Nova Scotia Civil Procedure Rulescompelled the disclosure of relevant and non-privileged documents, and Rule 16 in particular mandated the disclosure of electronic data. Previous case law had established that disclosure of a hard drive for forensic analysis fell squarely into this discovery regime. It was also uncontroversial that, because it was likely that privileged information was on the computers, an independent referee should be appointed to review the computers and screen them for anything privileged. In fact, the parties agreed on the individual who should be appointed referee.

    The contentious issue on the motion was determining who was to pay for the services of the referee. Lawyer G, as well as lawyer R who was representing the estate as regarded Franklyn’s work as a lawyer, argued that the Estate should not have to pay any of the cost for the referee, and that the plaintiff brother should have to pay at least 50% of the cost. The need to appoint the referee, it was argued, was the responsibility of the plaintiff, who created the uncomfortable situation of potentially privileged materials having to be reviewed and the deceased’s personal representative being unable to do it; moreover, were Franklyn still alive, he would not be able to do this himself because he would be a party and thus in a conflict of interest. However, Justice Rosinski rejected these arguments, noting that the necessity for protecting the privilege of Franklyn’s former clients via his computer had been created by Franklyn himself, while he was still alive, and it was up to the estate to address it now.

    In the end, while there was little in the way of relevant precedent, a solution had to be crafted to deal with the privileged material, since it was reasonable for all parties to think that there was material relevant to their cases on the hard drives. The equities of the situation led the court to the conclusion that the Estate should bear the cost of the referee, 50% being allocated to each of the personal aspect and business aspect of the estate.

  

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