Our Take on Things

Ontario, we need to talk. You have a backlog problem in your courts but especially in your tribunals. I know it seems like legal professionals have been complaining about judicial backlogs since before the Code of Hammurabi was even chiseled into stone, but you have a serious problem Ontario, and I think it’s time for an intervention.

Tribunal Watch Ontario last year reported that the four largest tribunals in Ontario had a collective backlog of over 67,000 cases. The Landlord and Tenant Board (LTB) alone accounted for 32,800 of those cases. Do you understand what an insane number that is? The Landlord and Tenant Board has less than 100 members to hear those cases. No wonder the average time to a hearing in the LTB has gone from seven weeks to seven months in the last four years.

Now, I know what you’re thinking. “What can I do? I’m just a small province of a measly 15 million people that only accounts for about 40% of Canada’s total GDP. How can I possibly solve this problem?” Well to start, more judges, adjudicators, and court staff would be nice.  Ontario’s population is projected to increase by 37.7 percent over the next 25 years and as a province, we should be making sure that our legal system has the resources it needs to serve that ever-growing population. That being said, let’s also not pretend you’ve been doing a good job at keeping the judges and adjudicators you already have.

Did you know that in the Human Rights Tribunal of Ontario (HRTO), the number of final decisions had fallen from an average of 110 a year to just 16 in 2021 and 2022? Even worse, most of those decisions were written by adjudicators whose appointments weren’t renewed and who had to attend hearings and write decisions after their appointments had already ended. You can’t blame that on Covid. That was all you, Ontario. And while you did allocate an extra $1.4 million in funding last year to hire 35 additional staff for the Landlord and Tenant Board, let’s be honest, expecting 35 additional people to solve a 32,800-case backlog is a big ask from your new employees. 

This state of affairs obviously can’t continue. Justice sufficiently delayed is indistinguishable from justice denied. We need significant reforms to shape our tribunals to be forward facing, accessible, efficient, and modern. But at this point, I’d settle for doing what we have traditionally done as a Province when faced with a crisis, and that is to throw enough money at the problem until we end up with a barely functional system that hopefully won’t come crashing down on us until it becomes someone else’s problem. 

Sincerely,

A concerned citizen

Max Shin, Associate Lawyer

People occasionally get so caught up in their feelings about being wronged or owed money that they forget to think about some of the important factors to consider before suing someone.

Feelings aside, below are a few factors to consider before you litigate:

Can You Recover?

So, if you win your lawsuit (which isn’t always guaranteed, no matter how strong you think your case is) are you able to collect on that judgment?  Do you really want to spend the money, time and resources to end up with a piece of paper that is worthless?

Ensuring the party you want to sue is solvent prior to litigation is a good idea.  That way, once you obtain judgment, you can issue a Writ of Seizure and Sale of Lands and just play the waiting game to get paid out.  You can also piggyback off another creditors’ judgment if they’re successful at enforcing theirs.  

Doing some online searches, property searches and some sleuthing can give you an idea if you may have a chance at successfully enforcing any judgment you obtain.

The Costs of Litigation

Are you prepared to incur the costs to litigate your matter?

Some lawyers and paralegals offer flat fee services; however, the costs associated with litigation can climb quickly.

If you’re successful, the Rules of the Small Claims Court allow you claim your disbursements and up to 15% of the amount of your claim for your representation.  The amount you get back depends on the Deputy Judge and how they’re feeling that particular day, so the 15% isn’t always what you get obtain.

Be Prepared to Settle For Less

If your claim is defended and you proceed to a Settlement Conference, Deputy Judges encourage the parties to settlement for less than what has been claimed.  You don’t have to settle; however, the Court expects you to have good-faith, candid discussions about the potential for settling.  Some Judges aren’t happy when you don’t settle (blogging from personal experience). 

Deputy Judges will usually make a statement like: “a settlement is where neither party is happy – the Plaintiff settles for less, and the Defendant ends up paying something.”

Settling also can prevent incurring further costs and time if the settlement is right.

Do You Have the Time or Patience to Litigate?

Especially now with the Small Claims Court moving slower than molasses, matters aren’t being heard anywhere near what they used to be.  We are still waiting for 2020 matters to be rescheduled. 

Being on hold with the Court for over 2 hours before giving up doesn’t help either.  It takes a lot of patience and time to litigate in a post-covid era.

The above is not an extensive list, but some of the more important factors to consider before you litigate.  Failing to assess important factors may result in getting a piece of paper you can’t enforce and being out more money before you started.

You may be wronged or owed money, but you also don’t want to get burned a second time when you discover it was all for nothing.

Murray Brown, Licensed Paralegal

It’s that time of the year again when everyone LOVES making New Year’s Resolutions, and year after year, almost everyone loses motivation in the second half of January.

Whether goals are work related or personal, for some reason people see the annual passage of time as a fresh start and a reason to get their act together.

People tend to set “best wishes” for themselves and hope for them to magically come true, all the while not taking any real steps towards making them happen. It’s almost like wanting to catch the bus, but simply watching it pull up to the stop and drive away.

Can you tell I’m not a fan of them?

Our work-life balance meeting this month covered this topic: How can we set a real goal, but also move to achieve it?

Think about a goal that is meaningful to you, but also manageable and realistic. Goals don’t have to be monumental; they can be as simple as reading a book for 10 minutes daily or taking the stairs instead of the elevator.

I’ll use myself as an example.

I’ve set a goal for myself in the new year to prioritize my health. I’ve taken steps to do so by (finally) unfreezing my gym membership.

If by the time January 2023 ends and you feel you need a positive change, don’t wait until 2024.

“The best time to plant a tree was 20 years ago. The second-best time is now.”

Meriam Noori, LLB

An interesting case came to my attention just in time for it to be my turn to write the firm’s weekly Blog.   The case is Kiselman v. Klerer, 2022 ONCA 489.    This is a decision of the Ontario Court of Appeal overturning two decisions below it, the first in Small Claims and an appeal of that decision to the Divisional Court. 

According to the Court of Appeal both the Deputy Small Claims Court Judge and the Divisional Court Judge were incorrect.

The facts of this case are that a Residential Landlord sued their former tenant for arrears of rent and damages to the premises in Small Claims Court after the tenant moved out.  

I’m going to pause here to point out this matter was started in 2017 under the Ontario Residential Tenancies Act, 2006 (“the Act”).  That is no longer the Act that governs residential Landlord and Tenant issues in Ontario and this case may have a different outcome if it were started in 2022.

Anyway, back to the case.  At the time the Small Claims Action was started the Act said the Landlord an Tenant tribunal had exclusive jurisdiction for matters if the tenant was still in the unit.  You’ll recall from the facts above the tenant had moved out, so “plain reading” of the Act says that it doesn’t have exclusive jurisdiction.

There were at least three decisions of the Small Claims Court Deputy Judges at that time that said despite that wording, if the Landlord could have with due diligence moved when the tenant was still in possession the Act applied and they had to go to the Landlord and Tenant Board, not the Small Claims Court.

Those decisions were not appealed by the Landlords who lost. That may have been because they didn’t have counsel, didn’t have the funds to Appeal or just didn’t want to carry on.  Regardless, it’s important to keep in mind they were all Small Claims Court decisions.

In Canada we have the doctrine of stare decisis, this means that Courts below are governed by the decisions of Courts that are levels higher than them.  Courts at the same level are persuasive, but not binding. 

The Divisional Court appears to have forgotten that when it accepted the tenant’s argument on Appeal and agreed that the matter should be before the Landlord and Tenant Board.

Fortunately, the Landlord chose to appeal to the Court of Appeal.  In this decision the Court pointed out the clear wording of the act meant Small Claims had jurisdiction and there was nothing to support the Small Claims Court decisions that decided the opposite.  Finally, five years after they started their Small Claims Action the Landlord was able to continue their Small Claims Court action.

They received $ 3,500.00 in legal fees (I’m sure the actual fees were closer to $ 20,000.00) and now they’re back in the cue …. Which means maybe they’ll have Judgment in 2024 given the backlogs.

The point of this blog is not to rail on about Court delays, but it is to point out that Appeals matter.  When parties with legitimate positions don’t Appeal, the Courts can be clogged with numerous similar decisions that are not correct.  Yes, economics factor into Appeal decisions, but ultimately, our legal system relies on the bravery of parties to Appeal incorrect decisions.

Inga B. Andriessen, Principal Lawyer

Most employers know that they need a clear and enforceable employment agreement with their employees, but many forget the importance of workplace policies.

Let’s start with the policies you must have in the workplace – these are mandated by legislation. Among the list of required policies that you should have in your workplace are:

1. Workplace harassment and violence;
2. Occupational Health and Safety;
3. Right to Disconnect policy (25 or more employees);
4. Accessibility for Ontarian with Disabilities Act;
5. Human Rights and Anti-Discrimination; and, 
6. Canada Labour Code (Federally regulated workplaces).

Aside from the above required policies, employers should also think about establishing policies that clearly set out their expectations of employee conduct in the workplace.

A well drafted policy can provide a guide for both employers and employees and avoid unforeseen problems in the workplace.  

Optional policies can address vacations, social media use, overtime, attendance, dress code, working from home, and employee disputes (and more). The creation and implementation of these policies can streamline operations in the workplace and reduce any uncertainty regarding the workplace “rules.” 

All policies should be clearly conveyed to employees, so that they understand both what is expected of them, as well as the consequences for their violations of the given policy.

Employers should have all of their policies reviewed annually to ensure that they are still up to date with relevant laws and meeting their internal requirements.

Robin K. Mann, Associate Lawyer

I’m going to get a little personal here, but it’s for a very good reason.

A close family member of mine over that last year and a half has been on a leave of absence more than they have been actually working.  In June of 2021, they suffered a massive heart attack and had a pacemaker implanted.  They were off work for many months recovering.  They went back to work in May of 2022 and in August, that same family member suffered a ruptured aneurysm and had major surgery.  They are still not back to work and in fact, they are scheduled for another surgery mid-December.  This family member is 47 years old.

Just the other day we were talking and they brought up a radio ad they had heard regarding changes to leaves of absences which they believed increased their leave time.  This caused me to pause, and I’ll you why. 

As I work for this firm, a large part of our practice is employment law.  While I’m no lawyer, I am usually apprised of changes that are being made to the Employment Standards Act (“ESA”).  I was not aware of any major changes that was coming down the pipeline for Ontario employees, but I was aware of some minor changes coming for Federal employees. 

There are 2 points to this story. Point number 1: Make sure you are looking at the legislation that applies to you.  The ESA is not Canada Labour Code (“CLC”). 

Here is a quick breakdown between the ESA and the CLC regarding leaves of absence:

Type of Leave:                   Ontario Employee Entitlement   Federal Employment Entitlement

Critical Illness                    Under 18: 37 weeks unpaid          Same

                                          Adult: 17 weeks unpaid                     Same

Family Caregiver Leave     8 weeks unpaid                            No leave provided

Sick Leave                         3 days of unpaid                           17 weeks of unpaid medical

                                                                                               16 weeks of unpaid re: Covid

Personal                            3 days unpaid                              5 days, 3 are paid

The only change that I am aware of is to the Federal paid sick leave entitlements, which could provide federal employees up to 10 days of paid leave in a calendar year. 

I’m not sure what ad my family member heard, but it could be that they maybe didn’t’ know what their full entitlement was.  To that end, here is point number 2:   You can’t take what you hear on the radio to heart.  There are a lot of caveats to leaves of absences.  Make sure you know what you are entitled to as an employee, and know what you as an employer are required to provide. 

Christine Allan, Law Clerk

      

As a former tax-lawyer, one thing that never fails to surprise me is how often intelligent and sophisticated clients fail to consider the tax implications of multimillion-dollar deals and transactions.

I remember working on a file with a client who had recently sold his stake in a business and wanted to know what the tax consequences would be.  The complicating factor was that even though the client wasn’t a shareholder of the business being sold, the three partners had agreed to split the proceeds evenly between them. With the payout date scheduled for three years after closing, the client decided to wait until a week before the payout to consult a tax lawyer about what kind of taxes he would be paying on those proceeds.

Here’s what he got. When the shares were sold, capital gains tax was triggered on the gross proceeds of the share sale. Now, without any supporting documents for the oral agreement, this payout to the sole non-shareholder partner looked a lot like employment income and would probably be taxed like it was well. Suddenly, his $1,000,000 share of the sale proceeds was starting to look a lot closer to about $300,000 after taxes. Funnily enough, the business that had been sold was a financial investment firm.

The point I’m trying to make is that this is a common phenomenon in both corporate and personal transactions. While practicing real estate law, I’ve seen parents transfer properties to their children without considering the capital gains tax or land transfer tax that would be incurred immediately or in the future as a result of those transactions.

Tax planning can be one of the most consequential considerations in any given transaction, and yet those involved often treated like an afterthought, if even that. So the next time you’re about to transfer or sell millions of dollars of property, try talking to a tax lawyer. 

Max H. Shin, Associate Lawyer

The other day we received a Notice of Trial from the Court.  The date of the Trial was November 1, 2022 at 8:30am.  However, the Notice of Trial was dated November 7, 2022.  This brought on some confusion, especially since the Settlement Conference in this matter just took place several weeks prior.

I tried to contact the Courthouse for clarity, and remained on hold for over two hours before finally hanging up, because I was tired of hearing the same message over and over:

“Thank you for your patience.  Your call is important to us…please remain on the line, and your call will be answered in sequence.”

While on hold, I decided to try my luck by emailing the Court, not expecting a response.  However, their response was just as confusing as their Notice.

We were advised that the Trial date was put “into the queue for November 1, 2023” not 2022 (obviously), however, the Trial still might not take place on November 1, 2023 as it says “SCC COVID 19 NEW HEARINGS TBD.”

I filed a Motion on this particular file in January, 2022.  We’re still waiting for a date.  The issue of our Motion should have been dealt with long before the Settlement Conference took place.

We were told that that our Motion was still in the queue to be scheduled.  Our Motion, that was filed in January, 2022 was still in a queue to be scheduled.  Why are Motions in a year-long queue? 

What has the Small Claims Court been doing that it is taking this long to schedule a Motion?  For the record, we are still waiting for Assessment Hearings to be scheduled that were requested back in 2020.

There has been essentially radio silence from the Small Claims Court to explain why things aren’t progressing as they should.  You would think after two years since the Pandemic started that things would go a bit smoother.  But alas, they are not.

Sometimes access to justice can be difficult.

Murray Brown, Licensed Paralegal

There was a time when a Blog with this title was only, ever about Small Claims Court.  That’s not the case today.

In Ontario, the Rules of Civil Procedure govern steps in a lawsuit.  The Associate Judges and Judges interpret and apply those Rules and in the past, different courthouses have had different procedures for applying the Rules.

However, we’re in a situation in the Toronto Court House now where the Judges are deciding how lawyers will run their files and that is not OK.

If you want to bring a motion in front of a Judge in Toronto you must first attend virtual  Civil Practice Court (CPC Court).   You and the other side agree to a timetable for your matter ahead of time and the Judge endorsed the record to make it official and give you a hearing date.

Less than a year ago the Rule was that you had to be heard within 100 days of CPC Court or explain to the Judge why you need more time. Evidently, those days are gone, though the Practice Direction, as of the date of writing this Blog, still says you need to arrive with dates within 100 days.

However, rather than schedule matters further out, or provide counsel and their clients the choice of continuing with the motion or choosing not to go that route, Judges are refusing to let counsel schedule motions.

That. Is. Not. In. The. Rules.

I appreciate the Courts are backlogged.  I appreciate we need more Judges.  Neither of these are an excuse to refuse to let Counsel run their case.  Prohibiting a party from bringing a motion they want to bring is Justice denied.  If it doesn’t succeed that gets addressed on costs. 

My suggestion for fixing the backlog

The Toronto Court House is backlogged because every wrongful dismissal plaintiff’s firm is bringing their claim in Toronto to take advantage of mandatory mediation.   A simple Rule change requiring employment claims to be brought where the plaintiff was employed will help curb some of the pressure.  Another option, make mandatory mediation Province wide.

Similarly, if Toronto Judges award significant costs against plaintiffs who should have started their action in Small Claims, rather than Superior Court, that will send a message as well and clear out a lot of the cases in Toronto.

Of course, we need more Judges appointed to hear the cases.  However, taking the steps I suggest above would go a long way to clearing out many of the cases currently grinding the Toronto Court House to a halt.

Inga B. Andriessen, JD