Re =

Auditors held responsible

Levee aecoun fession it on the chin recently when a Quebec. eepation ac Court

Judgment held a firm of tors responsible to

shareholders who claimed ‘they suffered losses as a result of - sintements ina

pros Justice John: Nolan's down

Helliwell and Ch ’ now Thorne Hi and Co, The decision is. being

widely studidd by the

profession and will: lik

ead to a revision of

Canada's auditing standards set by the 30,000member

Canadian Institute of

Chartered intan!

Accountants, Justice Nolan ruled the auditing firm failed to en- sure the accuracy of a balance sheet which was part of a 1971 prospectus

- offering stock of Pan

American Mines Ltd

He awarded six shareholders of the now defunct Montrealbased

misleading | " “Thorne,

uranium venture more than $142,000 in damages.

The case focuses on two 1s- sues which auditors and law- yers have been grappling with for years — auditors’ legal Habllity to third parties

and dependence on the work .

of a secondary auditor.

Gunn had depended on the work of Seidman and Seldman, a

- United States firm with

which it iad an gency agreement, for part of the fi- nancial in information in the prospectus

The space precedent |

set by court on an aul ’e legal responsibili to third parties is the mane disturbing of the two issues.

Some accountants are afraid the decision could open the door to a circus of litigation, =.

In the U.S., shareholders

have almost unlimited en-. ‘titlement to sue their company’s auditors.

’ While some precedents

exist in Canada on the issue, Justice Nolan's judgment takes it beyond what ac-

Alberta report says raise the taxes there

EDMONTON (CP) — Tax increases: for homeowners, farmers, hospitals, universities and churches aie rocequneuded in a

vernment report calling fr a revinies, of municipal Tropartytax ; Alberta. .

The ‘svete couneil nance council report's 64 =) recom: mendations contain

. tradition-breaking proposals which Municipal Aftaira

es ana i ae may - or any Alberta politictan to handle.

The recommendations in- clude:

— Assesment of homes at full market value with an escalator clause to allow taxes to rise with inflated home values determined

d,

— A municipal tax on unre tals, hind ing homes,

ve vy | ges,

fy cd getior éttinens non-profit housimg at a municipality's :

— A speculation tax on suburban agricultural land and recreational sites which would be accumulated an- nually and then paid an sale or development.

— An end to the split mill rates citles use to transfer aome of the property-tax ‘load to businesses from residences,’

The recommendations include a revised form of revenue sharing but not the sharing of provincial tax and

royalty revenue municipalities have been Municipalities would be able to enter into revenue- sharing plans with each

other 50 a municipality with a heavily-taxed industry

probably would not

could share some of the wealth with a neighboring community that helps serve the industry.

The council is a group of

’ provincial, municipal and

school board representatives

in. who spent four years . Feviewing the property-tax

system

Moore said he will spend the next year going aver the recommendations but said

many of the more ‘¢con- '

‘proposals

adopted. AE

He said the tax on farm: homes would probably be forgotten, the termination of the split mill rate would be very unpopular and the’ taxation of church land would be highly contentious and lead to undesirable

troversial

taxation differences across -

the province,

Moore said the retroactive into Insurance and Sheet Metal Shop tax on suburban developable Family Protection ‘arm as some merit, +—Mortgage Insurance But he noted that use of the ‘Busiees Insurance | te ae _ Charlie Belang er

x, ngeles hag Income replacenient:. ; q a blocked development of Registered ‘Retirement F Planning SCO Vopr. PLUMBING® HEATING LTD: 4 some parce tI CAUSE G,. "Unique Bathroom Boutique” : cevelopers_and ultimately Brian Montgomery 4496 LAKELSE AVENUE pay the accumulated dif-- Representative . | 3951 D “yer "YOUR P.O. Box 534 PHONE 635-9319 ference between agricultural | aysiness MoanuiLife Business 635°5546 Jon ners eo grt 0068 TERRACE. B.C. VeG 485 OR 635.9320

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countants have been lable for up to now, sald lawyer Mortimer Constantini, who - pergeanted the "suing 8

Armed with this judgment and Quebec's class action legislation, “the .. whole public benefits," Constantin! :

One shareholder, for example, could bring a collective: suiton behalf of all Shareholders’ ‘againgt an auditor who has no knowledge of them.

known limited-class, usua the immediate client such as the board of directors of -a company.

Peter "chant an” &c- counting professor at McGill University, said he was pleased with the judgment

.because it reaffirms that an

accountant must serve the general public, -

But he warned it could induce Erivolous litigation of the kind which has placed US. accountants. in 4 legal straitjacket. In the US.,

‘once an auditor signs

financial statements, he is liabie for any damages by anybody who might use the Statements, -

The Quebec Securitles

Commission — ‘cakes a narrower view ‘of the decision.

Commission secretary Louise’ Lebel-Chevaller sald. the Nolan judgment appiles only to financial statements ina prospectus, She sald she is not certain the judgment will extend to all classes of third parties.

Ms. Lebel-Chevaller added that accountants “will be more on their toes)” as a result of the decision. However, she continued, “in the due cours: 2f business,

you cannot avoid this sort of |

Donald Snell, director of the auditing standards division of the Canadian Institute of Chartered Ac- countants- said he supposed the judgment means the world is changing. “I shudder to think of what will happen to professional’

liability insurance rates.”

But Ron Pearl, of Clarkson Gordon and Co., said it was an interesting case which may new groun with he apparent change ta

@ apparen nge in the public mood over auditors.

“The accounting profession can adjust to anything,'’ Pearl said.

‘the alarm and all escaped unharmed.

HOT SHOTS JAILED

KAMLOOPS, B.C, (CP) — Thomas Krousenek, 16, and Douglas Penner, 19, who gave the RCMP in Clearwater a hot time by setting fire to their de- tachment headquarters and river boat last year, will get two years leas a day in the cooler, |

two men from nearby Clearwater were sentenced in provincial court Wednesday after being found guilty of two counts of causing damage. and another of public mischief, -

The: $20,000 fire Oct, 22 started in the boat which was placed against the detachment _ building which received damage to one wall.-

The building includes. the house of detachment commander Jim Switzer. seg ta 8 a C) fire and there were two heii + the building's

A night guard sounded

SNOW LAKE, Man. (CP) — E. Peter Gush, president of Hudson Bay Mining and Smelting Co. Lid., said Thuraday the opening of a new $33-million concentrator here may lead to more new mines and more jobs for Manitobans.

Gush, taking part in ceremonies to cfficially open the new. mill that will employ §0, said the Toronto-based company has decided to Place more emphasis on

“In fact, this year our exploration expenditures in the province will Increase by some 20 per cent to a tatal of about $4 million.”

About half of the money will be spent in the Flin Flon- Snow Lake area, Snow Lake, with a population of about

” 1,000, is about 12 kilometres

east of Flin Flon.

Brian Ransom, Manitoba mines minster, opened the new facility which will treat ‘one millim tons of ore a

" year, or 3,800 tons a day.

The mill is gea to produce 160,000 tons of copper and zinc concentrates

- a year for processing at the

a a Bes:

The Herald, Friday, June 29, 1979, Page 13

New concentrator will

company's metallurgical operations in Flin Flon,

By producing the concen- trates here, Hudson Bay Mining will save the cost of transporting the raw ore to Flin Fisn, as well a8 250,000 tons a year of mine backfill- material.

“The savings in trans- portation costs as a result of this . very substantial reduction of tons hauled was the main reason for the declaion to bulld a mill at Snow Lake," a company spokesman said,

Gush sald one of the longerterm benefits of the mill will be “‘the effect it has upon the economics of bringing other deposltsin the Snow ))Lake area into production.”

He said tha new mill will also free the concentrator at Flin Flon for other work which he said would make the development of un- developed deposits in the Flin Flon area more eco- nomical.,

“This extra capacity will enable us to mine at higher Tates or, hopefully, to open up new mines.”’

mean mines, more jobs

Gush said the company was considering the possibility of increasing the capacity of the Filn Flon zinc plant,

“Studies are uncer way and the outcome could result in considerable capital expenditures, but the result would be more efficlent and less costly operations — a very significant step in optimizing our asset base here in Manitoba,”

On Jan. 3, 1978, the com- pany brought the Western Mine into production and currently is involved in pre- production and development of the Spruc Spruce Point Mine, ail

“Therefore, we have made a significant. switch in our own exploration program

and @ are placing considerable ’ emphasis on Monitoba,” , Last November, the

company acquired a 37-per- cent interest in Tantalum Mining Corp. of Canada which haa a mine at Bernice Lake, Man.

Wat

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DOLLAR

MONTREAL (CP) — U.S, dollar in terms of Canadian funds at 3:30 pm. EDT Thursday was up 9100 at $1,1679. Pound sterling was up 1,31 at $2.5414,

In New York, the Canadian dollar was down : 7-10) at $0.8562, and pound sterling Was up 19-20 at $2.1760.

STOCKS

~ Oakwood P:

TORONTO (CP) — The Toronto stock market was

moderately hi at the close of active trading ursday.

The TSE 900 index rose

,210 to 1,814.59, a record-

mig and gus issues provided most of the strenghth, increase in

compared with 6.06 million Wednesday.

Among industrigls, Husky Qil advanced 3% te $0%, Hudson's Bay Oil and Gas 2% to $75%, Costaln Ltd. 1% to $17, Canadian Pacific Investments 155 to $93 and oe Life Insurance 1% to

Me.

Chrysler Corp. declined 1 to $10%, Bell Canada 4 to $21%, Noranda Mines 4 to $624, Faleonbrideg Nickel A ¥, to 4814 and Dome Pete % to ABI.

rose

Veatgron Mclutyre $52% and Bethlehem Copper Ay to $1044.

Canadian Superie Oil was up lk . $143, Cear Resources re to $9% and % to $124. Ranger Of] Canada was down % to $29% and Canadian Homatead Oils % to $20%.

VANCOUVER (CP) Prices advanced in heavy trading Thuraday as the Vancouver Stock Exchange recorded a volume of 5,168,211 shares,

Gains outnumbered

declines by a margin of three ©

to tworas 152 issues increased

in value, 100 declined and 151 of the issues that traded |

remained unchanged. Moat of the action was on the curb exchange as

Neptune Resources traded —

744,994 shares and gained .34 to .76. Regis Development

Corp. gained .4 to .29 on .

420,000 shares and Golden Shamrock was steady at .50 on 269,950 shares.

Nortek Engines Ltd, also got into six-digit volume on the curb exchange as it traded 154,000 shares and more than doubled tn value to $1.08 from 50, Oliver Resources gained a nickel to .40 and Mecca Minerals added a penny to 27,

Consolidated Boundary Explorations led resource iesues in volume and gained 08 to .72 on 147,400 shares. Rio Plata Silver Mines also put on eight cents to $1.18 on 128,700 shares and Darkhawk Development Corp. advanced .16 to .71 on 123,800 shares.

Liberty Petroleums put on .20 to $2.60 on 118,125 shares, Rhodes Resources. A warrants were unchanged at 40 and Black Glant Mines added .12 to $1.55,

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