Is Your Interest Rate Enforceable?

Do you charge interest on your invoices that are paid late, and if so, what is that rate?

Is that interest rate on your invoice a monthly rate or an annual rate?

Did your client acknowledge and accept that interest rate as a term of your engagement?

These are some questions to ask yourself if you sue a client for an outstanding invoice and you claim an interest rate higher than what the Courts of Justice Act (“CJA”) allows, which is currently 2.0% per annum at the time of writing this blog.

If you do not have a signed contract with your client acknowledging and accepting an interest rate higher than the CJA, then you run the risk of a judge only awarding you the CJA rate, despite your invoices indicating a much higher rate of interest.  The main reason being that your client did not accept this amount, and therefore there isn’t a meeting of the minds.

Also, the interest rate on your invoice is unenforceable if you indicate a monthly rate of interest rather than an annual rate.  Section 4 of the Interest Act states that no agreement to pay interest in excess of 5% per year is enforceable unless the rate of interest indicated is an annual rate. 

What does this mean?  If your invoice says 2% per month, one would assume that to be 24% per annum.  However, if you only indicate 2% per month on your invoice, then the maximum the Court will award you is 5%, however, most judges (not all) will only award the CJA rate.

If you want to charge a rate of interest higher than the CJA, be sure your client acknowledges the rate by signing the invoice or even better, have a contract that indicates rate of the interest on late payments, ensuring that the interest rate is expressed annually, or you will be out of luck if they default.

Murray Brown, Licensed Paralegal

The Rise of Telecommuting

Do you have employees that work from home? Well, if you do you are among the 20% of employers in Ontario who offer telecommuting to their employees.  “Telecommuting,” or working remotely, has never been more popular.

While telecommuting has the potential of saving employers’ money and can make for happier employees, employers still have to be mindful of their obligations under the Ontario Health and Safety Act.

According to this Act, employers are “required to take every precaution reasonable in the circumstances for the protection of a worker.” While in the traditional workplace it seems pretty obvious what this means, such as making sure the office or worksite is safe for employees to work in, what does it mean exactly when employees are working from home?

The problem as of right now is that the Act is not clear when it comes to telecommuters. The law is not entirely settled as to how far an employer’s responsibilities extend when employees work remotely. So, what can you as employers do about your employees that work remotely until the law becomes clearer? Think about developing policies for your telecommuters that ensure their remote stations are suitable from an occupational health and safety standpoint.

For your work-from-home policy think about what right you would have to investigate and injury or incident that occurs at your employees’ home or remote workstation. You may also want to consider whether you want to have specific requirements for employees working from home. If your policy is silent on a location for working remotely, you may be unintentionally granting your employees the option of working from locations that you have not contemplated or would not approve of. Remember the telecommuting policy you develop should be reasonable and implemented with fair notice to your employees.

The number of people working from home has grown over recent years, however the laws have not developed as quickly to cover remote employment. Don’t wait for the law to catch up with the times, be proactive!

Robin K. Mann, Associate Lawyer

And Justice For All?

We hear a lot about Access to Justice in the news and how lower income individuals cannot afford to litigate in Ontario.   That is a problem.  That is not the topic of this Blog.

This Blog is about the frustration of dealing with judicial officials who make off handed comments that corporations, some of them small and barely getting by, need to “spend money on legal fees to make money” (direct quote) to get relief from the Court. 

This specifically is in the area of equipment and vehicle leasing.  In that area of law, our clients own equipment (often worth over $ 100k) and lease it to individuals and businesses.  On occasion, the lessee makes and initial payment then runs off with the equipment or vehicle.

The police tell our clients this is a civil matter.

We then move before the Court for an Order for repossession.  This is where the frustration can come in.  Recently a judicial official told our lawyers, “it’s not really stolen, leasing companies always claim that” .  Wow.  This when the equipment was almost worth $ 200k and we had evidence that the lessee was ignoring our client and had skipped town.

Justice must include justice for leasing companies.  Running up the fees because the judicial officials think “the companies can afford it” is unacceptable.  Justice should be for everyone, it should be blind and there shouldn’t be a premium on it for leasing companies.

Justice for all please.  Thank-you.

Inga B. Andriessen JD

       

Is Your Interest Rate Enforceable?

When you invoice your client, do you indicate what the interest rate for late payments is?

Did your client accept this interest rate as a term of your engagement?

Is the interest rate on your invoice a monthly or annual rate?

These are all important questions to ask yourself if you sue a client for an outstanding invoice and you claim an interest rate higher than the Courts of Justice Act (“CJA”) rate, which is currently 2.0% per annum.

If you do not have a signed contract with your client acknowledging and accepting an interest rate higher than the CJA rate, then you run the risk of a judge denying your request and awarding you only the CJA rate, despite your invoices indicating a much higher rate of interest.

Additionally, the interest rate on your invoices become unenforceable if you indicate a monthly rate of interest rather than an annual rate.  Section 4 of the Interest Act states that no agreement to pay interest in excess of 5% per year is enforceable unless the rate of interest is expressed as an annual rate.  What does this mean?  If your invoice says 2% per month, one would assume you are claiming 24% per annum.  However, if you only indicate 2% per month on your invoice, then the maximum the Court will award you is 5% but most judges will only award the CJA rate.

If you do not have a contract with your client, and the interest rate on your invoice is higher than the CJA, it may not enforceable as an invoice is not a contract and the client did not agree to any rate of interest. 

If you want to charge a rate of interest higher than the CJA, make sure your client acknowledges the rate by signing the invoice or even better, have a contract that indicates rate of the interest on late payments, making that rate is an annual, or you will be out of luck if they default.

Murray Brown, Licensed Paralegal

A Year after the Construction Act in Ontario

Now that the changes have been in effect for over a year, let’s discuss the July 1, 2018 changes to the Construction Act, formerly the Construction Liens Act, to see how everyone is making out. 

One thing to keep in mind is that if the contract was entered into before July 1, 2018, the previous Construction Liens Act applies and the 45-day rules is in effect.  For the smaller projects, as we over a year past the change, this should not be a big issue.

The changes to registering a lien within 90 days after the date of last attendance could be favorable, allowing more time for contractors and owners to make payment.  However, this also could delay payment.  In additional, another 90 days after the date you had to register your lien, to perfect your lien could also be seen as a delay in getting you paid.

What does this mean? Yes, you have more time to work out payment on the project you worked on, but that doesn’t mean you can delay getting the file to our offices. 

I have spoken before about the steps required to register a lien, and the searches required.  New properties are not necessarily easily found in the Teranet property search system, therefore, do take more time to track down. 

If you know without a doubt that you will not be paid, don’t delay and get us the file.  If you are trying o negotiate payment, the best thing to do is get us the file two weeks before the deadline.  If you do that, at least we can get the searches done and be in a position to file the lien on title without any rushing around.

So, to sum it up, you have more time, but still don’t delay in getting us started on it. 

Christine Allan, Law Clerk

The Problem with Scheduling Civil Court Matters in Ontario

Are you reading this on your phone?  While reading this did you get a phone call from someone asking if you can meet next week?  Did you check your calendar on your phone, say yes and then book that into your phone?

Maybe you read this at the office.  While in the office you received an email meeting request with two other people.  You checked your schedule, proposed some dates, everyone agreed, and it was put in a calendar with an email meeting request sent to everyone.

That doesn’t happen in Ontario Courts.  Each Court House in Ontario has its’ own method of booking.  None of them involve sending email meeting requests, some require in person attendances by lawyers.  Most of them involve forms that have to be faxed into the Court Office, only to be frequently lost on the receiving end. 

In the legal community these complaints are raised so frequently it’s boring. 

The media and our own Canadian Bar Association (CBA) is focused on cuts to legal aid as a factor in the lack of access to justice for Canadians.  In the civil system, the archaic scheduling system increases the costs and time exponentially.  Perhaps a bit of media time or CBA ad campaigns could advocate for bringing our Civil  Court system into the modern age technology wise.  This would save money and time and increase the access to justice.

Until this changes, smart Ontario lawyers keep their hammers and chisels handy, just in case one of the Court Offices decide that is the best way to communicate.

Inga B. Andriessen, JD

What’s My Jurisdiction Got To Do With It?

Are you doing business with a party outside of Ontario? Are they drafting the Agreement? Have you read it? We mean, have you really read it?

While we could write a book about the number of things you need to look out for before signing a commercial contract, today’s focus will be on two specific, often overlooked, areas: Which law will govern your agreement? And in which jurisdiction will disputes be dealt with?     

These clauses are often mistaken by parties to be “boilerplate” and overlooked as focus tends to fall on the details specific to the business transaction.

“Governing Law” and “Jurisdiction” clauses, as they are often labelled, can be found if you scroll all the way down to the end of the agreement… yes … keep going…. there they are!  

So why are these clauses so important and how are they different, you ask? Well, the “Governing Law” clause tells you which province or country’s set of laws will apply to your contract or any disputes that may arise. The “Jurisdiction” clause, on the other hand, tells you which court will hear your disputes. For example, if the agreement states that the governing law is Ontario, but the jurisdiction is British Columbia (B.C.), that means that the Court in B.C. will apply the laws of Ontario, to the extent they are different from B.C. law, in dealing with your dispute.     

Doesn’t seem like a big deal does it? But think about it this way. What if you operate your business in Ontario, and enter a contract with a party under clauses that state the agreement will be governed by the laws of California? What if all disputes must be heard in California as well, under the agreement’s jurisdictional clause? 

This can present a huge problem for your Ontario-based business if a dispute arises. This means that you would need to hire a lawyer in California or pay a lawyer in Ontario who knows California’s laws and can travel to the States to litigate the matter. Yes, you are correct – that would cost a lot of money! And yes, we are psychic.   

We often get clients that are so excited or anxious to close a deal, they don’t want to overly negotiate the agreements drafted by the other side. When it comes to these clauses, often clients don’t care to haggle over these provisions because the relationship is new and positive, they can’t ever see it going south.

But that’s what we are here for – to expect the unexpected! Okay we may have borrowed that from the realty game show, Big Brother, but it’s true. Have a lawyer review your agreements before signing, they may catch something you think is “boilerplate” or “non-negotiable.”  

Robin K. Mann, J.D., Associate Lawyer

Back to School, Back to Business

Ah, the day after Labour Day.  It used to mean new teachers & new school supplies, but these days, as a business lawyer, it means our clients are now focussing on their business and finally getting back to the things we recommended they do back in June.

Some of the common things business reach out for in September are:

  1. Collection letters & litigation

I don’t know why people are o.k. with not being paid on time during the summer, but somehow they are.  The calendar changes and suddenly businesses realized their cash flow is not flowing – thankfully, a letter from our firm to debtors is what it takes for most of our clients to get paid.

  • Employment Agreements

The summer season draws to a close and suddenly businesses realize, they need to hire new people and oh yeah, they wanted our firm to draft up an Employment Agreement so they are protected if you need to terminate without cause.    

  • Terms & Conditions

Be it website or invoice terms, often these issues just float through the summer untouched.  Suddenly it’s September and businesses no longer can live without their T&Cs – no worries, we’ve got you covered.

Never worry that you look bad for having procrastinated.  We’re used to it and we’re o.k. with it: we just want to get your business protected & collected, so reach out and let’s get started.

Inga B. Andriessen, JD

Sr. Lawyer

Who Cares What Works for Others: What Works for You?

It’s the last week of August and I’m pretty sure I’m not the only one whose news feed is being hit with news feeds about work/life balance these days.   Everyone is talking work/life balance, but are they living it and what does it mean anyway?

I particularly laughed when one of my LinkedIn Contacts who is constantly sharing work/life balance articles, emailed me at 8:46 p.m. on a Saturday …. Um, hello?  What are you doing?

After I was done laughing, I took a step back and realized, maybe that is just how they are doing the work/life balance this week.  Maybe they took a day off during the week.  Maybe they knew they wouldn’t enjoy a family bbq on Sunday if they didn’t get work stuff out of their head.   Maybe it’s none of my business about how someone else balances their work and life. Scratch that, it’s definitely none of my business. 

I personally don’t care how others are doing the work/life balance (unless it clogs my newsfeed).  For me, it’s all about working very hard, then taking time off in nature to recharge.  After 26.5 years of practice as a lawyer, I know that if I can immerse myself on top of or under water (scuba diving) or take time to do a hike, even for one day on the weekend, I’m good to go, focussed and recharged.  If that works for you, then follow along.  If that doesn’t work for you: figure out what does.

However, never forget, there is a WORK in work/life balance and the more you work, the more interesting that life can be!

Inga B. Andriessen JD

       

Make Sure You Move Your Litigation Forward

I was recently successful in a Motion to dismiss an action for delay.

Our client paid money into Court 17 years ago (yes, 17 years ago) and the Plaintiff failed to do anything about that money our client paid into Court all those years ago.

The Court sent a letter to the parties advising that these funds were being held and that they needed to be dealt with.  Why it took them 17 years to get around to that, we’ll never know.

The Plaintiff brought a Motion to have that money paid to them, as they claim they were owed the money.

We brought our own Motion to dismiss the action for delay and have the money we paid into Court 17 years ago return to our client.  

The Plaintiff claimed that it was our job (we were the defendant) to move the matter forward, and we did not, as a result, caused the delay.  They were wrong.  Obviously, it is the plaintiff’s responsibly to ensure the litigation moves forward, not the defendants. 

If a Small Claims Court matter is not disposed of within two years, the Court should dismiss the action for delay.  Why the Court never dismissed this action is anyone’s guess – but the Deputy Judge agreed with my submissions that the Plaintiff should have moved this matter forward and failed to do so, and as a result, their Motion was dismissed and ours was granted. 

We are getting the money back and the action is dismissed.

Let this be a lesson to all Plaintiffs: if you proceed with legal action and you do not hear from the Court for a few months, follow up with them, because if you do nothing to move your matter forward, your action may be dismissed.

Murray Brown, Licensed Paralegal