Don’t Ignore Your Corporations Legal Requirements

Has your incorporated business been named as a party in a lawsuit? Is your incorporated business contemplating initiating a lawsuit?

It is important to keep in mind that The Law Society Act prohibits anyone other than a “licensee” (Lawyer) from providing legal services.

The Ontario Rules of Civil Procedure state that a party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court.

There have been circumstances where courts have granted leave to a corporate party to be represented by a non-lawyer. Many, if not all, of these cases are where the individual seeking to represent the corporation is a senior officer with the corporation or a sole shareholder because the individual seeking to represent the corporation was sufficiently connected to the corporation that they could be considered the “alter ego” of the corporation itself. (Lamond v. Smith, 2004 CarswellOnt 3213)

The Ontario courts have emphasised that allowing non-lawyers to represent corporations is the exception and not the rule. There are two good reasons for this.   

  1. When a court permits an individual to represent a corporation, it is permitting that individual to represent someone other than themselves in a matter before the court. The courts have ruled that this is comparable to allowing a non-lawyer to represent a litigant in matters before the court which is like permitting the unlicensed practice of law.
  2. Treating a closely held corporation as merely the alter ego of its shareholder or shareholders and allowing them to represent the corporation ignores the fact that, at the end of the day, the individual or individuals can walk away from any judgment against the corporation free from personal liability. This could lead to scenarios where corporate officers could cause endless litigation without fear of personal liability for even the other side’s costs.  This would not serve the public interest. (Leisure Farm Construction Limited v. Dalew Farms Inc. et al. 2021 ONSC 105)

In my first court appearance after being called to the bar, a corporation had a lawsuit they started against our client dismissed by the courts for failing to appoint a lawyer. The sole shareholder of the corporation ignored the courts repeated requests to appoint a lawyer.

The litigation process is quite long and can be complicated, however, with proper legal representation everything can go smoothly. If your corporation (or you individually while we are at it) needs clear and cost-efficient legal advice do not hesitate to reach out to anyone on our amazing team.

Ariel Dorfman, JD  Associate Lawyer

Getting Back on Track for 2024

Now that we are officially one month into 2024, let’s take a quick breather to see how this new year is going.

They say its usually by this time that our new years resolutions are broken (if they even make it this far). Why is this? Well, it’s usually one of the following culprits:

  1. Unrealistic goals
  2. Lack of specific plans
  3. Overwhelming expectations
  4. Lack of accountability
  5. Lack of intrinsic motivation
  6. No immediate rewards

Whatever the reason, now is the time to reassess and refocus – we can help with that!

For example, what better time to do some much needed (likely neglected) corporate housekeeping? Getting professionally organized for 2024 is a realistic goal that we can help you achieve.

Whether its finally getting around to organizing your corporate minute book or having your employee contracts reviewed and updated (you would be shocked to learn how many businesses have unenforceable contracts with their employees!), there are real tangible things you can do to get your business on track for 2024. 

We can even keep you accountable with our (relentless) follow ups! Don’t worry, you’ll love our email reminders. 

What’s in it for me, you ask? Well, if you want a reward – how about not having to pay out excessive amounts of termination pay when terminating an employee because you have an enforceable contract? Or, not having to spend thousands of dollars down the road to bring your corporation’s books up to date after years of bookkeeping neglect? If you ever plan to sell your business or bring in a shareholder or investor down the line, then getting organized will be an unavoidable eventuality. 

This year will be over before you know it, so whatever you are putting off for 2024, its time to face it! That reminds me, I’m going to go jump on my Peloton… after I clear off the cobwebs.   

Robin K. Mann, JD Associate Lawyer

Mentor your Students and Juniors

I am frequently in motion court in real life these days and see many associates and articling students from other firms appear in “real court” for the first time.

Most of those people have not been told what to do in “real court”.   They don’t know basics, like where to stand, when to bow, how to fill out a counsel sheet and the list goes on.

If you’re a lawyer who went to real court before covid shut that down for most people, take a moment and walk your lawyers through the process.  One is a better advocate for one’s client when they’re not stressed about “did I bow correctly” etc.

Another skill that appears to be lacking with recently called lawyers is how to properly wear their Robes.  Here is a handy graphic that helps with almost everything: http://tinyurl.com/edhsf55j .   The one thing it leaves out is the two long black pieces of fabric in the inside of your robes: tie those together behind your back and it stops your robes from sliding down.   

If you’re new to being in real court and have questions, there is no doubt a more experienced lawyer around who would be happy to answer questions and tell you where the robing room is so you can ditch your coat and winter boots, so don’t be shy, ask for help!

Inga B. Andriessen, JD, Principal Lawyer

Don’t Take Legal Advice from Tiktok…Ever

TikTok is a great place to be entertained and kill time, however, it is not a great place to obtain legal advice.

Over the holidays, having time to kill, I scrolled my FYP (For You Page) on TikTok and was blown away at the amount of people (aka Influencers) on TikTok (what are they even influencing?!) posting videos containing legal advice on areas such as employment law and residential tenancies.  These Influencers are not qualified (or licensed) to do provide legal advice.

Some of them claim that what they’re posting isn’t “legal advice,” but simply for “information purposes” or “entertainment purposes” only.  I disagree.  These disclaimers are a way for these influencers to attempt to avoid any responsibility and/or consequences for what they claim in their videos.

It is quite frightening how wrong some of this information is, and even worse, how many people believe it.

The comments on these posts are flooded with people asking further legal questions and the Influencer doubles down on their advice.

Some of the more notable TikToks are Influencers claiming that Employment Contracts are not enforceable, and you do not have to abide by the terms of your employment, then encourages folks to avoid signing them at all costs.

Another hot take being a tenant can stop paying rent because of the length of time it takes to get to a Hearing Date to evict them, giving the tenant enough time to find new residence so they can stiff the Landlord.  Just what we need, unnecessary Applications flooding an already backlogged tribunal.

Relying on TikTok lawyers can cause you a whole lot of stress, waste a lot of time and money and you would only have yourself to blame.

Tiktok is a terrible place to get legal advice.  Just don’t do it.  If you have any questions regarding the law, including your employment contract or tenancy, contact a lawyer or paralegal who are actually qualified to provide legal advice to you.

Murray Brown, Licensed Paralegal

Is your workplace all inclusive?  

All inclusive, what does that even mean in the workplace?  Well, when on vacation it means that everything is included in the price you pay. 

In the workplace, all inclusive would be:  Treating colleagues with dignity and fairness, and maintaining a workplace that is free of harassment, discrimination, and violence. It also means welcoming colleagues with different backgrounds and abilities.   

There could be many reasons why an employee would not feel included in a workplace, and as an employer, it’s up to you to set the tone and promote inclusion.  Without turning this blog into a political one, I will use myself as an example of how an employee could feel excluded. 

I am notorious for injuring myself, annually, semi-annually, bi-weekly, yes it’s almost like mortgage payments at this point.  Anyone who knows our firm knows that every year we have a Summer Fun Day.  For these fun days, I have had my fair share of aliments that kept me from being able to be fully active.  Instead of planning something that I may be able to do when date arrives, the great firm that I work for has ensured that our fun day is something that I will be able to take part in.  Whether having a game of darts as I had a human growing in me, to having an amazing cake decorating challenge to ease a shoulder injury that had me out for months.  I was included and never in any way felt like I wasn’t.

Yes, these are just examples of a physical ability issue, however, even when it comes to personal food choices, fasts and plain old “I just don’t want to eat that right now”, our firm prides itself on being able to include everyone. 

Making sure all of your employees and co-workers are feeling included is not anything that could be described as undue hardship, it’s really just a thought process and treating everyone as you would yourself. 

Christine Allan, Senior Law Clerk

Peremptory – What is it Good For?

If you’re familiar with the band Frankie Goes to Hollywood, then you’ll know the song Two Tribes.  In that song they pose the question “war, what is it good for” ?   The answer is “absolutely nothing say it again.”

Please insert the answer after my question in the title of this Blog.

Peremptory is supposed to mean there are no more adjournments given to the party to a law suit on whom a date is peremptory.   For example, if you show up in court and ask for an adjournment, the judge can say you can have this adjournment but it is peremptory and there will be no more.

A family lawyer friend of mine just had a case where the self represented party on the other side has had three adjournments all of which were peremptory.  

Business lawyers like our firm are seeing similar situations.

Given how long it takes to get motion dates in the GTA (I have one hearing that was adjourned from October 2023 to April 2024 as the “next available date” and that was speedy) peremptory must be enforced.

Alternatively, perhaps peremptory shouldn’t be used anymore. 

Self represented litigants need to be respected and they need to respect the Court Orders.  By not enforcing peremptory, these individuals don’t appreciate that they need to do what they have been Ordered to do and that’s creating further backlogs in the Courts.

If you need me, I’ll be here, trying my best to move the wheels of justice forward.

Inga B. Andriessen, Senior Lawyer

Commercial Contracts: Common Mistakes and Pitfalls

If you’re a business owner, chances are you’ve had to deal with a contract or two during your entrepreneurial tenure.

Whether your asked to provide a contract for services or given a distribution contract for your review by another party, its crucial that you get legal assistance before proceeding.

Despite what many may think, contracts are not all the same, with the same boilerplate language. Overlooking key details can lead to costly legal disputes. Avoiding common drafting mistakes is essential for protecting the interests of all parties involved.

Here are some common pitfalls to steer clear of when it comes to commercial contracts:

1. Ambiguous Language: One of the most frequent errors in contract drafting is the use of vague or ambiguous language. Unclear terms can lead to disagreements and legal battles. To ensure clarity, contracts should use precise language that leaves no room for interpretation. Don’t forget, it’s a contract and not a mystery novel – so we don’t want any future surprises!

2. Inadequate Scope of Work: Contracts often fail when they lack a thorough description of the scope of work, or the goods and services involved. Without a clear explanation of responsibilities, both parties may have different expectations, leading to disputes. Clearly outline the scope, deadlines, and deliverables to avoid misunderstandings down the road.

3. Ignoring Governing Law: Every contract should clearly state the governing law that will apply in case of a dispute. Failing to specify the jurisdiction can result in uncertainty about which laws apply, possibly leading to lengthy legal battles.

4. Forgetting Termination Provisions: Contracts should include well-defined termination clauses setting out the circumstances under which either party can end the agreement. Failing to include a termination clause is a classic blunder. It’s the escape hatch, the emergency exit, the clause that gracefully allows parties to part ways when the business tango turns into a solo waltz.

Contracts of any kind require careful attention to detail, and the above are just a few examples of contract mistakes. Remember, your contract is your shield in the business battlefield. Avoid these pitfalls, embrace clarity, and (most importantly) get legal advice.

Robin K. Mann, Associate Lawyer

Rent is Non-Negotiable

I really love when my blogs write themselves.

I do very little residential Landlord and Tenant work, but when I do, it’s interesting. 

Prior to serving a landlord’s “N” notice on a Tenant for rent arrears, one of our clients prefers we take a softer approach of demanding payment by way of a demand letter, rather than the official LTB Form.

I’ve been dealing with a particular tenant for quite some time, and usually (according to them), rent has paid late because of banking glitches.

After failing to pay rent for 4 months, and failing to respond to our demand letters,  our client has finally instructed us to serve the Tenant with an N4, being a notice that ends the tenancy for non-payment of Rent.  Should the tenant fail to pay by the date on the Notice, an Application to terminate the tenancy is brought.

Upon receipt of the N4, the tenant made the accusation that the N4 was in retaliation for the tenant’s “pending litigation.”  Am I psychic?  Did I know of this litigation that is pending, but has not yet commenced?  Perhaps the N4 is in response to the almost $20,000.00 in rent arrears they owe, but I digress.

The Tenant alleges negligence which resulted in alleged health issues as justification to stop paying rent, which they continue to reside at without payment of rent.  For the record, we are not talking about an average tenant in average rental unit.  The tenant is a sophisticated businessperson, and the unit can be described as more of a luxury property.

The Tenant has never made any allegations against our client for negligence, nor have they ever complained about health issues in the almost one-year back and forth with them about paying rent.

Some tenants are under the impression that they can stop paying rent for whatever reason they choose.  Rent in Ontario is non-negotiable.  The only way you can legally stop paying is if the Landlord and Tenant Board tells you can.   

It would also help if the tenant raised their issues with the landlord and/or their representative when they arise and not when the Landlord serves you with a Notice for failing to pay rent for months.  How is the Landlord supposed to remedy any issues if they’re not aware of them?

To legally stop paying rent in Ontario, the Tenant would be required to bring an Application before the Board to determine their rights.  Some tenants wait to complain at the Landlord’s Application hearing where the Landlord is obtaining an Order to evict the tenant, and at that time, it’s too late.

Failing to pay rent, and staying silent on your issues is not the appropriate way to deal with your issues with your landlord.  You can end up looking for a new home.

Murray Brown, Licensed Paralegal

Why Yes, that High Interest Rate Is Enforceable

Lately due to the economy we’re doing a lot of collection litigation.   Many times the collection is based on a contract and in the contract is the annual rate of interest that will be charged on default and all amounts associated with collecting the debt.  Often those rates are over 20% of interest per year.

The Courts will enforce those interest rates because, as  the Supreme Court of Canada has said, contract law is not the enemy of the parties but its’ servant.  This means that where two parties, particularly in a business context, agree to an annual interest rate that doesn’t violate the Canadian Interest Act, the defaulting party is going to pay that rate of interest.

These days many people are realizing that high rates of interest are hard to dig out of. 

As always, the best legal advice one can be given is:  know what you’re signing and if you cannot afford it: don’t sign.

Inga B. Andriessen, Principal Lawyer

Let’s talk about Legal Fees

Someone recently told me that they really like how open our firm is when it comes to setting out legal fees associated for certain matters.  That really is not something you expect to hear, you know, because clients buy lawyers their cottages, boats and Mercedes. 

This could not be far from the truth.  It amazes me that people think that what the lawyer charges gets put right into their pocket.  What about all the overhead charges, like rent, leases of copier equipment, phones, amazing staff and computers?  People are quick to make those lawyers jokes without actually looking at the big picture.

But let’s get back to the legal fees.  We provide a wide variety of services that are offered on a flat fee basis.  For example, small claims court matters are billed based on a percentage of the claim.  On the business side of things, basic incorporations, various business agreements and estate planning are all offered on a flat fee basis.  This is all set out up front and easy to see on our invoices to the clients.

What about that those matters that are not on a flat fee basis but on an hourly rate, for example, superior court litigation?  Our lawyers will, during the litigation, advise clients to put forth an offer to settle that will assist in getting a favourable cost award at Trial.  For instance, if you serve the other side with an offer to settle for an amount that is less than what was awarded to you at Trial, you are entitled to substantial indemnity costs from the date the offer was made onwards.  For this reason, getting that offer out early is key, and the lawyers will tell you when that time is. 

In addition to this, the lawyers will utilize the others in the firm that have a lower hourly rate to assist to keep those costs low, but still providing the same level of service. 

So, before you think that you are supporting a lawyer’s extravagant life, just remember that our firm does what we can to help keep legal fees at a minimum, and they do their best to assist in getting legal fees awarded back to you.    

Christine Allan, Sr. Law Clerk