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Litigation – Cynthia Davis

The question of whether individuals have a distinct right to bring an action for a breach of privacy in Ontario has long been debated. Until recently, the law in Ontario remained uncertain. In January 2012, the Ontario Court of Appeal confirmed that Ontarians do indeed have the right to protection from the intrusion upon their seclusion and solitude.

It took the case of Jones v. Tsige for the common law to articulate the need for this protection. In this case, Sandra Jones (the Plaintiff) and Winnie Tsige (the Defendant) both worked at different branches of the Bank of Montreal. The two women did not know each other; however, Jones’ ex-husband became romantically involved with Tsige.

Tsige used her workplace computer to access Jones’ personal bank accounts on at least 174 occasions over the course of four years. Tsige was able to obtain personal information including Jones’ banking transactions, date of birth, marital status and address. Tsige did not publish the information elsewhere. She claimed she accessed the information because she wanted to confirm that her boyfriend, Jones’ ex-husband, was making the child support payments he told her he was required to make.

On an appeal from a motion for summary judgment that dismissed the claim, the Court of Appeal recognized that in today’s modern society protection of personal privacy is a necessity, given the accelerated technological changes that have made highly personal information readily accessible.

The Court of Appeal reviewed numerous court decisions from Canadian, British and American courts, as well as articles written by experts in the area, to conclude that the law of Ontario would be sadly deficient if it required the court to send Jones away without a remedy on the facts of this case.

Justice Sharpe, writing for the court, stated, “[r]ecognition of such a cause of action would amount to an incremental step that is consistent with the role of this court to develop the common law in a manner consistent with the changing needs of society.”

A person will be liable for damages for invasion of privacy if he or she intentionally intrudes, physically or otherwise, upon the seclusion of another or the private affairs or concerns of another where that invasion would be found to be highly offensive to a reasonable person, causing distress, humiliation or anguish.

The Court of Appeal also held that proof of economic loss will not be required. Having said that, the court was quick to indicate that this cause of action would be limited in scope. Where no economic loss is established, damages will be symbolic to vindicate the infringement upon a person’s rights. As such, compensation will be a modest conventional sum, up to $20,000.

Further, a claim for intrusion upon seclusion will arise only for deliberate and significant invasions of personal privacy. Liability will attach only for intrusions into matters such as one’s financial or health records, sexual practices and orientation, employment, diary or private correspondence that, viewed objectively, can be described as highly offensive. Finally, the Court of Appeal made clear that a right to privacy is not absolute and these rights will have to be reconciled with competing claims, such as freedom of expression and freedom of the press.

For Jones, the court limited the damage award to $10,000, given that Tsige had apologized for her conduct and had suffered employment repercussions as well.

Our office will be monitoring this cause of action and the ways in which it is interpreted and applied to different facts.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: Cynthia Davis is a lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. Cynthia may be reached at (519) 741-8010 or <cdavis@sorbaralaw.com>.   

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Municipal, Land Use, and Development Law – David Sunday

Real estate developers in Canada and the United States will all be familiar with the due diligence issues that are common to most jurisdictions during the development land acquisition phase, such as the need to confirm zoning permissions and market feasibility. However, each Province and State will have its own unique variety of land use controls, some of which may “fly below the radar” of the development community but nevertheless can have a major impact on a property’s development potential. Ontario is no exception and this article flags three of its lesser known land use controls which should be considered when evaluating a possible development land acquisition in Ontario.

1. Endangered Species Act

Under the Endangered Species Act, the Province maintains a list of Species at Risk in Ontario (the “SARO List”). Once an endangered or threatened species is added to the SARO List, a variety of legislative provisions come into play, the overall goals of which are to protect species at risk and their habitats, and to promote the recovery of species at risk.

A site that provides habitat for a species at risk will typically be subject to very significant development constraints, as the Act prohibits any damage or destruction of species at risk habitat.

It bears noting that the SARO List includes not only mammals, but also various species of at risk trees and reptiles. In the Region of Waterloo, for example, the Jefferson Salamander and the Butternut Tree are two at risk species whose habitat has been identified on quite a number of sites proposed for development with significant resultant constraints.

Qualified biologists can assist a developer in determining if a site contains habitat for any species at risk and, if so, in assessing the extent of the development constraints.

2. Records of Site Condition under the Environmental Protection Act

In Ontario, what is known as a Record of Site Condition (“RSC”) must be registered with the Ministry of the Environment prior to changing the use of a property from industrial or commercial use to residential or parkland use.

An RSC is a document that summarizes the environmental condition of a property as determined by a “Qualified Professional” after conducting a Phase I Environmental Site Assessment, a Phase II Environmental Site Assessment (if appropriate), and confirmatory sampling (in the case of site cleanup).

The aim of this requirement is to ensure that contaminated industrial or commercial sites are not converted to more sensitive residential or parkland uses without first being properly remediated or risk assessed.

The effect of the RSC requirement is that any former industrial or commercial site in Ontario is unavailable for residential or parkland use until someone invests the time and money needed to obtain and register an RSC for that site.

3. Heritage Act

Ontario’s Heritage Act is intended to protect heritage properties and archaeological sites. It provides a framework for municipalities to designate individual heritage properties or to designate entire areas as Heritage Conservation Districts.

Once designated as a heritage property through the passing of a municipal by-law, a property becomes subject to restrictions on alterations which will affect heritage attributes. Before making such changes, an owner must obtain written consent from the municipal Council to such alterations.

An owner must also obtain written consent from the municipal Council prior to demolition of any building or structure on a designated property.

Developers will therefore find that heritage designated properties are more challenging development candidates than non-designated properties.

* * This article is intended only to inform and educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: David Sunday is the Group Leader in the Municipal, Land Use & Development Law Group at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. David may be reached at (519) 741-8010 or<dsunday@sorbaralaw.com>.   

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Labour and Employment – Michael Letourneau

The Ontario Court of Appeal recently released a decision that clarifies the law with respect to the effect of mitigation on a contractual severance payment.

Prior to this five-judge panel decision, the law in Ontario was divided as to whether a dismissed employee was entitled to receipt of a severance payment or pay in lieu of notice established in an employment contract without any deduction for income earned post-termination.

In Bowes v. Goss Power Products Ltd., the Court settled this uncertainty ruling that, where an employment contract sets out a specified notice period for termination without cause, the employee will not have a duty to mitigate his or her loss and the employer is not entitled to withhold or reduce contractual payments after the employee finds new employment. The duty to mitigate will apply to reduce the contractual severance payment where it is explicitly stated in the employment contract that such a deduction is required.

This decision will have a major impact on both existing employment agreements and the negotiation of new ones. Under existing agreements, employers who terminate without cause may be required to pay out a terminated employee’s full notice period, even if employee finds new work during the notice period.

For new agreements, employers and employees will likely be at odds in negotiating the duty to mitigate. Employers will seek to impose a mitigation clause in order to reduce the amount they ultimately pay out on termination. Employees will likely want such a clause omitted, so they know they will maximize their termination entitlements.

In the Bowes case, Mr. Bowes worked as Vice-President for Sales and Marketing for Goss Power Products Ltd. (GPP). His employment contract entitled him to six months notice, or pay in lieu, if he was terminated without cause. GPP terminated his employment, and Bowes started a new job only two weeks later. GPP then informed Bowes that, since he had new employment, they would not pay him more than the three weeks salary he was entitled to under the Employment Standards Act.

Bowes sued GPP, arguing that the company had agreed to give him six months notice, and that he should not be forced to accept less just because he had found alternate work shortly after termination. Although GPP was successful at trial, the Court of Appeal overturned the trial decision and awarded the full six months of notice pay to Bowes. In writing for the five-judge panel of the Court, Chief Justice Winkler held that a specified notice period or payment is equivalent to “liquidated damages” or a “contractual sum,” concept from commercial contracts that provide specified, fixed penalties for breaches. Since the parties agree to such payments in advance, there is no need for one party to mitigate the actual amount of the loss. The duty to mitigate applies only where the court must determine the amount of the damages as they relate to the period of reasonable notice of termination. But where the employer and employee have agreed in advance on the notice period, there is nothing left for the court to decide.

In his decision, Chief Justice Winkler held that it would be unfair to employees to allow employers to negotiate a fixed amount of notice pay, but then to pay the former employees less simply because they had found new work. This rule should apply unless the employer and employee had explicitly agreed otherwise. The Chief Justice acknowledged that the inferior bargaining power of employees and the desire to have predictability in employment contracts in order to reduce conflict and litigation after termination necessitated that employers be bound to the payment of the contractually agreed upon notice.

Employers and employees who would like to review current employment contracts or discuss a new contract can contact the lawyers in our Litigation Group for assistance.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: Michael Letourneau is a Lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. Michael may be reached at (519) 741-8010 or <mletourneau@sorbaralaw.com>.   

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Labour and Employment – Seth Jutzi

The Holiday Season may now have come and gone for another year, but did you make sure to track your overtime? Many employees likely did.

While holidays traditionally are a time for celebration and gathering with family and friends, increasingly they are becoming a time to catch up on work. The advent of mobile technology has transformed the world, and along with it the way we engage in work. Now, travelling to Aunt Tricia’s house in Hamilton or riding the chair lift at the ski hill are opportunities to check your smartphone or remotely log into your workplace desktop to catch up on email messages and the latest draft of an important document.

While mobile technology has allowed employers to increase workplace productivity, it has also kicked open the door to lawsuits brought by employees for unpaid overtime. Whether performed in the traditional workplace setting or on a smartphone outside regular office hours, employers have to keep in mind that these are workplace duties being performed for which employees can demand compensation.

In Ontario, overtime pay is governed by the Employment Standards Act, which states that employees shall receive overtime pay of at least one and one-half times the regular rate of pay for each hour worked in excess of 44 hours per week. The Act governs the vast majority of Ontario’s workforce, with a few exceptions for certain classes of workers like those in managerial roles or in certain professions like accounting and medicine.

Answering a few emails every evening and reviewing a set of documents on a Saturday morning can quickly push the average employee well beyond the 44-hour mark. All employers should be aware of this growing legal liability.

Several unpaid overtime cases are making their way through our legal systems. These cases include two high-profile class action lawsuits against the Canadian Imperial Bank of Commerce and the Bank of Nova Scotia. In the CIBC case, 3,000 employees are seeking $600 million in overtime pay, while in the case of Scotiabank, approximately 5,000 employees are claiming $350 million.

Employers who fail to address this issue run the risk of facing either civil litigation (i.e. a traditional lawsuit launched by the employee) or a complaint filed with the Ministry of Labour. If an employment standards officer finds that an employer owes wages to an employee, the officer may award the employee up to $10,000 in compensation.

Additionally, a corporation that is found to have contravened the Employment Standards Act can face a fine of up to $100,000 for a first offence. Fines for second and third offences can be as high as $250,000 and $500,000, respectively. In the case of an individual employer (i.e. a sole proprietorship), a contravention of the Act can lead to imprisonment for up to twelve months.

Employers should be mindful and ensure that there are clear and consistent policies regarding overtime and the use of mobile technology. Wherever such overtime is a likely component of an employee’s position, employers are well advised to address the issue directly in employment agreements.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

 

Author: Seth Jutzi is a lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario.  Seth may be reached at (519) 741-8010 or <sjutzi@sorbaralaw.com>.

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Collaborative Family Law – Jennifer Black

A (relatively) new alternative dispute resolution process is gaining increased traction in the family law world. Collaborative Family Law (CFL) arose as a response to the difficulties of family litigation and the limitations of family mediation. CFL is an innovative approach to resolving issues in a separation, including issues of custody, access, support and property division. CFL is providing a new experience for people going through separations.

The traditional process of negotiation offered to couples going through a separation has been the adversarial legal model. In this model, the negotiations tend to be conducted under the implied or overt threat of litigation whether the parties are in court or not. In contrast, the CFL process is confined to settlement without the threat of court intervention.

Mediation can be a powerful process option for couples. However, in mediation, parties work with one neutral third party who acts as a facilitator for discussions between them. That approach is not always appropriate for everyone. In addition, some parties fail to obtain legal advice prior to or during the mediation process. If these parties later obtain legal advice, the settlement reached in mediation tends to be more likely to break down. In the CFL process, by contrast, couples have their lawyers with them at all times during the negotiation process.

The CFL process seeks to protect the intangible interests of the parties to preserve relationships with extended family and mutual friends, to co-parent amicably, to be treated with respect, and to control the process and the outcome. In traditional adversarial negotiation, these intangible interests are often ignored.

In Collaborative Family Law, couples agree to act in good faith, make full disclosure, put their children first, and consider each other’s perspectives and interests. Collaboratively trained lawyers act as negotiation coaches, information resources, and advocates for the interests of their clients and the integrity of the process. The underpinning of Collaborative Family Law is that it is conducted on a “without prejudice” basis, where the parties and their lawyers agree that the lawyers are retained solely to facilitate the negotiation of a mutually acceptable separation agreement. If either party decides they wish to end the CFL process and go to court, the lawyers are disqualified from further representation.

In the CFL process, parties and their respective lawyers get together in settlement meetings. In these meetings and throughout the CFL process, the lawyers encourage the clients to take control over the agenda for the meetings and for the ultimate outcome. The lawyers work with their clients, encouraging them to think and speak for themselves. They assist their clients in assembling and exchanging financial disclosure and illustrate to them how to use that information to generate options for settlement.

It sometimes becomes necessary to involve other “experts” in the CFL process. A child specialist may be engaged to work independently with the clients to develop a parenting plan, or a valuator may be jointly retained by the clients to appraise a property or to value a business. These experts are neutral in their relations with the clients as they are working for both spouses. This not only reduces conflict, but it saves the parties money as they share the cost of one expert rather than retaining separate experts to do battle in court.

CFL requires an honest commitment by both spouses and their lawyers to negotiate matters reasonably, respectfully and with full disclosure of information. While there is no guarantee that matters will be resolved, there is a high chance of success where participants are committed to these goals.

CFL is not for everyone; some cases involving extremely high conflict or a need for immediate court intervention may not be suitable for the collaborative approach.

For many people going through a separation, CFL is a welcome alternative to the adversarial approach. At SorbaraLaw, we have three family law lawyers trained in Collaborative Family Law: Grace Sun, Lynn Dramnitzki, and Jennifer Black. Feel free to contact any of them to discuss whether the CFL process is appropriate for you.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Author: Jennifer Black is a lawyer in the Family Law group at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario.  Jennifer may be reached at (519) 836-1510 or <jblack@sorbaralaw.com>.   

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Family Law – Susan Deefholts

The end of a marriage marks a time of transition, upheaval and emotional challenges. For those who are legally married but separated, or who are in a subsequent, long-term cohabiting relationship while separated but still legally married, it also creates a number of uncertainties around the status of wills and beneficiary designations in the event of an untimely death.

Two recent decisions from the Ontario Court of Appeal appear to have introduced some clarity to the matter. In both decisions, the Court affirmed that the legally married surviving spouse, although separated, benefited from the deceased spouse’s estate.

In Carrigan v. Carrigan Estate, the Court reviewed the application of the spousal priority rule under the Pension Benefits Act (PBA). Generally under the PBA, even in cases where a pension holder designates a beneficiary other than the pension holder’s spouse to receive their benefits, a spouse will receive the benefit of the pension upon the pension holder’s death. The PBA does provide an exception to this rule where the pension holder is living separate and apart from the spouse on the date of death, in which case the spousal priority provisions under the PBA no longer apply.

In Carrigan, Ronald Carrigan separated from his wife, Melodee Carrigan, in 1996, but they never divorced. In 2000, he moved in with Jennifer Quinn, with whom he cohabited until the time of his death. The issue before the Court of Appeal was the application of the spousal priorities as, in this case, both Ms. Quinn and Mrs. Carrigan qualified as the “spouse” under the PBA.

The Court examined the PBA and ultimately concluded that, if the pension holder dies before retirement and is cohabiting with someone while separated from a legally married spouse, the word “spouse” refers only to the legally married spouse, thus excluding Ms. Quinn from receiving any benefit of the spousal priority under the Act. As Mr. Carrigan had been separated from Mrs. Carrigan at the time of his death, the PBA’s subsections dealing with spousal beneficiaries had no relevance to the allocation of Mr. Carrigan’s pension benefit. Instead, the listed beneficiaries on the plan would receive the benefit. In this case, the designated beneficiaries remained Mrs. Carrigan and the two children she had with Mr. Carrigan.

The Court’s interpretation of the PBA has implications for anyone who is eligible under a pension plan and is in a long-term common law relationship but legally married and separated from a former spouse. The spousal prioritization provisions of the PBA will not apply to provide the common law spouse with any rights to the benefits if the pension holder is still legally married to a former spouse. But the provisions do permit pension holders to designate beneficiaries under the PBA.

The Court of Appeal faced a similar issue in Makarchuk v. Makarchuk, holding that, after separation from a legally married spouse (but not divorce), the deceased’s will, which named the spouse as beneficiary, still applied. This remained the case even though the parties had signed a separation agreement containing standard wording wherein each party agreed to the release of rights “which he or she has or may acquire under the laws of any jurisdiction in the estate of the other.” The Court held that this wording was only sufficient to override any statutory rights. The will, as a private document, governed. The Court was mindful that the deceased, who was a retired lawyer, could have taken steps to revoke the will. He did not.

These decisions remind us that, upon separation, there is more to consider than just the equalization of property. Separating spouses should take additional steps to protect their assets, including executing new wills and powers of attorney, and changing beneficiary designations where applicable. These issues should also be revisited when entering into new long-term relationships.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Author: Susan Deefholts is a lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario.  Susan may be reached at (519) 836-1510 or <sdeefholts@sorbaralaw.com>.   

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Family Law – Jennifer Black

Under Ontario law, when a couple separates, a claim may be made pursuant to the Family Law Act for an equalization of net family property. This equalization scheme, however, requires that the parties be “married spouses” as defined in the Marriage Act. Under the Marriage Act, no marriage may be solemnized except under the authority of a license issued in accordance with the Marriage Act or the publication of bans. Consequently, some have questioned the legitimacy under Ontario law of marriages entered into by way of wedding ceremonies conducted in accordance with Sharia law.

This concern was illustrated in the recent case of Isse v. Said, in which a couple had married in an Islamic wedding ceremony in accordance with Sharia law only; the couple did not obtain a marriage license under the Marriage Act and, therefore, the marriage was not registered in Ontario.

In determining whether the parties were “married spouses” as set out in the Marriage Act, thus permitting a claim for an equalization of net family property, the Court reviewed the limited exception to requiring a marriage licence and registration as set out in the Act. To qualify as a “marriage,” the following requirements must be met:

1) the marriage ceremony must have been solemnized in good faith;

2) the marriage must have been intended to be in compliance with the Marriage Act,

3) neither party may have been under a legal disqualification to contract marriage; and

4) the parties must have lived together and cohabitated as a married couple after the solemnization.

In the case of this couple, it had been the wife’s intention that the marriage be in compliance with the law. The Court thus deemed the couple to have a valid marriage permitting a claim for the equalization of net family property under the Family Law Act. This is an important case for the Islamic community in Ontario as it recognizes important property rights for couples who are married in religious ceremonies but, through inadvertence, do not register the marriage. So long as the spouses believe that they were married in accordance with the law, they should still have the right to property division under the Family Law Act.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Author: Jennifer Black is a lawyer in the Family Law group at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario.  Jennifer may be reached at (519) 836-1510 or <jblack@sorbaralaw.com>.   

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Corporate Commercial – Cynthia Davis

Every Ontario corporation is required to keep a minute book. But just what exactly is a minute book and why is it so important?

Practically speaking, the corporate minute book is a binder that contains the documents and information pertinent to a corporation. It includes legal documents such as the Articles of Incorporation, the corporation’s by-laws, and, where applicable, the Shareholder’s Agreement. The minute book also holds the minutes of company meetings, and resolutions of both directors and shareholders. It contains registers: the shareholders register, the directors register and the officers register. Typically, share certificates for the corporation are also held in the minute book, although these certificates may be stored in a more secure location with copies of the originals in the book itself.

Often, we are asked about the importance of preparing and maintaining the corporate minute book. Under the Ontario Business Corporations Act (OBCA), corporations are required to keep up-to-date corporate records. Likewise, federal legislation also requires corporations governed by federal law to create and maintain a corporate record book. Further, the OBCA also requires that corporations permit access to the corporate minute book to shareholders upon request.

These documents are not only required by the OBCA, but they are generally required prior to receiving loans from financial institutions, or as part of the due diligence process for a share transaction, or investment by a third party into the corporation. Often, the cost to update the corporate minute book retroactively is greater than the cost of regular maintenance.

Keeping an up-to-date corporate minute book also assists corporations with compliance with other provisions of the OBCA. For example, the OBCA requires corporations to have an annual meeting of shareholders within 15 months of the previous shareholder meeting. Resolutions passed by shareholders at this meeting are then inserted into the minute book.

The OBCA also requires corporations to file a Notice of Change to advise of changes to the corporation, including the register of directors or officers, or of the address of an existing officer or director, or the head office of the corporation. The Notice of Change can be prepared together with the updates necessary to the registers contained in the corporate minute book.

As most officers and directors will know, any payment of bonuses and/or dividends must be approved by resolution. Given the tax implications surrounding the date of the payment, having the resolution documented in the minute book can assist financial advisors in ensuring that the appropriate paperwork is available to support the financial plan.

Of course, the OBCA also provides for significant penalties for a failure to maintain the corporate records. Failure to comply with the Act can lead to fines of $25,000, and the officers and directors of the corporation may be personally liable. Similarly, the Corporations Information Act provides for penalties of up to $25,000 for failing to comply with requirements to file corporate documents.

Should you require assistance in putting together or updating your corporate minute book, please feel free to contact a member of our corporate-commercial group for assistance.

* * This article is intended only to inform or educate. It is not legal advice.  Be sure to contact a lawyer to obtain legal advice on any specific matter.

Author: Cynthia Davis is a lawyer at Sorbara, Schumacher, McCann LLP, one of the largest and most respected regional law firms in Ontario. Cynthia may be reached at (519) 741-8010 or <cdavis@sorbaralaw.com>.   

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