In the Trenches

By Catherine Hyde, Paralegal

I offered to buy my daughter birthday plates and supplies for the upcoming 5^th birthday party for my granddaughter.  I knew she liked anything princess so asked if I should pick up some plates with that theme.  I get a text asking if there are any superheroes.  I am curious about this so asked if there were princesses who were superheroes –I’m thinking “Wonder Women”. Other texts went back and forth leading me to total confusion.  Eventually we spoke on the phone and lo and behold she is having the class over so there are boys and girls so she needed superheroes for the boys and princesses for the girls.  As a girl of the 60’s I am somewhat opposed to such gender specific types, however, that is another story.  My point here is that sometimes it is just a matter of sitting down and talking with the other individual in order to clear up the misconceptions which have led to a Small Claims Court Claim or any litigation for that matter.

As paralegals we are required pursuant to the Rule 3(5) and (6) of the Rules of Conduct to “advise and encourage a client to compromise or settle a dispute whenever it is possible to do so on a reasonable basis.”  In conjunction with this, a paralegal is to “consider the use of alternative dispute resolution for every dispute” including advising the client of the options.

The options for alternative dispute resolutions include negotiation, mediation and arbitration.  What are these terms?  Negotiations relate to discussions between the parties or their representatives in an attempt to come to a reasonable resolution of the issues at hand.  If the parties are unable to negotiate a settlement, and a Claim is issued, the parties still have an opportunity to continue to negotiate. Once a Defence is filed, a Settlement Conference is set.  At the Settlement Conference the parties again have an opportunity to discuss the issues and attempt to resolve the matter.  It must be remembered that the best settlement is often where no one party is completely happy but both can live with the resolution.  At any time the parties can also agree to seek the assistance of a mediator. Mediation involves the parties discussing the matter with a qualified mediator who acts as a neutral third party. A mediator cannot take sides or give legal advice but will help the parties stay on track, ensure one party does not intimidate another, and ensure the parties have equal input into the discussions. A report will be made as to the proposed agreement and the parties’ representatives can then finalize or tweak the agreement. If mediation fails, the parties can continue through the Court system to a trial, or if they wish, they can arrange for arbitration.  At arbitration, the Arbitrator will assess the positions and make a determination which will be binding upon the parties.  There is always an opportunity to sit down and discuss the issues that led to the dispute and see if it can be resolved.   Your paralegal should advise you of these opportunities and ensure that every opportunity to negotiate a settlement is taken in order to minimize the costs to all parties.

Now I’m not sure who is going to win the battle between princesses and superheroes but no doubt a little mediation will be required on the part of my daughter to ensure everyone has lots of fun.  Next time before you leap directly to a Plaintiff’s Claim, make sure you are taking a moment to see if a discussion, with the assistance of your representative, can perhaps lead to a resolution of matters as after all it could be a simple matter of miscommunication or misunderstanding between you and the opposing party.

By Jason Botelho, Associate

Canada’s legal system has seen many fascinating developments over the years. The Quebec Act of 1774, provided us with two systems of law which makes us very unique to other nations. The Quebec Act established the “civil law” system used in Quebec and the common law system which is used in the rest of the provinces.  In the Quebec civil law system, a written Civil Code sets out standards of acceptable behaviour or conduct in private legal relationships. The Civil Law system then uses court decisions to interpret the intentions of lawmakers. Conversely, the common law system of justice relies on the historical record of court interpretations of laws over the years.

Additionally, in 1982, the Charter of Rights of Freedoms, was entrenched in our Constitution and provides each of us various individual rights and limits the ability of governments to infringe these rights. Included in our rights are the right to liberty, equality, freedom of religion, freedom of expression, freedom to associate with a group and to be presumed innocent until proven guilty.

Along with these fascinating developments are, what I would classify, some peculiar entries to the Canadian legal frame work.

The following are some of the most interesting laws I could find, courtesy of Google, in Ontario and the whole of Canada:

Nation wide

•  30% of a radio stations content must be "Canadian Content"
•  You may not pay for a fifty-cent item with only pennies.
•  Citizens may not publicly remove bandages.
•  It is illegal for clear or non-dark sodas to contain caffeine.

Ontario Provincial Laws

• The speed limit is 80 km per hour for cars, but bicyclists have the right of way.

City Laws

Etobicoke

• Bylaw states that no more than 3.5 inches of water is allowed in a bathtub.

Cobourg

• If you have a water trough in your front yard it must be filled by 5:00 a.m.

Gananoque

• Homeowners are responsible for clearing snow off of municipal sidewalks.

Guelph

• The city is classified as a no-pee zone.

Kanata

• The colour of house and garage doors is regulated by city bylaws (a purple door get you a fine). It is also illegal to have a clothes line in your backyard.
• You can't work on your car in the street.

Oshawa

• It's illegal to climb trees.
• Homeowners are responsible for clearing snow off of municipal sidewalks. If sidewalks is not cleaned within 24 hours after a snowfall, city workers will clean it and the cost will be placed on the homeowners tax bill.

Ottawa

• It is illegal to eat ice-cream on Bank Street on a Sunday.

Toronto

• You can't drag a dead horse down Yonge St. on a Sunday.

Uxbridge

• Residents are not allowed to have an Internet connection faster than 56k.

Wawa

• You may not paint a ladder as it will be slippery when wet.
• It is illegal to show public affection on Sunday.

BOUNDARY DISPUTE RESOLUTION: A COMPARISON OF ONTARIO’S BOUNDARIES ACT AND SURVEYS ACT AS SOLUTIONS FOR MUNICIPAL ROADS

By John Barzo, Associate

Yours truly is now a published author!

I often tell people that before I became a lawyer, I was normal. 

I don’t think I will ever be able to convince anyone who reads this.

By Catherine Hyde, Paralegal

There is an old adage that says “Never Loan Money to your Family or Friends”.  Something you should try to remember but sometimes you just can’t say no and you decide to loan some money.  Maybe the shoe is on the other foot and you have convinced one of your friends or family to loan you money.  How can each of you protect your interests?

It is all too easy to give money to a friend and say “I know you will pay me back”.  But what happens when something goes wrong in the friendship and you part ways? Without something in writing or proof that you loaned your friend the money, you do not have anything to substantiate that in fact you loaned him the money.  It is your word against theirs.

To protect yourself, you should prepare a document (can be handwritten) setting out the terms of the loan i.e. the amount loaned, how much the payments are to be, when are the payments to be made, what interest rate, how is interest calculated, are the payments interest only or principal and interest, what will happen in the event of default.  If it is a large sum of money you will want to determine if there is collateral to secure the loan.  In this event you may wish to seek advice from a lawyer concerning security for your loan, and a more formal loan agreement.

Once the document is prepared, signed and dated by all parties, if possible it should be witnessed by a neutral third party.  Both parties should receive a copy of the document.

If you are the lender and the borrower defaults, i.e. does not comply with the terms of the loan arrived at by the two you as stated in the document, you can then seek to enforce the terms of payment.  You may wish to seek the advice of a lawyer or paralegal (depending on the amount owed) with respect to what the limitation period is i.e. based on the terms of your document, is there a time limit within which you can pursue payment.  If you are within the specified limitation period, the next step may be to write a demand letter for payment.  You will need to provide a copy of the agreement relating to the debt, record of any payments which you received, and your calculation of what is owed.  If the demand letter does not bring a satisfactory resolution, depending on the amount of monies owed to you, you can then decide to proceed with a claim for payment of the monies.  You must factor in the cost of pursuing the claim against the amount of money owed to you.

If you are the borrower and the lender has demanded payment, you need to calculate what you still owe, if anything.  Refer to the document signed by both of you as to the terms.  Ensure that throughout the loan period you have kept a copy of the cheque to the lender making a payment, or a copy of the bank statement showing the electronic payment and proof of who the payment was made. If it is cash, you will need to get a receipt signed by the lender acknowledging receipt of the payment.  Keep all your records and a tally each month as to the balance owing including interest, if any, less the payment.  In the event the lender makes a demand for payment, you will have records to verify that in fact you have made the payments and you can clearly prove the amount of money owing.  If in fact monies are still owed, you should consider making the payment within a specified time frame.  It will then be up to the lender to determine if they wish to pursue the further monies they believe to be owed or accept your calculation of the debt.   Once paid, you should have the lender write on your loan document that they have been paid in full.

If you have determined that you do still owe monies but you do not have the funds to make the payment in full immediately, discuss a payment plan with the lender i.e. post-dated cheques with   terms in the event of further default.

As always it is best to obtain advice from a paralegal (if the amount of the debt is less than $25,000.00) or a lawyer (particularly if the amount is in excess of $25,000.00) in order to determine what your rights are and how to proceed.

Of course, you could also follow that old adage and not loan the money.

By Samantha Hicks, Paralegal

You are owed money for services rendered; the invoices are beyond due and all attempts to contact the customer have failed.

You are ready to throw in the proverbial towel and write-off the amount outstanding; however, you are worried about the precedent that you are setting.

It has been suggested that you commence a Small Claims Court action to collect the amount owing, but you are hesitant…this isn’t something you want to navigate on your own nor do you want to spend more money on legal/representation fees than you are looking to collect.

You recall watching a movie (or was it a television show?) in which the loser was ordered to pay the winner’s legal/representation fees and wonder whether this 'loser pays' principle applies to the Small Claims Court?

The answer is 'yes' – the 'loser pays' principle does apply to the Ontario Small Claims Court. However, like all good things, section 29 of the Courts of Justice Act provides the maximum amount awarded to the winner for legal/representation fees is, generally, capped at 15% of the value/amount being claimed. 

For example:

•   $15,000.00 due and owing for invoices rendered (value/amount being claimed from customer)

            x 15%    =

•   $ 2,250.00 being the maximum amount awarded for legal/representation fees in the within example  

It is quite possible that, as the winner, you will spend more on legal/representation fees than the amount awarded by the Court…in which case, you need to look on the bright side – not only have you won, but you were also able to recover at least some of your legal/representation fees.

By Eric Finn, Associate

Section 14(4)(b) of the Ontario Expropriations Act provides that in determining the market value of expropriated land no account shall be taken of “any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation.”  This concept is derived from common law principles intended to screen out the impact of the proposed development giving rise to the expropriation on the market value of the property.  Implicit in the application of the section is the existence of a “scheme” of development leading to the expropriation and a determination of when such “scheme” arose.

Full paper at the link below

By William Brennan, Associate

With the start of the New Year many people sit down to look at how they did financially in the previous year.  One thing that many people discover is that while they have spent a lot of time working they haven’t necessarily been paid for all of their work.  These outstanding accounts can make what should have been a great year into a poor year.  The following are a few tips on ways to help collect those hard earned dollars.

•  Make sure that all of your invoices are up to date

People only pay their bills after they receive them.  Many hardworking people focus all of their effort on putting in long hours and doing excellent work, they unfortunately do not take the time to promptly send bills to their customers.  Keeping up with billing for the work you do is just as important as completing the work in the first place.

• Send a reminder letter

A politely worded reminder letter to a customer with an outstanding account will often encourage them to pay their outstanding account.  The New Year is an excellent opportunity for this, a polite letter wishing your customers a happy New Year, thanking them for their business and finally reminding them about the outstanding account can be a simple yet effective way of collecting on outstanding accounts.

• Have a lawyer send a letter on your behalf

Unfortunately, a polite reminder letter does not always work.  When a customer is either ignoring or refusing your requests for payment you may consider asking a lawyer to write a demand letter on your behalf.  A firmly worded demand letter from a lawyer is sometimes enough to prompt a customer to either pay the outstanding account in full or start a conversation on how to resolve the outstanding account.

• Start a lawsuit

Finally if all options have failed you could consider starting a lawsuit seeking payment of your outstanding account.  This is not a step to be taken lightly; you can generally assume that every lawsuit that you are involved with will cost you both time and money. These costs must be balanced against any amounts that you may potentially recover if your lawsuit is successful.

By John Barzo, Associate 

Litigation is a process.  Often the process follows a pre-determined script.  Sometimes you have to think outside of the box.

I recently had a situation where a client found out about a judgment against him.  He claimed not to have any knowledge of the lawsuit, let alone the judgment.  More importantly, the judgment led to a writ being filed against his property.  When trying to refinance, it stopped him in his tracks.

So run to the lawyer!

The usual script is that one has to show a reason why one did not defend, that once you found out,  you moved quickly, and that you have at least an arguable defence.  The reason for this test is that more often than not, someone is just trying to delay.

His reasons for not defending were a tad weak.  He did move quickly.  So we focused on the defence.

The claim against him was on the basis that he personally guaranteed a debt of his now defunct company.  At least that was what the claim suggested.  On being retained, we sought the information from the other lawyer.  It turns out there was no guarantee.  The only thing he signed was an authorization to have the payments processed on his credit card.

So I decided to try an aggressive move.  Not only did I bring a motion to set aside the default judgment, to allow my client to defend, I also simultaneously brought a motion for summary judgment to dismiss the action as against him.  Technically, one can’t bring such a motion until the defence is filed.

I successfully argued that the stronger the defence, the less important the first two factors were in determining whether the default should be set aside.  I suspect that the fact that I also moved to summarily dismiss the action underscored the point to the Judge, and gave the Judge the ability to decide right there and then so the file was not languishing in the courts.

by Scott Fairley, Partner 

In most cases it is necessary to register a construction lien against each individual property to which materials or services were supplied, within 45 days after the date of last supply or completion.  A lien will attach to the property or the holdback funds in relation to the supply to each lot.  This is not a simple task if a contractor or subcontractor supplies services or materials to multiple lots within a project, as is usually the case in residential subdivision projects.  The Construction Lien Act addresses this problem through the concept of a general lien.  

A general lien is essentially a blanket lien that covers all the lots in a subdivision to which a contactor or subcontractor supplied, for the entire value of the supply to all lots.  Rather than choosing to lien for the value of each supply to each individual lot, within 45 days of the last supply to each lot, a contractor or subcontractor can register a general lien for the total outstanding account.  This allows the lien claimant to register within 45 days of the supply to the last lot, without losing the right to lien for the value supplied to lots earlier in the project.  If a lot has been transferred to a homebuyer, it can no longer been the subject of a lien, but the amount supplied to that lot can be added to the lien against other lots if a general lien is available.  For example, if an unpaid subcontractor supplied $5,000 worth of material to each of lots 1 through 10, and all but Lot 10 are sold to homeowners, the lien must be registered against the remaining lot, being Lot 10.  However, the lien against Lot 10 will be for the full $50,000.00, although the actual supply to Lot 10 was only $5,000.00.  Of course, there must be sufficient equity in the remaining lot for the lien to have full value.  

For a general lien to be available the following conditions must be met: 

1. All of the premises for which the lien claimant seeks payment must be owned by the same owner; 
2. All of the work must be performed under a single contract between the owner and the general contractor; 
3. The contract between the owner and the general contractor must not include a provision that liens will expire on a lot by lot basis.  

This last condition can present difficulties for subcontractors.  An owner and a general contractor can include in their contract a provision that liens expire on a lot by lot basis, and the general contractor cannot rely on a general lien.  Similarly, any subcontractor under that general contract cannot rely on the general lien.  The difficulty is that the subcontractor is not a party to the general contract and did not agree that liens will expire on a lot by lot basis.  The subcontractor may be considering a general lien but will not know if liens expire on a lot by lot basis, which eliminates the possibility of a general lien.  It is advisable for a subcontractor on a subdivision project to find out before the first supply if the contract between the owner and contractor provides that liens expire on a lot by lot basis.  If it does, that subcontactor will have to consider its lien rights for each individual lot and lien rights will expire 45 days after the supply to each individual lot.  

By Eric R. Finn, Associate

Those who analyze dispute resolution methodologies often refer to a continuum of approaches ranging from a form of “struggle”, where the parties wage war on each other with the intent that might will eventually win out, to negotiation, where the parties by themselves or with the assistance of consultants resolve the issues involved in the dispute.  In between the two extremes on the continuum, three other approaches, involving a third party, are generally referred to as adjudication, arbitration and mediation.  A brief description and discussion of these five dispute resolution mechanisms follows.

Struggle

Authors have defined struggle as process or procedure that “can take the form of physical combat (military battles, strikes), wars of words (shouting matches), political contest (vying for allies) or taking unilateral advantage (theft).”  In the international arena and throughout history, wars, including civil wars, have been used as a means of resolving disputes.  Domestic examples of struggle include strikes, gang warfare, family arguments and commercial disputes, involving parties with unequal bargaining power. 

Being on the continuum of dispute resolution, can “struggle” be seen as producing an agreement.  Again, authors, believe that the result of a struggle is an “agreement”.  A war, upon its conclusion, will lead to a victor and peace.  A strike or lockout can eventually lead to an agreement once the parties have felt the impacts of the withdrawal of the work force. 

More commonly, the presence of a “struggle” may lead to an agreement because of the knowledge that third parties may intervene.  Police forces may intervene to stop violence.  Those involved in a labour dispute may be aware that a government may intervene to impose binding arbitration or back to work legislation.  Governments have already intervened with consumer legislation and class action remedies to balance the bargaining positions between consumers and those provided goods and services.  Courts are becoming more and more involved in resolving family disputes and domestic violence.  The greater the possibility of a third party intervening, the greater the likelihood the parties will be able to reach an agreement to end the struggle.

Negotiation

While struggle may eventually result in an agreement, the terms may not be conducive to a durable settlement.  We have all seen that unilateral action by one party, such as the seizing of land, may result in peace for some time but often the seizure will result in further conflict at a later date when interests shift.  Where the consequences of  a struggle are unacceptable and  the parties do not want to involve a third party, negotiation is the favoured dispute resolution remedy.  Negotiation is often chosen when both parties:

• Believe they cannot get what they want unilaterally
• Have some conflicting and some shared interests
• Are in a stalemate that harms them both, and
• Perceive negotiation to be the best way of attempting to end the conflict.

Negotiating techniques can take the form of positional bargaining or principled negotiation.  In the former, the primary goal of each party is to reach an agreement but the technique invariably favours the more powerful party.  The process involves a successive taking on and then giving up on a sequence of positions.  Consider the type of haggling that goes on at international bazaars as an example.

Principled negotiation, while also aimed at reaching an agreement, is intended to reconcile interests, avoid damaging and perhaps improve relationships and have relatively low transaction costs such as time, stress and money.  The four principles of this technique are:

1. Separate the person from the problem.
2. Reconcile interests, not positions.
3. Create options for mutual, not personal, gain.
4. Use objective standards.

As will be seen, when parties decide to involve a third party mediator to resolve disputes, they will find that most mediators today are trained in the art of principled negotiation.

Adjudication

Moving along the continuum away from struggle, to those options for dispute resolution involving third parties, the approach where the parties have least input into the dispute resolution process is adjudication.  Adjudication or litigation is a process in which a third-party judge, authorized by legislation, compares the parties information (evidence) presented in court or in a tribunal, according to the procedures of those bodies, and then renders a binding judgment that favours one party over the other.  There is a winner and a loser and the decision is binding.

The strengths of adjudication include the ability to predict an outcome where specific legislation or precedents are involved, the process results in a binding enforceable decision and the proceedings are transparent and, generally, open to the public.  The weaknesses include that fact that there is always a winner and a loser and therefore fewer satisfied participants than may result from mediation or prini9cpled negotiation, decisions have lower compliance rates than mediation and the oprocess offers the participants minimal control.

The issue of costs raises some debate.  Adjudication because of time involved from commencement to conclusion and the  procedural steps along the way, general leads to higher transactional costs even.  In mediation or arbitration, the procedures are general designed to reduce costs.  The variable in the debate is the cost of the mediator or arbitrator as compared to a government funded court.  Where a lengthy hearing before an arbitrator is required the cost of the private arbitration weigh the scale of costs in favour of adjudication.

Arbitration

With arbitration, the parties still present evidence and arguments to a neutral third party who makes a binding decision.  Unlike adjudication, however, the parties choose the private arbitrator and decide on the procedure to be used.  Arbitration also provides decisions based on objective standards .  If the parties agree, arbitration could be non-binding but by far the most preferable result is to have a binding decision which can be enforced pursuant to the parties’ agreement or government regulation.  As noted above, the parties pay for the services of the arbitrator.

Mediation

The form of dispute resolution closest to the negotiation end of the continuum is mediation.  Where mediation is used to resolve a dispute, a third party is involved to facilitate an agreement but the parties formulate the terms.  As with arbitration, the parties choose and pay the mediator and agree on the procedures to be used.  Because the aim of mediation is a consensual agreement, there is no binding effect on what takes place at a mediation or the views expressed by the mediator.  If an agreement is reached, the parties have contractual remedies of enforcement.

Two types of mediation have developed – rights based mediation and interest based mediation.  In the former process, the mediator is concerned with whether the rights of a party has been infringed and will generally result in the mediator expressing an opinion as to such infringement.  This type of mediation is primarily found in statute based mediation, for example, human rights disputes or motor vehicle accident benefits cases.

More commonly, mediation is interest based which is “a process whereby a third party facilitates understanding and mutual decision making on outcomes by parties involved in conflicts of interest.”  From this definition, it can be seen how interest based mediation will have significant success where the parties are involved in principled negotiation.  Mediators are trained to apply the four principles of principled negotiation to achieve an agreement which is in the interest of all parties.