Intellectual Property
Chad Blundy
9 Benefits to Filing a Patent Application 
Are you in possession of the next great idea or invention? 
Do you have a piece of equipment or technology that will set you apart from other competitors in your industry
Is it time for you to take steps to protect yourself and your intellectual property?
Intellectual Property
Chad Blundy
9 Benefits to Filing a Patent Application

Are you in possession of the next great idea or invention?

Do you have a piece of equipment or technology that will set you apart from other competitors in your industry?

Is it time for you to take steps to protect yourself and your intellectual property?

Residential Real Estate, Commercial & Corporate
Chad Blundy
Looking to Grow Your Real Estate Portfolio?

Carson Law is proud to support this exciting learning opportunity. It’s main focus will be to help individuals learn how multi-family real estate can boost capital and increase wealth.

Community, Residential Real Estate, Estate Administration, Commercial & Corporate
Chad Blundy
Carson Law Press Release - Staff Announcement ...
Intellectual Property
Chad Blundy
9 Benefits to Filing a Patent Application
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Ask A Lawyer!

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Recently, Ryan was able to sit down (virtually) with Matt McKeever, a Real Estate Investor and Entrepreneur to answer questions that viewers, like you, had about the real estate market and incorporating a real estate business.

                     Check out the information packed videos below!

Canadian Real Estate Lawyer Advice For First Time Buyers

Should I Incorporate My Real Estate Business? | Ask A Real Estate Lawyer

Is Wholesaling Real Estate In Canada Legal? 

If you enjoy these videos, let us know! We will continue to produce informative content to help you in any way we can.

Carson Law Office

Have a question for or want to know more about Matt Mckeever?

Instagram: http://www.instagram.com/mattmckeever85 Twitter: https://twitter.com/mattmckeever85 Business Inquires: mattmckeeverbusiness@gmail.com ►SUBSCRIBE: https://www.youtube.com/channel/UCdRtqnqBSq4GY7DGiYICu5g?sub_confirmation=1

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Understanding Construction Liens

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

On July 1, 2018, the Ontario Construction Lien Act changed its name to the Construction Act. This name change allowed the Act to represent a broader scope of topics. While much of the Act remained untouched, several key components were changed. These amendments now drastically change the scope of the law governing the construction industry.

There are a number of factors that come into play when determining when a construction lien expires. There are three important time frames to consider:

  • Preservation of lien deadline;

  • Perfection of lien deadline;

  • Two-year limitation period to set action down for trial.

Preservation

The initial step to pursuing a construction lien claim is to preserve the construction lien by registering it against the title of the land. While most liens need to be registered, there are certain circumstances where the lien needs to be served.

In order to calculate the deadline for preserving a lien, it must be determined whether the individual was a contractor or another person (ex. supplier, subcontractor). If the individual is in fact a contractor (a person who supplied directly to the owner), the lien expires 60 days after the publication of the Certificate of Substantial Performance of its contract or the date of which the contract was completed or abandoned, whichever occurs first. Previously, in the old Act, this was a 45-day period.

Perfection of a Lien

Registering a Claim for Lien, preserves the lien and temporarily extends its life. A preserved lien has 90 days to be perfected or else it will expire. The lien must be perfected 90 days from the last day on which the lien could have been preserved. The time to perfect a lien was extended from 45 days to 90 days, giving the individual 150 to register and perfect a lien.

Pursuant to subsection 36(3) of the Act, if the lien attaches to the property, the lien is perfected by issuing a Statement of Claim and by registering a Certificate of Action on title of the property. If the lien does not attach to the premises, such as Crown land or a railroad crossing, it is perfected by starting an action to enforce the lien. In some circumstances a lien may be perfected by sheltering under the perfected lien of another claimant.

The action is started when the Statement of Claim is issued in a court office in a country in which the property is located. Unlike the Rules of Civil Procedure, which requires that a Statement of Claim be served within a six-month period, a lien must be served within 90 days of the claim being issued.

Due to the new act, lien claims with a value under $25,000 will be referred to the Small Claims Court. The objective of this is to make the court process less expensive and easier for the claimants to resolve their disputes.

Two Year Limitation Period

Once a lien is perfected within the time limits set out in the Construction Act, it is important to note the two-year limitation to set the action down for trial.  If the lien is not set down for trial within the two-year limitation period, a motion may be brought to declare the lien as expired and to have the action dismissed.

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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Section 718.1 of the Criminal Code

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Author: Anika Helen - Paralegal Edited By: Ryan Carson

The purpose of proportionality is based on fairness and just. Proportionality is imperative when it comes to sentencing a person who has been convicted of a crime. It is important to prevent unjust punishment for crimes that can be dealt with rehabilitation or other means of help.

According to the Criminal Code, Section 718.1 states that fundamental principle that the sentence must be proportionate to gravity of offence and degree of responsibility of offender.

Proportionality is the governing principle when it comes to sentencing. The sentence should not be greater than the offender’s moral liability. This is important because it ensures that there is justice for the offender. Every case is different and has its own set of facts and specific situation that need to be considered during the sentencing process. Proposing sentence and deciding on a sentence is not easy for anyone, but it should be done with careful consideration as it can change someone’s entire life. In provincial court matters, there are many offenders that come in everyday for petty crimes and receive sentences that affect their lives to a greater extent than we think. A sentence should be fair and just so that the offender can learn from it and not have their lives destroyed by a mistake. And sometimes, that is all it is. A mistake. Sometimes, people make mistakes and pay a higher price for it than they should.

Section 718.2 states – “A court that imposes a sentence shall also take into consideration the following principles:

  • A sentence should be increased or reduced to account for any relevant aggravating or mitigating circumstances relating to the offence or the offender, and without limiting the generality of the foregoing,

    • Evidence that offence was motivated by bias, prejudice or hate based on race, national or ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation, or any other similar factor, or

    • Evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim shall be deemed to be aggravating circumstances;

  • A sentence should similar to sentences imposed on similar offenders for similar offences committed in similar circumstances;

  • Where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh;

  • An offender should not be deprived of liberty, if less restrictive sanctions may be appropriate in the circumstances; and

  • All available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the circumstances of Aboriginal offenders.”

It comes down to the concept of Restorative Justice. It is a recent concept in our justice system that puts emphasis on dealing with the wrong done to a person and community. The purpose of this is to shift the focus from an offender to helping and healing victims of the offender. Programs exist to repair relationships with the community. It involves the voluntarily participation of the victim, the offender and the members of the community to have discussions. The purpose is to talk, fix the damage and restore the relationships in the community to prevent further crimes from happening. The key is for the offender to accept and acknowledge responsibility for the crime committed and the harm done to the victim. Options like group conferencing, reconciliation panels, healing circles and victim-offender mediation are available these days to help the community and the people in it.

It is important to understand this section of the Criminal Code because sentencing is a huge part of the justice system. While it is imperative that offenders get proper punishments for what they have done, it is also important that sentencing should be proportionate to the level of crime committed. Sometimes, lives can be healed and changed with a bit of consideration and sympathy. New and young offenders can learn from their mistakes without having to give up on their lives.

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.

Disability Accommodation in the Workplace

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

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Employers in Ontario have a duty to accommodate employees in regards to any protected grounds covered under human rights legislation. Accommodation is a term used to describe the duties of an employer to give equal access and opportunity to individuals who are protected under the Ontario Human Rights Code. Although there are many protected grounds, disability will specifically be addressed in this article.

Disability covers quite a broad range of conditions, which include but are not limited to, physical, mental, developmental, hearing or vision impairments and learning disabilities. These may be visible or invisible and may have been present from birth, caused by an accident or developed over time.1

According to the Government of Ontario, roughly 15.5% of Ontario’s population has a disability.2 The Accessibility for Ontarians with Disabilities Act (AODA) was introduced in 2005 to improve accessibility standards for Ontarians with physical and mental disabilities while making accessibility a regular part of finding, hiring and supporting employees with disabilities. The AODA is made up of five standards, and includes requirements that organizations must meet, which are specific to the organization’s type and size. These five standards include information and communications, employment, transportation, design of public spaces and customer service.3 These standards require organizations to create and implement policies and practices that identify and remove barriers that people with disabilities may face, specifically in the workplace.

Employers have a duty to accommodate the needs of individuals with disabilities to the point of undue hardship to ensure that an employee has equal access to any opportunities and benefits available. This duty to accommodate places puts onus on the employer to remove any barriers an employee may face when trying to access such opportunities and benefits. This standard requires an employer to take every measure to provide the accommodation without causing undue hardship to the business. Otherwise, the employer must demonstrate that they are unable to reasonably accommodate the employee without causing such undue hardship, which means they must provide an employee with the requested accommodation unless it would cause serious hardship to the company. The Ontario Human Rights Code sets out three considerations when assessing whether an accommodation would cause undue hardship, which include cost, outside sources of funding and health and safety requirements.4 No other consideration may be considered when assessing undue hardship, such as business inconvenience, employee morale or third-party preference.5

For example, if an employee requests an accessible washroom, it is not enough for the employer to claim undue hardship just because it will add additional costs. For an employer to claim undue hardship in this case, they would have to prove that providing the accommodation would be so extreme that it would interfere with the operations of the business. In certain cases, providing an accommodation will not add any additional costs. Often, the accommodation only requires policy changes and flexible rules, which may cause an inconvenience but will not be a factor in considering undue hardship.

By removing the barriers that individuals with disabilities face in the workforce, the AODA intends to maximize both the inclusivity of our society and the value that each employee contributes to the economy. An inclusive workplace is one where everyone is treated with respect and becomes a place of equal opportunity.

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 Accessibility for Ontarians with Disabilities Act 2005
2 Government of Ontario Handbook for Accessible Employment
3 Accessibility for Ontarians with Disabilities Act 2005
4 Ontario Human Rights Commission
5 Ontario Human Rights Commission

Force Majeure

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

On March 11, 2020, the World Health Organization deemed the outbreak of Covid-19, or more commonly known as the coronavirus, a global pandemic. Many provinces entered into a state of emergency, office buildings closed, and many people were forced to work from home. Covid-19 began disrupting everything from travel to business operations. 

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Force majeure is a standard clause in contracts that allows both parties to be freed from liability or obligation when circumstances arise that are beyond the control of either party. These events can include war, pandemics, or an event described by the legal term act of God.

A well-expressed definition of a force majeure is found in the Supreme Court of Canada decision of Atlantic Paper Stock Ltd. v St. Anne-Nackawic:

“An Act of God clause or a force majeure clause … generally operates to discharge a contracting party when supervening, sometimes supernatural, event, beyond control of either party, makes performance impossible. The common thread is that of the unexpected something beyond reasonable human foresight and skill”.1
During the current Covid-19 pandemic, many people are unable to meet and perform their obligations. Does this automatically mean that the doctrine of force majeure excuses all obligations?

The short answer is no. In order for one’s obligations and duties to be excused by force majeure, the contract of the individual must have an applicable force majeure clause. Even if a force majeure clause is present, most are drafted broadly so that parties have to argue what events fall under the clause. Contrary, some clauses provide a long list of events that fall under force majeure. Many clauses indicate “acts of God” however, there is very little case law that supports what an act of God is.

The first question that needs to be asked is whether the force majeure event directly impacted the individual’s ability to perform their obligation and duties. A well-drafted force majeure clause should include a requirement that the party invoking the clause provide written notice of the force majeure to the other parties included in the contract. If the force majeure clause is relied upon, the party claiming force majeure will be required by the contract to give notice that the clause is being invoked as soon as they become aware that they plan to rely upon that clause. If for any reason, there is no specific notice period, they must provide notice that is reasonable. 
The careful drafting of a force majeure clause will note what type of contract it is placed in and will help minimize potential litigation. A Force Majeure clause is put in contracts to protect parties from events that do not typically occur during everyday life; therefore, when drafting a force majeure, it should address three specific questions:

          • How broad should be the definition of triggering events;
          • What impact must those events have on the party who invokes the clause; and
          • What effect should invocation have on the contractual obligation? 2

Again, when drafting the clause, many lawyers opt to use broad lists while others rely on all-inclusive and descriptive events. The force majeure clause is more than a boilerplate as it helps protect parties to a contract and avoids putting parties at risk of having a court interpret a contract. Even if a contract does not have a force majeure clause, there are still circumstances where the principle of frustration may apply. 

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 Atlantic Paper Stock Ltd v St Anne-Nackawic Pulp and Paper Co, [1976] 1 SCR 580, [1976] 1 RCS 580
2 Atcor Ltd v Continental Energy Marketing Ltd, [1996] AJ No 131, [1996] 6 WWR 274, 38 Alta LR (3d) 229, 178 AR 372, 25 BLR (2d) 1, 61 ACWS (3d) 75

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The Prudent Real Estate Investor’s Legal Checklist

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

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Real estate investing has long been a lucrative business practice. Whether you are new to the business, or already have multiple properties, it is important to make sure that you have the necessary legal safe guards in place. In order to best protect yourself and your business, there are many important legal steps that the prudent real estate investor should investigate and consider implementing into their business operations.

Incorporation

Incorporating your business requires transitioning your sole proprietorship in the business into a company that is recognized formally as a corporation. When a company incorporates the business becomes its own legal entity, separate from the individuals that that make up its ownership. Incorporating also helps to protect the personal assets of the individual business owners in the instance that judgements or other enforceable debts are registered against the company.

In Ontario, incorporations are governed by the Business Corporations Act, 1990. This act requires that all shareholders within the corporation are to be registered as such. Shareholders are those individuals who make up ownership of the company. When the corporation is created, a specific number of shares must be established and issued proportionately to the individual shareholders. The act further requires that a corporation must have at least 1 shareholder, but no more than 50.

All of these advantages of incorporating apply to the practice of real estate investing. Considering the value of real estate, once your operation reaches a certain size it makes a tremendous amount of sense to protect yourself and your partners by incorporating.

JV Agreements

A Joint Venture Agreement works to join together two or more parties, either individuals or corporations, who desire to enter into a limited business arrangement or a single project. The most common example of this arrangement we see in the real estate world involves parties coming together to combine their resources in order to invest in property. For example, Party A and Party B come together in order to purchase a multi-unit rental property. All parties to such an arrangement agree to pool together their resources and to share in the overall performance of the project, including any profits and losses.

Joint Venture Agreements are intended to clearly outline the responsibilities and expectations of the parties as they pertain to the current project. The agreement should further outline the specifics of the project itself, the contributions, both operational and financial, and the specific obligations of each party.

If you find yourself investing with other individuals, or even other companies on individual projects, a Joint Venture Agreement should be considered. An experienced lawyer can help to ensure that all your concerns are clearly and effectively addressed in order to best protect your interest in a given project.

The Transactional Process

If your business operations involve multiple purchases and sales of properties, having an experienced real estate lawyer that you know and trust is another essential tool to have in your company toolbox.

When purchasing or selling a property, a real estate lawyer will help to represent your interests in the particular transaction. They will communicate directly with the lawyer representing the other party to the transaction. They will work to resolve any issues that might arise between the parties before, during, and after the transaction has closed. This might involve the fulfillment of particular conditions to the agreements, or any breaches to the agreement that may arise.

Additionally, a real estate lawyer will help you to navigate many potential speed bumps that often present themselves when purchasing real property. A real estate lawyer will work to discover any potential title issues that might exist on a prospective property and take the necessary steps to resolve them.

Further, depending on the nature of the investment property itself a real estate lawyer can help you put into place other legal safeguards for your investment. For example, if investing in a rental property, a real estate lawyer will not only be able to assist you with the closing of the transaction, but also to put in place the necessary rental agreements with tenants renting the property.

Whatever the particulars of any given real estate investment, it is essential to have an experienced real estate lawyer in your corner.

In summary, the nature of investing in real estate requires a significant degree of due diligence, as large sums of money are involved. The legal components mentioned here are all essential aspects of the overall process of ensuring that your business maintains an optimal level of legal protection.

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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Common Summary Conviction Offences

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Author: Anika Helen - Paralegal
Edited By: Ryan Carson

“Summary” means in a quick and simple manner. Summary conviction offences are considered less serious than indictable offences because they are punishable by shorter prison sentences and smaller fees. The penalty for these offences is found in s.787(1) of the Criminal Code, which provides a maximum punishment of a $5,000 fine or a term of imprisonment of not more than two years less a day or both.

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It is extremely important to read the Code in detail for each offence. For every offence, the Code has listed what the Crown has to prove beyond a reasonable doubt. As with all offences, the Crown must prove both actus reus and mens rea of the offence beyond a reasonable doubt. That is, the act or the omission of the offence must be proven as well as the criminal intent. The accused must have had the mental capacity and the intent to commit the offence. The offence cannot have been the result of an accident. Therefore, the usual defence in criminal cases is a lack of intent. However, the intent may be satisfied by the intent to commit the act rather than by the intent to do something wrong.

What are the most common types of summary conviction offences?

Causing a Disturbance – conduct that disturbs public peace and order in or near a public place is an offence according to the Code. The conduct may be fighting, shouting, singing, using insulting or obscene language, loitering, being drunk, discharging firearms, or impending harassing or molesting other persons. To make out a case, the Crown must prove that the accused was not in a dwelling home and was engaging in one of the listed acts. The Crown also must prove that the accused was in or near a public place and someone was actually disturbed by the acts listed.

Trespassing at Night – Loitering or “prowling” on another person’s property without permission and without an excuse. Loitering means wandering with no precise definition and prowling includes a notion of evil. A prowler does not act causally, but with a purpose. In this case, the Crown does not need to prove that the accused intended to commit a specific evil act, but only that the accused person was loitering and prowling intentionally on another person’s property without an excuse. This offence is charged along with another offence, such as theft under $5,000 or possession of a break-in instrument. For example, a person might be charged with trespassing at night when the person entered a vehicle in a driveway to steal property from the vehicle.

Taking a Motor Vehicle Without Consent – “Joy riding” is the common term for this offence. This requires that the motor vehicle be taken without the owner’s consent. A person can be charged with this offence even if they are just a passenger in the vehicle that has been taken without consent. Possessing a stolen vehicle is an offence regardless of whether a person stole it or not. It is assumed that if a person has possession of a stolen vehicle, that it is the person themselves who stole the vehicle. The only defence available in a scenario where someone has possession of a stolen vehicle is that they had no idea that the vehicle was stolen.

Fraudulently obtaining food, beverage or accommodation – s. 364(1) of the Code states that every one who fraudulently obtains food, a beverage or accommodation at any place that is in the business of providing those things is guilty of an offence punishable on summary conviction. A common example of this is, not paying a restaurant bill. For this offence, the Crown must prove that the person intended not to pay for food, beverage or accommodation stolen.

Transportation Fraud – it is a criminal offence to obtain transportation in a fraudulent way. This means that any free or discounted ride obtained by intentional deceit or falsehood can lead to these charges. This offence carries a penalty of up to six months in jail and a criminal record. An example of this offence includes not paying for public transportation, such as TTC or Go Transit. However, the fraud must be intentional. A mistake can be forgiven by the court unless the person intended not to pay.

Attempts and Accessories After the Fact, Summary Conviction – anyone who attempts to commit a summary conviction offence or is an accessory after the fact to such an offence is also guilty of a summary conviction offence. An accessory after the fact is defined in s.23(1) as one who, knowing that a person has been a party to the offence, receives, comforts or assists that person for the purpose of enabling them to escape. A common example of this would be helping someone to hide to get away after they have robbed a bank or stolen a vehicle.

When charged with a summary conviction offence, it is best to reach out to a criminal lawyer or a paralegal who has experience in the field. Every situation has different circumstances. It is ideal to get help from someone who is experienced rather than defending one’s self alone. Sometimes, a mistake or an unfortunate situation can lead to these charges where there was no intent. A legal representative would be able to defend a person in those circumstances, so that the person’s record does not get tainted because of a mistake or an act they did not commit.

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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Non-Resident Speculation Tax

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

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In 2017, the province of Ontario implemented a specific tax on foreign real estate buyers, the Non-Resident Speculation Tax. The tax works to impose greater financial burdens on foreign real estate purchasers, providing for a tax rate of 15% in addition to the purchase price of residential property. The tax applies specifically to residential properties located in the Golden Horseshoe area, effective as of April 21, 2017. Agreements of Purchase and Sale that were signed prior to this date, and that were not assigned to another party after this date, are not subject to the Non-Resident Speculation Tax.

The tax is intended to deter foreign buyers from purchasing residential property in an effort to moderate the skyrocketing housing market in the Golden Horseshoe area. Foreign investors have long found the housing market in these areas of Ontario to be a safe and attractive place to invest their foreign dollars. This practice has caused the value of homes in these areas to inflate, somewhat artificially. As a result, residential property in these areas are often out of reach for the everyday local residents of these communities. The Non-Resident Speculation Tax helps to relevel the playing field, and works to moderate residential real estate prices, making them more affordable for local residents.

The Non-Resident Speculation Tax is applied to foreign buyers, any individuals who are neither Canadian Citizens, nor Permanent Residents. The tax is also applicable to foreign corporations, those with corporate nerve centers outside of Canada.

Taxable trustees are also subject to the Non-Resident Speculation Tax. This typically includes trusts which have one or more trustees considered to be a foreign entity, or if the direct beneficiary of a trust is an individual considered to be a foreign entity.

However, purchasers who have been subject to this tax may be entitled to a rebate in the instance that they meet particular exempting conditions provided for in the legislation. These exemptions include:

  • If the buyer within 4 years of the real estate purchase closing date, becomes a Canadian Citizen or a Permanent Resident.

  • If the buyer is also a full-time student at an educational institution, at a campus located in Ontario for at least 2 years.

  • If the buyer has been legally employed in Canada for a least 1 year.

Individuals applying for one of these exceptions are also required to abide by the following conditions:

  • The buyer must hold title to the subject property either exclusively, or exclusively between themselves and a spouse.

  • The buyer is required to occupy the subject property as their primary resident for a minimum of 60 days beyond the closing date of the transaction.

  • The buyer must submit their application for an exception rebate no longer than 4 years after the closing date of the transaction. 

The Non-Resident Speculation Tax may even have an effect on Canadian citizens in certain respects. If residential real estate is purchased through a partnership, where one of the partners is considered a foreign entity, the entire purchase will still be subject to the 15% tax. The tax is not imposed proportionality to the particular interest held by the foreign entity. In other words, if any member of a partnership is without an exemption to the tax, the tax will be fully applicable to the entire transaction.

Should you find yourself in a situation where the prospective purchase of residential property may be subject to the Non-Resident Speculation Tax, it is imperative that you meet with a lawyer to determine your potential eligibility for any of these exemptions. At Carson Law we can help you navigate these concerns, in part of an overall plan to best protect your interests.

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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Determining Which Business Venture is Right for You!

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

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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.

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.
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.
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.

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

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.

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Who is a Litigation Guardian and What Are Their Duties?

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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)).

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.

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

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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.

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. .

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Impact of COVID-19 on Landlords and Tenants

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Author: Anika Helen - Paralegal
Edited By: Ryan Carson

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

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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.

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.

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.

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.

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

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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.

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.

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.

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

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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.

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.

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.

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.

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

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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.

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

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 .

Alternative Approaches To Purchasing A Recreational Property

As the summer of 2021 quickly approaches many Ontarians revisit considerations of investing in recreational and cottage properties. Many individuals have been deterred in the past from diving into this market due to concerns surrounding winterization, and various other maintenance demands involved in cottage property ownership. Prospective buyers who may have found themselves in this camp in the past may find attractive the increasing trend in this area of real estate, a move towards condominium and time share approaches to cottage country living. These alternative approaches present their own unique set of benefits.

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Should You Consider A Cohabitation Agreement?

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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.
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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.

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 .

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Trademarks, .com Domain Names, and Consumer Confusion

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domain.jpg

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.

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.

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.

For Damages: Legal Action of Passing Off

scale of justice.jpg

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.

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.

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

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).

 

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).

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).

 

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.

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.

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.

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