Litigation

You lie, you pay !

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Have you ever sworn under oath or affirmed to tell the truth before signing a document in front of a Notary or Commissioner for taking Oaths?  Did you take it seriously?  If you were the Notary or the Commissioner, did you take it seriously?

I recently won a case which drove home the point for the other side that if you lie under Oath, there are consequences.  In that case the consequence was that the liar had to pay $ 5,000.00 in punitive damages (damages awarded by a Judge to punish bad beaviour) for lying in the document.   In preparing for that legal argument, I found other cases that awarded $ 15,000.00 for one instance of lying under Oath.

In addition to the Civil punishment, lying under Oath in a sworn document can attract the criminal charge of Making a False Statement.

“Making a false statement occurs when a person, who is not authorized or required by law to make a statement, makes such a statement by affidavit, solemn declaration or deposition, knowing that the statement is false.

This section is similar perjury and creates a criminal offence for a person who makes a false statement under oath when they were not required or authorized to make a statement.

Unlike perjury, making a false statement does not specifically require that the Crown Attorney prove that a person intended to mislead, it is only necessary that the person knew the statement was false.”*

It’s not just the person swearing the false document who can end up in trouble.  Section 131 of the Canadian Criminal Code says:

Perjury
131. (1) Subject to subsection (3), every one commits perjury who, with intent to mislead, makes before a person who is authorized by law to permit it to be made before him a false statement under oath or solemn affirmation, by affidavit, solemn declaration or deposition or orally, knowing that the statement is false.
…
Punishment
132. Every one who commits perjury is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.

The Notary or Commissioner must actually witness the signature and confirm with the individual signing the document that it is true.  One should never sign affidavits of, for example,  a senior lawyer in the firm who signed themand put on your desk for “Commissioning”.  Do you really want to be cross-examined on where the senior lawyer was when you saw them sign?  No.  No you don’t.

Overall, remember, when you’re stating that you’re telling the truth, there are serious consequences if you’re not and there are lawyers out there, like me, who will ensure that you face those consequences.

Inga B. Andriessen JD

*(n.d.). Retrieved from http://stephenjackcriminallawyer.ca/lying-police-court/

Detailed Records are Key in Litigation

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Recently we had a  matter where our client was sued by a business for a refund they allege they did not receive from them.  Our client advised that the payment was provided to a third party, related to the plaintiff.

Based upon the information we had, we brought that third party into the litigation, who then made their own claim against our client.

Neither the plaintiff nor the third party produced the documentation required to support their claims against our client.

Our client, however, produced their records, dating back to over a decade.  Not only did they have the business records that allowed them  to be successful in the Main Action, they also had the records to defeat the Defendant’s Claim.

Our client’s records were detailed and easy to follow.  They also produced records that showed that everyone was paid what they were owed.  On the other hand, the records of the parties suing our client however, were difficult to follow and did not support their positions.

This made victory that much easier for our clients.

There any many benefits to keeping detailed and accurate records when running your business.  You never know when you or your legal representative will need them.  The more organized you are, the better prepared your legal representative will be to assist you in being successful in litigation.  Being organized can come down to wining or losing.

Murray Brown, Paralegal

Why yes, you do have to prove your case

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At the end of last week, the Judge handed down his decision in the Jian Ghomeshi case. The finding was that the Crown had not proven its’ case “beyond a reasonable doubt”. That is the technical definition of what needs to be established in a criminal case before someone is convicted of an offence.

In Business Litigation, which is generally a Civil matter, the burden of proof is: has the plaintiff proven their case “on the balance of probabilities”? This is often described as a lower threshold.

While this threshold is lower than the criminal requirement, it still exists and a Judge will not simply “take your word for it” that something happened. You must prove your case.

To prove a case, evidence is gathered: emails, notes, contracts, photos and witness statements. These all form an important part of proving your case.

If you “forget” something until the defendant’s lawyer is cross-examining you, the decision is not likely going to go in your favour. If a Judge decides you’re lying or colluded with people to build up your case, you’re definitely not going to win.

Believing you are entitled to Judgment is not the same as proving it: you must prove your case or you’re not going to win.

Inga B. Andriessen JD

Where to start a business lawsuit

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Recently we’ve had numerous inquiries from businesses outside of Ontario asking where they should start their litigation. Some of these businesses are considering suing where they are located and then enforcing their Judgment in Ontario using our Reciprocal Enforcement legislation.

While it is easier for those outside of Ontario to first obtain Judgment in their local jurisdiction, it may ultimately be more complicated if the defendant did not respond in the law suit brought in the other jurisdiction.
In that case, the plaintiff could end up re-litigating the case in Ontario, which is doubling the cost of litigation.

Generally, we recommend that you start your law suit where the debtor has assets. This ensures that once you do have your Judgment, you don’t have to incur additional legal fees to have your Judgment recognized before you enforce it.

There is not one simple answer to the question though, so ensure you obtain legal advice before you decide where you are going to sue.

Inga B. Andriessen JD

About that contract you just signed ……

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I enjoyed my drive into the office today because the news included a story about the snow removal contractor, who failed to clear the highway I use daily from snow and ice last winter, being fined $ 900,000.00 for not doing their job.

To be clear: for me this was not just about taking four hours to get home instead of 45 minutes: it was about the danger of the condition of the roads. The roads were not crammed with motorists: the highway was virtually impassible. I vividly recall calling home and saying “I’m not sure I can get off the highway because all of the off ramps have collisions due to no salt on the ramps.”

In addition to hearing about the fine, I heard on the news that the company is still “fighting” the fine.

If you’re a business: could you be fined if you breach a contract? Could the person you just contracted with impose additional fees on you if you miss a fairly short deadline? Have you had your lawyer look over a contract if you don’t understand it?

We look over and recommend changes to many contracts for our clients before they sign them. Because of these changes, we have saved our clients a lot of money as well as time and energy on a business venture that was destined to be less than profitable for our client.

Some of the key issues we look for in contracts are: what law governs the contract? Many contracts coming out of companies from the USA will state that the laws of a specific State govern the contract. Worse yet, many contracts will require you to go to a specific County in a State in order to litigate: do you really want to have to retain a USA lawyer to protect your company?

Having a lawyer in our firm review a Contract will cost far less in legal fees than retaining our firm to litigate a poorly worded contract and you avoid conversations that start with “so, about that Contract you signed …..”.

Inga B. Andriessen JD

There are no tears in Business

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Remember years ago when Martha Stewart had an “Apprentice” TV Show and she told one of the female contestants, there are no tears in Business? That was likely some of the best advice she gave during the show.

Tears are borne from emotion and the emotion in a Business should come after hours, not during.

As a Business Lawyer one of the most challenging types of business I deal with it “the family business”. Businesses which involve multi-generational family relationships can be the most difficult businesses to find solutions to what would otherwise be simple problems.

The best advice anyone can offer a family Business is to use lawyers to negotiate difficult issues. Cool heads, steeped in legal knowledge are the right people to resolve conflicts.

Lately, litigation involving Constructive Trusts in Family Businesses has seen an increase in acceptance by Canadian Judges. Older generations who live off the work of their children and grand-children cannot cut those children out of the business without compensation.

Litigation is the last place a family Business should end up in, however, at times, that is the only way to ensure everyone is dealt with fairly.

If you need help navigating these waters, without tears, please reach out to me.

Inga B. Andriessen JD

So you want to get paid

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This week I am speaking at the Law Society of Upper Canada’s Solo & Small Firm Conference on “Getting Paid”. If you follow our firm on Twitter this week (@andriessenlaw) you’ll find all tweets this week are related to the topic of getting paid. Some of the tweets are lawyer specific, but most are for every business.

It appears even Taylor Swift is chiming in on my “you deserve to be paid” mantra this week. Ms. Swift, rightly demanded that Apple pay artists for using their songs, even if Apple had made a business decision not to be paid for providing those songs for three months. As soon as she spoke up, Apple agreed to pay the artists for their work.

In order to get paid by a client/customer, a business needs to behave as if it expects to get paid. This is done by having procedures in place from the start of the customer relationship that make it clear this is a business, not a volunteer relationship.

Providing a written statement of what you will charge and when you expect to be paid is a good starting point. Once you have done that and the customer has agreed, if they try to change the terms in the future, you can always refer back to your starting point and remind them what they agreed.

Remember: if you do the work or provide a service, you deserve to get paid.

I could go on and on about this topic, and will at the Conference. If you would like to follow up more on how to get paid, feel free to reach out to me: I’m full of really good ideas on getting you paid, including threatening to write a nasty Top 40 song about the non-payer. Oh wait, that would be Taylor Swift’s go to strategy, not mind.

Inga B. Andriessen JD

Let's get your business paid

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For over 23 years I’ve been a business lawyer and as a big part of that, I’ve sued debtors who owe my clients money.

Collection litigation is only an effective tool if it is done well. If the law firm is the only one making money, then it is not done well.

Our firm’s approach is to first ensure that there is “a pot of gold” at the end of the litigation rainbow. We search to ensure the debtors own property and confirm if there are Judgments against them already that any judgment we would obtain would have to share with.

If the debtor has property and/or is judgment free, we start litigation in the most cost effective way possible. If the claim is $ 25 000.00 and under, we start in Small Claims Court using our flat fee schedule. If the claim is in Superior Court, we use the Simplified Procedure to move the matter through the system as quickly as possible to contain legal fees for the client.

We ensure we do not start collection litigation in areas where mediation is mandatory. Mandatory mediation in a collection law suit is a benefit to a defendant: it increases the costs by approximately $ 2 500.00 and it is “another step” that has to occur before Judgment can ultimately be obtained.

We’re careful to ensure our clients understand the benefits of making a reasonable offer to settle early in the law suit, to ensure the Judgment includes an award of 100% of legal fees incurred from the date of the offer onwards.

All in all, we choose the quickest, most cost effective method to obtain judgment for our clients who are owed money.

We’re creative in our enforcement techniques as well – using the Oppression Remedy and Bulk Sales Act legislation to bring officers and directors into the law suit and expose their personal assets for enforcing Judgments.

We’re good at what we do and we enjoy collecting on behalf of our clients. We’d be happy to help you get paid as well.

Inga B. Andriessen JD

Listen Up !

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I was at a trade show recently, not a boring legal trade show, but the Outdoor Adventure show (hey, I have a life that extends beyond Court Rooms – honest!) and I was overwhelmed by the way many vendors were blurting out information as we walked past their booths. Many of those people spoke so quickly, I had no idea what they were marketing and apparently neither did they. One vendor told us how her product was great for “exhibitionists”: she meant exhibitors. She was mortified when she realized she had been saying “exhibitionists” all weekend.

Fast forward to the Monday after that weekend and I had a great meeting with some entrepreneurs excited about starting a new venture together. I took the time to listen to their thoughts, then slowly explained what legal help we could provide that would suit their needs.

I didn’t go on in detail about the facts from latest Court decision that would impact their situation, I didn’t recite a law from memory and I didn’t use a lot of legal language. I listened and then, in plain English, gave them my advice.

Many lawyers are like the vendor selling to exhibitionists. They speak quickly and are not even aware of what they’re saying. They don’t connect with their clients as business people, they preach down as if law is a pulpit and the client is listening in a church pew (and has to put a lot in the offering plate).

Business law is a conversation between a lawyer and their client. Lawyers need to listen up and be in tune with their client’s business.

If you’d like to talk, I’m listening. (with apologies to Frasier Crane)

Inga B. Andriessen JD

The Cost of Enforcing a Judgment in Ontario

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An interesting Ontario Court of Appeal decision was released on December 9, 2014 that impacts the costs of anyone trying to enforce a Judgment in the Province of Ontario by selling property owned by a debtor.

If there is a mortgage on a property, before the Sheriff will start the process of selling property so that the proceeds can be shared between all Judgment Creditors of a debtor, the Sheriff requires that the creditor, who is asking the property be sold, provide the Sheriff with a current Mortgage Discharge Statement.

The decision in Royal Bank requires that the creditor first try to obtain that information from the debtor, through an examination in aid of execution, before it bring a motion asking the Mortgagee (usually the mortgage company) to provide the information.

Usually, debtors do not attend examinations in aid of execution the first time. The process is generally one of serving a notice of examination (which must be served personally) then sending a lawyer to wait 15 minutes on the day of the examination for the debtor not to attend. Next a motion to obtain a Court Order to compel attendance must be brought. Then a second attendance occurs, which usually has a better chance of success. However, it is not unusual to bring a motion for Contempt of Court (which must be served personally) to require the debtor to actually attend at the examination.

If the debtor refuses to provide a Mortgage Discharge statement at the examination a further Court Order is required to compel that answer.

The average cost of the above process can quickly rise to $ 3000.00 if not more.

The Honourable Justice Hoy, in her dissent of the decision which found the above process to be required, noted:

“Many creditors are not as sophisticated as RBC, and can ill-afford the expense of being in and out
of court to enforce a valid judgment for a relatively modest amount.”

As this is the second time this issue has been considered by the Court of Appeal in Ontario, this is likely to remain the state of the law (unless it is appealed to the Supreme Court of Canada) for at least the next five to ten years.

Thankfully, the Court did provide a suggestion as to how to obtain the information without going through all of the legal hoops detailed here. The Court suggested if the litigation involves a contract, the contract can include a consent to release mortgage information in the event of a default.

Of course, I’m not sure how many parties will be willing to say, purchase a set of tires on credit and agree to the release of mortgage information to the company selling those tires.

As a law firm that acts for business creditors, this decision is frustrating for our clients as it leads to increased enforcement costs. However, if there is sufficient equity in the property, selling a debtor’s property to satisfy the Judgment can still make the client “whole” it will just take patience and money to get there.

Inga B. Andriessen JD

1 Royal Bank of Canada v. Trang, 2014 ONCA 883 (CanLII)
2 Royal Bank v. Trang, supra