Litigation

The end of Canadian Passport Shopping?

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Our federal government has made good on its promise from 2012 to end the days of bogus Canadian citizenship applications. I for one applaud these steps.

My parents and my wife’s family immigrated to Canada starting in the 1950’s. They settled in Canada, worked hard, married, raised families and made a life for themselves here. When able to do so, they each applied for and obtained their Canadian citizenship. They did so knowing full well that it meant a break from their previous life and that it represented the new life that they had come to Canada to pursue.

They did as so many others have done over the years – leaving behind their extended family, wrestling to overcome language barriers and learning the customs of a country foreign to them. They now enjoy fully the fruits of that labour, having all progressed into retirement.

If their nationality was ever queried by a stranger, as is normal given that English is a second language for them, each would say that they were Canadian and only then would advise of the country from which they had immigrated.

They did not come to Canada to obtain citizenship under false pretenses, thereby obtaining a Canadian passport and the ease of travel that accompanies such privileges. They did not return to their countries of origin shortly after arriving in Canada and thereafter falsely declare in their citizenship applications that they had been in Canada the entire time.

Such citizenship fraud is being investigated and prosecuted in Federal Court. Having proven that the citizenship application was fraudulently made, the rights associated with the privilege of citizenship are being stripped away.

The National Post recently reported on one such case: http://news.nationalpost.com/2014/07/28/blatantly-lying-loses-family-its-citizenship-but-earns-them-a-63k-bill-from-canadian-government/

Immigration lawyers are noting that investigation into this form of citizenship fraud has not been aggressively pursued in the past. This will not be the last such case that will be reported in the papers.

Paul H. Voorn, Business Litigation Lawyer

Small Claims Court Delays add to Costs for users

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Our firm always looks at a litigation file that we’re starting from the perspective of how to obtain money (not just a paper Judgment) for our client in the fastest, most economical way possible. This is the viewpoint from which this Blog is written.

In Ontario, you must sue in Small Claims Court for matters that are $ 25 000.00 (without interest) and under. Claims over $ 25 000.00 can also be started in Small Claims Court, however, any amount over $ 25 000.00 will not be awarded.

There are times when it is more cost effective to start matters in Small Claims Court, however, the chronic delays in the Small Claims Court process are making those times few and far between.

It is the norm in Small Claims to have defendants request an adjournment of the first motion date, settlement conference date and trial date. Each of these adjournments can add an additional 3 to 6 months, per stage, to a matter. That can drag a Small Claims Court matter out for many more months, if not a year, than a Superior Court matter.

In Superior Court , adjournments are also generally granted if requested, however, adjournments are generally for a period of two to four weeks, not months.

The advantage of the lawyer controlling the Superior Court schedule creates a big benefit for the client in terms of moving the matter along and obtaining judgment in the quickest time possible.

Ironically, given the speed advantage of Superior Court, an undefended matter can often be litigated for less money and Judgment obtained much more quickly than Small Claims Court.

If your lawyer recommends dropping the amount of your claim to fit into the Small Claims Court limit, make sure that lawyer understands the delays in the system and the impact that can have on your claim.

Inga B. Andriessen JD

You have a Judgment, now let's get you money.

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Judgments entitling you to money are just pretty pieces of paper until you take steps to enforce it.

Those Judgments can cost a lot of legal fees to obtain and there should be no satisfaction in obtaining a Judgment that only has value of principle, rather than enforcement.

So, what are the options for enforcing a Judgment?

The easiest option is a garnishment. A garnishment of a bank account that is solely owned by the debtor can be 100% garnished. The money is paid by the bank to the Sheriff, the Sheriff waits at least 30 days to see if there are other Judgments and then distributes the money pro-rata to everyone who has a Judgment against the debtor. The exception to that is that if a government agency has a writ filed, they have a priority to be paid before other Judgment creditors.

Jobs can be garnished at the rate of 20% net income. However, if there is a Family Law garnishment (50% of wages) that garnishment has a priority over non-Family Law Judgment creditors.

Any money owed to a Judgment debtor by another person/entity can also be garnished. Think of garnishment as a game of keep away. The debtor and person who owes them money are throwing a ball. The judgment creditor jumps in the middle of the two and takes (garnishes) the ball.

Another option to enforce a Judgment is to sell property. This is only a good option if the property is solely owned in the name of the Judgment debtor and the mortgage on the property is not significant. The Judgment creditor must pay significant fees to Sheriff for this process and the proceeds are shared by all Judgment creditors.

The Sheriff can also seize and sell goods of value. This process generally has significant fees and the Sheriff is reluctant to proceed with this in many areas of Ontario, resulting in significant legal fees being incurred to sell goods.

An examination in aid of execution is a once a year opportunity for a Judgment Creditor to ask the debtor questions under oath regarding assets that can be used to satisfy the Judgment: this is a good way to get information, but often expensive. Many Judgment debtors know the game: they take steps to increase the legal fees incurred before they finally provide answers.

At our firm we have even had several Judgment debtors choose 10 days in jail instead of answering questions about assets. Of course, ultimately, they answered the questions and they
had the 10 days in jail as an added bonus.

The best way to obtain information to enforce a Judgment is to conduct a Credit Search. This can only be done with the debtor’s permission or with an agency that has the right to search credit when a Judgment is obtained. We recommend our clients include ongoing Credit Search authorizations as part of their new customer intake forms: better to be safe than sorry.

Our firm has been successfully enforcing Judgments for over 22 years. We don’t like to get paper Judgments, we like to get money for our clients.

Inga B. Andriessen JD

We need more Judges & Courthouses in Ontario

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The Ontario Provincial election will be held June 12 and this is a good time to tell the candidates of all parties what’s troubling this Province.

As a law firm whose practice includes Business Law Litigation from the Small Claims Court to the Court of Appeal throughout Ontario, we have a strong opinion on the need for more resources to be provided to the Civil Court system in Ontario.

We don’t practice Criminal Law so we have no knowledge, nor opinion, on how long it takes to get to trial in that area, this Blog is only about Civil Law.

As a result of increasing the Small Claims Court Limit to $ 25 000.00 in Ontario, the number of claims being processed through that Court system has skyrocketed. However, the number of Judges has, at best, remained the same. In some jurisdictions the number of Small Claims Court Judges has decreased.

This means that for an undefended matter in Toronto, it takes at least 6 months to get a Judgment. If the matter is defended, the time is 18 months at a minimum.

In Brampton, the delay is even longer as that region is completed snowed under by the amount of claims and lack of Judges.

Of course, in most jurisdictions, there are not enough Court Rooms to accommodate more judges, so that needs to be dealt with at the same time as increasing the number of Judges.

At the Superior Court level ($ 25 000.00 +) in Toronto it takes at least four months to obtain Judgment if the matter is undefended. If the matter is defended and goes through to trial, it can take 2 years or more.

In Milton, Ontario a defended matter can get to trial in approximately 18 months after being issued, however, I understand the fall out from that is it takes 9 months to obtain an uncontested Divorce in the Region as the Judges who hear Civil matters also hear Family matters. That is not right.

The fall out from lack of Judges also extends to the Court Counter Staff.

At the Brampton’s Sheriff office they are responsible for receiving money garnished from employers and bank accounts. That money is to be held 30 days and then distributed between everyone who has a Judgment against the debtor.

Well, Brampton’s Sheriff office doesn’t open envelopes for at least six weeks. After the envelopes are opened and put in the system, they process the money after approximately 90 to 120 days, at least.

The impact of this delay is that other Judgments can come into the system and compete with the money that should have been distributed almost a half year earlier. This is not right.

This needs to be fixed.

Inga B. Andriessen JD

Business Expectations & Blurred Lines

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This past week I spoke to The Canadian Tennis Professionals Association and the Professional Tennis Registry at the Rogers Cup in Toronto about Social Media and the Law. Part of that conversation involved encouraging each club to decide what their specific expectations were for their employees and then using those expectations to craft a policy for the use of Social Media.

What does your business expect from its employees? What does it expect from its’ executives?

If you don’t want, for example, your CEO, to stumble down a main street in Toronto while intoxicated, posing for photo opportunities, you may want to spell that out in their Employment Contract. If you think back to the two Blackberry Executives who were let go after being drunk & disorderly on a plane a year or so ago, you’ll see that it is possible for a lawyer to craft clauses in contracts that require good behaviour when representing your business.

The problem that businesses frequently encounter with expectations surrounding behaviour is their failure to specify what is expected in writing. If you don’t set out what behaviour you expect, you will have a hard time convincing a Judge that the employee knew the behaviour was bad and that you should be allowed to fire them for cause for not adhering to your good behaviour standards.

Expectations are not just limited to employer/employee relationships. If you do business with a customer on a “handshake” and you don’t meet what the customer’s expectations were, you have little evidence to present to a Court that you should still be paid for the service/good you provided.

All businesses have expectations. There is nothing wrong with putting those expectations in writing. You will not lose a customer worth having by requiring they sign an agreement detailing what you will provide and what they will receive.

When it is in writing there are no blurred lines regarding business expectations. If you want to enforce your expectations, Judges want it in writing, so let’s give them what they want.

Inga B. Andriessen JD

Your Business Reputation

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Mike Duffy, Nigel Wright, Rob Ford – all men whose reputations have been taking a hit over the past week. Each of these individuals is choosing a different way to protect their reputation, but leaving aside personal reputations, what about your business reputation?

The issue of defamatory remarks by anonymous posters has become a business issue many have had to tackle – when hit with these remarks it is important to evaluate their impact and what, if anything, you intend to do about it.

If someone posts something defamatory about your business in an obscure blog that receives no traffic and does not appear in search results, then pursuing the poster will attract more attention to the false comments than leaving them alone. Before proceeding “on principal” ask yourself if the legal fees will exceed the monetary impact the posting has on your business. If the answer is yes, then you need to consider if you must proceed in any event to prevent yourself from being targeted by others or if it is better to simply let the blog comments die an slow, unviewed death.

Your business reputation extends beyond bad reviews on Yelp or in Blogs, it also extends into your credit relationships with customers. I recall vividly a young dentist we assisted many years ago. The dentist set up practice in a neighborhood and quickly found that many of the cheques for post-dated payments were being returned NSF. The dentist was getting a reputation for doing work without taking immediate payment and many were taking advantage of this. Ultimately, the dentist chose to sue on several accounts and “surprisingly” the dentist was no longer the victim of people seeking services with payment over time. The dentist has gone on to have a thriving practice, dispelling the concerns of many business owners that if they sue on for money that is owed, they will lose customers.

As lawyers we are always taught, you have one reputation, you don’t want to ruin it.

Are you protecting your business reputation from ruin?

Inga B. Andriessen JD

Understanding Clients and Delivering on your Promise

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I snagged the title to this Blog from a Huffington Post Blog by Krizia. The original blog described the evolution of a small business called Lotus Premium Denim. This Blog is not about Denim.

The title of the Blog grabbed my attention because it refers to two things many lawyers fail to do, but two things I know that we do at our firm.

The title of the Blog grabbed my attention because it refers to two things many lawyers fail to do, but two things I know that we do at our firm.

Delivering on our promise is critical in maintaining the client relationships we have established over the past 20 years. I’m proud to say that many of the clients we have today are clients we have had for the entire 20 years the firm has been around.

The keys to “promising” as a lawyer in my opinion are:

1. Communicating clearly to the client what you will be charging them.
As lawyers all we have to sell is our time, but how we sell it (by the hour or by the task) is an important difference and clients must be told about this up front.

2. Honestly evaluating any litigation and being clear, even if you have a strong case, there is always a possibility of a Judge finding against you.
Clients have to be told Judges are human and let’s face it, there is a reason we have Courts of Appeal.

3. Before starting any litigation, assess the likelihood of collecting on a Judgment and advising the client if the only result will be a “pretty piece of paper stamped Judgment”.
No one just wants a pretty piece of paper and why should the law firm be the only party that benefits from litigation?

If you are our client, we understand you and we promise to continue delivering excellent legal services to you.

Inga B. Andriessen JD

Take Responsibility for your Actions

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Sometimes writing a weekly blog is a challenge, some weeks it almost writes itself. This week the latter is true.

I heard on the radio yesterday, then read in the paper today, the story of the $ 22 000.00 Cell Phone Bill incurred by the 12 year old son of a family vacationing in Mexico. The son got a sunburn and stayed in the room for three days watching videos and gaming, thereby running up the bill. The father is outraged at the Cell Phone Company.

In a similar vein, I spoke with a business owner a few weeks ago who wanted to sue on an invoice that was 26 months overdue. No payments had been made since the invoice was delivered over two years ago. As a result of the limitation period in Ontario, the business owner was no longer able to sue. The owner told me that it was not fair that a law suit was no longer possible and the debtor had taken advantage of the business.

My answer to both of the above situations is: stop blaming others.

I have a child who has had access to cell phones since 10 years of age. That child has had drilled into them the cost of data and the fact you cannot use anything except WiFi if we are out of Canada. That child has also been taught how to turn off data roaming and the issue is discussed more than once every time we’re about to head south of the border. Not surprisingly, I have never had an unpleasant cell phone surprise.

With respect to the business that didn’t sue for over 2 years, that is just bad financial management. Our firm’s 30-60-90 Sue program wouldn’t let the receivable go that long. Banks won’t finance receivables past 90 days – why should a business? A debtor holding out payment for over two years didn’t take advantage of a business, the business let the debtor not pay for far too long.

When I pointed the above out to the business owner, my sense was I was the first person who had ever told them that they were responsible for their actions. I suppose in the future I may be giving the same shocking revelation to the child who racked up the cell phone bill the father is now complaining about and teaching his child the valuable lesson of “it’s not your fault, blame others.”

Taking responsibility for your personal actions and the actions of your business is important in order to succeed in life and business. The sooner that lesson is learned, the better.

Inga B. Andriessen JD

If you Lose, You Pay

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The news today contains two stories about parties seeking or being ordered to pay legal fees over $ 100 000.00 to a party on the other side of a law suit.

Helena Guergis has been ordered to pay $ 118 560.00 to the defendants she unsuccessfully sued for defamation after being removed from the Conservative Party and Caucus. Rob Ford is seeking over $ 100 000.00 from the man who unsuccessfully brought an Application for his removal from office.

The newspaper articles I read today are written from a point of view of shock that these awards are made and sought: they should not be. In Ontario, the loser of any stage of a law suit generally pays the legal fees of the winner.

There is good reason for awarding costs against the loser: it reduces frivolous litigation and ensures that we don’t end up looking like the USA legal system. I am aware of the view point that says this stifles legitimate litigation by scaring people away with the threat of legal fees.

The amount of legal fees awarded is divided into two categories: substantial indemnity and partial indemnity costs. Substantial indemnity costs are 100% of the legal fees and disbursements the winner paid their lawyer. Partial indemnity are approximately 60% of the legal fees and 100% of the disbursement the winner paid their lawyer.

Substantial indemnity costs are generally only awarded in a few situations:
1. if there is a contract that entitles the winner to those costs;
2. if the loser has alleged fraud and is unsuccessful;
3. if the winner had offered to settle for amount less than they were awarded.

The $ 100 000.00+ amount of costs that are in the news are due in large part due to the lawyers who represented the defendants. There are many very expensive “Bay Street” lawyers who will quickly run up fees. Some lawyers bill $ 1800/hour. Ours does not.

A company with a good reason to sue should not be afraid to do so. With good legal advice, the risks can be properly managed and there will be no $ 118 000.00 surprise legal bill at the end of the day.

Inga B. Andriessen JD

Lawsuits

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In the last month we’ve seen one, then two, and now three interesting, and completely expected lawsuits. I’m talking about the class actions against the federal government for the loss of a data drive containing the personal information about student borrowers.

As a former student loan holder, I am understandably upset about the data breach. And as a lawyer, I have a fairly good understanding of the litigation process. However, as a solicitor, I definitely have a bias against litigation – so take these comments for what they’re worth. IMHO, these lawsuits are dumb.

I think that someone should be held accountable, remediation should be made available for any damage that results from the breach, and steps should be taken to ensure that it never happens again. But these lawsuits almost guarantee that none of that is likely to happen.

Firstly, there is no evidence that any of the lost data was discovered by anyone, or has been used for any nefarious purpose. There is no actual harm. Some might argue that the lawsuit preserves the plaintiffs’ rights in the face of the Limitations Act should we later find out that identities have been stolen or something similar. I would argue that in the absence of an actual harm, the limitations clock hasn’t even started ticking yet.

Now instead of the government having a meaningful and transparent investigation into the mishap, we will have two separate and biased investigations, both protected by some degree by litigation privilege. And instead of being motivated by noble public policy objectives, the government’s investigation will be motivated by the desire to avoid legal liability and a fat payout from a skinny budget account.

Ultimately any damages, if any, will be paid out of taxpayer money. The government department responsible for the breach doesn’t have any money other than that allotted by taxing the very people who are behind the class action in the first place. In a best case scenario, the plaintiffs may get a marginal payout that exceeds their tax contribution by a pittance. The rest of us will be paying for it as well. The lawyers stand to do much better of course…

There are a lot of very good reasons for litigating. The courts offer remedies ranging from monetary to reputational to purely emotional – and many times the courts are the only place where these remedies can be found. When parties are wronged and the search for a remedy becomes intractable, then the legal system, flawed though it may be, can provide some great opportunities for real justice.

But in many cases, litigation can also completely subvert the available dispute resolution process. It can make people clam up, it can make information disappear, and it can add an emotional element that make some remedies completely unavailable.

A good lawyer should know when to use which tool and should advise clients accordingly. Certainly there are times when an individual may wish to proceed with a lawsuit, contrary to the advice of counsel, but I think that is rare, and I don’t think that is the case with these class actions. Bad lawsuits waste valuable court resources and they give good lawyers a bad name. Hopefully these ones will fizzle out and we can get back to using the courts to address serious issues.

Scott R. Young