"People who would not believe a High Priest if he said the sky was blue, and was able to produce signed affidavits to this effect from his white-haired old mother and three Vestal Virgins, would trust just about anything whispered darkly behind their hand by a complete stranger in a pub."Terry Pratchett, from the novel Maskerade.
Wednesday, December 30, 2009
What is believed?
The wisdom of crowds can be overrated.
"The IQ of a mob is the IQ of its most stupid member divided by the number of mobsters."Terry Pratchett, from the novel Maskerade.
Separation Agreements: Full Disclosure and Fair Dealing
The Supreme Court of Canada in Rick v. Brandsema has recently clarified the law regarding what is and isn't fair in the negotiation and contents of a separation agreement.
The SCC headnote found at Canlii gives an excellent summary (the numbers in square brackets being the relevant paragraph of the SCC judgment; the hyperlinks are by the author of this blog):
The SCC headnote found at Canlii gives an excellent summary (the numbers in square brackets being the relevant paragraph of the SCC judgment; the hyperlinks are by the author of this blog):
The parties married in 1973 and separated in 2000. During their 29 years together, they had five children and acquired a dairy farm in which they were equal shareholders, as well as other real property, vehicles and RRSPs. The parties were intermittently represented by lawyers and also used the services of mediators during their negotiation of a separation agreement. Approximately a year after their divorce, the wife sought to set aside the agreement on the grounds of unconscionability or, in the alternative, a reapportionment order under s. 65 of British Columbia’s Family Relations Act.
The trial judge found that the agreement was unconscionable because the husband had exploited the wife’s mental instability during negotiations and had deliberately concealed or under‑valued assets. This resulted in the wife receiving significantly less than her entitlement under the Act, despite the fact that it was the parties’ express intention to divide their assets equally. As a result, the trial judge made an order awarding the wife an amount representing the difference between the negotiated equalization payment and the amount she was entitled to under the Act. The Court of Appeal disagreed with the trial judge’s conclusions about the extent of the wife’s vulnerabilities and concluded that, in any event, they were effectively compensated for by the availability of counsel. [The wife appealed that BCCA decision to the Supreme Court of Canada and won.]
[...]
The singularly emotional environment that follows the disintegration of a spousal relationship means that the negotiation of separation agreements takes place in a uniquely difficult and vulnerable context. Special care must therefore be taken to ensure that the assets of the former relationship are distributed through a process that is, to the extent possible, free from informational and psychological exploitation. Where exploitation results in an agreement that deviates substantially from the objectives of the governing legislation, the resulting agreement may be found to be unconscionable and, as a result, unenforceable. [1] [44] [47]
While parties are generally free to decide for themselves what bargain they are prepared to make, decisions about what constitutes an acceptable settlement can only authoritatively be made if both parties come to the negotiating table with the information they need to consider what concessions to accept or offer. This requires that there be a duty on separating spouses to provide full and honest disclosure of all relevant financial information in order to help protect the integrity of the negotiating process. This duty not only anchors the ability of separating spouses to genuinely decide for themselves what constitutes an acceptable bargain, it helps ensure the finality of agreements. An agreement negotiated with full and honest disclosure and without exploitative tactics will likely survive judicial scrutiny. [45‑49]
Whether defective disclosure will justify judicial intervention, however, will depend on the circumstances of each case, including the extent of the misinformation and the degree to which it may have been deliberately generated. [49]
There is no reason to disturb the trial judge’s conclusion that the separation agreement was unconscionable. His findings about the husband’s defective disclosure and exploitation of his wife’s known mental vulnerabilities, support the conclusion. Although in some cases professional assistance will effectively compensate for vulnerabilities, in this case the trial judge concluded that the wife’s mental instability left her unable to make use of such assistance. [2] [6] [27-28] [31] [36] [58‑60] [62]
The husband’s failure to make full and honest disclosure, his knowledge that the negotiations were based on erroneous financial information, as well as his exploitation of what he knew to be his wife’s profound mental instability, resulted in a negotiated equalization payment that was $649,680 less than the wife’s entitlement under the Family Relations Act. In these circumstances, the trial judge was entitled to award this amount to compensate the wife for the loss caused by the unconscionable bargain. [6] [27-28] [31] [53] [63] [69]
Monday, December 14, 2009
The Canadian Centre for Policy Alternatives Weighs looks at the HST
The Canadian Centre for Policy Alternatives is "an independent, non-partisan research institute concerned with issues of social, economic environmental justice. Founded in 1980, the CCPA is one of Canada’s leading progressive voices in public policy debates".
CCPA recently examined the recently-approved Harmonized Sales Tax (HST)and concludes that the "majority of Ontarians won’t be worse off when the [HST] is implemented. Not A Tax Grab After All: A Second Look at Ontario’s HST examines the Ontario government’s HST plan and finds it's virtually revenue neutral when viewed as part of a total tax package that includes increased sales and property tax credits and a significant decrease in personal income tax rates".
To read CCPA's full paper in PDF format you can right-click and download it from here.
Other Camberwell House posts with further information on the HST:
"The HST and you"
"HST Transitional Rules"
CCPA recently examined the recently-approved Harmonized Sales Tax (HST)and concludes that the "majority of Ontarians won’t be worse off when the [HST] is implemented. Not A Tax Grab After All: A Second Look at Ontario’s HST examines the Ontario government’s HST plan and finds it's virtually revenue neutral when viewed as part of a total tax package that includes increased sales and property tax credits and a significant decrease in personal income tax rates".
To read CCPA's full paper in PDF format you can right-click and download it from here.
Other Camberwell House posts with further information on the HST:
"The HST and you"
"HST Transitional Rules"
Tuesday, December 1, 2009
Quantum Meruit
“Quantum meruit” is Latin for “as much as he deserves”. It refers to how the court determines what a party is owed for work done for another in one of two main cases: where there is no contract (and thus an unjust enrichment case) or where there is a contract but there are no express terms governing payment, (which can be an oral contract, or a written contract which is silent or unclear as to payment). If the right to payment is established by the court then, “in such circumstances, the Courts award reasonable remuneration to the person who has rendered the services”, [Dictionary of Canadian Law, (3d ed.)].
It is important that the rendering of services by one person to another has to be to one who has requested such services “or freely accepted them with the knowledge that they are not rendered gratuitously." [Gill v. Grant (1988), 30 E.T.R. 255 at 271 (B.C.S.C.) per Rowles J.] The rationale for this two-way-street is obvious: one should not be forced by a court to pay for services which one had neither requested nor knowingly accepted.
A very neat summary of what must be present to win a claim based soley on quantum meruit are found in Summers v. Harrower, 2005 CanLII 50261 (Ont S.C.J.), ¶ 11:
It is important that the rendering of services by one person to another has to be to one who has requested such services “or freely accepted them with the knowledge that they are not rendered gratuitously." [Gill v. Grant (1988), 30 E.T.R. 255 at 271 (B.C.S.C.) per Rowles J.] The rationale for this two-way-street is obvious: one should not be forced by a court to pay for services which one had neither requested nor knowingly accepted.
A very neat summary of what must be present to win a claim based soley on quantum meruit are found in Summers v. Harrower, 2005 CanLII 50261 (Ont S.C.J.), ¶ 11:
1. there was a contractual relationship between the parties;Quantum meruit is a very useful principle of law, permitting recovery of funds where there is inadequate documentation but evidence of the agreement and the work done.
2. the parties agreed that certain work was to be done but failed to agree on all aspects of the contract, for example, the price to be paid;
3. the defendant accepted the work;
4. both parties had or should have had in the circumstances an expectation that the work was not being rendered gratuitously; and
5. the payment sought was reasonable remuneration for the work done.
Latin and the law
This post started as an entry on the principle of quantum meruit, but the phrase itself got me to thinking about Latin words in the law. (The post on quantum meruit will have to wait until here.)
There was a time when reading law was an exercise in plowing through the classical educations of the British lawyers of a different era, a kind of penance paid by the rest of us for the sins of the teachers of countless generations of public school boys vigorously beaten into translations of the classics. Such educations produced a weird result where anything important had to be in Latin because, well, Latin was how educated people said important things and that was that. It also helped that such a forest of Latin stood as a code or in-language for the ruling classes which often excluded the entrepreneurial middle classes and definitely placed a comprehension barrier between the lower classes and their understanding of the net of laws that so severely and unfairly bound them. It's still surprising to realize that the study of English among Britain's educated classes was, until well into the 20th Century, often reserved for those children of privilege considered too slow for Latin and Greek. How idiotic such a fetishization of past millenia was is shown by the fact that Winston Churchill was shunted off into the study of English at Harrow because he was considered too dim for the classics. (The lad was once beaten when, told that a certain sentence construction would be used when addressing a table, blurted out, "but I never do!". Fortunately this early immersion in English eventually turned out to be for our societal benefit.)
Over the years Latin has, thankfully, largely dropped from frequent use in the law. Generations of lawyers have grown up without ever having picked up a Latin primer and I have a sneaking suspicion that the drop in the study of the classics is linked at least in important part to the end of corporal punishment in the schools: kids -- me, for one! -- probably have to be threatened with violence to waste time learning the endless, oppressive complexities of Latin grammar, an educational point recognized by the lads of Monty Python in this classic Life of Brian scene.
Reading a judicial decision from eighty years ago is an exercise in frustration, blocked as one is at every turn by a barbed wire tangle of Latin phrases which have perfectly acceptable English equivalents. Modern decisions are mercifully free of Latin, save where the term in question has become a term of art which is generally and instantly understood by lawyers to denote a specific thing, a word or phrase which one treats as an English word by adoption, like (non-legal) but instantly-comprehended words "blitzkreig", "bungalow" or "fait accompli". The law is better off for it.
There was a time when reading law was an exercise in plowing through the classical educations of the British lawyers of a different era, a kind of penance paid by the rest of us for the sins of the teachers of countless generations of public school boys vigorously beaten into translations of the classics. Such educations produced a weird result where anything important had to be in Latin because, well, Latin was how educated people said important things and that was that. It also helped that such a forest of Latin stood as a code or in-language for the ruling classes which often excluded the entrepreneurial middle classes and definitely placed a comprehension barrier between the lower classes and their understanding of the net of laws that so severely and unfairly bound them. It's still surprising to realize that the study of English among Britain's educated classes was, until well into the 20th Century, often reserved for those children of privilege considered too slow for Latin and Greek. How idiotic such a fetishization of past millenia was is shown by the fact that Winston Churchill was shunted off into the study of English at Harrow because he was considered too dim for the classics. (The lad was once beaten when, told that a certain sentence construction would be used when addressing a table, blurted out, "but I never do!". Fortunately this early immersion in English eventually turned out to be for our societal benefit.)
Over the years Latin has, thankfully, largely dropped from frequent use in the law. Generations of lawyers have grown up without ever having picked up a Latin primer and I have a sneaking suspicion that the drop in the study of the classics is linked at least in important part to the end of corporal punishment in the schools: kids -- me, for one! -- probably have to be threatened with violence to waste time learning the endless, oppressive complexities of Latin grammar, an educational point recognized by the lads of Monty Python in this classic Life of Brian scene.
Reading a judicial decision from eighty years ago is an exercise in frustration, blocked as one is at every turn by a barbed wire tangle of Latin phrases which have perfectly acceptable English equivalents. Modern decisions are mercifully free of Latin, save where the term in question has become a term of art which is generally and instantly understood by lawyers to denote a specific thing, a word or phrase which one treats as an English word by adoption, like (non-legal) but instantly-comprehended words "blitzkreig", "bungalow" or "fait accompli". The law is better off for it.
Unjust Enrichment
Unjust enrichment is a doctrine for the compensation of one who has unjustly received a benefit from another in a manner that the law will correct. It is a principle of “equity”.
Thomson-Carswell’s Dictionary of Canadian Law (3d ed) neatly summarizes the doctrine:
An example of unjust enrichment would be two companies working together without a written contract on a building project where Company A owns the land and Company B contributes labour and building supplies. Co.A refuses to pay Co.B, so where is B’s remedy? It can allege an oral contract, yes. But it can also allege that Co.A is unjustly enriched. Co.A has been enriched to the value of the contributions in labour and supplies and through any increase in the value of the property. Co.B has suffered a corresponding deprivation, in that it has lost those contributions and the profit (the increase in value) which would have been provided if those contributions had been used elsewhere. Lastly, there is no juristic reason for what happened. If, for example, Co.A had been owed $1m by Co.B and B’s deprivation was roughly the same, Co.A could claim a set-off for that debt, which could be a juristic reason which may be upheld by the court.
For further reading and a discussion of the principle, please see the Duhaime page on unjust enrichment.
Thomson-Carswell’s Dictionary of Canadian Law (3d ed) neatly summarizes the doctrine:
“ An action for unjust enrichment arises when three elements are satisfied: (1) an enrichment; (2) a corresponding deprivation; and (3) the absence of a juristic reason for the enrichment.”Each of these is required for the doctrine to be applied. Only when they are proven is the action established and the court able to grant compensation; from there the court goes on to determine what remedy will be applied: monetary compensation or a judgment finding a “constructive trust” which will result in an order that the claimant has an interest in or title to property.
An example of unjust enrichment would be two companies working together without a written contract on a building project where Company A owns the land and Company B contributes labour and building supplies. Co.A refuses to pay Co.B, so where is B’s remedy? It can allege an oral contract, yes. But it can also allege that Co.A is unjustly enriched. Co.A has been enriched to the value of the contributions in labour and supplies and through any increase in the value of the property. Co.B has suffered a corresponding deprivation, in that it has lost those contributions and the profit (the increase in value) which would have been provided if those contributions had been used elsewhere. Lastly, there is no juristic reason for what happened. If, for example, Co.A had been owed $1m by Co.B and B’s deprivation was roughly the same, Co.A could claim a set-off for that debt, which could be a juristic reason which may be upheld by the court.
For further reading and a discussion of the principle, please see the Duhaime page on unjust enrichment.
Wednesday, November 18, 2009
Thinking clearly on the accused
An avidity to punish is always dangerous to liberty. It leads men to stretch, to misinterpret, and to misapply even the best of laws. He that would make his own liberty secure must guard even his enemy from oppression; for if he violates this duty he establishes a precedent that will reach to himself.
Thomas Paine
Thursday, November 12, 2009
Varying a custody access order: When you can and when you can't
Is there a situation where parties are blocked from seeking variation of a custody or access order? Yes. Elizabeth Ramsden in LAO LAW’s The Bottom Line: A weekly summary of new cases in family law (November 11, 2009) summarizes this issue:
As the Court of Appeal noted, "[t]he matter is jurisdictional and a court must make a finding of a material change in circumstances even when, as here, both parties request a variation." [Emphasis added.]
The Court went on to note that where there is “significant conflict in the affidavit evidence of the parties … a variation motion cannot be properly determined on affidavit material. … [R]esolution of conflicting evidence on critical matters requires a trial of the issues, in which viva voce evidence is called. See this court’s decision in Schnarr v. Schnarr (2006), 22 R.F.L. (6th) 52”.
Even where both parties request a variation of a custody or access order, the court is without jurisdiction to vary the order unless it makes an explicit finding of a material change in circumstances since the previous order was made. A material change is one that:
(1) amounts to a change in the condition, means, needs or circumstances of the child and/or the parents’ ability to meet the child’s needs;
(2) materially affects the child; and
(3) was either not foreseen or could not have been reasonably contemplated by the judge who made the original order.
If an applicant fails to meet this threshold requirement, the inquiry can go no further: Persaud v. Garcia-Persaud, 2009 ONCA 782 (Laskin, Gillese and Juriansz JJ.A.), ¶ 4, [citing see Gordon v. Goertz, [1996] 2 S.C.R. 27, at ¶ 13 and Litman v. Sherman (2008), 52 R.F.L. (6th) 239 (Ont. C.A.)].
As the Court of Appeal noted, "[t]he matter is jurisdictional and a court must make a finding of a material change in circumstances even when, as here, both parties request a variation." [Emphasis added.]
The Court went on to note that where there is “significant conflict in the affidavit evidence of the parties … a variation motion cannot be properly determined on affidavit material. … [R]esolution of conflicting evidence on critical matters requires a trial of the issues, in which viva voce evidence is called. See this court’s decision in Schnarr v. Schnarr (2006), 22 R.F.L. (6th) 52”.
Wednesday, November 11, 2009
Living Wills: The Centre for Bioethics
The University of Toronto Joint Centre for Bioethics maintains a website with information, education and precedent materials on living wills. The website provides living will information for general living wills, cancer living wills and HIV living wills. Registration and sign-in (triggering a disclaimer) is required to view or download these precedents.
Wednesday, November 4, 2009
The necessary virtue of proof-reading
I spoke earlier today with a networking colleague who drew my attention to a letter she had received from one of her suppliers, expressing pleasure that their firm was once again my colleague's choice for her "hoe based business".
That missing M makes a lot of difference, doesn't it? Double check your outgoing letters!
That missing M makes a lot of difference, doesn't it? Double check your outgoing letters!
Friday, October 30, 2009
Some essential sources for directors of non-profits
Building a new not-for-profit organization: How to approach risk management. (HTML)
Paulette VinetteBy Paulette Vinette, CAE
Organization and Management of Nonprofits.
Charity Village (assorted authors)
Governance DO'S & DON'TS: Lessons from Case Studies on Twenty Canadian Non-profits. (PDF)
Mel Gill
Primer for Directors of Not for Profit Corporations (online HTML version).
Primer for Directors of Not for Profit Corporations (PDF version).
Co-ordinating Editor: Peter Broder. Text Editor: Norah McClintock. Contributors: Wayne Amundson; Jane Burke-Robertson; Terrance Carter; Jacqueline Connor; Paul Martel; David Stevens.
Paulette VinetteBy Paulette Vinette, CAE
Organization and Management of Nonprofits.
Charity Village (assorted authors)
Governance DO'S & DON'TS: Lessons from Case Studies on Twenty Canadian Non-profits. (PDF)
Mel Gill
Primer for Directors of Not for Profit Corporations (online HTML version).
Primer for Directors of Not for Profit Corporations (PDF version).
Co-ordinating Editor: Peter Broder. Text Editor: Norah McClintock. Contributors: Wayne Amundson; Jane Burke-Robertson; Terrance Carter; Jacqueline Connor; Paul Martel; David Stevens.
Wednesday, October 28, 2009
Precision often annoys people
Lawyers often get taken to task for our attention to detail and our precision with words. It's occasionally very vexing: nobody complains when a surgeon puts the knife in exactly the right spot, or feels hard done by when their contractor's woodwork meets just where it should. However, a lawyer often seems taken to task for getting our words Just So; it's seen as, well, sharp in the unpleasant sense of the word. You take the bad with the good in a job like this, but it's always a little comforting when somebody "gets it" so it was fun to come across this quote:
“It requires as much caution to tell the truth as to conceal it.”
Baltasar Gracian
Tuesday, October 27, 2009
HST Transitional Rules
"The 2009 Ontario Budget proposed a comprehensive package of tax changes. Central to this tax package is the proposed Harmonized Sales Tax for Ontario (HST), which, subject to legislative approval, would come into effect on July 1, 2010.
"This Notice provides details of proposed measures that would build on Ontario’s comprehensive tax package and help consumers and businesses transition to the HST.
"The Notice provides general descriptions of transitional rules for the HST that will be proposed to be enacted in the federal Excise Tax Act (ETA). It also provides general descriptions of provincial measures that will be proposed to be enacted to wind down the applicable provisions of the Ontario Retail Sales Tax Act (RSTA)."
For further information please see the Ontario Ministry of Revenue page on the HST at:
http://www.rev.gov.on.ca/en/taxchange/index.html
This PDF is available for download here.
HST Transitional Rules
"This Notice provides details of proposed measures that would build on Ontario’s comprehensive tax package and help consumers and businesses transition to the HST.
"The Notice provides general descriptions of transitional rules for the HST that will be proposed to be enacted in the federal Excise Tax Act (ETA). It also provides general descriptions of provincial measures that will be proposed to be enacted to wind down the applicable provisions of the Ontario Retail Sales Tax Act (RSTA)."
For further information please see the Ontario Ministry of Revenue page on the HST at:
http://www.rev.gov.on.ca/en/taxchange/index.html
This PDF is available for download here.
HST Transitional Rules
The HST and you
I recently attended a seminar on the new HST at this year's Bridges to Better Business event. The talk, given by a cheerful and helpful Mr. Jeremy Bertrand of the Ontario Ministry of Revenue, was very valuable, hitting many of the key questions we have about the new harmonized sales tax which is replacing the old provincial sale tax (PST).
Mr. Bertrand was kind enough to send me a PDF of his PowerPoint presentation ... and you can download it by right-clicking here.
I will be posting on some key points from that presentation later in this week.
For those of you who would prefer to read it online, here is the same presentation uploaded to ScribD. My thanks go to Mr. Jeremy Bertrand for the Ministry's permission to upload this to the Camberwell House site in furtherance of their goal of educating businesses about the new tax.
Ontario Min Rev HST FINAL 2009 09-Dms
Mr. Bertrand was kind enough to send me a PDF of his PowerPoint presentation ... and you can download it by right-clicking here.
I will be posting on some key points from that presentation later in this week.
For those of you who would prefer to read it online, here is the same presentation uploaded to ScribD. My thanks go to Mr. Jeremy Bertrand for the Ministry's permission to upload this to the Camberwell House site in furtherance of their goal of educating businesses about the new tax.
Ontario Min Rev HST FINAL 2009 09-Dms
Wednesday, August 19, 2009
Watch out for the Limitations Act
Where you suffer a loss and claim against your insurance, beware of the Limitations Act, 2002. It is not unheard of (!) for an insurance company to drag things. In such cases the insured thinks that the insurance company is "handling it". Unfortunately the insurer is -- whether accidentally or deliberately -- exploiting the belief of the insured that the insurance company is acting in good faith. The insured may, down the road, face a very unpleasant situation when a demand for the long-delayed payment is met by the insurance company denying the claim by pointing to the passage of the limitation period. (Note: The relevant section is reproduced at the bottom of this post.)
There are arguments in law which might defeat the insurance company's reliance on the Act in such cases but law must often defer to practicality: a client may not be able to contest the claim because any action to challenge the insurance company's position would have cost many times the amount due under the policy. The result? An insurance company pockets a tidy little profit by saying "you're too late!" to a claimant on a claim that they themselves have delayed. An individual or small business person should consider this very deeply and never forget it if they need to make an insurance claim. Whether the insurance company does this on purpose or merely benefits from its own incompetence is beside the point: they can and might do this to you too.
What can you do to avoid being scammed this way?
1. On any insured matter please remember that the two-year clock starts running as of the date of the damage.
2. Diarize, diarize, diarize. Mark off the six, twelve and fifteen month periods since the date of the claim, and follow up on those days.
3. Do everything in writing, preferably by email or fax. It is difficult for an insurer to take the position in court that they hadn't received a document ("we couldn't process the claim without it and they didn't send it to us so they have no case") if you can prove that they received it. (And please don't kid yourself: whether by accident or design any large organization will "lose" materials or information which help you and hurt them. Anybody who has dealt with a cable or cell phone company for example knows of this: somehow their promises to you rarely seem to make it onto your file!)
4. Watch out for sneaky handoffs. Large organizations of all kinds have learned that they can delay provision of service indefinitely if they keep you uncertain and confused over who really has responsibility for your file.
5. If they have not paid out by your fifteen month point, consult and, if necessary, retain counsel. Have the lawyer put the insurer on notice that failure to pay by a given date will result in a court action.
6. Don't bluff. Sue if necessary to preserve your rights. Once that two-year period has gone by your rights have largely disappeared.
An extract from the Limitations Act showing the basic two-year period:
There are arguments in law which might defeat the insurance company's reliance on the Act in such cases but law must often defer to practicality: a client may not be able to contest the claim because any action to challenge the insurance company's position would have cost many times the amount due under the policy. The result? An insurance company pockets a tidy little profit by saying "you're too late!" to a claimant on a claim that they themselves have delayed. An individual or small business person should consider this very deeply and never forget it if they need to make an insurance claim. Whether the insurance company does this on purpose or merely benefits from its own incompetence is beside the point: they can and might do this to you too.
What can you do to avoid being scammed this way?
1. On any insured matter please remember that the two-year clock starts running as of the date of the damage.
2. Diarize, diarize, diarize. Mark off the six, twelve and fifteen month periods since the date of the claim, and follow up on those days.
3. Do everything in writing, preferably by email or fax. It is difficult for an insurer to take the position in court that they hadn't received a document ("we couldn't process the claim without it and they didn't send it to us so they have no case") if you can prove that they received it. (And please don't kid yourself: whether by accident or design any large organization will "lose" materials or information which help you and hurt them. Anybody who has dealt with a cable or cell phone company for example knows of this: somehow their promises to you rarely seem to make it onto your file!)
4. Watch out for sneaky handoffs. Large organizations of all kinds have learned that they can delay provision of service indefinitely if they keep you uncertain and confused over who really has responsibility for your file.
5. If they have not paid out by your fifteen month point, consult and, if necessary, retain counsel. Have the lawyer put the insurer on notice that failure to pay by a given date will result in a court action.
6. Don't bluff. Sue if necessary to preserve your rights. Once that two-year period has gone by your rights have largely disappeared.
An extract from the Limitations Act showing the basic two-year period:
Basic limitation period
4. Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered....
Discovery
5. (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a)...
Presumption
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved....
Demand obligations
(3) For the purposes of subclause (1) (a) (i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made. ...
Same
(4) Subsection (3) applies in respect of every demand obligation created on or after January 1, 2004. ...
Thursday, July 2, 2009
A Beginner`s Guide to Wills and Estates
From a presentation given recently:
Wills Estates Presentation 20090611
To see this full page, please click on "Wills Estates Presentation 20090611" above the document, or click here.
Wills Estates Presentation 20090611
To see this full page, please click on "Wills Estates Presentation 20090611" above the document, or click here.
Tuesday, June 16, 2009
Every Litigator Believes This ... And Rightly So
Anybody seen the Malcolm Gladwell article in the New Yorker about how David beats Goliath? Everybody knows the part about the sling shot and the smooth stones but the fight starts with David on offense. He runs right at Goliath who is just standing there, gaping, shocked out of his wits that this kid is actually running right at him!! If you want to beat the the bastards, you gotta go on the offensive, stay on the offensive and when they're down, stomp on them. Acting like a weenie gets you nowhere. Goliath eats weenies for lunch.
Commenter "arcadesproject" at Hullabaloo, courtesy of "The Real Interrobang".
Friday, May 29, 2009
The Entrepreneur's Constant Nightmare
The Vendor Client relationship - in real world situations
The largest part of my practice is work for small businesses and their owners, and I can tell you that this is a very accurate reflection of the problems created by that breed of customer / client who expects Cadillac work for bicycle prices and thinks that the business should be grateful for the privilege.
The largest part of my practice is work for small businesses and their owners, and I can tell you that this is a very accurate reflection of the problems created by that breed of customer / client who expects Cadillac work for bicycle prices and thinks that the business should be grateful for the privilege.
Monday, May 11, 2009
LawPro Warning to lawyers re equipment loan fraud
LawPro tells the profession:
Our LAWPRO E-News mailing last week prompted several calls from
Ontario lawyers. From information we have gathered, it seems
clear to us that there is an organized scheme underway to
defraud Ontario lawyers using matters involving small business
equipment loans. These matters all share the same basic timeline
and circumstances, and in some cases, the same purported
individuals or entities (a lender from Halifax).
In all cases, about one month ago a previously unknown client
retained the lawyer to do an incorporation. The client presented
realistic looking photo ID (a newer Ontario driver licence). The
client paid in full for the incorporation.
In the last week the client returned to the firm asking the
lawyer to act on an equipment purchase loan matter. Loan amounts
are approximately $350,000 and the loan is to come from a
Halifax-based lender (there is someone answering the phone for
the lender - we suspect the fraudster or an accomplice). The
client is pushing to have the loan completed as quickly as
possible. The loan proceeds are to go to a third-party
corporation (not the client's new corporation).
There are clear badges of fraud in the above scenario. The
lawyers' suspicions were also raised for one or more of the
following reasons: the client and corporate addresses were the
same; it is unusual for a brand new corporation with no apparent
purpose to get a loan in this amount; the only security for the
loan was a promissory note or GSA; the client had only a cell
number or the home phone number given was not working, and the
address on the driver's licence is not a real one.
Over the past year, almost twenty of these types of fraud
schemes were reported to LAWPRO during the various holiday/long
weekend times. Please be wary if you are handling a matter that
appears the same or is similar to the ones described above.
Clearly there appears to be an organized fraud scheme targeting
Ontario lawyers. We encourage lawyers and their staff to be
extra careful in the next few weeks. Remember that these are
very sophisticated frauds. The letters and other documents
provided by the client and the certified cheques or money orders
received from the lender will look legitimate - but turn out to
be counterfeit. Cross-checks and searches on the names,
addresses, serial numbers or other information in the
documentation provided will prove to be false.
Please read LAWPRO's new Fraud Fact Sheet at
http://www.practicepro.ca/practice/pdf/FraudInfoSheet.pdf to
learn more about the red flags to look out for. Or see the
practicePRO Fraud page http://www.practicepro.ca/fraud for
information on fraud and how to avoid it.
Thursday, May 7, 2009
"Six Ways to Stall Estate Planning"
I recently came across an interesting article, "Six Ways to Stall Estate Planning" [PDF] by Thomas Junkin, Senior Vice President of the Fiduciary Trust Company of Canada. In it he examines six mental roadblocks we run into, internal barriers blocking us from our estate planning. While the short summary below is useful it is no substitute for reading the whole two-page article [PDF]; it contains much that anybody who must ponder estate planning (which is pretty much everybody) should know.
1. "I am too busy to worry about estate planning right now."
Don't fall into the trap of thinking that estate planning is neither important nor urgent, Junkin urges: while proper estate planning does take time it is necessary to deal with its complexity immediately. This is especially important in light of the fact that estate planning isn't an exercise in fill-in-the-blanks will preparation, especially in this era of blended families, rapidly changing family law rules and increasingly complex potential decisions.
2. "Thinking about death, especially my own, is frightening."
Yes, it is, no question about it, but it need be faced. That's why I always open my presentations on wills and estates planning [PDF] with this:
Junkin wisely suggests that you make estate planning an intellectual exercise rather than an emotional one. It is difficult, because thinking about executors, beneficiaries and guardians for one's children is an emotional issue. But properly structuring the planning makes it easier to deal with it.
3. "I am confused and intimidated by the complexity of estate planning."
Junkin cautions against falling into either of two extremes: being so disinterested in the fine points that one doesn't proceed, or being so details-oriented that one seeks to become an expert before proceeding. I have been an advocate for some years of detailed estate planning questionnaires which allow people to move through their process at a steady, measured pace which they can adjust to their own comfort level.
4. "My family relationships are strained."
"Awkward family situations lead to procrastination in two ways: Fear of confrontation with your family members, and fear of discussing potentially embarrassing family matters with someone outside the family." Junkin and I are in agreement on the importance of using the skills of your estate planner to help you resolve these emotional dilemma: working with somebody who will help you through these difficult decisions makes those problems solvable.
5. "I think estate planning must be very expensive."
It doesn't have to be expensive, but it will cost money to do properly. It's baffling to many lawyers that people who will not hesitate to spend $1,500 to fix a broken head gasket on their car will balk at spending $400.00 for properly done wills and powers of attorney. You can always take a taxi if the car doesn't work; you can't raise yourself from the dead to retroactively do all of the things for your family that you should have done when you were alive.
6. "I don’t know what I want to do with my estate."
This is where a estate planning in cooperation with your solicitor is vital. Much of the uncertainty comes from not knowing where to begin: many people don't even know the questions to ask, and it's the questions that provide the answers. Find a solicitor who will work through the whole process with you and who can provide access to specialized advice and services (financial planners, etc.) where required for the more sophisticated estates.
Mr. Junkin invites readers to go to Fiduciary Trust's Perspective library and browse their past articles and download copies.
1. "I am too busy to worry about estate planning right now."
Don't fall into the trap of thinking that estate planning is neither important nor urgent, Junkin urges: while proper estate planning does take time it is necessary to deal with its complexity immediately. This is especially important in light of the fact that estate planning isn't an exercise in fill-in-the-blanks will preparation, especially in this era of blended families, rapidly changing family law rules and increasingly complex potential decisions.
2. "Thinking about death, especially my own, is frightening."
Yes, it is, no question about it, but it need be faced. That's why I always open my presentations on wills and estates planning [PDF] with this:
Junkin wisely suggests that you make estate planning an intellectual exercise rather than an emotional one. It is difficult, because thinking about executors, beneficiaries and guardians for one's children is an emotional issue. But properly structuring the planning makes it easier to deal with it.3. "I am confused and intimidated by the complexity of estate planning."
Junkin cautions against falling into either of two extremes: being so disinterested in the fine points that one doesn't proceed, or being so details-oriented that one seeks to become an expert before proceeding. I have been an advocate for some years of detailed estate planning questionnaires which allow people to move through their process at a steady, measured pace which they can adjust to their own comfort level.
4. "My family relationships are strained."
"Awkward family situations lead to procrastination in two ways: Fear of confrontation with your family members, and fear of discussing potentially embarrassing family matters with someone outside the family." Junkin and I are in agreement on the importance of using the skills of your estate planner to help you resolve these emotional dilemma: working with somebody who will help you through these difficult decisions makes those problems solvable.
5. "I think estate planning must be very expensive."
It doesn't have to be expensive, but it will cost money to do properly. It's baffling to many lawyers that people who will not hesitate to spend $1,500 to fix a broken head gasket on their car will balk at spending $400.00 for properly done wills and powers of attorney. You can always take a taxi if the car doesn't work; you can't raise yourself from the dead to retroactively do all of the things for your family that you should have done when you were alive.
6. "I don’t know what I want to do with my estate."
This is where a estate planning in cooperation with your solicitor is vital. Much of the uncertainty comes from not knowing where to begin: many people don't even know the questions to ask, and it's the questions that provide the answers. Find a solicitor who will work through the whole process with you and who can provide access to specialized advice and services (financial planners, etc.) where required for the more sophisticated estates.
Mr. Junkin invites readers to go to Fiduciary Trust's Perspective library and browse their past articles and download copies.
Monday, May 4, 2009
Drug Decriminalization Policy Forum - 2nd Follow-up
In a follow up to this post, and this followup to that post, American civil liberties writer Glenn Greenwald is interviewed by Reason.tv, an American libertarian website:
Wednesday, April 29, 2009
Return of the Corvée?
Most of us sat through history lessons on the seigneurial system in New France. (History was very badly organized in the Ontario curricula in the 1970s and early 1980s and so I had to take it three times before Grade 10!) In those classes we became familiar with the term "corvée", which is "labour, often but not always unpaid, that persons in power have authority to compel their subjects to perform". They key words, naturally, are "unpaid" and "compel". These words came to mind today as I sat through my Law Society webcast of The Annotated Retainer Agreement.
Ms. Sharon Shore of Epstein, Cole, (a very respected Toronto family law firm) gave a presentation on retainers in family law cases. One of the things that she has noted is that courts are increasingly requiring lawyers in family law cases to stay on the record and continue to represent their clients for further stages, long past the time when the client has paid -- or has the ability to pay -- the lawyers's fees. Ms. Shore noted that she had recently seen a case where a lawyer had to stay on the record for an additional two months and perform all the work to be done during that time. While she did not say so specifically one must concede that it is unlikely that the lawyer in that case will ever see payment for all that work.
Lawyers often have to deal with the conflicting demands on them as professionals on the one hand with being business people on the other. This problem often takes quite literal form as the caselaw in assessment cases (where the quantum of a lawyer's bill is examined) and professional liability cases are often in direct conflict. One assessment case may say that in Situation X a lawyer can't collect for making a judgment call to proceed with Action Y because it wasn't part of the retainer agreement and the client can't be forced to pay for something that the lawyer independently thought was in the client's best interests. However, a solicitor's negligence case may have a holding that in a same or similar Situation X the lawyer was obliged to perform Action Y because it was necessary for the client and that the duties incumbent upon a professional transcend the usual "no pay no work" underpinning of a normal commercial service transaction. These dilemmas are usually resolved by lawyers' governing bodies, insurers, courts and assessment officers in favour of the client. (The myth that judges and lawyers protect other lawyers is just that: a myth. It is rather closer to the truth to say what one lawyer attending the session said: that the lawyers are seen as a source of fiscal indemnification for the mistakes of others. The reader will thus start to get some small idea of why law is listed as a "disabling profession" in the book of that name and why they suffer higher burnout, suicide and alcoholism rates than the general population; having to square a circle under great stress and externally imposed demands will do that.)
It is a given that the court processes are becoming unaffordable and that access to justice is a vital and indispensable necessity for a civilized and complex society. I do have profound concerns, though, about a system which responds to problems created jointly by its own structural flaws, governmental under-budgeting, conflicting demands, increasing complexity and sophistication and information-intensiveness, and, most of all, hugely increased public demand by simply demanding that lawyers work for free. Nobody is demanding that the judges work for free, or the court clerks, or the expert witnesses, or the doctors, psychologists or counsellors, or court reporters or process servers ... of all the people being paid to be in a court only the lawyers can be and are arbitrarily deemed to be available without charge.
The problems of the court system are very large and demand immediate attention, but telling lawyers and lawyers alone among all the involved professionals that their need to be paid for their time and effort is now an optional extra is a cop-out, and a highly selective and hypocritical one at that.
Ms. Sharon Shore of Epstein, Cole, (a very respected Toronto family law firm) gave a presentation on retainers in family law cases. One of the things that she has noted is that courts are increasingly requiring lawyers in family law cases to stay on the record and continue to represent their clients for further stages, long past the time when the client has paid -- or has the ability to pay -- the lawyers's fees. Ms. Shore noted that she had recently seen a case where a lawyer had to stay on the record for an additional two months and perform all the work to be done during that time. While she did not say so specifically one must concede that it is unlikely that the lawyer in that case will ever see payment for all that work.
Lawyers often have to deal with the conflicting demands on them as professionals on the one hand with being business people on the other. This problem often takes quite literal form as the caselaw in assessment cases (where the quantum of a lawyer's bill is examined) and professional liability cases are often in direct conflict. One assessment case may say that in Situation X a lawyer can't collect for making a judgment call to proceed with Action Y because it wasn't part of the retainer agreement and the client can't be forced to pay for something that the lawyer independently thought was in the client's best interests. However, a solicitor's negligence case may have a holding that in a same or similar Situation X the lawyer was obliged to perform Action Y because it was necessary for the client and that the duties incumbent upon a professional transcend the usual "no pay no work" underpinning of a normal commercial service transaction. These dilemmas are usually resolved by lawyers' governing bodies, insurers, courts and assessment officers in favour of the client. (The myth that judges and lawyers protect other lawyers is just that: a myth. It is rather closer to the truth to say what one lawyer attending the session said: that the lawyers are seen as a source of fiscal indemnification for the mistakes of others. The reader will thus start to get some small idea of why law is listed as a "disabling profession" in the book of that name and why they suffer higher burnout, suicide and alcoholism rates than the general population; having to square a circle under great stress and externally imposed demands will do that.)
It is a given that the court processes are becoming unaffordable and that access to justice is a vital and indispensable necessity for a civilized and complex society. I do have profound concerns, though, about a system which responds to problems created jointly by its own structural flaws, governmental under-budgeting, conflicting demands, increasing complexity and sophistication and information-intensiveness, and, most of all, hugely increased public demand by simply demanding that lawyers work for free. Nobody is demanding that the judges work for free, or the court clerks, or the expert witnesses, or the doctors, psychologists or counsellors, or court reporters or process servers ... of all the people being paid to be in a court only the lawyers can be and are arbitrarily deemed to be available without charge.
The problems of the court system are very large and demand immediate attention, but telling lawyers and lawyers alone among all the involved professionals that their need to be paid for their time and effort is now an optional extra is a cop-out, and a highly selective and hypocritical one at that.
Tuesday, April 28, 2009
Quebec's insurers will have to be more specific and do so earlier.
The Quebec Court of Appeal has come down with an interesting decision in Lombard Canada Ltd. v. Ezeflow Inc., (decision in French only).
Ezeflow is a manufacturer of pipes for oil-drilling platforms and Lombard was its general commercial liability insurance provider. Flaws showed up in some installed Ezeflow pipes and that company made a claim on its insurance. Lombard refused on four grounds and later relied on another clause in the insurance agreement. The matter went to trial, Ezeflow won at trial and Lombard took the matter to the Court of Appeal, where the appeal was upheld. However it noted that Lombard could not use an exclusion which was not used as a reason for denial at the outset of the action. As Kelly Harris notes [infra], "Quebec courts do not recognize the doctrine of estoppel [fn1], which prevents new defences from being introduced once a case has begun." Jean-Charles René of Ogilvy, Renault notes,
Footnotes:
fn1 - Quebec is the only province which does not use a "common law" system (like that of England or America) for the resolution of non-criminal disputes; it uses a "civil law" system more akin to European models.]
Further Reading
The entry above is only a cursory examination of the case. I strongly recommend that any interested reader read these articles:
“Quebec Court Of Appeal Weighs In On Scope Of Coverage Under Cgl Policy For Costs Of Removing Insured’s Defective Products”. Nicholl Paskell-Mede, Lawyers.
“Quebec Court of Appeal Warns Insurers To Specify All the Reasons for Denial of Coverage.”
Jean-Charles René, Ogilvie Renault.
“Court tells insurers to lie in the bed they made.” Kelly Harris, Canadian Lawyer Magazine, February, 2009. [Note: Canadian Lawyer uses an unusual digital version of its magazine. You will have to go to the link and then flip the pages as if you were reading the magazine in its treeware format.]
Ezeflow is a manufacturer of pipes for oil-drilling platforms and Lombard was its general commercial liability insurance provider. Flaws showed up in some installed Ezeflow pipes and that company made a claim on its insurance. Lombard refused on four grounds and later relied on another clause in the insurance agreement. The matter went to trial, Ezeflow won at trial and Lombard took the matter to the Court of Appeal, where the appeal was upheld. However it noted that Lombard could not use an exclusion which was not used as a reason for denial at the outset of the action. As Kelly Harris notes [infra], "Quebec courts do not recognize the doctrine of estoppel [fn1], which prevents new defences from being introduced once a case has begun." Jean-Charles René of Ogilvy, Renault notes,
In Quebec, the courts have refused to apply the doctrine of estoppel, but have recognized a similar concept in civil law, the "fin de non-recevoir" which bars an insurer from adding to its reasons for denial of coverage on the basis that it is deemed to have waived the right to do so. According to the case law, such a waiver does not need to have been expressly stated in writing, but may be tacit, provided it is unequivocal, i.e., there is no doubt as to the insurer's intention to waive a clause in the policy. Some writers have observed that it is harder to prove a "fin de non-recevoir" than to prove estoppel because the civil law concept requires proof that, by its representations, the insurer indicated its intention to modify its rights.Ezeflow has now ended the insurers' practice of reserving a right to bring up any clause later on; they must now commit at the outset of the action. M. René:
[I]nsureds would be well advised to require their insurer to state its position precisely as soon as it is apprised of a situation that could trigger a claim, thereby forcing the insurer, so to speak, "to make its bed and lie in it".
Footnotes:
fn1 - Quebec is the only province which does not use a "common law" system (like that of England or America) for the resolution of non-criminal disputes; it uses a "civil law" system more akin to European models.]
Further Reading
The entry above is only a cursory examination of the case. I strongly recommend that any interested reader read these articles:
“Quebec Court Of Appeal Weighs In On Scope Of Coverage Under Cgl Policy For Costs Of Removing Insured’s Defective Products”. Nicholl Paskell-Mede, Lawyers.
“Quebec Court of Appeal Warns Insurers To Specify All the Reasons for Denial of Coverage.”
Jean-Charles René, Ogilvie Renault.
“Court tells insurers to lie in the bed they made.” Kelly Harris, Canadian Lawyer Magazine, February, 2009. [Note: Canadian Lawyer uses an unusual digital version of its magazine. You will have to go to the link and then flip the pages as if you were reading the magazine in its treeware format.]
An update on two previous posts
On February 5, 2009 I did a post on parental alienation. Since then the judge who has written a book on the subject, Harvey P. Brownstone, has done an op-ed piece in the Globe and Mail on this topic.
On March 31 I did a post on some hysterical American prosecutorial reactions to "sexting". Noted criminal defence attorney Eddie Greenspan has since written a piece on the issue.
On March 31 I did a post on some hysterical American prosecutorial reactions to "sexting". Noted criminal defence attorney Eddie Greenspan has since written a piece on the issue.
Wednesday, April 22, 2009
Missing Child: The suspect looks like this
"The composite drawing of a female suspect, said to be 19 to 25 years old, about 5 foot 1 and some 125 pounds, that was released last night is based on a description provided by an "independent witness," police said this morning."(Toronto Star)
Victoria "Tori" Stafford is 8 years old and resides in Woodstock. Victoria attended school at Oliver Stephen's Public School in Woodstock, and left school when dismissed at 3:25 PM. Victoria had invited two friends to her house to watch a movie after school, and she was seen leaving the school. A video tape shows Victoria walking northbound on Fyfe Street in Woodstock with a white female. The time on the videotape is 3:32 PM. The female is wearing a white, waist length winter coat and may be carrying a black bag. The video shows Victoria and the female cross the street and continue walking east at the intersection of Walter Street.OPP Website on the Victoria "Tori" Stafford disappearance.
Victoria was wearing black and white running shoes, black leotards, a black velvet pleated skirt, an army green coloured "Hanna Montana" T-shirt that had pink stitching with a hood, a black "Hanna Montana" winter coat with a hood trimmed with white fur, a black head hand, and butterfly earings. She was carrying a purple coloured "Bratz" bag.
If you have any information, please call the OPP at 1-877-9FIND ME (1-877-934-6363) Toll Free in Canada or email them at Tips or at opp.isb.resolve@ontario.ca, or call (705) 330-4144 for local or outside of Canada.
Wednesday, April 15, 2009
Tuesday, April 14, 2009
Drug Decriminalization Policy Forum - Follow-up
On March 14, 2009 I provided details to the Cato Institute's policy forum on Portugal's experience with drug decriminalization. The policy forum is now complete and the video can be found here.
You can download a podcast (in mp3 format) of the event here.
You can download a podcast (in mp3 format) of the event here.
Tuesday, March 31, 2009
A victory for sanity
Yesterday I blogged about a crazy American case where a disturbingly obsessed American prosecutor went after a bunch of teenage girls, seeking to have them jailed as child pornographers for having pictures of themselves in bras. Fortunately the federal court in question isn't as Salemish as he is:
PHILADELPHIA, March 30 (Reuters) - A U.S. judge on Monday barred a Pennsylvania prosecutor from filing child pornography charges against three teenage girls caught with sexually suggestive pictures of themselves on their cell phones.
U.S. District Judge James Munley said he was issuing a restraining order on Wyoming County District Attorney George Skumanick ..... [snip]
Witold Walczack, legal director of the ACLU of Pennsylvania, welcomed the legal decision."This country needs to have a discussion about whether prosecuting minors as child pornographers for merely being impulsive and naive is the appropriate way to address the serious consequences that can result from sexting," he said.[snip]
Monday, March 30, 2009
Going too far: Where the Americans go we should fear to tread
Lawyers, Guns and Money is one of my favourite American political blogs. It touches on politics, gender relations and defence and strategic studies issues, all of which are fascinating to me.
There is a recent post entitled "The Police State and the Private" which is a worthwhile read. It addresses in small part the disturbing tendency of American police and prosecutorial authorities to strip away not only rights but basic human dignity from youth simply because they are in school and their elders are downright hysterical about drugs. The fear-based attitude itself is nothing new: the statement of the Norwegian criminologist Nils Christie that schools exist to keep a large and potentially troublesome portion of the population occupied is many decades old, for example. But when taken this far it is insane and verges on child abuse.
Sadly, this is not an uncommon bit of lunacy:
No-one would argue that "sexting" is a remarkably foolish thing to do; in a worst case scenario it can even lead to tragedy. But placing poor-judgment teenagers into the same category as the vermin who ogle pictures of children is bizarre and destructive.
Our Canadian courts have flaws, and our society has flaws, but our cops, prosecutors and judicial system have not completely taken leave of their senses. They aren't putting children in prison for doofus idiocy yet, nor are these professionals demanding that we do so. For that we should be profoundly grateful, thank them, and very, very wary of any Canadian figure who starts to look longingly south for hideous ideas posing as good ones.
Further reading:
There is a recent post entitled "The Police State and the Private" which is a worthwhile read. It addresses in small part the disturbing tendency of American police and prosecutorial authorities to strip away not only rights but basic human dignity from youth simply because they are in school and their elders are downright hysterical about drugs. The fear-based attitude itself is nothing new: the statement of the Norwegian criminologist Nils Christie that schools exist to keep a large and potentially troublesome portion of the population occupied is many decades old, for example. But when taken this far it is insane and verges on child abuse.
"On the basis of an uncorroborated tip from the culpable eighth grader, public middle school officials searched futilely for prescription-strength ibuprofen by strip-searching thirteen-year-old honor student Savana Redding. "Fortunately, the court concluded that:
"the school officials violated Savana's Fourth Amendment right to be free from unreasonable search and seizure. The strip search of Savana was neither "justified at its inception," New Jersey v. T.L.O., 469 U.S. 325, 341 (1985), nor, as a grossly intrusive search of a middle school girl to locate pills with the potency of two over-the-counter Advil capsules, "reasonably related in scope to the circumstances" giving rise to its initiation. Id. Because these constitutional principles were clearly established at the time that middle school officials directed and conducted the search, the school official in charge is not entitled to qualified immunity from suit for the unconstitutional strip search of Savana."The American blogger aimai nails it in a post on that LGM thread:
The weirdest thing of all to me about these school cases in general and this one in particular is how bizarre it is that almost everyone concerned just assumes that the same tactics appropriate to prisons and armies (both situations in which individual members voluntarily or involuntarily give up their civil rights and can be presumed to be hostile to the rules governing their behavior) are applied to children seeking education in a communal setting.The same lunacy is found in a case where teenagers took pictures of each other in bra and panties at a slumber party are being threatened with child pornography charges. (For more details please read the post found at Radley Balko's blog, "The Agitator", and the links below.)
A school is not a prison. School children are not prisoners. Moroever, the interests of a student are not, and can not be, understood to be different from those of administrators or the administrators want the wrong thing for the children.
[...]
Whatever you think of the kid the correct pedagogical strategy is to create a space in which the school is not a prison, the teachers and staff are not the enemy. And if you can't do that to start with you can't teach the kids. You've already failed.
Sadly, this is not an uncommon bit of lunacy:
- In one Florida a judge convicted a 17 year old boy and a 16 year old girl of child pornography because they took digital pictures of each other whilst fooling around, a decision that was upheld on appeal. One judge therein spoke of the harm that these pictures could do to these children. ( Frankly, if I was seventeen and told that I had a choice between a lifetime as a convicted criminal labelled as a sexual deviant on the one hand, and the embarassment of somebody seeing me have fumbling teen sex on the other I'd reach for the camera and red face be damned.)
- In Ohio a 15 year old girl is facing felony charges and forced registration as a sex offender for sending pictures of herself to classmates (and charges against the classmates may be pending).
- In Denton, Texas, a 13 year old boy is under arrest for receiving a picture sent by a female teenage classmate and thus having it on his cellphone.
No-one would argue that "sexting" is a remarkably foolish thing to do; in a worst case scenario it can even lead to tragedy. But placing poor-judgment teenagers into the same category as the vermin who ogle pictures of children is bizarre and destructive.
Our Canadian courts have flaws, and our society has flaws, but our cops, prosecutors and judicial system have not completely taken leave of their senses. They aren't putting children in prison for doofus idiocy yet, nor are these professionals demanding that we do so. For that we should be profoundly grateful, thank them, and very, very wary of any Canadian figure who starts to look longingly south for hideous ideas posing as good ones.
Further reading:
- "The new pornographers: What's more disturbing -- that teens are texting each other naked pictures of themselves, or that it could get them branded as sex offenders for life?" - Tracy Clark-Flory, Salon Magazine, February 20, 2009.
- "Students Sue Prosecutor in Cellphone Photos Case", Sean D. Hamill, New York Times, Marc 25, 2009.
- "`Sexting' teens strike back!", Tracy Clark-Flory, Salon Magazine, March 27, 2009.
Networking Wednesday: March 4, 2009
At the Small Business Centre:
Me on the right, Mr. John Travis, a sales and marketing specialist, on the left.
And I got a lot of compliments on the tie.
Me on the right, Mr. John Travis, a sales and marketing specialist, on the left.And I got a lot of compliments on the tie.
Sunday, March 15, 2009
Business Social Law No. 12
The person who reschedules a business social event twice is responsible for the tab.
Business Social Law No. 11
The person who cancels a business social event is responsible for rescheduling it.
Saturday, March 14, 2009
"Drug Decriminalization in Portugal" - Has it worked?
Drug Decriminalization in Portugal - Online Policy Forum, Cato Institute.
Friday, April 3, 2009 - 12:00 PM EDT (1600h UDT "Zulu" Time)
From the Cato Institute Website:
Featuring Glenn Greenwald, Attorney and Best-selling Author; with comments by Peter Reuter, Department of Criminology, University of Maryland; moderated by Tim Lynch, Director, Project on Criminal Justice, Cato Institute.
The Cato Institute
1000 Massachusetts Avenue, NW
Washington, DC 20001Go to this page at the above time to watch the event live.
In 2001, Portugal began a remarkable policy experiment, decriminalizing all drugs, including cocaine and heroin. Some predicted disastrous results—that drug addiction rates would soar and the country would become a haven for "drug tourists." Now that several years have passed, policy experts can study the results. In a new paper for the Cato Institute, attorney and author Glenn Greenwald closely examines the Portugal experiment and concludes that the doomsayers were wrong. There is now a widespread consensus in Portugal that decriminalization has been a success. The debate in Portugal has shifted rather dramatically to minor adjustments in the existing arrangement. There is no real debate about whether drugs should once again be criminalized. Join us for a discussion about Glenn Greenwald's field research in Portugal and what lessons his findings may hold for drug policies in other countries.
[You can] watch this forum live online at Friday, April 3, 2009 at 12 [noon Eastern (Toronto, London, ON) time].
Monday, March 9, 2009
"The first thing we do, let's kill all the lawyers."
It's a fun line, but where does it come from?
The line is from Shakespeare's Henry VI, Part II and comes in Act 4, Scene II from the mouth of Dick the butcher, a follower of the rebel Jack Cade:
I refuse to take sides on this famous quote: being a lawyer is no guarantee of saintliness: some are monsters, and their deaths are not to be mourned. Others are struck down trying to make the world better. Most of us are neither, naturally. Enlisting Shakespeare into a debate is probably not only a fool's errand but also missing the more wonderful point. Shakespeare should be enjoyed as magic, as music, as fun. If I started being overworried about precise facts in Shakespeare then I'd be obliged to dislike Richard III's magnificent rendering of that king as one of the best villains ever in literature, even though Richard was unfairly maligned , certainly was innocent of the crimes of which he is accused .... and I'm pretty darned sure that he didn't murder his nephews.
My recommendation? Sit down and enjoy the play. And if you don't I'll send some witches after you.
The line is from Shakespeare's Henry VI, Part II and comes in Act 4, Scene II from the mouth of Dick the butcher, a follower of the rebel Jack Cade:
CADE: Be brave, then; for your captain is brave, and vowsMany lawyers are the first to note that these words are taken from the mouth of a villain in the service of a rebel and stand for the proposition that lawyers must be eliminated if this foul revolution is to take place. Others, to say the least, disagree. Seth Finkelstein, in his post "`The first thing we do, let's kill all the lawyers' - it's a lawyer joke" notes the following:
reformation. There shall be in England seven
halfpenny loaves sold for a penny: the three-hooped
pot; shall have ten hoops and I will make it felony
to drink small beer: all the realm shall be in
common; and in Cheapside shall my palfrey go to
grass: and when I am king, as king I will be,--
ALL: God save your majesty!
CADE: I thank you, good people: there shall be no money;
all shall eat and drink on my score; and I will
apparel them all in one livery, that they may agree
like brothers and worship me their lord.
DICK: The first thing we do, let's kill all the lawyers.
CADE: Nay, that I mean to do. Is not this a lamentable
thing, that of the skin of an innocent lamb should
be made parchment? that parchment, being scribbled
o'er, should undo a man? Some say the bee stings:
but I say, 'tis the bee's wax; for I did but seal
once to a thing, and I was never mine own man
since. [...]
"The audience must have doubled over in laughter at this. Far from "eliminating those who might stand in the way of a contemplated revolution" or portraying lawyers as "guardians of independent thinking" [as some lawyers have posited], it's offered as the best feature imagined of yet for utopia. It's hilarious. A very rough and simplistic modern translation would be "When I'm the King, there'll be two cars in every garage, and a chicken in every pot" "AND NO LAWYERS". It's a clearly lawyer-bashing joke. This is further supported by the dialogue just afterwards [i.e. the bit about lambskin and wax].I'm only in part agreement with Finkelstein here. This exchange is promptly followed by the brief but nightmare farce of the Clerk of Chatham being brought in, accused of being able to read and write and suffering murder as a result as a result of a pseudo-trial. A villain is a villain, and whether the rebels want to kill noble lawyers or nasty ones is rather beside the point so far as the quote is concerned. The "jus' folks" of the rebellion want the lawyers bumped off and the crowd must have loved that bit, if we accept Finkelstein's guess. Shakespeare was a playwright, after all, so playing to the crowd was what he did for his humble living and I doubt that the folks in the crowd liked lawyers any more than the average man today. But one can't avoid the fact that there is definitely an element of "yeah, and look at who wants the lawyers gone: these ignorant, murderous fools" in this scene of the play: Shakespeare wants the laugh from the audience and he also wants to show what a bunch of psychotic cretins this bunch are. Trying to slot the quote into just one category diminishes, I think, our realization that, Great Writer! aside Shakespeare was really good at keeping an audience happy.
[...]
He might just as well have been describing "shrink-wrap" software licensing agreements today in the last sentence. To understand what Cade is saying here, you have to know that documents of the time were likely parchment, and sealed with wax. So when he says "Some say the bees stings; but I say, 'tis the bee's wax". he's making an ironic comment somewhat akin to "Some men rob you with a six-gun, and some with a fountain pen". And the fact that he himself is an evil man only serves to heighten the irony, not discredit the sentiment - the more evil he is, the more the contrast is apparent."
I refuse to take sides on this famous quote: being a lawyer is no guarantee of saintliness: some are monsters, and their deaths are not to be mourned. Others are struck down trying to make the world better. Most of us are neither, naturally. Enlisting Shakespeare into a debate is probably not only a fool's errand but also missing the more wonderful point. Shakespeare should be enjoyed as magic, as music, as fun. If I started being overworried about precise facts in Shakespeare then I'd be obliged to dislike Richard III's magnificent rendering of that king as one of the best villains ever in literature, even though Richard was unfairly maligned , certainly was innocent of the crimes of which he is accused .... and I'm pretty darned sure that he didn't murder his nephews.
My recommendation? Sit down and enjoy the play. And if you don't I'll send some witches after you.
Augustine's Law No. XXXVII
"Ninety percent of the time things will turn out worse than you expect. The other 10 percent of the time you had no right to expect so much."
Augustine's Laws, © 1997, Norman R. Augustine.
Saturday, March 7, 2009
The Networkers
Camberwell House is a member of The Networkers.
The Networkers is a dynamic group of business entrepreneurs that meets every Friday morning from 6:55 a.m. to 8:30 a.m. The main purpose of the group is to help grow each other's business by providing leads for new business opportunities.
The group is also a support system for small business operators who are often the sole proprietor/only employee of the businesses they own. Members share information such as where they got business cards for a great price, who built their web site, or how to fill out government remittance forms. Of course, members often use the professional services of other group members.
Our group admits only one member per profession so that group members are not competing against one another. Occasionally, we go out in search of people in specific professions that we think will complement our group.
Keep your eye on the blog for profiles and details of Networkers member businesses.
Friday, March 6, 2009
What is "Equity" and how is it different from common law and statutory law?
Defined
Put in a nutshell, it's when the court concerns itself with fairness. More formally, Black's Legal Dictionary defines it as:
Duhaime's legal dictionary (an excellent source of in-depth definitions and explanations) provides an excellent short history of this area of the law, here. In that summary, Duhaime's quotes the famous English jurist and legal commentator Sir William Blackstone when he points out the danger in becoming too attached to equity as a tool of law:
Common law v. statute law v. equity ... and different courts?
Duhaime's has this to say about the differences:
Previously done:
Common law.
Statutory law.
Put in a nutshell, it's when the court concerns itself with fairness. More formally, Black's Legal Dictionary defines it as:
Justice administered according to fairness as contrasted with the strictly formulated rules of the common law. [...] A system of jurisprudence collateral to, and in some cases independent of, "law"; the object of which is to render the administration of justice more complete, by affording relief where the courts of law are incompetent [meaning that they do not have the authority, rather than the colloquial definition of `can not by reason of deficiency'!] to give it...Examples of equitable principles are "estoppel", "constructive trusts", "unjust enrichment" and "rectification". (Please see my blog posts on rectification here, here, here and here for details on rectification. There will be posts later on estoppel, constructive trusts and unjust enrichment.)
Duhaime's legal dictionary (an excellent source of in-depth definitions and explanations) provides an excellent short history of this area of the law, here. In that summary, Duhaime's quotes the famous English jurist and legal commentator Sir William Blackstone when he points out the danger in becoming too attached to equity as a tool of law:
"Law, without equity, though hard and disagreeable, is much more desirable for the public good than equity without law, which would make every judge a legislator, and introduce most infinite confusion, as there would be almost as many different rules of action laid down in our courts as there are differences of capacity and sentiment in the human mind." (I Blk. Comm. 62)I must confess myself in agreement with Blackstone. A system of public, known and predictable law which uses equity as a tool to adjust the system to ensure fair results is far better than an all-over-the-map system based on thousands of individual judge's views of what is "fair" or not.
Common law v. statute law v. equity ... and different courts?
Duhaime's has this to say about the differences:
Equity law developed after the common law to offset the rigid interpretations medieval English judges were giving the common law.While it might be a matter of debate whether or not common law and equity are fused it is important to note that the courts which apply them are: Ontario does not separate its courts of common law and equity. The Superior Court of Justice, the Divisional Court, the Court of Appeal and Canada's Supreme Court are all courts which can and do apply statutory law and common law and equity.
For hundreds of years, there were separate courts in England and its dependents: one for common law and one for equity (aka Chancery) and the decisions of the latter, where they conflicted, prevailed.
It is a matter of legal debate whether or not common law and equity are now "fused." It is certainly common to speak of the "common law" to refer to the entire body of English law, including common law and equity.
Previously done:
Common law.
Statutory law.
Thursday, March 5, 2009
What is "statutory law" and how is it different from equity and common law?
Defined
Statutory law is that body of laws created by legislatures. (Ontario has all statutes, constantly updated, available at its e-laws site.) Such law includes regulations made under the statutes in question if those regulations are properly made pursuant to a valid grant of authority made by the legislature in the statute in question. (This, naturally, does not include that most cherished of tricks of the bureaucracy, "policy", which often represents a de facto law in that persons both individual and corporate must abide by them or else be stymied, but that is for another day.)
Common law v. statute law v. equity ... and different courts?
Duhaime's legal dictionary (an excellent source of in-depth definitions and explanations) has this to say about the differences:
Previously done: Common law
Coming soon: Equity
Statutory law is that body of laws created by legislatures. (Ontario has all statutes, constantly updated, available at its e-laws site.) Such law includes regulations made under the statutes in question if those regulations are properly made pursuant to a valid grant of authority made by the legislature in the statute in question. (This, naturally, does not include that most cherished of tricks of the bureaucracy, "policy", which often represents a de facto law in that persons both individual and corporate must abide by them or else be stymied, but that is for another day.)
Common law v. statute law v. equity ... and different courts?
Duhaime's legal dictionary (an excellent source of in-depth definitions and explanations) has this to say about the differences:
Equity law developed after the common law to offset the rigid interpretations medieval English judges were giving the common law.While it might be a matter of debate whether or not common law and equity are fused it is important to note that the courts are: Ontario does not separate its courts of common law and equity. The Superior Court of Justice, the Divisional Court, the Court of Appeal and Canada's Supreme Court are all courts which can and do apply statutory law and common law and equity.
For hundreds of years, there were separate courts in England and its dependents: one for common law and one for equity (aka Chancery) and the decisions of the latter, where they conflicted, prevailed.
It is a matter of legal debate whether or not common law and equity are now "fused." It is certainly common to speak of the "common law" to refer to the entire body of English law, including common law and equity.
Previously done: Common law
Coming soon: Equity
Wednesday, March 4, 2009
"Stand By Me"
When I started this blog a short time ago I had the firm intention to keep it almost entirely professional in scope. Even the brief tangents, I decided, were to be related to the job. I made that decision, though, knowing that sometime I would come across something that just had to be posted even though it had nothing to do with the law or ADR or small business.
Today's the day.
Credit: The Playing For Change Foundation, "building and connecting music/art schools around the world".
Today's the day.
Credit: The Playing For Change Foundation, "building and connecting music/art schools around the world".
Augustine's Law No. XIII
"There are many highly successful businesses... There are also many highly paid executives. The policy is not to intermingle the two."
Augustine's Laws, © 1997, Norman R. Augustine.
What is "the common law" and how is it different from equity and statutory law?
Defined
The "common law" is made up of those principles and "causes of action" relating to the government, property rights and personal rights including physical security which derive their authority solely from usages and customs or from the judgments and decrees of the courts recognizing, affirming and enforcing such usages and customs. It is law which does not rest for its authority on laws or regulations enacted by legislatures, but rather on court-established law. Put alternatively, the courts have said that `X situation gives right to Y cause of action'; there is no specific law passed by parliament or the legislature which mandates that `X situation gives right to Y cause of action'. A court will have found the right and other courts will have accepted it and developed it with legal precedents. Judges examine the facts, check previous cases to see if a principle of the common law applies to them, and then apply such precedents to the those facts, granting judgment based on their view of the strength of the facts and the applicability of the principles.
Common law v. statute law v. equity ... and different courts?
Duhaime's legal dictionary (an excellent source of in-depth definitions and explanations) has this to say about the differences:
Coming soon:
Equity
Statutory law
The "common law" is made up of those principles and "causes of action" relating to the government, property rights and personal rights including physical security which derive their authority solely from usages and customs or from the judgments and decrees of the courts recognizing, affirming and enforcing such usages and customs. It is law which does not rest for its authority on laws or regulations enacted by legislatures, but rather on court-established law. Put alternatively, the courts have said that `X situation gives right to Y cause of action'; there is no specific law passed by parliament or the legislature which mandates that `X situation gives right to Y cause of action'. A court will have found the right and other courts will have accepted it and developed it with legal precedents. Judges examine the facts, check previous cases to see if a principle of the common law applies to them, and then apply such precedents to the those facts, granting judgment based on their view of the strength of the facts and the applicability of the principles.
Common law v. statute law v. equity ... and different courts?
Duhaime's legal dictionary (an excellent source of in-depth definitions and explanations) has this to say about the differences:
Equity law developed after the common law to offset the rigid interpretations medieval English judges were giving the common law.While it might be a matter of debate whether or not common law and equity are fused it is important to note that the courts are: Ontario does not separate its courts of common law and equity. The Superior Court of Justice, the Divisional Court, the Court of Appeal and Canada's Supreme Court are all courts which can and do apply statutory law and common law and equity.
For hundreds of years, there were separate courts in England and its dependents: one for common law and one for equity (aka Chancery) and the decisions of the latter, where they conflicted, prevailed.
It is a matter of legal debate whether or not common law and equity are now "fused." It is certainly common to speak of the "common law" to refer to the entire body of English law, including common law and equity.
Coming soon:
Equity
Statutory law
"Cause of Action" - What is it?
A cause of action is 'the fact or facts which give a person a right to judicial relief". A right to a judicial relief without any facts backing up does not give rise to a cause of action. Equally, not every fact or situation or problem or loss or negative event gives right to judicial relief. Having a "cause of action" lies in having facts regarding which the law recognizes a right to sue.
A useful example would be this:
I may walk up to you and hold up, say, three fingers. That rather odd act does not, in and of itself, create a "cause of action" because you can't sue me for holding three fingers in the air. If, on the other hand, that was a symbol used by those who once regularly beat you within an inch of your life (and I knew it) then you might have a cause of action in that you now have grounds to sue me for intentional infliction of emotional distress.
A useful example would be this:
I may walk up to you and hold up, say, three fingers. That rather odd act does not, in and of itself, create a "cause of action" because you can't sue me for holding three fingers in the air. If, on the other hand, that was a symbol used by those who once regularly beat you within an inch of your life (and I knew it) then you might have a cause of action in that you now have grounds to sue me for intentional infliction of emotional distress.
Monday, March 2, 2009
Location for The Networkers
If you are going to join us at our 0655h Friday morning breakfasts, welcome! This map will make it easier to get there. We hold these breakfast meetings at One Restaurant, 1 Grosvenor Street, in the ground floor of "The Grosvenor" apartment building. Despite the name the entrance isn't on Grosvenor-facing (i.e.: north) side of the building, which but rather on its south-facing portion of the building, marked with a red "1" on this map:
Click on the map (or here) to enlarge the picture!
Free parking is available in the lot visible to the south of the building, and is accessed either from St. James Street (marked with a green "S") or St. George Street (marked with a green "E").
Click on the map (or here) to enlarge the picture!Free parking is available in the lot visible to the south of the building, and is accessed either from St. James Street (marked with a green "S") or St. George Street (marked with a green "E").
Today's new business phrase: "Imprisoned in the Elevator"
I recently dealt with a software supplier - PCLaw - whose online support is fantastic but whose Ontario training sessions are currently restricted to Toronto and Ottawa. In an exchange of emails with one of their product managers, PC Law's plans for training online and in other centres was detailed for me. I appreciated the rapid and courteous reply.
The exchange did get me pondering about the lead time between the conception of a project/product/service and getting it to market. Many promising ideas either die in the corporate womb or gestate far too long, emerging too late and missing their moment. The film industry's term for this is "development hell", and the software industry's term is "vapourware". Any large organization is at risk for having its projects suffer this fate.
Having dealt at length with both private sector and public sector approval processes, it occurred to me that one specific component of the development process produces a disproportionate share of such delays: approvals and amendments up and down the food chain. As a result, a great idea doesn't make it out the door on time or at all because of this lengthy-to-unending process as each make-it-perfect request has to be reviewed, re-reviewed, approved and re-approved.
It just goes up and down; it never goes out.
The exchange did get me pondering about the lead time between the conception of a project/product/service and getting it to market. Many promising ideas either die in the corporate womb or gestate far too long, emerging too late and missing their moment. The film industry's term for this is "development hell", and the software industry's term is "vapourware". Any large organization is at risk for having its projects suffer this fate.
Having dealt at length with both private sector and public sector approval processes, it occurred to me that one specific component of the development process produces a disproportionate share of such delays: approvals and amendments up and down the food chain. As a result, a great idea doesn't make it out the door on time or at all because of this lengthy-to-unending process as each make-it-perfect request has to be reviewed, re-reviewed, approved and re-approved.
The project is imprisoned in the elevator.
It just goes up and down; it never goes out.
Sunday, March 1, 2009
PCLaw Tip of the Day
When working past midnight, doing month-end book-keeping, my PCLaw Tip of the Day was this:
(Click on the image for a larger version.)
(Click on the image for a larger version.)
Thursday, February 26, 2009
What is "Rectification" in Contract Law? 4: Evidence Required
Previous posts: Definition of Rectification; unilateral mistake; mutual mistake.
We conclude our four-day examination of the law of rectification with an analysis of how a party actually goes about proving its case, and how the court will determine whether or not they succeed.
The court will consider:
The doctrine of rectification is not an everyday thing. "[P]arties, especially experienced and sophisticated parties, cannot routinely look to this remedy to correct mistakes in signed contracts." The courts have been consistent in their cautions against "opening the floodgates". [Royal Bank v. El-Bris, (fn2), ¶ 35.]
Footnotes:
fn1 - H.F. Clarke Ltd. v. Thermidaire Corp. Ltd., [1973] 2 O.R. 57 at 64 - 65 (C.A.), [reversed on other grounds 1974 CanLII 30 (S.C.C.), [1976] 1 S.C.R. 319].
fn2 - Royal Bank of Canada v. El-Bris Limited, [2008] 92 O.R. (3d) 779 (C.A.).
fn3 - Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club, 2002 SCC 19 (CanLII), [2002] 1 S.C.R. 678 (S.C.C.)
We conclude our four-day examination of the law of rectification with an analysis of how a party actually goes about proving its case, and how the court will determine whether or not they succeed.
The court will consider:
- all the relevant documents [Clarke v. Thermidaire, (fn1), ¶26 and Royal Bank v. El-Bris, (fn2), ¶ 20-22];
- the oral evidence of the parties and/or witnesses, including the key issue of whether the oposing sides are in agreement or have differing versions of the facts [Clarke v. Thermidaire, (fn1), ¶ 26]
- the later conduct of the parties, [Royal Bank v. El-Bris, (fn2), ¶ 32].
- When the court considers oral evidence it is doing something that it rarely does in contract cases: outside (also called "extrinsic") evidence to contradict or add to the terms of a contract is normally not allowed. (This is called the "parol evidence rule".) However, parol evidence is permitted in rectification cases. [Royal Bank v. El-Bris, (fn2), ¶ 24].
- A court may order rectification even if the testimony of the party seeking rectification is not corroborated by the documentary evidence. [Royal Bank v. El-Bris, (fn2), ¶ 24; Sylvan, (fn2), ¶ 43.]
- The judge need not specifically use the word "rectification" to apply the doctrine of rectification. [Royal Bank v. El-Bris, (fn2), ¶ 6.]
The doctrine of rectification is not an everyday thing. "[P]arties, especially experienced and sophisticated parties, cannot routinely look to this remedy to correct mistakes in signed contracts." The courts have been consistent in their cautions against "opening the floodgates". [Royal Bank v. El-Bris, (fn2), ¶ 35.]
Footnotes:
fn1 - H.F. Clarke Ltd. v. Thermidaire Corp. Ltd., [1973] 2 O.R. 57 at 64 - 65 (C.A.), [reversed on other grounds 1974 CanLII 30 (S.C.C.), [1976] 1 S.C.R. 319].
fn2 - Royal Bank of Canada v. El-Bris Limited, [2008] 92 O.R. (3d) 779 (C.A.).
fn3 - Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club, 2002 SCC 19 (CanLII), [2002] 1 S.C.R. 678 (S.C.C.)
Wednesday, February 25, 2009
What is "Rectification" in Contract Law? 3: Mutual Mistake
Two days ago I did a post on the law of "rectification", a legal concept used "to correct a contract which has been mistakenly drawn so as to carry out the common intention of the parties and have the contract reflect their true agreement"; yesterday I addressed rectification in cases where the mistake lay only on one side.
Today's blog post will address what happens when both parties make a mistake.
The case
We continue our examination of the Ontario Court of Appeal's decision in Royal Bank of Canada v. El-Bris Limited, [2008] 92 O.R. (3d) 779 (C.A.). In that case the bank sought to collect on a guarantee: a businessman had given a personal guarantee for $700,000 in additional credit, and, as a part of that guarantee, had pledged a collateral mortgage. He repaid the debt, and sought a discharge of the mortgage (which was granted), but the bank pursued him for $700,000 under the guarantee. The businessman took the position that the guarantee had been for only $700,000, not $1,400,000, that the mortgage had been security for the guarantee, and with the repayment of the $700,000 the discharge of the mortgage his personal obligation was now terminated. The paperwork supported the bank's side that his guarantee was not limited to the $700,000; the businessman asserted that such a limitation was what was intended all along and sought rectification.
The trial judge agreed with the businessman, finding that the "parties intended the collateral mortgage to be security for Ellis's guarantee" and that paying off the collateral mortgage entitled him to a discharge of his obligation under the personal guarantee. The Court of Appeal dismissed the bank's appeal, agreed with the trial judge -- and thus also with this Mr. Ellis and not the rather more notorious one(s) -- agreed with the businessman.
The law
First and most importantly, the four-part test for unilateral mistake detailed yesterday does not apply to cases of mutual mistake. In such cases the test is less stringent, and has been laid down by the Court of Appeal in a previous case: Downtown King West Development Corp. v. Massey Ferguson Industries Ltd. 1996 CanLII 1232 (ON C.A.), (1996), 28 O.R. (3d) 327 at 336 (C.A.):
(fn1) - H.F. Clarke Ltd. v. Thermidaire Corp. Ltd., [1973] 2 O.R. 57 at 64 - 65 (C.A.), reversed on other grounds 1974 CanLII 30 (S.C.C.), [1976] 1 S.C.R. 319.
Today's blog post will address what happens when both parties make a mistake.
The case
We continue our examination of the Ontario Court of Appeal's decision in Royal Bank of Canada v. El-Bris Limited, [2008] 92 O.R. (3d) 779 (C.A.). In that case the bank sought to collect on a guarantee: a businessman had given a personal guarantee for $700,000 in additional credit, and, as a part of that guarantee, had pledged a collateral mortgage. He repaid the debt, and sought a discharge of the mortgage (which was granted), but the bank pursued him for $700,000 under the guarantee. The businessman took the position that the guarantee had been for only $700,000, not $1,400,000, that the mortgage had been security for the guarantee, and with the repayment of the $700,000 the discharge of the mortgage his personal obligation was now terminated. The paperwork supported the bank's side that his guarantee was not limited to the $700,000; the businessman asserted that such a limitation was what was intended all along and sought rectification.
The trial judge agreed with the businessman, finding that the "parties intended the collateral mortgage to be security for Ellis's guarantee" and that paying off the collateral mortgage entitled him to a discharge of his obligation under the personal guarantee. The Court of Appeal dismissed the bank's appeal, agreed with the trial judge -- and thus also with this Mr. Ellis and not the rather more notorious one(s) -- agreed with the businessman.
The law
First and most importantly, the four-part test for unilateral mistake detailed yesterday does not apply to cases of mutual mistake. In such cases the test is less stringent, and has been laid down by the Court of Appeal in a previous case: Downtown King West Development Corp. v. Massey Ferguson Industries Ltd. 1996 CanLII 1232 (ON C.A.), (1996), 28 O.R. (3d) 327 at 336 (C.A.):
"the remedy of rectification is available only in certain defined circumstances and cannot be invoked to correct every mistake. In principle, rectification is permitted, not for the purpose of altering the terms of an agreement, but to correct a contract which has been mistakenly drawn so as to carry out the common intention of the parties and have the contract reflect their true agreement. The remedy is normally granted only where the mistake is mutual or common to the contracting parties."In short, rectification exists to make the mistaken written contract reflect the real agreement of the parties; thus, to obtain rectification in a case of alleged mutual mistake becomes a question of fact and thus one for the presentation and examination of clear evidence. Does the evidence make it clear what the alleged real contract was?
When may the Court exercise its jurisdiction to grant rectification? In order for a party to succeed on a plea of rectification, he must satisfy the Court that the parties, all of them, were in complete agreement as to the terms of their contract but wrote them down incorrectly. It is not a question of the Court being asked to speculate about the parties’ intention, but rather to make an inquiry to determine whether the written agreement properly records the intention of the parties as clearly revealed in their prior agreement. The Court will not write a contract for businessmen or others but rather through the exercise of its jurisdiction to grant rectification in appropriate circumstances, it will reproduce their contract in harmony with the intention clearly manifested by them, and so defeat claims or defences which would otherwise unfairly succeed to the end that business may be fairly and ethically done... (fn1)Tomorrow: the evidence required to obtain rectification.
(fn1) - H.F. Clarke Ltd. v. Thermidaire Corp. Ltd., [1973] 2 O.R. 57 at 64 - 65 (C.A.), reversed on other grounds 1974 CanLII 30 (S.C.C.), [1976] 1 S.C.R. 319.
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