Aarbo Fuldauer

An Act called the “Citizen’s Arrest and Self-defence Act” has received Royal Assent and will come into force on proclamation.

In 2009, a shop owner chased down a repeat shoplifter, tied him up and held him in the back of a van until the police were able to attend. The shopowner was charged with forcible confinement and assault and while he was found not guilty, the public outcry prompted political action.

Citizen’s Arrest

Under the current citizen’s arrest provision, there are three circumstances when a citizen may make an arrest:

1. the citizen finds someone committing an indictable offence;

2. the citizen believes that someone has committed a criminal offence and is escaping from and freshly pursued by a police officer; or

3. the citizen is a property owner or in lawful possession of property or someone authorized by the owner or person in lawful possession and finds someone committing a criminal offence in relation to that property.

The new provision only affects the third circumstance by adding that a citizen may arrest someone within a reasonable time after the offence is committed if the citizen reasonably believe that it is not feasible for a police officer to make the arrest. As a result, a citizen may arrest someone even if they do not “catch them in the act”.

This new provision addresses the issue of a shopowner who makes an arrest after pursuing a shoplifter. However, arresting someone who is not caught in the act raises a new issue because the citizen may not correctly identify the suspect and inadvertently arrest an innocent person.

Self-defence

Self-defence can be divided into two main areas: defence of self or others and defence of property.

The Criminal Code currently has nine provisions that deal with self defence and they are notoriously complex and difficult to understand. The Act will repeal all of the previous sections and replace them with one provision for each of the two areas of self-defence.

In regard to defence of self or others, the new provision states that a person is not guilty of an offence if:

that person reasonably believes that force or a threat of force is being used against him or another person;

the act is done for the purpose of defending himself or another person from the force or threat of force; and

the act is reasonable in the circumstances.

The new provision also sets out factors that a court must consider in determining if a person has a defence.

In regard to defence of property, a person who commits an act in self-defence must be someone who is in peacable possession of property or someone acting under the authority of or lawfully assisting a person who is in peacable possession of property. The person against whom the act is committed must be about to enter, or entering the property, about to take or has just taken property, or is about to damage or destroy property.

In all cases, the act must have been committed for the purpose of preventing someone from entering the property, taking property or causing damage to property, or to remove that person from the property.

The current legislation provides that the person who commits an act in self-defence must use “no more force than necessary” in all circumstances except in the case of protecting a dwelling house from a break and enter when a homeowner may use “as much force as necessary”. This language will be changed to say that the act must be “reasonable in the circumstances”.

The change in language is unlikely to affect the position of the courts in Canada that deadly force is not reasonable in defence of property alone.

Do I really need a will?

Everyone needs a will, even single people with no children. The rare exception may be single persons with no children and no assets, but most people will likely acquire some assets or have children in his or her lifetime. Thus, even if one does not have any assets or children now then one should still have a will if they are planning on acquiring assets or having children in the future.

If you do not have a will then your estate will go “intestate”. This means that someone will need to come forward and bring an application at the courts to have your assets administered in accordance with inflexible rules as to how assets should be divided. Also, the government will decide who will raise your children. It is a very costly process and takes much longer to administer.

It is possible to draft your own will or use a kit acquired from a stationary store, but in my experience these very often create problems. There are rules that must be followed. There are rules that govern the validity of a will and there are rules about where your money should go. For example, have you ever heard of the “Rule Against Perpetuities”? It states that a gift in a will must vest within a life in being and 21 years. If the rule is not followed the gift or the will could fail.

The point is that people are not completely free to do whatever they want with their money on death. There is a priority list of who must be paid and relatives who must be cared for upon death. If any one of these rules are not followed then a will could be found to be invalid or go “partially intestate” (partially invalid). Also, there are tax implications to just about everything that is done in a will (or not done!).

Most lawyers do no charge a lot of money to prepare a will. The cost to correct errors and omissions on self-drafted wills can cost many thousands of dollars and pit family member against family member. Poor drafting can lead to an estate paying more tax than necessary. Thus, for a small price to have a will drafted, you can possibly save many thousands in litigation costs, tax bills and family strife.

Finally, doing up a professional will allow the following goals to be accomplished in a manner that can be relied upon:

– Pick the person(s) who will administer your estate and specify what compensation, if any, he or she should receive.

– Pick a guardian for your children.

– Make gifts to different people, or in different proportions than provided for by the Wills and Succession Act which says that everything goes to your spouse (or adult interdependent partner) if you don’t have children, and a combination of your spouse (or adult interdependent partner) if you do. This can be essential for blended families (second marriages).

– Prevent people from having a share in your estate that might otherwise be entitled to a share.

– Delay past age 18 when someone will receive a part of your estate.

– Create a trust for someone, including a discretionary trust for disabled family members.

– Give someone a life estate in something.

– Chose alternate beneficiaries of gifts, trusts, or the residue of your estate.

– Create mirror wills where you and your spouse decide how to plan your estates together.

– Give to charities.

Warning on Conventional Mortgage Assumptions in Real Estate Transactions in Alberta

It used to be the case in Alberta that mortgage companies had little to say when new purchasers wished to finance their transactions by assuming the seller’s conventional mortgage.[i] This is no longer the case.

Mortgage companies are now almost invariably including ‘due on sale’ clauses in all residential mortgages.

The clause means that if a mortgage is to be assumed, the seller must first notify the mortgage company with information about the purchaser (no doubt information about the purchaser’s credit worthiness), and obtain written approval from them. If approval is not obtained, the mortgage company can demand immediate payment in full.

We recommend the following steps be taken writing up a real estate contract involving assuming a seller’s mortgage;

1. Ensure that if financing is planned to occur by a mortgage assumption, the seller must first notify the mortgage company of this intention, and the purchaser will have to provide information to that company.

2. Include as a condition to the transaction that the mortgage company allows the assumption by the purchaser. The condition should also require the seller and purchaser to contact the mortgage company in a timely fashion, and provide whatever information the mortgage company reasonably requires.

A further difficulty may be encountered where for example parents go on the title with a child to help out the child to obtain new financing where the child would not otherwise qualify. In this situation often the parents believe that shortly after the close of the purchase, they can transfer the title to their child with that child in effect assuming the mortgage for him or herself. In this situation the ‘due on sale’ clause may very well result in the mortgage company refusing the ‘assumption’ and requiring payment in full of the mortgage.

We recommend that parents and children be made aware that in the above situation the parents will need to stay on title for the longer term, until their child can qualify without them.

We hope this information is useful in structuring real estate sales and purchases.

[i] Different considerations apply for CMHC insured mortgages

When to Value Matrimonial Property for the Purposes of Division

One thing I like to blog about are those questions you get asked all the time by clients or the misunderstandings that people have about the law that seem to have acquired “general acceptance” in society. The problem is that these understandings are sometimes wrong. The great thing about blogging is that you can address the same question to many people at the same time.

One issue that I have noticed a misunderstanding about is the time at which divorce lawyers value matrimonial property for the purposes of division in Alberta. This is a family law problem that our lawyers help clients with all the time.

This answer only applies to married couples, not common law couples separating. Very different principles can apply to common law couples because their ownership principles are often decided under trust law, usually constructive or resulting trusts. The reason for the difference is the Matrimonial Property Act of Alberta. This act only applies to persons who are legally married.

Section7(3)(a) of the Matrimonial Property Act essentially sets the date of valuation as the “date of trial”. What this means practically speaking is that the assets will be valued at the time of consideration or the last possible point in time. Most matrimonial property disputes never make it to trial. Trials are far too expensive for the average person, so they end up settling through some form of negotiation or mediation. It is important to understand, however, that the assets will be valued at about the time of the settlement or the settlement meeting. That is the last point in time where the issue is relevant.

Many people assume that the value of assets to be used for division will be set at the time of separation. They feel that the day they breakup somehow sets the value of the asset. This is not true, unless both parties agree. In fact, it is not even the date of divorce that is relevant. Some people get divorced before they settle all their property disputes and they think that “this” must be the date, but no, it is the the last possible date for consideration.

The rationale for this is understandable. The breaking up does not change the fact that the asset is matrimonial property. It remains matrimonial property until is is divided or sold and the proceeds divided. Until then, any market fluctuation in the value of the asset will affect division. Why should either person be subject to market fluctuations and not the other? The basic principle of property division under the Matrimonial Property Act is simple: subject to some exemptions, there shall be an equal division of assets acquired during marriage. It does not matter in whose name the asset may be or in whose is in possession of the asset may be after separation. There is a continued equalization of the asset until division. In sum, both parties take the risk of market changes until the assets are finally decided.

It is section 7(4) of the Matrimonial Property Act that states that property acquired during marriage should be divided equally. This is a principle that is followed quite strictly by Alberta Courts. Section 8 of the Act does give some conditions to take into consideration when dividing equally. Section 8(f) of the Act states that the Court can take into consideration the fact that a party may have acquired an asset after separation when deciding the division of property. In my observation, however, it is almost impossible to invoke this provision to have the asset excluded from consideration because any assets acquired after separation generally would have required the use of matrimonial assets to purchase. In other words, if you take an asset that was considered matrimonial property and sell it after separation to buy another asset then you are using matrimonial property to acquire the asset, so the Court will consider that asset to be matrimonial property as well. In my observation section 8 of the Act does not provide reasons for an unequal division, but considerations to ensure an equal division. For example, the Court will not simply divide up the face value of the asset, it will take into consideration any tax consequences or the like to ensure each party is getting a truly equal division of assets. The purpose of section 8, in my opinion, is not to provide reason for an unequal division, but to ensure a equal division. Unequal divisions are rare and one has to loo elsewhere for those reasons.

When do children get to decide which Parent they want to live with?

The theme of recent posts is the misunderstandings that people have in the area of family law that have acquired some general acceptance in society. Family law and divorce lawyers deal with these misconceptions all the time.

One misconception is the age at which children get to decide which parent they want to live with in a separation. Many people believe that it is 12 years old. This is not necessarily true.

The age of 12 is an important date, but 12 year old children do not get to decide where to live. Family law lawyers are told by child psychologists that at about the age of 12 children can acquire enough cognitive development to be asked the question. In other words, their opinion becomes relevant, but it will be not determinative at 12 or even 13. Also, children develop at different rates so some 12 years may not have formed the cognitive development to even be asked the question.

One always has to question, regardless of age, whether it is wise to be involving children in a parenting dispute at all. Children cannot and should run a household. They cannot and should not make parenting decisions. They are children, not adults, and these are adult issues. It is just that simple.

Before the age of 12 it is generally understood that children’s opinions are not relevant. They are too young to have any sort of say. In fact, in my opinion, it is unfair and not in the best interests of the children to even ask. It may do more harm than good. Parents may think that they are doing a good thing by getting their child involved, but the psychologists I have talked to say it can actually be quite harmful. Children will often tell both parents the exact same thing, that they want to live with them. At that age saying that is not a contradictory statement: they do want to live with both parents.

I attended a conference on this topic a couple years back and psychologists tend to agree that young children tend to make statements that adults may view as contradictory, but to the child they are not. Children will often tell their parents what they want to hear. They love the their parents and want to please them in a very stressful time such as separation. Also children tend to sympathize with the parent in which care they are at that particular moment time. If they feel a parent is stressed and wanting them to answer is a specific way then they will answer a question the way they feel the parent wants them to answer. They are telling the truth, but they may be saying the same thing to both parents. This will create a great deal of stress for young children and it is not in their best interests to be brought into this situation. If parents then use this information to justify denying access or change access or bring court applications then this can cause serious distress to a child.

Alberta has a great program for spearating parents called the “Parenting After Separation Course”. It is free and mandatory in many circusmtances if the parents are in the court system. It teaches important lessons for parents.

Great Article on reading the fine print:

http://business.financialpost.com/2012/09/17/why-you-should-read-the-fine-print/

It is important for people and businesses to read all of the contracts that they sign. If you do not understand what you are reading then speak to a lawyer. The contract lawyers at Courtney Aarbo regularly assist small and medium sized businesses with contracts.

A few dollars at the front end of a negotiation can save a lot of money later.

When are Latent Defects actionable?

I recently argued an appeal in the area of latent defects in real estate transactions. This is one complicated area of the law. This posting, as with all posts, should be verified with a lawyer familiar with this area of law. Also, this posting deals mostly with commercial real estate transactions, as opposed to residential.

The Alberta Court of Appeal has drawn a clear distinction between “concealment” and “non-disclosure”. Concealment requires a positive step to hide a defect in land coupled with an intention to withhold knowledge of the defect from the purchaser. Non-disclosure or mere silence is just a failure to volunteer information that might be of interest to the other side. Absent a duty to disclose, non-disclosure generally has no legal consequences, except in rare cases. The non-disclosure of a defect in the premises is generally not actionable unless there is a covenant in the contract that the defect does not exist. Non-disclosure is not the equivalent of concealment: Motkoski Holdings Ltd. v. Yellowhead (County), 2010 ABCA 72 at paragraphs 59 – 60, 63-64

The test in Alberta seems to be:

Is the defect complained of a latent defect?
Did the vendor have knowledge or was it reckless as to the existence of latent defects? If so, was there active concealment of the defect OR was there non-disclosure and a covenant in the contract that the defect does not exist OR did the vendor make a misrepresentation as to the latent defects and did the buyer reply upon the misrepresentation?
Did the defects make it unfit for habitation or take away from the purchaser’s use, occupation or enjoyment of the premises?

Darryl Aarbo of our office recently chaired the Law and Practice Update conference for the Legal Education Society of Alberta (LESA). Congratulations for taking on this challenge and we understand that the program was a great success.

The Law and Practice Update is a two day program offered by LESA directed at lawyer practicing in small and solo practices. Lawyers with a full service practice. Not only did it cover off substantive areas of law, but it had a technology component as well. Basically, how to bring the law office into the 21st century. The areas of law covered were: civil litigation, family law, criminal law, tax law for non-specialists, wills and estates and residential real estate. The program is offered once a year.

For more information on Legal Education Society of Alberta programs:

http://blog.lesaonline.org/?p=1017

Host Liability of Bars & Restaurants For Impaired Patrons in Alberta

by Gary Courtney, Courtney Aarbo Barristers and Solicitors.

Over the past 20 years or so a significant number of cases across Canadahave imposed liability on bars/restaurants when patrons leave their establishment in an intoxicated condition and end up harming themselves or others.

Almost invariably in such cases the bar/restaurant ends up being a defendant in a legal proceeding along with the intoxicated person, or at times with the intoxicated person being the plaintiff. The claims typically are for damages for the injuries to persons harmed by the intoxicated person.

Under the law, if a court finds a bar/restaurant even 1% at fault for the accident, with the rest of the responsibility being with the intoxicated patron, the bar/restaurant will be jointly liable with the intoxicated patron and therefore liable to pay all of the plaintiff’s damages. In many cases the defendant patron who is most at fault has no money to pay damages, or simply declares bankruptcy, leaving the bar/restaurant to pay 100% of the damages.

Of course bars/restaurants have quite expensive insurance in place, usually at least $2 million of coverage. It is critical to understand that in the event damages are higher than the insurance coverage however, the bar/restaurant will be liable for that excess. If damages are $3 million and there is but $2 million of insurance, the bar will be liable for the $1 million of difference. Given the amounts of potential damages in a catastrophic case, we recommend at least $5 million dollars of insurance coverage.

Regardless of whether there is sufficient insurance coverage to cover the law suit damages or not, being involved in a serious accident case will be very stressful, time consuming and an expensive experience for bar/restaurant owners, and their staff. It goes without saying that the best scenario for owners and employees of bars/restaurants is not to ever be involved in such cases, but if a law suit occurs, to be in a position where the bar/restaurant is not even 1% at fault, due to staff taking the necessary steps to deal with an intoxicated patron.

This memorandum is meant to provide bar and restaurant owners and employees with a summary of the recent cases imposing a duty of care on “commercial hosts”. Courtney Aarbo hopes that the readers will find it useful in minimizing the legal risk involved in these difficult situations.

1. When is there a legal “Duty of Care” of a bar/restaurant?

A bar/restaurant owes a duty to take reasonable care for the safety of patrons and the public once a patron steps through its doors. That duty of is especially acute where there is a reasonably foreseeable risk of injury arising from a patron’s consumption of alcohol. Usually the reasonably foreseeable risk of injury centers around driving while intoxicated.

Once the bar/restaurant has a duty of care, it may be required (through the actions of its employees) to take positive steps to prevent a patron driving if the patron’s drinking creates a reasonably foreseeable risk of injury to the patron or third parties.

2. When does The Reasonably Foreseeable Risk arise?

The primary legal question is when is there a reasonably foreseeable risk of injury which puts the bar/restaurant under a duty to take positive steps to prevent injury to the patron or the public. Such a situation arises where:

A. the bar/restaurant (through its employees) knows or ought reasonably to know that the patron is intoxicated;

whether a host ought to know that a patron is intoxicated will depend on visible behavior/speech of the patron and how much alcohol the patron has been served by the bar/restaurant;
of note is that the bar/restaurant is required to monitor the level of a patron’s intoxication and alcohol consumption (even if the commercial host does not have the technical/logistical means to monitor consumption). Obviously this may entail knowledge by staff of how many drinks can normally be consumed before intoxication occurs, as well as a system to monitor patron’s consumption.

And

B. the bar/restaurant knows or ought to know that the patron intends to drive;

whether a bar/restaurant ought to know that a patron intends to drive will depend on (a) the location of the bar (is it accessible by car only) (b) whether the patron is known and usually drives (c) whether there are indications that the patron will drive (statements by the patron/others, signs of keys, showing of driver’s license) (d) whether the patron is with others who are sober and can be expected to take care of the patron and make safe arrangements for his travel;
of note is one leading case , where it was held that if an intoxicated patron is in the establishment with a group of people, which includes sober adults who are aware of the consumption of the intoxicated patron, it is reasonable for the commercial establishment to assume that (i) the people will travel together and (ii) one of the sober people will drive or make arrangements to get the intoxicated person home – therefore it was not reasonably foreseeable in the circumstances that the intoxicated patron would drive.

The basis of imposing liability on a bar/restaurant for an intoxicated patron’s driving is that an intoxicated patron cannot be relied on to act reasonably (i.e. decide not to drive when it would be dangerous to do so) so the bar/restaurant must intervene to prevent him from driving.

Given the above rationale, it seems unlikely that the law would consider it reasonable for an employee to rely on an intoxicated person to commit to what he says, when he says that he will not drive. Intoxicated people forget, lie or fail to see the importance of what they are doing. In the case Neufeld v Foster /1999/ (BCSC), a bar employee asked an intoxicated patron in a group of 4 who were all intoxicated for his keys. The patron told the employee that he had already given his keys to someone and that the group would not be driving and would be taking a taxi. One of the 4 patrons drove, although it was not clear which. It was found to be reasonably foreseeable that one of the intoxicated patrons would drive, even despite an intoxicated member of the group saying that they would not.

3. What the bar/restaurant must do to meet the “Duty of Care”

Once it becomes reasonably foreseeable that the patron poses a risk of injury to highways users because it should be known that he is intoxicated and plans to drive, the bar/restaurant then has a duty of care that requires it to take positive steps so that it is no longer reasonably foreseeable that the patron will drive from the premises.

What kinds of positive steps to prevent an intoxicated person driving will satisfy a bar/restaurant’s duty of care to prevent the intoxicated patron driving? Reviewing the case law examples provides some guidance;

1. Jordan House Ltd. v. Menow 1973(SC) (a case where an intoxicated patron was leaving by foot and was injured on the highway), described the duty generally as a “duty to see that the patron got home safely” by “taking him under its charge” or “putting him under the charge of a responsible person” or “see that he was not turned out…until he was in a reasonably fit condition to look after himself”. Specific examples include:

call the police
call a taxi
make arrangements with another person able and willing to transport the patron

2. Stewart v. Pettie 1995(SC) was a case where an intoxicated patron was with a group, including a sober wife and sister, who were aware of how much he had drank. The drunk patron drove, resulting in an accident and harm to the wife. The court stated that the standard of care of the hotel could be satisfied by putting the patron under the charge of a responsible person, or in a case where the patron is alone, by “calling the patron’s wife or sister to take charge of him”:

in the case itself, the patron was already in the care of sober adults (wife and sister) who he came to the establishment with and who knew how much he had had to drink and the bar employees were aware of this;
it was not necessary for the bar employees to take positive action to “put” the patron in their care – it was reasonable to assume that the group was not travelling separately and that the sober people would drive or make alternative transport arrangement (it was not necessary to ask questions confirming that the sober people would make proper travel arrangements);
it was held that the bar was not negligent

3. Holton v Mackinnon 2005 (BCSC): a patron and his plaintiff friend had been drinking during the day and then drank further at a nightclub. The patron drove home, with the plaintiff in the car and arrived at home. They left again soon after and had an accident in which the plaintiff was injured. It was held by the court that;

the nightclub had not satisfied its duty of care to the plaintiff;
the court said that in the circumstances, a bar was required to “put the intoxicated patron in the charge of a competent, sober individual and prevent…[him] from driving his vehicle”.

4. LaFace v. McWilliams 2005 (BCSC): a patron who drove and injured third parties on the highway had been drinking at a hotel. Outside the pub, a member of the public saw the patron and recognized that he was drunk and about to drive. That person took it upon herself to try to find someone to take the patron home or drive his car home, by talking to the doorman and also going into the pub. She was not successful. At one stage, she specifically told an employee that the patron was drunk and needed help finding someone to help him get home safely. The pub employees did nothing and the patron drove. The court held;

the pub had not satisfied it’s duty of care;
the patron was not put into the care of a responsible person, even though the member of the public voluntarily took steps to prevent him driving;
the case seems to say that even if someone accepts responsibility to prevent a person driving, if the bar staff are aware (or ought to be aware) of a risk that this will not prevent the patron driving, the bar must intervene;
in such circumstances, the bar cannot simply say that another person has taken responsibility to get the patron home safely – the voluntary taking of responsibility by a member of the public does not remove the responsibility of the bar to prevent the person driving.

5. Neufeld v Foster /1999/ (BCSC): even though a bar employee demanded keys from one intoxicated patron in a 4 person group (although not from all of the group) and insisted that person not drive, questioned another intoxicated member of the group and was told that they intended to take a taxi, and then called for a taxi, the bar had not satisfied the standard of care required. The court held;

the bar staff failed to see to it that the intoxicated patrons actually got in the taxi instead of driving;
it seems therefore that whatever means the bar staff employ to prevent the patron driving, that method must be relatively “complete”, in the sense that it is no longer reasonably foreseeable that the intoxicated patron will drive;
in the case of using a taxi, the bar must ensure the patron gets in the taxi; in the case of taking keys, the bar must take keys, not just ask for them; in the case of putting the patron in the care of a responsible person, the bar must actually find someone willing and able to look after the patron and prevent him driving, not just attempt to do so;
this is consistent with general statements about the standard of care required of a commercial host in Jordan v. Menow (“duty to see that [the patron] got home safely”) and Childs v. Desormeaux and Holton v MacKinnon (“ensure that the patron is in the care of a responsible person”).

6. Haughton v Burden /2001/ (Ont SCJ): intoxicated patrons were drinking in a nightclub. Staff called a taxi and ensured that the intoxicated patrons got into the taxi. After they had arrived home in the taxi, the patrons got into their own vehicle and were involved in an accident. It was held that by ensuring that the intoxicated patrons actually got into the taxi, the nightclub had satisfied its standard of care. However, the nightclub could still be liable for breach of its statutory duty in over-serving the patrons, since the Ontario Liquor License Act made a breach of that statutory duty actionable.

7. Little Plume v. Weir 1998 (ABQB): the plaintiff patron had been drinking for 24 hours before entering a bar. He stayed for 10 minutes dozing in a booth and the staff did not serve him. He was required to leave. An employee offered to call the patron a taxi but the patron walked out without answering, apparently intoxicated. After leaving the bar, the patron crossed the road (not at a crosswalk) and was struck by a car, rendering him a paraplegic. It was held that the bar had met the standard of care that it owed to the patron, by offering to call him a taxi. It was not necessary for the bar to see that the patron actually got into the taxi. The case seems to have been decided on the basis that the standard of care required of a bar/restaurant is less exacting if the commercial host has not served an already intoxicated patron alcohol.

The principle emerging from the case-law is that in order to satisfy the standard of care, positive steps must be taken by the bar to stop the patron driving so that it is unforeseeable (to a reasonable person) that the patron will drive. In other words – if the bar employee asks an intoxicated patron to hand over his keys, the standard is satisfied if the patron hands them over. If the patron has keys but does not hand them over (because e.g. he says that he has already done so, or has lost them), the standard is probably not satisfied without the employee going further by for example ensuring that keys are not on the patron’s person to be found once the patron is in a vehicle, or better yet convincing the patron to take a taxi or ride with a sober person and take steps to make sure this happens.

The case law indicates that it is not sufficient to absolve a bar of civil liability, that a responsible person has taken some action designed to prevent the patron driving away. It must also be reasonable to believe that the responsible person’s intervention would prevent the patron from driving.

4. Conclusion

While obviously the cases have some inconsistency in how much the bar/restaurant must do to meet its duty of care once there is a reasonably foreseeable risk that an intoxicated patron may drive, some general themes have emerged.

The main principle is that bar/restaurant staff must take active steps to prevent an intoxicated person from driving. The steps may be to take away the persons keys and call a cab. A second option is to call a cab for the person and not take away his or her keys, although the bar/restaurant may still be liable if the patron gets into his car anyway. Case Law suggests that the bar/restaurant should make sure the patron gets into the cab to avoid potential liability if there is a real risk that the patron might not take the cab but instead drive away.

If dealing with an intoxicated patron in a group which includes sober persons, the bar/restaurant staff would be well advised to take positive action to make sure that a sober designated driver is the one that drives. The ideal scenario would be for the bar staff to go into the parking lot to make certain that the sober patron does in fact drive. Cases are not totally consistent but it may be enough if the bar/restaurant staff member asks the group who is driving, and sees to it that intoxicated patrons hand their keys to the designated driver. The risk is that out in the parking lot the keys might find their way back to the intoxicated patrons. It is less likely to be enough for the employees to simply ask the group who is driving, and the designated driver says ”I am driving” without the staff member at least making sure keys are no longer in the intoxicated patron’s possession.

In the event that an intoxicated patron will not cooperate with bar staff in the calling of a cab (and taking a cab), or surrendering keys to a sober designated driver, then we suggest that the police be called immediately, with attempts being made to delay the intoxicated persons departure until the police arrive to take control of the situation. Doing so will certainly strengthen the bar/restaurants argument that it took definitive steps to deal with the situation and therefore should not have liability.

Obviously the best strategy is for the bar/restaurant to avoid over serving patrons, given the requirements of liquor licensing laws, the potential civil liability discussed above, and the difficult predicament staff are put in, in dealing with intoxicated patrons generally. Note though that the bar/restaurant can have the same duty to look after a patron if the bar serves only one drink to a patron who is already drunk, when he or she enters the premises.

We hope that the above summary of the current law will assist bar and restaurant owners and employees as they prepare their policy on this issue, and deal with this very difficult issue that presents itself on a daily basis.

If Courtney Aarbo Barristers and Solicitors can assist you in any other way with respect to legal matters involving your business, please call at 403 571-5120 or email at info@aflawyers.ca.

You can also vists the Alberta Gaming and Liquor website: http://aglc.ca

Am I in a Common Law relationship? If so, so what?!

What does “Common Law” mean in the Family Law context?

A lot of people consider themselves to be in a common law relationship, but what does that mean? How long does it take to be considered to be in a common law relationship? If I am in one, what rights and obligations do I have to my partner?

The term “common law” has a very different meaning depending on whom you ask and in what context. If you ask the Canada Revenue Agency you will get one answer, if you ask your insurance company you will get another and if you ask the Alberta government you will get a third answer. There is no uniform definition of common law in Canada. Hence the confusion.

Basically everyone seems to understand that to be “common law” you have to be in a marriage-like relationship, as opposed to be living together with a roommate or family member. You have to be a couple, right? What does that mean?

There are two definitions that are most common: one for federal tax law and one for area regulated by the Alberta government.

For the Canada Revenue Agency, you have to be living together for one (1) year in a conjugal or have a child together. Here is its definition:

Common-law partner

This applies to a person who is not your spouse (spouse = legally married), with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:

a) has been living with you in a conjugal relationship for at least 12 continuous months;

b) is the parent of your child by birth or adoption; or

c) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.

In addition, an individual immediately becomes your common-law partner if you previously lived together in a conjugal relationship for at least 12 continuous months and you have resumed living together in such a relationship. Under proposed changes, this condition will no longer exist. The effect of this proposed change is that a person (other than a person described in b) or c)) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

Note

The term “12 continuous months” in this definition includes any period that you were separated for less than 90 days because of a breakdown in the relationship. For instance, if you and your spouse or common-law partner were separated for two months during the year, but reconciled before the end of the year, you are still considered to be married or living common-law for income tax purposes.

This is a very important definition when dealing with anything under the Federal Government of Canada and, in particular, your taxes. There is nothing more important that the federal government does in relation to its citizens than collect and spend taxes. On a day-to-day basis, it is the most common interaction between citizen and federal government.

One needs to be accurate in declaring your status to the federal government. First, nobody should ever lie to CRA. Lying to the CRA is an offence that you have serious consequences.

Second, it is normally in most people’s best interests to tell the truth. One probably gets more benefits from being in a common law relationship than cost. For example, if your partner dies then you can “roll-over” his or her RRSPs into your name without having to pay the deferred taxes on that income. If you leave your RRSPs to a “friend” or your child then all the deferred taxes have to be paid upon death. This can be a massive tax bill for all the people diligently maxing out their RRSPs.

The Alberta Government has a completely different definition and, in fact, does not even use the words “common law”. The Alberta government uses the terms “Adult Interdependent Partners (AIP)” or “Adult Interdependent Relationship (AIR)”. It is basically the same thing with a longer title. I suspect that the person who used to work for the Yellow Pages thinking up category names now works for government of Alberta thinking up names for legislation.

To be considered an Adult Interdependent Partner (a common law couple) for any areas regulated by the provincial government, people have to have lived together for three (3) years or have a child together. The Definition:

In this Act,

(a) “adult interdependent partner” means an adult interdependent partner within the meaning of section 3, but does not include a former adult interdependent partner;

(b) “adult interdependent partner agreement” means an agreement referred to in section 7;

(c) “adult interdependent relationship” means the relationship between 2 persons who are adult interdependent partners of each other;

(d) “former adult interdependent partner” means a former adult interdependent partner within the meaning of section 10;

(e) “Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

(f) “relationship of interdependence” means a relationship outside marriage in which any 2 persons

(i) share one another’s lives,

(ii) are emotionally committed to one another, and

(iii) function as an economic and domestic unit;

(g) “spouse”means the husband or wife of a married person.

(2) In determining whether 2 persons function as an economic and domestic unit for the purposes of subsection (1)(f)(iii), all the circumstances of the relationship must be taken into account, including such of the following matters as may be relevant:

(a) whether or not the persons have a conjugal relationship;

(b) the degree of exclusivity of the relationship;

(c) the conduct and habits of the persons in respect of household activities and living arrangements;

(d) the degree to which the persons hold themselves out to others as an economic and domestic unit;

(e) the degree to which the persons formalize their legal obligations, intentions and responsibilities toward one another;

(f) the extent to which direct and indirect contributions have been made by either person to the other or to their mutual well‑being;

(g) the degree of financial dependence or interdependence and any arrangements for financial support between the persons;

(h) the care and support of children;

(i) the ownership, use and acquisition of property.

Application of Act

2 This Act applies to adult interdependent relationships arising before or after this Act comes into force.

Adult interdependent partner

3(1) Subject to subsection (2), a person is the adult interdependent partner of another person if

(a) the person has lived with the other person in a relationship of interdependence

(i) for a continuous period of not less than 3 years, or

(ii) of some permanence, if there is a child of the relationship by birth or adoption,

(b) the person has entered into an adult interdependent partner agreement with the other person under section 7.

(2) Persons who are related to each other by blood or adoption may only become adult interdependent partners of each other by entering into an adult interdependent partner agreement under section 7.

Relationship of interdependence

4(1) A relationship of interdependence may exist between 2 persons who are related to each other by blood or adoption except where one of the persons is a minor.

(2) A relationship of interdependence does not exist between 2 persons where one of the persons provides the other with domestic support and personal care for a fee or other consideration or on behalf of another person or organization, including a government.

Hows that for a short simple definition!

Next to taxes, this definition will affect the most people most often, assuming you live in Alberta of course. The provincial government regulates far more of our lives than does the federal government. For example, if two people are AIPs then they have significant rights and obligations under the Family Law Act and the Wills and Succession Act. These two pieces of provincial legislation potentially affect all of our lives. They regulate rights and obligations in common law and married relationships upon break-up and rights and obligations upon death.

For example, the FLA defines when and how much spousal support is paid by common law couples when they split up. The WSA speaks to the right upon death and the obligations to your partner upon death. Most people will live in a relationship covered by the FLA at some point in their life and all people will die at some point. As Ben Franklin stated there are only two certain things in life: death and taxes. At some point in time, people living together are going to have to deal with these definitions. It is inevitable.

There is one area that is not covered by legislation or these definitions: property ownership amongst common law couples. All married person fall under the Matrimonial Property Act. There is no similar or analogous legislation for common law couples. In other words, there is no specific government regulation of what happens to property when common law couples get together or breakup. This area of the law is still regulated by the Laws of Equity and/or the Laws of Contract (which to confuse things even more — is the “common law” — not the common law applying to unmarried couple in a relationship but the general body of case law the has accumulated in Canada and other countries following that system of law — These are the laws found in the accumulation of case law). It is specifically called “constructive trust” or “resulting trust” or “unjust enrichment” law. All terms are correct depending on the context. How long does have to live together for these principles to apply? There is no set time. Rights and obligation can be in place when it is “just and equitable to do so”.

Private Definitions

The above speak to government definitions. Your insurance company, for example, may have a completely different definition to determine when your partner can get access to your dental plan. There is not set time or definition. One would need to ask their insurance provider or employer.

The Essential Elements of a Contract

A contract is a promise or promises, made by at least two parties, which is legally actionable if the promise is not kept. Everyday without realizing it we enter into numerous contracts.

In business it is essential that you recognize when you are entering a legally binding contract by knowing and identifying its 3 legal essentials: an offer, acceptance and consideration.

a. Offer and Acceptance

To reach a contract there is a type of negotiation process during which an offer is made, and accepted.

An offer is defined as:

“An intimation, by words or conduct, of a willingness to enter into a legally binding contract, and which in its terms expressly or impliedly indicates that it is to become binding on the offeree or as soon as it has been accepted by an act, forbearance or return promise on the part of the person whom it is addressed.”

An acceptance is defined as:

“The expression, by words or conduct, of assent to the terms of the offer in the manner prescribed or indicated by the offeror.”

Often the offer and acceptance process is a very simple and informal one, for example you drive your car to a gas pump where the proprietor has offered impliedly to sell gas at $1.00 per litre, you accept this offer by the act of filing your gas tank.

There are occasions where the offer and acceptance process is very complicated, involving many pages of terms constituting an offer, with the offer itself being revised many times through the negotiation process. For example, a lease agreement may be 50 pages long, and have taken months of offers, counter-offers, and negotiation to finally gain an acceptance, and finally becoming a legally binding agreement.

b. Consideration

To be a legally enforceable promise a contract must involve consideration. Consideration has been defined in the following manner:

“A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other”

A gratuitous promise, being a promise without consideration, is not enforceable in Canadian Law. By way of an example if Tom promises to give Brian $1,000.00, but doesn’t, Brian cannot sue Tom to enforce a contract, as Tom only gave a gratuitous promise. If Tom promises to give Brian $1,000.00 if he cuts Tom’s lawn, and Brian cuts the lawn, then consideration has occurred, and Tom has a legally enforceable obligation to pay $1,000.00.

Many times in business one comes across the following language:

“Now Therefore in consideration of the payment by X to Y of $1.00 and other good and valuable consideration, the payment of which is acknowledged by Y…”

This phrase in many contracts is meant to ensure that the legal requirement of consideration having been paid for a promise to be legally enforceable has been met. The token amount of $1.00 will be sufficient consideration for the promises made by Y, no matter how valuable those promises may be.

For more information contact Courtney Aarbo Barristers and Solicitors at www.aflawyers.caor info@aflawyers.ca or phone 403 571-5120 .

Providing Information to Assist in Business

Contract Terms

Contracts contain terms, which really embody what the agreement is. Some terms of agreements are characterized as “conditions” others are called “warranties”. Some terms in contracts are expressed, some are implied.

a) Conditions versus Warranties

Essential terms of agreements are called conditions, a breach of which entitles the innocent party to an option not completing his or her side of the deal and sue for damages, or complete the deal and sue for damages. Terms that are not essential, but are “subsidiary” or “collateral” are called warranties, which if broken only entitle the innocent party to receive damages, but does not give the right to not complete his or her side of the deal.

To illustrate what might be a condition versus warranty, your company has entered into an agreement to purchase a photocopier for $10,000.00 with a capacity to copy 10 pages per minute, and with a term that service would be provided within three hours of being called. The supplying of a photocopier would be a condition of the agreement.

The provision regarding service within three hours, would probably be a warranty such that if it took four hours to service, the contract could not be repudiated. In the event the copier could only copy eight pages per minute, that term might or might not be a condition.

Parties may agree that a contract term that one would thinkwould normally be a warranty be given the characteristic of a condition, by calling it a condition in the agreement. When entering into an agreement, you should be careful to describe essential matters as conditions, especially if without such a designation a judge might have trouble thinking of it as a condition. You should be particularly careful of terms that the other side is calling a condition.

If you are unsure if the breach of contract is a breach of condition or warranty, you may have to consult a lawyer. It you wrongly cancel a contract for a breach of warranty, the other side may sue you for damages.

b) Express versus Implied Terms

An express term is a term verbally or in writing set into the agreement. An implied term is a contract term that the parties have not expressly inserted, but the law will imply.

Implied terms are ones that need not be expressed, but are so obvious that it goes without saying, for example in the case of the photocopier purchase referred to above, an implied term might be that the machine could be plugged into the regular electrical system, or that it photocopied onto normal 11” x 14” paper.

Other implied terms may not be as obvious, but are implied by law.

For example in the Sale of Goods Act, R.S.A. 2000 C. S-2 it is implied by law into a contract for the sale of goods that:

i) the vendor has the right to sell the goods;

ii) the buyer shall have the goods free from claim by anyone else;

iii) if the sale is by description or sample that the goods will correspond with the description or sample;

iv) if the buyer lets the seller know he relies on the seller to give him goods fit for a particular purpose, that the goods will be fit for that purpose;

v) goods bought by description will be of “merchantable” quality.

For more information contact Courtney Aarbo Barristers and Solicitors at www.aflawyers.ca

or info@aflawyers.ca or phone 403 571-5120.

by Courtney Aarbo Barristers and Solicitors

Subject to the terms of the Statute of Frauds which is outline below, both written and verbal agreements are valid and enforceable.

The difficulty with a verbal agreement is that the terms of it may be very difficult to determine, as opposed to a written agreement. It is therefore always preferable to put an agreement in writing.

An agreement may be partially in writing, and partially verbal. There is great difficulty in this type of agreement however, in that the “Parol Evidence Rule” states that evidence of a verbal term that contradicts a written term of an agreement should be rejected.

Most written commercial agreements contain a term stating that the written agreement contains the whole of the agreement between the parties, and there have been no verbal representations. Obviously arguing for a verbal term in the face of such a provision is a difficult proposition.

If one bought a photocopier and there was a written term of the agreement that the Vendor would supply one box of photocopier paper, but the salesman promises two boxes, this promise would probably not be enforceable as the verbal two box promise contradicted the one box written provision. In addition the written contract probably has a term that it contains the entire agreement, thereby further frustrating the buyer’s argument that he or she was verbally promised two boxes.

The lesson to be learned is that while a verbal agreement may be enforceable, the far better practice is to prepare a written record of the agreement. Make sure that all terms of the agreement are accurately written into the document. Never rely on a verbal promise that is not incorporated into the written agreement. If the written agreement contains a term that it is the entire agreement with no verbal representations (which is a good practice to include), make doubly sure everything is included.

In the event that you have entered into a verbal agreement, you should prepare a letter/memo setting out in detail all the terms that were agreed to, and place it on your file. It is also a good practice to forward a copy of the letter/memo to the other contracting party “confirming” what was agreed. If the other contracting party does not contact you contradicting your letter/memo, it is likely that a Court will place great reliance on it as accurately embodying the deal.

Sometimes your written contract will be formed by a series of letters, faxes and or emails. In other words the contract is not incorporated into a nice 2 or 3 document. Make certain that the pieces of paper that form your “less formal” agreement are all put together and kept in a secure location.

The Statute of Frauds enacted in 1677 is still in force in Alberta and it sets out which contract MUST be in writing. Traditionally, the Statute of Frauds requires a signed writing in the following circumstances:

Contracts in consideration of marriage. This provision covers prenuptial agreements.
Contracts that cannot be performed within one year. However, contracts of indefinite duration do not fall under the statute of frauds regardless of how long the performance actually takes.
Contracts for the transfer of an interest in land. This applies not only to a contract to sell land but also to any other contract in which land or an interest in it is disposed, such as the grant of a mortgage or an easement.
Contracts by the executor of a will to pay a debt of the estate with his own money.
Contracts for the sale of goods involving a purchase price of $50 or more in Alberta.
Contracts in which one party becomes a surety (acts as guarantor) for another party’s debt or other obligation.

For more information contact Courtney Aarbo Barristers and Solicitors at www.aflawyers.caor info@aflawyers.ca or phone 403 571-5120. .

EMPLOYMANT LAW UPDATE

RESTRICTIVE CONVENANTS AND FIDUCIARY DUTIES

by DARRYL AARBO, BARRISTER AND SOLICITOR

In the recent Alberta Court of Appeal decision of Evans v The Sports Corporation, 2013 ABCA 14 (CanLII) the Court clarified and revisited restrictive covenants and fiduciary duties. There is nothing new in this decision, but it is always extremely helpful to revisit these areas in a specific fact scenario to better understand these concepts.

No surprises on the restrictive covenant issue. The Court confirms that the enforceability of these agreements are tough, to say the least. In this case the Court of Appeal overturned the trail decision that was going to enforce it. The Court of Appeal went back to its decision in Globex Foreign Exchange Corp. v. Kelcher, 2011 ABCA 240 to support its position. When considering whether the agreement is reasonable and enforceable the clause, among many other things, must be unambiguous. Again, being unambiguous is really one of many harsh tests that these clauses must pass.

The agreement in this case failed on this basis. It found its plain meaning to be “ambiguous and reach undeterminable.” It could not determine with certainty which clients were covered by the clause.

This ruling is consistent with a long line of cases that make the enforcement of restrictive covenants unenforceable. Makes one wonder why employers even bother anymore, except in the rarest of cases.

The next issue was fiduciary duties. This case is again consistent with former rulings out of this Court, but again it is always good to revisit the concepts in particular instances. The key principle in play here is that one does not need to be an executive or high ranking officer of a company, or a director or a shareholder. It found that: “…the status of a fiduciary does not emanate from holding corporate office. Rather, it relates to the responsibilities entrusted to an employee, including any attendant power to affect the economic interests of the company.”

A final issue the Court deals with is whether the employee was relieved of his fiduciary duties when he was “wrongfully dismissed”. The Court, without much discussion at all, distinguished the Alberta trial decision of ADM Measurements Ltd v Bullet Electric Ltd, by simply stating that this situation “is much different”. It then goes on to state: “…we (do not) subscribe to the view that a termination of employment will automatically relieve a former employee of ongoing fiduciary obligations.”

The above quotes are given in more details below. All citations form Canlii.

Background

[7]In 1999, Evans approached TSC about the possibility of becoming a sports agent. Trained as a lawyer, Evans had been working for six years as the director of legal and business affairs for the Professional Hockey Players’ Association. At a meeting during the NHL All-Star game in 2000, Evans was invited to join TSC. He was seen as someone who could take over the recruitment and management of the Czech and Slovak hockey players from Kotlowitz.

[8]Evans moved from Toronto to Edmonton and took over the Czech-Slovak Pipeline. The parties then, with the help of lawyers, negotiated an employment agreement with a three-year term. The contract contained the following restrictive covenant:

7.Non-Disclosure, Developments, and Unfair Competition

Evans acknowledges that he is a key employee of the Company and that in the course of his employment with the Company, he has been and will be entrusted with, has developed and will develop, and has obtained and will obtain confidential information and trade secrets concerning the business of the Company, the disclosure of any of which to the Company’s competitors or the general public would be highly detrimental to the best interests of the Company. Evans further acknowledges and agrees that the right to maintain confidential all of such confidential information and trade secrets constitutes a proprietary right which the Company is entitled to protect. Accordingly, Evans covenants and agrees with the Company that:

(b) he will not, either during the continuance of his employment under this agreement or for a period of 24 months thereafter, obtain or attempt to obtain the withdrawal from the Company of any employees of the Company.

(c) he will not, either during the continuance of his employment or for a period of 24 months thereafter, directly or indirectly through others, call on, solicit, divert or take away or attempts to call on, solicit, divert or take away any client of the Company which has been a client of the Company or any other company to whom Evans provided any services related to the Company’s business. This provision shall not apply to those clients of the Company from whom Evans has received or is owed payments under section 4 of this agreement.

(j) Evans acknowledges and agrees that any revenue generated by Evans’ activities which contravene paragraphs 7(a), (b), (c) (d) and (e) of this agreement will unjustly enrich Evans or another third party and will thereby create a trust in favour of the Company in relation to the revenue referenced in this paragraph.

Evans left his employer and continued to work with his clients and in particular, client sourced before his employment.

Restrictive Covenant

[27] … The majority judgment in Globex emphasized the requirement that a restrictive covenant be unambiguous when considering its reasonableness. The majority stated, at paras 19-20:

If it is impossible to predict when you are breaching a restrictive covenant, it is in essence unreasonable.

Second, the clause is ambiguous in another way. Read literally, all it prohibited was soliciting customers “for” any client of the appellant. There is no suggestion that the respondents’ new employer was a client of the appellant. It seems unlikely this is what the clause was meant to prohibit. But the example demonstrates the difficulty in ascertaining the reach of the clause.

[28]In this case, the non-solicitation clause in 7(c) is directed at “any client of the Company which has been a client of the Company or any other company to whom Evans provided any services related to the Company’s business”. It seems likely that this provision is aimed at prohibiting solicitation of other people previously given services by Evans while they were clients of this or a related company. However, the clause can also be read as prohibiting solicitation of past clients of TSC. It is difficult to understand why it would be reasonable to restrain Evans from soliciting past clients which have already left the company.

[29]In short, we are not satisfied that the restrictive covenant in clause 7(c) is plain or readily interpretable. Rather, its meaning is ambiguous and its reach undeterminable. As observed by the Supreme Court in Shafron v KRG Insurance Brokers (Western) Inc, 2009 SCC 6 (CanLII), 2009 SCC 6, [2009] 1 SCR 157, “a restrictive covenant is prima facie unenforceable unless it is shown to be reasonable. However, if the covenant is ambiguous, in the sense that what is prohibited is not clear as to activity, time, or geography, it is not possible to demonstrate that it is reasonable” (para 43).

Fiduciary Duties

[34]Evans correctly points out that he was neither a director nor shareholder of TSC, and that he could not hire or promote any employee. As this court pointed out, however, in Anderson, Smyth & Kelly Custom Brokers Ltd v World Wide custom Brokers Ltd, 1996 ABCA 169 (CanLII), 1996 ABCA 169 at para 15, 39 Alta LR (3d) 411, the status of a fiduciary does not emanate from holding corporate office. Rather, it relates to the responsibilities entrusted to an employee, including any attendant power to affect the economic interests of the company. In this case, while the Eastern European market was merely a segment of the overall business operations of TSC, Evans was entrusted with primary responsibility for its successful operation. TSC paid Henys and Kadlecek to find and recruit players who were then turned over to Evans. Evans could then use the power and influence arising from the personal relationship developed with these players, either for the benefit of TSC, or for himself. The great majority of the revenues flowing to Evans and his company, after he left TSC, were from the players originally entrusted to his care by TSC.

[35]While the trial judge did not frame it this way, the situation is akin to the appropriation of a corporate opportunity; namely, players entrusted to Evans to develop on behalf of TSC were diverted to his own benefit. We are satisfied, therefore, that the trial judge did not err in finding Evans a fiduciary in the circumstances of this case.

[36]Evans submits that even if he had fiduciary obligations, they were relieved when he was “wrongfully dismissed” on April 12, 2006. He cites ADM Measurements Ltd v Bullet Electric Ltd, 2012 ABQB 150 (CanLII), 2012 ABQB 150, 9 Alta LR (5th) 278, wherein the court concluded that, even if an employee is a fiduciary, any fiduciary obligation would end when the employee “was constructively dismissed without cause”(para 117).

[37]In our view, Evans’situation is much different than that of the employee in ADM, nor do we subscribe to the view that a termination of employment will automatically relieve a former employee of ongoing fiduciary obligations. here, it was only after Evans gave notice that he would be departing on April 17 that TSC required that he immediately leave his office and asserted that it had no further need for his services. While we do not condone the failure of TSC to make payment for the five-day balance of the term, it is doubtful that the breach to make payment constituted a “wrongful dismissal” and, in any event, involved no repudiation of the employment contract. In these circumstances, TSC’s relatively minor breach of contract is irrelevant to Evans’ongoing fiduciary obligations, and does not serve to relieve him of them.

Proper Signing of Agreements

By: Courtney Aarbo, Barristers and Solicitors

Providing Information to Assist in Business

a) Sole Proprietor, Partnership, or Corporation

There are basically three types of business entity:

· a sole proprietorship;

· a partnership;

· a corporation.

The sole proprietor is a business entity owned by a person who as the owner has personal liability for all that that business does. The sole proprietorship may be operating under a registered business name, for “Quick and Cheap Computing”, but the owner “Phil Jones” is the business. If you had to sue on an agreement, you would sue “Phil Jones” personally.

A partnership is a business entity owned by two or more separate legal entities who generally have joint liability for all that the business does. The business may operate under a registered business name for example “Quick and Cheap Computing”, but be owned by the two partners “Phil Jones” and “John Cheap”, who each have personal liability for the business debt. Usually the partners will have a written (or verbal) agreement relating to the establishment of the partnership.

A Corporation is a separate legal entity from its owners, who are the stockholders. Debt of the corporation is not normally a personal liability of the individual stockholders. If “Quick and Cheap Computing Inc.” runs up $100,000.00 of debts, the stockholders are not personally liable. The Corporation should be looked upon as if it is a separate legal person, which needs the help of other persons to enter legal relations, which other persons have the corporate signing authority.

It is essential that you know, and properly describe the parties to a contract. Always make sure that the other side to a contract knows you act on behalf of a corporation if that is the case. Always find out who or what you are contracting with. If you don’t know, or wish to check, any registry shop will be able to search a business name to determine if it is a corporation, or simply a registered name, or neither. Failure to properly indicate one is acting on behalf of a corporation will likely result in personal liability under the contract for the person signing it.

b) Signing of Contract

In order for contracts to be binding upon all parties, it is in their best interest that they be signed properly. As most documents are not prepared by lawyers, it is necessary for people in business to make sure proper signing occurs.

If you are dealing with a corporate entity, it will always end its name with one of the words or suffixes Company, Co., Limited, Ltd., Corporation, Corp., or Incorporated, Inc.

What follows is a reference table for proper description and execution of documents:

Type of Business	Name Description	Execution

Sole Proprietor	Phil Jones carrying on business under the name “Quick and Cheap Computing”	_______ ________________ Witness Phil Jones

Partnership	Phil Jones and John Cheap carrying on business in Partnership under the name “Quick and Cheap Computing”	_______ ________________ Witness Phil Jones _______ ________________ Witness John Cheap

Corporation	“Quick and Cheap Computing Inc.”	“Quick and Cheap Computing” Inc. Per: ___________________ Phil Jones (President) Per: __________________ John Cheap (Treasurer)

It is always good practice to check identification of the person signing an agreement especially if one is witnessing his or her signature. Corporate seals are not essential when a corporation is signing, but if a seal is not being used one should make sure the persons signing for the corporation has proper signing authority. One is usually safe if the signing person is an officer or director of the corporation (although not always). A registry shop corporate search should indicate directors and officers. If in doubt verify corporate signing authority.

It is also a good practice for the parties to initial each page of the contract.

c) Alteration of Contracts

It is essential that any alterations to contracts be done in writing. All too often the parties agree to an amendment of their agreement, but fail to properly document it.

Properly documenting an alteration may involve making a simple change to the original agreement by crossing a few words out and then having the signing parties initial the change and date it. In a more complex alteration, a separate written document or an “Addendum” will need to be prepared. An addendum is attached to the original agreement and initialed by all parties.

A verbal agreement may cause great difficulty. Similarly a verbal alteration or amendment to a written agreement may be unenforceable. Remember that the written agreement likely contains the term that it contains the whole agreement. Under the Parol Evidence Rule, verbal contract terms should not be allowed to contradict written terms.

A review of the original agreement may reveal a term that states how amendments or alterations are made. If there is such a term make sure it is followed precisely.

For more information contact Courtney Aarbo Barristers and Solicitors at www.aflawyers.caor info@aflawyers.ca or phone 403 571-5120.

Common Contract Format

By: Gary Courtney, Barrister and Solicitor,

Providing Information to Assist in Business

Most commercial agreements prepared by lawyers, or prepared from a lawyer’s precedent, have six parts, each with their own purpose:

a) Date

Generally the date of the agreement will be the first thing found in any agreement. It should be the date the agreement is signed. It is usually the date the agreement is effective.

From time to time one may find the following term:

“This Agreement dated the 5^th day of May, 2012 to be effective from the 1^stday of January, 2012.”

In other words the term is backdating the agreement. The above term is much preferred to simply dating the Agreement for January 1^st, 2012, when in fact it is not signed until May 5^th.

There is nothing wrong with the above wording having the effect of backdating an agreement, as long as the agreement was in fact in place on January 1, 2012, but simply took about four months to properly document.

A problem arises if there was no agreement on January 1, 2012, as in reality the agreement was not struck until May. In other words we do not have a proper effective date of an agreement that took a few months to document, but we have a fictitious backdating of an agreement reached in May. In this case the contracting parties may be committing a fraud if for example the reason for backdating is to obtain some tax advantage.

b) Parties

The second part of the contract should accurately set out the parties to the agreement. Make sure the name of a corporate party is accurately set out.

c) Preamble

Most contracts, especially if the document is a lengthy one, will set out a preamble.

The preamble is meant to set out the background for the parties entering into an agreement. Its purpose is to assist in explaining what will be coming next, i.e., what has been agreed. It also often contains a standard clause acknowledging the flow of consideration necessary to form a binding agreement.

In addition to the Preamble’s position in the contract document, following the listing of the “Parties”, one can often recognize the preamble by the use of the word “Whereas”.

A typical example is as follows:

“Whereas:

1. Sally Smith is the owner of 50 shares of A.B.C. Investments Ltd. which she wishes to sell;

2. John Jones wishes to purchase 50 shares of A.B.C. Investments Ltd.

Now Therefore in return for the sum of $1.00 paid by John Jones to Sally Smith and other good and valuable consideration contained herein the payment and receipt of which is acknowledged:

IT IS AGREED”

d) What is Agreed

The next part of the typical agreement will generally be the setting out of the main points of the agreement. If the contracting parties were asked what has been agreed, most or all would be incorporated into this part of the agreement.

Usually this part of the contract will state what is to be done, when it is to be done, and how it is to be done.

This part might state the following:

1. Sally Smith agrees to sell and transfer to John Jones all her interest and title to 50 shares of A.B.C. Investments Ltd. for a price of $1,000.00, or $20.00 per share.

2. John Jones will pay to Sally Smith the sum of $1,000.00 or $20.00 per share for the 50 shares of A.B.C. Investments Ltd., which sum will be paid on or before May 31, 2000, by certified cheque payable in trust for Sally Smith to Courtney Aarbo, Barristers and Solicitors, 1131 Kensington Road N.W. (3^rd Floor), Calgary, Alberta, T2P 3P4.

3. On receipt of payment for the shares Sally Smith will forthwith effect the share transfer by causing a transfer of the share certificate to John Jones to be effected and registered on the share register of A.B.C. Investments Ltd.

e) Standard Clauses

The next parts of a standard agreement are the standard clauses, sometimes referred to as “the fine print”. The section is typically thought of as the part of the agreement that the parties’ lawyers would likely put into an agreement. It may be much longer than the rest of the agreement. The terms are difficult to understand. Unfortunately the parties often do not read these sections of the agreement prior to signing it.

In the share transfer agreement that we have been using as an example this area of the agreement would likely contain terms covering the following areas:

· Extensive provisions regarding representations and warranties that Sally Smith would give to John Jones concerning her having good and clear title to the shares, her having the right to transfer the shares, and even the financial position of the company itself.

· Detailed particulars of further acts which must be done to effect the share transfer.

· Conditions precedent to the share transfer.

· Termination of the agreement.

· Amendment of the agreement.

· Interest for late payment.

· Where notices can be sent.

· Arbitration of dispute clause.

· “Standard” closing clauses such as the clause that the written agreement contains the whole agreement.

A further example that most persons can relate to is a mortgage. Most individuals will review their mortgage, to the extent of the first few clauses setting out the amount borrowed, the interest rate, and the payment terms. A particularly studious person may review their early payment provision. With respect to the other 80% of the mortgage, few take the time to review it.

If people did review their whole mortgage, they would find shocking terms, such as that they were supposed to get permission of the mortgage company for renovations, and provide copies of their insurance policies.

Persons in business should be aware that the “Fine Print” generally contains crucial terms which should be reviewed and understood before signing. In the event the agreement is signed, and one of the “Fine Print” terms comes back to haunt the signatory, there is no defense to a claim based on not having read the contract.

In the real world of business it is difficult to find the time, or have the patience to review all the “Fine Print”. If the contract is of great importance then likely it will be reviewed by the business’ lawyer, in which case one can often rely on the lawyer to bring any problem to your attention. Due to cost concerns, it is not always possible to hire a lawyer, but if that decision is made, it will be even more critical for the business person to take the time to review the agreement thoroughly.

The last part of any agreement is the portion where the parties sign.

For more information contact Courtney Aarbo Barristers and Solicitors at www.aflawyers.caor info@aflawyers.ca or phone 403 571-5120.

BUSINESS ACCOUNT COLLECTION

In small businesses, being paid for ones work, being only partially paid, or having to expand energy and money to collect an account is a huge detriment to ones bottom line. In an effort to minimize your difficulties Courtney Aarbo Barristers and Solicitors (www.aflawyers.ca) is pleased to provide you with;

10 Tips for account Collection

If your business is not being ‘paid up front’, then you are in the business of extending credit and you should try to think a bit like your bank.

If your business is extending significant credit, have the customer fill out a credit application, which will hopefully contain information about the customer’s address, place of employment, and bank. All this information way be invaluable in later trying to chase the customer for payment.

If possible obtain a credit card number with an authorization to use it to pay for the services once completed.

If worried about a customer’s credit worthiness do some basic checks on him or her. For example our office or a registry shop can order a ‘Personal Property Registry Search’ at a cost of only a few dollars. This search will show what creditors are registered against the customer and against his or her assets. It will also show registered writs of enforcement by other creditors who have obtained Court Judgments. Obviously doing business with a poor credit risk is to be avoided.

If possible prepare a contract with the customer and make sure it is properly signed. The contract should specify the ‘terms of payment’ and what interest is to be paid on overdue accounts. Note: Simply putting an interest rate on the bottom of an invoice (for example 2% per month) is not legally enforceable. An interest rate must be agreed to in writing in a contract in advance of the contract’s performance.

Make sure any contract contains a term that the customer will repay to the business any and all costs of collecting an account, including lawyer’s fees and disbursements on a solicitor/ client basis. Hopefully if you need to hire a lawyer to collect an account, the cost can be added to the claim.

Be sure to clearly and carefully document on invoices the services which have been done or provided and the charges and credits on the account. Too often unclear accounting results in a customer not paying on a timely basis, or at all.

Be sure that any changes to the work being done or product provided is carefully documented, preferably with the customer acknowledging the change in writing. Surprise changes in a final accounting often result in payment problems. If an account has to be sued on to collect an improperly documented change, a judgment may not be awarded by a judge.

Keep a complete file reflecting what has been done for the customer. For example memos of important conversations or copies of emails confirming important events provide a good record. This documentation will be very useful in settlement discussions or court proceedings.

Sit down with a customer to discuss in a calm straightforward manner any difficulties he or she has with the services or the accounting. Often misunderstandings can be worked through before positions harden on payment. Often a small compromise on an account is much better than a dragged out fight with a customer, sapping your time and energy, and possibly incurring legal bills.

The above points deal largely with account collection before the need to come into a lawyers office. Frankly the most positive outcome for a business is not to have to hire a lawyer for account collection. While we are happy to provide legal services for this purpose, we would prefer to see accounts all paid on time leaving business to retain our services for more positive purposes.

We hope you find the above to be helpful.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.aflawyers.ca

SELLING AND PURCHASING A BUSINESS

At Courtney Aarbo (www.aflawyers.ca) we attempt to be proactive in providing some general information that may assist businesses now or at some point in the future. We hope you find the information helpful.

Obviously at some point in the life of a business, an owner may be contemplating selling the business or buying another business.

No matter whether one is selling or buying a business, it is wise to consider the following:

Early Planning– particularly when one is selling a business, it is important to get one’s accountant and lawyer involved as soon as possible.

A very important consideration in a sale is for the “Seller” to be able to utilize the $750,000.00 “Small Business Capital Gains Exemption”. At least 2 years before a sale, an owner should consult his or her accountant to determine if the business would qualify. If not, there is a likelihood that steps can be taken to bring the business into line with CRA requirements before the sale. If you don’t qualify this very large tax deduction could be lost.

Structuring a Deal- all too often clients will present an agreement that has not been structured properly from their point of view or in their best interests.

One example is how the sale/purchase price is to be paid. There should be a deposit posted. In an asset sale the purchase price should be properly allocated to assets and goodwill from a tax stand point. If the Seller is going to carry some of the purchase price it is crucial that the loan to the Buyer has been properly set up, been properly secured, and things such as personal guarantees for the loan considered.

Share vs Asset Sales- there is a major difference from both Sellers and Buyers viewpoint between a transaction where the Seller signs over his or her shares in the corporation, verses selling assets and goodwill. It is extremely important for both sides to consult their accountants and legal advisers on the point, before they commit to a deal. Some of the considerations are;

• Business liabilities- in a properly documented purchase of assets, generally speaking the Buyer takes them free and clear of the Seller’s secured or unsecured or unknown creditors. With a share purchase, the Buyer takes over the corporate Seller by becoming the shareholder, but also will inherit any of that corporations problems- known and unknown. Generally it is a bit of a risk for Buyers.

• Tax issues- if a Seller can take advantage of the $750,000.00 Small Business Capital Gains Exemption by a share sale, that is a clear benefit. A Buyer may rather wish to buy assets so that the Buyer gains ability to depreciate the assets on a yearly tax filing basis.

• Existing contracts- generally it is easier to assume the business contracts of an existing corporation by buying its shares, as that corporation legally continues to run its business, with the existing contracts. When buying assets this is not the case and there will be a greater need to deal with any existing contracts by having to contact and possibly negotiate new agreements or assignments of old agreements to the new owner.

• Employees- in a share sale, the corporate employer continues as the employer. Employees continue in their jobs. If the Buyer doesn’t want an employee, special terms may need to be agreed to where the Seller terminates the employee and pays severance, otherwise the Buyer will be responsible to pay full severance sometime in the future. In an asset sale, the Seller no longer runs the business, and generally terminates all employees, paying them severance. It is usually agreed that the Buyer will hire back the employees it wants to keep- but severance will still have to be paid by the Seller. Obviously the issue of employees needs to be carefully addressed in the deal’s negotiation stage, not as an after thought.

Conditions of the Deal- often there will be several conditions put in the agreement, which if not fulfilled, will allow the Buyer to not close. It is very important that these conditions be kept to a minimum, and are reasonable from the Seller’s perspective. If not, the Buyer is given an ability to walk away from the deal without the Seller having any recourse. It is very important to the Buyer that critical matters are made conditions.

Reviewing the Lease- the premises lease almost always needs to be taken over or negotiated by the Buyer. The lease terms need to be reviewed early in the process. Usually, being satisfied about the lease is a condition of the sale.

Non- competition/ Non-solicitation Clauses- these can be critical to both sides. Obviously the Buyer does not wish to buy a business, and find its value diminished by the Seller competing. The Seller does not want to be prevented from making a living in the future. A reasonable compromise of the 2 competing interests needs to be incorporated.

Obviously, the above points only scratch the service of these issues and can only be properly dealt with by a full consultation. We hope you agree however, that it is important to be aware of all of them in any sale/purchase process. The critical piece of advice that we do urge you to take is the need to consult accountants and lawyers early in the process, before mistakes that cannot be corrected are made.

If we can be of further assistance we would be pleased to speak with you.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.aflawyers.ca

Providing Information to Assist Small Businesses

By Courtney Aarbo Barristers & Solicitors

It has been our experience at Courtney Aarbo that in sales of rental property there is some confusion about what is required to be done by seller’s to comply with the “Residential Tenancies Act of Alberta”. Failing to comply with this legislation can result in great complications or even not being able to close the real estate deal.

As a first point one should note clause 2 (1) of the Act, which exempts certain types of rental properties from its provisions. These include rentals of mobile homes and rooms rental within the landlord’s home (boarders).

Assuming the Act applies, and the Seller is attempting to sell a home or condo that is rented with either a yearly or monthly lease, and the Buyer is planning to move in as apposed to continuing to rent, then the Seller is going to need to properly terminate the lease as of the sale closing date, or earlier. Failure to do so will breach the Seller’s obligation to provide the Buyer vacant possession under the contract.

If the Lease is a ‘month to month’ lease then section 8 (1) (b) of the Act requires the landlord (the Seller) to give the tenant notice on or before “the first day of the notice period.” The notice period is defined as being 3 consecutive ‘Tenancy months’. By way of example, if the sale is to close on July 1^st, then the month to month tenant must be given proper notice to vacate by no later than April 1^st.

If the Lease is a yearly tenancy then section 9 of the Act requires that a landlord give notice to the tenant “on or before the 90^th day before the last day of the tenancy year”, to be effective at the end of the lease year. Section 10 (c) does allow a notice to terminate a yearly tenancy that is late to be effective 90 days later so long as it is served before the end of the tenancy year. By way of example, if the lease year ends June 30, a notice would need to be served on the Tenant on or before April 2^nd to be effective June 30^th. If however it was served on June 1^st, it would be effective 90 days later. If the landlord (the Seller) did not serve the tenant until July 1^st, into a new tenancy year, the notice would not terminate the tenancy until June 30^th the following year- obviously a problem if the real estate deal close date is only one month later.

Please note that by section 10 of the Act the notice to terminate must

a) be in writing;

b) be signed by the person giving the notice (landlord) or the landlord’s agent;

c) set out the reason for terminating the tenancy example: a sale of the property;

d) identify the premises for which the notice is being served; and

e) state the date on which the tenancy is to terminate.

Service of the notice can be effected under Section 57 of the Act by personal service, registered mail, or certified mail. If the landlord cannot serve because the tenant is absent from the premises, it can be left with an adult or posted to the premises door.

Of course if the Buyer is purchasing the property with the idea of not continuing to rent it, then provided the Buyer wants the existing tenant, no notice to terminate needs to be given. The Seller will however have to assigned the tenancy agreement to the Buyer, notify the Tenant of his or her new landlord, and properly adjust on closing for rent paid and damage deposits. These adjustments are usually calculated by the Seller and Buyer’s respective lawyers.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4or info@aflawyers.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors
www.aflawyers.ca

Commercial Lease Basics

By Courtney Aarbo, Barristers & Solicitors

Providing Information to Assist Small Businesses

One of the most important, and costly agreements entered into by virtually all businesses new and old, is a commercial lease for their premises.

The standard lease agreement for commercial space will almost always be the longest and most difficult to understand “standard form” agreement one will have to deal with. The lease agreement of the 50 page variety will almost without exception be extremely one sided providing the Landlord with everything conceivable, and the Tenant with the minimum possible protection.

Despite what the leasing agent of the landlord lets on, the Tenant has a lot of bargaining power. Many of the one sided terms in the standard form lease blank can be eliminated or amended, resulting in large savings to the Tenant.

Given all these factors it is a very wise investment to retain professional help such as a lease broker and / or lawyer to help.

What follows are general recommendationswhen dealing with lease negotiations and the lease itself:

The commercial leasing agent, while useful to advise you efficiently as to the rental space on the market, is not the best person to provide you with advice on whether you are getting a “good deal”. Remember, the leasing agent is paid usually a percentage commission by the Landlord, only if he rents the space.

It is critical that you have an idea as to the market rate for space before you start bargaining on a specific location. Look around. Make inquiries. You should approach your search in a fashion similar to how you would look for a house.

Everything is negotiable (within reason).

Gross rent usually means the total amount the tenant will pay to the Landlord- it is a fixed sum. Net rent plus operating costs is not a fixed sum. The net rent to the Landlord (his “profit”) is fixed, but the operating costs will fluctuate (usually going up) through the lease term. Often the operating costs are more than the net rent. With Gross rent you should have a known fixed sum per month for you to pay during the entire term.

Most commercial leases involve net rent plus operating costs. It is crucial that you obtain a history of the operating costs for the space and that you have a good assurance as to what to expect during the lease term. For example, if a property tax reassessment is in the works- it has been known for operating costs to double in one year due to property tax increases. It is critical that you obtain a detailed definition of what is included in operating costs. Sometimes Landlords try to charge inappropriate items as operating costs. It is critical that the lease stipulates that the tenant get a proper account of the operating cost charges each year.

If you operate through a corporation, personal guarantees of the rent payment by your corporation are almost always requested, but can frequently be eliminated or reduced in negotiations. Remember that you set up a corporation to avoid personal liability, so it is obviously unwise to lose the protection through a huge personal guarantee.

Tenant inducements like several “free” months rent, or money towards tenant improvements are regularly given by Landlords (and appreciated by tenants starting out in business). Nothing comes “free” however, as most Landlords will have calculated the payback for the tenant inducements by requiring higher rent during the balance of the term. If you don’t require tenant inducements, then require lower rent.

Most commercial leases involve a 5 or 6 page “Offer to Lease” and a 50 page lease (to be signed later) The Offer to Lease is a binding legal document that may in fact constitute a binding lease. Most major terms are set out in the offer. Going to your lawyer for advice on matters covered in the Offer to Lease, after it is signed is too late. At a minimum make sure the offer contains a term that it is subject to approval by your lawyer, and that your lawyer can propose reasonable amendments to the lease itself. Better yet, call the lawyer in during negotiations, where he or she can do the most good.

Get any “verbal” assurance put into the offer and lease. Virtually all offers and leases have a clause that says there have been no representations except what is in the document in writing. If it is not written in, you may not get the concession.

That 50 page document which the leasing agent says is “standard” contains 50 pages of detailed legal clauses, many of which you will have difficulty understanding and many of which should be eliminated or amended. These clauses are important. The fact that it is the “Landlord’s Standard Lease” should tell you that it is written for the Landlord’s benefit, not yours. Have your lawyer review it before you sign it.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4or info@courtneyaarbo,ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors
www.aflawyers.ca

Ten Common Problem Terms in Commercial Leases

By Gary Courtney, Barristers & Solicitors

Providing Information to Assist Small Businesses

One of the important and costly agreements entered into by virtually all businesses new and old is a commercial lease for their premises.

What follows is some commentary on terms of commercial leases that often cause tenants difficulty:

Commencement of the Lease Term. When reviewing a lease one will normally find that a Landlord will only agree to use its best efforts to deliver the premises on a specific date, and be released from liability for any damages which may arise as a result of late possession. For the tenant a fixed possession date might be critical. There should be a provision setting an outside date by which possession must be delivered. The commencement date should provide the Tenant ample time move in and open for business.

Percentage Rent. Many Leases contain provisions for additional rent to be paid based upon a percentage of gross sales. The definition of gross sales is critical and those items included and excluded from gross sales should be carefully reviewed. Better yet, try to have this clause omitted.

Operating/ Additional Cost. The definition of these costs is critical to the overall costs to the tenant of the lease, as these cost payments can be substantial. The definition of occupancy costs should be reviewed carefully to ensure that there is no double charging, for example, by including both a depreciation charge and a capital cost replacement charge for parts of the building that need replacing. Care should be taken to ensure that the portion payable by the tenant is the proportion the leased premises bears to the whole of the rented and rentable area of the building. In the event there is a vacant space in the building, the Landlord should bear the common area costs in respect of such vacant area. It is also essential that your agreement provide proper and full accounting of the claimed costs.

Insurance. The types and dollar levels of insurance required of the tenant should be reviewed with insurance advisors to confirm a tenant is able to comply with such requirements.

Caveats. Commercial Leases normally prohibit the tenant from filing a copy of the Lease with the Land Titles Office. This provisions is inserted as Landlords do not wish the business terms of each Lease transaction to be available for public scrutiny. However, the Lease should not prevent the tenant from filing a Caveat at Land Titles on title to the property to protect its interest in the lease, (only available if the Lease term is three years or more). It is critical to register this caveat or else you risk having your lease ignored by a future buyer or financier of the property.

Subletting and Assignment. Any prohibitions that require a landlord’s consent should be qualified by the proviso that such consent will not be unreasonably withheld. These clauses are very complex and need to be carefully reviewed. These clauses become critical if the tenant wants to move location for example.

Option to Renew. Should be contained in virtually all Leases. The Option to Renew usually provides that if the lease is renewed for a new term it will be on the same terns as the initial lease, except for the amount of rent. An option to renew should provide for some fair method of determining the rent for the new term.

Default. All default provisions (except perhaps for a default in the payment of rent) should be qualified by the requirement for the landlord to give notice to the tenant and provide the tenant with a reasonable period of time within which to remedy any default before the landlord is permitted to exercise its remedies under the lease.

Demolition Clause (Sale Clause). Allows for the termination of the lease in case of demolition or sale of the premises. If the landlord wants one the tenant should investigate what is happening at the property and perhaps argue for terms compensating him if the clauses are acted upon.

Environmental Clauses. These terms should be carefully reviewed to insure the tenant does not have to pay for the clean up of environmental problems for which it is not a fault.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4or info@aflawyers.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.aflawyers.ca

Insurance Contracts

By Gary Courtney, Barrister & Solicitor

Providing Information to Assist Small Businesses

Typically most businesses will have fire insurance, business interruption insurance, and general liability insurance. Less common types of insurance include motor vehicle insurance, life insurance for owners and employees, and disability insurance for owners and employees.

Obviously insurance contracts can be critical to the life of one’s business, or for yours or your employees well being. For virtually all of us, the only time insurance policies are gone through in detail is when a claim is being made. Sometimes the policy will first be reviewed when the insurance company has denied a claim.

Insurance policies tend to be very long, very difficult to read and understand, and have a good deal of “fine print”. In spite of this, these agreements need to be thoroughly reviewed BEFORE one needs to make a claim. If is important for any business to obtain the advice of a good insurance broker or agent, with experience in assisting business owners.

If one does not have the time or inclination to review insurance policies exhaustively, one can lessen the risk of not obtaining proper coverage by making it clear to the insurance agent/broker, what kind of insurance coverage is desired, to cover what eventualities. Your request for advice from the agent/broker should be in writing, keeping a copy for yourself. In the event that a claim is made for insurance coverage of the kind you instructed the agent/broker you wanted, and it turns out that coverage was not provided, it is possible that one will be able to claim negligence against the agent/broker,

It is good practice to ask the insurance agent/broker to explain (in writing), the exclusions under the insurance policies. In the event your claim is later denied for an exclusion that was not set out, one may be able to successfully claim against the agent/broker, or insurance company for coverage.

Never give false information, or omit to provide relevant information to an insurance company. Information that one fails to mention in an insurance application, often will be grounds for a denial of coverage when a claim is made.

It is good practice to review the adequacy of insurance coverage periodically as one’s business grows and changes.

In the event that a claim for insurance is denied, consult with a lawyer. When one makes a claim on insurance, one becomes a liability to the insurance company, which liability the insurance company often attempts to minimize. Sometimes an over zealous insurance adjuster will interpret terms of the insurance contract in ways that will not stand up if challenged. It may be that a letter from the lawyer will change the adjusters decision. Courts generally will interpret provisions of insurance agreements strictly against the insurance company.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta T2N 3P4or info@aflawyers.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.aflawyers.ca

Unanimous Shareholder’s Agreements

By Gary Courtney, Barrister & Solicitor

A typical unanimous shareholders agreement (USA) is an agreement signed by some or all (usually all) shareholders of a private corporation to deal with certain issues that may come up in the life of a corporation in the manner agreed to.

To back up a bit, in a corporation with no USA, it’s day to day affairs are run by a board of directors, who are elected annually by voting shareholders. The power of the shareholders to manage the corporation is basically limited to being able to vote in or out a director, and having to approve by a 2/3rds vote, fundamental changes to the Articles of Incorporation of the corporation (see the Alberta Business Corporations Act).

A typical USA will take some powers away from the board of directors and give them instead to the shareholders to approve. A ‘shareholders agreement’ can set out that certain action requires unanimous consent or less than unanimity of shareholders is needed red (for example 67%).

Issues to be voted on by shareholders often include ones such as going into debt, spending money above a certain amount, issuing new shares, bringing in new shareholders, moving business locations, etc… Shareholders agreements also typically may deal with long term major issues, like;

– How personal guarantees by shareholders of corporate debt will be handled, and that risk shared;

– Provide remaining shareholders with a right of first refusal to buy a departing shareholders shares;

– Provide for a trigger to force a buy out of a shareholder where it is necessary for him/her to be bought out, called a ‘shotgun’ clause;

– Provide for buyouts on death, disability, or personal crisis in the lives of shareholders;

– Set out a valuation formula for shares in any of the above situations;

– A non-competition clause, confidential clause, and/or non-solicitation clause in the event of a shareholder leaving;

– A dispute resolution mechanism for handling shareholder’s disputes.

Obviously USA’s are a key mechanism to deal with the longer term serious issues that are certain to come up in the life of a corporation where there is more than one shareholder. For example, unless all shareholders agree to wind up/ sell the business at the same time, there will be a future scenario where a shareholder leaves, and the remaining shareholders want to continue on. The USAallows this to occur without major disruption.

Another reason to consider having a USA deals with minority shareholders protection. If there are 3 shareholders owning 60%, 20%, and 20% of voting shares for example, the bottom line is without an agreement the 60% shareholders largely controls the corporation (there are a few restrictions on what a majority shareholder can do under the Business Corporations Act). A USAagreement requiring say an 80% or 100% vote for certain important issues will protect the minority shareholder.

So when is an agreement needed? At Courtney Aarbo Barristers & Solicitors we recommend one be considered anytime there is more than one shareholder. The more shareholders there are, the more important having a USAbecomes.

If you have questions about unanimous shareholders agreements, or in fact any issue facing your corporation, the lawyers at Courtney Aarbo would be happy to discuss the issue with you.

For more information contact Aarbo Fuldauer LLP at www.aflawyers.caor at info@aflawyers.ca or phone 403-571-5120. We are located at 3^rd Floor, 1131 Kensington Road N.W., Calgary, Alberta T2N 3P4.

Gary C. Courtney

Aarbo Fuldauer LLP

www.aflawyers.ca

What Happens To Your Will If You Get Married/Divorced?

By Anthony Pranata, Barristers & Solicitors

October 15, 2013

This post will focus on two questions:

What happens to my Will if I get married/enter into an adult interdependent partner relationship (ex. common law relationship)?

What happens to my Will if I get divorced/terminate an AIP relationship?

Prior to February 2012, getting married or entering into an AIP relationship would have normally revoked your Will. This sometimes yielded undesirable results. For example, if you had a valid Will, then got married, and then passed away before making a new Will, you would have died without a Will.

Also prior to February 2012, getting divorced or terminating an AIP relationship had no effect on your Will. This also yielded undesirable results at times. For example, if you were married and you created a Will where you left everything to your spouse, then divorced, and then you passed away before changing your Will, you would have died leaving everything to your ex-spouse.

The answer to the above questions changed in February 2012 when the Alberta government consolidated several statutes and enacted the Wills and Succession Act of Alberta.

Under the Wills and Succession Act:

Getting married/entering into an AIP relationship DOES NOT REVOKE your current Will.

Getting divorced/terminating an AIP relationship DOES NOT REVOKE your current Will, but DOES REVOKE any gift or interest in property that you give to your ex-partner in your Will. The exception to this rule is if a court of law finds that you clearly intended to give that gift or interest in property to your ex-partner despite the divorce/termination of the AIP relationship.

For more information, please contact the law office of Aarbo Fuldauer LLP, Lawyers at:

Address: 3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120

Email: info@aflawyers.ca

Anthony Pranata

Barrister & Solicitor

www.aflawyers.ca

*The information contained in this blog is not legal advice. It should not be construed as legal advice and should not be relied upon as such. If you require legal assistance, please contact a lawye

VRIEND v. ALBERTA

15^thAnniversary of a Human Rights Milestone in

Constitutional Law and Employment Law

Darryl A. Aarbo, Barrister and Solicitor

Calgary, Alberta

This year represents the 15^thanniversary of a landmark decision in the area of human rights law, employment law and constitutional law. In 1998 the Supreme Court of Canada came out with a unanimous decision in Vriend v. Alberta [1998] 1 S.C.R. 493. This decision has had a huge effect on these three areas of the law over the last 15 years. It is a decision taught throughout the world and studied by students internationally, not just by lawyers but by constitutional experts and human rights advocates.

At first blush the decision looks like it is a gay rights case dealing with sexual orientation. Nevertheless, it is far more than that, although it is without question an important case for the LGBTQ community.

Mr. Vriend worked as a laboratory coordinator at a college in Alberta. He held a full-time position and all of his evaluations were extremely positive. There were no blemishes on his employment record whatsoever. The college was a Christian college. It initially had no policy on sexual orientation but when it learned of Mr. Vriend’s sexual orientation then it came out with the policy and insisted upon his resignation. When he declined to resign, he was terminated. The sole reason given was his sexual orientation. The college was explicit that it was terminating him because of his sexual orientation.

Mr. Vriend attempted to file a complaint with the Alberta Human Rights Commission on the grounds that his employer had discriminated against him because of his sexual orientation, but the commission advised him that he could not make a complaint under the legislation because it did not include sexual orientation as a protected ground.

Mr. Vriend sued the provincial government of Alberta because its human rights legislation did not cover sexual orientation. He did not sue the college or file a complaint against the college, but he went after the government because its legislation omitted sexual orientation in its protection. This is the essential nature of the dispute and the basis for its complexity and why it had such a massive impact on constitutional law.

To put this case into its proper context for younger people or people living outside of the province of Alberta, the government of the province of Alberta at the time was a socially conservative group of individuals relative to other governments. Further, it was a big issue of the government at the time that unelected Judges were imposing their will on an elected legislative assembly. Thus, when presented with an issue of gay rights and the possibility of the Courts imposing its will upon the government, the government opposed this litigation vehemently.

The case became a regular news item. There were rallies and protests. There were fundraisers and organizations set up on both sides of the argument. It was extremely polarizing and contentious throughout Alberta and Canada. Interveners joined in the arguments on both sides. It was the modern Canadian equivalent of Edwards v. Canada (the “Persons Case”), the 1928 Canadian Supreme Court of Canada decision that found women were “persons” and therefore eligible to sit in the Canadian Senate. It could also be compared to Brown v. Board of Education, the landmark 1954 decision for the civil rights movement in the United States. The Vriend case became a rallying point for human rights advocates on one side and socially conservative persons opposed to judicial intervention on the other.

Why was it such an important? First, many argued that the Court was trying to regulate private activity. A misunderstanding of many people is that the Charter of Rights and Freedoms regulates the day-to-day lives of private citizens in Canada. It does not. The Constitution of Canada, which the Charter of Rights and Freedoms is a part of the, only regulates the various levels of governments in Canada. Constitutions throughout the world seek to regulate government activity, not private activity. In this instance many argued that what was being proposed was actually regulating private activity because Mr. Vriend was a private citizen who worked for a private college (although receiving government funding). The Court found that it was not regulating private activity because it was dealing with government legislation. The twist here was that the government legislation in question did regulate private activity because it was human rights legislation. Human rights legislation does govern acceptable behaviour of private citizens. Nevertheless, the decision only applied to the legislation, which was the activity of government in its regulation of private activity.

Second, and more important, the reason this case was so controversial at the time was that the Alberta’s human rights legislation omitted any reference to sexual orientation. Further, the Canadian Charter of Rights and Freedoms, a part of the Canadian Constitution, also omitted any explicit reference to sexual orientation. In its decision the Supreme Court of Canada read-in sexual orientation as a prohibited ground of discrimination into Alberta’s human right legislation and to do that it interpreted the Constitution of Canada as including protection for sexual orientation even though it was not explicitly written down by the drafters. It expanded the scope of the Constitution itself by its own decision. It did so based upon well-established precedent and constitutional law and there were decisions leading up to this case that laid the foundation for what the court did, but it was considered by many to be an extraordinary example of judicial activism.

It is a monumental decision because it is an example of the old maxim that the constitution is a “living tree” or a “living document”. The Courts interpreted the Constitution to protect a group of individuals who were being discriminated against at the time when the general population was only becoming more favorable to the idea of protecting their rights. Just as the Persons Case and the Brown decision were controversial in their time, this decision was also very controversial. History judges the Persons case and the Brown case positively as progression towards equality for all and the Vriend decision is a long line of decisions where the Court’s protecting minority group not being protected by elected representatives. Further, the single most important aspect of this decision is that it leaves open the protection for groups that governments or the majority of people may not consider worthy of protection today.

Darryl Aarbo

darrylaarbo@aflawyers.ca

What if I Die Without a Will?

By Aarbo Fuldauer LLP, Lawyers

A will is the basic legally binding document that we all should have prepared. Of course there are many occasions when people die without a will. I am often asked ‘what happens then?’

In Alberta, a person dying without a will dies ‘intestate’. When this happens Part 3 of the Wills and Succession Act of Alberta governs what happens to your estate. I will attempt a brief summary of the distribution scheme imposed by the legislation;

Section 60 If you die learning a spouse or adult interdependent partner (‘common law spouse’) and no children, your entire estate goes to the spouse or adult interdependent partner;

Section 61 If you die leaving a spouse or adult interdependent partner and a child or children where your surviving spouse is also the parent, your spouse or adult interdependent partner gets your entire estate. If the spouse is not the parent of the child or children then the spouse or adult interdependent partner gets 50% and the child/children share the other 50%

Section 63 If you still have a spouse but you were separated at least 2 years or had a court order or agreement that is a final property split, then the spouse is deemed to have predeceased you and gets nothing.

Section 66 If you have no spouse or adult interdependent partner, but have children (or grandchildren) at the time of death, the estate will be split equally amongst your children or grandchildren, with a share also being split amongst grandchildren from a pre-deceasing child.

Section 67 If you have no spouse, adult interdependent partner, children, or grandchildren, your estate goes first to your parents or parent of surviving, but if not it goes to your siblings.

Basically the act continues in its distribution scheme down the line of relatives to a limited extent. In the event there are no relatives close enough to qualify then eventually the government of Alberta would become the beneficiary of last resort.

Of course many issues are not and really cannot be covered off by the above default legislation. Some of the more obvious problems when there is no will include:

1) No appointment of an Executor as occurs in the will to look after the funeral and process the estate debts, assets and bequests. Instead an ‘Administrator’ must be appointed by the Courts;

2) You will have no say over funeral arrangements, although usually a funeral home will ask your next of kin for direction;

3) There will be no bequests of money or special keep sakes to chosen people or charities;

4) There will be no ability to set up life estates for people in things like your home;

5) Children and grandchildren will take at 18 years of age rather then at an older more mature age.

6) You will not be able to set up a trust fund for young beneficiaries, for example your children, where money is held until a certain age by a trusted person and used for education and necessaries of life, until the child is old enough to manage the money wisely (say 25);

7) While a young beneficiary is under 18 the government of Albertawill manage his or her money;

8) If you have no surviving spouse, children or grandchildren, while the estate will likely go to your more extended family, nothing will go to your predeceasing spouses ‘blood’ relatives;

9) You will not have a chance to name a guardian to look after your children who are under 18;

10) The legal costs of the estate will likely be higher than if you had a will.

Hopefully after reviewing the above information you will agree that having a will prepared should be a priority. The fee for a couple doing a standard will is not prohibitive usually about $700.00 for the two, not each. The cost of a single will is normally $500.00.

For more information contact Aarbo Fuldauer LLP, Lawyers at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta, T2N 3P4 or info@aflawyers.ca or phone 403-571-5120.

Aarbo Fuldauer LLP,

www.aflawyers.ca

– The information contained in this blog is not legal advice. It should not be construed as legal advice and should not be relied upon as such. If you require legal advise, please contact a lawyer.

What is “Probating a Will’ and

Are All Wills Probated in Alberta?

By Aarbo Fuldauer LLP, Lawyers

Probating a will is a procedure that occurs after a persons death where the Executor named in the will submits the will to the Court for review and approval.

Once a ‘Probate Application’ is submitted a Judge will review the will to determine its validity, and other information provided to the Court regarding the deceased, the family, the beneficiaries, and the assets/debts of the Estate. Beneficiaries will also be notified about the application.

Normally a Judge will then grant a ‘Probate Order’ approving the will and the Executor’s appointment. In Calgary at present the Court usually takes about 2 months to grant an order, once the correct and complete paperwork is filed at Court.

Most, but not all Wills need to be probated. If the deceased owned any interests in land that were not in ‘joint tenancy’ with someone else, so that on death the land interest goes into the estate, a probate must occur. Land Titles will not transfer a land interest in an estate until there is a certified copy of Probate Order registered.

If there are any bank accounts or investments of the deceased that were not being held in a ‘joint account’, or for which a named beneficiary or the investment would on death automatically receive the investment (an RRSP named beneficiary), then the will must be probated before the bank or investment company will allow the Executor to access the funds.

The rule of thumb really is that all wills need to be submitted to the Court for a Probate Application, unless really nothing of significant value goes into the estate on death because the deceased was a pauper, or the deceased’s assets were all transferred to people outside of the will through joint ownership or naming of beneficiaries on investment documents.

We do recommend that when a will needs to be ‘probated’, the Executor retain a lawyer. At Courtney Aarbo we will assist in providing necessary advise to the Executor on how to administer the Estate, we will prepare, serve, and file the Probate Application, transfer land interests once the Probate Order arrives, assist with finalizing the Estate, and be available for questions from Executors and Beneficiaries as the Estate is administered. The approximate fee cost for this work on a normal estate is between $2,500.00 and $4,000.00.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta, T2N 3P4 or info@aflawyers.ca or phone 403-571-5120.

Gary C. Courtney

Courtney Aarbo Barristers & Solicitors

www.aflawyers.ca

Land Interests of a Deceased in Alberta

When can they be Transferred and/or Sold?

By Aarbo Fuldauer LLP, Barristers & Solicitors

In many cases the majority of a deceased’s estate value is made up of land interests (house, condo,farm land). Their efficient transfer to ‘survivors’ and ‘beneficiaries’ is very important.

A first step for an Executor of a deceased is to determine what land interests in fact come into the Estate on a death.

If a deceased owned a land interest ‘jointly with right of survivorship’, then the land interest is not technically part of the estate, and does not become an asset under the will for the Executor to administer. Instead the land interest of the deceased transfers automatically on death, to be owned 100% by the ‘survivor’ on title. This method of ownership is typical of spouses and common law partners, meaning the surviving spouse/ partner will automatically become sole owner. What the survivor on title needs to do is file at the Land Titles Office the necessary ‘ Survivorship Declaration’, together with proof of the death.

All other forms of land titles ownership by a deceased will in fact fall into the deceased’s estate and be dealt with under the term’s of the will, or if no will, pursuant to the Wills and Succession Act of Alberta (for an intestacy).

A land ownership coming into the estate cannot have its title altered, be it to the name of a beneficiary, or to a new purchaser if being sold, until a Probate Order or Order for Administration is granted by a Justice of the Alberta Court of Queen’s Bench. The Land Titles Office by law cannot alter the title until there is a Court Order in place.

The obtaining of a Court Order will occur only after the Executor under the will, or the person applying to administer an estate, brings the necessary ‘Probate Application’, or ‘Application for Appointment of Administrator’ to the Courts. The procedure involves the filing of about a 10 to 15 page application touching on various aspects of the deceased, the beneficiaries, the will, and the estate value. At present the Court is taking about 2 months to approve an application once it is filed in the correct form.

Until the ‘Probate Order’ or ‘Order of Administration’ is granted by the Court, the Executor and Administrator have no ability to legally sign contracts listing or selling land, let alone signing a transfer to a beneficiary or purchaser. Once the Court Order is obtained it is filed at Land Titles and the land interest will be placed into the name of the Executor/Administrator. Only then can the Executor/Administrator sell or transfer the title.

It is not only essential for the Executor or Administrator of an Estate to understand the above procedure and timing for dealing with land interest in estates for sale or transfer purposes, it is also essential for all necessary steps to be taken to secure, insure, and safeguard the property while the process unfolds.

At Courtney Aarbo Barristers & Solicitors we are happy to assist you with any estate issues or concerns that might occur, including applying for Probate and Administration Orders, and transferring land interests.

For more information contact Courtney Aarbo Barristers & Solicitors at 3^rd Floor 1131 Kensington Road N.W., Calgary Alberta, T2N 3P4 or info@aflawyers.ca or phone 403-571-5120.

Courtney Aarbo Barristers & Solicitors

www.aflawyers.ca

**Review of the The Civil Marriage Act, S.C. 2005, c. 33**

by Darryl Aarbo

I have had the opportunity to review the federal Civil Marriage Act in force since June 26, 2013. It carries the citation of 2005, but was not formally proclaimed until 2013.

As far as I am aware I am preparing the first divorce under this legislation in Alberta. I have contacted the Clerk and this information has been confirmed to me.

I will not bore you with the technicalities of how to proceed with the divorce under the Civil Marriage Act, as opposed to the Divorce Act, because it is essentially the same procedure as a divorce using slightly modified Court forms. Of particular note, however, is that the parties do not seem to be able to seek corollary relief upon the divorce. This means that they cannot seek spousal support, child support or deal with custody and access. The legislation only deals with obtaining a divorce.

The reason this legislation came into its existence is because Canada allows same sex marriage. What has happened is that couples have married in Canada then moved abroad. If these couples find themselves in a jurisdiction that does not recognize same sex marriage then they cannot get divorced. If a country does not recognize same sex marriage then they are not going to recognize same sex divorce. This has put a number of couples throughout the world in an extremely difficult position. They cannot get divorced.

The reason they cannot get divorced in Canada is because our Divorce Act requires them to be a resident for at least one year. One cannot be a resident in Alberta and some other country at the same time. The two are mutually exclusive.

What is particularly interesting about the legislation is that Part 2 of the legislation deals with the dissolution of marriage for non-resident spouses. It is a fairly straight forward and technical legislation that allows people caught in this conundrum to obtain a divorce in Canada even if they live abroad.

What is also of particular note about the legislation is Part 1. Part 1 of the legislation deals with the solemnization of marriage. Why this is unusual is because this is the exclusive jurisdiction of the provinces. Nevertheless, s. 3 of the legislation states that: “It is recognized that officials of religious groups are free to refuse to perform marriages that are not in accordance with their religious beliefs.”

Section 3.1 states and goes on to explain that the reason for this section is to reserve a freedom of conscience and religion guaranteed under the Charter. It seems to be a twisted logic that the Charter of Rights and Freedoms is itself used to justify another breach of the Charter of Rights and Freedoms. Normally the Courts engage in a balancing of rights, as opposed to using one right to override another right.
In any event, it is this writer’s opinion that those sections ultra vires the federal government. In other words, these sections would violate the Constitution Act, 1867. The Constitution Act, 1867 divides up the powers between the provinces and federal government. The solemnization of marriage is a provincial responsibility and it would appear that the federal government is trying to legislate within this realm.

Darryl Aarbo

darrylaarbo@courteyaarbo.ca

SHARED PARENTING AND CHILD SUPPORT OBLIGATIONS

by Darryl Aarbo

A situation that comes up quite regularly and is misunderstood by many clients is the child support obligations where there is shared parenting regime in effect. Shared parenting occurs when each parent’s care of the children falls within the range of between 60% and 40%. In other words, each parent has the children for at least 40% of the time.

The analysis of when the parents are in a shared parenting arrangement, assuming they do not agree, is complicated in itself. Do you factor in school time? Sleeping time? What time do you factor in? That analysis can be difficult unless the parties agree. We will assume for the purpose of this article that the parents have agreed that they are in a shared parenting arrangement or the Court has made that finding.

The misunderstanding of clients on the child support arrangements in a shared parenting regime has reached the proportion of urban myth. What I mean by that is clients assume that once they are in a shared parenting arrangement then there will be an automatic set off of child support obligations. For example, parents will look at what their child support obligations would be to the other parent and then figure out what the other parent would pay them if the children were with that person full time and set off the two amounts. For example, they figure out that if the kids were living with Mom full time then Dad would have to pay her $1,000.00 per month. Then they figure out that Mom would have to pay Dad $500.00 per month if the kids were living with Dad full time. They take the two amounts and set them off and determine that Dad should pay Mom $500.00 for the support of the children in the shared parenting arrangement.

Some clients believe this to be the case no matter what and want it to be the case so badly that they have a hard time accepting that this is not necessarily the situation. The decision of Contino v. Contino 2005 SCC 63 clarified the law in this regard. Although the decision is more than five years old and it is from the Supreme Court of Canada, many people understand that the set off is the only way to deal with child support.

Section 9 of the Federal Child Support Guidelines states as follows:

“9 Where a spouse exercises a right of access to, or has physical custody of

a child for not less than 40% of the time over the course of a year, the amount

of the child support Order must be determined by taking into account:

(a) the amount set out in the applicable tables for each of the spouses;

(b) the increase cost of shared parenting arrangements; and

(c) the conditions, means, needs and other circumstances of each

spouse and of any child for whom support is sought.

In the Supreme Court of Canada’s analysis of this section it stated that section 9 does not include a conclusive formula to determine how the table amounts are to be considered or accounted for. It stated that a simple set off amount is only a starting point for the section 9 analysis, that it must be followed by an examination of the continuing ability of the recipient parent to meet the needs of the child, especially in light of the fact that many costs are fixed.

Section 9(c) gives the Court a great deal of discretion to modify the set off amount where, considering the financial realities of the parents, it would lead to a significant variation in the standard of living experienced by the children as they move from one household to the other. It further stated that the Court should, in so far as possible, ensure that the child of the parties enjoys a standard of living that is reasonably comparable to the standard of living before the divorce and does not vary markedly in material respects moving from one household to the other. The method for achieving this outcome should be evidence based.

What the Court is stating is that there is not a simple formula. Setting off each parent’s child support obligations is only the first step. After that the Court can tinker with the child support to meet the objectives set out by the Court and the Federal Child Support Guidelines. In the experience of the writer, it is common for the Courts to engage in this analysis. Nevertheless, the myth exists amongst not only clients but some lawyers that all one does is do a set off.

What the Court has to do is engage in an analysis of the standard of living of each household. If one household is heavily burdened by debt or the affect of the set off would have a negative impact on the children, then the Court can and will vary the set off amount to minimize any negative impacts on the children. In fact, the Court can have one parent pay the full amount of his or her child support without any set off at all.

From a practitioner point of view, it is important to note the Court’s comment that it is evidence based. The parties must lead evidence for the Court to do the analysis. In other words, one cannot simply submit to the Judge the parties’ income and the set off amounts using a simple formula or table provided by one of the child support software programs. The parties must lead evidence of each party’s standard of living, expenses, revenue, income, debt and assets. Basically, comprehensive budgets and sworn statements of assets, debts and income must be submitted. Income must be broken down and not simply providing the line 150 amount for the Court.

Darryl Aarbo, Barrister and Solicitor

The information contained in this blog is not legal advice. It should not be construed as legal advice and should not be relied upon as such. If you require legal advice, please contact a lawyer.

What happens if a verbal agreement conflicts with a written agreement?

By Anthony Pranata, Barrister & Solicitor

January 6, 2014

First and foremost, all contracts in Canada are subject to what is known as the “parol evidence rule”. The parol evidence rule generally bars extrinsic evidence (ex. things that are verbally expressed between two parties) that would alter the meaning of a written contract.

When the written contact is clear, the parties’ intention is to be derived primarily from the words they have used in the contract. Evidence of context cannot be allowed to contradict those words.

For example, if you enter into a written contract with another person to sell your car to him for $10,000.00, he cannot turn around and say that, after you two signed the agreement, you verbally agreed that you would sell him the car for only $9,000.00 because the power windows do not work.

However, let’s say that the written contract stated that the price of the car is either $10,000.00 if the power windows work or $9,000.00 if the power windows do not work. And let’s say that the windows only roll down half way. Does this mean that the power windows do work or do not work? Obviously you are going to argue that the windows do work because they do in fact go down, but the buyer is going to argue that the power windows do not work because these windows can only be rolled down halfway. In this case, the written contract is ambiguous because it does not describe in detail what a “working power window” entails. Since the written contract is reasonably susceptible to having more than one meaning, extrinsic evidence would be admissible in a court of law to try to describe what you and the buyer meant by a “working power window”.

There are other exceptions to admitting oral evidence to vary a written contract, but in general:

a) Extrinsic evidence cannot be used to interpret a contract if the contract is clear and unambiguous.

b) Extrinsic evidence may be used to interpret a contract if the contract is ambiguous.

c) Extrinsic evidence on an issue that is silent in the original written contract will be accepted by a court of law. In this case, provided that the extrinsic evidence satisfies all the legal requirements for forming a contract, the extrinsic evidence simply becomes a collateral contract (a second contract in addition to the original one).

For more information, please contact the law office of Courtney Aarbo, Barristers & Solicitors at info@aflawyers.ca

Anthony Pranata

Barrister & Solicitor

*The information contained in this blog is not legal advice. It should not be construed as legal advice and should not be relied upon as such. If you require legal assistance, please contact a lawyer*

DEATH AND TAXES — Estate Planning Advice

By Darryl Aarbo. Barrister and Solicitor

“…in this world nothing can be said to be certain, except death and taxes.”

—Benjamin Franklin, in a letter to Jean-Baptiste Leroy, 1789

As was stated by Benjamin Franklin, two of the great certainties in life are death and taxes. It should also be noted that death does not get you out of paying any taxes. In fact, it may result in you paying more taxes in a particular year than would normally have been owed if you had survived. Good tax planning is always a good investment if you want your heirs to get the maximum benefit from the money you have saved.

When you die someone will have to file on your behalf (usually your executor) various tax returns. There will be a deemed year end on your date of death. Your estate will be responsible for any taxes accrued up to that date as you normally would. In other words, any money earned as income up to that point would be declared in the final return and you would be taxed the marginal tax rate where your income puts you. This is where good tax planning is crucial because there can be a “deemed disposition” of your assets upon your death. For example, your RRSPs are normally all deemed to have been sold on your date of death. If you have $200,000.00 in RRSPs then your estate is going to have a very big tax bill because all of those RRSPs will be fully taxed. A good portion of that money is going to be taxed at the top bracket of 39% (Alberta). With tax planning the RRSP deemed cash in may be able to be avoided by naming a spouse or common-law partner as beneficiary of the RRSP.

Good tax planning may also involve purchasing property in joint names or transferring it into joint names so that on death of one joint owner the deemed disposition does not then occur.

Further, after you die then a new taxable entity will be created, that being your “estate”. An estate is taxable in an analogous fashion of the Corporation. There is no physical entity per se, but it is a legal entity and it is subject to taxation. If there is any income earned after your death, such as interest or rent, then trust returns will have to be filed for every year after you die until your affairs completely resolved and the Canada Revenue Agency (“CRA”) issues a document stating that all of the deceased taxes have been paid in full.

There are strict timelines in place by CRA. Failure to meet these deadlines can result in penalties and interest:

· If the death occurred between January 1 and October 31, the due date for the final return is April 30 of the following year;

· If the death occurred between November 1 and December 31, the due date for the final return is six months after the date of death.

· The due date for filing the T1 return of a surviving spouse or common-law partner who was living with the deceased is the same as the due date for the deceased final return indicated above

If the deceased or the deceased spouse or common-law partner was carrying on a business in the year of death the following due dates apply:

· If the death occurred between January 1 and December 15, the due date for the final return is June 15 of the following year;

· if the death occurred between December 16 to December 31, the due date for the final return is six months after the date of death.

For more information contact the lawyers of Aarbo Fuldauer LLP, Barristers & Solicitors.

darrylaarbo@aflawyers.ca

I created a masterpiece – how do I copyright it?

By Anthony Pranata of Courtney Aarbo, Barristers & Solicitors

The law is fluid. It is an adaptive animal that changes along with the times. New laws are being written and old laws are being amended and repealed. Lawyers are constantly having to keep up-to-date with these changes in legislation in order to properly advise their clients.

Copyright law is interesting in that it has undergone significant changes over the years in response to advances in technology. Traditionally, copyright law encompassed 4 areas – literary works, dramatic works, musical works, and artistic works. As the world became more technological, the scope of copyright law expanded so that it could protect original works such as live performances, broadcasts (communication signals), and sound recordings. In the advent of the internet age, the scope of copyright law expanded even further to provide protection for emails and texts. But despite these changes in copyright law throughout the years, what has remained constant is the imagination and ingenuity of humanity and the desire to create something the world has never experienced. And along with this desire comes the question, how do I make sure that my creation is protected? How do I copyright my work?

The answer to this question is much simpler than people may think. In Canada, as soon as you create a book, or play, or a song, or a painting, and it is “fixed”, that work is copyrighted. “Fixed” means that the work must be expressed in some material form of some permanence such that it is capable of identification. This is commonly accomplished by having the work written down. For example, an idea for a story or a song in one’s head is not copyrightable, but as soon as that idea is written down into a book or sheet music, it is copyrighted.

You can also register your work with Canada’s Copyright Office, which is part of the Canadian Intellectual Property Office. Even though copyright will exist in your work as soon as you create it, there are advantages to registering your work with the Copyright Office. Firstly, when a work is registered, there is a presumption that copyright exists in that work (as not everything that is created is necessarily copyrightable). Secondly, in the event that someone tries to pass off someone else’s work as their own, there is a presumption that the person who registered that work with the Copyright Office is the owner of the copyright of that work.

For more information, please contact the law office of Courtney Aarbo, Barristers & Solicitors at:

Address: 3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120

Email: info@aflawyers.ca

Anthony Pranata

Barrister & Solicitor
www.aflawyers.ca

Sexual Harassment — Employment Law Advice

by Darryl A. Aarbo, Barrister and Solicitor

This is only anecdotal evidence, by sexual harassment in the workplace tends to cluster around certain days and events in a year: holiday (Christmas) parties, Stampede events (Calgary only obviously); St. Patrick’s Day and even Valentine’s Day. The first three are obvious, if you have ever been to a large corporate holiday party or a corporate Stampede event in Calgary then you know that large amounts of alcohol can be consumed in a short period of time with co-workers being in close proximity of each other. Alcohol and work events are a dangerous mix.

Valentine’s Day can also be a dangerous day. It is not traditionally an alcohol based event, but like buying a puppy for someone at Christmas, sexual advances to a co-worker on Valentine’s Day can seem like a good idea at the time, but a little later can result in a big problem. It’s all in the planning and execution. Sometimes it is best to avoid the big “holidays” to avoid big expectations and pressure.

Mutually acceptable workplace flirtation is not sexual harassment. The key words being “mutually” and “acceptable”. Co-workers are allowed to ask each other out on a date, but if it is a person in authority over a subordinate employee then problems can arise. Also, repeatedly asking someone out can also be harassment even if each request is innocuous in itself, but how many times does it take get you a date with someone playing hard-to-get and how many times does it take to get fired for sexual harassment? Gifts delivered at work to an unsuspecting co-worker in front of the rest of the staff may or may not be sexual harassment depending on the gift and circumstances, but it can be a very awkward situation and may mean a trip to the human resources manager a bit latter on for a discussion on proper workplace behaviour if you got the “signals” wrong. Obviously overt sexual remarks and advances are wrong. Touching is always wrong, as well as showing sexualized images and innuendo.

Problems arise because sexual harassment is a very subjective thing and some employers are simply not prepared for the subtle occurrences of sexual harassment. That is why Valentine’s Day can be a much riskier day than others. It is pretty obvious that getting drunk and making a lewd remark or advance is wrong and can easily end in termination, but what about sending flowers to a co-worker in front of everyone when she does not know they are coming? What happens if he or she does accept the request to go out on a date and it is a disaster and you have to work together on Monday morning? What if a relationship commences between a manager and subordinate that is originally consensual but ends in tears and a complaint to the human resources manager. These little subtleties can be much trickier to navigate than a serious and obvious offense.

It is extremely important that all employers, regardless of size, have a clear, accessible and enforced harassment policy. Employees need to know the boundaries and need to know the rules will be enforced fairly and consistently at all times. It is the employer’s legal responsibility to ensure a safe workplace in world where human beings will be human beings. The key is to be prepared before the inevitable complaint gets made.

Happy Valentine’s Day!

I have copy and pasted the Alberta Human Rights Commission’s Information sheet on sexual harassment:

Sexual harassment

INFORMATION SHEET

A printable PDF version of this information sheet is available.

What is sexual harassment?

Sexual harassment is discrimination based on the ground of gender, which is prohibited under the Alberta Human Rights Act. Sexual harassment is any unwelcome sexual behaviour that adversely affects, or threatens to affect, directly or indirectly, a person’s job security, working conditions or prospects for promotion or earnings; or prevents a person from getting a job, living accommodations or any kind of public service.

Sexual harassment is usually an attempt by one person to exert power over another person. It can be perpetrated by a supervisor, a co-worker, a landlord or a service provider.

Sexual harassment is unwanted, often coercive, sexual behaviour directed by one person toward another. It is emotionally abusive and creates an unhealthy, unproductive atmosphere in the workplace.

Employees, customers or clients can make sexual harassment complaints to the Alberta Human Rights Commission. These complaints can be costly, both in terms of financial costs and employee morale, particularly for employers who do not have an effective sexual harassment policy in place or who do not treat such complaints seriously.

Who is affected?

Males, females and transgendered [1] individuals can all experience sexual harassment. Sexual harassment can occur between individuals of different geners (for example, male to female) or between individuals of the same gender (for example, female to female).

What constitutes sexual harassment?

Sexual harassment can be expressed in many ways, from very subtle to very obvious, through any of the following:

suggestive remarks, sexual jokes or compromising invitations;
verbal abuse;
visual display of suggestive images;
leering or whistling;
patting, rubbing or other unwanted physical contact;
outright demands for sexual favours; and
physical assault.

Sexual harassment and workplace romance

Mutually acceptable workplace flirtation is not sexual harassment.

Who is legally responsible?

The Supreme Court of Canada has decided that in cases of proven sexual harassment, employers are responsible for the actions of their employees.

Lack of awareness by management does not necessarily eliminate this liability.

Employer responsibilities

In Alberta, employers are responsible for maintaining a work environment free from sexual harassment for all employees, customers and clients.

A supervisor who neglects to follow up on a complaint of sexual harassment may be liable under the AlbertaHuman Rights Act for failing to take prompt and appropriate action.

Having an effective sexual harassment policy in place can decrease an employer’s liability if a human rights complaint is made. Prompt and appropriate action on sexual harassment complaints can reduce an employer’s liability still further.

Sexual harassment policy development

Commission staff can help employers develop sexual harassment policies. Staff can also provide educational workshops to help employers, managements and employees understnd their rights and responsibilities related to sexual harassment in the workplace. Please contact the Commission for more information about these services.

What to do about sexual harassment

Anyone who believes they has been sexually harassed should first make it clear to the offender and/or to a person in authority that such action has occurred and is unwanted. Employees who are harassed may also wish to contact their union or employee association.

If the behaviour persists, or corrective action is not taken, a complaint may be made to the Alberta Human Rights Commission. A complaint must be made within one year of the alleged incident or the Commission does not have the authority to accept the complaint.

For the purposes of investigation, a record should be kept of when the alleged incidents occurred, the nature of the behaviour, the names of any witnesses and any other information relevant to the investigation.

It is against the law to retaliate against anyone who has made a compliant of discrimination in good faith or who has given evidence in support of or against a complaint.
Footnote1. The words “transgender” and “transgendered” are used to refer to people who identify as either transgender or transsexual. The Ontario Human Rights Commission offers a helpful definition of gender identity on its website: “Gender identity is linked to a person’s sense of self, and particularly the sense of being male or female. A person’s gender identity is different fom their sexual orientation, which is also protected under the [Ontario Human Rights] Code. People’s gender identity may be different from their birth-assigned sex, and may include:
Transgender: People whose life experience includes existing in more than one gender. This may nclude people who identify as transsexal, and people who describe themselves as being on a gender spectrum or as living outside the gender categories of ‘man’ or ‘woman.’
Transsexual: Peope who were identified at birth as one sex, but who identify themselves differently. They may seek or undergo one or more medicat treatments to align their bodies with their internally felt idenityt, such as hormone therapy, sex-reassignment surgery or other procedures.”
Please note: A complaint must be made to the Alberta Human Rights Commission within one year after the alleged incident of discrimination. The one-year period starts the day after the date on which the incident occurred. For help calculating the one-year period, contact the Commission.

What can I do with my copyright?

By Anthony Pranata of Aarbo Fuldauer LLP

So you are the owner of a copyright. What does that mean?

It means you have the sole discretion to do whatever you want with the work. No one can use your copyrighted work without your permission.

There are several common ways to exploit your work. Firstly, you can enter into a license agreement. It is an agreement between you and another party where you authorize that party to use your copyrighted work. The license will normally dictate the extent to which the other party can use your work, the duration of the license, and what you are getting in return (often money).

Secondly, you can assignyour work to another party. This is similar to a license in that you authorize another party to use your copyrighted work to whatever extent you agree upon, except that the authorization is of a permanent duration. Think of this like selling the right to your work to someone else.

Thirdly, you can have a copyright collective or copyright organizationrepresent you. There are different copyright collectives available depending on the area of your work. For example, if you are the copyright owner of a musical work, you may be interested in the Society of Composers, Authors, and Music Publishers of Canada (SOCAN), which is the copyright collective for the performing rights in musical works.

Let’s say that a band wanted to play your musical work in a commercial setting, such as at a concert. The band would have to get your permission in order to legally use your music, which would normally involve you and the band entering into a license agreement where you grant the band a license to play your music at that concert. However, tracking you down may be difficult, and unless the band was particularly interested in playing your song, the band may simply choose the next song on their list if that song’s artist is easier to locate. SOCAN eliminates the need to personally track down every artist to obtain a license agreement. Provided that you have registered your musical work with SOCAN, SOCAN has the ability to grant the band the necessary license to allow it to play your song at the concert in exchange for a license fee to be paid by the band. As SOCAN grants more and more licenses to different parties to use your musical work, SOCAN will obtain more and more licensing fees from these parties. SOCAN will then provide you with a payment proportionate to the number of times your song has been used. These payments are called royalties.

As already indicated, there are different copyright collectives for different areas of work in order to streamline the process of obtaining a license to use that work. If you are interested in taking advantage of a copyright collective, whether to make yourself known or to make your work more easily accessible, you should find the right copyright collective for your situation.

by Anthony Pranata, Barrister and Solicitor

Anthony’s email: apranata@aflawyers.ca
Anthony’s bio: https://www.aflawyers.ca/pranata.php

Or for more information, please contact the law office of Aarbo Fuldauer LLP at:

Address: 3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120

Email: info@aflawyers.ca

Estate Planning for Persons with Disabilities

Discretionary Trusts and Registered Disability Savings Plans

By Aarbo Fuldauer LLP, Barristers & Solicitors

It is always a huge concern for parents of persons with disabilities to estate plan for when the parent dies. How will a disabled son or daughter be looked after? Two savings vehicles have traditionally been resorted to, the “Discretionary Trust” and the “Registered Disability Savings Plans”.

Discretionary Trust

In Alberta, traditionally parents would set up a discretionary trust whereby a Trustee, often a brother or sister of the disabled child, would be appointed Trustee over a sum of money. This Trustee would invest the fund and pay it out to cover the needs of the disabled child. Often, any money left in the fund on the death of the disabled child would go back to the parents’ Will to then be distributed to other beneficiaries.

Disabled adults in Alberta regularly receive support payments from the Alberta Government (usually under the “Aish” program). In the past, the government would allow the disabled adult to continue to receive Aish benefits so long as the amount in the discretionary trust did not exceed $100,000.00. The discretionary trust thus was a vehicle to purchase “extras” for the disabled adult, above the minimal amount received from Aish.

Unfortunately, government officials have recently indicated that the policy of Aish benefits continuing even though there was a discretionary trust for the disabled adult not exceeding $100,000.00, is now no longer the policy. In the future, the Aish benefits may well be cut off until the $100,000.00 fund is exhausted.

In our view, the discretionary trust vehicle should not be considered as a supplement amount on top of Aish benefits anymore. It may well be however, that the discretionary trust estate planning vehicle is still useful to care for the disabled adult for other valid reasons.

Registered Disability Savings Plan

The preferred vehicle for looking after a disabled adult, after his or her parents are gone, is probably the Registered Disability Savings Plan (“RDSP”).

Anyone can set up a RDSP for a disabled person. It functions a lot like an RESP in that there is no tax deduction on contributions, but any interest, and as well various government grants to top up the fund are not taxable.

The maximum amount of contributions is $200,000.00.

A parent can contribute to the fund after death through his/her Will and can name the RDSP as a beneficiary up to $200,000.00 from RRSP/RIF accounts. Money left through an RRSP/RIF from a parent can even be rolled over to the RDSP without the RRSP money being deemed cashed in and taxed.

A parent can name a person to administer the RDSP in the case of a disabled adult beneficiary with a mental disability.

Lastly, and possibly most importantly, Alberta government officials have indicated that an RDSP plan (up to $200,000.00) will not result in the disabled person being cut off from their Aish (government) benefits. Obviously, this is quite different then the government policy on discretionary trusts.

If we at Aarbo Fuldauer LLP can assist further in the Will documentation required to plan for a disabled beneficiary, we would be pleased to do so.

For more information, please contact the law office of Aarbo Fuldauer LLP, Barristers & Solicitors at:

Address: 3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120

Email: info@aflawyers.ca

Gary C. Courtney

Barrister & Solicitor
garycourtneyaarbo@aflawyers.ca

Liability Issues with Backcountry Skiing,

Extreme Sports, Waivers and Assumption of Risk

Kennedy v. Coe

2014 BCSC 120

http://www.canlii.org/en/bc/bcsc/doc/2014/2014bcsc120/2014bcsc120.html

By Darryl A. Aarbo

Back country downhill skiing is becoming more popular. Advances in equipment technology combined with the assistance of highly trained guides have allowed more people have the pleasure of experiencing this style of skiing. Just as technology and sherpas as made climbing Everest easier than when Sir Edmund Hillary first climbed it, backcountry skiing has been made easier with new skis and guides who know where to go. I have tried it and I love it. In fact, I am now quite addicted to powder skiing. I have done a number of trips into the backcountry using helicopter and cats. No lifts lines, absolute quiet, stunning scenery, deep light powder that makes you feel like you are floating. Those are just some of the things that make it a fantastic experience.

The downside of more people into the back country is more accidents and more deaths. This year was no exception. It is very dangerous and even the best guide cannot completely avoid all avalanches. Also, unbeknownst to many, one of the biggest dangers is not avalanches but tree wells. Most people that fall into a tree well cannot get out without assistance. In an experiment, 90% of volunteers that went into one could not get out without assistance. Without assistance most people will die. A tree well is basically a void around the base of a coniferous tree. It acts like a “booby trap”, as we used to say as kids. If the snow is deep enough you can ski right over it without even knowing you are skiing over a tree until you hit the void. There are places in the Purcell and Selkirk Mountains ranges where you are sking on many metres of snow. Also, if skiing in trees that are clearly visible then you may never notice the wells because the lower limbs of the trees and the loose snow on top of the well make it almost invisible. Once in a tree well, the more you struggle against it, the more the walls collapse around it and the more snow falls down from the tree above covering the victim. Having a buddy is critical to getting out alive.

It was inevitable that a tree well death would end up in a law suit. The first case of its kind was Kennedy v. Coe, a 2014 decision of the British Columbia Supreme Court. It has become known as the “Ski Buddy” case. On January 11, 2009 a man died while heli-skiing with a group of guided skiers in the back country when he fell into a tree well. He was not rescued and suffocated.

The man’s widow sued his assigned “ski buddy”. This is the person that was assigned to ski with the deceased at various times during the day. The two men had never met each other before sharing this adventure. It is common practice in back country skiing for the guide to pair people up, especially when skiing through the trees where tree wells are common. The idea being that if one person goes into a well then the other person can help get them out. When skiing through the trees it is impossible for the guides to watch every skier all the time.

The widow did not sue the heli-ski company or the guides, but sued the buddy. The deceased had signed a waiver regarding the heli-ski operation. She argued that the buddy owed her husband duty of care and he failed in that duty of care when he did not assist her husband when he fell into a tree well. This is the first case of its kind in Canada.

What this case was asking was whether those two men owed a duty of care to each other and if so, was the defendant negligent in the exercise of his duty of care.

The Court found that there was not a duty of care between the two skiers in the circumstances of this case. The Court left it open to find that a duty of care could arise in a different fact situation. The Court found that in this case the guide had not expressly instructed the two to ski together for the portion of the run where Mr. Kennedy died. Thus, leaving it open to another court to find a duty of care in a different fact situation. In particular, the court seemed to suggest that if they had been told to ski together on that run then there may have been a duty of care. The Court went on to find, however, that if there was a duty in this case then the defendant met that duty. He reported the man missing within one to three minutes of meeting at the assigned spot.

Practically speaking, however, reporting someone missing within a few minutes at the bottom of the hill is not much help. If you have ever done this before, you would know why. When you are at the bottom of a treed run and you look up, there are hundreds if not thousands of trees. The road back is deep snow, possibly metres deep, up a sharp incline. Where do you start looking for a person buried in snow? If his tracks got skied over then it could be impossible.

The court also talked about the assumption of risk in a high risk sport. What follows are my comments on the assumption of risk in high risk sports. I represent a lot of sporting clubs and umbrella sporting groups. I tell them all the same thing. There is a difference between the voluntary “assumption of risk” and “negligence” – never forget that. The waiver is an acknowledgement of the inherent risks of any sport and is particularly important in cat or heli skiing. People need to know that they can die and how they can die so they can make an informed decision as to whether or not they want to participate. The waiver is very important in that regard. If someone dies in an avalanche or tree well then the waiver is important. Also, it is important to deal with injury, such as a broken leg or neck for that matter. It should not be open to someone to participate in an extreme sport and then sue because that person broke a leg.

For the waiver to be most effective there should be a close monitoring of the signing process. At a resort I was at recently there was an employee that hovered with each guest individually and ensured that they read the waiver and then asked if we had any questions. They would be able to state unequivocally that we read it, if asked in court. I suspect that they were also monitoring for alcohol or drug consumption because they were close enough to our face to smell anything on my breath. That is the proper way to have a waiver signed. Anything less could affect its enforceability.

Where waivers get complicated is negligence. Again, there is the assumption of risk, but this does not cover errors and omissions made by people in the exercise of their duties. It is an important distinction and not many appreciate the difference. Waivers are not very effective, if at all, to cover negligence. I will give you an obvious example. If there is a problem with the helicopter, the operator is informed of the problem and continues to use it despite the advice of the mechanic that there is a problem. There is an accident and people are injured. There would likely be liability. The ski resort clearly owes a duty of care and an accident would be foreseeable once the mechanic advises of a problem. The waiver does not cover heli accidents when the resort pushes forward in spite of a known problem.

I will give another more subtle example of something that happened to me over Christmas. I was cat skiing with my buddy. My friend bought a new pair of skis and, although the DIN setting was fine while resort skiing, when we were in the deep powder the DIN setting was obviously not correct. My friend kept popping out. It was frustrating for the whole group and we were already running late because a couple of skiers from Ontario decided at the last minute to rent those packs that expand in the event of avalanche so we were already running about half an hour behind. It was going to be an awesome powder day because it had been snowing like crazy, and probably one of the first really good powder days of the season. The front guide was visibly annoyed by the situation, he seemed more concerned about his good day skiing than safety. As we were about to head into the trees my friend asked for a screwdriver to adjust the setting. He was obviously concerned about heading into the trees. I will never forget what the front guide said: “Just gimp it down and we will fix it at the bottom”. Both the back guide and myself jumped in and said absolutely not, we fix it now before we go into the trees. It was the back guide who pulled out the screwdriver and let my friend fix it himself.

As a friend and lawyer I have a lot of problem with the guides’ comment. If my buddy had followed that advice and then ejected and hit a tree or then fell into a tree well then I have to think there is a chance that there would be liability. There was a statement by a person in authority, he basically ordered him down and an accident occurred then there could be a legal problem.

The other thing with this guide was that his instructions were very poor. It was snowing like crazy and windy at the top, yet he talked forward a lot of time. He would start talking to us and then turn to start his run, while finishing his sentence – while giving us instructions! If we were at the back, we had to ask other people what he said. What if we were supposedly told to keep left of his tracks and ski within 20 metres but we thought we heard him say keep within 20 metres of his tracks, we ski right within 10 metres and fell off a cliff or set off an avalanche? The last thing about this guy (as you can tell I was not impressed).

These are real life examples where problems could have been caused by the guide. Real life examples that could have resulted in a problem but did not. Again, I would not think that waivers cover these examples. Getting the customer to assume the risk does not allow the organization to get away with negligent behaviour. There is a clear duty of care imposed upon guides. Their behaviour and training is crucial. They have to put safety first always, even when you have a couple from Ontario renting more equipment at the last minute or have a slow skier or a skier has technical problems. Safety First.

For more information contact:

Darryl A. Aarbo, Barrister & Solicitor
3^rd Floor 1131 Kensington Road N.W.,
Calgary Alberta T2N 3P4
403-571-5120

Darryl’s email: darrylaarbo@aflawyers.ca
Darryl’s bio: https://www.aflawyers.ca/aarbo.php
Darryl Skiing:

*The information contained in this blog is not legal advice. It should not be construed as legal advice and should not be relied upon as such. If you require legal assistance, please contact a lawyer*

Family Law Information from Experienced Family Law Lawyers:

What is the Difference between a Separation, a Separation Agreement, a Judicial Separation and a Declaration of Irreconcilability?

by Olivier Fuldauer

These similar-sounding things are actually quite different. A separation describes the situation where one spouse or both spouses (married or common law) decide not to live together as spouses anymore and take some physical step to create the separation. This can be moving to another room or another home altogether.

A Judicial Separation in Alberta means a type of court order that can be obtained under the Matrimonial Property Act that lets people apply to the court for a division of their matrimonial property. It’s a fairly narrow concept that gets very limited use because it is just one of several possible preconditions to making a court application to divide matrimonial property. The Matrimonial Property Act only applies to married couples.

A Declaration of Irreconcilability is similar type of order that the court can make under the Family Law Act. This order can apply to a broader range of people, not just married people. A Declaration of Irreconcilability states that the parties (married spouses, common law spouses or adult interdependent partners) have no prospect of reconciling. The point of this type of order is similar to the Judicial Separation order described in the above paragraph. It is one of the possible preconditions to making a court application to divide property under the Family Law Act (married or not married people) or matrimonial property under the Matrimonial Property Act (married people).

A Separation Agreement is a type of contract that is the end-result of a negotiation. It is an agreement that can contain as much or as little of what separating people want to agree to in writing. The beauty of Separation Agreements is that they are flexible and legally enforceable, particularly regarding division of property and spousal support.

To be effective under the Matrimonial Property Act, Separation Agreements must have been made with legal advice. The legal advice should include advice on how favourable or unfavourable the Separation Agreement is. An agreement between two people on how they want to sort out their affairs without this legal advice has little or no legal effect.

For most people a Separation Agreement is an important goal because it can give finality on division of property and spousal support. And even though there is less finality on issues related to children, a Separation Agreement still goes a long way toward setting the roadmap for the way forward regarding parenting and child support.

Olivier Fuldauer, Barrister and Solicitor
Olivier’s bio:https://www.aflawyers.ca/fuldauer.php

Email Olivier: ofuldauer@aflawyers.ca

Family Law Page: https://www.aflawyers.ca/family_law.php

For more information, please contact the law office of Aarbo Fuldauer LLP, Barristers & Solicitors at:

Address: 3^rdFloor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: 403-571-5120

Email: info@aflawyers.ca

Should I Hire an Employment Lawyer to Review your Severance Package?

By Darryl A. Aarbo

www.aflawyers.ca

We get a lot of calls from people who have been terminated from their employment wondering if they should hire a lawyer to review their severance package. A severance package can be a very important legal arrangement with lasting consequences for a person’s career and financial well-being.

Assessing a severance package requires a proper intake interview to determine all of the relevant variables and factors that should go into a severance package. I have yet to see anything on the Internet that can provide this advice in a meaningful way to a person due to the number of variables. This does not mean that the lawyer has to undertake a detailed analysis of case law in every circumstance. Most experienced employment law lawyers can provide an opinion relatively quickly after a proper intake interview. In other words, the lawyer can usually render an initial verbal opinion at the end of an initial consultation. It is normally a preliminary opinion without the aid of legal research, but a range can be provided with some accuracy if you get an experienced employment law lawyer.

The Internet is one of the greatest inventions of our age, but it does give people the false sense of security that they can become an expert in any field instantly by reading a couple of articles on the Internet on a particular topic. Unless and until we get to the point where information can be downloaded instantly into the human brain like in the movie The Matrix then there will be value added to hiring professionals to obtain advice in medicine, accounting, law and just about any other discipline.

Because of the nuances in the law and the interconnected legal relationship between an employee and employer it is impossible to advise a client as to whether it is appropriate to hire a lawyer to further negotiate a severance package until the intake interview is completed. Sometimes the package on offer is reasonable. Sometimes it is most appropriate for the employee him or herself to return to the employer to ask for some additional monies or components to the severance package. Sometimes it is faster and most appropriate for the lawyer to counter offer.

If a lawyer is hired to negotiate a severance package then there is no guarantee that that lawyer can improve the offer. Nevertheless, hiring a lawyer does send a message to the employer that the employee is serious about his or her concerns and is taking a professional approach to dealing with the concerns. Termination can be a difficult process for both the employee and the person terminating. In smaller or midsize companies the person doing the terminating and negotiating on behalf of the employer may have worked with that person in a close capacity for many years. Hiring a lawyer by the employee often results in the employer hiring a lawyer to represent its interests. Hiring lawyers to negotiate the package allows the parties to remove any distractions and focus on the issues in an efficient and meaningful way.

Further, if a person has been terminated from a large corporation with a sophisticated human resources department and there is no personal connection between the involved parties then that employer often appreciates the professionalism of dealing with a lawyer, even if they do not retain its own lawyer during the negotiation phase.

Hiring a lawyer allows the parties to focus in on the real and material issues in dispute between the parties in an efficient manner without dealing with any irrelevant issues that may unnecessarily complicate the process. I can tell you from years of experience that no employer wants to pay more than it has to on the termination of an employee. Further, unless there is an existing and valid contract that deals with the termination then most employers go in low with any offers. Without a lawyer most employees accept the first offer and therefore the employer saves money on the package itself and any legal costs that may be incurred. This does not mean that they put their best offer forward first. In my experienced most employers leave some room for negotiation.

Finally, sometimes the employers are simply not sophisticated in the area of employment law. They make mistakes and they sometimes dig in their heels with offers that are inappropriate or even illegal as they may violate employment standards legislation. Sometimes these employers feel that they know better and make a horrible offer and dig in their heels. The best advantage to having a lawyer in this case is that employer will usually go get their own lawyer and that lawyer will explain to the employer why their offer cannot be maintained law and a more reasonable offer is forthcoming. The size of the company does not determine this issue.

Finally, one aspect that people almost always forget to negotiate on their own is the own reference. A experienced lawyers knows what and when to negotiate a reference.

For more information, please contact the law office of Aarbo Fuldauer LLP, Barristers & Solicitors at:

Darryl A. Aarbo, Barrister & Solicitor

Darryl’s bio: https://www.aflawyers.ca/aarbo.php

Darryl’s email: darrylaarbo@aflawyers.ca

Employment Law page: https://www.aflawyers.ca/employment.php

Posting Videos on YouTube – Copyright Infringement or Not?

The “Mash-Up” Provision

By Anthony Pranata of Aarbo Fuldauer LLP
https://www.aflawyers.ca/index.php

Have you ever watched a YouTube video where the creator of the video used a popular song as the background music? Have you ever wondered whether the creator got permission from the artist of the song to use the song in the YouTube video? Have you ever wondered what would happen if the song artist decided to sue that video creator for “stealing” his/her song without permission?

You may have come to the logical conclusion that it is not worth it for pop stars like Justin Bieber and Miley Cyrus to crack down on that artistic YouTube video creator who decided to use “Baby” and “Wrecking Ball” in his video, and you are probably right. However, from a legal perspective, even if those artists wanted to crack down on the video creator, the video creator would have many defences available to him against these superstars.

Generally speaking, you cannot use a substantial portion of copyrighted work in your own work without the permission of the owner of the copyrighted work. However, copyright law is full of exceptions, one of which being the exception of non-commercial user-generated content. This exception is enumerated in section 29.21 of the Copyright Act, RSC 1985, c. C-42 (a new piece of legislation that was introduced into the Copyright Act in 2012) – this provision is sometimes referred to as the “mash-up” provision. This provision states that it is not an infringement of copyright to use even a substantial amount of a copyrighted work in your own new work provided that:

The copyrighted work has already been published (ie. made available to the public);
Your new work was created for non-commercial purposes;
The source of the copyrighted work is mentioned in the new work if it is reasonable in the circumstances to do so;
The creator of the new work had no reason to believe that the copyrighted work was itself an infringement on another party’s copyright; and
The use of, and dissemination of, the new work does not have a substantial adverse effect on the copyrighted work.

If the above conditions are met, the YouTube video creator would not have to worry about million dollar lawsuits from Hollywood pop stars. However, if the video were to become YouTube famous and the video creator started raking in royalties as a result, he might want to consider giving Justin Bieber’s and Miley Cyrus’ agent a call to see if he can get a license from them.

For more information, please contact the law office of Aarbo Fuldauer LLP at:

Address: 3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120

Email: info@aflawyers.ca

Anthony Pranata, Barrister & Solicitor
https://www.aflawyers.ca/pranata.php

apranata@aflawyers.ca

Canadian Intellectual Property Office:
http://www.cipo.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/Home

<spanstyle=””>HUMAN RIGHTS UPDATE – EMPLOYMENT LAW

A very interest case to come recently is Wilson v. Solis Mexican Foods Inc. 2013 ONSC 5799. http://canlii.ca/t/g0nkm The Ontario Supreme Court exercised its jurisdiction under the Ontario Human Rights Code to award human rights damages in a wrongful dismissal action. After a back injury the employee was terminated after she requested a gradual return to work. Instead she was terminated. The Court held that the termination of employment was due in whole or in part to Ms. Wilson’s back injury and awarded $20,000.00 for discrimination on the basis of disability. It is interesting and unique because section 46.1 of the Ontario Code provides that a Court in a civil proceeding may make an award with respect to the breach of the person’s human rights. In that regard it does make sense and it all seems perfectly reasonable, but it does demonstrate a further evolution away from the decision in Honda Canada v. Keays of the Supreme Court of Canada. It is a decision that does not make any practical sense with respect to this area of the law. One can only hope that the Alberta Courts will follow suite and/or the Alberta legislature would also see the merit in distancing itself from the principals set out in Honda Canada v. Keays. As stated before in an earlier post, the Supreme Court of Canada decision was likely correct at law, but not terribly practical for the modern funding of human rights commissions. Surely it could have found a way to allow more crossover between human rights and employment law.

by Darryl A. Aarbo, Aarbo Fuldauer LLP

https://www.aflawyers.ca/aarbo.php

darrylaarbo@aflawyers.ca

Link to Alberta Human Rights Commission:

http://www.albertahumanrights.ab.ca/

Employment Law – Privacy Law

Case comment on:

Alberta (Information and Privacy Commissioner) v. United Food and Commercial Workers, Local 401 2013 S.C.C. 62 http://canlii.ca/t/g1vf6

During a lawful strike lasting 305 days both the Union and the Employer videotaped and photographed individuals crossing the picket line. The Union posted signs in the area of the picketing stating that images of persons crossing the picket line might be placed on a website. A number of people filmed complained to the Alberta Information and Privacy Commissioner. The case ended up at the Supreme Court of Canada. The issue was the general rule that organizations cannot collect, use or disclose personal information without consent. It was held that by imposing restrictions on the ability of unions to communicate and persuade the public of their cause, the act impaired the ability of the Union to use one of the most effective bargaining strategies in the course of a lawful strike. This infringement of the right to freedom of expression was deemed disproportionate to the government’s objective of providing individuals with control over the personal information that they expose by crossing a picket line and was therefore unconstitutional. The declaration in validity was suspended for twelve months to give the Alberta Legislature time to decide how best to make the legislation constitutional compliant.

It is the writer’s opinion that privacy laws have gone too far in certain circumstances. Although extremely important to have privacy laws at one level, they seem to have been taken to extreme measures in some contexts. The information being collected in this case appears to have been collected in an open and public space. The people were being given notice of the fact that they were being recorded. It is not as if they were being filmed in secret or on private property. It used to be that filming or capturing images in the public was perfectly acceptable and reasonable. There does not seem to be any logic in extended these laws to covering situations where people are in the public’s fear. Good decision by the SCC.

Darryl A. Aarbo, Barrister and Solicitor

darrylaarbo@aflawyers.ca

visit our employment law page

https://www.aflawyers.ca/employment.php

visit Darryl’s bio:

https://www.aflawyers.ca/aarbo.php

Office of the Information and Privacy Commissioner of Alberta:

http://www.oipc.ab.ca/pages/home/default.aspx

HUMAN RIGHTS UPDATE – EMPLOYMENT LAW

One of the most interesting decisions I have come across in the past year has been the decision of Fair v. Hamilton-Wentworth District School Board2013 H.R.T.O. 440. http://canlii.ca/t/fq6vhThe Ontario Human Rights Tribunal found that the employer had breached its obligations under the Ontario Human Rights code by terminating employee’s employment in 2003. She was not accommodated and instead was terminated. The Tribunal ordered that the non-union employee be reinstated to employment despite the fact that she had been away from the workplace for approximately a decade.

It is true that the Ontario legislation specifically provides for reinstatement, but it is extraordinarily unusual for employees to be reinstated in a non-union workplace. In fact, the writer has never seen the exercise of this remedy outside of a unionized workplace. Why? I suspect that it would be very difficult for both the employee and employer to be reintegrated without the assistance a union. In what position would she be placed? Her old position? There are no bumping rights in employee law as opposed to the world of labour law. If the employer were to remove the prior employee and that employee had been there for ten years then they would on the hook for a severance package, a severance package for a 10 year employee.

The case is very interesting but it seems unlikely to catch on as a remedy generally within this area of the law.

Darryl Aarbo, Aarbo Fuldauer LLP

darrylaarbo@aflawyers.ca

To see Darryl’s bio:

https://www.aflawyers.ca/aarbo.phpTo see our human rights page:

https://www.aflawyers.ca/human_rights.php

Alberta Human Rights Commission:

http://www.albertahumanrights.ab.ca/

What happens if I die without a Will?

By Anthony Pranata

Aarbo Fuldauer LLP
www.aflawyers.ca

I would like to clarify what I have recently discovered to be a common misconception regarding Wills. A number of clients have informed me of their concern to have a Will drafted as soon as possible because they did not want to die without a Will and leave all their assets in the pockets of the government. I fully advocate the importance of having a Will, but rest assured that if you die without a Will, the government is not going to swoop in and take all of your stuff, unless you have no living heirs.

The legislation that governs the distribution of intestate estates (ie. estates of people who die without a Will) can be found in sections 58 through 70 of the Wills and Succession Act, SA 2010, c W-12.2. http://canlii.ca/t/8ntp One of the good things about this portion of the Wills and Succession Act is that a person’s intestate estate is distributed in a way that that person may have reasonably distributed it anyway had he/she drafted a Will. That is to say, Alberta law dictates the distribution of an intestate estate in a very “common sense” way.

The following are common scenarios that might occur in a situation where someone dies without a Will:

a) If the deceased has a surviving spouse or adult interdependent partner (ex. common law spouse) with NO children, 100% of the deceased’s estate would go to the deceased’s spouse/adult interdependent partner.

b) If the deceased has a surviving spouse or adult interdependent partner WITH children, and all of the deceased’s children are also children of the surviving spouse/adult interdependent partner, then 100% of the deceased’s estate would still go to the deceased’s spouse/adult interdependent partner.

c) If the deceased has no surviving spouse or adult interdependent partner but has children, and all of the children were alive at the time the deceased died, the deceased’s estate would be split equally between his/her children.

d) If the deceased has no surviving spouse or adult interdependent partner but has 2 children for example, but only 1 was alive at the time the deceased died, 100% of the deceased’s estate would go to the child still alive UNLESS the deceased child has children of his/her own.

e) If the deceased has no surviving spouse or adult interdependent partner but has 2 children for example, but only 1 was alive at the time the deceased died, and the deceased child has 3 children of his/her own, 50% of the deceased’s estate would go the living child and the other 50% of the deceased’s estate would be split equally amongst the deceased child’s children (ie. the deceased’s grandchildren). That is, each of the 3 grandchildren would get 1/3 of 50% of the deceased’s estate.

f) If the deceased has no surviving spouse or adult interdependent partner or children or grandchildren, the deceased’s estate would be split equally between his/her parents, or to the survivor of them if only one parent is alive.

g) If the deceased has no surviving parents, then the deceased’s estate would be split equally amongst the children of the parents (ie. the deceased’s siblings and half-siblings).

The above examples are only SOME of the possible scenarios that may occur and is by no means an exhaustive list. You will need to refer to the Wills and Succession Act or consult a lawyer if you require information on an intestate estate situation that is not addressed above.

It is possible that the government will get your money, but it would be rare. Under the terms of Unclaimed Personal Property and Vested Property Act,C. U‑1.5 there are provisions that the government may get the money, but you really would have to have no know heirs. http://canlii.ca/t/81wh

Even though the law has measures to deal with intestate estates, I highly caution against relying on the Wills and Succession Act to dictate the distribution of your intestate estate in lieu of preparing a Will, especially if the legislation would dictate a distribution contrary to what you would have otherwise wanted. For example, if you have no surviving spouse or adult interdependent partner but you have 3 adult children, and you only have a good relationship with 1 of your children, you may want to give the majority or entirety of your estate to that one adult child. This would have to be specified in a Will. If you do not have a Will when you pass away, your 3 adult children would share equally in your estate.

Drafting a Will provides other significant advantages:

a) Designate Executor (personal representative)— You can designate a personal representative to manage your estate when you die. This is likely going to be someone that you highly trust as that person will have full access to your sensitive financial information. Without a Will, the person who ends up being entitled to administer your estate may not be someone that you would have wanted to gain access to your financial information.

b) Designate Guardian — You can designate a guardian for your children. Most often your primary choice is going to be your wife/husband/partner, but it would be wise for you to choose an alternate guardian in the event you and your partner die in a common accident. Choosing an alternate guardian is normally a conversation you would have with your partner while taking into account a variety of factors, not the least of which is who you believe would be the best person/couple to raise your children in accordance with your own beliefs and values. However, without a Will, you will not be able to dictate who gets guardianship of your children. In the best case scenario, your children will go to the person/couple you would have otherwise chosen. However, in (one of) the worst case scenario(s), there will be a massive fight amongst your family members as to who would be the most suitable guardian. If they cannot come to an agreement, they would have to make an application to court for the court to decide who would be the most suitable guardian. Further, the legal fees incurred in this application would likely be taken out of your own estate which is money that would have otherwise gone to your children. Though there may only be a small percentage of families who would put up this much of a fight over guardianship of your children, the fact remains that such a hassle is easily avoidable by drafting a Will.

c) Designate personal items — Many people have possessions that have low market value but high sentimental value. For example, a necklace passed down from generation to generation may not be worth very much if you try to sell it at a jewelry store, but is still very important to you because of all of the adventures that necklace has experienced. Most people prefer to leave their sentimental items to a particular person, whether it be their child, one of their relatives, or even a close friend. This is something that, again, can only be accomplished with a Will. Without a Will, all of your belongings, including your sentimental items, would be distributed to the person(s) entitled to your property in accordance with the Wills and Succession Act, which may not be the person you would have wanted to have such a keepsake.

d) Cost and Clarity — A Will is at least just as much for your loved ones as it is for yourself. If you die without a Will, or for that matter, if you die with a Will that has been poorly drafted, any inconvenience by reason of such is suffered by your loved ones, not you. Without a Will, your loved ones are the ones who are going to have to expend the time and energy to apply to court to be your estate’s administrator and your children’s guardians. With a poorly drafted Will, your loved ones are the ones who are going to have to rack their brain to interpret your Will and determine how you wanted to distribute your estate upon your death. These are all things you can avoid with a properly drafted Will.

The above are several examples of why you should draft a Will instead of leaving your estate to be distributed as an intestate estate in accordance with the Wills and Succession Act. With a Will, you can dictate the distribution of your estate in your own terms without having to worry about whether the law on intestate estates will distribute your property in a manner you want.

For more information, please contact the law office of Aarbo Fuldauer LLP at:

Address: 3^rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: 403-571-5120

Email: info@aflawyers.ca

Anthony Pranata, Barrister & Solicitor
apranata@aflawyers.ca

To see Anthony’s bio:
https://www.aflawyers.ca/pranata.php

To visit our Will and Estate Planning page:
https://www.aflawyers.ca/wills.php

The Wills and Succession Act of Alberta:
https://www.canlii.org/en/ab/laws/stat/sa-2010-c-w-12.2/latest/sa-2010-c-w-12.2.html

Are You as Good as Married on January 1, 2020?

Changes to laws in Alberta when it comes to common law relationship and common law property are in effect now – and may affect you and your common law partner should you break up. On January 1, 2020 the Alberta Matrimonial Property Act was replaced with the new Family Property Act. The new legislation changes the rules around common law property – or the property you and your common law partner own – for couples who meet certain criteria and separate after January 1, 2020. Here is what you need to know.

What is Common Law?

In Alberta, a couple is considered “common law”, or an Adult Interdependent Partner (“AIP”), under the legislation when (a) you and your partner have lived together for 3 or more years, or (b) you and your partner have lived together with some degree of permanence, and have a child together. In other words, you and your partner live together as a couple, but you are not legally married. It is important to note that if you don’t meet these criteria, you may still be a common law couple and have property division rights but not under the new legislation.

What’s the Difference Between Married and Common Law When It Comes to Property?

Both Married Property Division and Common Law Property Division are dealt with as part of Family Law. Family Law is made up of a combination of legislation and caselaw. In this blog we are highlighting an important change to the legislation.

When married couples separate, they have the right to various property remedies, typically one-half of whatever matrimonial property was accumulated during the marriage. This right to half of the matrimonial property may be subject to a legally binding cohabitation or marriage agreement, as well as other exceptions set out the legislation and caselaw. Also, depending on the circumstances, exemptions to equal division can include such things as inheritances, gifts, lawsuit damages and property that was owned prior to marriage.

When it comes to property division for married or common law couples, there are a variety of family law dispute resolution options. However, one important thing separating married couples from common law couples is that married couples have the right to apply to the court for an order for exclusive possession of the matrimonial home. This can force one party to move out of the home so that the other party can occupy it exclusively. The new legislation now makes this available to qualifying separated common law couples.

How Do You Know if the New Family Property Act Affects You?

All couples who separated before January 1, 2020 will still be under the pre-existing common property division scheme, which typically provides separating common law couples with fewer property division rights than married couples. However, if you separate after January 1, 2020 the new Family Property Act may apply to your property division and other rights.

The new Family Property Act will apply to you if meet the definition of an AIP (mentioned above) in the Alberta Adult Interdependent Relationships Act. To restate, an AIP is a person living in a relationship of interdependence that meets at least one of the following criteria:

You have lived in an interdependent relationship continuously for at least 3 years; or
There is an interdependent relationship of some permanence and you have a child together; or
You have signed an agreement to be in an interdependent relationship that meets the criteria of the Adult Interdependent Relationships Act.

It is notable that the above list of relationships now subject to property division under the new Family Property Act is not limited to romantic relationships. For example, an adult interdependent relationship could include 2 non-romantic adult friends or relatives who live together, have done so for more than 3 years, and are financially interdependent. In order to be considered an AIP, both people must share each other’s lives, be emotionally committed to one another, and function as an economic and domestic unit. People who live together and provide a service, such as personal care or housekeeping and are compensated, are generally not considered to be AIPs.

What If You Have Questions?

As discussed, these new changes not only bring non-married common law couples into our legislated matrimonial property division scheme, but also bring in people who we might not have considered to be common law couples but are in a relationship of interdependence as defined by the Adult Interdependent Relationships Act.

Do any of these changes make things different if you are married? No. However, a legally binding cohabitation or marriage agreement is going to be more important now than ever before, as these changes will impact a broader range of couples.

If you want to understand what your property rights are upon separation, please speak to one of our family law lawyers by contacting info@aflawyers.ca, or contacting us here.

This blog post is intended as general information only and not legal advice. If you require legal advice, we recommend you see a lawyer.

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**Review of the The Civil Marriage Act, S.C. 2005, c. 33**