Our Take on Things

We as humans have a great attribute to persevere. We like to think that everything will work out in the end if we keep fighting for what we believe is right. This idea can get you far in life but it can also cost you a lot especially in the legal field.

One of the first things, all individuals should know prior to commencing a claim is that “if it doesn’t make dollars, it doesn’t make sense” (Big Pun reference). In the legal world personal feelings and grudges cloud the mind of all those involved and it leads to money being wasted with little to no recourse for recouping those losses.

If your reason for commencing a claim is personal or the individual you are going after has no money to pay a judgment, it may be better to seek alternatives to commencing a legal action. This may include having a conversation with the opposing party, seeking a mediator or just cutting your losses. While, the ladder may be hard to swallow, it may make be the difference between losing hundreds and losing thousands of dollars.

Looking at commencing a claim as a business decision is something many lawyers won’t broadcast. As a field we work on billables and nothing drives up billables like personal feelings. However, advising a client about treating a claim as a business decision opposed to a personal one is what retains clients long term.

In our firm, we conduct searches ahead of starting a law suit to be certain there is something to collect a Judgment from. Many other firms don’t do that – you need to ask yourself why?

So, long story short, always say to yourself, “if it doesn’t make dollars, it doesn’t make sense” and if it does make dollars, commencing a legal claim may be the next logical business decision.

Harman S. Toor JD
Associate Litigator

I was recently successful in a Small Claims law suit where our client was sued for alleged damages to a vehicle the plaintiff claimed were caused by our client.

It was obvious after reviewing the Plaintiff’s Claim that the plaintiff had no reason to sue our client. The Deputy Judge at the Settlement Conference had a hard time understanding what the plaintiff’s damages were. We were also confused, and so was the plaintiff! (Helpful hint: if you don’t understand what your paralegal or lawyer has drafted, ask them before they sue on your behalf.)

After the Settlement Conference, we served an Offer to Settle for a nominal amount in an attempt to avoid going to Trial. The nominal amount was based upon our Defence and the Deputy Judge’s thoughts at the Settlement Conference. More importantly, the Offer was served because of the cost consequences for the failure to accept an Offer that is better than the end result.

The Small Claims Court Rules state that if an Offer to Settle is not accepted, but was served before the Trial date, and does not expire before the start of the Trial, the successful party is be entitled to costs that are double the amount that would normally be awarded.
In our case, the claim was in the amount of $25,000.00. The maximum a successful party would be entitled to for representation is 15%, being $3,750.00. With disbursements, our client’s costs ended up being approximately $4,300.00.

During my submissions, I requested that amount, and because our Offer was not accepted and was better than the result (for us at least), I requested double, around $8,600.00.

When the Deputy Judge asked for submissions from the plaintiff’s paralegal representatives (there were two) as to what I was requesting, they asked the Court for leniency. They claimed that the stress caused to their client was worth the Court being lenient when ordering costs against them. As the Court had already found that our client was not responsible for that stress, their request was denied. Our client ended up with a cost order of $7,900.00. Our client was very pleased with this result.

As litigation is never guaranteed, it is always important to consider serving an Offer to Settle, whether you are the plaintiff or defendant, because it may help you in the end, whether it is you paying less in costs if your offer was better than the result, or you getting double costs if you are successful.

Murray S. Brown, Paralegal

Ontario lawyers all recently received the email from the Law Society telling us we have to create a Statement of Principles that acknowledges our obligation to promote equality, diversity and inclusion generally, and in your behaviour towards colleagues, employees, clients and the public.
That’s not hard for me – I’ve always operated on the basis of hiring the best people, regardless of colour, creed, who they love & who they worship. I don’t behave that way because I’m told to, it’s just who I am.

As a result, I was surprised by Bruce Pardy’s commentary in the National Post (see here http://tinyurl.com/y7tcd5ve) suggesting this made him believe he was in North Korea.

As a Mentor in Ryerson’s Law Practice Program I walk through soon to be Called lawyers through our Rules of Professional Conduct. For the past three years I’ve discussed the obligations we have as lawyers treat all equally – maybe Bruce doesn’t know he is already required to behave in accordance with the Statement of Principles the LSUC is asking him to affirm?

I think this Statement of Principles is kind of like renewing marriage vows – it reminds you of the Oath we take when we become lawyers in this Province.

It’s always good to have an opposing view to consider, particularly when you’re a lawyer – so thank you Bruce for providing that view as jarring as it is to read.

If you thought by the title of today’s post that we were jumping ship and reviewing the American reality television show of the same name, rest assured we are not! Today’s post is a reflection of some of the recent contract negotiation work we have assisted our clients with and the importance of bringing your legal advisors early in the game.

Zero sum negotiations are increasingly becoming a thing in the past as arm’s length parties look to true partnerships (not in the legal sense of the word though!), as a desired goal in business relationships. Its time and cost effectiveness, as well as the business stability it brings, has influenced the art of the deal to bring commercial fairness in contract negotiations.

However, the timing of contract negotiations is an important factor to consider as you do not want to find yourself backed into a corner where the other side refuses to accept changes that are important to you. Once you begin work or advance monies in connection with a proposed deal, your conduct could be misinterpreted by the other side as being your agreement to the proposed arrangement – including your agreement to their contract. However, without a signed contract in place beforehand, you could find yourself in a lower bargaining position due to the lessened incentive by the other party to agree to any requested changes or terms you discover when reviewing the contract.

Avoid being caught in such a situation. Before you become invested in a proposed deal or arrangement, connect with your legal advisors first and ideally, bring them in the moment you are seriously contemplating a contractual relationship with a third party. Preserve your reasonable opportunity to advance changes and terms so that you feel confident you are entering a contractual relationship with commercial fairness.

Michelle Eames, LLB, LLM

There are so many people out there who have not given serious thought about Estate Planning. They question “what will happen if I die?”, “what will happen if both myself and spouse dies, my child(ren) will get the property , right?”.

Before that happens (I mean before you die), how about having a sit down with a lawyer and plan your estate. Simple, right? Not as simple as one may think.

It is a process, and the more prepared you are at your first meeting with your lawyer, the better it is for your lawyer to begin drafting your Will with all of the information being available upfront. Know who you want as your Trustees, alternate trustees, and know who will hold your Powers of Attorney, both property and personal care.

You need to think about all of property and assets that you have, including any corporate assets, you need to think about your bank accounts, life insurance policies, investments (RESP’s RRIF’s etc.), and vehicles.

It is common for spouses to have mirror wills (if I die my estate goes to my spouse and vis versa), but if you plan on something different, be prepared and instruct your lawyer and be clear with your instructions.

One of the most important things that clients tend to forget to think about is in the event of a common disaster. What happens if your whole family dies? That also needs to be addressed. Are there charities that you would like to support? Are there friends who have been behind you that you would like to leave something to? Think about the whole picture.

The more information that you come to meeting with, the quicker your Estate Planning will go.

Christine Allan, Law Clerk

There are numerous situations where a client walks into a law office with a valid issue but is unable to receive the outcome they desire. In this profession, clients do not always get the results they want however they should never be robbed of their day in court due to their claim being prevented by limitation issues. Limitation issues arise when an action is discovered and brought outside the correct time period.

When starting an action, one of the main items to consider is the expiration of the limitation period. Prior to the implementation of the Limitations Act, 2002 (“LA”) the amount of time a claimant had to bring an action depended on the event and type of action. This provided uncertainty to lawyers which in turn provided uncertainty for clients.

With the implementation of the LA, the Ontario government attempted to simplify limitation requirements. The LA provided a general limitation period of two years. This means that a lawsuit must be brought within two years of the day on which the claim was discovered.

While the LA simplified when an action could be brought it provided exceptions to when it did not apply, which can still lead to confusion. One of those exceptions is claims involving real property. Real property is governed by the Real Property Limitations Act (“RPLA”).

The RPLA provides a ten year limitation period for actions dealing with land. Section 4 of the RPLA outlines when a proceeding falls under the RPLA and is subject to a ten year limitation period.

However, not all actions dealing with land fall within the RPLA. A breach of contract while dealing with land will not be subject to the ten year limitation period and would instead fall under the LA. An action or claim for damages must fall within the definition of “land” in the RPLA for it to be covered by the ten year limitation period.

While the difference between the two acts may seem trivial it may be the different between an action involving land being available or being barred. Thus, while you may be under the impression that you have no cause of action due to two years passing since you discovered your claim, if it involves land you may still have a viable cause of action.

In short, when an issue arises, do not delay talking to a legal professional. Lawyers can help you but due to the LA and RPLA, we also have to work within “limits.”

Harman S. Toor, JD

Our firm is a Professional Corporation. The Canadian Government has declared we are therefore tax cheats. I disagree.

Many of our clients are also Professional Corporations or Small Business Corporations. They are not tax cheats either.

Over the past twenty-four year, I have hired at least thirty people. For each of those employees, I have paid the “top ups” of EI, CPP and taxes as well as our Provincial Employer’s Health Tax. I provide extended health benefits for my employees and our Professional Corporation supports High School Scholarships, the Ontario Justice Education Network and other organizations that need help.

I don’t have a Government Pension. I’ve had to save up in an RRSP, of course at the same time I was saving for my kid’s education in an RESP.

I didn’t get a paid Maternity Leave, I took ten days off and was back at work after having my child. I don’t get a paid sick day, though I do provide my employees with five paid sick days per year. I didn’t get paid when I had an unexpected emergency surgery that left me unable to work for eight weeks.

I’m not complaining about any of the above, but I am complaining when the Canadian Government tells me I’m not “paying my share” and I’m a “tax cheat”. That’s not what Small Business is doing by using a Corporation. Small Business is protecting personal liability by using a Corporation. Small Business is separating personal finances from business finances. Small Business is building the backbone of our economy.

I am not a tax cheat !

Inga B. Andriessen JD

One thing that we have noticed with our corporate clients is that they are often operating under a name different than that which has been incorporated. For example, incorporating “ABC Company Incorporated” and then operating under “DEF Co”.

What’s the problem with that? Everything. The Business Names Act specifically states that “no corporation shall carry on business or identify itself to the public under a name other than its corporate name unless the name is registered by that corporation.”

The corporation that you registered is a legal entity that can enter into contracts, etc. You cannot choose to operate under a different name without doing the proper searches and registering that name with the Ministry of Government and Consumer Services. In failing do that, you could potentially be infringing on someone’s Trademark, which can be serious problem.

How do you fix this? When incorporating, you can choose to either incorporate with the name that you want to operate under, or if you choose to operate under a different name, get your corporate lawyers to take that extra step to ensure that the business name is available and register it. The corporation will own that business name. It is a legal entity, and can be used on a store front, when invoicing clients and in operations.

Same goes for individuals who wish to operate without incorporating. You still need to register a Business Name. This is called a Sole Proprietorship, or in the case of more than one individual, a Partnership. The searches are still required and you will then be able to operate with that name.

Our advice: reach out to a lawyer to assist with your corporate planning. In most cases, it will save you money as it can cost more to fix mistakes than to have it done right in the first place.

Christine Allan, Law Clerk

We recently had a request from client who is a condominium owner to proceed with an eviction because their tenant was not only failing to pay them rent, but they also had listed the condominium for rent on the Airbnb website.

The question they asked was: Can a tenant rent out their unit through a sharing site like Airbnb? In their case, the answer was no.

Airbnb is short term subletting. Section 97 of the Residential Tenancies Act states that a tenant must obtain consent from the landlord in order to sublet the unit.

Subletting without the consent of the landlord infringes on a landlord’s rights under Section 64 of the Act, and is grounds for eviction.

Even if the landlord consents to this type of subletting, which they should not, the issue of using the unit as an Airbnb may still not be permitted. Section 134(3) of the Act does not allow a tenant to sublet their unit for an amount greater than the rent paid to the landlord. If you are paying $3,000.00 a month in rent to your landlord, and your potential income over the month is more than $3,000.00, then you have breached the Act, and this is grounds for eviction. This section does not allow you collect any fees, penalties, or key deposits from an Airbnb guest.

If the rental unit is a condominium, not only are there issues to deal with under the Act, but Condominium Corporations have its own declarations or bylaws, and most forbid short-term tenancies like Airbnb. The shortest tenancy usually allowed (and most recently upheld in Court) is four months. This is mainly due to these short-term tenants using the amenities of the building, which they are not permitted to use, and for the potential disregard by those guests for the property, and most importantly for security reasons.

Tenants will also have to pay for any damages to the unit as to the landlord as a result of the Airbnb guests. The problem for the tenant is not having enough information on these guests to pursue them for legal action to recover those costs. In addition, the landlord who is the owner of the condominium may face fines imposed by the Condominium Board for any damages caused by the Airbnb guests to the common elements of the building.

If you are a condominium owner and you want to use your unit as an Airbnb, first check the Condominium’s Declaration to ensure you can, and also make sure you also confirm with your insurer that you are covered. If damages to your unit are caused by your Airbnb guests, you may not be covered under your policy.

Murray Brown, Paralegal

When entering into a services contract, you may be focused on the business terms such as the scope of services and the fees to be paid and gloss over the provisions towards the end of a contract that look like boilerplate provisions. These provisions include the governing law of the contract and assignment provisions that typically restrict one party’s ability to transfer the contract to a third party without the consent of the other party. So, why be so hung up on an assignment clause?

Well, paying careful attention to an assignment clause may save you headaches down the road if a service provider you are expecting to carry out services for many years in a contract suddenly decides to merge with another company or sells its shares to another party that you are not too confident in or concerned about. If you were expecting to rely on the assignment clause to prohibit the transfer of your contract to the newly merged company or new owners, you would be disappointed to find out that the assignment clause is not the mechanism to achieve that if your assignment provision does not include a restriction on a change in control of the service provider.

Having a change of control restriction in your assignment clause will help restrict the transferability of your contract if there is a change in ownership of the service provider to minimize any impact on the quality and level of services you expect to receive. If you are currently negotiating a services contract or thinking of entering into one, we can help you review the assignment clause to protect your interests.

Want to know more? Please reach out to me at any time.

Michelle Eames, LLB, LLM