Determining Which Business Venture is Right for You!

Author: Sarah Nadon – Law Student
Edited By: Ryan Carson

Partnership agreements may arise informally through the shake of a hand; however, rarely is that the best course to follow when creating a partnership. Partnerships are very much like sole proprietorships however they involve two or more people.

Most partnerships, either big or small, operate subject to an agreement among the partners that lays out specific rights and obligations of every party, as well as provisions for running the company, both day to day and in the event that someone dies, or the partnership is dissolved. This article will examine the pros and cons of joint ventures and shareholders agreements as well as common mistakes that occur when entering into a business venture.

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Shareholders agreement

A shareholder’s agreement is an agreement between the shareholders of an existing corporation. The agreement is used to assure that owners’ rights are protected. Shareholders agreements are very fact specific and are tailored to the unique circumstances of the parties.¹

This type of agreement typically deals with two basic areas:
      • Control and management of the corporation; and
      • Termination of the relationship of the shareholder, whether by transfer of the shares to third          parties, a buy-out of the shares by a different shareholder or by liquidation of the corporation.²

In a shareholder’s agreement each party is responsible for the actions of the other shareholders. Shareholders share risk, costs and profits with one another.

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Joint Venture

A joint venture involves two or more businesses or individuals combining their resources and expertise to achieve a shared goal. Joint ventures are usually undertaken by previously established businesses. Joint ventures are relatively new meaning unlike corporations, they are the least regulated. Much like partnerships, joint ventures do involve a fiduciary duty.³

Joint ventures are typically created by express agreement, which will define the rights, obligations and prospective liability of each participant in the joint venture.⁴ Unlike a shareholder’s agreement, each party is responsible for the debts they acquire but split the profits according to the agreement.

The main difference between a joint venture and a shareholder agreement is whether the agreement is between one company or several, as a shareholder’s agreement cannot be created with several different companies.

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How to decide between a joint venture and a corporation

Corporations are another form of a business entity structure made available to the public. A corporation is when a company’s owners operate as a single business entity and is formed by filing articles of incorporation, while a joint venture is a partnership between two or more businesses that want to work together towards a common goal.⁵ A corporation has a separate legal entity from its shareholders meaning it has the same rights as an individual. In Canada, corporations have all the legal rights of a person therefore they are eligible for loans, can carry on business, sue or be sued. Corporations offer limited liability and is one of the most common business structures in Canada.

Since joint ventures have no statute to govern them, they are strictly governed by the contract made between the parties. Joint ventures allow flexibility for the parties and are not considered to be a taxpayer under Canadian tax legislation while corporations are taxed by both the Ontario and federal income taxes.⁶

When choosing a business entity, one should consider the legal liability, the tax implications, the cost of formation, the ongoing administration and the flexibility they desire. In addition, how the entity is governed may also be an important consideration.

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What kind of questions should be answered before talking to a lawyer?

Before speaking to a lawyer, one will want to have an idea of which type of agreement they would like drafted. Next, they should know who the parties to the agreement will be, when the agreement will end, if ever. The parties to the agreement should also know what the objective of the agreement is in order to help the lawyer draft a proper contract.

What to include in an agreement?

Shareholders agreement:

• The right to remove directors

• Terms to protect minority share holders

• Restrictions on how and when someone can dispose of their shares

• Limitations on what actions a director can take

• A business plan to assure that all shareholders are on the same page

• How to resolve a shareholder dispute

• The right to first refusal clause

Joint Venture:

• Type of joint venture

• Benefits and risks

• Financial contribution each party will make

• Objective of the joint venture

• Ownership of the intellectual property created by the joint venture

• How liabilities, profits and losses are shared

Common mistakes

• If in a limited partnership, limited partners are not allowed to take an active role in management of the partnership, as it exposes the limited partners to the same level of liability as the general partner

• Not choosing the right business entity

• Starting a venture without a business entity

• Not filing the proper documentation for the business entity

• Excluding important clauses from the business contract

• Inadequate capitalization

• Ignoring intellectual property and getting sued for infringement

• Objectives of a joint venture are not 100% clear and communicated with everyone

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹ The Editorial Staff of LexisNexis Canada in co-operation with The Institute of Chartered Secretaries and Administrators in Canada, Canadian Corporate Secretary’s Guide (LexisNexis Canada, 2003) (loose-leaf updated 2020), (QL)
² Ibid.
³ Meinhard v. Salmon, 62 A.L.R. 1 at 4-5 (N.Y.C.A., 1928)
⁴ Chitel v. Bank of Montreal, [2002] O.J. No. 2170 (Ont. S.C.J.
⁵ Canada Business Corporations Act, RSC 1985, c C-44, Part II.
⁶ Neil Hazan, “Joint Ventures in Canada: Overview” Joint Ventures Law Global Guide, August 1 2017.

Who is a Litigation Guardian and What Are Their Duties?

Author: Anika Helen - Paralegal
Edited By: Ryan Carson

Litigation is a process that may not be known to many people. It is tiring, complicated and time consuming, and not to mention, it takes money to go into litigation. It can be especially difficult when a claim involves a party with minors and the disabled. There are three types of parties under disability according to r.1.02(1) of the Rules of Small Claims Court.

1. Persons under the age of 18 years old are considered to be minors.
2. Mentally incapable in respect of an issue in the action, whether the person or party has a guardian     or not; The term mentally incapable is defined within the meaning of s. 6 (incapacity to manage     property) or s.45 (incapacity for personal care) of the Substitute Decisions Act, 1992.
3. An Absentee: The term absentee is defined in s. 1 of the Absentees Act as a person who, having     had his or her usual place of residence in Ontario, has disappeared, whose whereabouts is     unknown, and as to whom there is no knowledge as to whether he or she is alive or dead.

Rule 4 of the rules governs claims by or against a person under disability shall be commenced or continued by a Litigation Guardian (r. 4.01(1)). Though a minor can begin an action not exceeding the amount of $500, an action against a person under disability must be defended by the defendant’s litigation guardian, according to r.4.02(1)).

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So, what is a litigation guardian? A litigation guardian is an officer of the court who represents the person under disability in a limited sense. A litigation guardian is not a party to the action and is not master of the suit. There are several duties of a litigation guardian.

A litigation guardian must diligently attend to the interests of the person under disability and take all steps necessary for the protection of those interests. A litigation guardian is allowed to do anything in a proceeding that the party would usually be required or authorized to do so. If a litigation guardian consents to any departure from ordinary course of practice, they must need approval of the court.

Any money payable to a person under disability as a result of an order or settlement must be paid into court, unless a Judge states otherwise. The litigation guardian is not entitled to receive any compensation, and is liable to account for any money they receive. A litigation guardian can have no interest in the party’s cause of action or the outcomes of the action.

A litigation guardian is required to not only protect the person under disability and their interests but also protect other parties and the court. They are required to be competent so that they are able to take steps in the proceedings, instruct the legal representative, responsible for costs, and to ensure that judgments are respected and performed. A litigation guardian is also expected to protect the court though efforts to prevent an abuse of the court’s process by or against a person under disability.

Issues related to disability and the need for a litigation guardian arise commonly when minors sue as plaintiffs in proceedings. The most common cause of action is usually personal injury cases. In situations like these, the parents or other relatives of the minor tends to act as the litigation guardian. However, there are times when there could be conflict of interest; where the parents or the relatives are involved in the incident that caused the claim to begin with. For example, in a car collision where a child was injured and a parent was driving the car. The child can sue the other driver as well as their own parent who was driving the car for negligence. In this case, the parent who was driving the car would not be allowed to act as a litigation guardian. A paralegal or a lawyer would also not be allowed to represent both parents and the child unless a waiver is signed by both the parents as well as the child that they want the same legal representative. And often times, that is not the case.

To act as a litigation guardian in an action, a person must consent to it. This can be done by filling out Form 4A of the Small Claims Court. Who may be a litigation guardian? Generally, any person who is not under disability may act as litigation guardian, subject to r.4.03(2) and r. 4.03(1). In some unfortunate cases when there are no available persons to act as a litigation guardian for a child, a Children’s Lawyer shall be the litigation guardian.

When a minor or disabled is being sued and they have no litigation guardian, the court may, after notifying the proposed guardian, appoint as litigation guardian any person who has no interest in the action contrary to that of the defendant. If an action has been brought against a defendant under disability and has not been defended by a litigation guardian, the court may set aside the noting of default judgment against the defendant on such terms that are just and fair and also set aside any step taken to enforce the judgment.

It is important to find the right litigation guardian that has the best interest in mind for the child. Failure to appoint a litigation guardian is an irregularity but it does not invalidate a proceeding. This can be fixed by appointing one. If an action has been commenced and it appears that there is no litigation guardian for a minor in the action, then the action should not proceed further until one has been appointed.

Where an action is commenced without a litigation guardian, the paralegal or the lawyer commencing the action may be personally liable to pay the defendant’s costs even if the legal representative was unaware of the legal disability of the plaintiff. However, legal representatives who acted with a bona fide belief and were not negligent are not awarded costs by the court.

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Removal of Litigation Guardian

There are three scenarios where a litigation guardian may be removed from an action:

1. When a minor reaches the age of majority. In other words, when the child turns 18 years of age. 2. When a party is no longer under disability. For example, someone sick gets better and are able to     make their own educated decisions.
3. And finally, when a court determines that the litigation guardian is not acting in the best interest     of the child/disabled. For example, there can be a conflict of interest. In this scenario, the court     can appoint a Public Guardian and Trustee or a Children’s Lawyer.

Litigation can be confusing and it can be hard to understand the rules and regulations of a proceeding. It’s always helpful to consult a legal representative so that anyone commencing an action can be fully informed about what their options are and the next steps. When it comes to minors and the disabled, it is even more important to make the right decision to make sure they are protected and represented the way they deserve.

Kawhi Leonard Loses Copyright Lawsuit against Nike

Author: Sarah Nadon – Law Student
Edited By: Ryan Carson

When many see the “Klaw” logo, they associate it with the former Raptors all-star, Kawhi Leonard. The logo was created by Nike Corp based on a sketch drawn by Kawhi Leonard when he was in school, but just because many people associate the logo with Leonard does not mean that he is its rightful owner. According to a recent ruling by a United-States federal judge, the logo created does not belong to him; it belongs to Nike.¹

Last summer, there was a widely reported feud between Nike, the largest sports apparel company and Kawhi Leonard over the ownership of the “Klaw” logo. The logo is of Leonard’s large hand, which inside contains his initials “KL” and the number 2, which he had worn on his jersey for much of his basketball career.² Leonard was adamant that he had the idea to create a logo which incorporated his initials and the number "2" into a drawing of his hand and before entering the Nike Contract, he created the "Leonard Sketch" as a draft of that idea. Over the course of the next few years, Nike developed variations of the logo, while Leonard states that he had the final say over the logo's final appearance.

In 2018 when the endorsement deal ended, Nike and Leonard parted ways, and Leonard demanded a court to declare that he is the sole owner of the logo and that Nike fraudulently registered the logo with the United-States Copyright Office in Washington D.C.³ While Leonard was filing his lawsuit, Nike disputed Leonard’s story and sued him for copyright infringement, breach of contract and fraud.

Litigation originally began in Southern California but moved to the U.S. District Court for the District of Oregon, giving Nike a home-court advantage. Judge Michael Mosman presided over the case.⁴ On April 22, 2020, Mosman J. heard Nike’s Motion for Judgement. Mosman J. stated that ownership over the “Klaw” design turns on the Nike contract entered into by Leonard. Paragraph 8 of the contract states:
           OWNERSHIP OF NIKE MARKS, DESIGNS & CREATIVES.
           (a) [Leonard] acknowledges that NIKE exclusively owns all rights, title and interest in and to            the NIKE Marks and that NIKE shall exclusively own all rights, title and interest in and to            any logos, trademarks, service marks, characters, personas, copyrights, shoe or other product            designs, patents, trade secrets or other forms of intellectual property created by NIKE . . . or            [Leonard] in connection with this Contract;⁵

The judge held that the Nike contract established Nike’s ownership of the logo because the “klaw” logo was (1) a new piece of intellectual property and (2) created “in connection” with the Nike contract.

While throughout the case, Nike asserted that this was a tale of two images, Leonard consistently refers to the “Leonard Logo.”⁶ This is because Leonard’s theory is that no new intellectual property was created over the course of the Nike contract; instead, the “Klaw” logo is the finished result of mere modifications to the logo Leonard has created independently of Nike. The judge rejected that theory during oral arguments.

Next, the judge analyzed whether the “Klaw” design was created “in connection with” the Nike contract. If the logo was created in connection with the contract, Nike owns it. Leonard’s argument was that the contractual language “in connection with” is ambiguous and unconvincing.⁷ The purpose of the Nike contract was to pay Leonard for “the use of [Leonard]’s personal services and expertise in the sport of professional basketball and [Leonard]’s endorsement of the Nike brand and use of Nike products.”⁸ According to Leonard, at some point during the contract, Nike wanted to create a logo for the merchandise to be sold under Leonard’s Nike contract. The “Klaw” logo was created and affixed to merchandise that Leonard wore and endorsed and Nike sold.⁹ Not only was this activity done in connection with the Nike contract, but it also represented the entire point of the Nike contract. Since the logo was created under the Nike contract for the purpose of endorsing both Nike and Leonard, Nike owns the design and the right to register a copyright for it.

Furthermore, the judge granted in part and denied in part Nike’s counterclaims, which included a declaratory judgement of copyright ownership, copyright infringement, copyright right cancellation for fraud on the copyright office, breach of contract paragraph 8, breach of contract paragraph 13 and breach of contract paragraph 21.¹⁰ The judge granted breach of contract under paragraph 21 as the contract states that any dispute arising under the contract should be litigated in an Oregon court. Leonard filed his action in the Southern District of California.

Nike was granted copyright ownership and, in part, breach of contract but denied judgement on other counterclaims. Leonard’s lawyers are currently weighing their options on what to do next.

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹ Sports Illustrated, News Release, “Kawhi Leonard Loses Copyright Lawsuit Against Nike Over Logo (April 23, 2020) https://www.si.com/nba/2020/04/23/kawhi-leonard-loses-lawsuit-against-nike.
² Ibid.
³Ibid.
⁴ Ibid.
⁵Nike Contract [16-1] at 7.
⁶Kawhi Leonard v Nike Inc., ( D. Or. 2020)
⁷Ibid.
⁸ Ibid.
⁹Ibid.
¹⁰Ibid. .

Impact of COVID-19 on Landlords and Tenants

Author: Anika Helen - Paralegal
Edited By: Ryan Carson

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What has changed for landlords and their tenants in the midst of Covid-19?

The Covid-19 crisis had a significant impact on our economy and still continuing to do so. The government had previously decided to close all non-essential businesses to stop the spread of the virus. It has left a significant amount of people with no jobs. According to IPSOS, one in three (36%) Canadians say they have been laid off, on reduced hours/pay (13%), or have shuttered their small businesses (5%). In addition, three in ten (31%) Canadians have less than a week savings to pay for bills if no income is coming in. As a result, many are struggling to make rent payments on time or in many cases, are not able to pay rent at all.

Though there is hope that we will be able to return to normal very quickly after things start to re-open, there will be people who will not be able to get their jobs back right away. Even though, the economy will recover fairly quick, not everyone will be able to get back on their feet instantly. The government have implemented certain changes that is supposed to somewhat help tenants and landlords until the pandemic is over.

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Changes to the Eviction Process

Tribunals in Ontario have suspended all eviction-related activity. No renter households are currently at imminent risk of eviction for non-payment of rent. However, while evictions are stopped for now, the current expectation is that tenants will eventually have to get caught up on rent. A landlord is free to give written notice to their tenant; however, the tenant does not have to move out. Property owners are not permitted to lock-out tenants on their own. Only the law enforcement is permitted to do so. Tenants are encouraged to contact the Province’s Rental Housing Enforcement Unit in case their landlords have locked them out of their rental units. The government urges people to pay rent if they are able to. People who were not laid-off or still have the ability to earn, should be paying their rent. Tenants are not encouraged to not pay rent. If you are able to, you should be paying your rent without undue hardship.

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Possible Solutions for Landlord

Because Tribunals in Ontario are not allowing landlords to evict their tenants anymore, there is not much a landlord can do at this point. Unfortunately, landlords have to be patient and understanding. While we are all aware that landlords are facing financial hardship as well due to mortgage payments, certain financial institutions are offering mortgage deferrals up to a certain point during this pandemic. Landlords are encouraged to get in touch with their financial institution to seek any help available to them.

As for dealing with tenants not being able to pay rent, landlords should have a discussion with their tenants and agree to reduce rents or defer payments where possible. As mentioned above, tenants are not going to be allowed to not pay rent and not make up for those non-payments. Landlords should get into agreements with their existing tenants that allow tenants to pay back their rent arrears in small increments within a defined period of time. For example, if a tenant arrears in the amount of $5,000, the landlord and tenant can agree that when the tenant starts paying rent again, they can pay extra $300-400 a month on top their rent until the $5,000 have been recouped by the landlord. Tenants might not agree to a specified amount but landlords and tenants should come to an agreement together with an amount that works best for both parties.

Unfortunately, tenants are not always able to keep their side of a promise. If a tenant stops paying their incremental amount, they are breaching the repayment agreement. At that point, the landlord can and is permitted to file an application with the Landlord and Tenant Board to obtain an order for eviction. The application can also include the repayment of arrears. If a tenant does not leave after an order has been obtained, a landlord can have a sheriff remove the tenant from the rental unit. If the tenant fails to pay the repayment of arrears, the landlord must enforce the order with the help with small claims court.

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Entering a Rental Unit and Physical Distancing

Before the pandemic, a landlord was permitted to only enter a tenant’s unit in specific circumstances. In most cases, the landlord must:

• Give the tenant 24 hours written notice

• State what day and time they will enter (between the hours of 8 a.m. and 8 p.m.)

• State the reason for entering the unit

There are certain special circumstances such as emergencies where the landlord can enter the unit without notice and the tenant cannot refuse to let the landlord in. Due to Covid-19, landlords are encouraged to request entry only in urgent situations and strictly follow the physical distancing guidelines.

In conclusion, both tenants and landlords are facing unusual circumstances in the midst of this pandemic. However, the above-mentioned changes will aid tenants and landlords with their specific situations. If a tenant or a landlord is facing such hardships, they should seek legal consultation or help to guide them in the right way. There are free legal clinics available to tenants as well as landlords. Seeking help and getting the correct information in this situation is the first step to recovering from this crisis.

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

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Power of Attorney General Overview - Continued

Author: Warren Gilmore - Law Student
Edited By: Ryan Carson

Power of Attorney for Property

This specific type of Power of Attorney works to provide your appointed attorney with the power to conduct your financial affairs. This includes your interests in both real and personal property in the event that you become mentally incapable, and unable to conduct these affairs yourself.

The reach of this document can be as expansive as you wish, but typically they are constructed to provide your designated attorneys with the necessary authority to manage your financial affairs. Such as, paying bills, managing your investment portfolio, or the buying and selling of property.

A particular level of mental capacity is required in order to create a legally enforceable Power of Attorney for Property. 

• First, you are required to know what property you currently hold, as well as its estimated value.

• Second, you must understand your responsibilities to your financial dependents.

• Third, you must be aware of what specific authority you are delegating to your appointed individuals.

• Fourth, you must understand that your attorney is obligated to account for all decisions made in regards to your property.

• Fifth, you must understand that you have the right to revoke your power of attorney at any time, so long as you are mentally capable.

• Sixth, you must understand the potential consequences that could result due to mismanagement of your property at the hands of your attorney.

• Last, you must understand the unfortunate possibility that your attorney may abuse their authority.

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Power of Attorney for Personal Care

Conversely, A Power of Attorney for Personal Care involves the designation of authority to make decisions surrounding medical treatment, health care, safety, food, and other matters of a similarly intimate nature. This document allows you to outline in advance what your future care will look like by placing the power to make these important decisions in the hands of someone you trust to carry out matters in your best interest. This document provides you and your loved ones with the peace of mind that your personal interests will be looked after should you no longer be able to adhere to them yourself.

A particular level of mental capacity is required in order to create a legally enforceable Power of Attorney for Personal Care. 

• First, you must be able understand whether or not the individual you have appointed to be your attorney truly has your best interest at heart.

• Second, you must understand that your appointed attorney may very well be required to make important decisions of your behalf.

A Power of Attorney for Personal Care can only be acted upon in the event that you become mentally incapable of making decisions on your own. Typically, it is left up to the judgement of your appointed attorney to determine whether or not you are mentally capable. However, if an impending decision is one involving medical or long-term care, it is up to a medical professional to determine whether or not you are mentally capable of making such a decision before your attorney will be legally permitted to act.

At Carson Law we are dedicated to helping our clients put together the appropriate set of Power of Attorney documents tailored to fit your unique set of needs.

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To read Warren’s corresponding article on Power of Attorney General Overview, click here.

Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

Power of Attorney General Overview

Author: Warren Gilmore - Law Student
Edited By: Ryan Carson

An overwhelming majority of Ontario adults currently go about their daily lives without the security of having a properly drafted will and a power of attorney in place. It is important to address these matters regardless of one’s age in order to avoid the pitfalls of probate, and to provide yourself and your loved ones with peace of mind through proper estate planning.

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Powers of Attorney Generally

While Ontario law does not refer to the term “living will”, a properly executed Power of Attorney works to fill this void in the province. Powers of Attorney, unlike your last will and testament, maintain a legal effect only while you are living.  A Power of Attorney is a legally binding document which requires one to appoint a specific individual or individuals, to make important decisions on your behalf. The document provides these appointed individuals with the legal authority needed to carry out important decisions. The types of decisions made pursuant to these documents depend on the nature of the specific type of Power Attorney drafted. Power of Attorney documents typically involve “Power of Attorney for Property”, and “Power of Attorney for Personal Care”.
While a Power of Attorney is not mandated by law in Ontario, the protection it offers, the peace of mind it provides, and its relatively low cost of creation, make it a foundational component of estate planning. One that we recommend to all of our clients, regardless of the particular stage of life they currently find themselves in.

In Ontario, the government does not maintain an official registry for these documents. Therefore, it is best practice to ensure that the location of these legal documents is known to the people who will be required to act upon them. We recommend, of course maintaining a copy for your own records, but also leaving copies with your lawyer, and any individuals who may have legal responsibilities pursuant to the document itself.

Without a Power of Attorney, should you become unable to make decision on your own behalf, another individual must petition a court in order to obtain legal authority to represent your affairs. Failing this, a court will appoint a guardian to represent your interests. In order to avoid this situation, it is important to have a legally enforceable Power of Attorney in place.

When appointing an individual as your attorney, any one over the age of 18 for property, and over the age of 16 for personal care, can legally assume this role. It is important to choose an individual who is responsible and trust worthy, as assuming the role of an appointed attorney requires a great degree of consideration and integrity.  Best practice is to consult your lawyer when making this decision.

In the instance you wish to appoint more than one individual as your attorney, proper drafting is required to outline how decisions are to be made amongst these appointed individuals. If you elect for your attorneys to be required to act “jointly”, both individuals must make decisions together, one cannot act without the consent of the other. Conversely, if you elect for your attorneys to be required to act “jointly and severally”, one individual can make decisions either collectively or individually. Whichever variation you prefer, it is important to have this reflected clearly in the document in order to avoid contention or confusion down the road.

Your Power of Attorney, should you wish, can be revoked any time after its execution so long as you remain mentally capable. Otherwise, your Power of Attorney ends naturally upon your death, or the death of your appointed attorney.

It is important to consult with an experienced lawyer when drafting your Power of Attorney to ensure that your wishes are sufficiently documented and legally enforceable. At Carson Law we are dedicated to providing our clients with the highest level of professionalism in all aspects of our practice.

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

Estate Planning: A How To Guide

Author: Stacey Staios - Articling Student
Edited By: Ryan Carson

Developing an estate plan can be difficult, as it requires you to plan for life after you have passed away. However, dying without such a plan may cause confusion and complications. Creating an estate plan is important if you want to have your property divided and distributed according to your wishes and there are a number of steps that you can take to ensure this.

Will

The first and arguably most important step in estate planning is to make a will. A will is a document that takes effect after you pass away and can include ‘things’ such as the distribution of your assets, custody of minor children and burial/funeral instructions.

If you die without a will, the law deems that you have died intestate, meaning you have not left any instructions as to how you wish your property ‘is’ to be divided and distributed. Without a will, the Ontario Succession Law Reform Act will determine who your beneficiaries are and how your property will be divided, resulting in a potential loss of control.

Specifically, having a will is important for unmarried couples or couples who have remarried. Unmarried cohabiting couples are not afforded the same rights as married couples in regards to division of property. Therefore, if one unmarried party in a common law relationship wishes to leave property to the surviving spouse, it is best to include this in a will.

Also included in a will can be a chosen executor. This individual will be responsible for settling your estate after death. Executor duties include but are not limited to, arranging a funeral, securing and appraising the assets of the deceased, paying any debts or taxes of the deceased and distributing the assets according to the will. In addition to appointing a primary executor, you may choose an alternative executor who will assume responsibility in the event the primary executor passes away or becomes ill and cannot fulfil executor duties.

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Power of Attorney

A power of attorney may be the next document to complete in your estate planning. A power of attorney is a document in which you give someone the right to make decisions for you in the event something were to happen and you are not able to look after on your own.¹

There are two types of Power of Attorney: Power of Attorney for Personal Care and Power of Attorney for Property. The former is someone who will be named to make decisions about your health, housing, and other personal aspects in the event you become mentally incapable of making these decisions.

In contrast, a Power of Attorney for Property will be someone who you choose to make decisions about your financial affairs.² Every individual has the freedom to choose a Power of Attorney, but it must be made free from any undue influence by the attorney or third party.

You are free to choose more than one Power of Attorney, but when two or more attorneys are chosen, they must agree on a decision unless your Power of Attorney says they can make decisions jointly and severally. When you decide your Power of Attorney, you may choose a substitute attorney the event that your original attorney cannot or will not fulfil their duties.

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Trusts

In developing your estate plan, you may choose to set up a trust for your family that takes effect during your lifetime or upon your death. A trust is created when one party transfers ownership of their assets to a trustee, who in turn holds and distributes those assets to the beneficiaries, according to the owner’s instructions. Setting up a trust may be advantageous for those who have minor children, where in the event the children are left with no living parents, the trust can provide an income to the minors and pay out the capital when they reach a specific age. Every trust is individual to the person who creates it, and is another way to ensure your family will be taken care of when you are no longer living.

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A family member’s passing can become a stressful and confusing time for the surviving family members, especially if left without a will, Power of Attorney, or a trust in place. This is why estate planning is imperative. At Carson Law, we are here to help guide you through each step in your personalized estate plan. From creating a will specifically tailored to your wishes and preparing documents for your chosen Power of Attorney, our team will be there. Our Firm’s extensive knowledge of estate planning will enable us to set up, maintain and execute your family trust according to your instructions as well as provide professional trustee and executor services to ensure that your wishes are fulfilled as requested.

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Articles written by Stacey Staios:

Should you consider a cohabitation agreement? What is wrongful dismissal?

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Ontario Ministry of the Attorney General; attorneygeneral.jus.gov.on.ca
²Ontario Ministry of the Attorney General .

What Is Wrongful Dismissal?

Author: Stacey Staios - Articling Student
Edited By: Ryan Carson

Wrongful dismissal is a commonly misunderstood term. In Ontario, an employer is allowed to terminate an employee on a without cause basis, so long as the employer’s decision to terminate the employment relationship is not discriminatory and the employer provides advance notice to the employee or payment in lieu of such notice, which is also known as termination pay. An employee is wrongfully dismissed when an employer terminates their employment without providing the proper notice or termination pay in lieu of such notice.

Under the Employment Standards Act, 2000 (“ESA”), advance notice is required for every employee who has been continuously employed for at least three months.¹ The minimum amount of statutory notice an employer must to provide an employee with depends on the employee’s length of service and can be found in the chart below.

During the applicable statutory notice period, the employer must fulfil specific obligations. An employer may not reduce the employee’s wages or alter the terms or conditions of their employment. The employer must provide benefit continuation throughout the statutory notice period and pay the employee wages that they are entitled to, which cannot be less than the employee’s regular wage for a regular work week.²

According to section 61(1) of the ESA, an employer may terminate the employee’s employment without notice if the employer pays the employee a lump sum amount that is equal to the amount the employee would have been entitled to receive under section 60 of the ESA had notice been given in accordance with that section and if the employer agrees to contribute to the employees benefit plan during that time.

Wrongful dismissal occurs when an employer terminates an employee without providing the proper amount of notice or pay in lieu thereof. In some circumstances, employees may be entitled to common law reasonable notice. Common law reasonable notice is determined by looking at factors such as the character of the employment, the length of service, the age of the employee and the availability of similar employment. Some employees may have an employment contract that includes a termination clause which removes their right to common law severance and limits their entitlements upon termination to those prescribed in the ESA.

In the event that an employee is terminated, section 2 of the Employment Standards Act sets out a list of employees who are not entitled to notice of termination or termination pay.³ Employers may want to claim that there was just cause for the dismissal to avoid providing notice or termination pay to the employee.

However, if an employee believes that their termination was incorrectly labelled as being for cause, they may bring a claim to prove that their dismissal was not justified. In this case, the terminated employee may file such a claim against their employer seeking damages, which is also known as a wrongful dismissal action.

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Period of Employment Notice Required

Less than 1 year 1 week
1 year but less than 3 years 2 weeks
3 years but less than 4 years 3 weeks
4 years but less than 5 years 4 weeks
5 years but less than 6 years 5 weeks
6 years but less than 7 years 6 weeks
7 years but less than 8 years 7 weeks
8 years or more 8 weeks

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Employment Standards Act 2000, s.54(a)
²Employment Standards Act 2000, s.60(1)
³Employment Standards Act 2000, s.2 .

Should You Consider A Cohabitation Agreement?

Author: Stacey Staios - Articling Student
Edited By: Ryan Carson

A cohabitation agreement is an agreement signed by two unmarried individuals who are living together or intend to live together in the future. When a couple decides to live together, a cohabitation agreement can clearly set out the rights and obligations of each party, either in the event of a breakdown of the relationship or upon the passing of one of the partners.

There are many benefits to entering into a cohabitation agreement, regardless of whether the parties intend to marry or remain in a common law relationship. For the purpose of support obligations, common law couples are defined in Ontario as couples who have lived together continuously for no less than three years, or one year if they are in a relationship of some permanence and have a child together.¹

When it comes to the division of property, there is a distinction between the rights available to common law couples and married couples. If one party in a common law relationship passes away without a will, the surviving common law partner does not have an automatic right to their spouse’s property under the Family Law Act like a married couple would, regardless of the length of their relationship or cohabitation. Rather, they must have the courts determine their share via a claim in equity under a constructive trust, which can be overwhelming, costly and time consuming.
Couples who decide to enter into a cohabitation agreement can ‘bypass’ these legal limitations and set out specifically what property they wish to leave behind to the surviving common law spouse. In the event of a breakdown of the relationship, the parties can, using a cohabitation agreement, contract out of any right or obligation that would otherwise take place without an agreement, including spousal support and the division of property.

For some, entering into a cohabitation agreement under section 53(1) of the Family Law Act may be advantageous, particularly if there is a significant disparity in the parties income, assets or debts. Such agreements can keep these assets separate and have the couple remain financially independent. In the event that the couple decides to marry at a later date, a cohabitation agreement can transition into a marriage contract under section 53(2) of the Family Law Act. ²

When it comes to rights and obligations that both parties wish to contract out of using a cohabitation agreement, section 56 of the Family Law Act is applicable. This section states that a domestic contract, relating to the custody of or access to the child may be set aside and disregarded by the court if, in the opinion of the court, the contract is not in the best interest of the child.³ Further, section 56(4) of the Act states that a domestic contract may also be set aside if (a) a party failed to disclose any significant assets, debts or liabilities, or (b) if a party did not understand the nature or consequence of the domestic contract. Therefore, contingent on the parties satisfying these requirements, their domestic contract will stand in court.

Given that there is no statutory right to the division of property among common law couples, a cohabitation agreement may be entered into by those who wish to remain unmarried and have a division of property regime. It is important to have a qualified and experienced lawyer draft an agreement of this nature, as there are many factors and variables that can affect its validity. Whether you are inquiring about a cohabitation agreement, require one to be drafted, or need it to be reviewed by a lawyer, our team is here to help. At Carson Law our lawyers have many years of experience helping families in Burlington, Ontario and its surrounding areas create these domestic contracts in a cost effective and practical way.

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹ Ontario Family Law Act, s.29.
² Ontario Family Law Act, s.53(2)
³Ontario Family Law Act, s.56 .

Trademarks, .com Domain Names, and Consumer Confusion

Over the past several years, e-commerce use has been growing exponentially, as consumers and corporations alike turn to this convenient method of exchange. As this trend increases, so too does the importance of a corporation’s domain name. Domain names (the words we see before “.com” in a given website’s URL) are consumers’ first impression of a corporation’s product or service, as their wording gives a taste of what the website will hold. Domain names are also often connected to a website’s meta tags, which are used to increase the likelihood that the website will appear as a result during search engine use.

Naturally, many corporations use their trademarked names as their domain names. This way, consumers who are familiar with the corporation’s mark can guess what the website’s URL will be, or can likely find the corporation’s website by entering the corporation’s name into a search engine.

But corporations using their trademarks as their domain names face a problem: other website creators may have domain names that are extremely similar to a corporation’s own domain name. Consumers guessing a corporation’s domain name, or typing a corporation’s name in a search engine, may mistakenly end up at another site with a similar domain name. Alternatively, consumers typing in the correct domain name of a corporation may also be automatically redirected to another site with a similar domain name.

In these cases, a corporation loses business from consumers who never arrive at the corporation’s site. These problems get worse when someone intentionally creates a site with a similar domain name to that of a site of a well-known mark; or when someone creates a site with a similar domain name to a corporation’s and also provides similar products or services to that corporation.

So, what can corporations do in these situations? There are several legal avenues that a corporation can take when their trademark or domain name is tarnished in these ways, and we will outline some of them here.

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Deciding on the Best Course of Action

In these types of situations, a corporation’s choice of action will affect the remedy that it can receive. A corporation should choose its course of action based on its needs. For example, if a corporation mainly wants to stop consumers from being confused about the whereabouts and/or content of the corporation’s website, it will want to pursue a course of action whose remedy stops other sites from using domain names similar to their own. Similarly, if a corporation mainly wants to be compensated for the business lost, it will want to pursue a course of action whose remedy is damages.

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For Stopping Consumer Confusion: ICANN Dispute Resolution Policy

Disputes over .com domain names are sometimes often regulated by the ICANN Uniform Domain Name Dispute Resolution Policy (UDRP). (Similar policies exist for other sorts of domain names—e.g., the CIRA process for .ca domain names—but discussing them goes beyond the scope of this article.) The remedies available to a complainant through this process are limited to the cancellation of the domain name or the transfer of the domain name registration to the complainant.

The Uniform Domain Name Dispute Resolution Policy (UDRP) applies to every registrant of a .com domain name by virtue of their obtaining it, because every accredited domain name registrar has adopted this mandatory process. Registrants must go through this dispute resolution process if another domain name user has brought a complaint against them asserting that they have done all of the following:

1. The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; AND

2. The domain name holder has no rights or legitimate interests in respect of the domain name; AND

3. The domain name has been registered and is being used in bad faith.

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For Damages: Legal Action of Passing Off

In many cases, complainants find the UDRP too narrow: either the policy does not adequately cover their concern, or the remedies are insufficient for their needs. The policy does not, however, preclude complainants from also bringing a legal action in court. The legal action that best lends itself to many domain name disputes is passing off.

Passing off in the context of domain name disputes requires that the defendant’s use of a domain name imports the reputation or knowledge of the plaintiff’s service or product into the consumer’s mind when they go to the defendant’s site (British Columbia Automobile Assn v OPEIU). In this way, the plaintiff is essentially trying to stop the defendant from capitalizing on the goodwill attached to the plaintiff’s mark.

Remedies for passing off can include interim and interlocutory injunctions; compensatory damages; and, if the defendant repeats their behaviour, or if it is otherwise a marked departure from the ordinary standards of behaviour by being planned or deliberate, punitive damages (Dentec).

Note that there is a two-year limitation period on this type of action.

Passing off requires the plaintiff to prove three criteria (Ciba-Geigy Canada Ltd v Apotex Inc, 1992 CanLII 33, SCC [Ciba-Geigy]):

1. Goodwill for the plaintiff’s company exists in the minds of consumers. This criterion is especially important in domain name disputes if a corporation conducts a significant portion of its business through the site, because, “[by] implication, they attach their goodwill to their services supplied through their ‘get-up’, their trade name” (Airline Seat Co v 1396804 Ontario Inc, 2000 CanLII 22666, ONSC [Airline Seat Co] at para 13).

2. The public was deceived due to a misrepresentation, so that they are led to believe that there is some business connection or association between the parties (i.e., so that confusion exists).

3. Actual or potential damage will occur to the plaintiff. In cases of passing off, potential damage is presumed when it is caused by the plaintiff losing control over its reputation through a misrepresentation (Ciba-Geigy). The defendant’s use of a domain name similar to the plaintiff’s can cause this loss of control (Law Society of British Columbia).

Again, the complainant should obtain independent proof of the above.

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Other Possible Legal Actions

This article has mainly explained the ICANN dispute resolution process and the tort of passing off, but below we will describe some other causes of action that may be more appropriate to a complainant’s situation. Still, these causes of action describe situations where domain name similarity creates confusion for consumers about the location and/or content of the corporation’s website.

Trademark Infringement: A plaintiff may seek an interlocutory injunction on the use of the confusing domain name as remedy for breach of trademark. To achieve this remedy, the plaintiff must meet a three-part test: first, there must be a serious issue to be tried; second, the plaintiff must suffer irreparable harm without the injunction; and third, there is a balance of convenience.

Breach of Copyright: A breach of copyright claim may help corporations whose consumers, in trying to find the corporation’s website, find websites that have used the corporation’s website design, logo, or other artistic features. To succeed at this claim, the plaintiff must show that the defendant reproduced original artistic work belonging to the plaintiff without the plaintiff’s permission.

Defamation: A defamation claim can help corporations whose consumers, in trying to find the corporation’s website, come across websites that are intentionally trying to diminish the corporation’s reputation. To succeed at this claim, the plaintiff must show that the words in question have been published, that the words refer to the plaintiff, and that the words—in their ordinary or natural meaning, or in an extended meaning—are defamatory of the plaintiff.

Operating and Holding Companies - Why They Make Sense

A business can be structured using an operating company and a holding company together, where the operating company runs the business and the holding company oversees it. Using this structure, an operating company, or opco, is a public facing corporation that carries out and is liable for all active business. Often, an opco is a standard business that sells a product or service. By contrast, a holding company, or holdco, is a behind-the-scenes corporation that holds usually 100% of the shares in one or more opcos. Rather than carrying out active business, the holdco allows for an opco’s shareholder(s) to make the most of the opco’s dividends, taxes, etc. Think of a holdco as an administrative tool that supports an opco by giving its structure an extra layer. Note that both opcos and holdcos are incorporated.

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To help illustrate some potential opco/holdco relationships, consider the following examples:

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Image 1

Let’s say Shannon is the sole shareholder in a company that sells handcrafted timepieces, called Freckle Past. If Shannon decides to use a holdco to manage her opco, she creates the structure in image 1 (right).

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View fullsize

Image 2

Now, let’s imagine that Shannon and Erika are equal shareholders of Freckle Past. Shannon and Erika have different ideas for managing their earnings, so they decide to each use their own holdco to manage their respective halves of the opco’s profit. That creates the structure in image 2 (right).

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View fullsize

Image 3

Finally, let’s say that, in addition to owning 50% of the shares in Freckle Past, Erika also owns 100% of the shares in a donut shop, Hole Foods. She decides to use one holdco to manage all of her shares, creating the structure in image 3 (right).

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There are several advantages to the opco/holdco business structure.

The first few benefits are related to the fact that dividends from an opco can be transferred tax free to a shareholder’s holdco. Whether an opco has one shareholder or multiple shareholders, a shareholder can transfer opco dividends to their holdco instead of directly receiving the dividend as personal income. Doing so does not mean that the shareholder earns no income. By contrast, since the shareholder has complete control over their holdco, they can decide when they want to use their dividends as personal income, and how much of their dividends they want to use as personal income. Below, we’ve outlined a few instances where this element of choice is especially beneficial:

Let's return to our example: We'll use the scenario where Freckle Past has two shareholders, Shannon and Erika, and each of them uses a holdco to manage their shares (image 2, above). Suppose that Shannon and Erika are trying to decide on the best time to pay the shareholders a dividend from the opco. Shannon feels that she needs personal income soon, but Erika does not—and does not want to pay income tax at present. Despite this apparent conflict, the shareholders will still be able to easily decide on a mutually convenient time for distributing the dividends from their shared opco, since the holdcos allow them to maintain their own income schedules. The next time that Freckle Past pays its shareholders their equal dividends (via their holdcos), Shannon can use her dividend as personal income while Erika can use her dividend to fund some investments.

1. When an opco has multiple shareholders, using holdcos means that the opco can distribute dividends when it is beneficial for the business, while shareholders can use these dividends on their own schedules, and in their preferred ways.
   

2. A shareholder who defers income tax when transferring their opco dividend to their holdco retains a larger amount of money to use before it becomes personal income (namely, to use on investments). Rather than taking the opco’s dividend as personal income, paying income tax on it, and then investing the remainder, the shareholder invests the money before it is taxed, grows it, and then has a larger sum to use.
   

3. A shareholder can reduce their own income taxes by distributing money from the holdco as income to several family members.

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Storing excess money from an opco in a holdco creates two more opportunities for shareholders:

First, removing non-essential assets from the opco can protect them from creditor and liability claims within the opco, as the assets stored in the holdco cannot be collected for opco claims.

Second, removing excess money from the opco also helps the opco to meet the criteria for a business whose share sales count towards a shareholder’s lifetime capital gains exemption. The lifetime capital gains exemption refers to the dollar amount of shares in a non-public Canadian corporation that a shareholder can sell tax free. This amount, which is capped at a set maximum and which carries forward indefinitely through all of a shareholder’s sales, only pertains to businesses that meet certain criteria. One such criteria is that assets in the business in question remain active, and removing excess money from an opco ensures that the remainder of the “purified” money is active.

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Using an opco/holdco structure presents many financial benefits for shareholders, but it adds some complexity to business administration (from legal and accounting perspectives, for example). If you would like to explore the possibility of using this structure in your corporation, our office would be pleased to discuss your options with you. Our extensive experience with corporate matters means that we can expertly guide you through the process of setting up and maintaining an opco/holdco structure.

Maternity Leave Announcement

Congratulations to our Real Estate Manager, Julie Saliba!

Julie will be on maternity leave from May 1, 2020 until November 1, 2021.

All real estate needs will still be completed in a timely manner and within the high standards that Carson Law demonstrates. If you have any questions, please feel free to contact us.

GENERAL INQUIRIES RYAN CARSON

info@carsonlaw.ca ryan@carsonlaw.ca

905.336.8940 905.336.8940 ext.1001

Rent Assistance Program for Small Business Tenants

On April 24, 2020, the Ontario Government announced rental assistance for small businesses during COVID-19. The Canada Emergency Commercial Rent Assistance Program (CECRA), has been developed for small business tenants and landlords to share the costs of rent.

For eligible businesses, both tenants and landlords will be asked to pay 25 per cent of the before profit costs, for April, May and June with the provincial and federal government paying the remaining 50 per cent.³

An eligible small business tenant is one that:
• Pays monthly rent not exceeding $50,000 in gross rent payments; and is,³
• A non-essential small business that has temporarily closed, or who is experiencing a 70 per cent drop in pre-COVID-19 revenues (determined by comparing revenues in April, May or June to the same month in 2019 or alternatively compared to average revenues for January and February 2020).³

The property owner must meet the following requirements:
• You own property that generates rental revenue from commercial real property located in Canada.¹ • You are the property owner of the commercial real property where the impacted small business tenants are located.¹
• You have a mortgage loan secured by the commercial real property, occupied by one or more small business tenants.*¹
• You have entered or will enter into a rent reduction agreement for the period of April, May, and June 2020, that will reduce impacted small business tenant’s rent by at least 75%.¹
• Your rent reduction agreement with impacted tenants includes a moratorium on eviction for the period of April, May and June 2020.¹
• You have declared rental income on your tax return (personal or corporate) for tax years 2018 and/or 2019.¹

*For those property owners who do not have a mortgage, an alternative mechanism will be implemented. Further information will be outlined in the near future.

All parties must also agree to enter into a rent forgiveness agreement in order to participate in the Canada Emergency Commercial Rent Assistance Program. This agreement will simply state that the landlord agrees to reduce the tenant’s rent by at least 75 per cent for the month of April, May and June; and the landlord agrees to not evict the tenant during those three months.

This forgivable loan program will be paid out directly to the mortgage lender of the qualifying commercial property owner by the Canada Mortgage and Housing Corporation. It is expected that CECRA will be operational by mid-May and be available until September 30, 2020. Support would be retroactive to April 1, 2020 covering April, May and June 2020. The federal government will be sharing more details of this program in the near future.²

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Canada Mortgage and Housing Corporation. (2020, May 1). Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. Retrieved May 4, 2020, from https://www.cmhc-schl.gc.ca/en/finance-and-investing/covid19-cecra-small-business. ²Moher, J. (2020, April 27). Canada Emergency Commercial Rent Assistance Program for Small Businesses. Retrieved May 4, 2020, from https://www.dalelessmann.com/news/blog/canada-emergency-commercial-rent-assistance-program-small-businesses?utm_source=Mondaq&utm_medium=syndication&utm_campaign=LinkedIn-integration. ³Office of the Premier. (2020, April 24). Ontario-Canada Emergency Commercial Rent Assistance Program. Retrieved May 4, 2020, from https://news.ontario.ca/opo/en/2020/04/ontario-canada-emergency-commercial-rent-assistance-program.html.

Since COVID-19, Where Have Home Prices Increased and Decreased Across the GTA?

““Everyday is an opportunity disguised as a challenge. No doubt we are all in the same storm but definitely in different boats so let’s be kind to one another. As these statistics show, real estate values on average are holding strong and in almost all GTA cities have increased from last year! This is still a great time to sell from a price standpoint if you were thinking of listing pre-COVID-19. The sky is not falling on the real estate market. First, take care of yourself, family, and friends. Second, if you need help let us or someone know as we are all in this together. Third, there is great opportunity out there, great listings that need buyers, and if I was looking personally or as an investor there is great inventory without the competition of multi buyers. Finally, stay safe and make sure to work with a realtor using all the necessary precautions when showing you homes.””

— Ryan Carson

Powers of Attorney and Substitute Decision Making during COVID-19

With all that surrounds COVID-19, we may have started to consider what is important to us and what would happen if we were to suddenly become seriously ill.

With the current restrictions on travel and social gatherings, you may need to re-evaluate if your chosen attorney is best suited for the job. This person should be capable of quickly communicating, getting informed, asking questions and providing consent where necessary as well as know ahead of time what choices you would like to make.

Perhaps ask yourself the following¹:
• Is that person immune-compromised?
• Is that person in quarantine or otherwise vulnerable?
• Will this person be able to safely and effectively perform the necessary functions?
• If you have more than one attorney for unanimous decision-making, is this still achievable?
• If your attorney is a front-line worker, can they still be available when the time comes?

If all else, you should appoint an alternate-decision maker in the event that your attorney becomes incapable or unwilling to act. If neither of these are appointed, to have your money, property and personal care looked after, a next of kin will need to bring a guardianship application before the Court.¹In a normal world, this process is timely and costly. In the world we are currently living in, this could be difficult to execute with all Courts closed and only accepting urgent matters and select applications.

Reminder: For the duration of COVID-19, powers of attorney must be witnessed by two witnesses, but the signing can be done by way of audio-visual communication, with the donor signing remotely and the two witnesses watching and signing by video call. For the remote signing, one of the witnesses must be a lawyer or licensed paralegal.

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Morris, S. (2020, April 21). COVID-19 Updates for your Business. Retrieved May 1, 2020, from https://www.mindengross.com/resources/news-events/2020/04/21/substitute-decision-making-during-covid-19-why-you-need-(or-may-need-to-update)-your-power-of-attorney

Amendment to Wills and Powers of Attorney Requirements

On April 23, 2020, the Ontario Government amended an order under s. 7.0.2(4), of the Emergency Management and Civil Protection Act allowing wills and powers of attorney to be witnessed and signed virtually.

First revision is that for both wills and powers of attorney, at least one witness must be a licensee within the meaning of the Law Society Act. The Law Society understands that the Ontario government means this to be an Ontario-licensed lawyer or paralegal at the time of signing.

Second, for wills executed and witnessed virtually, the testator may sign and witnesses may subscribe on separate copies of the will, in counterpart. Likewise, donors and witnesses to powers of attorney for property or personal care that are executed and witnessed virtually may sign on separate copies of the power of attorney, in counterpart.

These changes will remain in place for the duration of Ontario being under a State of Emergency. You can view the order here

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For any questions or concerns, please contact our offices

905.336.8940
info@carsonlaw.ca

Alternative Dispute Resolution during COVID-19

With the Ontario Court of Justice limiting access to courthouses to help prevent the spread of COVID-19, there are still ways to settle a dispute without going to court. This method for resolving a legal dispute outside of the courts is called an Alternative Dispute Resolution (ADR). With the current state of affairs, this may be an appealing option to help parties settle their differences, rather than to wait for the courts to open and be backlogged with cases.

Below are some of the benefits of using the most common forms of Alternative Dispute Resolution, which are: Collaborative Law, Mediation and Arbitration.

Collaborative Law
• Attorney assistance – each participant has their own lawyer ²
• Faster agreements – many cases take 4-6 months²
• Client control – clients decide the terms of their own agreements with help from their Collaborative attorneys. A final agreement will not be reached until both parties agree to it.²
• Maintains privacy – Participants of Collaborative law cases are able to decide what goes into the documents, which will become public record.²
• Preservation of relationships – Collaborative Law helps to focus on communicating with each other instead of attacking.²

Mediation
• A Mediator is an unbiased, impartial person who helps each party in their negotiations to help find mutually acceptable, practical solutions.⁵
• Meetings can be scheduled, depending on each parties’ availability, to occur within days.¹
• Flexible formatting such as regular or on-demand follow up.¹

Arbitration
• Decision of an arbitrator is legally binding, as if it were made by a judge.⁴
• A speedy and customized process tailored to the dispute issue.⁴
• Private proceeding for reputation or business confidentiality .⁴
• Can adhere to the current social distancing requirements.⁴

Alternative Dispute Resolutions are used in a way that is appropriate and best suited for both parties. There are other forms of ADR and the use of a specific method will depend on the nature of that particular dispute.³

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For more information on the benefits of Alternative Dispute Resolutions, please visit any one of the below organizations within Canada that specialize in ADR.

ADR Institute of Canada (ADRIC)
Intellectual Property Institute of Canada (IPIC)
IP Neutrals of Canada

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Birnberg, G. (2020, March). The Business Case for Neutral Facilitation in the Days of the Coronavirus (COVID-19). Retrieved April 21, 2020, from https://www.mediate.com/articles/birnberg-neutral-covid.cfm ²Forest, C. (2019, February 20). Benefits of Collaborative Law: Win-Win Agreements. Retrieved April 20, 2020, from https://www.keepoutofcourt.com/benefits-of-collaborative-law/ ³Intellectual Property Office. (2018, September 25). Alternative dispute resolution. Retrieved April 21, 2020, from https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr04443.html ⁴Munro,, L. C. (2020, April 2). Arbitration COVID-19 Benefits: Lerners LLP London & Toronto. Retrieved April 21, 2020, from https://www.lerners.ca/lernx/arbitration-covid-19/ ⁵Waterous Holden Amey Hitchon LLP. (2019). Alternatives to Court – ADR. Retrieved April 21, 2020, from http://waterousholden.com/alternatives-to-court-adr/?gclid=Cj0KCQjws_r0BRCwARIsAMxfDRiTkhF4NAcKUaWz46-QOHXqMuK-N51HIuB38GVqssDdNW0hLl3BZcwaAro-EALw_wcB

Joint custody during COVID-19

Currently, navigating different environments in and outside of the home has become something of an uncertainty and a bit of trial and error. An item that is up in air in terms of legality and having parents hesitating on decisions, is how to properly handle joint custody and the transferring of a child between homes during COVID-19.

The Ontario courts are telling us that children’s lives cannot be placed on hold without risking serious emotional harm and upset to the children. However, some parents may have to forgo time with their child if they are under self-isolation due to recent travel or exposure to COVID-19¹.
It’s all about what’s in the best interest for the child and providing love and support from both parents. In some cases, a parent’s behaviour may raise concern about parental judgement and that will need to be taken into consideration. This can include failing to comply with social distancing, or not taking responsible health precautions.²

Parents with a shared custody agreement can refer to the Ontario Superior Court’s recent case, Ribeiro v Wright, 2020 ONSC 1829 (CanLII) for guidance on how to navigate this new normal.

In summary:

• The court says existing parenting arrangements and schedules should continue with modifications to ensure COVID-19 precautions, such as physical distancing, are being followed.²
• In some cases, the court says parents may have to forgo their time with the child if they have to self-isolate because they’ve become ill, they’ve travelled abroad, or they’ve been exposed to someone with the illness.²
• The Ontario Superior Court judge says there should zero tolerance in the eyes of the court for any parent who recklessly exposes a child (or members of the child’s household) to any COVID-19 risk.²
• There may need to be changes to transportation, exchange locations, or any terms of supervision, according to the court.²
• In step-families, the court says parents will need assurance that COVID-19 precautions are being maintained in relation to each person who spends any amount of time in a household – including children of former or new relationships.²
• For the sake of the child, all parties must find ways to maintain important parental relationships.²

There will be no easy answer, for every household is different, but the need for collaboration and to work on developing new custody arrangements could be the best option for both parties.

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The province of Ontario has set up a free legal aid hotline for residents unsure of their obligations during COVID-19.

Toll-free: 1-800-668-8258
Greater Toronto Area: 1-416-979-1446

The Law Society of Ontario has also launched a hotline where you can be connected with a family lawyer who will provide 30 minutes of free legal advice.

Crisis Line: 416-947-5255
Toll Free: 1-855-947-5255 
www.findlegalhelp.ca

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Loriggio, P. (2020, March 30). Parents should respect custody arrangements during COVID-19 pandemic: Ontario courts. Retrieved April 13, 2020, from https://globalnews.ca/news/6753749/custody-agreements-ontario-courts-covid-19/ ² Ribeiro v Wright, 2020 ONSC 1829 (CanLII), , retrieved on 2020-04-13

To Tenants and Landlords during COVID-19 ...

With the current environment, tenants and landlords are in the same boat when it comes to rent. Tenants are worried about their inability to make rent; landlords are worried about their operating costs and many people from both parties find themselves unable to meet the obligations of their contracts. Currently, no new eviction orders will be issued until further notice and sheriff’s offices will postpone any scheduled enforcement of current eviction orders.³

Tenants who are able to pay their rent must do so, to the best of their abilities. If not, an honest conversation between a landlord and tenant is often the best first step in dealing with this challenging problem. With this conversation, deferring payments is the most common approach at this moment. Looking into the future of lease agreements due to COVID-19, we can perhaps start to see ‘pandemic clauses’ become a standard feature of leases and agreements.¹

In the meantime, here is a list of short-term solutions that landlords may consider:

• Basic Rent abatement or deferral.²
• Basic Rent suspension for defined periods i.e. 3-6 months or longer depending on the nature of the tenancy.²
• Basic Rent deferrals for a defined period and a corresponding increase of Basic Rent at a point in the future to make up for a Basic Rent deferral.²
• Either eliminating or reducing the obligation to pay Basic Rent and replacing it with the requirement to pay Percentage Rent for a defined period of time. A switch to paying Percentage Rent is similar to a "pay what you can" approach.²
• Less common, is abating or suspending both Basic Rent and Operating Costs. Typically, landlords like to recover at least their out of pocket expenses such as realty taxes, insurance, utilities still and maintenance costs.²
• Reduction or elimination of administrative fee and/or management fee component of operating cost charge.²
• Reduction or elimination of promotional and marketing fees.²
• Reduction of services offered and performed at the property to effect a reduction in operating costs to be charged to tenants during the COVID pandemic crisis.²
• Depending on the size of the property, number of tenants and nature of the tenancies in a given property, a landlord can consider a reduction of services provided to tenants during the state of emergency, which would potentially reduce operating costs.²
• If the landlord would rather that a particular tenant vacate its premises, then the landlord may consider building in an automatic termination or an option to terminate for the landlord.²
• Ensure that any concession you agree to clearly provides the following²:
        → insert a consideration clause;
        → clearly state when the concession expires;
        → the lease is otherwise in full force and effect and remains unamended;
        → time shall continue to remain of the essence;
        → the concession is not a waiver of any other clause in the lease;
        → the indemnifier signs the amendment, if applicable.

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Assistance for Tenants

If you need help financially you can:
• contact your local service manager
• apply for COVID-19 emergency assistance
• access federal government programs

Assistance for Landlords

Landlords may wish to:
• talk to their municipality about help with property taxes and municipal service fees.
• inquire with their mortgage lender about mortgage payment deferrals
• investigate federal government programs

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Disclaimer

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.

References

¹Hinton, K., & Mckenzie, R. (2020, April 1). 5 tips for handling commercial leases and contracts during COVID-19 and beyond. Retrieved April 20, 2020, from https://www.bcbusiness.ca/5-tips-for-handling-commercial-leases-and-contracts-during-COVID-19-and-beyond. ²Lanteigne, J., & Rosen, S. D. (2020, March 26). COVID-19 (coronavirus) advisory: Commercial landlord survival guide. Retrieved April 19, 2020, from https://gowlingwlg.com/en/insights-resources/articles/2020/covid-19-commercial-landlord-survival-guide/ ³Ministry of Municipal Affairs and Housing. (2020, March 28). Renting: changes during COVID-19 (coronavirus). Retrieved April 19, 2020, from https://www.ontario.ca/page/renting-changes-during-covid-19